Property Rights Solves Oil Leaks Better than Regulation

Not only have millions of pages of American regulations failed to prevent the oil leak, but regulations are in fact the primary cause of the leak, and regulations are also the primary cause of the failure to clean up the oil. Let’s look at three compelling examples before we look at the solution:

Everyone knows by now that America lacks the ships and technology to clean up the oil leak, and we all know that several foreign countries have offered to provide ships and technology that could do the job. However, the US government said no to most foreign help for the first two months – maybe because of pride, or maybe the usual government incompetence, or maybe it is government regulation such as the The Jones Act that prevented these foreign ships from entering US waters.

The Jones Act was passed in the 1920’s to favor American unions, and after 57 days of nearly zero progress, Obama is still reluctant to offend American unions and waive the Jones Act so that foreign ships can help. Consider that Bush waived the Jones Act within four days after Hurricane Katrina. This reminds me of “regulatory capture” where the regulators are basically working to protect established businesses from lawsuits and to create hurdles for new competitors. In this case we could be witnessing a phenomenon I will call Presidential capture – by the unions.

Perhaps neither Obama’s pride or incompetence, nor The Jones Act have been slowing down the cleanup. I don’t dismiss the Jones Act just because the Coast Guard said that no one had requested a waiver. Consider that the Coast Guard is not credible as the sole source because it works for the President, and consider that no one will request a waiver if they expect it to be rejected. Instead, I tend to dismiss the Jones Act because it does not restrict oil recovery vehicles or ships more than 3 miles from the coast.

Given that skimmers suck up oil and water and spit out the water, which contains 5% of the original oil, perhaps the real cause of the cleanup delay is the EPA regulation that prevents water containing droplets of oil from being dumped into the sea.

I don’t know why the Obama administration has rejected the dredging ships, but regardless of the reasons for these government road blocks, the key point is that they are government road blocks.

The second example is the regulation that limited BP’s liability for any accident to a mere 75 million dollars. Clearly, if BP knew they would be required to repair any and all damage they caused to our property, then BP would have been more careful, and we know in this particular case that BP could have been more careful.

The third example of how regulation caused the oil leak is that BP had to drill in 5000 feet of water because regulations prevented drilling on land, and regulations prevented drilling in shallow coastal waters.

How’s that Big Government working out for you?

The solution to the BP oil leak is the a fundamental human right that the mainstream media fear to utter aloud.

It is Property Rights.

It is the authoritarian leftist bent of the elitists who control the mainstream media that makes them fear the concept of property rights because one cannot respect property rights and also redistribute wealth. The two concepts are diametrically opposed.

Not only would Property Rights solve the BP oil leak, property rights would have prevented it in the first place.

Property Rights are simple. If BP pollutes my property then I (or my agents acting on my behalf) have the right to force BP to restore my property or provide equal compensation, and if BP knows that it will be forced to clean up its mess, then it will be very careful to not make that mess.

Whereas Property Rights are simple, Big Government is complex. We have millions of pages of regulations. Big Government tries to regulate everything, which offers more opportunities for bribes, human error, miscalculation, and confusion; however, Big Government is neither omniscient nor can it predict the future.  BP obviously did not fear us or our agents in Big Government acting on our behalf to defend our property rights.

How’s that Big Government working out for you?

Big Government decouples actions from consequences. Big Government insulates business leaders from the consequences of their business decisions.

Regulation strangles innovation and makes us less safe in the long run. For example, assuming that by some miracle government actually mandated  the best valve for each oil well in every single one of the diverse set of variables related to each well (astronomically unlikely), then if a better valve were invented, it is extremely unlikely that regulators would adopt it in a timely manner, thus making us less safe in the future than we could have been. Of course, regulations would make businesses less likely to invent a better valve in the first place because they couldn’t sell it until they got government approval, thus reducing innovation in a manner that we cannot even see or measure.

Very sneaky.

Very douchy.

How’s that Big Government working out for you?

Although regulation strangles innovation that could make us safer, consider that sometimes regulations do prevent bad behavior – even violations of property rights. Regulation sometimes prevents mistakes by companies, and thus prevents some problems from escalating to the point where government would have to enforce our property rights.

It is in our best interests to avoid a situation where we are dependent on Big Government to protect our property rights because Big Government doesn’t care. In fact, Big government is more likely to abuse our property rights itself than to defend them. How else can it redistribute our land and wealth to its constituents such as wealthy land developers as well as voting blocks of poor people.

Therefore, by preventing some problems from escalating to the point requiring government action, which would result in failure either by incompetence or corruption, regulation protects us – not by  regulating business – but by regulating government.

How’s big government working out for you?

It is the left that grew government and scrubbed concepts like property rights from our national dialog, which more and more people are beginning to realize was a really douchy thing for the left to do to we the people.

Big Government tries to make us believe they are competent, and if they can’t convince us of their competence, then they try to at least assure us that they’re the good guys.

The reality is that Big Government is incompetent. The reality is that Big Government is not the good guys. The reality is that Big Government avoids reality.

How’s Big Government working out for you?

Can you imagine how a smaller government whose main purpose is to protect our rights would help with the reality along the Mexican border? I’ll bet you can.

The Promise of Reality is Freedom.


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Josh - June 4, 2010



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