Dangerous Allies: Big Business and Big Government




Dangerous Allies: Big Business and Big Government

by Ron Paul

Last week ended with some promising news on finally stopping the oil spill in the Gulf of Mexico. Unfortunately the administration still seems to believe that shutting down working oil wells is a higher priority than effectively dealing with the broken one. They are again issuing a moratorium on offshore drilling while maintaining a de facto ban on new permits even for shallow water drilling which they previously stated would not be affected. The courts have twice declared this unconstitutional, over 70% of the people see this as unreasonable, yet the administration seems determined to simply end offshore drilling, at least for those producers that cannot afford to sit idle for any unknown period of time until the ban is lifted.

Whether or not this latest effort will hold up in court is yet to be seen. Sadly, many smaller oil producers in the Gulf see the writing on the wall and instead of waiting around and risking their livelihoods on the whims of American politicians and judges, they are leaving for friendlier business climates. What is happening to this country when the Republic of the Congo is better for business than the United States?

One big factor is regime uncertainty. Regime uncertainty is the opposite of the rule of law. It is the rule of the whims of the people who are in charge and what mood they are in on any particular day. It is usually associated with third world dictatorships and plays a major role in why some countries remain poor. When a business cannot predict whether a government will issue a permit, confiscate or nationalize their capital investments, tax them into bankruptcy or arbitrarily stall their operations, they tend to do business elsewhere. This type of government hostility is not conducive to wealth creation and it is tragic to see it chasing away businesses here when wee need the jobs and productivity more than ever.

When the rule of law is respected it provides business with some measure of predictability so they can plan and operate smoothly. When it is not respected there are just too many variables, too much risk of loss or waste. Of course disregard of the rule of law creates other problems, too. For the larger and better connected businesses it creates the opportunity of regulatory capture. If the government becomes too unpredictable, one business survival strategy is to become so involved in government and regulatory bodies that they effectively gain control over the very entities that are supposed to keep them in line. In other words, if you can’t beat the government, become the government.

A business that achieves regulatory capture is also able to write and implement laws and regulations that they can deal with but its competitors cannot. The eventual outcome is that companies use regulation to drive everyone else out of business until a monopoly is achieved, putting consumers at its mercy. Meanwhile, the people develop a false sense of security, assuming that the many regulatory bodies in place are protecting them. Without respect for the rule of law, however, those bodies and their regulations are more likely protecting and enabling big business at the expense of small business and the consumer. We see this not only with big oil, but big banking, big defense contractors, you name it. That is why especially in a crisis we should uphold the Constitution. It is the ultimate consumer protection from crony corporatism.



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152 Comments:

  1. In my country, Poland, government in 2 weekes passed a law, that delegalize most of the hazard business - specially one-armed bandit machines. People, who was using this stuff in 14 days become criminals.

    And You are angry becouse of offshoring drilling? Wait till You become country like Poland. You are on good way.

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    • That's our point exactly... we don't want to "be on our way" like European corrupt governments.
      Libertarians want less government and NO corruption at all.
      Enjoy your Poland dude!

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      • fred the protectionist

        No, Libertarians want anarchy and a slave based economy.

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        • So Fred you think that Independents like me as well as Libertarians don't care about the environment and support big corporations that break the law? HUH? What you're saying is false facts. & you need to do some research.

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        • fred the protectionist

          Libertarian/Neocons support "big corporations", whatever that means, you people love cheap foreign labor.

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      • I'm not enjoing. In last presidental elections, all of 10 candidates was socialists, exept 1. He get 2,5% of votes. Same story in rest of Europe. We're going to fall soon, probably USA will too.

        Sad. When I was a kid, I thought, I will escape to USA some day. Now I see it becomes same place. Where to go now? :)

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  2. The Obama Regime's response to the BP well collapse and oil leak is a textbook response of complete and total incompetence in the face of an emergency. Rather than sending fire boats, naval rescue ships they did nothing. Instead of pulling together the industry experts for a fast response, he vacillated, went on vacation and played golf and did nothing.

