Friday, July 2, 2010

Apathy in America: Part One

Politics seems to have frozen the ability for America to react to any situation ranging from the bigwigs in Washington to the people sitting in front of their TV watching Glen Beck or Keith Olbermann. This general sense of apathy towards local and national issues has resulted in bad situations getting worse and although it is scary to see America slip into this indifferent state, it is not surprising. Be assured, there will be no ranting and repeating main stream political trash in this article, this will only be a thread of personal opinion regarding the negative system of incentives that exists in this nation.

The BP oil spill will serve as a starter and foundation to this thesis of apathy in America. The spill at the Deepwater Horizon drill site started about two months ago and it is projected that the relief wells being drilled will take another month to complete. Although this situation is a tragedy and future care must be taken to prevent such a large spill, the right thing for America as a nation right now is to clean up the oil as fast as possible. However, the very opposite has happened and now the entire country is thoroughly frustrated with; well, everyone. Republicans are blaming and bashing President Obama while Democrats and Obama are bashing BP. Meanwhile, the big media is breeding anger and hate at every possible level to insure people continue to watch the oil leaking on streaming video feeds. Every pundit has a solution in their own mind but none of the solutions are being implemented. Why?

The answer is not a one sentence solution as is the norm per the big media nor is it 100 percent accurate due to massive complexities of the oil spill. Instead, this answer does allow an explanation of why this spill has not been handled efficiently. It is all about the incentives.

In an Article by Paul H. Rubin (Wall Street Journal, 7/2/2010, opinion) he clearly lays out the many contributing factors of why the cleanup is progressing at such a slow pace but he fails to explain why these solutions are not being implemented. First, the EPA could temporarily relax restrictions on the amount of oil in discharge water which is currently at 15 parts per million. This law is used to clean up small spills in clean water, however, this is a very large spill and focusing so much on 15 parts per million is a colossal waste of time. What is stopping the EPA from temporarily easing regulations? Their incentives as an agency have been to increase the environmental responsibility of both the government and the privet sector. Easing restrictions on clean up laws would be seen as a loss of face in the political world and could inspire companies to challenge many of their hard earned laws. In addition, the agency would lose many of the environmental lobby groups that provide so much money to EPA. Easing restrictions would be political suicide for many of the EPA head leaders. The incentive to keep regulations outweighs the benefit of a faster clean up.

The second point made by Mr. Rubin is the failure of the President to issue an executive order to waive the Jones Act, which keeps foreign ships from operating in U.S coastal waters. Many nations have offered their ships and services to help clean up the oil and such experienced assistance would boost the cleanup dramatically. Incentives once again help explain why that on day 70 of the oil spill America has not accepted foreign help.

Obama has a very large support base from union labor which viciously defends the Jones Act regardless of the oil spill. Any temporary halt of the Jones Act would be considered a slap in the face to organized labor and Obama would lose money and support from union lobbyist. This would be a devastating blow to the Democratic Party right before important mid-term elections. Obama might commit political suicide if he waived the Jones Act. These incentives outweigh allowing the world’s largest oil skimmer from Taiwan to enter the Gulf of Mexico even though it can process nearly 500,000 barrels of oil a day out of the water.

The last point made by Mr. Rubin is why only 400 oil skimmers are operating in the Gulf out of the fleet of nearly 2000 in the United States. Bureaucracy and regulations are keeping these ships stationed at home ports in case of an oil spill. As a senator from Florida pointed out, “It is the equivalent of not sending fire trucks to the scene of a fire for fear that a fire could start.” If congress were to order ships to the oil spill from other areas of the country and a spill happened in those areas the ships had just left, the local anger at such an action would lose a voting congressman his next election. Although the chance of another major spill in another area of the country is astronomically high, the incentive to avoid losing an upcoming election is too high for a bill to find the floor of congress.

These were just three easy solutions pointed out by Mr. Rubin and there are thousands more ways to speed the oil clean up. The problem is that misplaced incentives in politics have kept actions from taking place. There is also a plethora of reasons that big media has not pointed out these easy solutions but incentives keep them from informing the public. An entire book could be written on misplaced incentives in the oil spill but that is a task for a smarter person with time on his hands.

The lesson to learn here is that incentives rule people’s actions and politics is no different. To find answers to issues, do some research and critical thinking on what could be preventing a solution to a situation. This can be done on every level of society, from individual day to day tasks all the way to geo-politics. Just remember, it’s all about the incentives.

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