Suppose you were caught shoplifting an item worth about $200. Now imagine that the sole penalty for your offense was a fine of $.05. In addition to breathing a sigh of relief, you might give your theft another try. After all, the penalty was so insignificance that trying your crime again offers a big payoff with little risk. This seems to be the position in which BP now finds itself.

Worst case estimates are that BP's fine for the worst oil spill in U.S. history would top out around $21 billion. This sounds like a lot of money until one remembers that BP's annual earnings have been around $20 billion. In this context, $21 billion is barely a slap on the wrist, especially if we consider that they expect to take a tax write-off of $10 billion.

Not only does this punishment not appear to fit the crime, but it is difficult to imagine how it could have much of a deterrent effect. BP has an extremely profitable model of doing business and a reputation for cutting corners when it comes to safety. Why would they possibly change what has been so successful?

H/T to Liberaland

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