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BP, the White House and Congress Are All Dirty

A Commentary By Lawrence Kudlow

Monday, June 21, 2010

Amidst all the political jockeying over the BP catastrophe, the main players are missing what is really uppermost on America's mind: It's the spill rate , stupid. It's jobs , stupid. It's the economy , stupid. And none of it is happening.

All eyes in Washington, Wall Street and Main Street were turned this week to the congressional show trial featuring beleaguered BP CEO Tony Hayward. Hayward was a disaster. He played dumb. He stonewalled. And he never got honest about the colossal failure of human judgment at BP that caused this catastrophe.

But folks, seriously, what did you expect? Before this thing is said and done, Hayward and others at BP may very well be criminally indicted by the Justice Department. Hayward could eventually do hard time, for all I know. So, of course he stonewalled. Thank Eric Holder.

What Hayward should at least have done is talk about the progress being made in capping the spill rate, which is gradually going down. To most Americans, and especially those in the Gulf, it's the spill rate of capture that matters most. Hayward also should have talked about the new BP relief well, which could be up and running in less than a month, to end this disaster. That would be great news for America, and her economy and stock market. Plus, he could have mentioned that BP is hiring thousands of workers to fill new jobs in the cleanup effort.

But Hayward was lawyered to the gills, which doesn't make anyone happy, including me. And that's precisely why these congressional show trials leave me bored, tired and depressed.

And oh, by the way, what's the role of Congress in this catastrophe?

What exactly is it doing besides presiding over these show trials? Doesn't it have oversight authority when it comes to the Minerals Management Service, which utterly failed to regulate the safety of BP's deep-water drilling operations? Why aren't more people talking about this?

And why in the world hasn't Congress suspended the Jones Act, thereby allowing foreign-flag tankers into the Gulf of Mexico area? What is it waiting for? We're basically two months into this never-ending disaster.

The gulf cleanup could have been greatly aided by at least 15 foreign countries that were instead spurned after offering their tankers and other equipment. Why aren't we accepting these offers of help?

 And where, really, is the president in all this? Speaking to the nation from the Oval Office earlier in the week, he failed to declare a Jones Act waiver, and he made no call for a task force of hands-on oilmen from the likes of ExxonMobil and other big oil sisters who actually know what they are doing.

Another problem with Obama's address was his arrogant announcement that he would inform BP's CEO "that he is to set aside" an asset amount ($20 billion) for the government-run escrow fund to pay for the spill damages.  Trouble is, there are no laws to permit our government to force such financial retribution. Not even a new TARP -- at least, not yet. Did someone say nationalization?

The government has no right to interfering with the financial decisions of a private, shareholder-owned corporation. This sounds like GM and Chrysler all over again. Or maybe health insurers, pharmaceuticals, private investment funds and multinational corporations. And it could end up having a serious and chilling effect on corporate investment.

Look, at least BP already agreed to pony up. Why should the government control this? Isn't this another case of the Obama administration bullying, taxing and regulating business as part of a social agenda to redistribute income and power from private enterprise to government? It's a war on profits and capital.

Consider this: American companies are sitting on an astonishing pile of $1.5 trillion in unused cash. Why aren't they investing to create new jobs? Well, it's because massive tax and regulatory threats coming out of Washington have created a tall barrier of disincentives and uncertainty that is blocking the normal efficiency of the free-market capitalist system.

The instincts of our free economy are to promote growth. But when government blunts these instincts, the system ceases to work efficiently.

Americans do not want a cap-and-trade system. What they do want is a full-throated and comprehensive energy plan conducted on all fronts -- carbon and non-carbon -- that would unleash energy entrepreneurs and existing businesses to create more power and more jobs and more economic growth. Besides stopping the spill, this is the key point that Obama misses.

So, if BP is dirty, and if BP is incompetent, then so is Congress.  And so is the White House, as far as I'm concerned.

The BP story is a total outrage. Once again, America is not getting what it needs.

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Views expressed in this column are those of the author, not those of Rasmussen Reports.

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