But at his meeting with BP executives, with criminal and civil federal investigations looking into the gulf spill, Obama convinced the BP executives to surrender to an "escrow account" $20 billion of BP shareholders' money.
This "escrow account" will be managed by a Washington lawyer, who will oversee the distribution of funds to claimants. But Obama personally guaranteed that claims will be paid. "The people of the gulf have my commitment that BP will meet its obligations to them," Obama said. His political goal was to position himself as a champion of the little guy against big oil.
The owners of BP are ordinary people. You might be one yourself. According to The Washington Post, 40 percent of BP's stock is held in the United States. In Great Britain, according to the Post, one of every seven pounds -- or 14 percent -- paid in dividends to pension funds is paid by BP.
After the company's executives met with Obama, BP said it would suspend its dividend payments for three quarters -- meaning $7.8 billion would not be paid to pension funds, to retirees who invested in BP and to other shareholders.
The Fifth Amendment of our Constitution says: "No person shall be ... deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation."
In this case, BP's executives caved to Obama, preferring to cut their own political and public-relations losses rather than insist that due process of law be observed through the normal channels of American justice as they moved forward with their stated commitment to make restitution to those injured by the oil spill. But this sets a bad precedent for people who value property rights.
America will soon face a great financial crisis. The unprecedented federal deficits coming as a result of the welfare state that liberals have build up over the past 75 years will require the government to either dramatically diminish the entitlement benefits they have promised or dramatically increase government revenues. When that crisis comes, liberal politicians just might see the modest wealth accumulated by those middle-class Americans who actually saved -- by investing in such things as, say, BP stock -- as an attractive source of revenue to keep the dole flowing.
A president who has established a pattern of using executive power to unilaterally bully and intimidate corporate executives into surrendering their stockholders' property will be a happy precedent for them -- and a dangerous one for private property rights and the rule of law.
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