Fmr. Clinton Labor Sec. Reich: It's Time for White House to Take Over BP
If you think government has all the answers, you'll certainly approve of this call.
Former Clinton Secretary of Labor and CNBC contributor Robert Reich has determined it's time for President Barack Obama to seize the reigns of control from BP (NYSE:BP) and put the North American operations of the company into a "temporary receivership." He told host Michelle Caruso-Cabrera on CNBC's June 1 broadcast of "Closing Bell" that the government was the only entity remaining capable of determining if the oil giant was properly utilizing its resources to contain a spill that has been going on since mid-April.
"Well, Michelle, it is temporary," Reich said. "And the government merely takes over the North America operations, the subsidiary, in order to make sure the public is getting the right information, in order to make sure that risks and benefits are being weighed properly - still using the expertise and intelligence of BP. I think, in fact in many ways BP would want some relief and might even appreciate that direct kind of ownership."
Reich originally made the call in a column posted on May 31. However his appearance on CNBC comes on heels of Obama's Attorney General Eric Holder announcing there would be a criminal and civil probe of BP's handling of the disaster. And as Reich explained, legally the government's hands were tied.
"We know that Saturday for example Steven Chu, the secretary of Energy, said to BP that top - that top gunning that you were trying to use is just too dangerous," he continued. "But you see the government right now has no official legal authority to tell BP what to do. And when we hear that this thing is going to go on until August, most Americans don't even know and have no assurance that all of the resources BP could possibly utilize are actually being utilized.
Caruso-Cabrera questioned the ability of the government to handle this crisis, since its ability to regulate hasn't thwarted many other serious calamities. But Reich still maintained the government would know best in this instance.
"Well, Michelle, regulation is imperfect, obviously," Reich said. "It is better than nationalization. It is better than many other things that we have, but in order to have regulation that works, we've got to have regulators who believe in regulation and are genuinely going to enforce it and who don't get too cozy with those interested with being regulated. My concern here is - with sort of regard to this particular disaster, we're beyond the regulatory finger-pointing issue. I mean, we are really at a stage of national emergency. This is like - well the analogy would be Three Mile Island. If you have a nuclear reactor that's melting down you don't leave it up to the private company to continue to monitor and safeguard and sort of oversee. You really do have to have government taking it over."