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May 25, 2010

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So again, you seem to be ascribing to deregulation what in fact was a highly regulated industry with large amounts of regulatory capture. Deregulation and regulatory capture are not the same problem and they don't have similar solutions.

Where in the post does Eric ascribe the oil spill to deregulation?

"Government should just get out of the way of big business, de-regulate, allow self-regulation, lax oversight, ignore capture"

I took this to be a snarky iteration of what Eric sees as the Conservative platform. His implication is that if the level of regulation is so inadequate that we got a horrific oil spill, why on earth would we listen to a party which a) proposes that there be less and laxer regulation and b) listen to a party which controlled the presidency between 2001 and 2008, and chose to do nothing but enable the excesses which led to this spill? NB I'm sure Democrats are a part of the problem.

Now, we've waltzed this rumba before (on the topic of the Health Insurance bill) about whether the problem is too little regulation (sort of the stock ObWi position) or too-much-because-it-causes-capture (Sebastian's position as I remember it).

Sebastin, can you please propose your solutions?

"Now, we've waltzed this rumba before . . ."

You can rumba to 3/4 time? On the other hand, it could be a useful metaphor for the difficulties here.

So again, you seem to be ascribing to deregulation what in fact was a highly regulated industry with large amounts of regulatory capture. Deregulation and regulatory capture are not the same problem and they don't have similar solutions.

Hmmm.

Maybe that's why I listed "capture" too?
I mean, Seb, it's right there in my opening paragraph. I thought that was rather blatant, a list of all of the conservative myopia on the relationship of business to society, and controls placed by the latter on the former.

The GOP cares little for capture (it's generally a feature, not a bug), pushes for deregulation and self regulation (which render capture a quaint throwback when industry had to even bother), etc.

And, in actuality, there are some solutions that are shared. One of those being shifting rhetoric and public perception of regulation and the wisdom of leaving business alone to do as it pleases.

Get past the shrug your shoulders response to capture, de-regulation and self-regulation.

Adding only that the last GOP President aided and abetted capture with a vengeance by appointing industry bigs to major industry oversight positions, in addition to gutting the investigative/enforcement/oversight budgets/agencies.

Maybe you just spend so much time being snarky that I have no idea when you're serious.

Meaning that caused you to not read the word "capture"?

Here's some non-snark.

Capture, deregulation, whatever. You say po-tay-to, I say po-tah-to.

The name for what is going on is we are getting screwed.

We damned well better find a way to institute an effective regulation regime, for minerals and extraction as well as other industries, because if government doesn't get it done, folks will begin doing it for themselves.

And that will not be a pretty sight.

Uh, Eric, I did read the word "capture", and I think Sebastian may have too, and, whether he did or not, Sebastian's comment makes sense in that light.

Regulatory capture is a persistent disease of regulatory regimes and agencies - and I say that as a supporter of the regulatory regimes and agencies. It's a problem under both liberal and conservative administrations. Republican officialdom may wink at it more, while Democratic leadership may (one can hope at least) be more concerned about it, but that difference does not make regulatory capture part and parcel with deregulation.

The approaches to try to deal with regulatory capture are also a different question.

All of which is exactly what Sebastian said, only longer. Please stop sparking at each other and start listening to each other. What would hilzoy think?

AR: Capture is a problem under each. Bush was an extreme example of facilitating capture. But then, a political movement that touts self-regulation and de-regulation will have little concern for capture, right?

I mean, what's the objection - an industry that shouldn't be regulated at all has too much influence over the regulators that shouldn't be there in the first place?

Thus, my indictment of a broad array of GOP policies and philosophical positions, that all end up at the same endpoint.

Deregulation and regulatory capture are not the same problem and they don't have similar solutions.

The approaches to try to deal with regulatory capture are also a different question.

As the old Jewish guys I grew up around in NY would say: "Nu?"

You can rumba to 3/4 time?

The deeper Cuban cats will tell you that it's all 3/4.

Yes, Eric, but let's be fair here, for God's sake.

Corruption from the top down (the White House
intimidating Federal regulators into ignoring regulation and running the government like a business (wine, women, blow, and song for the regulators too, not just the customers) is equaled by the corrupt influence of the Sierra Club, the Wilderness Society, those without health insurance, and the rest of the elite liberal intelligentsia.

What about the following cases of undue influence:

A. A woman in Georgia who no insurance carrier will cover because of pre-existing MS and other health problems offering to pleasure any Georgian politician or health insurance commissioner who will agree to a high-risk insurance pool in her state despite it being funded by a Kenyan in Washington D.C. The great thing about southern politicans, however, is that they accept the pleasuring and still remain true to their ideology and still won't do anything about her insurance problem. Now THAT's incorruptible.

