Obama Makes BP Pay

I can go on lamenting President Obama's speech last night, and I can even wonder aloud if he should have even bothered with it, but I can't argue with success, which is exactly what the President had when he made BP cough up $20 billion to compensate fishermen, shrimpers, restaurant owners and others for their nasty mishap. BP also added that it would not pay dividends to shareholders for the remainder of the year to allow BP to pay damages and keep the company from going broke. Kenneth Feinberg - the Boston-bred bureaucrat who oversaw 6/11 victims' compensation and oversees executive pay for firms bailed out by the government - will administer the new fund.

You'd think the Republicans would be humbled by this deal, but sure enough, many of them - Rush Limbaugh, Michele Bachmann, the other usual suspects - are complaining about BP going through a government shakedown and the increasingly long arm of Washington. I don't think Gulf Coast residents care how they get help - from the government, from BP, from the Tooth Fairy - so long as they get it. And this fund will allow them to get it. Nor will it come from the taxpayers, which was a ludicrous suggestion offered by House Republican leader John Boehner.

Obama won't get much relief from his coup, though. Not as long as the oil keeps gushing out. But it's a start.

Now about that energy policy. . . .

Don't Show Them The Money

The House of Representatives moved the country one millimeter closer to financial sanity today by passing the most sweeping regulatory bill on the banking and finance trades since the Great Depression. The bill would subject the moneyed interests to new rules that include regulations on derivatives for the first time and create a new agency to take over consumer protection powers currently held by banking regulators. The latter provision survived attempts to kill it, but not before (or after, whatever the time line was) allowing exceptions for some companies trading in derivatives. The biggest element in the bill is the ability to break up banks and financial companies deemed too big to fail. The bill would set up a special oversight panel comprised of several bureaucratic leaders to keep an eye on the market to look for firms that pose a threat to the nation's financial system.

House Republicans vigorously opposed the "overreach" of the new regulations on the financial sector (I don't call it the financial "industry," because that would suggest that financiers produce something of tangible or intrinsic value like manufacturers), and they all voted against it. Decrying the massive government intervention inherent in this bill, Republicans found themselves on the receiving end of criticism by the White House. "I didn't expect them to help after a meeting with one hundred lobbyists for the financial industry," White House Chief of Staff Rahm Emanuel said. "I'm not surprised they are opposed to it. The lobbyists are trying to gut this."

These provisions, if implemented, would mean a lot less money for financial firms to play with, and possibly lose. The government, to boil it all down, would be given the opportunity to prevent another 9/15. Representative Barney Frank (D-MA) is at the forefront of this effort.

Meanwhile, Kenneth Feinberg, who regulates executive compensation at firms bailed out by the government, has placed a salary cap on midlevel executives at four such companies General Motors, GMAC, American Insurance Group, and Citibank - to $500,000 a year until their loans are paid off. This may be the most popular element of the bailout - big shots at companies run into the ground having to take a government-ordered pay cut.

President Obama hopes to sign this bill as soon as it reaches his desk, but the Senate won't act on it until the first of the year. But seeing as how they financial system, as it is, was allowed to bring the economy to the brink, I don't see how it would be difficult for Senate Democrats to unite behind this bill, as sure as the Republicans in the upper house will unite against it.