(Two updates added below.)
I'm sitting here at my desk watching the oil droids hack away at the blowout preventer in preparation for the "cap" portion of the "cut and cap" procedure, which, contrary to what I'm hearing on cable news, is intended to do something other than stopping the flow of oil into the Gulf of Mexico. In fact, this latest solution isn't a solution for stopping the flow of oil at all. The oil will continue to gush from the well, only now BP will be able to more effectively harvest some of the oil -- a more reliable version of what they were doing with the riser insertion tube for the better part of last month.
Good for them. So they can resume drinking their milkshake between now and August when, we hope, the relief well will be completed. At which time, corporate milkshake drinking will carry on via more conventional methods.
And why not? It's the free market after all. As I watch these robots slice the riser from the blowout preventer and read the news about lakes of oil moving towards the coasts of Florida, I'm wondering who to blame for this. The list is long, but, in part, I blame anyone who bought into the lines: "government is the problem" and "the era of big government is over." It's been systematic deregulation and the elevation of free market libertarian laissez-faire capitalism that have wrought this damage and allowed potentially destructive corporations to write their own rules and do as they please.
Does anyone seriously believe that BP has suddenly become a philanthropic venture interested in doing whatever it takes -- sparing no expense -- to make the Gulf region whole again? It will do the absolute minimum necessary to weasel its way through this crisis. Not a red cent more.
Last week, while the "top kill" procedure was failing, BP continued its effort to fight regulations in Canada mandating relief wells for every offshore rig. Simultaneously, Rayola Dougher, a lobbyist with the American Petroleum Institute laughed off the notion of requiring relief wells here in America.
Dougher said on MSNBC, "That would be -- that would really make it unviable [sic]. I couldn't even imagine such a suggestion." A relief well costs around $100 million. That would cut into revenues and so -- nope.
This is one of many reasons why Robert Reich's plan makes sense at this point. Temporary receivership. Despite the political peril involved in such an endeavor, the government should take over BP, its manpower and assets, and eliminate the corporate revenue motive from the capping and cleanup process. BP has proved itself incapable of tackling this job with the best interests of Gulf coast livelihoods and the marine environment in mind, and so they ought to lose their privileges to operate in the Gulf of Mexico for a while.
After all, the nature of any corporation is to mitigate losses and increase revenues. Keep the shareholders as happy as possible, spend the least amount of money necessary, hire the best lawyers to avoid paying punitive fines and get back to drilling and selling oil for profit. This is what corporations do.
So it comes as no surprise that the only achievements since the rig explosion have involved releasing a syllabus of weasely remarks designed to ameliorate any damage to the BP brand, and literally harvesting oil from the riser.
At the peak of the riser insertion tube's efficacy, BP was successfully harvesting around 200,000 gallons of oil per day with a total capacity to process around 15,000 barrels per day. That's a lot of milkshake drinking in the middle of an unprecedented oil spill. And so BP will probably do what they always do. Refine and sell those barrels for a profit. And once the relief wells are completed, they'll do the same.
Regardless of Justice Department investigations or lawsuits or cleanup costs, BP will emerge from this disaster and continue to profit from the drilling and selling of petroleum, including the oil from Macondo prospect.
Exxon, as precedent, is now Exxon-Mobil and is doing just fine. It endlessly appealed the fines imposed as the result of Valdez oil spill and whittled the down the cost of the disaster to corporate pocket change, and whatever money they paid out was covered by insurance policies.
Read that again. Exxon almost entirely escaped financial damages from the Valdez. In fact, it spent most of the last 21 years appealing its financial liability related to the Prince William Sound disaster. Why? Mitigating losses, and increasing revenues. There's no reason or evidence to believe that BP will be any different, lest anyone think they're in this to take full responsibility and do whatever it takes to repair the Gulf waters and its coastline.
Predictably, BP has lied or misrepresented the truth all along the way.
Are we to believe that this is a corporation acting responsibly and with the best interests of the Gulf in mind? Not a chance in hell. This is a spoiled, petulant and entitled corporation operating in a largely deregulated free market atmosphere, and BP is so arrogant that it expects this atmosphere to carry it through this thing.
Simultaneously, most of the small businesses along the Gulf coast, which have nothing to do with the oil industry, have been crushed. Someone explain to those people how they shouldn't sweat it -- their businesses are just small sacrifices in the grander scheme of unregulated capitalism on the march. Clear the way, Mr. Gump with your shrimp boat, the free market has to drill, baby, drill. Didn't you hear? The "era of big government" ended back in the 1990s. You obviously didn't get the message, so, you know, buh-bye.
Forty years of corporate deregulation by conservative Republican Ayn Rand fetishists (and their Democratic enablers) have successfully poisoned the Gulf of Mexico. Ironically, the most liberal pro-regulation president in this same span of time -- the president who has announced on several occasions a significant break from Reagan's "government is the problem" mantra -- appears to be the only politician being blamed for this so far. One of many reasons why I fear it'll be another 40 years before we roll back this free market monster.