B. Democratic after Democratic Interior and EPA Cabinet secretaries going to mollusk conventions where they are pleasured in back rooms by highly paid quahogs and have been witnessed accepting raw fish from directly from the bills of lobbyist pelicans. I once saw a table full of environmentalists at a high-class restaurant sharing a platter of pristine non-oiled oysters and clams from the Gulf, who had offered themselves up as bribes to keep the ocean clean.

C. The entire Udall family has been on camping trips ..... in the forest .... with below legal-age tree-huggers. What about that?

D. The Mafia used to get around regulation (justifiably, mind you) by appealing to police commissioners and law enforcement via the old regulatory capture technique of the dead prostitute in the regulators' bed. Ya gotta do what ya gotta do.

By the way, this comment has nothing to do with Sebastian.

It has to do with the fact that Sebastian has no influence in the Republican Party, which has been captured by corrupt, ignorant, damaging, anti-American scum.

Not that the Democratic Party is much better.

Here's the funny thing about the Republican Party, however. Their moral wing wants to outlaw prostitution. Their business wing needs a thriving prostitution trade to do business and capture the regulators, when they aren't servicing the customers.

The prostitutes don't know whether they are coming or going.

Other than your "indictment of a broad array of GOP policies and philosophical positions", what policies, rules, etc. should be in place to combat or weigh against the creep of regulatory capture, which is a problem whether or not the people you're indicting are in power?

Which is the question that, in fairness, I think Sebastian was referring to when he wrote that the two things don't have similar solutions.

On a more basic level, why haven't any of these fnckers been prosecuted??!!??

Please tell us that at least they've been fired and,if applicable, lost their government pensions.

Please?

Deregulation and regulatory capture are not the same problem and they don't have similar solutions.

Im not sure about the second part of that sentence; at least, in a general sense, the solutions would seem to be 'create effective regulatory frameworks/agencies insulated from capture'.
Also, I don't see how to interpret this as not negative for deregulation of the industry either- not that it *is* deregulated, but that some groups on the right frequently call for deregulation & that the lack of limits imposed by regulatory capture reveal that industries often favor solutions that impose a burden on the public. As at the current leak in the Gulf, we see industry foregoing reasonable safety precautions with the aid of a compliant regulator- and no reason to think that the lack of such a regulator would've caused them to act in a more reasonable manner.

@ Thullen
The prostitutes don't know whether they are coming or going.

Well, they should at least know whether the customers are...

Another superb comment.

what policies, rules, etc. should be in place to combat or weigh against the creep of regulatory capture

I would start with "if you are caught literally in bed with someone you are supposed to be regulating with a mirror and a couple of lines of blow, you're fired".

And then take it from there.

Sound good?

As I said, we need to change the rhetoric and the general perception of regulation in order to create an environment where public expectations/demands are greater/better placed.

We also need to take more discretion away from regulators, and instill more compulsory, statutory regulations.

Next, empower real, toothy enforcement, as well as overseers and ombudsman that can monitor the regulators themselves to ensure that they're doing their jobs.

In order to achieve the foregoing, however, we will likely need to elect more and better Democrats seeing as how the GOP views capture as a feature, not a bug, and will do its best to sabotage regulatory frameworks put in place by others since they think de-regulation and self-regulation are better in just about every scenario.

It's going to be a hell of a battle, and the odds aren't good, but thems the stakes.

Hang on. If deregulation means there's not regulators doing their jobs, and regulatory capture also means the regulators aren't doing their jobs, what's the difference? At least when it comes to the consequences of their inaction.

At least in the most blatant cases, like these. Subtler kinds of regulator capture where the regulators get most of their information and working time with the people who should be regulated is a somewhat different matter, but that's not what we're talking about in this case.

Right.

Well, regulatory capture can have other effects than just weak regulation- favoring established players over newcomers, favoring domestic players over foreign ones, favoring specific players who provide post-regulatory jobs, etc.
To play devil's advocate, there's another way that deregulation and regulatory capture are different- in the former case, the illusion of regulation creates different expectations that can affect other things (just as a bogus medicine is not just harmful as a scam, but also bc it may forestall efforts to seek competent treatment). For example, the illusion of a competent regulatory regime for deepwater wells may have led to the capping of liability for operators. Or, more cynically, the illusion may merely have allowed for such a cap as a giveaway to the industry, with the compliant regulators serving as window dressing.

True also CW. But in the present example, I think the type of capture that has occurred has had the effect of eviscerating regulation, which makes the de-regulation or self-regulation routes seem like non-starters in terms of addressing the issues.

Eric,
I agree- I think it would be hard to argue that BP would've behaved differently if they had no regulation at all instead of sham regulation.
Just wanted to say that regulatory capture is actually worse than regulation in a couple of ways; one of those things that people ought to give a crap about, but it's hard to get enough of them to care bc it can't easily be summed up in one sentence composed entirely of monosyllabic words...

Agreed all around.

