Perhaps the most enervating element of the BP-Deepwater Horizon disaster is its eery familiarity -- the sheer, inexorable predictability of it all. There is poetic injustice in its propinquity on the calendar to the Obama administration's decision to expand offshore drilling last month, and to the Supreme Court decision just this year that further did away with any distinction between 'corporate rights' and 'individual rights'.
Equally predictable is the route the story will take, the revelations that will arise, and the conclusions that will be reached. Talk of lax regulatory standards already runs rampant through a wide array of media outlets. Righteous cries of 'I told you so' resound. Surely this disaster was avoidable...it must have been. But from Goldman Sachs to Massey Energy to -- now -- British Petroleum (and, unsurprisingly, possibly Halliburton), how much will things change? Ultimately the recourse is dictated by the laws we already have in place. And constantly these laws and regulatory structures turn out to have been rendered obsolete and toothless by precisely the entities they purport to oversee.
The gulf story will likely be no more about corporate corner-cutting than a broken political system -- the recurring motif of this year. And regrettably, in a nation that incarcerates people by the hundreds of thousands for victimless crimes of self-indulgence it is yet inconceivable that those who wreck global ecological and financial systems could ever suffer anything exceeding the "cost of doing business." When a corporation falls short of regulatory standards it does not do so accidentally or unwittingly. Rather, it is a calculated choice based on risible enforcement efforts and piddling penalties passed by legislators and public officials on the political take.
Massey Energy's Upper Big Branch explosion that left 29 miners dead last month was a teachable tragic moment. As Mine Safety and Health News's Ellen Smith thoroughly documented here at HuffPost and elsewhere, dozens of past violations did nothing to alter the toxic cynicism that prioritizes profit margin before safety and lives. Whether those pointless deaths and the pressure from survivors' families will yield real changes to that reality is yet to be seen. But either way, the likelihood of true justice for this incident seems low. As Smith writes, "Curiously the only individuals who might be held personally liable under the Mine Act for the current disaster are the mine supervisors and foremen. There are no provisions to hold accountable those people who are responsible for safety policies and procedures, or the corporate executives who insisted it was more important to "run coal" than to build ventilation controls, or the board of directors, which is ultimately responsible for the conduct of the corporation."
Despite lofty guarantees from the president, the same may as well be said for the Deepwater Horizon explosion and its so far cataclysmic aftermath. As the New York Times reports, "Under the law that established the reserve, called the Oil Spill Liability Trust Fund, the operators of the offshore rig face no more than $75 million in liability for the damages that might be claimed by individuals, companies or the government, although they are responsible for the cost of containing and cleaning up the spill."
Beyond the costs of actual clean-up, will BP suffer in the long run? Will Americans stage mass boycotts against the company through consumer discrimination? Will it become the industry pariah that politicians ostracize, even if it provides jobs in their states and districts? Don't count on it. With gasoline prices already on the uptick and likely to rise more going into the summer season the lowest price per gallon will sell, no matter who you are. This is why the greed always pays off, and it is why neither producer nor consumer can realistically be expected to fix things. Solutions must come from an intermediary in the form of good governance.
Unfortunately we can't count much on that these days either. It is little wonder that our regulatory structures are so reliably unreliable. And even if there turns out to have been no regulatory failure in the case of BP, the resolution and restitution regime for disasters of this scale is obviously lacking. The fact that OpenSecrets.org -- the Center for Responsive Politics website that closely tracks political contributions and special interest "heavy hitters" -- is suffering site traffic overloads this week is telling. OpenSecrets does indeed label BP a heavy hitter because in the 2008 election cycle it "contributed half a million dollars to federal candidates. About 40 percent of these donations went to Democrats. The top recipient of BP-related donations during the 2008 cycle was President Barack Obama himself, who collected $71,00." It also reports that in 2009 BP spent $16 million on lobbying and that in the first quarter of 2010 it's already expensed $3.53 million for the same purpose, putting it second behind ConocoPhillips for the industry.
Though it's chump change in BP's overall budget, half a million bucks in an election cycle can go an astoundingly long way. In their "Iceberg Theory of Campaign Contributions," [pdf] Marcos Chamon of the IMF and Ethan Kaplan of Stockholm University explain the power of special interest threats (made far more credible by Citizens United) as a part of lobbying and electioneering. It basically goes as follows: We'll give two-thousand bucks to your reelection campaign, but if we're not pleased with your vote, we'll give your challenger ten. Taking into account the leveraging that goes into these threats (spending $2,000 for $12,000 of influence), $500,000 all of a sudden becomes much, much more. Chamon and Kaplan cite the U.S. sugar industry for their example, which in 1998 turned $2.8 million in campaign contributions into over $1,000,000,000 in federal subsidies. And sugar doesn't even compare to "black gold".
Firms like BP, Massey and Goldman Sachs (to name Public Enemies one, two, and three these days) are the definition of a "special interest". There is no political, ideological or religious component to their wants. It's all about the money, and no potential friend on the Hill is precluded. Legislators from both parties enter office with implicit agreements all the time to include this or that subsidy, or to go soft on this or that regulation to hold up their end of the bargain with their electoral benefactors. And when it's all told one is left with bodies of legislation that appear to be (sometimes actually are) written completely for and by the industry itself.
