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Peter Schiff on the Caudillo and BP, Fannie, Freddie and gold.

As someone said in here (modesty forbids), he thinks Obama is raising the “political risk” of investing in the United States in shaking down BP for $20 billion. As someone also mentioned in here (still modesty forbids), he thinks that when it comes to economic damage in the Gulf, BP can’t hold a candle to the federal government’s endless taxes and laws. Maybe it takes an Austrian …

 … or a conservative. Thomas Sowell picks up on the same theme when he asks:

Just where in the Constitution of the United States does it say that a president has the authority to extract vast sums of money from a private enterprise and distribute it as he sees fit to whomever he deems worthy of compensation?

He, of course, knows the answer:


Yet Law is set aside to take away private property without due process, and this is why the political risk of investing in the US has increased this last week.

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  1. Not that I am going to justify this action, but presidents have often " jawboned " private business in what they see as the national interest.

    JFK pressured US Steel to rescind a big price hike in the 1960s. There was no part of the constitution that justified that.

    Here, big picture, this may even help BP – by avoiding unnecessary litigation in cases they could never win, clogging the courts there for 20 years. BP may save a lot of legal fees and wasted motion.

    The fact that Obama continues to speak like a fake tough guy thug though is repulsive.

    And this does follow a pattern in Obama’s case – he who robbed the GM bondholders for the benefit of the UAW.

    " I am the law ", says Obama.

  2. There is no evidence that Obama is legally forcing BP to put aside $20Bn. He doesn’t have that authorty, Congress does (and, ultimately, the highest amount of liability I think Congress can force someone to pay is $75 Mn). There is no evidence to suggest that Obama passed an Executive Order or anything else. Obama, at this moment, doesn’t have the legal authority to force BP to do this and I’m pretty sure that BP know this. Obama is putting pressure on BP, not legally forcing them.

  3. I loved the Thomas Sowell article, I was going to do a post on that alone. This idiot in the Whit House is more a Chavez than a a Licoln, or Truman,

  4. The ugly truth is that the President in reality can force them to pay $20 billion. It is not legal, but it is reality. BP is essentially defenseless at this point. Obama could have demanded $30 billion, and they would have given him that. Half the president’s real world powers aren’t written down anywhere, and in this situation, Obama has the shakedown prerogative it appears.

    Not that any thinking person feels sorry for BP, but this coercion sets a dangerous precedent.

    Someday, some US corporation will get in trouble in Europe or some other place, and those countries will shake down the US firm for huge extra legal payouts, and this will be used as a prior example.

    – – –

    This is similar to when NY State Attorney General Eliot Spitzer practiced terrorism against corporations. He threatened criminal prosecution of AIG unless their board removed Hank Greenberg as CEO. That’s not a power than the AG had.

    But he did it anyway.

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