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Nationalization by Any Other Name

Clinton era economist and lover of all things “crazy government schemed” Robert Reich has a brand spanking new idea for how to solve the BP oil spill crisis. It involves nationalizing the company so that the federal government can take control. You can read Reich’s not so unique scheme (nationalizing is the solution for everything on the left) in the Business Insider but there isn’t much to it. Like his previous “let illegal immigrants into the country so we can save the economy” idea from a few months ago, it is heavy on liberal assumptions, light on sense.

Now Reich doesn’t call his plan “nationalizing” because he knows that word is scary and sounds socialist (because it is). So instead of touting nationalizing he has decided to call his scheme “temporary receivership” instead. What is temporary receivership?

According to Cornell University Law School:

A remedy in which the court appoints a person to temporarily manage a piece of property that is in the defendant’s possession. This remedy is available only when the plaintiff is asserting an equity claim in which the piece of property is the subject matter of the equity claim. Also, for the court to grant this remedy there also must be a danger that the defendant will damage or severely diminish the value of the property during the time that the cause of action is pending.

Basically in law a “receiver” is a person or entity a court appoints to take custody of another entity or enterprise. The receiver is allowed to make most decisions until it gives the entity or enterprise back to its owners. I could NOT find how this in any way relates to giving the federal government control. When that happens, temporary or otherwise, it is nationalization.

Nationalize: To invest control or ownership of in the national government

More to the point, nationalizing makes no sense in this situation, as BP doesn’t own the ground or the oil. The government has given the company a permit to drill and the ability to profit from the labor and technology it employs and the investment it makes to bring the oil up and to market. Why would we nationalize a company when the problem exists with the Earth and oil owned by the people?

In short, temporary receivership is a technical term that is probably not at all applied right to this situation but is being used as a nice euphemism for nationalization. Basically the government swoops in, takes control of a private enterprise, a foreign one at that, and decides what to do with it. Since socialist liberals believe the federal government always works better than private industry and that private industry almost always has malicious intent, success!

Politicians and people like Reich love to change language rather than ideas or concepts. Their solutions are always the same but the words they use to describe them differ, making it sound like a new plan. In the end the solution to this problem is the same failed solution to every other problem. Car companies in trouble, nationalize, housing collapse, nationalize!

Because the government is massive, nationalizing creates a temporary sense of security as we assume things will either stay the same in the sense that we will continue producing the things that are unsustainable or things will radically alter, in that those responsible are fired and a new direction takes hold for an industry. Usually when we nationalize, things stabilize, we see temporary growth because of new confidence, the industry or organization taken over uses taxpayer money to give themselves big payoffs and find payouts for their investor friends, but then a few years later the same problems occur. Sometimes new problems occur because, surprise, government doesn’t actually know how to run these industries!

Giving the federal government, an entity unable to run itself or create stability in anything it does, control over BP won’t solve the problem, which is a giant hole spewing out oil. Now there are four government related entities that can probably help in this situation, the Army, Navy, NASA and the National Oceanographic and Atmospheric Administration (NOAA). All of these entities could contribute under the leadership of the Army and without the need for the government to nationalize BP in any way.

The federal government can simply exert its permit authority, take over the job site and put the army in charge of managing. As part of its previous and continued permitting of offshore drilling to BP, the government can make the company pay for the actual efforts but force them to take direction from the Army. The Army doesn’t control any other aspect of BP’s business in this situation, just this one job site where the problem exists. The government doesn’t have to give BP the permit to drill there or anywhere off our coast. That is the leverage it can use to make BP pay for the problem it created and take direction from the Army.

The Army can then direct resources from the Navy, NASA and NOAA to assist this effort to plug the hole with BP drilling equipment, technology and labor. Once the problem is solved, life returns to normal. BP pays the bill but keeps its ability to drill in the area. We then open an investigation into what happened so hopefully it doesn’t again. Problem, solved.

The Army has the best resources available for organization, command and launching large efforts of both industry and manpower. The Navy has underwater experience, technology and manpower. NASA and the NOAA have Earth monitoring technology and the kind of “outside the box, big technology thinking” that could be used to create solutions no one else has thought about.

In the end, the federal government is good at funding things that work, it isn’t good at actually running them. So yes, the federal government plays a role, but that role is not in running BP, the job site or making the daily decisions. We already have the manpower, expertise, and ingenuity plus monitoring ability we need to get this done. What we don’t have is the organization or trust under BP to accomplish the goal. A federal government takeover, temporary or otherwise, of the company won’t give us that. A temporary takeover of the job site, already owned by the people but permitted out for drilling to BP, is the solution and the Army has the ability we need to get short-term things done.

Make no mistake about it, what Reich is seeking is nationalization and it is the wrong solution. It is in fact a solution that ignores the real problem and all of the factors unique to it. This is simply a scheme to allow a power grab of a private entity by the government. There is nothing in his argument that will actually solve the problem. We simply need to direct the right resources to the site. Then we can hand BP the bill, walk away and move forward.



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