    Never in history have We the People witnessed such inept leadership and gross incompetence in tandem.

    Now add to that leadership gaff.... a leader hell bent on nationalizing industries and forcing businesses to unionize those he can't directly take over.

    Big Government running Big Businesses is a catastrophe in the making. Now just imagine the current level of government incompetence running the oil industry, Yes you guessed it >>> Half the Supply at Double the Price<<<
    Just like Europe, they pay $7.50-$8.25 / gallon, welcome to Europe America.

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    • fred the protectionist

      If it were up to you Libertarians, the Federal Gubment would have no assets to "fight the oil spill".

      You know all that "minimal goverment" talk we all hear of Libertarians, well what's all this criticizing of Obama when your ultimate goal is a the very same outcome. Stick to Emmanual Goldstein bashing, it's what you partisans are best at.

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      • You make no sense, why should the federal governmet be fighting the oil spill? It should be the local state coast guards and such, all the while charging BP a hefty bill for causing the accident. In regards of BP, its buisness, shit happens, and you pay for it. But instead government (despite saying they would be hard on BP) has capped the amount BP has to pay, so as to cover the rest on the taxpayers dime. We are all going to pay for the mistakes of BP workers. To make it worse, State officials have constantly informed us that the federal government continues to get in the way and deny them access to their own shores. its absurd. Most horrid of all, recently on a vote of 420-1, congress passed the power of subpeona to the president, inorder to give the BP commission (basically a delegation of beuracrats) the same power. for those of you who don't know what subpeona power is, it is th power to request someone for a hearing, and then have them arrested for not showing up. Ever heard of contempt of court? We may now be held in contempt of the president or in contempt of "executive ordered beurocratic commission #X". I was going to ask you all to guess who had the strength, integrity, and honor to vote NO on that bill, but I couldn't help myself: Ron Paul.

        Secondly how are Libertarians in want of a slave based economy? Becuase the free-market condones slavery? Do you read much? And Anarchy? Just becuase we see government as a necessary evil doesn't mean we want anarchy. It just means we want as little as possibly needed to protect Life Liberty and Property.

        Lastly, no one claims to be a utopianist, all systems have there flaws, we just believe we have the least flaws, and the most fair and moral system. This derives from the idea that we take only what we earn, and earn without infinging on the life liberty or property of others. Other systems, want to take more, and give more, to spread wealth a little often in the name of humanitarianism. The problem here is, it becomes a "legal" form of stealing, its immoral, and often resolves in a reduction of production.

        Its a bit late where I am at, sorry about the lack of eloquency.

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        • fred the protectionist

          "You make no sense, why should the federal governmet be fighting the oil spill? It should be the local state coast guards and such, all the while charging BP a hefty bill for causing the accident. "

          There is so much fail in your first 2 opening sentences, I couldn't even read the rest.

          A) You Libertarians are hypocrites. You claim you are for tort reform, but apparently are too stupid to realize Tort Reform means LIMITED liability, not unlimited liability.

          B) You Libertarians are hypocrites. Stop critisizing Obama for being ineffectual when your entire goal is to to make the federal government ineffectual. And the Coast Guard is part of the Federal Government, "Florida is in Georgia idiot."

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    • @shane farrar:
      okay, its not the lack of eloquence, it is your lack of knowledge. The state has no coast guard, it is a federal agency. It is the duty of the coast guard to do such things (its kind of in the Constitution, the navy part).

      But lets assume that the state government has a coast guard. Cost? $10.1 billion.
      Okay, lets just have the state of Louisiana fend for itself. I'm sure oil revenues will cover that. Its good for me, at least. I'm in Indiana. I don't particularly see any benefit from my taxes having to be paid for by the coast guard.

