Dave Yost: The curse of deregulation
I wonder how many of us can remember the good old days? We were able to fly out of most of the smaller cities and connect to major air hubs without getting a mortgage for the trip. Our telephone service was functioning reliably and consistently, and we did not have to buy a new phone every few years. Electrical products generally worked as expected. Drywall was made from products that were safe to place in homes. Our energy and financial markets had rules that seemed to contain disasters of the sorts we seem to be having on a regular basis.
If one wonders what happened to those days, it does not take too long to think of one word: deregulation. Those wondrous pre-Reagan years point out one of the central reasons for having government at all; the need to keep things working in a safe and orderly manner.
I spent most of my career in the telecommunications design business at Bell Labs. In the pre-1984 years, the telecom industry was regulated by design, and the systems that we depend on had to work all the time. We had a “two minutes a year” downtime target for reliability. A major system had to run without failure essentially “forever”; or until it was replaced by another such system. Even the replacement had to be instant; heaven forbid we might lose an emergency call. In order to guarantee such reliability, we had an army of experts and thousands of people available to fix things in an emergency. I once took a call from a telephone company exec in Salt Lake City who told me that a plumbing contractor had flooded the building and phone service was down in the whole city. Because of the vast integration and technical resources we had, a replacement system was up and running in less than 48 hours. The process worked because the means to do this was built into the plan and the phone rates that we all paid for local and long distance service.
The same kind of high reliability systems exist to monitor nuclear plants, and control airplanes in flight. They are supposed to exist in such things as air traffic control and Wall Street trading systems. Downtime is simply not allowed and if something happens – a system crashes and stays down – a major inquiry into the disaster follows. In this mode of operation, it is simply unacceptable to have to boot the system and pray that it comes up in 10 minutes.
In today’s world, we have few arenas left that are effectively regulated. In some cases we have rules, but they are not enforced. The steady assault on regulated industries has been happening for years but is primarily the result of years of lobbyist control of Congress. The energy (gas, oil, electrical), financial, telecom, airline, and even heath industries to some extent have all had their supervision relaxed and their rules changed under the banner of deregulation and free markets. The people who might be able to restore phone service in a major city are gone. Even the companies are gone or on the way out; a fact that is causing a major brain drain for US firms. Look at Qwest, our local Bell System remnant. Without a wireless business to sustain them, they have been acquired by a company I never heard of. The engineering support for many companies comes from foreign expats who will work cheaper because a free market budget will not support a higher wage or benefits. I actually know one individual who is doing engineering for a major wireless firm out of her home office. The Bell Labs that I started to work for years ago simply does not exist anymore. Huge buildings lie empty in IL, NJ, and other states. The jobs that these people had are now either overseas or do not exist anymore. The next rescue team for a phone outage may come from China or India.
While many business people scream at regulations as something getting in their way, I view certain industries and utilities as being critical to our well being. If BP did not have a proven method to stop oil in the event of a deep water blowout, they never should have been allowed to drill in the first place. Their “accident” rate was fairly high for regular rigs. How could they possibly have argued that deep water drilling was safe?
Engineering disasters do not happen because of one failure. They happen because something goes wrong on top of something that was not checked: A component, such as a piece of steel in a bridge, was built wrong and the inspector looked the other way; airplanes crash when a pilot is allowed to fly with little sleep the night before or has insufficient training. I was shocked recently when I watched a news show about how little pilots are paid since the industry was deregulated; allowing “Fly Cheaper with Cheaper Pilots” carriers to capture more markets. Since I started working on this story, I have read about how BP’s contractors apparently ignored early warning signs and that known problems existed in their supposedly “fail-safe” Blow Out Protector.
I doubt the oil industry can be trusted to police their own work any more than the financial industry can be trusted to keep us out of trouble without new rules and stiffer regulations. It’s just as easy for a company like BP’s concrete subcontractor, Halliburton, to cut corners as it is for a cheap airline to avoid airplane maintenance. Note that I’m not placing blame here, just pointing out that self-regulation and self-inspection simply does not work. On the other hand, we cannot expect a company to spend half of their time waiting for an inspector to show up. Regulations need to make sense and government needs to budget an adequate number of enforcement experts.
Failure in the oil industry means a portion of our country is damaged for decades, if not forever. The economic impact of an event like the spill in the Gulf is enormous, and even BP’s finances are limited. We need to carefully evaluate whether this free market mode of operating for certain industries is in our best interests. Lastly, I hope the Tea Party gang understands this and starts to realize that government has a good side, too.
Dave Yost is a retired Bell Labs engineer, now living in Silverthorne and Williams Bay, WI.
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