Getting serious about regulation

Robert Reich

Kai Ryssdal: The Food and Drug Administration has spoken up on the nuclear crisis in Japan. Dairy products and produce from the area around the Fukushima Daiichi nuclear plant aren't allowed into the U.S. anymore.

Other foods from Japan aren't affected by the ban. The FDA says it's being prudent in the interests of consumer safety.

Today in our coverage of the disaster, commentator Robert Reich weighs in on the culture of American regulations.

Robert Reich: How much should we be prepared to pay for safety?

Years ago, GE marketed the reactors used in Japan's Fukushima nuclear plant as cheaper to build than other reactors because they used a comparatively smaller and less expensive containment structure. American safety officials have long thought the smaller design to be more vulnerable to explosion and rupture in emergencies than competing ones. By the way, the same design is used in 23 American nuclear reactors at 16 plants.

It's not the only example. The national commission appointed to investigate the BP oil spill last April found that BP failed to adequately supervise Halliburton Company's work on installing the well, even though BP knew Halliburton lacked experience. Massey Energy -- owner of the West Virginia coal mine that exploded last spring, killing 29 miners -- refused to spend money needed to ensure its mines were safe. And so on.

Now don't get me wrong. No company can be expected to build a nuclear reactor, oil well, coal mine, or anything else that's 100 percent safe under all circumstances. The costs would be prohibitive. It's unreasonable to expect corporations to totally guard against small chances of every potential accident.

Inevitably there's a trade-off. Reasonable precaution means spending as much on safety as the probability of a particular disaster occurring. And then multiplying by its likely harm to human beings and the environment if it does occur.

The problem is, profit-making corporations have every incentive to underestimate these probabilities and lowball the likely harms, which is why it's necessary to have such things as regulations, and why regulators need to have enough resources to enforce them. And it's why recent proposals in Congress to cut the budgets of regulatory agencies charged with protecting the public's safety are wrong-headed.

Those who argue that regulations kill jobs ignore an important fact: Lack of adequate regulation kills people.

Ryssdal: Robert Reich was Secretary of Labor for President Clinton. His most recent book is called "Aftershock: The Next Economy and America's Future." Our future includes David Frum. Send us your comments -- click on the contact link.

About the author

Robert Reich is chancellor's professor of public policy at the University of California, Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton.
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Robert Reich was dead on is his description of a proper approach to motivate for safety. For rare, high-consequence disasters, however, there is more to it. Engineering catastrophes inevitably occur as a result of an incredible string of improbable events that ONLY IN HINDSIGHT can we see lead inexorably to destruction. If this unlikely chain to disaster had been knowable before the event, then clever engineers would have designed to prevent it. However, remove but a single link and, not only would there be no calamity, nobody could even know that it was close.
Each seemingly minor event that builds to the crisis, when viewed by itself, appears innocent, with minimal safety consequences. Thus even people sincere about safety are motivated, piece-by-piece, only by the mundane worries about convenience and cost. Almost always that turns out OK and people are rewarded for taking the risk that hardly seemed to be a risk at the time. This happened at Chernobyl, Bophal, in both space shuttle disasters, as well as the recent mortgage fiasco.
Therefore it is not enough to envision possible failures, calculate their probabilities and multiply by the human consequences. We need regulation that continually raises the safety stakes for even minor-seeming decisions in the minds of everybody involved in potentially risky endeavors. For if there is no reward for safety, there will be no safety.

Thank you very much for running Mr. Reich's sensible commentary on regulation. This is a very timely word for us that we would do well to heed. Here in our present administration in Wisconsin, the word "regulation" is all but a curse word. Mr. Reich's point that regulations reduce deaths is one that every voter needs to know, especially if that voter considers him or herself pro-life. Thank you.

Far too may academicians find it too easy to get away with oversimplifying the core problems of our democracy, which is why we never have any comprehensive solutions, so our political, economic, social and environmental problems are constantly out the control with no solutions in sight as long as our politicians keep getting away with perpetuating our dysfunctional system of democracy.

Academicians live in Ivory Towers where they can marginalize the needs of We The People because they don't have to interact with or answer to We The People.

The root cause they refuse to admit is the fact that our never-ending government failures are produced by our education system that has failed to produce leaders for far too long. Thus, most politicians are only interested in staying in office, forcing them to sell out our democracy to special interests to achieve that end.

No wonder our politicians keep failing to protect American Democracy and quality of life for future generations as their paramount responsibility to We The People.

I agree with Robert Reich's central point: you can't keep the store from getting robbed by paying the cop on the beat less money.

It's tempting to think that a good way to pay for these regulations is to have the industries it affects pay for them. We saw what good that did with the credit agencies. These really need to be concidered a necessary part of the general fund.

Joe Knutson makes some very good additional points that must be considered if we are really going to fix the destructive problems we are experiencing today.

The #1 fact of life in America today that is undermining American Democracy and quality of life is the fact that our universities have totally failed to educate our social, political and economic leaders to protect humanity for long-term survival first, while still producing profits that all American institutions thrive on.

Far too many politicians, judges, academicians, etc. are influenced by the power of money to the point where our federal and state governments are completely dysfunctional, and our state of California is a worst-case scenario state government.

It is way beyond obvious that university professors must change their Ivory Tower culture. You and your faculty colleagues must learn to and immediately begin teaching, inspiring, motivating and creating a new culture of American leadership that meets the challenges of change that are threatening and undermining all of our political, economic and social institutions today.

Business as usual practices used today are destroying our way of life, and like our Founders did before us we must once again produce leaders that are dedicated to the long-term survival of America and humanity with an acceptable quality of life for all.

"Lack of adequate regulation kills people."

That's incorrect, or perhaps just imprecise. *Negligence* kills people (in this context). The presence of and even proper enforcement of regulation is still not a guarantee of public safety. If you think businesses are motivated to avoid the costs of proper safety, you can be sure they have just as much motivation to circumvent those regulations or to cut corners elsewhere. The bigger picture, however, is that because businesses have an incentive to minimize risk (to themselves) and maximize profit, the reason those businesses are acting as if they have an incentive to disregard the safety and property of others would seem to be that our legal system doesn't adequately punish the individuals who make those decisions for their criminal negligence if and when harmful incidents occur. Let's track down the people who made those decisions and put them on trial for criminal negligence or manslaughter (as we would if any individual perpetrated such crimes alone). That seems like a powerful enough incentive to me.

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