THE FREE-MARKET GOGGLES... THEY DO NOTHING!

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House Panel Probe Raises 'Serious Questions' About BP Decisions

By Siobhan Hughes and Tennille Tracy, Of DOW JONES NEWSWIRES

WASHINGTON -(Dow Jones)- A U.S. House panel said that its probe of BP PLC (BP, BP.LN) is "raising serious questions" about the company's decisions in the days and hours before a catastrophic drilling-rig explosion.

The Monday letter from House Energy and Commerce Committee Chairman Henry Waxman (D., Calif.) to BP Chief Executive Tony Hayward sets the stage for a showdown when he appears before the panel on Thursday. Hayward, who will testify for the first time before Congress since the April 20 disaster, is already under pressure from Senate Democrats to set aside $20 billion as a down payment on costs associated with the disaster.

"Time after time, it appears that BP made decisions that increased the risk of a blowout to save the company time or expense," Waxman and his colleagues wrote in the 25-page letter.

On April 15, five days before the explosion, BP's drilling engineer called the Macondo well, currently still leaking oil, a "nightmare well," according to the letter. The panel wrote that in spite of the well's difficulties, "BP appears to have made multiple decisions for economic reasons that increased the danger of a catastrophic well failure."

The letter said that "in several instances these decisions appear to violate industry guidelines and were made despite warnings from BP's own personnel and its contractors."

The committee said that "in effect, it appears that BP repeatedly chose risky procedures in order to reduce costs and save time and made minimal efforts to contain the added risk."

[emphasis added]

http://www.nasdaq.com/aspx/company-news-story.aspx?storyid=201006141327dowjonesdjonline000267

[link from TheOneBob]

Comments

[vatine]

Gosh! Goggly! An actor in a free market maximising short-term income. How unexpected!

[etcet.livejournal.com]

... but we've been assured that the free market is supposed to be self-regulating for maximum benefit!

I really wonder how long it will take all the people who really think that to suffocate inside of that glass house, because "maximum current profit" =/= "maximum benefit" unless you're a completely sociopathic asshole.

... oh, I seem to have answered my own question.

[vatine]

In a friction-free market, with rational (and possibly benevolent) actors and decent to perfect fore-sight and information, things will probably work out to within delta or epsilon of optimal.

There is friction in the market, most actors are not rational, information is imperfect and forecasting is utter shite.

[etcet.livejournal.com]

most actors are not rational

Even in the ethical/logical sense, this is a wild understatement, never mind the messy real world. *sigh*

[theonebob.livejournal.com]

And yet we're trusting the space programs to the free-market.

[etcet.livejournal.com]

Don't look at ME, dude. I want to visit the fucking moon.

[vatine]

I couldn't say "all" with a straight face, because I can imagine a hypothetical rational actor and set p(exists) at least higher than 0.2 and so had to frame my language to conform with my prejudices.