BP Oil Spill and Limits on their Liability

http://online.wsj.com/article/SB10001424052748704198004575310571698602094.html?mod=WSJ_hps_LEADNewsCollection

BP has continually said they are going to do what they need to do to right the mammoth oil spill in the Gulf. OK, that is great - but limits on your liability? - I don't think so. One of the critical aspects to a well functioning market is accountability. If you are going to risk cutting corners to cut costs in your operations, you better be damn sure you know what you're doing. If you make a mistake, you should bear 100% of the costs and related consequences.

If a person decides that it is easier to go drive home drunk instead of paying for a cab, sure they may get away with it sometimes and save money in the short term, but if the worst scenario occurs, they are 100% liable. As a corporation that had cut corners with their safety protocols, BP must be 100% liable for everything and anything arising from their mistake.

This rule would be taken into account by smart managers and companies will ramp up their safety procedures without much prodding from the government. I'm not suggesting that there should not be regulations in the industry, I am suggesting that holding a company completely responsible is the best long term solution for the world.

What if BP goes bankrupt? - Well, too bad for BP. They messed up and their mistake has costs billions to many people who did not contribute at all to BP's poor judgement. The stock and bond holders? - sorry, this is what capitalism is all about. You stand to make money and you stand to lose money and in the long term, those who are vigilant about where they invest their money will be most successful. Of course, the government's role is to ensure that all important information is accurate and accessible - but it is the market's role to determine who gets capital and who does not. And in this case, BP, like a drunk driver who drove into a building and destroyed it, you need to be held fully liable.