Risks Socialized Once Again

Image via Wikipedia

I refer to what is probably the largest environmental disaster in US history, BP's gulf oil spill. The US has this crazy law limiting the liability from oil spills to $75 million.

Apparently, this was done to give oil companies the incentives to take on risky exploration and drilling.

And guess what? It worked!

But, as always, you create more of what you subsidize. More risk taking, with less concern about the consequences.

Of course, Obama is trying to change this limit RETROACTIVELY, which is a clear violation of the rule of law. You can't make a set of rules and then go back and change them after the fact. People can't violate rules that weren't in place when they made their decisions.

If that effort succeeds, we will have further eroded the rule of law. The government took on that liability when it passed that rule and now we're stuck with it.

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