The False Promise of Regulation

by Jeffrey Miron on June 21st, 2010
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An examination by The New York Times highlights the chasm between the oil industry’s assertions about the reliability of its blowout preventers and a more complex reality. It reveals that the federal agency charged with regulating offshore drilling, the Minerals Management Service, repeatedly declined to act on advice from its own experts on how it could minimize the risk of a blind shear ram failure.

The libertarian skepticism of this kind of regulation is not based on blind faith in markets; it is based on open-eyed recognition of how regulation works (not) in practice.

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  • Bill

    I ques my questions are:

    What incentive do the regulators have to regulate?

    How can they regulate an industry that they do not understand as well as those in the industry.

    How much are they going to regulate those that give money to their campaigns?

    Perhaps the governments regulation and stamp of approval allows companies to take more risks as the risk they take may not be under the umbrella of government regulation.

    If our federal officials were more personally liable for their actions as we are in the private sector perhaps things might be different.
    I realize this has complications.

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