Canadian Cincinnatus

Gulf oil spill demonstrates the ineffectiveness of excessive government regulation

ig government cheerleaders wants to portray the BP oil spill in the Gulf of Mexico as a failure of ‘unregulated’ free enterprise – a classic case of what happens of private companies running amok without oversight. While it is almost certainly true that negligence on the part of British Petroleum caused this disaster, it is also true that this disaster is a failure of ‘big regulation’ as well. Let me explain.

For starters, there is a phenomenon that economists call regulatory capture. This is when regulators and legislators get into a cozy and mutually beneficial relationship where regulations are bent in the regulatees favour. All of the presents showered on the Department of Interior officials by BP are evidence of this. When control freaks push for more and more regulation of ever increasing complexity for the public good, the tacit assumption is that the regulators and legislators work selflessly for the public good. But what allows them to assume that? Have we found angels in the form of politicians and bureaucrats? I don’t think so. In the real world, the people burdened with the regulations have the biggest in the regulatory process. The rest of the public lazily assumes that the problem has being taken care of, and indeed it has, just not quite the way they think it has been. The more regulations you have, the worse this problem gets because the legal framework gets more obtuse and complicated. For instance, how many special favours are buried in the 2,700 pages of Obamacare?

As an example, take the remote arctic community of Hall Beach. The town is partially dry in that there is an alcohol committee that decides who gets a license to import booze and who doesn’t. The joke around town was that all the biggest drunks are on that committee. And why wouldn’t they be? They’ve got a big incentive to make sure that they get to keep drinking. If you don’t drink, you don’t really care enough to attend all those boring committee meetings.

A bigger example: Bill Clinton’s legal crusade against big tobacco in the 1990’s. The assumption in the media covering the story was that these lawsuits hurt big tobacco, because they are forced to make restitution for Medicare expenses incurred by aging smokers. Wrong. The tobacco companies benefited handsomely. How? Though they did have to pay hefty penalties to the states, their payoff was that upstart competitors were banned from setting up shop. You see it would be ‘unfair’ because those new companies would not have any restitution to make. Not having sold cigarettes before, they were not yet responsible for any medical bills and therefore weren’t a cash cow for the states yet. Those fines were money well spent as far as big tobacco was concerned because their payoff was a government guaranteed monopoly.

The second problem with excessive regulation is that regulations often have unintended consequences that actually make the problem they are intended to fix even worse. Take oil drilling. Drilling on land in the ANWAR region of Alaska? Banned for environmental reasons. Drilling for oil in the shallow continental shelf of the west coast? Banned, same reasons. Drilling for oil in the shallow continental shelf of the east coast? Banned. Shale oil production in Wyoming and the Dakotas? Banned. What’s left? Drilling for oil off the continental shelf in extremely deep water, where fixing blowouts is extremely difficult – that’s what’s left. Considering the cost and complexity of drilling there, nobody would be doing it if they had been allowed access to oil in the much less challenging regions that are now off-limits. 

The third problem is the stupidity of the regulations themselves. Quite often regulations concentrate on irrelevant minutiae while leaving critical issues untouched. For instance, does anybody believe that BP drilling operation was completely unregulated before the Deepwater Horizon rig blew up? Of course not. Likely, they were subject to thousands and thousands of pages of regulations covering all kinds of details – most trivial. In all probability that’s why the Department of the Interior gave them a safety award. All those forms and all those requirements were filled out - to a t. The only problem was that those regulations left the elephant in the room – what do you do when the blowout valve fails? – untouched.

 

Speed limits are the root of all evil

I have come to a conclusion: Speed limits are the root of all evil in today’s nanny state. Think about it. Before speed limits existed, the cop and the citizen were on side on every issue. When the citizen saw a cop, all he felt, if he felt anything at all, was an increased sense of personal security and well being. After all, the cop is a public servant with a gun hired by his tax dollars to protect good citizens like himself. The cop’s presence only meant that he was less likely to get mugged or beaten.

But with speed limits, this changed. Today, when a citizen sees a cop, he instinctively covers his brake and hopes the cop did not notice him. Today, the cop is no longer on the same team as the citizen - even though the citizen still pays his salary. Today, the cop is not viewed first as a protector. He is viewed as a nuisance first and a protector second. Today, the first thing that pops into the citizens head when he sees the cop is how do I avoid the harassment he metes out.

This is not good, for it has set up a bad precedent - a bad precedent that the government has gotten into the habit of increasingly applying. First it is speed limits. Then its tickets for creeping through 4-way stop signs. Then it is RIDE spot-checks. After that came police helicopters searching for marijuana plants. The latest innovation is SWAT teams shooting homeowners who resist their assault on a wrong address. Looking at the headlines of a newspaper, and one is left with the impression that the government has declared war on its citizens. And you don’t have to be a pot smoker or a gun owner to feel this way. It seems the only citizens our justice system really empathizes with are convicted murderers who get released after 10 years of day passes.

In Democracy in America, Alexis de Tocqueville compared the attitudes of Americans and Europeans with regard to law enforcement. In America, de Tocqueville observed that the citizens seem genuinely interested in catching law-breakers. Formally, they participate in the posses organized by the cops. Informally, they help whenever they can. By contrast, Europeans look with disinterest and maybe even a little sympathy for the crooks as they watch the professionals do their work. De Tocqueville wrote this in 1842. How times have changed. Today, if a citizen defends himself successfully, or even if he takes the initiative and captures a crook, instead of getting a medal and an attaboy, he gets an upbraiding. The very idea. How dare a citizen take work away from a professional! In the 1940 movie, Its a Wonderful Life, the cop who found Jimmy Stewart drunk behind the wheel his car after he had crashed it into a tree - but caused no real damage to anybody but himself, turned off the ignition and made sure Jimmy got home safe. Today, he would have thrown the book at him.

The problem with our speed limits, and the reason they presaged many bad things, is not from the nature of speed limits themselves - in the abstract. There is nothing, in principle, wrong with making sure organ-donor ninja bikes don’t go 200 km/h down residential streets. The problem is that they were one of the first laws that were used as an instrument of social engineering. Any driver with a scintilla of common sense knows that the speed limits are set lower than can be justified by safety concerns. The fact that everybody routinely exceeds these limits on almost every road they use is proof positive that this is the case. The 55 mph limit on divided highways designed for 70-80 mph in the US is the most blatant example of this. The fact that police tend to enforce these limits in areas where it is safest to exceed them, is proof that the cops realize this.

The reason behind the excessively low limits is an impulse by certain politically influential segments of the population who want to micromanage their fellow citizens. These people are convinced they know better than everybody else what is good for them, and are not happy unless they are modifying for the better, coercively if necessarily, the lives of their less enlightened peers. The phrase, “He who governs best, govern least” is totally alien to them. I think Mencken was right when he opined that what motivates these people “is the brooding fear, that somehow someone somewhere is out there having fun.”

Of course, the intent of the law quickly becomes obvious to people when they see how it is applied. They realize that there is no good reason for the speed limits to be as low as they are, and they ignore them. The flow of traffic reflects the general consensus on what the correct speed limit should be, and most likely, this choice is much closer to the mark that what the poke-noses determined.

The problem is that now everyone is now a lawbreaker, and consequently now shares a fellowship with their fellow lawbreakers who only choose to break the commandments against rape and murder instead.
The cops who are unwilling participants in all of this (after all, they have no choice but to obey orders), is to feel embittered and take their bitterness out on people who should be their allies.

Cincinnatus, 1997