The Times takes note of a striking reaction in West, Texas after a tragic explosion resulted in massive casualties and property destruction–no reaction.
Five days after an explosion at a fertilizer plant leveled a wide swath of this town, Gov. Rick Perry tried to woo Illinois business officials by trumpeting his state’s low taxes and limited regulations. Asked about the disaster, Mr. Perry responded that more government intervention and increased spending on safety inspections would not have prevented what has become one of the nation’s worst industrial accidents in decades.
“Through their elected officials,” he said, Texans “clearly send the message of their comfort with the amount of oversight.”
This antipathy toward regulations is shared by many residents here. Politicians and economists credit the stance with helping attract jobs and investment to Texas, which has one of the fastest-growing economies in the country, and with winning the state a year-after-year ranking as the nation’s most business friendly.
Even in West, last month’s devastating blast did little to shake local skepticism of government regulations. Tommy Muska, the mayor, echoed Governor Perry in the view that tougher zoning or fire safety rules would not have saved his town. “Monday morning quarterbacking,” he said.
Raymond J. Snokhous, a retired lawyer in West who lost two cousins — brothers who were volunteer firefighters — in the explosion, said, “There has been nobody saying anything about more regulations.”
Assuming these explosions are in fact black swans, then the correct answer is not to say, as Perry does, that additional regulations would not have stopped this *particular* disaster. But, Texas is something on the right track to dealing with black swans. Economic resiliency, embodied in what Taleb calls “Antifragile,” puts the community in the best position to recuperate from disasters that could not have been prevented.
The article even notes that it is impossible to know if additional regulations would have solved the problem. The answer is probably not, but fire codes woudl ahve helped!
It is impossible to know whether tougher regulations would have prevented the disaster near West, especially since investigators remain unsure what sparked the fire that caused the fertilizer to explode. McLennan is among the counties without a fire code.
But federal officials and fire safety experts contend that fire codes and other requirements would probably have made a difference. A fire code would have required frequent inspections by fire marshals who might have prohibited the plant’s owner from storing the fertilizer just hundreds of feet from a school, a hospital, a railroad and other public buildings, they say. A fire code also would probably have mandated sprinklers and forbidden the storage of ammonium nitrate near combustible materials. (Investigators say the fertilizer was stored in a largely wooden building near piles of seed, one possible factor in the fire.)
“It’s tough to overstate the importance fire codes would have made,” said Scott Harris, a former emergency management coordinator in Texas for the Environmental Protection Agency, who is now with UL Workplace Health and Safety, a safety science company. “Texas just hasn’t wrapped its brain around this fact yet.”
Yet, the article continues to criticize the libertarian nature of Texas, even though it concedes (halfway through) that the regulations would not necessarily have helped.
The Times notes that this free-market paradise has severe downsides:
Texas has always prided itself on its free-market posture. It is the only state that does not require companies to contribute to workers’ compensation coverage. It boasts the largest city in the country, Houston, with no zoning laws. It does not have a state fire code, and it prohibits smaller counties from having such codes. Some Texas counties even cite the lack of local fire codes as a reason for companies to move there.
But Texas has also had the nation’s highest number of workplace fatalities — more than 400 annually — for much of the past decade. Fires and explosions at Texas’ more than 1,300 chemical and industrial plants have cost as much in property damage as those in all the other states combined for the five years ending in May 2012. Compared with Illinois, which has the nation’s second-largest number of high-risk sites, more than 950, but tighter fire and safety rules, Texas had more than three times the number of accidents, four times the number of injuries and deaths, and 300 times the property damage costs.
I think these numbers may be misleading, as Texas has a much higher population (and thus larger workforce) than Illinois. For example, according to this chart from the Bureau of Labor Statistics, in 2011, Texas had 433 casualties (a decrease from 2010), while California, another populous state with perhaps the most stringent regulations in the country had 390 fatalities.
The article continues, and a Prof from UT Law School blames economic freedom for this explosion.
As federal investigators sift through the rubble at the West Fertilizer Company plant seeking clues about the April 17 blast that killed at least 14 people and injured roughly 200 others, some here argue that Texas’ culture itself contributed to the calamity.
“The Wild West approach to protecting public health and safety is what you get when you give companies too much economic freedom and not enough responsibility and accountability,” said Thomas O. McGarity, a professor at the University of Texas at Austin School of Law and an expert on regulation.
…
This antiregulatory zeal is an outgrowth of a broader Texas ideology: that government should get out of people’s lives, a deeply held belief throughout the state that touches many aspects of life here, including its gun culture, its Republican-dominated Legislature and its cowboy past and present.
The Times scoffs at the libertarian-ness nature of Texas.
This antiregulatory zeal is an outgrowth of a broader Texas ideology: that government should get out of people’s lives, a deeply held belief throughout the state that touches many aspects of life here, including its gun culture, its Republican-dominated Legislature and its cowboy past and present.
Texas is one of only four states with legislatures that meet as infrequently as possible, once every two years, as required by the state’s 137-year-old Constitution. From the freewheeling days of independent oilmen known as wildcatters to the 2012 presidential race, in which President Obama lost Texas by nearly 1.3 million votes, the state’s pro-business, limited-government mantra has been a vital part of its identity.
Fittingly enough, in Saturday’s Times, there is an article about the difficulty of recovery from Hurricane Sandy, in light of the fact that new regulations have driven up the cost of flood insurance and rebuilding:
It’s been more than six months since Hurricane Sandy hit the East Coast, yet many people whose homes were ravaged by the storm still do not know how to put all the pieces back together.
By now, most know how muchinsurance money they have to work with, though plenty of people are stillstruggling to get more. But a new federal law that happened to coincide with the arrival of the storm will cause flood insurance premiums to skyrocket and require stricter, and thus more expensive, rebuilding standards.
So in the most devastated communities, families are being forced to make difficult financial calculations: can they afford the new flood insurance premiums, which, at worst, can reach as high as $30,000 a year? Do they have the money to rebuild their homes to the government’s new specifications? Does it even pay to stay?
Some families have already thrown up their hands and put their houses up for sale, while others talk of making the best of really bad options. “This issue is more devastating to more people than Sandy itself, believe it or not,” said Ron Jampel, a resident of the Shore Acres section of Brick, N.J., who started an advocacy group for affected homeowners inNew Jersey called Save Our Communities 2013.
Think about that. Families are choosing to sell their homes and leave rather than abide by the new regulatory burdens. Personally, I never understood why people were willing to live right near the shore where their home could be destroyed any minute. But people assumed that risk. The subsidies given to those living by the water do not seem to make sense.
I have a somewhat related comparison between living in New York and Texas, which has suited me quite well. Recently, I had to file the state franchise taxes for the LLC I incorporated in Texas this year. The process was absolutely painless. The website not only walked me through the process–no need to buy any software–but told me that based on my paltry revenues in 2012, I was below the “no-tax-due threshold.” In other words, I owed nothing. This small vignette stands in stark contrast to my previous experiences with corporate taxes. When I was in college, I incorporated a business in New York to provide web design services. My first year in business, I think I paid more in taxes and tax-preparation fees than I earned in revenue. In the second year, it about evened out. By the third year, I said forget it, it wasn’t worth paying all the taxes. I would operate as a sole proprietor I shut down the corporation (at some cost). These are the costs that are hidden with regulatory burdens–the company that simply ceases to exist. This was an early foray into shrugging.