April 27, 2011

Regulating Extraordinary Disasters into Existence

By Bruce Thompson
"The perfect is the enemy of good enough."  One wonders if the big government enthusiasts of the Obama Administration have the gravitas and understanding of nuance to see the irony that government over-regulation played a major role in both of the "Black Swan" (highly improbable) man-caused disasters of the past year.  These are events that are outliers, carry extreme impacts and that we can explain after the fact making them predictable going forward. The two examples are the BP Macondo well accident in the Gulf of Mexico and the first explosion at the Tokyo Electric Power (Tepco) Fukushima nuclear complex.  Save for an overly cautious response to government regulation, neither incident would have ripened into the disasters they became.  Yet the instinctive response of the government has been greater and more intrusive regulation.  The government regulators display all the necessary elements of Santayana's definition of a regulatory...(Read Full Article)