Mining for More Bureaucrats
Safety regulations don't actually increase safety.
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The New York Times reports that there were no survivors from the recent explosion at a mine in Montcoal, WV. In their reaction to this unhappy event, the Times reveals their view that bureaucratic regulators are always cloaked in virtue whereas businessmen are always suspect if not venal:
In 2008, the Aracoma Coal Company, a subsidiary of Massey, agreed to pay $4.2 million in criminal fines and civil penalties and to plead guilty to several safety violations related to that fire...
This week's blast comes after a year in which the Upper Big Branch mine had repeated problems with methane buildups. Since April 2009, federal regulators have cited the mine eight times for "substantial" violations relating to the mine's methane control plans, according to the records.
As one would expect under circumstances that create so much publicity, the bureaucracy has promised to leap into action:
Kevin Stricklin, of the federal Mine Safety and Health Administration, said he planned an aggressive investigation of the disaster. "I can tell you this: No stone will be left unturned," he said.
We're reminded of the recent incident in New York City when a crane fell off a building while being raised to a higher floor. The bureaucracy promised a full investigation, but cautioned that the investigation would take months. In the meantime, they tightened regulations concerning raising and lowering cranes even though they had no idea what had gone wrong and there was no way to know whether their new rules would help or hinder.
The investigation later revealed that the accident was caused by a faulty weld applied during manufacturing in China. Short of x-raying the entire crane, there was no way that any inspection could have detected the flaw until the crane failed. No amount of regulation by building inspectors or safety engineers could have prevented that particular accident. Yet the "emergency" tighter regulations remain in place, adding additional costs for no benefit.
How Much Investigation Do We Need?
It's pretty clear what happened in the coal mine - methane gas built up and exploded, but we don't yet know why. This isn't a hazard that's limited to coal mines - the same sort of thing happened a few years ago in New York City when a gas main leaked and blew up a street.
Gas buildup has been a problem in coal mines since coal was first mined. Deep mining has always been dangerous which is part of why mining coal pays so well, even though most miners are relatively uneducated and have no special skills. All you need is the ability to follow directions, though even that can be a challenge - the Times reports that the mine workers seem not to have inspected the methane detectors as often as the regulations required.
As illustrated by the construction crane accident, that doesn't necessarily mean that mine management was acting dangerously because there's no guarantee that regulations have any relationship with reality.
Shortly after the New York crane incident, it was found that an official near the top of the building department had been taking bribes to let contractors get around regulations. The department was in haste to say that his criminality had in no way compromised safety.
If they can claim with a straight face that evading regulations didn't compromise safety, what's the point of having the regulations in the first place? Is the purpose of regulation just to create jobs by giving bureaucrats something to do?
There is a place for regulation and safety standards in mining of any kind, of course. Deaths in Chinese coal mines are 4 times as common per worker and 108 times as common per ton of coal mined as in the US. More miners die in Chinese coal mines than in American mines partly because their safety rules and regulations are much looser than ours, insofar as they exist at all. Regulations and licenses for operating mining machinery certainly have the potential to make mining safer.
Unfortunately, there is a perpetual conflict between certification and competence. Many states require licenses for, say, barbers and cosmetologists in the name of "protecting the public." Most customers, however, are able to instantly gauge the competence of their own hairdresser and switch to a different one if dissatisfied, no bureaucrat required. The only significant effect of such licenses is to make it harder to get into the business and thus more costly to the public.
Because accidents eventually happen even in the safest working environment, but there is no periodic push to eliminate obsolete or useless regulations, the mass of red tape tends to grow over time. Looking at work rules across history shows by how much: during WW II, shipyards trained newbies to do high-voltage electrical wiring for combat naval vessels in 90 days whereas modern apprenticeship programs make a learner spend 4 years getting a license to do simple household wiring.
Has the art of wiring grown so complex in the past half-century? Hardly; it's the regulations and red tape that have grown. These regulations give little noticeable benefit except to the bureaucrats who write them and to the electricians who can charge more for their services because so few young persons are able to enter the profession.
Regulations versus Reality
If the past is any guide, federal regulators will use this accident to spew forth volumes of fine print regarding mine operation. This will increase the cost of mining coal and thus boost the cost of electricity generated by burning the coal.
Not only that, if the cost of deep-mined coal goes up too much, utilities will buy coal from the western open-pit mines. Right now, western coal has to be hauled a long way from the mines to the utilities. If deep coal gets too expensive, it'll be priced out of the market and the ex-miners will be unemployed.
Regulation is based on the same fallacious assumption as Obamacare - government apologists believe that government can control what happens if they write enough regulations. The falsity of this assumption is proclaimed by a common scatolotical bumper sticker observing that "S**t happens."
Indeed, events nobody wants happen no matter what you do. When something unusual happens, technical folk speak of "rare occurrences" or "black swans," and government types scream for more regulation. No matter how hard you try, you can't control everything, events will occur.
Southern New Hampshire, Massachusetts, and Rhode Island have had an unusually rainy spring and many houses were flooded. The newspapers wrote of a new arrival who'd bought a house in the flood plain. He checked the records. He found that the house had flooded only twice in the past 30 years and that the most recent incident was the year before he bought it.
