One of the core beliefs of the Republican Party has been that government regulation is bad and stifles innovation, creativity and profitability of industry. They believe that industry, because of self-interests, will regulate itself much more efficiently and with less overhead than government. Reagan believed this to his core and attempted to deregulate anything he could get his hands on.
I believe the recent oil spill is the proverbial "last straw" in the debate over government deregulation.
The core Republican belief in government deregulation has been taking hits for decades on the financial-side of the debate. The causes of previous crises of the Savings and Loan industries in the 1980s and 1990s and the current financial meltdown that took us to the brink of a global economic collapse have been clearly shown to have been caused by free market forces run amok. Financial regulations which could have prevented these crises were either never put in place or repealed under the guise of freeing the market from the profit-limiting shackles of government. The allure of enormous short-term profits were just too great to prevent the leaders of industry from enforcing any kind of restraint or self-regulation.
There was no bigger believer in this philosophy than Alan Greenspan. However, even he finally had to admit that he was wrong. From the NY Times on 10/24/2008:
But on Thursday, almost three years after stepping down as chairman of the Federal Reserve, a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending.
“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,” he told the House Committee on Oversight and Government Reform.
One would think that the debate over government regulation of industry would have been over with a resounding victory for those on the side of strict government regulation after these recent financial disasters have shown the folly in the belief of industrial self-regulation. Sadly, one would be wrong as even this current financial crisis has not convinced many on the right of their failed belief.
How is this debate still being waged after such epic failure in the financial industry? I believe the problem lies with the financial industry itself. It is overly complicated what is going on and most can't comprehend the issues involved and what exactly went wrong. People are upset about Wall Street being bailed out more than why it got in trouble in the first place.
I think this oil spill will be the final straw to kill the notion that industry can regulate itself and doesn't require strict government oversight. Unlike the hard to comprehend financial regulatory mess, this problem is easy for everyone to understand. The oil industry told us that technological advances had made off-shoring drilling virtually fail-proof. People now see this was a huge lie.
As this oil soils our beautiful shorelines, fouls our air, destroys coastal based industries and kills millions of innocent wildlife, the lie will be exposed. The public will finally understand that industry is only out for making short-term profits for its management teams and nothing else. There can be no doubt now that government needs to play its role as strong advocate and protector of its citizens.
If anything good can come of this unmitigated disaster, I hope it is that we are finally able to get more government protection in many of these large industries (energy, finance, agriculture, etc.) which for far too long have made their own rules. I also hope this is a big red flag to the Obama administration that nothing is fail-safe and thwarts recent efforts to revive the nuclear industry.