Gulf Oil Spill Shows Regulation is Not a Four-Letter Word

While calls for smaller government and more freedom for industry are common, the massive oil spill in the Gulf of Mexico raises the question whether consumer safety is being jeopardized by a lack of effective regulation. Wake Forest University Law Professor Sidney Shapiro, one of the country’s leading experts on regulatory policy, says the solution may lie in reforming the regulatory system. “There’s been a confluence of factors that has made almost all the regulatory agencies largely dysfunctional,” Shapiro said, “not the least of which are budget cuts.” Taking inflation into account, some agencies now receive only half as much funding as they used to, leaving them dangerously short of personnel.

The result, Shapiro said, is a series of unprecedented regulatory failures. The short list includes not only the largest oil spill in American history, but also the recent Toyota recall, lead paint-coated toys, ecoli- and salmonella ridden foods, and mine explosions.

“Every time we look at one of these disasters, we tend to blame the regulatory agencies. But if we look behind the scenes, it’s a much more complicated picture and a rather frightening one. It’s likely we’re going to continue to have a string of these calamities unless we do something to act on these various causes,” said Shapiro, who along with Rena Steinzor, is the author of the new book, The People’s Agents and the Battle to Protect the American Public: Special Interests, Government, and the Threats to National Health, Safety and the Environment, published by the University of Chicago Press.

These recent disasters feed people’s views of the government’s ineffectiveness, but the public should also stop and ask why regulatory agencies have proven ineffective, Shapiro added. “While Americans distrust government, they also expect it to protect them and their children.  The greatest danger is that we will not get beyond this distrust to fix the problems that prevent effective regulation.”

Despite the seriousness of the recent regulatory failures, solutions may be hard to come by in the short-term.

“There are no magic bullets,” Shapiro said. “We took 20 or 25 years to bend into this pretzel, and it will take awhile to work our way out of it.”