Then again – I’m sure the BP attorneys are working hard to make sure they pay only a fraction of the true damage. Paul Krugman had an interesting point:
the libertarian alternative to regulation — just use tort law to make people pay for the damage they cause — doesn’t work in practice, because when push comes to shove politicians will shield the rich and powerful from paying the real cost ... Well, here’s the thing: regulation demonstrably does work where tort law doesn’t. Consider the environmental issue: in reality, the perpetrators of oil spills never pay most of the cost
While the “drill baby drill” proponents of offshore drilling used to tell us that we had the technology to keep oil spills from happening or once they did happen from becoming environmental nightmares - as we have recently learned, technology has not advanced that much. If oil companies are shielded from paying more than pennies on the dollar for such potential problems, it is no wonder they under-invest in this technology. The stock market seems to be signaling that BP shareholders may indeed pay much more than pennies on the dollar. If that does happen, bravo!
Update: John Boehner voices a very different view than mine:
In response to a question from TPMDC, House Minority Leader John Boehner said he believes taxpayers should help pick up the tab for the clean up. "I think the people responsible in the oil spill--BP and the federal government--should take full responsibility for what's happening there," Boehner said at his weekly press conference this morning. Boehner's statement followed comments last Friday by US Chamber of Commerce CEO Tom Donohue who said he opposes efforts to stick BP, a member of the Chamber, with the bill. "It is generally not the practice of this country to change the laws after the game," he said. "Everybody is going to contribute to this clean up. We are all going to have to do it. We are going to have to get the money from the government and from the companies and we will figure out a way to do that." So today I asked Boehner, "Do you agree with Tom Donohue of the Chamber that the government and taxpayers should pitch in to clean up the oil spill?" The shorter answer is yes.
This sounds like the Congressman wants us to subsidize negative externalities.
There were regulatory attempts, deep within the government, to address the technology shortfall in deepwater drilling before permits were granted, but they were ignored. To me that is regulatory failure. Does that get BP off the hook for clean-up costs beyond its statutory obligations? If they want their brand to recover in the US, no.
ReplyDeleteA "Bo[eh]ne[r] of contention"?
ReplyDeleteAll of the naturally occurring oil and minerals within the sovereignty of the United States of America are the responsibility of the United States government. Most unlike factories, and corporate associations of productive individuals, this natural bounty is to be managed by government for the benefit of the people. The United States government has a fiduciary responsibility in regard to these natural assets. SO it has come to pass that the United States government will have recognized that it has been negligent in regard to this responsibility. Henceforth, the United States government shall at all times retain legal title to all such natural "goods" and retain contractors to develop such "goods" in a manner that is most beneficial to the people of the United States. As oppsed to the United States receiving a royalty on the oil, the oil field service contractors will receive a percentage of the accounting profits from the recovery of the "goods", The United States government will be responsible for this and any other "spills" because the United States government will direct contractors in the development of the UN_OWNED resources that belong equally to all persons of the United States. And those contractors will act only at the direction of the United States government. The contractors can and will own equipment and technology to accomplish the tasks of oil recovery. But the US government retains ownership of the natural environment and the oil itself and is responsible for any environmental degradation.
ReplyDeleteThus:
When the EPA and the Department of Energy tell a contractor that an xxx ton block of concrete with suitable and automatically closing access ports must be placed above any water bound bore hole BEFORE DRILLING CAN COMMENCE then that will be the case.
further:
All of the market value of all the minerals after payments to contractors (including contractors percentage of accounting profits) will inure to the benefit of the United States Treasury.
If government is to be saddled with the costs then government will be reaping the gains.
Boehner: "It is generally not the practice of this country to change the laws after the game"
ReplyDeleteIn fact, the Constitution explicitly prohibits ex post facto laws.
I always enjoy reading intelligent articles by an author who is definitely knowledgeable on their chosen subject. I'll be following this thread with much interest. Keep up the great work, till next time
ReplyDelete