This homeowner's dilemma speaks to the rules of statistics and rare occurrences - they're not related to each other, so they don't come regularly like clockwork. New Hampshire recently broke a 90-year-old record for snowy winters and Washington DC recently broke a snow record set back in the 1850's. Does that mean they won't see that much snow again for 100 years? Not at all; both are just as likely to get another 100 year snowstorm this coming year although it's unlikely.
Handing Rare Events
The Times pointed out that there were relatively few mining fatalities last year, as if that were totally to the credit of the bureaucracy. The Wall Street Journal pointed out that regulations may or may not have much to do with mine safety:
In the last decade alone, the U.S. coal-mining injury rate has fallen by 45% and the fatality rate by 62%. Some credit the 1977 Federal Mine Safety and Health Act and the 2006 Mine Improvement and New Emergency Response Act (MINER) for the improved safety, though both fatalities and injuries declined at about the same rate before and after the laws were passed.
One notable result of the 2006 law is that federal citations of the industry for safety violations rose by 32%. A 2007 report on mine safety by the Government Accountability Office predicted that an increase in citations would lead to an increase in appeals by the industry. One in four citations is now appealed, three times the rate before the law passed. [emphasis added]
Fatalities and injuries have been dropping steadily for a long time. Although the bureaucracy claims credit for improved safety, the WSJ points out that the rate at which accidents declined didn't seem to change after the law was passed. They note, however, the many more rulings are appealed than in the past, which boosts costs for the industry and boosts employment in the bureaucracy.
The bureaucratic approach to rare events is to write regulations any time anything unfortunate happens and keep collecting regulations until the file cabinets burst. The New York Times is screaming that the government should be given more resources to regulate automobiles even though nobody knows whether there are any problems with Toyota electronics or not. If there aren't any problems, extra regulations will merely add cost. If there are, the government's track record with software suggests that there's no possible way the government will be able to address any software issues.
In most cases, extra regulation merely imposes costs on consumers without any benefit. "But," you ask, "who's to keep the mines safe?"
That's simple - insurance companies. Back when electricity was new, insurance agents noticed that electric appliances tended to start fires. Hard-nosed capitalists that they were, they didn't want houses burning down because burning houses cost them money.
Their solution - they set up Underwriter's Laboratories (insurance underwriters, underwriter's laboratory, get it?) whose UL symbol is found on just about every electrical appliance you buy. They didn't require anyone to buy appliances approved by UL, they merely wrote into their policies that if a non-UL appliance in your house caught fire, they didn't have to pay off on your fire insurance.
To this day, it is not strictly speaking illegal to sell non-UL appliances, but almost nobody does because for many years nobody would dare buy them, and now consumers have come to expect the label.
Mining accidents have become rare, so the same solution could work for mining. No mine owner would dare operate a mine without insurance. No insurance company would dare insure a mine that isn't operated safely because their money is on the line.
Ergo, the mine must be operated to the satisfaction of a hard-nosed insurance company and its investors who have nothing to gain and everything to lose by an unsafe mine, or it won't be operated at all. Insurance companies have to write large checks when a mine explodes. They'll be much more careful about safety than any bureaucrat could ever be.
Nobody in business wants a mine disaster - not the workers who die, not the mine company who has to close the mine, and not the insurance company who has to pay out. Unlike mine owners and insurance companies, bureaucrats have no skin in the game. They don't care whether their regulations are effective or not, they just want to get paid to write rules and get paid to enforce them.
From the point of view of the bureaucracy, it's perfectly OK if mines explode because they get to write more rules. It's all fine and dandy if the regulations are so excessive that the mine has to shut down completely - it creates more jobs for their fellow bureaucrats at the unemployment office!
Writing regulations and enforcing them creates jobs for bureaucrats and boosts costs for everyone else. No matter how many regulations they write, however, our government can't control everything and can't prevent all risk.
Unfortunately for us, the government never learns this and keeps straining for perfection in safety and regulation. The harder they try, the less freedom we have.
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What does Chinese history have to teach America that Joe Biden doesn't know?
When you can get sued for spilling coffee on yourself, how could you expect Toyota to do anything but protect itself. A class action suit over something trivial quickly sucks resources from a company. In order to protect itself, it must defend itself vigorously.
Tort reform would solve this problem. It would allow companies to resolve issues without fear of being put out of business. Of course, real negligence or actual intent should be dealt with. But our current climate doesn't allow a business to reasonably deal with actual issues.
Lessons From the Big Branch Tragedy
The cause of the latest mining disaster may not be known, but what is clear is the need for strengthening the rules that govern the industry.
http://www.nytimes.com/2010/04/14/opinion/14wed2.html
They Should Know Better
Medical personnel shunned the swine flu vaccine in droves. Of all people, they should know the importance of getting vaccinated.
http://www.nytimes.com/2010/04/14/opinion/14wed3.html
Reviewing Mine Safety, Obama Faults Company and the Government
By SHERYL GAY STOLBERG
The president ordered more oversight, blaming "a failure first and foremost of management, but also a failure of oversight and a failure of laws" for a deadly explosion.
http://www.nytimes.com/2010/04/16/us/politics/16obama.html
(Yes I know you were being sarcastic)