What Are The Real Lessons From the “Deepwater Horizon” Accident?

Like everyone else I’ve been watching the results of the aftermath of BP’s deepwater exploration rig “Deepwater Horizon” explosion and subsequent sinking and release of millions of barrels of oil into the Gulf.  I’m sorry for the people on the gulf, particularly on the Louisiana and Mississippi coasts, that are having to deal with this mess, my heart goes out to you much as it would if your homes burned down (by accident), you were in a serious car accident (by accident) or you lost your homes to a tornado or hurricane (natural disaster/accident).

I hope my point wasn’t too subtle for anyone.  This was an ACCIDENT.  In time, we’ll find out if it was a preventable accident or not, but for now it’s just a horrible accident.  The plain truth is that it was also inevitable.  We’ve been drilling offshore since the 1930’s and the modern drill platforms appeared in 1961 or thereabouts.  Right now there are a little over 600 rigs available for lease or use by the oil companies to drill for oil.  The oil exploration business is and INDUSTRY.  It’s a very complex industry and anytime you deal with a complex industrial process from time to time there is going to be an accident.  All of these marvelous machines and all of these trained workers have a human component and that component will, from time to time, fail either in the design or implementation of their machines or in their performance of the job.  The point is, industrial accidents happen.  The always have, they always will, it’s only human.

The real test is what happens after the accident.  How does the company respond to the accident and its aftermath?  In the case of the Deepwater Horizon, I’d have to say that BP didn’t respond very well.  I believe after talking to people that work on the rigs out in the gulf and people that are quite knowledgeable about the subject that INITIALLY, BP was trying to save the hole.  I don’t think that lasted long, though, because they quickly came to the realization that it wasn’t going to be possible to save it.  From that point on, BP’s only interest was in containing the oil short term and plugging the hole long term.  Yes, I’d call that a failure on their part.  I think they’re still failing in some ways when I read and see people and boats ready to go to work to contain and clean up that are sitting and waiting for contracts/orders/authorizations.  It would be nice to think that these altruistic souls would just go out and get to work but the harsh truth is it takes fuel to run those boats, it takes money to pay people that should be fishing but can’t and need other work, and only a few can actually just pick up and go long term to do this kind of thing, everyone else needs some kind of money to be able to actually get to work.

BP, being such a large international corporation, is a political entity itself.  Except for a very few at the higher levels, everyone there is worried about their job.  They’re not going to exceed their authority and the buck gets passed up higher until there is actual approval to do some of these things, so people wait.  This is a failure.  Likewise, our federal government has failed miserably.  I believe this failure would have occurred if the president’s name had an (R) or a (D) after it for the exact same reasons as BP’s failure, nobody willing to take the responsibility to actually DO anything.

If we understand and accept that the accident was inevitable the question then becomes how do we deal with it once it happens?  Obviously this is where we need to make changes and improvements.  FEMA and the USCG need to have an immediate response plan in place that the field commanders can instantly begin implementing.  The oil companies need to do the same thing.  Both parties need to realize that in some cases, this accident being a prime example, there is no possible way to have all of the resources you need instantly available 24/7 so when help is offered, as it was by the Dutch and other European nations, they are able to bring them in and put them to work right away instead of waiting for 2 months and then when they’re here, ignoring their input and recommendations.

The mess will get cleaned up.  The hole will get plugged.  The gulf will return to normal.  It’s going to take a long time, of that there is no doubt, but for this to be anything but a complete waste the oil companies and the federal government need to use this to learn where their system failed so that when the NEXT accident happens they are better prepared to contain and clean up the resulting mess.

-john stricker

Published in: on June 15, 2010 at 7:55 am  Leave a Comment  
Tags: , ,

The US Government Has Limits. REALLY! It Does!!

Contrary to what many in Washington that say they represent us believe (on BOTH sides of the aisle) the US Government does, indeed, have limits on what it can and cannot do.  They’re not even really that hard to find, all one has to do is look in a copy of the United States Constitution.  It’s all in there.  So let’s take a few minutes and actually LOOK at it, READ it, and try to UNDERSTAND it, at least where it applies to how the founding fathers wanted to limit the power of the federal government.