BP will hang its head for now, but when the class action lawsuits come rolling in from the industries destroyed by Deepwater Horizon don't expect to see an overly munificent defendant ready to make amends. And don't expect it to not scapegoat the owner of the rig, Transocean, Ltd. In the end John Galt will always capitalize and Joe Six-Pack will always look for the best bargain. Ignoring rudimentary economic axioms won't change anything.
If corporations may participate in political expression, will they also be subjected to potential political or criminal repercussions that make the cost of doing certain kinds of business too much to even consider? Will "limited liability" continue to apply to unethical and illegal behavior as well as investment? Will stakeholders such as employees, customers and the surrounding environment be kept in mind alongside profits? The compounded frustration with BP, Massey, Goldman and anyone else lurking behind the next crisis will shunt many important questions like these to the forefront of policy discussions. But in the background will always be the money that oils the gears of a perversely incentivizing political system. Until that sees fundamental change, mine ventilation could easily remain inadequate, remote emergency stop valves optional, and casino-style financial products hidden in the shadows.
Related Readings:
Citizens United, the Roberts Court, and the Future of American Electioneering
Obama's State of the Union Falls Short on Correcting Citizens United
American Plutocracy: Corruption Is In the Eyes of the Beholder
Obama's Agenda: Hope, Change, and Lobby-Cencricity
Follow Stuart Whatley on Twitter: www.twitter.com/stuwhat84
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Karl Marx
...and oceans also
First step ought to be to discriminate against all those "serious" candidates who take corporate money. Our rule ought to be, "you take corporate money, I don't vote for you!" Cast your vote for some third party schmuck who has no money and no chance of winning. Until we are willing to do that we will have more of the same. Why expect anything different?
For years the manta in this country is Don't Admit Responsbility. From car accidents to criminal action, few are willing to admit their role and responsiblity in doing damage to others.
Unfortunatley, because our Congress is beholding to BIG BUSINESS what's best for the people who vote them into office is often shunted aside. Only at election time does focus return to the voters, but only minimally.
Seems to me everytime a proposal is put forth to reign in dangerous practices, it's either a violation of rights or positioned to "cost" the taxpayers. And,as it appears we are getting dumber and more compliant by the generation, these false statements often go unchallenged and propaganda is accepted as fact.
We are a very young nation, a teenager in comparison to other countries, and the the road through puberty is never easy. I just hope we survive.
This doesn't seem like much of a contribution to me. Even Goldman Sachs' contribution of just under $1,000,000 to Obama's 2008 campaign (per opensecrets.org) doesn't seem like much compared to what we the people gave Obama for his 2008 campaign.
My understanding is that on the internet the "little people" (which certainly means most of us) gave Obama $600,000,000 for his 2008 campaign. That's over 600 times what GS gave him and well over 8,000 times what BP gave him.
So, my question is, "What do we get out of our contributions, other than to subsidize GS's losses and probably BP's disaster?"
The eery familiarity is the retrospective Einsteins that come out of the woods and make comments like that. Sure, you knew it would happen. You claim everything about business is a disaster waiting to happen and so it requires greater regulation... larger government control. All you have to do is wait for the disaster... doesn't matter how long it takes... all the past years of perfect operation do not matter. It is the crisis at hand that matters, and a good lib knows not to waste a good crisis to score political capital.
There are over 3000 offshore oil drilling platforms at work for the US... over 700 in the gulf. How many oil spills have occurred compared to the number of days, weeks, months, years, decades these platforms have been pumping oil to run all the generators to produce the electricity that powers the computer you use to type such drivel?
The number of platforms in the Gulf, the number of years in operation without oil spills - they mean nothing when a single failure can have such a wide reaching effect. Setting aside environmental destruction, difficult as that is to do, this is going to cost billions of dollars by the time it's over. Do you really think BP will reimburse us all for higher gas prices, higher shrimp prices? Or the people who live on the Gulf coast whose livelihoods will be lost? How about all the people who make a living from tourism and tourism related businesses? Or the businesses "downstream", that create that economic multiplier we hear about? Where will all those people get relief from a disaster they had no control over?
Be it Wall St. or the oil industry or mining - when failure hurts many more than just those who caused the failure, it is unacceptable to allow failure. That requires strict regulation regardless of cost or inconvenience. Ultimately, it's far less expensive.
Good politicians - of both varieties - use crisis to score political capital or have you forgotten one of the worst offenders - GWBush&Co.
This oil spill is tragic and terrible, but it does not threaten our existence and the economy will not tank from it. These two events are several orders of magnitude different, and I find it a bit offensive that you would even compare them.
be equally impressive, though I haven't tried them yet. No other typos found, so you are
forgiven, Stuart Whatley, because it's always content over spelling in the final analysis.
begin to fulfill the usual meaning of "hagiography." I'll fan you for that one. Feel free
to fan me back so we can carry on our mutual lay-editing function. LOL.
If people are still so stupid that they believe that these mercenaries will treat the Mojave (which is just as essential and vibrant an ecosystem as the Gulf of Mexico) or ratepayers and taxpayers any better than they treat the oceans, I give up. Seriously, we have Sierra Club, NRDC, Wilderness Society, Nature Conservancy slobbering all over themselves to shove these awful, deadly, massive, expensive boondoggles through, at any cost. WTH???
We need to take responsibility for our power through point of use solutions (rooftop solar, passive solar, efficiency, storage, etc.) and leave our wilderness alone. We have sacrificed enough at the altar of Big Energy.