realcoolhand
Posts: 261
Joined: 3/22/2009 Status: offline
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quote:
ORIGINAL: maybemaybenot quote:
ORIGINAL: realcoolhand Difference between Obama and Bush: Bush woke up every morning for a week before Katrina, saw that a hurricane was headed toward the city, and thought "heh, I can deal with that tomorrow." Obama woke up one morning and the Gulf was full of oil. Agree on the Bush point. < see I told you we would agree on a few things > Agreed on Obama point, with exception. Obama has had a month to do something... he has sat tight and not dealt with it either. Unless you call saying " Plug the damn hole " doing something. In fairness, plugging massive under-water oil leaks isn't traditionally something the President is responsible for, or (come to think of it) something that anyone has had to deal with. This is really the sort of risk that we should expect the folks who CREATE the risk to be prepared to deal with; they SHOULD have to figure the FULL cost of solving the problem into the basic cost-benefit analysis they use to evaluate the whether deep-sea drilling is a good business decision. After all, they're the ones who capture the benefit of oil extraction. Which brings me to my pet peeve; tort reform. It comes in all shapes and sizes, and recently we've heard a lot about how the damages for which BP may be responsible are capped at some (now clearly ridiculously low) figure. Sure, it SEEMS to lower the cost of doing business and, in this case, encouraged more oil production. That said, it only SEEMS to lower the cost of doing business. What it really does is externalize the cost of massive fuck-ups like this one, shifting those costs to the public. At the same time, it magnifies those risks. It magnifies those risks by incentivizing BIG risks over reasonable risks. Say the cap on damages is 75 million. If an oil company only takes risks that could do 12 million in damage a pop, then they will have to eat the whole cost of those risks. However, if they take chances that could cost billions, anything over the 75 million cap is basically free money--they can reap the reward incumbent in the risk, without actually bearing the risk. Perverse economic incentives hurt everyone, and tort reform creates perverse economic incentives.
< Message edited by realcoolhand -- 6/2/2010 6:09:01 PM >
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