If we survive the oil spill, we have to find a way to make the free enterprise system work with balanced and effective regulation, or something, at some point, is going to kill us all.
In point of fact, the pressure of the oil coming out of the well is so great that it could cause the entire reservoir of oil to burst open, which will destroy a vast area of ocean. How large depends on how much oil is released, but it’s not inconceivable that the whole of the Caribbean and much of the Atlantic could become involved.
Additionally, there will be such substantial releases of methane and other gasses that there will be a direct threat to continental life due to non-survivable levels of pollution.
Of course, we must hope and trust that this extreme outcome will not happen.
The problem is that we have allowed an irresponsible company, through lack of proper regulation and proper application of existing regulations, to ignore safety in favor of saving small amounts of money by drilling cheaper wells and ignoring not only the regulations, but common sense.
However, this is far from the only company that has been acting in an irresponsible manner in recent years. Wall Street and the banking industry have caused incredible, worldwide catastrophes, the worst financial collapse in history, which may be essentially unrecoverable except on a generational basis.
This has all happened for the same reason: the abandonment not only of regulation but enforcement on the part of government.
In 2006, BP was fined nearly 700 million dollars for the Prudhoe Bay oil spill, which was caused by extreme cost cutting measures that led to corroded pipe and failed equipment. Gross negligence was involved. But they did not pay anything like that much of a fine. In fact, they paid 20 million dollars, thanks to the refusal of both President George W. Bush and Alaska Governor Sarah Palin to demand that the fines be paid.
This sent a very clear message to BP and to the oil industry in general: safety doesn’t matter, so we can get away with anything.
Similarly, the abandonment of a whole vast regulatory structure that started with Ronald Reagan and continued unabated through every presidency since, until to the current one, enabled banking to become a gigantic form of organized theft and wholesale fraud.
And now millions of people are out of work as a direct result of this institutionalized fraud and the massive economic collapse that resulted, and the government has had to take on massive debt to keep the economy afloat–an action that may or may not work, but which will certainly lead to years of sacrifice on the part of ordinary citizens as that debt is serviced with our tax dollars.
It all started with a single phrase: “Government is not the solution. Government is the problem.”
I remember how I felt when I first heard Ronald Reagan say it. The idea of abandoning the regulatory structure that had been constructed since the Great Depression was very appealing, but I feared that it would lead us back into the boom or bust economy that we had lived with from the founding of the country until World War II.
It has turned out to be even worse than I imagined possible, even in my worst nightmares. When I heard Joe Barton apologizing to BP during the recent congressional hearings, I thought to myself that some people literally never learn.
His apology was worded in a very interesting way: as if BP was not a large institution at all, but an individual person being essentially ‘shaken down’ by a bullying government. This ancient concept of the corporation as a person is deeply embedded into western liberal democracy. It is the reason that the Supreme Court recently made the essentially traitorous decision that any corporation in the world is free to contribute to American political campaigns.
The problem is that corporations are not people. They are public institutions with institutional rights and responsibilities.
It is clear to me now, as it was not during the Reagan era, or, for that matter, the Clinton era, that we cannot succeed as a society without a government that is strong enough to provide an effective regulatory background to corporate enterprise.
This is because the responsibility of companies is to make money, and to do that by whatever means are available. Without regulation, it is now crystal clear that irresponsible and even fraudulent means will be used if they can be used.
Six months ago, I was uneasy about the Tea Party Movement because I saw the mayhem that a lack of regulation on Wall Street caused, and I saw the movement as being too simplistic to do anything more than simply walk away from the mess.
Now I am terrified of the Tea Party Movement because it is clearly mistaken, but I fear that it is liable to end up with the deciding few votes in the Senate and possibly also the House.
I have often in this journal declared myself to be a political moderate, but I find myself now in the strange position of being a radical: I believe that we should have a government that is strong enough to regulate the corporate world for the common good. I do not think that this should be done in such a way that it destroys incentive or squelches free enterprise, but it is clear that the danger of continuing with inadequate regulation is too great.
We cannot take another risk like BP, not and expect to survive much longer as a species. As matters stand, if the spill becomes uncontrollable, at the least the economies of North America, the Caribbean and probably Europe will be destroyed.
Even if the well is capped, there is going to be tremendous environmental damage and economic disruption, far beyond the ability of any company to ever repair. To save a few dollars here and there, the people in charge of BP were willing to risk the very life of their institution. They were that short sighted. But so were the heads of AIG, Lehman Brothers, Citibank and all the other failed institutions that haunt our world today, some ruined, some recovering, none, I would guess, having learned much of anything by the experience.
But we shouldn’t expect them to. In an economy that is geared toward rewarding perpetual growth, corners are going to be cut, regulations ignored, and safety compromised.
There has to be a powerful and intrusive force pushing against the power of big companies, and that is well-run, effective government.
Disempowering the government at a time like this would be insane. Instead, what we need to do is to find a way to create a balanced and intelligent regulatory environment without destroying free enterprise.
There are enough intelligent people in congress now to do this, but if we elect extremists in the fall, there won’t be. What will happen then is a frozen government at a time when we urgently need one that works.
The dark clouds are no longer building on the horizon. They’re here.
NOTE: This Journal entry, previously published on our old site, will have any links removed.