27 May 2010

When disaster strikes

I've been thinking this morning about how our society/nation/culture reacts to major disasters. When we look at the Deepwater Horizon spill, the Upper Big Branch mine collapse in early April, or even the financial collapse, Congress and the media seem to take up the public's interest by identifying those at fault and figuring out how to prevent the same thing from happening again. The answer, in each case, seems to be regulation: introduce more of it, or make sure that the regulatory structures aren't being tainted by corruption.

If you're interested in the question of blame, I highly recommend this piece from the Times-Picayune. The author thinks that what the American people need, alongside a proper outrage, is an appreciation of the technological challenges involved in both the drilling and the repair operations. He begins, "Pity the President of the United States who has to admit to the American people the limits of American know-how." Though I'm not going to make any excuses, I honestly felt similar pity for Bush during Katrina: when a cataclysmic event strikes, how much can we really expect of the federal government?

As for the question of regulation, I touched on the topic in a paper I wrote about the financial services industry for my Agrarian Theology class this semester. The problem with recovery through regulation is that these disasters keep happening because we are basing our livelihood on inherently risky enterprises:
The consensus solution to the contraction of credit markets has been to introduce governmental regulation of derivatives markets and to loan tremendous sums of money to banks (money which, of course, the federal government has borrowed from foreign creditors). It is unclear whether we have gained any cultural or moral wisdom. “A human economy cannot prescribe the terms of its own success,” Wendell Berry writes. “If we see the human economy as the only economy, we will see its errors as political failures, and we will continue to talk about ‘recovery.’” Indeed, the entire purpose of the federal government’s drastic intervention—what is meant by the term ‘recovery’—seems to be the stabilization of financial institutions so that we can resume borrowing and lending in a way that generates artificial wealth without being bounded by the limits that constrain real wealth. Constraint, of course, is a virtue well understood by farmers and entirely foreign to bankers.

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