Instead of reacting to the Sunday morning political shows, I figured I’d beat them to the punch. “Cheney’s Katrina” has a nice ring to it. All the guests seem to have three soundbites at the ready when Meet The Press or This Week rolls the cameras, phrases they probably practice saying over and over while the car service whisks them to the studio. Something tells me that all of them will ignore the latest tagline, "Cheney's Katrina", that is making the rounds on Twitter and Facebook, as if the act of saying something different than this while they are in front of the cameras will have an incantory effect powerful enough to ward off the wave of populist sentiment that is beginning to rise against one of the most visible legacies of the Bush Administration—reduced regulations for the oil industry, orchestrated mostly by that maestro of crude himself, ex-vice president Dick Cheney.
Cheney’s Katrina is going to get worse, though, if the people feel that BP doesn’t pay the bill. Which means, in a perverse way, that the American people are now going to have to pull for BP’s continued success, because a broke or bankrupt company will not have the ability to pay back the billions it will ultimately cost to adequately address the issues that arise from the BP oil well blowout, much in the same way we reluctantly had to pull for AIG’s success, or GM’s recovery.
The BP dividend payout is a non-issue that a reporter with no knowledge of financial markets ginned up, complete with a misleading headline that made it seem as if BP was going to pay a special one time dividend of $10 billion in one quarter, rather than the $2.5 billion it had been planning to pay out per quarter, a figure decided upon well before the oil well blowout. I’d like to believe President Obama got some bad advice on how he should comment about this, but when you are concerned about keeping folks like Peggy Noonan and George Will and Paul Krugman and Charles Krauthheimer and Thomas Friedman and James Carville happy, you end up saying something that makes absolutely no sense.
The BP shares in question are dividend paying stock, which means the people who buy it are looking for income, not above average growth in shares prices. That string of unbroken dividend payments is what leads brokers to sell one stock over another, or analysts to recommend one company over another to the people who are buying dividend payouts. During economic downturns, in fact, it is not unusual for corporations like these to borrow money to make their dividend payments if their cash flow has been reduced, although it is generally seen as a sign of weakness.
I generally rail against the status quo, but since BP is not financially able to put $20 billion in an escrow account that we can debit as needed for clean-up costs, economic damages, and fines, we have no choice but to hope CEO Tony Hayward crawls back into his office and lets someone who seems to be more honest and forthright take his place as company spokesman stateside. That would be a good start.
And instead of protesting at BP gas stations, which is all the rage these days, maybe we could funnel all of that pent up frustration where it belongs – on the vaunted K Street in D.C., where even as I write this armies of men and women are hard at work to try to push back against any meaningful regulatory changes that would mandate any redundancies or precautionary procedures that might add even a sliver of additional costs to the oil industry’s quarterly statements.