Government Decision-Making in the Gulf

My first column at Forbes.com is up here (and on the opinion home page, which is kind of cool), and extends on some thoughts I have already posted on my blog about why government decisions in multi-agency task forces, such as those running the Gulf cleanup effort, seem to be made in such a stupid manner.

As most scientists know, one of the best tests of a theory is whether it makes correct predictions about future events.  Since I wrote this article several days ago, we have seen this new story which is absolutely consistent with the decision-making paradigm I describe in the article (from Q&O)

Louisiana has been busily building berms about a mile out from the coast to halt the infiltration of oil into its sensitive marshes, wetlands and prime fishing areas. This process was greatly delayed by federal red tape, and now that the state has permits in hand it's being order to stop because, according to the U.S. Fish and Wildlife Department, it's doing it wrong:

The federal government is shutting down the dredging that was being done to create protective sand berms in the Gulf of Mexico.

The berms are meant to protect the Louisiana coastline from oil. But the U.S. Fish and Wildlife Department has concerns about the dredging is being done.

Plaquemines Parish President Billy Nungesser, who was one of the most vocal advocates of the dredging plan, has sent a letter to President Barack Obama, pleading for the work to continue.

[...]

Nungesser has asked for the dredging to continue for the next seven days, the amount of time it would take to move the dredging operations two miles and out resume work.

Work is scheduled to halt at midnight Wednesday.

Pat Austin is trying to understand the federal obstruction, but finds that political reasoning is the only thing that makes sense of it all:

I'm trying to see both sides here; I'm trying to understand the "coastal scientists" who contend that the berms will "change tidal patterns" and lead to more long term erosion of the islands, but if the islands are killed off by the oil what difference does it make? To borrow from Greta Perry's analogy, if my house is on fire, what does it matter what room I try to extinguish first? It's all doing down.

Read the Forbes article -- why exactly this decision was not only possible but inevitable is discussed in detail.

  • Danimal

    Congrats, man! I know the extra work will be a pain, but your's is an opinion I'd like to see more disseminated.

    Besides, you're the one doing the extra work, not me!

  • http://exit78.com Mike

    Very cool to get the opportunity for a Forbes piece!

    Very good piece, too. It helps make sense of some of the poor response in the Gulf.

    Great job!

  • Mary

    Congrats! Excellent first piece!

  • JoshK

    Congrats on the piece. Well written and engaging. One minor thing, I would get a better picture, this one has camera glare and is at the wrong angle.

  • TG

    Great piece! And congratulations on getting the Forbes gig.

  • Engineer Bob

    I had the same problem at a large private company -- many senior people, many committees, many vested interests. Everyone has a veto (or "more study needed"), no one can make "yes" stick.

    Then management adopted the "RAPID" program. Sure, I thought, more brainless consultant-ware.

    But I'm amazed and pleased. Senior management has strongly bought into having one "decider" for important topics, with the "decider" known in advance, with written decisions, and a well defined escalation path (which is rarely used and much more rarely succeeds). Yes, there are lots of meetings getting the decision-relevant data straight (it is still a large company), but there is a fairly short fuse before the decision is made.

    After a couple of years of adoption in more and more areas, I'm seeing a much more effective environment of making timely decisions for products.

  • Michael

    Congratulations on another success. I agree with Josh. A little sun and background will do wonders for you.

  • richard

    Good post.

    Small remark: Did you see the blog sw automatically inserted a link when you mentioned "Team Pepsi" to the pepsico stock? You should try to avoid that.

    Also: please try to get a different photo. This one looks like the police made it.

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  • Pat Moffitt

    Your premise is entirely correct from my experience. And in keeping with the premise it seems it is not the Jones Act that is the problem with oil skimming but EPA failing to give the permits for the oil water separators to operate because they do not meet their procedural requirements. (If found true- a criminally insane act)

    However there is another important element at work here that is more relevant to the berms. Regulatory agencies react to political demands and politicians orchestrate and react to media's "explanation" of any unfolding crisis. Media does not sell news- it sells advertising by offering "man bites dog" stories to its customers. Alarmism sells. As an example the 2003 Nat'l Acad. study "Oil in the Sea III"- warned that comparisons to Exxon Valdez equivalents should NEVER be used in reporting a spill. It is the concentration of oil at point of impact, type of oil, type of ecosystem, season, temperature, acclimated organisms etc that determine impact not the total amount of oil released. But how many times have you heard this spill compared to the number of Exxon Valdez equivalents on the news?

    But the real problem is the claims by politicians and media that the Gulf will die, that it will never recover. If true it means we needn't worry about consequences associated with our protection or mitigation efforts. Why worry if by inaction there is no hope? The Gulf spill can and is hurting the Gulf but it cannot kill it. And past Gulf spills of oil show marsh recovery in months to a few years.

    The Nat'l Academies study cautioned that in many spills the most severe inshore damage was done by the cleanup efforts. It was the aggressive INSHORE cleaning efforts using chemicals, steam and crews and equipment tromping around on sensitive soils that caused recovery times to double compared to areas where NO remediation was undertaken. OFFSHORE the advise is get as aggressive as you can-(The use of dispersants -a complex issue,skimming, burning, booming etc.) We are doing the opposite.