      Secondly, damages are only capped at $75 million if it was accidental and not the result of negligence or violation of regulations. It seems fair, right? Things out of your control should be limited. Things that are under your control should not be limited. AND THAT IS THE CASE - listen now - there are no limits on damages in cases of negligence. Because of BP's track record of substandard safety records, they will more than likely pay over $20 billion not only for compensation, but billions more in fines implemented by the government agency: The EPA. This would likely not have been the case in the libertarian model. You think BP would've voluntarily compensated the fisherman and workers affected, much less spanked themselves over the negligence in safety by "fining themselves"? Think hard now.

      And Ron Paul, I'm ashamed. You should check your facts. Its a ban on NEW offshore oil drilling. Current ones aren't being told to stop, and pack your bags and get the hell out.

      What this country needs isn't less government, it needs a more transparent, less corrupt government. And shifting the power from the Federal Government, where at least it is somewhat checked by the other two branches, is better than having corporations run rampant, saying f-you to regulations, privatizing the profits and socializing the costs.

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  3. Unless there's proof to the contrary, I'd say the Republican Party "leadership" back-stabbed Ron Paul and supported John McCain in the 2008 election to maintain their "too big to fail" monopoly corporate sellout status!

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  4. The misconception that our country was founded as a Democratic Republic was done by Woodrow Wilson to connect himself with the founders. Wilson coined the phrase Democratic Republic into the mainstream of his party for this reason and because the Republicans in that era spoke often about our Constitutional Republic and need to preserve it, as the founders intended, from tyranny.

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  5. impeach Obama

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  6. BP has an abominal safety record. Killing US petrochem workers seems to be their second line of business. Yet they were permitted to drill in 5000 feet of water, which is a challenge even for our good Oil companies. This is another intentional disaster created by the US govt. Now they have a 20 billion slush fund for the lawyers and politician to dip into, they can borrow Billions from the Fed to fund the "war on oil spills", and invade more countries that price their oil in Euros vs US dollars

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    • fred the protectionist

      What do you expect, it's a British company, the British pioneered the art of exploiting foreign resources at all costs.

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  7. In the original writings of many of the founders our nation was constructed as a Constitutional Republic, NOT a Democratic Republic!

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  8. aixelsydyslexia

    Leave it to the U.S. to think that by adding red tape will magically solve the problem without focusing on practical efforts which directly attack the source of the problem.

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  9. selfrealizedexile

    If I was an oil business and the courts already declared Obama's moratorium unconstitutional, I'd start drilling again and personally give Obama the finger.

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  10. Obama is just 1 Big Puppet & a total idiot!
    2012 We our going to take out the GARBAGE!!

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  11. Ron Paul 2012.
    Restore The Republic!

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  12. This guy makes a lot of sense. Not like Obama who only had visions, Ron Paul has facts.

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  13. "The only way Obama has a chance is if we have another 9/11". Said by a former aide to Bill Clinton when discussing the next presidential election.

    Stay out of tall buildings. Be well and be safe.

    And, please don't vote for democrats or republicans.

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  14. Here is a great read on what Dr Paul is talking about, please read it and spread it around to educate your family and friends.
    .
    preview . tinyurl . com /govt-failer
    .

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  15. Its like being the inshurance REP and owning the auto body shop:))) At the same time:)

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  16. Obama Deception every one look into this . Thanks Ron :)))) Keep on keeping it real:) Dave

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  17. Corporatism is as bad a communism.

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  18. Right on, Dr. Paul!! The man of LAWLESSNESS currently rules our country, so that we will be irreparably beyond salvation!! They have taken out all of the stops, so that NO ONE can make a living anymore in this country!! god bless you for THE TRUTH!!

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  19. Mussolini defined this as Fascism. I dont think this can be a good way in 2010.

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  20. hmm ... this is posted today (18´th) but will be spoken by Ron Poul tomorrow (19´th)
    now THATS good internet conecktion LoL´Z

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