CNBC's Cramer and Burnett: Could BP and Obama Have Handled Spill Better?
Reports are surfacing that BP is finally considering a suspension of its shareholder's dividend, but what could have been done differently to avert the public relations nightmare BP is facing? Two CNBC hosts had some ideas about that, and about what could have happened if BP chose not to play ball.
Jim Cramer and Erin Burnett shared their thoughts on the "Stop Trading" segment of "Street Signs" June 11. According to the "Mad Money" host, Obama could have set a foul precedent for multi-national businesses if BP (NYSE:BP) didn't agree to make some concessions on how it is handling its day-to-day operations in the wake of this ecological crisis.
"I think that this is a, a stock that represents great value but you're dealing with the government," Cramer said. "I saw that Nancy Pelosi, she's the second most powerful person in our country, saying that they shouldn't be paying a dividend. I mean, this is one of those situations where I know, the president's approval ratings are down and what you got to do is you got to go after BP if you're the president. I'm not saying I would do it but I'm saying if I were the president of the United States, BP is public enemy number one and you're not even going to listen to what the British say. You just gotta say, ‘Guys, here's the deal, we're not, we're not going to have any dividends here. And just you know, take it or leave it, partner, because this is a company that needs U.S. ball play."
And as for other cards the Obama administration could play? There were several since it's politically ripe for the legislative and executive branches to act in an extraordinary manner.
"Hey listen, the president could take away Prudhoe Bay," Cramer continued. "There's a Fifth Amendment against the taking of property in this country, as opposed to like say the old Soviet Union. But you know what, I got to tell you, when you got an angry president and angry Congress, nobody's safe. And Mark Twain said that a few years ago."
And Burnett wondered if both parties involved, the federal government and BP, might have come out way ahead had this matter been handled behind the scenes.
"You know, yeah, I just wonder Jim, you know if you think about it whether the administration in hindsight could have done it differently," Burnett said. "You know, instead of having the first thing you do - go out and say they should cut the dividend publicly, making them sort of look evil, maybe privately you have that conversation. And maybe they did and BP was just so resistant, that's why they went public. So maybe I'm jumping to a conclusion, but if they didn't, it would seem maybe having a little bit more - let's just say [better] relationship between the government and BP. At least while we get through this. It might have been a better thing."
But one thing Cramer pointed out that not a lot of other outlets have seemed to pick up on - the amount of oil gushing from this spill in such a short amount of time indicates this was an incredibly huge find from a purely oil exploration perspective.
"What you have on right now, you see the flow, and I thought it was 1,500," Cramer said. "I remember when I was on the ‘Today' show and they were talking about it being 1,500 barrels, 2,000 barrels. Now look, here's what my oil friends say. My oil friends are very tied in. This is the greatest well in the world right now. It is literally pumping out more oil than anyone has ever seen. It has not let up one bit. My friends who are oil men are saying the same thing over and over - "This is the greatest discovery in this planet and what's really going on is that they can't get the pressure down. They're just stalling hoping the pressure will come down and it doesn't stop. It's the greatest find of all time."