Lessons from Recent Disasters (posted by DT)

The oil spill in the Gulf of Mexico, on the heels of the coal mine disaster in West Virginia, makes me think about government regulations. I think this also applies to Wall Street regulation to some degree.

Businesses hate government "red tape". Workers hate red tape. I work in a (state) government-regulated facility, and I hate the government's red tape. It is incredibly inefficient, forcing businesses everywhere to jump through often silly hoops to show the regulators that they're safe in some way.

Of course, we all feel we work for organizations that are fully incentivized without government help to avoid a major catastrophe. If someone dies in my facility because of our negligence, we would be in huge trouble, and we don't need government regulations to show us that. Similarly, mine owners and oil well owners probably argue that they don't need so many regulations to keep their facilities from killing workers or destroying a region because they care about quality too.

But then we get these two disasters, and we need to step back and remember that this is why governments throw up so much red tape. How many mine workers are alive and well thanks to "red tape" that forces them to have safe rooms and fans and gas detectors? How many oil spills have been avoided thanks to governments forcing drillers to put in redundant safety features that stop wells from blowing out?

This Gulf spill is a complete catastrophe for the region. 1000 miles of coastline may be destroyed for years to come. The fishing industry may be completely wiped out. So the next time an oil company complains about too much bureaucracy making it too hard to create jobs, we have to remember this- all that bureaucracy protects us, and we cut corners at our collective peril.