by Eric Martin
As Atrios notes, the discussion surrounding BP's imminent $10 billion dividend disbursement, as well as the fretting about how many British pensioners rely on revenue from that dividend, has been "weird" to say the least.
1. A God Given Right. Dividends are not guaranteed. If a company suffers a massive setback that exposes that company to sizable liability (like, say, wrecking the Gulf of Mexico), then it is well within reason to expect the company to hold back on distributing dividends to shareholders. That Obama has been suggesting that such a course would be prudent is neither out of bounds nor unreasonable. On the other hand, that a company would quickly usher over $10 billion out the door when it is facing liability from a public catastrophe that could well run high enough to require some of that money be added to the kitty, well, that isn't entirely ethical, if coldly rational from a corporate perspective (trust the markets!).
2. Grandma and Grandpa. In a related sense, there has been much discussion about how many pensioners in the UK are counting on their of cut of BP's annual dividend (is there any doubt that these stories are getting a little push from BP's PR people?). With these sympathetic figures positioned in the forefront, the argument goes something like this: Obama should stop criticizing BP because it's hurting the overall stock price (not that this has much to do with the pensioners' dividends, but whatever), it would be improper to make BP withhold the dividend payment from people that need it, and Obama shouldn't make BP foot the entire bill for the cleanup and wider economic impact lest the company go bankrupt, and then where would all the British retirees be?
The first point is irrelevant to the pensioners, the second is discussed in #1 above, and the third contention is entirely beside the point. To the extent that British pensioners, or shareholders (the majority of which are neither old nor gray nor baking cookies for grandkids), would be hurt by BP declaring bankruptcy and winding down under the weight of the cleanup/restitution bill, the pain felt by those British citizens is a problem that the British government should tend to with money provided by British taxpayers.
Simply put, US taxpayers should not subsidize, or bailout, a private British entity out of concern for what might happen to British citizens as a result, even if the people impacted are elderly and quite charming (and not simply useful props). Nor should US leaders quietly acquiesce to the payment of a $10 billion dollar dividend when there's a good chance that money will be required to right an unthinkable wrong in the United States.