The phrase "Too big to fail" entered the modern American lexicon with a terrible vengeance a couple of years ago, after billions of tax dollars were deployed as spit and mortar to hold up failing companies which, if they actually did fail, would have sent the US and the rest of the world spiraling into some kind of mega-ultra-super depression. That's what we were told, anyway, and it may well be true, but that hardly gets rid of the rancid taste the phrase leaves behind when spoken.

The very first sentence on the basic theory of capitalism is that nothing and no one can be too big to fail; the spirit of competition is the bedrock foundation of this particular economic theory, and competition means there will be winners, and there will be losers. There must be, if the formula is to have any integrity or validity, and so "Too big to fail" flies in the face of the whole concept by putting certain companies on an unassailable pedestal. If they lose, we all get crushed, so they can't be allowed to lose.

And yet here we are, surrounded by corporations that are allowed to lie, cheat and steal billions upon billions of dollars while savaging the environment and destroying the lives of millions of people. Surprising? Not if you have a brain in your head. Capitalism, as practiced in the United States and, unfortunately, throughout much of the world is, at bottom, a fraud and a sham. The cementing of "Too big to fail" into our public discourse is proof enough of that. Capitalism without meaningful regulation is a ticking time bomb, and that time bomb has gone off with both a terrible bang and a pathetic whimper.

As I watched the catastrophe of the Deepwater Horizon explosion continue to spread across the Gulf, it never occurred to me that BP might try to qualify for "Too big to fail" status, but as it turns out, we might be hearing that exact claim from them in pretty short order. Most Americans, upon hearing them attempt it, will probably be forced to overcome a desire to sack the first BP gas station they can find, but I have a strong idea that BP is going to trot the line out before too much more time passes.

The reason? Home:

The British government is drawing up contingency plans for a possible collapse of BP. This is amid mounting fears that the oil giant could be broken up or taken over in the wake of the Gulf of Mexico oil disaster. The talks, which are being led by officials at the Department for Business and the Treasury, reflect growing concern within Whitehall about the implications that a corporate failure of BP, formerly Britain's biggest company, would have on British interests domestically and around the world.

BP, whose value has more than halved since the April 20 accident, has liabilities of up to $US70 billion ($84bn), according to estimates by Goldman Sachs. The company employs 10,105 British staff directly and generated tax receipts of pound stg. 5.8bn ($10bn) in 2009. It also owns much of Britain's most critical energy infrastructure, including the Forties Pipeline System that connects more than 50 oil and gas producing fields in the North Sea.

In addition, BP controls vital strategic assets overseas, including the Baku-Tbilisi-Ceyhan pipeline that bypasses Russia and Iran to connect Europe with the rich oil and gas resources of Azerbaijan and the Caspian region. As well as the political ramifications stemming from a collapse of BP, the government is also concerned about the impact on millions of British pensioners for whom the company's dividends have served as an important plank of their retirement income.

Prime Minister David Cameron and Energy Secretary Chris Huhne are set to discuss BP's future with US officials during a trip to Washington on July 20. Speaking in Toronto at the G20 on June 25, Mr Cameron warned that BP faced potential destruction unless US authorities stepped in to prevent its compensation costs escalating out of control.

The Department for Business declined to comment on the contingency plans, which are believed to still be under discussion and have encompassed a range of subjects from pension arrangements to the future of BP's international empire. A person familiar with the talks said: "It is not clear how bad this will get, but the government needs to be prepared for any eventuality."

BP already faces crippling costs from the accident but if the leak cannot be plugged by drilling a relief well, there is a growing threat of a takeover, with ExxonMobil and Royal Dutch Shell touted as the most likely candidates. One insider claimed that one possibility mooted was whether, under extreme circumstances, the government should consider intervening to protect BP, which was a nationalised company until 1987. (emphasis added)

Intervening to protect BP? Try to contain your shock. "Too big to fail," baby. Works every time.

So, let's try to put together a tally of the damages done by our modern version of capitalism and its newest bastard child, BP. A lack of any meaningful regulation allowed the construction and subsequent detonation of the Deepwater Horizon, allowed drilling at a depth we have no concrete way to deal with, and allowed drilling without any contingency plans for what to do if something goes wrong (imagine what kind of hell we'll be in if another one of these rigs decides to spit the bit?). Result: an annihilated ecosystem writ large, drops of oil coming down with the rain, entire livelihoods wiped out, untold millions of wildlife creatures cooked alive, and, oh yeah, a truly despicable media blackout that keeps the truth of what's happening away from the sensitive ears of the American people.

But that's just here. In BP's home country of Britain, the Deepwater disaster not only threatens virtually their entire energy infrastructure, but has put the pensions of millions in peril. Imagine if most Americans had their retirement futures tied up in Enron stock; that's pretty much what the British people are looking at today. So, yeah, expect the poor little rich boys at BP to go hat in hand to the British government before too much more time passes to make their pitch for being "Too big to fail."

It'll probably work, and if it does, be sure to thank your neighborhood capitalist.

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