BP: Too big to fail?

For a fair account of how BP is doing in the public relations department, consult the pages of the Times of London from the day after the congressional hearings.

“BP boss sits on his hands as anger explodes,” read one headline.

“From Mr. Bean to Mr. Has-been for BP's Tony Hayward,” punned another, alluding to Hayward's reputed resemblance to Rowan Atkinson's hilariously goofy character. Read with your best British accent for the full effect.

“When it was not irritated, [Hayward's] tone was that of a weary registrar in a South London crematorium,” observed the Times's Giles Whittell in a much-cited piece. “As to the meagre substance of his answers, he appeared to have drunk deeply of the wisdom of his lawyers.”

Maybe he's exhausted and just wants his life back, as he whined a couple of weeks ago.

Whatever the reason, it's clear that Hayward is clueless when it comes to handling the media, at least in a crisis.

BP's board has apparently come to the same conclusion, since, hours after the hearings, the unartful dodger Hayward was shifted out of the limelight. This weekend he's reportedly getting at least some of his life back by watching his prize yacht, “Bob,” race in the oil-free waters off the Isle of Wight.

(Digression: Bob?)

If BP has been singularly out of step in its response to the crisis, part of it is due to yet another manifestation of the Too-Big-To-Fail syndrome, according to the Times's rival paper, the Daily Telegraph.

Until losing nearly 50 percent of its share in recent weeks, BP was the largest corporation in Britain. As such, it could be forgiven for seeing itself as too big to fail. After all, one-sixth of British pension payouts are said to depend on BP's dividends.

Be that as it may, from the U.S. perspective BP is just one player among many in the energy industry. And, as the Telegraph's analysis points out, despite our pro-business culture, the U.S. is not averse to doling out the equivalent of the death penalty to offending corporations, whatever their size or influence. Enron, WorldCom and Arthur Andersen are just three of many that have been made to walk the plank in recent years.

This sort of forced corporate collapse happens with astounding frequency in the U.S. In fact, many would argue that it's just part of the normal pruning process of a free economy. As the Telegraph observes, “The U.S. economy is so large and dynamic that it matters little if a big company is demonised out of existence; there are always others coming up through the ranks to take its place.”

All this meshes well with our ideas about justice; when a robber baron gets his due, we feel as if our system is working.

“The future of BP matters little to the U.S.; it matters a lot to Britain,” concludes the Telegraph. “BP's mistake has been to approach this catastrophe from this peculiarly British standpoint. The assumption that it is indispensable is proving sadly deluded.

It's certain the U.S. government will take strong action against BP. The corporation has enormous resources and can probably handle punitive fines even on a mammoth scale. If the punishment goes beyond that — revoking operating licenses and drilling rights off our shores and in Alaska, for example — then the worst fears of BP's shareholders could be realized.

Raising the odds of the death penalty is the shared desire of the president and Congress to show that they’re not cozying up to big corporations after all. Add to that the political boost from appearing to protect the environment.

Hence the anxiety that's fueling what may be the No. 1 debate on U.K. investment websites this weekend: Should you sell your BP shares?