Regulate Now! Afterall, we have an oil crisis!!!
May 12, 2010
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Posted by Michael S. Langston
Oil leaks into the Gulf of Mexico from the end of the pipe that was supposed to pump oil from the sea floor before the Deepwater Horizon oil rig exploded Photo: AP
The audacity of writers will never cease to amaze me and today is no exception.
In a piece at Salon.com, authored by Andrew Leonard, and titled Gulf oil spill gas price blackmail Mr. Leonard tries to make the case that the Obama Administration should:
Ignore critics of regulation who warn of rising pump prices. They are obsessed with the wrong bottom line.
Though his only reasoning seems to be that the opponents of new regulations only came to be after a major crisis. First, he starts with some of the current opposition statements:
The International Energy Agency is frightened, reports the Financial Times that “a knee-jerk reaction by regulators, banning new offshore licensing altogether,” in response to the Gulf oil spill, will end up increasing costs for the oil industry, and “therefore oil prices.”….
This helps us understand why he uses words like blackmail and frightened…. because these people are only looking at the bottom line. From here, now that we understand these people are greedy and uncaring for anything other than money, he moves quickly into the timing of this opposition:
…it’s impressive to see how quickly the clamor advising the White House not to go overboard on offshore regulation has flared up. The parallels with the financial crisis are irresistible: A massive failure of markets and government oversight leads to a disaster, but before the wreckage has even been cleared away, we are told that regulatory overkill will be bad for business….
What he seemingly fails to grasp is, well, with all due respect to Mr. Leonard, he is failing to grasp the obvious – people generally don’t oppose or support regulations when they aren’t being proposed at all. So this argument about timing is completely irrelevant.
Logically, people, groups, communities, companies…. all of us have enough to worry about that we don’t usually worry about those things that aren’t happening.
It’s possible the author is unaware, but most of the pro-life movement didn’t really exist until 1973 as it wasn’t necessary prior to that. Maybe he finds this suspect as well?
But logic be damned, he uses this to springboard into the current investigation to explain why drastic changes in regulations are needed right now:
…But focusing only on the bottom line without taking into account the larger picture of what could go wrong — and what is going wrong — is exactly how we ended up with a giant Gulf oil slick in the first place….
Ironically, & potentially unwittingly, he then gives reasons why major regulation change should be avoided. By trying to conflate some idea of greed into this, but still keep the appearance of some factual stance, he states some of the issues clearly and properly notices that we don’t yet know what happened.
The main reason we don’t know – the only real people currently talking are those with a stake in not being blamed and there are 3 primary private actors and a multitude of government actors. Independent investigators will sort through all parties statements, responsibilities, duties, actions, and all the rest and hopefully come to some answer as to what really took place. Until then, any newly proposed regulation will be premature and wholly inconsistent with wise decision-making.
Additionally, he never refutes the words used by opponents, because he simply can’t. Economics shows us without emotion or emotion-filled words such as “blackmail” that regulations cost businesses money and those costs have to be borne out by the consumers.
The one interesting thing he noted was about the parallel to the financial market, but here he sees reverse of reality. The parallel Mr. Leonard should easily see is that we have a government bent on adding more and more power at the federal level attempting to use fear of another crisis to grab more power before even understanding why the crisis happened in the first place. Instead, of fearing this, he seems to be concerned only for some hypothetical lack of regulation, as if that has been the problem all along.
The reality is there. Going back historically, let’s say, going way, way back to… how about 6 months ago? When fear of another financial crisis was & is still being used to add regulations on entities such as pay-day loan companies, on investment vehicles such as derivatives, on compensation of employees, and many, many more things which had absolutely nothing to do with the current crisis, his concern for lack of regulation seems oddly misplaced.
After all, this is not only the same administration which is pushing for specious financial regulations, but they are also the same group which after years of railing against the Patriot Act, when the time came to do something, they did. They reauthorized its use to maintain their power.
Please note though – it’s not just this administration. Historically, governments seek to expand their power, they use crises to do so, and once those crises are mitigated, they keep the power they promised us was only necessary under the circumstances.
Whether a terrorist event, an economic crisis, or even an oil spill by greedy business people, allowing the government to take more and more powers before we even have an idea of what took place is the perfect move for those who want reduced freedoms.
As Hayek stated:
‘Emergencies’ have always been the pretext on which the safeguards of individual liberty have been eroded.
Categories: Critical Thinking, History, Politics, Politics of Fear, Regulation/Deregulation
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Tags: Critical Thinking, Economics, Financial Regulations, History, Housing Crisis, Patriot Act, Politics of Fear, Regulations
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