Thursday, June 03, 2010

Deregulation Lives

Someone had to take the fall, and it was Elizabeth Birnbaum.

On May 27 the head of the Mineral Management Service, which regulates offshore drilling, became the first casualty of the Gulf oil spill. Although she officially resigned, Birnbaum was pushed and should be only the first individual to lose a job over the worst oil spill in U.S. history.

Obviously, the MMS was sloppy, ineffective, negligent. The Wall Street Journal found its

examination of the MMS's track record found several instances of the agency identifying potential safety problems and then either not requiring follow-up or relying on the industry to craft a solution. In some cases, the industry didn't do its part.

The Journal also found that the safety record of U.S. offshore drilling compares unfavorably, in terms of deaths and serious accidents, to other major oil-producing countries. Over the past five years, an offshore oil worker in the U.S. was more than four times as likely to be killed than a worker in European waters, and 23% more likely to sustain an injury, according to International Association of Drilling Contractors data, which is adjusted for man-hours* worked.

The agency conducts inspections of drilling rigs and platforms but, the paper added, the "number of rigs inspected has fallen significantly in recent years, according to agency data, from 1,292 in 2005 to 760 by 2009" and its inspections frequently are inadequate.


Over the past decade, the number of MMS enforcement cases that resulted in penalties ranged from a high of 66 in 2000 to a low of 20 last year. A report by the agency's inspector general in 2000 found that it seldom referred safety or environmental violations to the Justice Department for criminal prosecution, even when it should have done so.

But this was not due primarily to the agency's ineptitude or its unique favoritism toward the industry it regulates. Itself,

the MMS in a 2005 rule change pointed to a 1996 law that encouraged federal agencies to "benefit from the expertise of the private sector" by adopting industry standards. Mr. Herbst also pointed out that the MMS often has a seat on panels setting industry standards.

The industry regulated itself- or, rather, has not regulated itself. Over the past thirty years, Congress and the President have periodically cooperated, or competed against each other, in breaking the nation's regulatory scheme. Regulations have been weakened,
penalties reduced for violation of those weakened regulations, and budgets cut for inspectors.

This plan has been promoted by 1.5 major political parties. It has been the ideology, rhetoric, and governing philosophy of the GOP, set on its path of undermining government when its patron saint declared "government is not the solution to the problem, government is the problem." And Democrats largely have avoided challenging that mantra, rarely defending the importance of government in the lives of poor and middle class Americans.

And it has taken its toll for the last three decades. Among the instances which stand out is the repeal of the Glass-Steagall Act of 1933 by the Financial Services Modernization Act of 1999, wherein the divide between commercial and investment banking was torn down, initiated by the great free market conservative, Republican Senator Phil Gramm of Texas and signed into law by the neo-liberal, centrist Democrat, President Bill Clinton. Glass-Steagall helped prevent a second great depression; Gramm-Leach-Bliley helped usher in the great recession from which we have only barely begun to emerge.

Another would be the present environmental-energy-economic crisis of the British Petroleum oil spill. Here we have another neo-liberal, centrist Democratic President who, accordingly, trusted the giant oil company. It has the interests of the American people at heart, President Obama believed, at least initially. And it has the unique ability to solve the problem because, after all, government is "the problem," not "the solution."

As the federal government relies on BP to clean up its mess, the trail of incompetence and deception on the part of the energy giant pile up. As distrust of BP has grown, so has belief in the effectiveness of President Obama, an ironic twist for the man Republicans would like us to believe is a socialist.

*(Really, now, can we dispense with "man-hours" and replace it with "person hours?" If not, can we dispense with "chair" when we mean "chairman," "chairwoman," or "chairperson"? The only function of a chair at a meeting is to allow someone to sit.)

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