And, as I watch this video, the solution occurs to me: they should just plug the oil leak with every single existing copy of Atlas Shrugged.
UPDATE: I can't believe I have to do this, but for the record, I'm not opposed to capitalism. I'm opposed to deregulated, laissez-faire, irresponsible capitalism. The mini-McCarthys in the comments are clearly incapable of, you know, reading.
UPDATE 2: Robert Reich reports:
A petroleum engineer who's worked in the oil industry tells me BP is doing the minimum to clean up the oil and everything it can to protect its bottom line. According to the engineer, here's what BP should be doing right now to mitigate the damage.
I rest my case.
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That's not what a President does. He makes the hard call, and takes responsibility. Removing BP from making the decisions, or better yet receivership, wouldn't fulfill Obama's requirement of dodging any voter backlash.
So now he's hemorrhaging his voter block badly...if there's another choice, he's looking at really making history. Apparently he's going to use 'fear' politics to get us back into the fold...but from what I see, it's not working now, and people are getting angrier.
I do find some humor in Republicans who hope to pick up the presidency from angry Obama defectors. With 22% of the US population registered Republican, and losing numbers consistently, that's like a snowball in h*ll.
Luckily, there seem to be some good progressives out there who may be willing to help...
1. They'd rather be making money harvesting oil from the leak then spending it cleaning up.
2. You don't need wildlife, a clean environment, or a lively tourism industry to do offshore drilling. It might as well stay messed up because chances are they'll do it again not paying attention to safety policies, so why fix it now?
HELLO Bob Cesca. Hate to break it to you pal but Obama told Thad Allen to protect BP's assets and help BP with whatever else BP needs. BP couldn't do all this self-interest shit in the Gulf unless Obama wanted it that way. 50 days, nothing done. Please try and get a clue Bob. This isn't Bush in office, its OBAMA at the helm and Obama is serving the better interest of BP with the sole INTENT to do so.
source please
And the citizens of America are just not savvy enough to know that that isn't the case, and that Obama would actually be acting in the best interests of all Americans.
Too many Americans remain brainwashed that government is the problem to everything. Until that can change, we will remain controlled by corporations. Only the power of the American people en masse will be able to change the direction this country has slipped into. If this isn't the spark (and it appears not to be), then we certainly have a long long time to wait before something happens!!!
Government intervention inhibits the free market's ability to self-correct:
1) Government limits business owner liability by allowing them to form corporations. It's very difficult to "pierce the corporate veil" and hold owners fully responsible for their actions because of legal protection.
2) Government limits oil company liability to a paltry $75 million. Simply raising liability would be stupid - there should be NO liability limit.
3) Government gives your tax money to oil companies via energy subsidies.
4) Government gives your tax money to oil companies via bail-outs and sharing clean-up costs.
5) Government gives tax breaks to oil companies (another form of subsidy). Therefore, you pay more taxes to make up for the revenue shortfall. Of course, those taxes help pay the other subsidies!
6) Government heavily regulates the entire energy sector, creating high barriers to entry for new businesses with alternative technologies.
These are but a few of the ways government meddling and political favoritism distort market forces.
When businesses don't pay the full costs of production (via subsidies and tax breaks) or the full costs of their mistakes (via legal protection and bail-outs), they are artificially kept from failing in the market.
Corporations would not exist in truly free markets. Your 'solution' of even more government meddling would just make the problem worse and raise the likelyhood of this becoming more common in the future.
But the last two sentences are the strangest of all. I agree that businesses should pay the full costs of production, but without government regulation they absolutely will not. This is Econ 101 stuff -- as a business gets bigger, and gains monopoly power, it does everything it can to increase barriers to entry, slough off the costs to others, and gain government welfare through kickbacks. True costs are not born by any corporation. Protection for society at large from the abuses of corporations can only come from society at large, and that can only come from government regulation.
And "Corporations would not exist in truly free markets." Are you serious? Then, since you seem to be a free marketeer, you are in favor of aboloshing statutes that allow corporations to exist? Really? I'm pretty radical, but I'm not sure even I could support that.
This would permieate the company and be an incentative for the company directors to appoint executives that would emphasize the prevention of deaths, injuries, and/or damages caused by the company. A CEO stating that he did not know anything about the company operations should no longer be a "get out of jail free" card as it is now.
One person cannot know everything about the company, but this legislation would be an incentive for the directora to appoint only qualified people that will emphasize safety in order to prevent disasters, and prevent jail time for the responsible officers and directors.
The TV interviews with previous BP CEO John Browne, and the current BP CEO Tony Hayward reveals to me their ivory tower attitude of disconnect from the deaths, injuries, and/or damages caused by their policies that influenced the BPcompany drilling operations. If they had been criminally responsible for the company policies that caused and/or contribuited to the deaths, injuries, and/or damages on that offshore drilling rig, then they might not have encouraged the unsafe drilling procedures that they apparently encouraged with their policies.
