Saturday, May 08, 2010

Oil Spill: BP Suffers Setback on Containment -

Oil Spill: BP Suffers Setback on Containment -
BP lowered a concrete-and-steel structure known as a containment dome almost a mile to the seafloor in an effort to stop the flow of oil from the drilling site. But gas hydrates, ice-like solids that form when methane gas combines with water under certain conditions, clogged the opening at the top of the dome, preventing oil from being funneled to the surface, said Doug Suttles, BP's chief operating officer, on a media conference call. "I wouldn't say it has failed," Mr. Suttles said at a news conference. "What I would say is what we attempted to do last night wasn't successful."

Tragically funny.

The same people who are saying "It didn't fail" also assessed the risk of the drilling at near zero. Is english not their native language?

The trajectory of this is obvious. With ever bigger government employing a "too big to fail" philosophy, corporations get sloppier and sloppier with their risk assessment. "If this goes well, big payout, if not, let the public sector take over the clean-up... just like they did last time."

But what really happens is that governments use these "mistakes" as ammunition for more government "preventative" measures. More government supervision, more government picking the favorites, accelerating the "shit rises to the top" phenomenon. We trade glad-handing corporate types for glad-handing federal types and revolving doors as we see in the finacial sector. And then?

And then there is no accountability. Oh well, the government officials did their best. Suspend them for two weeks if they downloaded any porn. No firings, no loss of generous retirement benefits. The taxpayers will pay, now and into the distant future. True believers in the media will hush it all up for us.

Capitalism can work. But companies must pay for their mistakes, to the point of extinction for the big mistakes. In the US we use every disaster as an excuse to expand government, making blame placing harder rather than easier. In China the top guy hangs himself. Neither system does it right. But I would say that at least the Chinese model does something to discourage others from making similar mistakes. Hanging isn't necessary. Bankrupting the top management would be a much better approach. Branding them with felonies would make it harder for them to repeat.

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