What Catch-22 tells us about the BP spill
If it's good for the syndicate, it's good for you, say the bankers.
As oil continues to gush into the Gulf of Mexico, another victim has made an appearance beyond dead fish and poisoned pelicans: British pensioners. According to yesterday's Daily Telegraph, the spill - and the American government's reaction to it - is hurting them terribly.
"BP's position at the top of the London Stock Exchange and its previous reliability have made it a bedrock of almost every pension fund in the country, meaning its value is crucial to millions of workers," the paper reported. The story continues with these chilling quotes:
"We need to ensure that BP is not unfairly treated - it is not some bloodless corporation," said one of Britain's top fund managers. "Hit BP and a lot of people get hit. UK pension money becomes a donation to the US government and the lawyers at the expense of Mrs Jones and other pension funds."
Mark Dampier of the financial services company Hargreaves Lansdown said: "[Mr Obama] is playing to the gallery but is not bringing a solution any closer. Obama has his boot on the throat of British pensioners. There is no point in bashing BP all the time, it's not helpful. It is a terrible situation, but having the American president on your back is not going to get it all cleared up any quicker."
Neil Duncan-Jordan, of the National Pensioners Convention, said: "Most ordinary people would not have thought that BP would have an impact on their retirement but if BP's share price goes down then their pension pot goes down.
"Most of those pension funds are invested in the default option, which is stocks and shares, and so if BP goes down the pan then their pension pot goes down the pan."
Can a pot go down a pan? That pressing question aside, the outraged tone taken by the fund managers here is extremely familiar. It's the voice of Milo Minderbinder, a character in Joseph Heller's Catch-22. Milo runs a syndicate, which comprises a number of generally crazy money-making schemes, and in which "everyone has a share". An elegant piece of circular logic allows the syndicate to get away with almost anything:
"Milo, how do you do it?" Yossarian inquired with laughing amazement and admiration. "You fill out a flight plane for one place and then you go to another. Don't the people in the control towers ever raise hell?"
"They all belong to the syndicate." Milo said. "And they know that what's good for the syndicate is good for the country, because that's what makes Sammy run. The men in the control towers have a share, too, and that's why they always have to do whatever they can to help the syndicate."
"Do I have a share?"
"Everybody has a share."
Everybody has a share, so what's good for the syndicate is good for everybody, what's good for the syndicate is good for the country, and what's good for Milo is good for the syndicate. Why, anything else is simply unpatriotic. Even the Germans have a share, so eventually the syndicate is being paid by the Americans to attack a bridge while being paid by the Germans to defend it. Milo starts flying German planes, and is horrified when an effort is made by the American authorities to confiscate those planes.
"Is this Russia?" Milo assailed them incredulously at the top of his voice. "Confiscate?" he shrieked, as though he could not believe his own ears. "Since when is it the policy of the American government to confiscate the private property of its citizens? Shame on you! Shame on all of you for even thinking such a horrible thought!"
"But Milo," Major Danby interrupted timidly, "we're at war with Germany, and those are German planes."
"They are no such thing!" Milo retorted furiously. "Those planes belong to the syndicate, and everybody has a share. Confiscate? How can you possibly confiscate your own private property? Confiscate, indeed! I've never heard anything so depraved in my whole life."
His tone of voice is familiar, isn't it? It's the same aggrieved wail of the fund managers, the banks, the hedge funds. Eventually, the syndicate bombs its own airbase, and Milo has gone too far. He is made to reimburse the government.
But the syndicate has been making unearthly profits, and everyone benefits, and the government is a democracy, and therefore made up of people who have already benefited, so really the government doesn't need to be reimbursed and the benefit has already gone to the people. Even when it's fouling its own nest and screwing everything in sight, the syndicate is good for everybody and good for the country. Similar logic is being used by the defenders of BP.
William Wiles is Senior Editor at Icon magazine. A longer version of his post appears on his blog, Spillway.