Carleton, I don't doubt that BP had every intention of stringently applying the best safety standards, entirely without oversight. But the Office of Mines and Minerals regulators, with their pert bottoms and large-bore nasal passages, were irresistible! It's really our fault for hiring sexy bureaucrats who like to party.

I direct your attention to this WaPo interview with Shell's former CEO. I find this particularly hilarious:

[interviewer:] Why do we hate oil companies?

The short answer is because the government has taught us to. Government's failure over many decades to make the difficult decisions and choices with respect to our energy future means they look for a scapegoat when things go wrong. The primary scapegoats they choose are the oil companies

His solution?

[interviewer:} You propose the creation of a powerful Federal Energy Resources Board that would include "knowledgeable leaders" to choose technologies and allocate resources. Wouldn't that arrangement be fundamentally undemocratic?

It would only come into existence through an act of Congress, just as the Federal Reserve Act created the Fed. The board members would be presidential appointments with confirmation by the Senate, like Fed governors. . . . The criteria for selection is what's important. You need someone who knows about science and technology . . . such as John Holdren, the White House science adviser. Distinguished former CEOs who know and understand what energy is all about


In other words, government is at fault for not enough interference in the free market. The solution: more regulatory capture!

What could possibly go wrong?

Does the head of the MMS still have her job?

Why?

This is someone who still denied that exemptions were given even when shown the documents in question. She "oversees" an agency in which the inspectors spend more time jerking off, literally, than doing anything to ensure the safety of oil drilling operations.


Is she a political appointee, or civil service? Either way, she can be moved out of her current job by an administration that actually cares about ending the party-time culture of the agency.

Given what's come out already, why has that not happened?

Carleton Wu: regulatory capture is actually worse than regulation [sic; 'deregulation' meant, surely?] in a couple of ways; one of those things that people ought to give a crap about, but it's hard to get enough of them to care bc it can't easily be summed up in one sentence composed entirely of monosyllabic words...

Au contraire: Oil corps bought off feds with blow, porn, tix, so well blew up, killed Gulf.

"I would start with "if you are caught literally in bed with someone you are supposed to be regulating with a mirror and a couple of lines of blow, you're fired".'

I'd like to point out that regulatory capture doesn't necessarily imply capture by those being regulated. Though that's *usually* the case, an agency can be captured by any group which cares strongly about the subject of the regulation. For instance, the BATF is a case study in regulatory capture by the opponents of an industry, rather than the industry itself.

Please tell us that at least they've been fired and,if applicable, lost their government pensions.

The problem is that they are almost guaranteed a highly paid position at the companies they 'regulated'. Rachel Maddow mentioned one special case where one regulator (while still in office) negotiated with the regulated oil company for such a job. Mysteriously at the same time his investigations into wrongdoings etc. of said company dropped to zero.

TPM is reporting that "Elizabeth Birnbaum, head of the U.S. Minerals Management Service, the agency that oversees offshore drilling, has been fired"

Top kill worked?

Just to keep this in a thread that isn't just about dead.

ok, but I'm still crossing my fingers

Good on the admin for firing Birnbaum.

Another update; from Slarti's link:

The Coast Guard has estimated the flow at 5,000 barrels a day, but independent estimates suggest it is much higher -- perhaps tens of thousands of barrels a day.

An hour or so after that story was posted, the U.S. Geological Survey head held a press conference to announce the current official govt estimate of the flow: 12-19,000 barrels a day. And that might be low.

A rapidly evolving story, indeed.

The report from the combined operations center on the 'top kill' project is considerably more guarded than Adm. Allen's take, and than the LAT/Trib story:

The oil spill response unified command, which includes both BP and the Coast Guard, said it could not confirm or deny the Latimes.com report, which cited Coast Guard Admiral Thad Allen.

BP shares were up more than 5 percent in London trading.

Allen told National Public Radio that BP engineers had "been able to force mud down and not allow any hydrocarbons to come up." But he added this did not mean the well was sealed or that the problem was solved.

...

BP Managing Director Robert Dudley said earlier on Thursday the procedure was "moving the way we want it to." But he told NBC's "Today Show" it was too early to say whether it had been successful.

Following this moment by moment is crazy-making, so out to the vegetable garden for me:

Marine scientists have discovered a massive new plume of what they believe to be oil deep beneath the Gulf of Mexico, stretching 22 miles from the leaking wellhead northeast toward Mobile Bay, Alabama.

The discovery by researchers on the University of South Florida College of Marine Science's Weatherbird II vessel is the second significant undersea plume recorded since the Deepwater Horizon exploded on April 20.

David Hollander, associate professor of chemical oceanography at the school, says the thick plume was detected just beneath the surface down to about 3,300 feet. He says it's more than 6 miles wide.

Scientists say they are worried the undersea plumes may be from chemical dispersants used to break up the oil a mile under the surface.

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