Posts Tagged ‘public policy’

Weighing Risk, and Justice

Author: Gary Hart

In the second half of the 20th century major technologies, mostly having to do with energy production, emerged.  These included offshore oil drilling platforms, giant tanker transportation, and nuclear power plants.  Almost all energy production facilities, such as hydroelectric dams, tar sands, experimentation with oil shale, coal production, and so forth, also got much bigger.  Economies of scale was the usual justification.  If you are going to the trouble of drilling a mile or more down in the ocean or building a nuclear reactor, you got more bang for the buck by doing it on a grand scale.

Chernobyl and Three Mile Island, and now Deepwater Horizon, showed that with high production comes high risk.  High risk ventures such as these in the U.S. are licensed by the United States government.  Certain standards have to be met to obtain both a construction and an operating license for a nuclear power plant.  Presumably, some standards of safety and efficiency are also required for an offshore drilling permit.  British Petroleum had a five-story tall “fail-safe” apparatus on the ocean floor to prevent a well blow out.  It failed.

The U.S., and possibly all advanced nations in the world, require a public policy that authorizes high-risk ventures, ones whose failure produces catastrophe, only after very serious requirements are met: every system that might fail must be clearly identified; every system to respond to failure must be thoroughly tested and demonstrated; every technical and human response to failure and catastrophe must be drilled, tested, and proven; every operator must maintain highly-skilled emergency response teams at every facility around the clock; all levels of government emergency response must be integrated, drilled, and ready (including emergency evacuation of civilians); the costs of catastrophic failure must be included in the public record; a large emergency response fund must be maintained by the operator (that is to say, every operator must be self-insured); well-trained government monitors must be at every high-risk facility around the clock and have instant communications access to emergency response teams and senior government officials; and licenses to construct and operate these massive facilities must be signed by cabinet-level officials who personally assume responsibility in cases of catastrophic failure.

This final measure would certainly sober up those, including “drill, baby, drill” politicians, who might have their names on the line.  Right now we do not know what officials in the U.S. government finally authorized Deepwater Horizon, what safety measures its drilling permits required, what tests of the “fail-safe” apparatus were conducted, what plans, if any, BP and government agencies had for catastrophic response, and a host of other questions.

The alternative, of course, is to accept the risks of major failures, more Deepwater Horizons, as the way the world works.  Stuff happens.  Public memory is short.  Rare brown pelicans are expendable.  Gas in our tanks is not.  Gulf fishermen are on their own.  Besides, offshore drilling, massive coal extraction, and nuclear power plants create jobs.  Get rid of government, eliminate regulations, let free markets work, accept risk, forget catastrophies.  What are a few Deepwater Horizons in the great scheme of modern life.

The arc of the moral compass bends toward justice.

Students of American history find it remarkable how struggles of the founding days continue to repeat themselves down through the decades and centuries.  That is because so many of the founding disputes were based on differing views of human nature, and human nature seems to change very little.

Currently, we are locked yet again in one of our recurring half-century battles over the size of banks.  In this case, size matters because size equals power.  Here again we see Thomas Jefferson and Alexander Hamilton head-to-head.  Hamilton wanted a very large and powerful national bank, and banking system, to foster large-scale investment, economic expansion, and competition with older European systems.  Jefferson opposed this scheme because he anticipated the inordinate political power such concentrated wealth would have within the democratic process.

Jefferson saw a handful of bankers controlling vast economic power, encouraging speculation, manipulating investments and currency values, and warping the political process to its own ends.  He knew that money equaled power and that it distorted political systems, including republican ones, throughout history.  What a surprise!

Yet, here we are now, two and a quarter centuries later, and, though Jefferson was clearly right, Hamilton has won…yet again.  Now the few giant banks, combinations of traditional banking and rampant, largely unregulated speculation, not only too big to fail–and thus guaranteed against collapse by everyday taxpayers–but also too big to be brought under public regulation.  An army of lobbyists, upwards of 1,500 or more, many former members of Congress and their families, swarming the halls of the peoples’ Congress, warning of apocalypse if they are required to be transparent, even with public money, protecting astronomical bonuses (distributed as a nose-thumbing thank you to those of us who bailed them out), and trading campaign contributions for influence.

Expecting the predictable tut-tutting about how I’ve traded my chance for statesmanship for populist ranting, my response is: Jefferson, once again, was right, and I’m proud to be on his side.