The current oil spill, like the financial crisis before it, has given ammunition to those who believe that the free market is dangerous and that deregulation leads to crises. President Obama, in his June 15, 2010, address to the nation, specifically blamed the lax oversight of BP’s operations on a “failed philosophy that views all regulation with hostility — a philosophy that says corporations should be allowed to play by their own rules and police themselves.”
This gets to a core debate between Left and Right but overlooks the real nature of the problem. For many on the Right, government is the problem, while many on the Left see government as the solution. (This holds true in many different policy areas, from health care to industrial policy, among others.) But a major part of the problem is not government bias or objectivity, but rather government competence, which is not being addressed by most commentators.
Without a doubt, the ‘anti-government’ ideology that has been trumpeted by many on the Right is flawed. There are many things that government should not do, some of which are promoted by those on the Left. The failure of the Mineral Management Service to oversee the safe operation of the Deepwater Horizon (and other operations presumably) in an appropriate manner certainly highlights the fallacy of the belief that industry can regulate itself.
No doubt, this attitude amongst political appointees in the agency put in place by the Bush Administration played a role in creating this shortcoming, and the recent revelations about cozy relations with industry (including sex and drugs, even better than money!) have been repeatedly cited to confirm this.
But this also reflects an anti-corporate bias on the Left (more in another blog), which implies that anything touched by industry or corporations must be self-serving and bad, while the government is objective and dispassionate and can therefore be trusted. There are some grounds for concern about industry being self-serving, in the sense that everyone is self-serving (that’s why Mother Theresa is such an exception). But that does not mean the government can be relied upon to do a good job.
As evidence, consider by another scandal rocking Washington, this one involving the oversight of Arlington Cemetery.
As the Washington Post put it, “The investigators found that these and other blunders were the result of a “dysfunctional” and chaotic management system at the cemetery, which was poisoned by bitterness among top supervisors and hobbled by antiquated record-keeping.” There were no private interests involved, no corruption, and certainly no oil companies implicated, yet those involved performed abysmally.
Beyond that, a pro-industry bias is not the only factor involved in the negligent oversight. Bear in mind that the agency’s employees were not replaced wholesale by the Bush Administration, and, more tellingly, the Department of Interior has long been plagued by charges of rank incompetence. Although it has largely disappeared from memory now, the Department spent a decade and a half struggling with a lawsuit from Native Americans who felt that their mineral royalties had been badly mismanaged.
And this was not caused by economic ideology, politicians of Left or Right, but apparently was a long-standing problem. The suit was originally filed in 1996, during the Clinton Administration, and by 1999, the federal judge hearing the case blasted the Secretaries of Interior and Treasury, saying “the way the defendants have handled this litigation up to the commencement of the contempt trial is nothing short of a travesty.”
The problem is that, in reacting to the apparent carelessness by BP, many politicians are implying that the government can be trusted to do an adequate job of oversight, if it is merely purged of industry influence.
Sadly, this is not the case, although that is hardly a rationale for not trying. Government must provide public goods, such as environmental protection and the safety of offshore operations, but the government should be given no more of a ‘free pass’ than industry. As Juvenal reportedly said, “Quis custodiet ipsos custodes?” Roughly, “Who will watch the watchers?”
“Trust, but Verify”
Perhaps the best approach is to revert to the Reagan-era philosophy (at least the one he applied to the Soviets) of “Trust, but verify.” The government (and insurance industry) should watch the oil companies, the people should watch the government. Historically, all of these have done less than a stellar job, which is why that most famous of philosophers, Pogo, said, “We have met the enemy and he is us.”