"The forces of the market are just that: They are forces; they are like the wind and the tides; they are things that if you want to try to ignore them, you ignore them at your peril, and ... if you find a way of ordering your life that is compatible with these forces, indeed which harnesses these forces to the benefit of your society, that's the way to go." -- Arnold Harberger, University of Chicago Economist
Thursday, June 17, 2010
BP Oil Spill: Against Gov. Bobby Jindal's Wishes, Crude-Sucking Barges Stopped by Coast Guard - ABC News
EXCERPT:
"Sixteen barges sat stationary today, although they were sucking up thousands of gallons of BP's oil as recently as Tuesday. Workers in hazmat suits and gas masks pumped the oil out of the Louisiana waters and into steel tanks. It was a homegrown idea that seemed to be effective at collecting the thick gunk.
"These barges work. You've seen them work. You've seen them suck oil out of the water," said Jindal.
So why stop now?
"The Coast Guard came and shut them down," Jindal said. "You got men on the barges in the oil, and they have been told by the Coast Guard, 'Cease and desist. Stop sucking up that oil.'"
A Coast Guard representative told ABC News today that it shares the same goal as the governor. "We are all in this together. The enemy is the oil," said Coast Guard Lt. Cmdr. Dan Lauer.
But the Coast Guard ordered the stoppage because of reasons that Jindal found frustrating. The Coast Guard needed to confirm that there were fire extinguishers and life vests on board, and then it had trouble contacting the people who built the barges.
***
After Jindal strenuously made his case, the barges finally got the go-ahead today to return to the Gulf and get back to work, after more than 24 hours of sitting idle.
QUESTIONS:
1. Do you think the Coast Guard official who ordered the barges to stop sucking up oil was comparing the benefits of his actions with their costs, or was he simply following the rules it was his job to enforce?
2. Did the Coast Guard official have much incentive to allow a rule to be broken simply because the benefits to society of breaking the rule exceeded the likely costs?
3. If the Coast Guard official had been a manager for a corporation that was going to bear the full costs of the spill, would he have been more or less likely to weigh benefits versus costs in making his decision?
Labels:
Gov v Market Decisions,
Incentives,
Oil Spill,
Oppportunity Cost,
Video