The limits are really laid down in the amendments, particularly the first through eleventh.  The real killer to federal power are the ninth and tenth amendments and they were not placed there by chance or at random.  So we actually start with the text I’ll copy them here:

Amendment 9:  The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

Amendment 10:  The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

Pretty simple, isn’t it?  The Constitution is a document that was adopted to specifically limit the power of the federal government.  To understand where the founding fathers are coming from, they had just thrown aside the yoke of a repressive, dictatorial monarchy and had no desire to ever see their new nation fall under the same taskmasters.  The ninth amendment makes it quite clear that the purpose of the Constitution is NOT to limit the people or the states, except in some very specific circumstances, but rather to limit the power and scope of a federal government.  The wording of the ninth amendment is quite clear on that point.

The tenth amendment is also quite clear.  It says, very plainly, that if it doesn’t say in the Constitution that the federal government can do it, then it can’t do it.  If it doesn’t say that the States or the People can’t do it, then they can do it.  Simple.  Elegant.  To the point.

Prior to passage of the Bill of Rights James Madison wrote in the Federalist Paper No. 45, “The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite.”  It’s important to note that Madison saw no need for the Tenth Amendment feeling the Constitution would take care of this on its own, however other founding fathers disagreed especially as they were considering the other amendments included in those first ten and insisted that the ninth and tenth be included to prevent the growth and excess of federal power.

Alexander Hamilton wrote in Federalist No.84, “[A Bill of Rights] would contain various exceptions to powers not granted; and, on this very account, would afford a colorable pretext to claim more than were granted. For why declare that things shall not be done which there is no power to do?”  Clearly, Hamilton was concerned that some of the powers delegated in the Constitution and even the Bill of Rights could at a future date be perverted and twisted in a “catch-all” type of mentality empowering the federal government with rights it was never intended to have.

In 1883 Supreme Court Justice Joseph Story wrote, “The Constitution was, from its very origin, contemplated to be the frame of a national government, of special and enumerated powers, and not of general and unlimited powers”, echoing Hamilton’s sentiments.  In 1931 the Supreme Court found in “United States vs. Sprague” that “The Tenth Amendment was intended to confirm the understanding of the people at the time the Constitution was adopted, that powers not granted to the United States were reserved to the states or to the people. It added nothing to the instrument as originally ratified…” in the majority opinion written by Justice Owen Roberts.  This opinion reiterated that the tenth amendment was in place confirming that the Constitution was there to limit the power of the federal government and free the States and the citizens.

Somehow, later in the 20th century, the Supreme Court and the federal government lost sight of this primary, over-riding principle of our governing document.  Following the Great Depression and New Deal era, the federal government gained more power virtually year by year and our society, economy, and overall standard of living has been in decline because of that.

We have the road map of what works, it’s the US Constitution.  We simply have to abide by it and if the federal government won’t do it, then drastic change is certain to result.

-john stricker

Published in: on June 7, 2010 at 11:56 pm  Leave a Comment  
Tags: , , ,

Now that we have “Health Care Reform”, will we ever be rid of it?

In my last ravings I wrote about how the Health Care Reform Act was several thousand answers to what amounts to only 2 real problems with your health care system.  It’s been signed into law by the President.  I’ve had a number of discussions with many people about how we can get rid of it.

The answer, sadly, is I don’t believe we can.  Even if we’re wildly optimistic and believe that in 2010 the Republicans gain control of the House AND Senate, it’s still not going to happen.  To repeal the bill it will have to be voted on by BOTH bodies and then sent to the President for his signature.  He won’t sign a repeal of the bill, I think that’s pretty clear, and he’ll veto it.  To override that veto takes a 2/3 majority and nobody thinks that’s going to happen.

All of this means that the actual BENEFITS of the bill, that is the government payments and controls in the bill, will begin to take effect before 2012 while President Obama is still in office, even if he turns out to be a one-term president.  Once the benefits start getting paid, and the businesses quit providing health insurance to their employees (which is one of the main goals of the Act), people will be reliant on the government health care plan.  At that point, there will be no turning back from this debacle.  Once these benefits start coming from Washington, they will be permanent, at least until it bankrupts the country.  Health Care will become another in a series of “sacred cows” that can’t be touched just like Social Security and Medicare is now.

There is one glimmer of hope.  Normally all major laws have a clause in them that says should any single provision of the act be found to be unconstitutional the rest of the act remains in full force.  In their haste to ram this legislation through Congress and get it on the President’s desk, this provision was omitted in the law as signed.  Since it’s been signed, it is done and can no longer be amended.  There are numerous challenges to this bill working their way through the federal court system and they will eventually get to the Supreme Court (at least some of them certainly will).  The only hope of getting this bill overturned is for this to get through the courts, have a major section of it found unconstitutional by the Supreme Court, and in that way making it null and void.

