Morning Must Reads — How small of you

Can BP stay afloat?

In a weird meeting with President Obama “popping in and out” BP agreed to set up a $20 billion fund for damages to be administered by President Obama’s bailout pay czar, eliminated its stock dividend (to the dismay of many U.K. pensioners), and agreed to pay $100 million to pay the salaries of competitors’ employees idled by an Obama ban on drilling.

Both BP and Obama hoped to get a lift from the meeting, which the president wanted to show that he was tough and involved (my column on Obama’s Bobby Jndal moment is here) and BP wanted to show it was being responsive.

Those hopes came to little good.

In a Teutonic deadpan, BP chairman Carl-Henric Svanberg (the former CEO of Ericsson) came to the sticks outside the West Wing and said: “We care about the small people. I hear comments sometimes that large oil companies, or greedy companies, don’t care. But that is not case in BP, we care about the small people.”

Ah, the famous Swedish warmth.

The question here and in Britain is whether BP can survive.

Some of that will depend on how long the Obama administration wants to treat the company like a cow to milk and not a steer to slaughter.

Writer Jason Schwartz explains just how hard the president could come down on BP if Eric Holder can find a way to bring a criminal prosecution. Aside from losing billions in government contracts, the costs could overwhelm BP’s $16.6 billion annual profits.

“Predictions by analysts of the overall cost of the spill to BP, when criminal penalties are included, have been rising. On Wednesday, Pavel Molchanov, an analyst at Raymond James, estimated the total legal cost, including criminal fines, at $62.9 billion, which would dwarf the $20 billion escrow account to be used to pay claims of economic loss.

The agreement to create the fund would not pre-empt people from using the courts to resolve disputes with BP over the spill.”

Financial Times — Hayward prepares for wrath of Congress

BP CEO Tony Hayward should dig up that oil rigger’s helmet he was wearing in interviews at the start of the gulf debacle, because the debris is going to be raining down from the bench as he testifies before the House Energy and Commerce Committee’s subcommittee on oversight and investigations.

You can expect Rep. Bart Stupak to take the most shots, but everyone will get in their digs as the hapless Hayward not only leads a company responsible for the worst oil spill in American history but also is guilty of the even graver American sin of being bad at public relations.

Writer Ed Crooks gives us an advance on Hayward’s testimony, in which he will try to be more American in his emoting while still holding the line on culpability. I wonder what John Edwards charges for a consulting session?

“In his prepared statement for Thursday’s hearing, Mr Hayward did not accept BP’s responsbility for the accident, saying ‘none of us yet knows why it happened’.

However, he listed seven potential factors in what was ‘a complex accident, caused by an unprecedented combination of failures,’ many of them controlled or influenced by BP, such as the steel casing inserted into the well to secure it, and the testing of the well to check that it had been sealed…

In his written evidence, Mr Hayward said: ‘A number of companies are involved, including BP, and it is simply too early to understand the cause. There is still extensive work to do.’

He also gave further details of the effort to fight the spill, promising that ‘We will not rest until the well is under control, and we will meet all our obligations to clean up the spill and address its environmental and economic impacts.’”

Wall Street Journal — Slippery Start: U.S. Response to Spill Falters

Powerful reporting from writers Jeffry Ball and Jonathan Weisman who outline the ways in which the federal government bungled the response to the spill. The conclusion is surprising: The feds jumped in with a fast response, but then bogged down as the scope of the incident became apparent. Muscle-bound and tied in red tape, agencies have continued to struggle. But the biggest problem seems to be that just like the oil industry, the government had never contemplated a spill of this size.

The story is the most useful timeline so far on the administration and federal response.

“Two days later, the White House received word that oil was escaping into the Gulf. White House science adviser John Holdren, an environmental scientist, pulled aside two top security officials, White House counterterrorism adviser John Brennan and National Security Council chief of staff Denis McDonough. He pressed them on what secret technology the government had—a submarine, for example—that could help, Mr. McDonough recalls. The answer was none.”

USA Today — Ads are latest weapon to scare off layoffs

You’ve seen the ads from teachers unions seeking a $23 billion cash pump for public school payrolls that feature sad children dressed as bankers wondering where their bailout is. But writer Judy Keen explains that ads by public employee unions facing layoffs have gone beyond being exploitive.

A picture of a child being abducted comes from a police union fighting payroll reductions in Sacramento County. The union also showed residents an ad that shows a burglar breaking in to a home with the line “Do you feel safe?”

“Chairman Roger Dickinson of the Sacramento County Board of Supervisors, says the county’s $180 million budget gap means “literally no operation … is going to be spared reductions.” Although reducing the number of deputies might slow response times, violent crime is down, he says. Budget hearings are this week.”

Washington Post — Pollster Scott Rasmussen’s numbers are firing up Republicans and Democrats

Writer Jason Horowitz does his best to belittle pollster Scott Rasmussen, whose constant surveying is driving liberals crazy this year.

The old knock on Rasmussen, not mentioned in this story, is that his automated push-button polls weren’t as accurate as live-interview calls. That has been proven untrue. People are quite accustomed to dialing their way through automated responses and may prefer the impersonal touch when it comes to sharing opinions.

Now the belief on the Left is that Rasmussen just cooks his numbers – that he is some kind of charlatan who lies in order to create a Republican victory narrative. One of his biggest detractors, Left blogger Markos Moulitsas, tried to create a competing poll narrative of Democratic viability with the firm Research 2000, but had to drop the effort after a rift with his pollsters.

The Post, which has the least trusted of the major media polls, is a strange outlet for this story.

Rasmussen’s better numbers for Republicans are a function of polling likely voters, based on a self-identification, rather than the eligible voter model of most polls. We know from years of experience that the GOP beats eligible voter polls (especially on a national generic congressional ballot) by 3 to 5 points because Republicans are more reliable voters.

Rasmussen isn’t offering deep-digging polls like the NBC/WSJ, but just snapshots of where attitudes are heading.

But Democrats are convinced that opinion is following his polls, not the other way around. That sounds like a heavy bit of rationalizing to me – especially with surveys like the bipartisan survey done for NPR that shows a wipeout wave coming for Democrats this fall.

It would be a shame if other outlets followed the Post in trying to de-legitimize Rasmussen’s always-interesting and often-useful polls because Democrats are trying to block out bad news.

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