Third World America - Arianna Huffington [50]
In 2010 there were three headline-grabbing examples of what happens when corporations get their way in Washington and our public watchdogs become little more than obedient lapdogs, unwilling to bite the corporate hand that feeds them: the explosion at the Upper Big Branch coal mine in West Virginia; the BP oil blowout in the Gulf of Mexico; and the ongoing aftershocks of the financial collapse, including the fraud charges against Goldman Sachs.
All these disparate events are linked by the same root cause: a badly broken regulatory system.
The loss of life in the Upper Big Branch mine and on the Deepwater Horizon oil rig happened in one horrific instant. The economic collapse has not killed people, but it has gradually destroyed the lives of millions of Americans. All three calamities occurred because elected officials who should have been enforcing a regulatory system that protects working families instead allowed the system to protect the corporations it was meant to watch over.
Most of the systemic breakdowns that led to the regulatory failure at Upper Big Branch and on the BP rig were the same ones that led to the housing bubble, credit-default swaps, toxic derivatives—and, by extension, the bank bailout, long-term unemployment, and the rapid decline of America’s middle class.
Days after the Upper Big Branch disaster, the New York Times described the Mine Safety and Health Administration (MSHA), the regulatory agency that so atrociously failed the Upper Big Branch miners, this way: it is “fundamentally weak in several areas”; “the fines it levies are relatively small, and many go uncollected for years”; “it lacks subpoena power, a basic investigatory tool”; “its investigators are not technically law enforcement officers”; “its criminal sanctions are weak”; “fines remain so low that they are mere rounding errors on the bottom lines” of the companies being regulated; and it shows a “reluctance to flex all of its powers.”23
In an eerie echo, in the wake of the Deepwater Horizon disaster, the Wall Street Journal described the Minerals Management Service (MMS), the government agency that oversees offshore drilling, this way: it “doesn’t write or implement most safety regulations, having gradually shifted such responsibilities to the oil industry itself”; it “seldom referred safety or environmental violations to the Justice Department for criminal prosecution, even when it should have done so”; and it “got out of the business of telling companies what training was necessary for workers involved in keeping wells from gushing out of control.”24 Florida senator Bill Nelson summed it up: “If MMS wasn’t asleep at the wheel, it sure was letting Big Oil do most of the driving.”25 Chris Oynes, the Interior Department’s top official overseeing offshore oil and gas drilling, announced his retirement shortly after the disastrous explosion, and Elizabeth Birnbaum, the head of MMS, was forced out thirty-seven days after the spill began—just another pair of resignations that came too late to make a difference.26, 27
The problem isn’t a shortage of regulators. It’s the way we’ve allowed the regulated to game the system. The federal government has entire agencies dedicated to overseeing offshore drilling and the mining industry. Indeed, a federal inspector was at the Upper Big Branch mine hours before it blew up.28
Similarly, there are plenty of financial regulatory agencies.29 In fact, before the economic meltdown there were dozens of federal regulators dedicated to keeping an eye on each of the big banks—in many cases, with offices inside the premises of the banks themselves. Fannie Mae and Freddie Mac had the Office of Federal Housing Enterprise Oversight dedicated to them, and the SEC, which monitored their securities