Obama blames Gulf oil disaster on breakdown at BP | Reuters

Below is one of today's headlines from Reuters, and a link to the article. Unfortunately, the President is 100 percent wrong. What happened at BP was not any type of "breakdown", but an example the way capitalism works without genuine government regulation and oversight. This is not an example of "bad people" but of a a flawed system.

Businesses in a pure "ideal" capitalist economy are beholden to their owners only and to required to produce profit for their owners. Period. Businesses are not beholden to the public, to their customers (except to the extent that they need customers to make a profit for their owners), and most especially businesses are not beholden to "the environment" or to the human species. The only thing that can change this is "interference" by government, in the form of laws and regulations, regular inspections and oversight, and fines, penalties, and in extreme cases shutting down operations when laws and regulations are not followed.

If our government does not provide this type of "interference" there is no reason on earth for a manager or executive in any business to spend money for safety measures, tests and retest, safety equipment, etc. The logic of a capitalist business is to cut costs wherever costs can be cut, to produce the greatest profit possible.


Obama blames Gulf oil disaster on breakdown at BP | Reuters


Photo: Bands of oil are seen near the site of the Deepwater Horizon oil spill in the Gulf of Mexico off the coast of Louisiana May 21, 2010. Photo Credit: REUTERS/Lee Celano

Armchair Politicing

With high hopes and the opportunity for breakthroughs on issues ranging from health care to foreign policy to the economy, every pundit, blogger, and concerned citizen seems to be offering what they would do if in President-Elect Obama's position come January 20th.

With that, I offer my own proposal - his second policy goal should deal with energy.

I think it is widely and justifiably expected that his first act will be to come up with a series of economic proposals, many of which he outlined in his first press conference Friday. Looking past his proposals of extending unemployment benefits, infrastructure projects, and the like, I believe Obama should then turn his focus to energy.

The reasons are three-fold:

(1) Currently, there is vast public support for a new national energy plan. The latest post-election poll pegs US support at 78%. With such support, passing a comprehensive energy plan would continue the excitement among voters and calls for bipartisanship that have been made both inside and outside of Washington.

(2) Within a similar context to the first reason, a comprehensive energy plan is a much easier "win" politically than other Obama-proposed reforms like health care. A consensus can be forged in Congress as long as the proposal includes offshore drilling for oil, a policy that directs oil companies to use the land they already have and don't use, as well as more directed research and development of alternative energy. Building off of that consensus can be other policies such as a National Low Carbon Fuel Standard, increasing the Renewable Fuel Standard, or the focusing of infrastructure projects on upgrading our electric grid for alternative uses.

(3) Such policies can be framed within an economic context. The fabled green economy can be realized if the US gets truly serious about alternative energy and vehicles, as well as sustainability. A huge push for energy legislation directly after implementing specific economic policies, would show the world the US is serious and provide a good framework for future work towards a new, sustainable economy.

With that in mind, many pieces of legislation have been offered in the past few months that could be the source of discussion, two of which follow:

(1) 21st Century Energy Technology Deployment Act - Introduced in both the House and Senate, CETDA would focus on upgrading our electric grid and move to further deploy many of the alternative energy technologies the US has to the market. It sets targets for the efficiency of different alternative energy sources, such as wind and solar and it charters a 21st Century Energy Deployment Corporation that would act as the vehicle for implementing future technological breakthroughs.

(2) Green Energy Production Act - Introduced by Senator Sherrod Brown of Ohio, GEPA would create a specific green energy corporation within the Department of Energy, that would consist of both public and private members, to focus federal research and development efforts on green technologies. The corporation would direct grants to higher education organizations for R&D as well as towards projects aimed at commercializing products.

In both cases, the idea is clear. The US needs a focused effort to mobilize the, what seems like, haphazard group of federal and state R&D labs and universities working on energy efficient technologies. Such a one-two punch of economic-energy policies would move the US in a prosperous (in my opinion) direction.