Oil Cassandras

[steuard]

I've followed most of the news about the oil leak in the Gulf, but I haven't read much commentary or analysis about it lately (too many guests and travel). So perhaps those of you who have been following the discussion can answer a question that's come to my mind:

Is there any reason at all that the hard-core environmental activists don't have every right to say "I told you so" to the rest of us after this? (Not that they should...) After all, given the likely enormous economic impact of the disaster (let alone the environmental consequences) this seems like exactly the sort of scenario they've been warning about for years (and in very much the way they might have predicted, with the government complacently believing the oil industry's rosy assurances that nothing could go wrong).

Comments

[steuard.livejournal.com]

I thought about touching on those laws in my comment, but I cut that bit for the sake of brevity. I did touch on it there: while the existing massive corporations in this market may be able to afford to pay the costs out of pocket, one should not expect smaller, newer entrants to that market to have such deep pockets. So for a free market to function, there must be systems in place to counter that issue. I'd overlooked the idea of mandatory insurance (foolishly); I'll say a bit about that in a response to your post.

The other reason those laws exist, of course, is that corporations argued that without some sort of guarantee along those lines the costs of doing business would be too unpredictable and investors would not back them at all. So (to oversimplify a complex situation) the corporations agreed to submit to government oversight of their operations in exchange for the government "insurance" that they viewed as necessary in order for their business to be viable in the first place.