Capitalism is not to blame for the oil spill in the G of M

I took a moment recently to read Bob Cesca’s Huffington Post article. Cesca is no different than many who are taking the oil spill as an opportunity for context dropping smears of capitalism and capitalists; the economic system and the risk takers within that provide them the very means to spew their socialist claptrap, not to mention create the highest standard of living in the history of mankind. Such pot shots at capitalism are clearly not helping matters.

The degree of myopic, out of context, drivel spewed by Cesca seemed to know no end, as he apparently has little or no knowledge of history (one wonders if he ever heard of the Santa Barbara spill of 1969, and what ensued on the heels of reaction to it). Mr. Cesca would like us all to believe, just as the proponents of government controlled health care, that there IS a “free market”…and that this “free market” is the root cause of the current disaster (just plug in one, it doesn’t seem to matter with this crowd). The same lame argument was made regarding the supposed 40 million people without health insurance, that it was the free market supposedly failing by virtue of the fact some people chose not to purchase health insurance, or simply could not afford the premium charges (let alone purchase care out of pocket). Ergo, it must be the free market, capitalism, that is to blame for this social injustice simply because in the present state providers of those services, and the insurance to pay for it, make an accounting profit. In the same convoluted out-of-context way energy companies are now being held up as poster children for the supposed failure of capitalism.

Cesca’s article-and oh so many like it right now-is obtuse on multiple levels, but the principal problem is that he ignores the fact of the reams of regulations the oil industry already deals with; this implicit notion that somehow this current oil spill occurred in a context of true capitalism. Moreover, there are two correlated implications here. First, that the government has had no role in impelling oil companies to explore in deeper and more remote areas. And secondly, in the absence of market forces (total government control) accidents and disasters would never occur. The principle fact is patently untrue, in fact it is the case that due in no small measure oil producers are prevented BY REGULATIONS AND LAWS from drilling in areas that would pose less risk of the very disaster we are dealing with today… As a consequence, in addition to incredible demand for their products, they find themselves impelled to go deeper underwater for oil.

As if, for example, oil shale production, tar sands production, drilling in ANWAR, or simply drilling upon the continental shelf are unregulated sources that could be tapped at a moment’s notice in lieu of drilling under 5000 feet of sea water? As if no American lives (such as soldiers in the Gulf Wars) have been lost because of these regulations and restrictions about the wrists of not just oil producers, but developers of nuclear, and other energy resources? Please note, such longstanding and profound fundamental interventions into the marketplace for energy creates an imbalanced demand for petroleum from unsavory Middle Eastern and South American regimes. Moreover, it impels more government interventions into the subsidization of incredibly inefficient alternatives such as wind, solar, ethanol, etc. Such regulation also increases the cost of the oil they do produce. The reality here is that just as the lack of a truly free market in health care provision by virtue of medical licensing, mandated coverage provisions in insurance, and inane tax law is the root cause of the high cost of health care and health insurance, so too is it the case that decades of regulation (not to mention outrageous hearings in congress) upon the oil producers has resulted in their having to deviate significantly in where and how they source and lift crude oil, and natural gas. The idea that in the absence of profit seeking firms that no disasters would ever occur is a non-sequiter hardly to be matched. Point being, free market? WHAT FREE MARKET?

If market forces are the problem, and more and stricter government regulation is the answer (or, as Mr. Cesca actually suggests, a complete government take-over), then we all should be prepared for far worse disasters than what is occurring right now south of Louisiana. It should be utterly clear that government regulations simply do not work-just look around you! The world you see, the disasters at your doorstep, are in all too many cases products and shining examples of failed government policy, not a failed marketplace. To the degree the marketplace is perceived to have failed, virtually without exception it is linked directly (in fact may be directly the result of) to interference, restrictions, taxation of one degree or another from governments or government sanctioned special interests. Those myriad interventions that are already there mean that there is no such thing as a free market operating – neither in health care or in energy production. To suggest that oil companies have been heretofore unregulated and free to do as they please subject to clear, unambiguous, market signals is a suggestion so bereft of reality that it vies with immaculate conception, seas parting at ones command, and rivers that run with milk and honey. In Cesca’s myopic world-view, the idea here is ideological; since regulation didn’t actually work we must not admit that reality, but rather we need to obfuscate the issue by blaming capitalism and advocate for more regulations (indeed, total takeovers).

So, one may ask, where are the government solutions to this mess? Where are the government engineers and scientists with the savvy to “plug the damn hole.” Where is Obama and his metaphysical wizardry?? An adult perspective is what is needed here, and a focus on the engineering and science task at hand. To the extent that the market can still work, it will do its job of, yes, cleaning up this mess. BP is clearly a problem-child, and the market place will be very unkind to BP and they know it. This will send unmistakable messages to all energy producers, indeed to producers all over the planet. There are no muted signals right now. BP has huge resources and they will need all of them to first control this spill, and then the costs associated with the clean-up. It is in their best interest, long term and short term, to get this disaster under control as quickly and effectively as possible. Other oil producers see this as well and are likely meeting as I write to develop more robust safety systems. To the extent the market place still operates, that is one of the signals it is broadcasting.

Government can help, and it should. But what it should not engage in are premature lawsuits- that is counter-productive. It should mobilize its resources to the extent it has them, and deploy them to the Gulf of Mexico in efforts to assist the engineers and scientists from BP, and their subsidiaries and partners working on this, so that the problem can be solved and drilling operations confidently restored. “What can we do to help you, BP” should have been Obama’s immediate reaction. Moreover, “all hands should be on deck” should have also been Obama’s reaction – particularly as regards legitimate federal assistance to the various states where clean-up from this disaster will likely take a long time. But rather, the reflexive response from day one was “plug the damn hole,” and find a way to sue those profit-seekers.

Government should also learn the key lesson here that it shares a great deal of the blame here for forcing the hands of energy producers. The Cesca’s of the world didn’t want to see an oil rig from shore, therefore they were banned from the continental shelf. Well, Cesca should take a trip down to the gulf and take a look at his “not in my eyesight” approach – he can see it now, and it’s all over the beaches and covering the feathers and skin of the diversity of flora and fauna all along the gulf’s ecosystem. Something tells me that the Cesca’s of the world wouldn’t know a free market if it bit them on their metro-sexual hind ends.. The real answer, in Cesca’s mind, is that government should run the show and that there ought not be any profit motive. Good luck, Bob, finding a nice cafe latte in such a realm..

Posted in Capitalism Advocacy. Tags: , , . Comments Off on Capitalism is not to blame for the oil spill in the G of M
%d bloggers like this: