Thomas Frank Isn’t Being Fair With Laissez-Faire

Posted by Jason | Posted in Government | Posted on 02-06-2010

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This morning I was reading a piece by Thomas Frank, the token idiotic liberal over at the Wall Street Journal. His piece is an argument against people calling for laissez-faire capitalism, and he uses the oil spill as his proof that we need government.

Just last week, for example, the Washington Post featured a 2,500-word essay by Arthur C. Brooks, head of the American Enterprise Institute, calling for a “New Culture War” for laissez-faire capitalism—a grand moral debate over the right relationship of business and government that Mr. Brooks felt his side was sure to win.

Well, the Gulf spill has given Mr. Brooks and his movement the perfect opportunity to stage that debate. On one side, we’ve got the liberty-minded oil companies, the gentle giants that, just two months ago, the right was so keen to liberate from federal interference and to unleash on the nation’s coastline.

And on the side of government, we’ve got the Obama administration, which has backtracked on its new offshore-drilling policy and even announced plans to beef up drilling regulations. True, for most Americans that’s not a lot of statism to deplore, but the tea party movement is accustomed to regard even the most insignificant regulatory initiative as a front in the eternal war between freedom and socialism.

“Liberty-minded oil companies”? Is he serious? What oil company isn’t buying politicians? What oil company is begging for less federal involvement? Oh sure, they may not want the government involved in their operations, but they sure love government to be involved in steering leases their way, sending troops off to secure oil over seas, etc. Oil companies are in bed with government.

Also, laissez-faire doesn’t mean unaccountable. Those harmed by the spill would have recourse through the courts. BP and the other companies involved would have to compensate property owners for the damage they caused.

Most importantly, who will find an inventive way to blame government for the disaster? Not blame it for reacting too slowly after the spill—that is merely a statist reflex in disguise—but for somehow causing the spill with its meddlesome concerns for safety and the environment?

The answer, as far as I have been able to determine, is almost nobody. True, newspaper columnist Charles Krauthammer attempted last week to divert a little blame toward “environmental chic,” arguing that one reason the oil companies were even drilling in the Gulf is that environmentalism has blocked their access to other spots, such as the Arctic National Wildlife Refuge.

But for the most part, what we hear from the right these days is essentially the same as what we hear from the liberals: complaints about corporate misbehavior, the need for more federal action, and demands for a shakeup of the regulatory agencies involved so that they might regulate better in the future.

Has Mr. Frank ever heard of moral hazard? I’d blame the government for making the oil companies focus on bribing them instead of focusing doing what’s necessary to protect themselves from liability. Maybe if BP wasn’t wining and dining MMS bureaucrats in order to get awards and win approval for their projects, they would instead hire the best minds to focus on safety instead of hiring the best lobbyists to mingle with politicians and bureaucrats.

In fact, one of the people leading the criticism of the Minerals Management Service—the regulator in question—has been conservative paladin Darrell Issa (R. Calif.), who correctly accuses MMS of having “too cozy of a relationship” with industry. Former GOP vice presidential candidate Sarah Palin, for her part, has actually used the spill to outflank Mr. Obama on the left, suggesting that someone should find out whether his administration’s vacillating response can be attributed to the sizable campaign contributions he has received from BP employees over the years.

These are refreshing arguments to hear from the right. After hurricane Katrina wrecked New Orleans, you will recall, conservative pundit Amity Shlaes famously described the Bush administration’s vacillating response as the traditional observance of the “Federalist Pause.”

And Galt only knows how many times “coziness” of the MMS variety has been celebrated as part of the struggle for free markets and free people. For a reminder, just pull out that famous 2003 photograph of James Gilleran, then director of the Office of Thrift Supervision, a bank regulator, “cutting red tape” along with a smiling group of bank-industry lobbyists.

So Frank does see that the regulators are useless, but he call is for more regulation. Are we to believe every time there is a failure that that just means there wasn’t enough regulation, when it turns out the regulators were all corrupt?

But things are different today. The catastrophe is too great to brush it off with the usual laissez-faire scholasticism. So the great debate must wait. We are all liberals for the duration.

via Thomas Frank: Laissez-Faire Meets the Oil Spill – WSJ.com.

I’m still not a liberal Mr. Frank, well in the modern day context anyway. Laissez-fair is the correct approach. It is the only way for companies like BP to pay the piper instead of the governors. Mr. Frank comes to these debates with too many assumptions. He assume laissez-fair would mean no accountability, which is wrong. It would be increased accountability. Remember the corporate veil is a state created entity to protect the big wigs from liability. Remove that veil, and see how many idiotic risks are taken by our economic titans.

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