Wednesday, June 23, 2010

Stop shifting the oil-blame

With the Gulf oil spill hogging headlines and dictating domestic (and apparently, foreign) policy, everyone is looking for a scapegoat. In last week’s BP congressional hearings, America found one: the cherry-cheeked, sharp-tongued CEO, Tony Hayward. While Democrats and Republicans threw away partisan battles and united in their shared victory over the alleged gruesome malfeasances of British Petroleum, a thought couldn’t help but cross my mind: are we being a little hasty? With midterm elections coming up and each side looking to prove a point and exploit a national crisis, I began to wonder where the line between proper investigation and McCarthy-style blame-shifting was blurred and when America could take responsibility for a disaster that it, too, was responsible for.

To be frank, the media coverage surrounding the spill has seemed absurd and misguided to me. The undue pressure on Obama to “show more emotion” and take a strong national (read: federal) stance has put the president in an awkward place where he is forced to shift priorities and show face in front of a disaster over which he has no control or expertise. He cancelled his long-awaited trip to Indonesia because of nationalist cries for him to remain at home. In an interview, he stated he’s looking for “ass” to “kick” in order to find a culprit in the oil crisis. The office of the President is NOT Chuck Norris and forcing Obama to take a Bible-belt ass-kicking mean-mugging bad boy position against corporations is not the solution – specifically, it is part of the problem. More importantly, this is not part of the executive duty. Obama should not be focused on creating a fa├žade of control in the domestic crisis over which he and his office have little ot no control over (nor should they). He should not be sacrificing foreign policy over the oil spill and he definitely should not be wasting his time trying to kick BP’s ass.

In no way do I support BP’s careless actions (including their copy-pasted disaster guide which was clearly not tailored for the Gulf) or the total natural destruction that has happened as a result of their profiteering. But to me, this is a simple example of political economy at play. Specifically, the effect of for-profit capitalism working in hand with big government aimed to regulate.

To understand my framework, you have to accept that it is a corporation’s goal and natural inclination to maximize revenue and minimize costs; this, of course, being done to the extent to which externalities do not outweigh profit. That would obviously be capitalism in a sentence. But, the key factor in my opinion, isn’t BP’s profit-chasing; rather, it’s the Federal Government (specifically, the Minerals Management Service) that is responsible for LETTING BP get away with this case of marine murder.  

In September 2008, reports were released by the Inspector General of the Interior Department that implicated over a dozen MMS officials of unethical and criminal conduct while performing their duties. They were having sex with energy company representatives and using recreational drugs with them at parties.  In May 2010, another investigation revealed that MMS had allowed BP officials to fill in the inspection reports in pencil, over which the regulators would trace in pen before submitting. MMS officials accepted meals, sporting event tickets, and gifts from oil companies. As the New York Times put it, the MMS was "a dysfunctional organization that has been riddled with conflicts of interest, unprofessional behavior and a free-for-all atmosphere” since it was put in place during the Bush-era.

If the regulatory agency itself fails, why are we holding BP solely responsible for the larger and inevitable failings of capitalism? After all, it’s BP’s simple market objective to maximize its earnings – in its corporate framework, it IS a zero-sum game. And, it’s the simple job of the (very large) government we have to regulate that game. If the government fails, it’s natural for BP to take advantage and play off the books. Our system is meant to work because there is oversight, and it’s the comfort of that oversight within which we reconcile our hesitations about corporations to begin with.

I’m not blaming Obama – if anything, it was Bush who started the MMS and his legacy which perpetuates in its culture. I am, however, criticizing American government for failing to accepting its own mistakes and refusing to step off its perch of moral hierarchy. Yes, BP screwed up, big time. But no, Tony Hayward should not be allowed to become the political Satan of America because that will prevent the government from looking inwards and making regulatory reform. Mindless scapegoating and media pressure on Obama to keep the face that they want will continue to hurt the government and blindfold Americans only further.

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