Who regulates the regulators?

Friday, September 10, 2010

This was a question posed by Robert Kuttner in the June 19-20, 2010 issue of the International Herald Tribune.

Why weren’t the rules established by the U.S. Minerals Management Service strictly followed, which would have prevented the tragic oil spill that is devastating the waters and coastlines of the Gulf of Mexico?

Because the petroleum mining companies continued to be granted licenses “due to intense pressure from the industry and its political allies in Washington”, said Kuttner. He added, “U.S. government supervision was particularly lax and corrupt under Vice President Dick Cheney, former executive director of Halliburton... And the Obama administration has not reestablished more efficient monitoring ".

The same has occurred on the “financial front". The rating agencies haven’t been prevented from unduly issuing triple-A credit scores. These regulatory defects continued throughout the Clinton and Bush administrations.

And despite the ongoing claims of unyielding globalizers, there has been no self-regulation in the marketplace.

"Oil companies seek short-term profits and don’t invest in safety as they should".

Regulation requires honest and competent regulators. Only the political will, duly supported by the appropriate civil society organizations will be able to counteract the colossal strength of large enterprises.

Leadership. Political power. And demanding citizens. It is surprising that in the same issue of that newspaper Obama is criticized for “having pushed the limits of his executive authority” in his treatment of British Petroleum, being “determined”, in the words of the President, “to do what the citizens can’t and the companies won’t”.

The political crisis is much more dangerous than the financial crisis.

Let’s wholeheartedly support those who have sufficient “determination” to once and for all change an economic system that has generated so much inequality. Let’s support the progressive transition toward a knowledge-based economy to enable global sustainable development.

To do so requires political leadership. And “honest and competent” regulators ".