Think about the people who have died waiting for a drug to pass FDA muster. Think about the people who have suffered because of poorly designed roads. At least let them be sued for malpractice or financial losses.
In practice this does not work because people usually buy any product which is good and serves its purpose as long as the price is reasonable (the people who shop at Walmart are the very people who will likely to lose their jobs because of Walmart's moving jobs overseas).
So BP will continue to make sell products and make money and keep destroying more oceans.
After all oceans is destroyed, that's when the free market really kicks in. Since most people no longer have jobs, there is no one to buy BP products, so BP finally goes out of business, but the oceans are also all gone. Everyone lives happily ever after.
Drill, baby, drill!
Seriously, I don't care if you agree with laissez-faire capitalism or not, but at least do your homework before pretending to have a valid counter-argument against the system.
"Free market" or "laissez-faire" capitalim is a myth -- this concept derives from the theory of perfect competition. But this requires certain assumptions, including free entry and exit, perfect information, and an infinite numbers of buyers and sellers, impossible conditions in the real world. Economies of scale often dictate only a few producers, we protect the public through regulation, as with utilities. While many believe (as with religion) in "free-market" capitalism, what large corporations want is just the opposite -- monopoly capitalism, but with freedom for the monopolists to operate with impunity. Under "free-market" capitalism, long term profits would be zero. The fact that the oil industry is obscenely profitable way beyond any historical norm should illustrate how "free" the market is not, and the lack of freedom I am referring is not due to government regulation.
Dave is taking this situation to an extreme. But this extreme is, in my opinion, far more likely than major corporations operating in the best interests of the world's inhabitants.
The public will forget again!
Do you know the previous name of this organization?
So, in conclusion, capitalism is stupid and communism rocks. Go USSR!!!! Even though I believe government does have a placein this, technically free market will deal with this anyways. Firstly, the revenue that will pay for this catastrophy will come from BP's "evil" profits. Secondly, If you think that people won't boycott BP if they don't pull a PR miracle out of their backside, you are sorely mistaken. Third, if you're really so jealous of big oil's 3.4% profit margin, go buy stock. I hear you can get quite a deal on BP these days.
I'm pretty sure the Minerals Management Service (MMS), a department of the U.S. Department of the Interior is supposed to regulate and inspect oil rigs for safety issues. This rig had several problems that had not been addressed prior to the multiple failures which lead to it's destruction. My understanding is that in the last 2 years, BP has had substantially more violations than other oil companies.
Also, consider that the MMS takes in over $10 billion annually from the oil companies on leases in the Gulf of Mexico.
At least the Obama administration fired their political appointed (lawyer) MMA boss who knew very little about offshore drilling, and did not even monitor the activities of her bureaucrat employees who were supposed to be enforcing the BP offshore drilling instead of watching internet porn.
Why did the Obama administration appoint this person to that job in the beginning? Are any more unqualified people serving in appointed jobs that should be fired? The Republicans are equally guilty of appointing unqualified people to administrate federal government functions. Maybe all positions below Cabinet level should not be political appointments.
I think that we are getting the best government, administration, regulation enforcement, and legislation that the lobbyist's money (food, wine, women, sex, song, vacations, hunting trips, hot tub parties, and cash) can buy!
It must be hard for our government representatives, their aides, political appointees, and the federal bureaucrats to resist the constant pressure to enjoy the free sexual services of the Corps of Washington prostitutes and other free perks offered by the Corps of Washington Lobbyists in return for their votes, actions, and/or lack of action!
I do not understand why people don't get this. We don't (and shouldn't) allow behaviors like extortion or coercion by force for commercial profit. This requires regulation.
Ayn Rand's theses were based in the idea that when honest people were allowed leeway with their commercial pursuits, everyone would benefit, but when parasitic behavior was enforced, the incentive to create wealth was removed.
But her premises were based on the idea that people and corporations, when left to their own devices, would essentially pick the most beneficial path, which she incorrectly identified as coinciding with the most self-serving. The previous poster summed this up with, "The goal is to maximize the freedom of each individual to act as he wants, without harming anyone else."
BP is currently behaving more like James Taggart than Hank Reardon.
The only laws and regulations that are justifiable under a system of laissez-faire capitalism are those that protect individual rights. The goal is to maximize the freedom of each individual to act as he wants, without harming anyone else.
- http://www.objectivistcenter.org/cth--1237-Pollution_and_Environmental_Regulation.aspx
Pollution of the water or air effects the freedom of each individual so it falls under their exception to regulation. Libertarians originally (Ayn Rand wasn't a Libertarian or a Republican by the way) believed in pure Laissez-faire capitalism. Objectivists are different then Libertarians because they believe in Laissez-faire capitalism _AND_ government. I think a large number of Libertarians these days are actually objectivists or other people that don't fall in the Republican niche as there is no Objectivist political party because full deregulation seems to be limited to the wackos of the Libertarian party (every political party has them).