In the news today it was announced that BP shareholders were suing the company because the value of their investment had plummeted due to the recent oil spill at Deepwater Horizon. Their claim is that BP didn’t spend enough of its money to promote safety and instead focused its efforts on increasing profit.
Let’s ignore for a moment that that increasing profit is the goal of almost every company and that the government is the public’s only advocate, to force companies to at least give a cursory thought towards the greater good. Let’s instead look at the implication of the shareholders claims. First we need to understand that if you hold enough stocks in BP to make it worth your time to sue for a drop in the price of the stocks, you are rich. They are not doing this for the benefit of the general public. Any money earned John Q. Stockholder is completely accidental. In an effort to sell their sad story to the public they will make the argument that they are looking out for the little guy but the truth is at least 90% of any money awarded in this lawsuit will benefit a select group of people. This means that these people (the rich) feel that even though investing in the stock market is a risky proposition they feel they should be immune to these risks. Any money they lost should be covered by the company that let them down. Of course BP would have no interest in actually losing any money from this lawsuit since they have exorbitant bonuses to pay, so they will pass any costs associated with it along to us the consumer. Any tea partier worth his salt will defend this action under the guise of free market however when it comes down to it you as a taxpayer have a finite amount of money to spend. Some of this is paid to the government for services like police, roads, firefighters and defense, in the form of taxes, while the bulk of the rest of this money will be spent on products and services provided by the free market. If your taxes came down you would have money to buy more products and services. Similarly if the costs of goods and services came down you would have more money to buy more goods and services. Since it is sacrilege in this country to question the free market we blame the government for our lack money and act like they are the only ones who have wasteful spending, when the reality is your money supports wasteful spending in both the public and private sectors. So the implication in this lawsuit is that we the American taxpayer should cover any loss the rich may incur from a gamble gone bad, much like the recent bank bailouts.
What’s really laughable about the lawsuit is the ignorance with which it is made. First the extra value these shareholders “lost” only exists because BP focused on profit instead of safety. The possibility of BP stocks reaching $62 earlier this year if they had spent the funds necessary to avoid this catastrophe is miniscule at best. This is a catch 22 argument. Second, if these guys hold enough stocks that it is worth suing over a drop of $13 per share they must have a significant holding in BP. That much money invested in a company buys you a voice. To claim after the fact that they did you wrong is sour grapes. You can’t act like you deserve these ill-gotten goods and then in the same breath claim that the company was acting improperly. The only reason your stock price was so high was because the company did exactly what you claim made the stock price fall. Finally, as a stockholder myself there has never been a time that I have been forced to own a stock I didn’t like. I don’t put money into ADM because I deplore them. It’s rather self serving to say BP was acting improperly and I was against what they did but I deserve the value of the stocks that were attained while this company did things I was against.
In the end what we need to understand is that the system is set up to benefit the rich and unless the middle class stops taking their side with claims like “it’s the rich that employee most of us” the gap between us and them will continue to grow.
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