Thursday, May 06, 2010

Robert Reich on the similarities between Goldman Sachs, Halliburton, and Massey Energy

What do Massey Energy, Goldman Sachs, and Halliburton have in common? They're all the beneficiaries of a insufficient regulation. Halliburton, in spite of being responsible for multiple breaches of laws-from the deaths of at least 16 troops, from electrocution owing to KBR's faulty wiring, from the detention of Jamie Jones after Jones had been raped, to the inability to account for $1.4 billion in Iraq to which Halliburton was entrusted, to the very process by which Halliburton was awarded multiple contracts which had not been exposed to public bidding.

Goldman Sachs has benefitted from a close relationship with the federal government (quite apart from the political party in the ascendance in Washington). They are bailed out, in spite of their bundling almost indecipherable, and typically worthless financial products. Their sway, and the tendency of the SEC to watch porn rather than regulate Goldman Sachs, facilitated the ascendance of Goldman Sachs and the other large banks largely responsible for sending the world's economy into the toilet.

Massey Energy has a lengthy record of breaking laws and not being punished. Its CEO, Don Blankenship spent over $3 million to elect a member of the West Virginia Supreme Court who subsequently voted to repeal a fine imposed on Massey Energy over a conviction reached in West Virginia ruling that Massey had engaged in fraud in order to put a competitor, Harman Energy, out of business. His company was fined $1.5 million over the deaths of two miners who the regulatory agency ruled had died because of safety violations in a Massey mine in January 2006. Massey Energy, via its' CEO claims to believe that regulation would comprise us needing to learn Chinese and he also is quite alright with elementary school aged children breathing coal-laced air.

All these companies have been the beneficiaries of a Wild West of commerce over the last 30 years, in which business has largely been untethered from rules that would significantly motivate them not to do damage to the communities in which they do business. Reich nails this dynamic much better than I can.

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