In a previous column (“BP’s Fate in a Free Market, Part Two“), I discussed the possible ways that unlimited tort liability might discipline corporate polluters and other malfeasors in a free market regime. Total damages from a spill like Deepwater Horizon, if not enough to liquidate all the assets of a company like BP, would probably eat up enough of their ongoing revenue stream for many years to amount to a corporate death sentence. The resulting market pressures to maintain robust liability insurance would be intense, and the economic incentives for insurers to impose effective safety regimes would be overwhelming.
But look at the other side of the scale. How’s the much-vaunted regulatory state actually been performing? BP management deliberately skimped on safety measures, neglected maintenance on multiple levels of failsafe mechanisms because they cut into profits, and slept (and snorted crystal meth) with government inspectors.
Now one could argue, and that quite plausibly, that this was a holdover from the Bush years, when Exxon-Mobil lobbyists wrote environmental policy on hunting trips with Dick Cheney.
But that doesn’t explain the farce put on by Tony Hayward and Barack Obama since the spill happened. While emoting in TV ads, saying all the right things about “earning the public trust” and “making things right,” what has Hayward actually been doing? From what I’ve seen on CNN, the skimmers and cleanup crews actually assigned to controlling damage are a tiny fraction of the resources that could be brought to bear, if BP hired all the specialists and contract workers available for the job. Instead, they’ve spent what amounts to a few days’ total profits. BP brought in ringers to pad the cleanup effort a hundredfold for Obama’s appearance, while warning their cleanup workers not to talk to the press. BP told cleanup workers they didn’t need safety gear like masks and gloves — mainly because the sight of all those people in spacesuits would be really bad PR — and (again) warned them not to talk to the press. BP has refused to share its inside knowledge of the chemical composition of its dispersants, which means the cleanup workers, public and ecosystem are subject to God only knows what kinds of risks. The average age of cleanup workers from the Exxon-Valdez spill today is 51, some talking head on CNN said today, and most of them are dead.
Despite all his superficially assuring promises to make good on all damages, on closer inspection Hayward shows himself to be as much a master of “what is is” as Bill Clinton. Notice how he keeps inserting that “all valid claims” qualifier? That means, according to my crystal ball, that BP will fight every single claim to the highest available court of appeals, and will end up paying only the “valid claims” of those fishermen rich enough to afford a gazillion dollars in legal fees.
In short, while boohooing like Iron Eyes Cody in his tearjerker TV ads, Hayward is displaying exactly the same leadership style that created the mess in the first place: cutting corners, doing things on the cheap, stonewalling, shining it on and covering up.
And what is our “progressive” government doing about it? Hayward’s not even getting the kind of grilling the Detroit CEOs got before Congress (remember how they fidgeted about the corporate jets?). Let alone any tough talk about criminal prosecutions from the Justice Department.
Imagine the treatment you’d get from the government if you owed them $1000, and contrast that with the government’s treatment of a man who was almost certainly criminally negligent in causing billions of dollars worth of damage.
Think: this is the most “progressive” president, with the largest Democratic majority, likely to be elected in a generation. If this guy lacks the political will to make full use of the powers available to him in holding a dirtbag like Hayward accountable in a smoking gun case like this, what good’s a regulatory state?
A regulatory state that works properly only when completely staffed with Dudley Do-Rights, who never sleep on the job (especially with the people they’re supposed to be regulating) is a regulatory state that will never work. In the real world, government is a lot more apt to protect the corporations against you than vice versa.