Who’s to Blame?

Tuesday 11 May 2010 - Filed under Dumbassery + Government + Regulation

Apparently executives from the 3 companies involved in the gulf oil spill, BP, Transocean and Halliburton, are tripping over themselves because they can’t get to the podium fast enough to lay the blame for the spill on someone else.  If the Libertarian Party was in charge of shit, the answer would be easy.  According to a mass email sent out to all Libertarian Party members,

The New York Times has reported that federal law limits BP’s liability to $75 million, and Transocean’s liability to $65 million.

These kinds of artificial liability limits distort the markets, and basically create “moral hazard” by encouraging companies to act in riskier ways than they would otherwise. If BP’s well causes damage to property, then BP should be fully liable for all of the damage. It is BP’s reponsibility to “make whole” whoever gets damaged.

If Congress hadn’t limited BP’s liability, it’s likely that BP would have acted differently. Knowing that a spill could cost them billions, BP might have demanded additional safeguards for their well, or tested their safeguards more thoroughly. These choices would have been expensive, but they might have prevented the huge costs that the spill area is now facing.

The focus is on personal responsibility and the utmost protection provided for property. If someone does something, and in the process of doing that something they damage another’s property, that someone who was doing that something should be legally required to fix the problem, however extensive, and pay for the full expense out of pocket.  No subsidies, no limits.  When we get government out of the business of limiting liability, companies will start to act as if they have something to lose and conduct their businesses accordingly.

2010-05-11  »  madlibertarianguy