I listened to the president’s Oval Office address last night. Underwhelmed? Are you kidding me, I was almost  completely without whelm. My blogfriend Moe expressed a similar reaction, and I told her that he sounded about as emphatic as if he were announcing a Labor Department undersecretary appointment.

What’s more, I have been bracing myself for his meeting today with BP leaders in the White House. I was worried how it would play out, especially perceptually. The most powerful man in the known universe resorting to what would look like peer-to-peer negotations with the BP gangstas? Ugggh. For the life of me, I do not remember the management team of Babcock and Wilcox, or General Public Utilities, or Metropolitan Edison, traipsing up to the White House for lunch with President Carter in 1979.

The next misfortune came on my way to the office this morning. Glenn Beck is cackling it up with whoever the sidekick is, and gleefully reporting polling from Louisiana that showed opinion of the president’s handling of the Gulf Coast crisis running almost two-to-one against, while opinion of Gov. Jindal’s handling of it was running almost two-to-one in support. I was thinking how weird that is — I am pretty sure neither president nor governor had plugged the leak; neither had prevented oil from reaching land; neither had satisfactorily deployed an army in eco-defense. Apparently, at least a third of the respondents of that poll didn’t much care that neither leader had made much of an observable difference, but chose to give high marks to Jindal and low marks to Obama nonetheless. Another big uggggh.

Fast forward to about 12:15 p.m., and my iPhone buzzes with a CNN bulletin that the White House had gotten BP to agree to set aside $20 billion to pay claims related to this disaster. And, the fund is to be administered outside of BP. Seriously? Game change! There is nothing like this in the history of private enterprise. Not of this magnitude, certainly.

Think of all the comparable instances where the culpable company had to be run through the litigation grinder, seeking every step of the way to minimize its financial exposure. Exxon certainly did with the Valdez. Union Carbide did with Bhopal. Johns Manville with asbestos. Tobacco companies with product liability. Besides the money eventually awarded and paid grudgingly if at all, about the only good thing to come from the whole excruciating litigation process was the movie Erin Brockovich.

I know that this does not circumvent ligitation. There still will be plenty of that to go around. I also know that damages could exceed $20 billion, or even that we still could hit rough spots on the road to finalizing this arrangement. But this absolutely will get many more dollars, much faster, much less contentiously, into the right peoples’ pockets. It is a phenomenal, unprecedented achievement for any president in times like these. Remind me again, how much non-taxpayer money has Bobby Jindal secured to make whole those who have been damaged by this disaster? Oh. Yeah. Right. I remember now.

I take it all back, Mr. President. I am sorry I doubted. You did great. And millions of people need to line up to shake your hand and thank you. And quite a few Louisianans who responded to those polls need to apologize. I won’t even say out loud what Glenn Beck should do.

Is BP an evil corporation, hellbent on purposely destroying the Gulf of Mexico and everything else it can get its capitalist paws on? Hardly. I don’t believe that for a second, and you shouldn’t either. But I do believe that there is a way that corporations, especially large ones, go about making decisions that this whole episodes spotlights. Corporations have a propensity to underestimate high-impact, low probability events. They pursue strategies that work 99.99% of the time. But when the other 0.01% comes around, watch out.

That’s exactly what we have seen these past months from Toyota. That company made decisions about the design and safety of their vehicles, decisions that will work just fine almost all the time. But not all the time. Same thing in the financial sector: the mortgage-backed derivatives fiasco is another case in point. As long as there is not a massive drop in real estate values, all is well. Until it happens. Enron, the same thing. Over and over and over.

There is a classic parable about gambling, supposedly a foolproof way to make money. Here is the scenario. Suppose you play a game with more or less 50% odds of winning each bet — blackjack, for example. Bet $5 on the first hand. If you lose, double your bet on the next hand — $10. Keep doubling until you win. Eventually, you’re going to win a hand, right? When you do — whether it’s on the very first hand, or the 100th — you will recoup all your cumulative losses, plus earn a profit equal to your original bet. So you can’t go wrong. Here’s the problem, though. Sooner or later you will encounter a string of losses sufficient to break your bank. Mathematically, it always happens, sooner or later. Eventually, there always is a Gulf Oil disaster, or a steep drop in real estate values, or a string of safety defects. Any model of governance that is premised on the risk being zero is folly. 

So, let’s not demonize BP. Let’s understand this as the inherent behavior of pretty much any large business enterprise. And therefore, let us further understand that, when the decisions of these enterprises have the capacity to wreak havoc far beyond the provincial borders of the corporate suites, it is incumbent on our government to impose intelligent regulatory boundaries on their behavior.

It is about to become utterly obvious that I am no petroleum engineer. How about we stop trying to plug the Gulf oil leak, other than the major relief well effort that will take until August and which, by all accounts, is a high percentage play to solve the problem entirely. All these interim plug the leak measures are failing anyway.

Instead, how about we focus on containment? Implement strategies to contain and gather all the oil coming out. My high school daughter had what I thought is a great idea. The leaking well is, what, 21 inches or so in diameter, right? Why don’t we simply lower a pipe that’s, say, 5 feet wide over the leak, a pipe that runs all the way to the surface? Then we would be able to collect the oil under surface conditions and under much less pressure.

There are probably innumerable versions of this same concept. I had envisioned a huge parachute-like thing lowered over the leak, the size of a couple of football fields maybe. Trap the oil in that. Then you have hundreds, or thousands even, of relief valves in the “parachute,” with hoses to channel the oil to the surface to be collected.

Who knows, maybe they’ve all thought about that already, and there are engineering reasons why such solutions would fail. But maybe not. When you’re a drilling company, you think like a drilling company. Not an environmental disaster averting company.

It seems all the efforts have been to plug the leak. All I’m saying is, maybe we should just try to contain the leaking oil instead. Or in addition to. If the new government estimates are right, and if it takes until mid-August to finish the relief well, we could avert more than 1,000,000 more barrels of oil leaking into the Gulf. The entire Exxon Valdez spill was about 250,000 barrels.

This is pretty crazy. Other than federal fiscal and tax policy I don’t think I’ve ever done three posts on the same topic, and here I am doing just that on the nomination of Rand Paul, of all things. Don’t get the wrong idea. I’m not obsessed. I’m not. I’m not. I’m really not. Really.

So anyway…

Now Dr. Paul is working to clarify that he does not support repeal of the civil rights legislation, or the Fair Housing Act. And I do believe him. I am sure he is thinking, “How the hell did we get to talking about this??? It has nothing to do with what I want to emphasize in my campaign, or as Senator.” But his original comments do provide a glimpse into his mindset. My blog friend Thrasybulus sees Paul as a full-blown libertarian, with all the conceptual and ideological baggage that represents. And as much as Paul wants this topic to simply vanish, it’s pretty hard to put that genie back in the bottle.

Dr. Paul’s original comments on the Rachel Maddow show stated, essentially, that private businesses should not be subject to government mandates to adhere to societal civil rights standards. If he believes that, then it is fair to ask where he does, and does not, think government should intervene in the workings of private business.

  • Should government regulate safety in privately owned coal mines (certainly near and dear to the voters of Kentucky, which accounts for 10% of total U.S. coal extraction)?
  • Should government regulate oil extraction practices by private companies such as BP?
  • Should government regulate fair lending practices by private banks?
  • Should government regulate fair hiring practices by private employers?

If he does believe in such regulation, then what is the difference between those examples and civil rights? If he does not believe in such regulation, well, then I guess we’ll just know that.