Thursday, May 13, 2010

Mind The Oil Spill, But Don't Take Your Eye Off The Market Fundamentalists



This is something I feel strongly about. The 1990's odd fundamentalist revival was all about the marketplace as somehow morally superior and equipped with perfect adjustment mechanisms for everything. No need to worry about outsourcing or globalization or regulation! We all knew who buttered our bread and politicians spent their days licking that butter. (Where do these bad metaphors come from?)

And look what we have now. The Chinese have underbid most everyone else, and one way that was managed was through quality adulteration. Hence the cadmium in the jewelry for little girls and the pet food which killed. Remember that this is a direct consequence of the Bush era slow killing of all overseeing agencies, safety testing and so on.

The financial industry turned out to be a giant Las Vegas, run by people who now say they didn't know what they were doing because the alternative is to admit that they are crooks.

And then that bay of oil at the bottom of the U.S.. That, too, turns out to have much to do with the marketplace. Why was BP so much more profitable than its competitors? Because it applied outsourcing without oversight:

In the days after an oil well spun out of control in the Gulf of Mexico, BP engineers tried to activate a huge piece of underwater safety equipment but failed because the device had been so altered that diagrams BP got from the equipment's owner didn't match the supposedly failsafe device's configuration, congressional investigators said Wednesday.

The oil well also failed at least one critical pressure test on the day that gas surged up the drill pipe and set the Deepwater Horizon drilling rig aflame, killing 11 and setting off a spill that has spewed 210,000 gallons of crude into the gulf every day for three weeks, according to BP documents provided to congressional investigators.

Don't forget that this, too, is about free market fundamentalism:

Listening to an interview on National Public Radio the other day, I was struck by a comment made by one of the experts discussing the BP oil disaster in the Gulf. The person said that the reason Exxon had a better record on disasters than BP was it had its own engineers whose responsibility it was to second guess their sub-contractors. BP, he said, didn't do this.

And why didn't BP do it? Because it saved money by not having in-house engineers doing the oversight!

We must NOT forget those underlying connections. We are in these messes to a large part because the free market ideologists won. Yet I don't see the general public getting angry at the firms the way the teabaggers are angry at the government, and I don't see enough discussion about the need to reign in the forces of short-sighted greed. Those are the forces that we have been worshipping recently.

There is something else that the three disaster stories I told share: The costs fall first and hardest on the innocent. That those costs don't fall first and hardest on the firms which cause them is the very reason for our problems. We know how to make the firms carry those costs but we are not doing it (yes, BP should pay for every single penny).

And that means more disasters in the future.