brni (brni) wrote,
brni
brni

aberration? or scapegoat?

It's difficult to discuss the scapegoating of BP in the current crisis, especially as this goat really has gone out and ate Aunt Petunia's prize-winning rose bushes.

But it is important, as we watch the arrogant bastards paraded around to the white house and congress in vast display of official disapproval, that we do not forget that the goat was let into the yard with a nod and a wink and a mock-stern warning to leave a few for poor old Aunt Petunia.

What we're seeing right now is a framing of the Gulf of Mexico "spill" (geyser) as an aberration, and of BP's safety record, or lack thereof, also as an aberration. That there is a systemic problem, but the systemic problem is localized to BP.

And that's not the case at all.

There IS a systemic problem. Two, actually.

The first is the collusion of business and government, on a vast and grand scale, over practically all aspects of the economy. There are code-words for this: free market, deregulation, pro-business government, free trade. And this is the cool-aid that everyone's drinking, whether they be Republican or Democrat or Libertarian. This is the business community supporting the government so that the government can support business's rights to abuse the people. This is the consolidation of the media into so few hands that nobody takes them seriously, and the news becomes a farce, picking a side and putting on "entertainment" to support it (Fox News and MSNBC, anyone?), but both sides steadfastly refusing to question the fundamental basics of the system that gives rise to this collusion of forces. We are now seeing oil execs from other companies lining up to condemn BP as beyond the pale, violators of the public trust. People from the oil industry have been put in charge of the investigation of the BP disaster. BP, they will discover, did Bad Things. Things that other oil companies would never dream of.

The second is perhaps even more insidious - it is the function of fiduciary duty in the corporate world. Fiduciary duty requires of the Board of Directors and the corporate officers that they maximize shareholder interest. This is, in fact, the overriding ethical and legal responsibility that the board and the officers have. With yearly net revenues of $20B, the ability to save billions of dollars per year by skimping on safety is something that very directly affects both stock prices and dividends, so the amount of money saved (i.e. profit maximized) has to be examined against the likelihood of potential risks, and then a decision made based on that.

I refer you to the Ford Pinto Memo of 1968.

Key piece is Table 3:


BENEFITS:

Savings - 180 burn deaths, 180 serious burn injuries, 2100 burned vehicles

Unit Cost - $200,000 per death, $67,000 per injury, $700 per vehicle.

Total Benefit - 180x($200,000)+180x($67,000)+2100x($700) = $49.5 million.

COSTS:

Sales - 11 million cars, 1.5 million light trucks.

Unit Cost - $11 per car, $11 per truck.

Total Cost - 11,000,000x($11)+1,500,000x($11) = $137 million.


Same shit, different day. Choosing a more costly but less safe - or less environmentally damaging, or less bad-for-employees-and-communities - course is a violation of fiduciary duty, which is "the highest standard of care at either equity of law," - a duty which makes it illegal for a CEO to obey the law if it adversely impacts company profits.

 
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