Comment: Ask BP

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In reply to comment: Question: Where does the risk go? (see in situ)

Ask BP

Go ask BP who is paying the external costs of the misplaced risk that they avoided. It's FEMA, many other US federal departments, state and local entities and the remaining portion was left to those suffering loss. This is because oil gets many subsidies, one large one being mining/drilling rights without full insurance requirements.

Want a better example? Look at the nuclear industry. Without the government insurance on that industry, nuclear sourced electricity would be more than double it's already 'higher than any other' price. As it stands now, they pay 1.2 cents/kWh which is about 1/10th of the sales price.

Just look at all the major man-made catastrophes. Love canal, TMI, Valdez, Enron, falling bridges, Fanny & Freddy, derivatives, the 2003 N.E. power grid outage and so on. Companies only pay what they can afford to lose without hurting their bottom line. All these were caused by documented neglect by one or more people and previously known by many others. Only one went to jail from the entire list.

Others will tell you that there "may" be the possibility of them going to jail and while you can see that is true, you can also see how that's working out. In short, when you bribe the regulators to make the rules in favor of your business practices, whatever you do becomes legal, regardless of right or wrong. The best example I can think of is: Did you know it's legal for one financial company to steal (borrow) shares from another one without notifying them, bet on them, return them at the original price and keep the profit? Replace "shares" with "cars" sometime and see how that goes.