Archives for May 26, 2010

Interestingly, the various disasters that have been dominating recent news are playing out like bad movie sequels. To be specific, each new disaster takes the dominant theme of the previous one and then seems to try to top it. In the case of Toyota, it was found that they were a bit too cozy with the folks who were supposed to be regulating them. In the case of the financial mess, it was once again found that the regulators and the “regulated” were very cozy. It was also found that some of the foxes guarding the other foxes (to keep them from the hen house) were viewing naked foxes online. In the latest disaster, the BP oil spill, the regulatory agency folks seem to have been cozy with the drilling companies and some were also apparently viewing porn. The new twist was that at least one regulator admits to using Meth. God only knows what will be next.

Since Obama is president now, he will be criticized for these regulatory failures. However, the problems with the regulators of drilling are prior to Obama (2000-2008). While it is tempting to put the blame on the Bush administration, this problem seems to be a systemic one that crosses party lines and administrations. After all, the Obama administration is rather cozy with Wall Street.

The main problem in these cases is that there is a lack of enforced regulation that keeps the people who are supposed to be regulating from getting too cozy with the people they are supposed to regulate. In short, there is a serious problem with corruption and undue influence. While some aspects of the problem can be addressed with revised regulations (and enforcement of existing laws), regulations are only as good as the people who enforce them (or fail to do so). This indicates the classic problem of how to get ethical and competent people into such positions and how to keep them from succumbing to corruption. It is, in short, the general problem of good government.

Some obvious fixes include outlawing gifts, having regular “inspections” of regulators to determine what they are doing (or not doing), and checking for conflicts of interest (such as close relations to the folks in the industry to be regulated). Other fixes including having stronger regulations that are harder to bypass or work around. After all, weak points in the laws make it easier for corruption to grab hold.  Of course, these weak points are not the fault of the regulators-they are created by politicians by accident or by design. In the case of designed weak points and loop holes, these serve to undermine good regulatory practices by building in ways for companies to get around regulations. Typically companies have to use their influence to take advantages of weak points, which is how corruption can get started.

So, good laws and good people are the fix. As always. Good luck with that.

As a final point, I want to discuss the drugs and the porn. My rough hypothesis is that the cozy relationships played a causal role. One possibility is that corruption breeds corruption. In other words, when a person has a moral weakness in one area, it makes it easier for other moral weakness to take hold. A second possibility is that one corruption did not contribute to another, but that both are the effects of bad character. A third possibility is that the cozy relation between industry and the regulators left the regulators with little real work to do.  As the saying goes, idle hands do the devil’s work (that is, clicking links to porn).

Interestingly enough, porn would probably be a useful indicator. To be specific, if a government employee has the time to view porn at work, then s/he is probably not doing his/her job properly. As such, checking for porn in the workplace would be a good idea (and not just for the usual reasons).

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