Congressional Democrats Demand BP Suspend Its Dividend, Undermining the Global Free Market Economy and Further Endangering the Environment

The Democrats in Congress today clearly took aim at British Petroleum, demanding that the company suspend its dividend in order to pay for the Gulf cleanup.

To be clear, the Gulf oil spill is a disaster of untold proportions. The damage that has been done to the Ocean is simply beyond comprehension. BP's apparent lack of any sort of contingency planning is simply unfathomable. The company's constant missteps have been extraordinary and it needs to be made to pay for the damage that it has done. The Attorney General should examine whether criminal charges should be brought at the appropriate time.

At the same time, it needs to be recognized that we live in a country were due process is recognized and where we don't operate like a Third World dictatorship seizing assets and directing how a company is to perform its global operations.

There are many retirees in the UK who rely on the BP dividend for their living, either directly through share holding or through pension funds that own the stock. While BP's liability my ultimately impair the dividend, where the legislature proposes preemptive action to require BP to suspend its dividend risks setting off forced selling that will send the company into an immediate death spiral.

Where legislature oversteps its bounds and dictates what dividend policy a company should pursue, it undermine the basic tenets of a free market and a global economy. It undermines the corporate relationship with shareholders and the very stability that investors require to deploy capital.

The scariest part of the entire thing, however, is that we are relying on British Petroleum to stop an ongoing ecological disaster at the same time as our government has decided to tie their hands and dismember them.