The oil gusher spewed oil into the gulf from Apr until mid July.  The fall-out from default derivatives trading continues to drive unemployment rates, the housing markets and state government budget shortfalls.  Both in oil and in finance when the crisis hit the people looked to the government agencies charged with monitoring these industries and we received the same answer "we don't have anyone in our agency with the expertise to provide any useful help".  In both cases,  we invoked our belief in Reagan Regulation and allowed industry the opportunity to chose the responsible action - and they didn't. In Reagan Regulation theory BP of course would install the safety device which automatically triggers because that $50,000 investment could have made the $20 billion escrow fund unnecessary. Of course, AIG would ensure the mortgage derivatives they were insuring were constructed of sound loans.  Reagan Regulation results turn out to be significantly different than Reagan Regulation theory.  I find this particularly annoying because I believe the fundamental cause of the creation of Reagan Regulation theory has significantly inhibited the economic prosperity of the country.  Specifically poorly constructed and / or outdated regulations do stifle business.  Unfortunately, whatever Reagan Regulation theory used to be under President Reagan isn't what it is today.  Today the Reaganites have decided Reagan Regulation theory means no regulation.  Instead of the anarchy promoted by the self declared Reagan disciples I propose a McMasters Regulation theory.  

The premise of McMasters Regulation theory is make regulations so they provide an even playing field for businesses without causing waste in fulfilling unnecessary or outdated requirements.  One of the key requirements for ensuring an even playing field is to properly fund and staff the regulatory agency.  The easiest way to properly staffing and funding regulatory agency is to make sure the regulations are necessary and relevant.  Another way to say this is don't pass a bunch of laws that don't make sense.  If you pass a law make sure someone is enforcing it.  In general I believe the fewer regulations the better.  But that can't mean no laws.  I also believe this requires the government to develop and maintain experts within the regulatory fields.  Lets look for example at the government people in charge of the oil gusher and the financial leak.

Has Admiral Thad Allen given any indication he is anything more than a government repeater of BP information?  The reason for this is because not only did he not have any contributions to help solve the Gulf crisis none of the staff around him had any expertise about oil operations.  Consequently, for the first few weeks the government experts were regulated to be mouth pieces for the BP company line.  When BP said they thought the well was leaking 10,000 barrels a day the government line became 10,000 barrels a day.  NPR went out and found an expert that within days of the first postings of video was able to more closely estimate 70,000 barrels a day.  Unfortunately, the system which moves our military members up through the ranks ensured the person in charge would not possess the skills necessary to evaluate a full spectrum of possibilities; so when BP made the assertion it didn't matter how much oil was coming out of the well our government representative mouthed the same response. Of course this was a silly response since how much oil was leaking should have directly affected the protection response.  The scary part of this entire episode was at one time it looked like there was going to be an outcry by some of the liberal sect of our society for the government to take over operations.  Fortunately, the media was responsible and didn't play up this story.  I'm almost certain the story stopped because in the back rooms the Admiral quietly admitted to the reporters they would be helpless to work the problem as the lead agency.  The question I leave you with is, "Did the well get capped earlier, later or neither by having the government's involved in the process."  Furthermore, would the public have benefited by having competent experts in the MMS or other regulator agency to support and advise the person in Admiral Allan's post?

Secretary Geithner made the rounds on Sunday morning TV recently.  I personally would have a lot of sympathy for an egg head that just didn't do television good.  I'm prone to stage fright and although I got myself on the ballot last election it's probably a good thing I didn't make TV appearances. However, from all indications Geithner's tax return problems probably were a good indication of his capability of understanding complex financial situations.  I saw his appearance on both Meet the Press and one other Sunday morning political show.  He was very smooth in offering that the President's plan was leading us to better times but he was either unwilling or unable to go into more depth than trust us because we proclaim we're smart.  

My worry is this lack of expertise at the top of the regulatory agencies is an indication of a greater problem within the ranks of those same and all other government regulatory agencies.  I'm tempted to try and analyze why:  Could it be the get along to get along mentality in most organizations?  Could it be that people now start to hide the fact they don't know what they're doing from day one when they walk into the organization, when they get promoted up they have to surround themselves with other people that don't know what they're doing so they don't get found out?  I don't really know. But it does lead me to wonder how long will it take until a majority of our bridge and building engineers don't know anything about bridge and building inspections and disreputable companies start to skimp on construction practices without being discovered until they start falling all around us.

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