Painting by Numbers: A Recipe for Disaster
Five years after Hurricane Katrina, the BP oil spill offers a chance to learn a lesson that we should have learned five years ago. Certainly, the two events differ in important ways – the hurricane itself was a force of nature, and the oil well blowout although powered by nature, was clearly the result of human activity. But the hurricane was not just a natural disaster. Its impact resulted from a series of human decisions and actions that exacerbated the hurricane’s effects and impaired the response effort. The lesson we should learn from these disasters is this: numbers may not lie, but they will fool us if we let them. Numbers – like those that predict how likely a disaster is, or the cost of taking steps to prevent a disaster – can be a helpful tool as we make decisions, like what kinds of levees to build and whether to allow oil drilling in a particular area. But the problem with numbers is the very thing we love most about them. They’re so precise. They seem to give us “the answer”.
The problem is that numbers appear much more certain than they are. They give you an answer, but it …
CPR Member Scholar Sidney Shapiro will be on the Leslie Marshall Show at 7:20ET this evening discussing regulatory failures, from the BP oil spill to the Katrina disaster of five years ago, and the lessons learned. The program is syndicated on TalkUSA and streams live.
Cross-posted from the Huffington Post.
Eager to blame the state of the economy on the Administration, House Minority Leader John Boehner recently tried to argue that the Administration's regulatory agenda is standing in the way of recovery. Sadly for Boehner, he tried to make that case shortly before the fifth anniversary of Hurricane Katrina, and while the smell of the BP oil spill still lingers in the Gulf. By any reasonable measure those two incidents are among the costliest and most devastating examples of the human and monetary costs of lax regulation.
In a letter to President Barack Obama, Boehner criticized the Administration's plans to implement 191 rules with potential economic costs greater than $100 million, arguing that "uncertainty" in the business community about the fate of the regulations is "contributing significantly to the ongoing difficulty our economy is facing." Apparently, Boehner and other opponents …
In November 2008, with Riegel v. Medtronic recently decided, bills introduced into Congress to overturn its effect, and Wyeth v. Levine about to be argued in the Supreme Court, the President of the American Bar Association created a task force to review ABA policies regarding preemption of state tort law. The composition of the task force was equally split between those who generally favor preemption and those who generally oppose it and included both private practitioners and academics (I was one of those academics). Earlier this month the task force unanimously presented its recommendations to the House of Delegates of the ABA, the policy making body of the ABA, and the House adopted those recommendations by an overwhelming majority.
Eschewing any attempt to take a substantive position on the desirability of preemption of state tort law or the lack thereof, the task force focused on the procedures …
Cross-posted from Legal Planet.
Administrative agencies sometimes issue regulations that have the effect of overruling state law — and sometimes that is the sole effect of the regulation. This proved quite controversial during the Bush Administration, which used agency rulemaking efforts to cut back on state tort law. The ABA has a adopted a new resolution dealing with this issue. The resolution reads:
RESOLVED, That the American Bar Association urges Congress to address foreseeable preemption issues clearly and explicitly when it enacts a statute that has the potential to displace, supplement, or otherwise affect state tort law by:
(1) clearly and explicitly stating when it intends to preempt state tort law; and,
(2) clearly and explicitly setting forth the extent of the preemption of state tort law it intends, and the extent to which, through a savings clause or other means, it intends not to preempt state tort …
It turns out there’s more than one way an offshore oil rig can kill a fish. Even when they’re not spewing oil into the ocean, oil rigs kill vast numbers of fish and other aquatic organisms in their daily operations by sucking them up into their cooling water intake systems, where they get squashed against screens and otherwise beat up by the mechanism. Power plants do it too, as does any industrial facility that circulates water for cooling. Congress recognized this problem four decades ago and so put a specific provision in the Clean Water Act directing the EPA to regulate cooling water intake structures. But there’s been a fight raging for years about just how EPA should carry out those responsibilities.
You may remember that the U.S. Supreme Court weighed in on this controversy last year in Entergy Corp. v. Riverkeeper, largely …
The Minerals Managements Service's coziness with an industry it was supposed to be monitoring has brought attention back to an all-too-pervasive problem: regulatory agencies becoming "captured" by the regulated industries.
This morning the Senate Judiciary Committee's Subcommittee on Administrative Oversight and the Courts is holding a hearing on “Protecting the Public Interest: Understanding the Threat of Agency Capture.” CPR Member Scholar Sidney Shapiro is testifying about the nature and extent of agency capture, and what Congress can do about it. (There's also a news release.)
Shapiro says there are three preliminary types of capture:
- Political Capture occurs when an agency fails to protect the public and the environment because regulators friendly to industry block regulatory efforts or do not enforce the laws and regulations then in effect.
- Representational Capture occurs when industry representatives regularly appear before an agency, offering detailed comments and criticisms, while …
Now that Congress has passed legislation creating a new Consumer Financial Protection Bureau in the Treasury Department, attention has shifted to how the Obama Administration will implement the new law.
The issue of who President Obama should appoint to head the new agency is now front and center. Consumer groups and many members of Congress believe that Professor Elizabeth Warren, who came up with the idea for a consumer protection agency for the financial sector and has been an aggressive consumer advocate during the entire financial crisis, should be the President’s choice. The banking industry’s position is “anyone but Warren.”
Elizabeth Warren (who was my colleague at the University of Texas for many years) is the most qualified candidate. Although she would inevitably have to make compromises in launching the new agency, she is a charismatic leader who would remain a strong consumer advocate and …
The EPA released a guidance document on Monday that promises to integrate environmental justice considerations into the fabric of its rulemaking efforts. Titled the Interim Guidance on Considering Environmental Justice During the Development of an Action, EPA’s Guidance sets forth concrete steps meant to flag those instances in which its rules or similar actions raise environmental justice concerns. Specifically, the Guidance directs agency staff involved in rulemaking to “meaningfully engage with and consider the impacts on” communities of color, low-income communities, indigenous populations, and tribes.
EPA’s Guidance responds to an issue raised by CPR Member Scholars at the dawn of the Obama Administration. In our 2008 report, Protecting Public Health and the Environment by the Stroke of a Presidential Pen, we observed that efforts to address environmental injustice had languished in the 15 years since President Clinton issued the Environmental Justice Executive Order (Executive Order …
Cross-posted from Legal Planet.
A key figure in behavioral economics recently issued a warning about over-reliance on its findings. In a NY Times op. ed, Dr. George Lowenstein raised questions about some uses of behavioral economics by government policymakers:
As policymakers use it to devise programs, it’s becoming clear that behavioral economics is being asked to solve problems it wasn’t meant to address. Indeed, it seems in some cases that behavioral economics is being used as a political expedient, allowing policymakers to avoid painful but more effective solutions rooted in traditional economics.
Behavioral economics should complement, not substitute for, more substantive economic interventions. If traditional economics suggests that we should have a larger price difference between sugar-free and sugared drinks, behavioral economics could suggest whether consumers would respond better to a subsidy on unsweetened drinks or a tax on sugary drinks.
But that’s the …