Will this happen?  I give it about an 1:3 chance of being overturned in the Supreme Court, if that, but it is a chance.  If we, the people, are extremely fortunate it will happen quickly and the court will rule in favor of the people.  Time will tell.

-john stricker

Published in: on June 4, 2010 at 9:42 pm  Comments (10)  
Tags: , ,

It doesn’t work in Canada, why do they think it will work here?

Nationalized Health Care, that is.

If you’ve spent any time looking at the health care reform bill that was signed into law (note I didn’t say “passed” as that bill was never properly voted on, but that’s a rant for a different column….) why do the politicians think it will work here?  An article from Reuters this past Monday (http://news.yahoo.com/s/nm/20100531/hl_nm/us_health_3) goes into great detail on exactly how the Canadian model is beginning to collapse under its own weight.  Among the primary reasons given are “an aging population” with more and more demands placed on the system with fewer and fewer young people able to pay for it.

With the health care reform bill, we are setting ourselves up in the same position.  The US Population is aging and Medicare, along with the Part B subsidies and the Prescription  Drug plans nearing their breaking points before the bill even comes into effect.

The sad part is, it’s all avoidable.

I don’t argue that some changes had to be made.  Medical costs have been growing at 4 to 6 times the inflation rate for other goods and services.  This plan will not make them any less expensive.  Here’s an idea for a plan that COULD have worked had the Congress not been hell-bent on demanding a total national takeover of health care.  There are two main issues that most US citizens felt needed to be addressed.  First, about 10% of the population was uninsured.  Notice I didn’t say couldn’t afford insurance, I said uninsured.  There is a difference.  Every one of us knows someone (or more than one) family or person that is perfectly capable of AFFORDING insurance but simply chooses to drive that new car, or have that new boat, or live in a house that is barely within their means.  They made a choice to embrace those luxuries rather than buy health insurance.  I’m going to very blunt here and say that I have NO sympathy whatsoever for those people.  None.  Their lot in life, if they ever face a catastrophic illness or accident, was chosen by them and nobody else.

There is a group, however, that simply can’t afford health insurance.  I do have sympathy for those folks.  If you have to choose between keeping the lights on and putting food on the table or buying health insurance any of us would make the same choice, and those people need help.

The second issue is a catastrophic illness or accident that maxes out your HMO or insurance that nobody could have foreseen or adequately prepared for.  Again, this group needs help as well.

The answer to these issues is really not that hard and yes, the government is involved.

To take care of the issue of a catastrophic medical expense I propose the government have a National Catastrophic Health Care plan.  Set a limit (I’ll leave the actual amount to the actuaries to determine) where after that point the national plan takes over.  Let’s say for the sake of discussion that limit is somewhere around $50,000.  The first $50,000 of a person’s health care is that person’s responsibility, beyond that, the catastrophic plan takes over.  This would be funded by taxes, either a direct tax like Social Security/Payroll Taxes or a national sales tax on EVERYTHING, no exemptions.

This would leave the amount below that to be the responsibility of the individual.  For that, conventional health insurance COULD be purchased, if the person so wishes it.  They wouldn’t have to buy it, that’s up to them, but its their problem.  Now think for a minute what that would do to insurance rates if every company KNEW, beyond a shadow of a doubt, that NOBODY would ever cost them more than the $50,000.  Rates would plummet, making it more affordable.  Most people aren’t all that concerned about the regular trips to the doctor for checkups, or their kids vaccinations, or the occasional cold.  They can handle that, given some time.  What they can’t handle is when things spiral out of control with catastrophic illness and injury.

Even though rates would drop, some people still couldn’t afford even those costs.  For those people that are below a certain income level, they are charged a % of their income to be part of a national health care pool for low income individuals.  We do that now with low rent housing and even some types of food assistance.  Once their income exceeds a certain point, they are no longer charged that % but the amount under the catastrophic limit is still their responsibility.

We don’t have to destroy what is the finest health care system in the world today to take care of these two issues.  Are there other problems?  Sure there are, but in scope they are minor issues and none of them requires 2300+ pages of new law to address.  They don’t require ordering by threat of imprisonment people take out insurance.  They don’t require nationalizing over 1/4 or our economy to address and make no mistake, friends, that is just exactly what this bill is designed to do.

My next rant will be on what to do about it since the bill has already been signed into law…….

-john stricker

Published in: on June 3, 2010 at 10:18 pm  Leave a Comment  
Tags: , ,