Thursday, August 16, 2012

The Myth Of "Free Markets" When Tragedy Strikes

Yesterday 28 year old Connecticut woman tragically died in a parasailing ride gone awfully wrong in Pompano Beach, Florida. She and her husband plummeted into the ocean from a height of 200 feet when their safety harness broke.

This is the second parasailing fatality in Pompano Beach since 2007. According to the city's mayor, there is little to no regulation or oversight of this recreational activity:

Parasailing companies operate in Florida with little-to-no regulation from the state or the federal government. Mayor Fisher said he has been pushing for legislation to impose stronger safety standards.
“And obviously it fell on deaf ears,” Fisher said. “And so here we are today, losing another life because of no inspections and no opportunities to make sure that this equipment is safe. For someone to have come down on vacation to Pompano Beach, it’s inexcusable to me.”
Imagine how upset her husband and parents would rightly be over what happened here. My guess is that the parasailing outfit touted how "safe" its practices were, and nobody put up a sign on the door of the business that said: "there is no real regulation or oversight of the parasailing industry." In fairness, we don't know how safe or unsafe this outfit was and only time will tell whether this tragedy was just a matter of time, or whether there were extenuating circumstances.

But it sounds to me like this was a classic "free market" industry that certain politicians and people love to promote and yearn for. "Let these businesses regulate themselves" and "government stay out" is often their clarion call. Sounds great on paper until something like this happens. And then many of these same folks then say (with a straight face): "What the hell is going on here? You mean that they're allowed to run a risky business like this with no inspections or oversight?" "Where is the government in all this and why have they not stepped in and stopped these dangerous practices?."

Therein lies the conundrum. Many times, lax or no regulation opens the door to cutting corners and taking shortcuts that often lead to tragedies like this. Would increased oversight have guaranteed this would not have happened? Of course not. Many heavily regulated industries, like the trucking industry, still have a fair number of preventable trucking collisions due to shoddy hiring practices, imposed driver fatigue, and other shortcomings.

But one thing is for sure: when there is no watchdog, deterrant, or minimal oversight, it's only a matter of time until people get hurt. Ironically, the cries for "less regulation" come at a time when the business community is lobbying in frenzy like fashion for "legal reforms" that limit wrongdoers legal responsibility, dole out lawsuit immunity like candy, and limit what injured people can recover in legitimate lawsuits involving truly preventable injuries. It's the perfect lobbying trifecta: less regulation, less lawsuits and less liability. So much for the "personal responsibility" and "accountability" that these same groups and politicians love to preach about when it comes to individuals (and so much for the "corporations are people too" drivel...)

And don't tell me that "doing the right thing" and the self incentive for safety is enough to make companies sell a safe product or service. The Pinto, Firestone tires, Vioxx, bladder suspension vaginal slings, The Massey Mine collapse, Wall Street molesters of our economy and retirement plans, and a whole host of other offending products and incidents come to mind.

Allow me to borrow from the "freedom isn't free" bumper sticker I see all the time. Free markets aren't free either. They come with a price. And sometimes the cost is something you can't add with a calculator: human life. 

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