    Berms have the potential to do real long term damage. Marshes are a temporary solution to an ever changing equation of sediment and current. Change the current or sediment load and we change where or if a particular marsh continues to exist. (Berms can also change salinity, how high the tides reach into the marshes and other critical ecosystem elements ) Could there be some places where berms have advantages -sure. No-one however is asking where or if type questions with respect to berm placement. Like everything else related to this spill- informed decision making is lost in the fog of regulatory do nothing culture, politics, ideology, legal maneuvering, and a press that will say anything to sell some air time. And the tax payers and the environment are forced to pay for it all

  • Noumenon

    It was a good article, and the logic of "the EPA is only responsible for one side of the tradeoff, so they ignore it" seems really fresh and correct to me.

  • Henry Bowman

    The government agencies have been bad for quite a while. Nearly 25 years ago I was in charge of a seismic survey on a U.S.-owned island (an atoll) in the Pacific. Part of the plan was to detonate explosives in the lagoon of the atoll; these would be the primary sources for the experiment.

    Three government agencies had responsibilities on the island: the DOE, the DOD, and the Interior Dept, via the Fish & Wildlife Service (FWS). We filed a lengthy Environmental Assessment prior to the experiment.

    Ultimately, we were denied permission to detonate explosives in the lagoon. The reason stated was that we might damage some (possibly) resident turtles.

    What's wrong with this ruling? The FWS told us that no turtles were known to inhabit the island or its environs. However, such animals might be present; hence, no permission. This despite literally decades of studying the island by FWS, with no turtles sighted.

    The default response is no, as you stated.

  • Pat Moffitt

    Logical risk/reward. If there is no reward for the bureaucracy- it will take no risk. What is illogical is to think any system would act by any other metric. If you want to change a system - change the incentives.

  • Mark

    Good article, but one point that is missing is that in times of emergency the President as executive does have the power to overrule agencies and to create conditions where slightly off standard methods and techniques can be uses. All previous presidents I have known have written executive orders temporarily suspending laws and regulations until the emergency is over both Democrat and Republican.

    I don't want to point fingers but I don't understand why our current President is not stepping in more to stop the bureaucracies. Most of the items you mentioned in the article could have been solved with executive order, and It seems like only days after he gave a speech how he was in charge, the Coast Guard prevented ships from building a berm until the can be inspected, indicating the President still has not done much.

    I don't know what is wrong with the guy. I don't think it is a dem vs rep thing going. Maybe he has a tin ear.

  • happyjuggler0

    I submitted your Forbes piece to reddit. With any luck some of them will look for you column in the future.

    http://www.reddit.com/r/Economics/duplicates/cjdvr/it_is_all_about_incentives_the_problem_with/

    Guess which subreddit has received it least favorably.

  • Les

    Remember those days at the beginning of the Obama administration when he was appointing 'Czars' left and right? Wouldn't this argueably be one of the few times when a 'Czar' might actually be useful?

  • Yoshidad

    First, congrats on the column in Forbes. You are the perfect capitalist for their toolkit.

    And, in general, your point is devastatingly accurate: the "conspiracy of mediocrity" triumphs all too often when either private (BP) or public (EPA) bureaucracy has to make a decision. Decision makers seldom get rewarded for innovation or solutions, but risk plenty of punishments if they don't go along with the (risk-averse) crowd. Hence the mediocre outcome.

    That said, could a country that, e.g., de-funds its public service sector, then whines about poor regulation, enforcement, etc. be just a teensy bit hypocritical? Sure, it's practically an inborn reaction to want to strangle the obstructionist bureaucrats (I've sure been there), but is that what adults do when they want to get work done in the real world?

    After 40 years of Pepsi (or was it Coke?) promoting the belief that the nine scariest words in the English language are "I'm from the government and I'm here to help," and promoting the grossest ignorance about the necessity for intelligent public policy...Doesn't anyone from Pepsi (or Coke?) bear some responsibility for the collapse of the common weal?

    Gosh! I wonder!...?

    As for that Pepsi/Coke distinction, sadly I've found the Obama administration a sad and sorry echo of the Bush 43 administration. Obama's regime has been marked primarily by timid incrementalism that is (laughably!) condemned by the right as "socialism"... Consider Mitt Romney's corporatist health care scheme that is now Obamacare as a prime example. Obama mentioned single-payer, but worked actively to prevent even a public option. Bush just *threatened* to prosecute whistleblowers; Obama now prosecutes them. Obama promises due process, but authorizes extraordinary rendition. The Bush-era federal prosecutors remain in place, at least one with a private agenda to prosecute former Alabama Governor Don Siegelman.

    Many of the abuses of the old regime are in place, if not magnified. That's not change you can believe in, it's "the more things change, the more they stay the same."

    Meanwhile, here's an encouraging story about actual democracy in action:

    In Australia, the planning department invites the public to study an issue they need to decide exactly as they would empanel a jury. (The Perth planning director says "You Yanks don't capitalize on the wisdom of democracy, you empower mobs.")

    When the issue comes up for decision, the "jury" representing the public appears as a wise counterbalance to the other biased parties (the developer, the neighbors), and provide some political cover for the City Council making the decision. They get it right 99 times out of a hundred. Beach front development in Perth now has public access, for one example. Just try to get to the beach in Malibu...I dare you. The U.S. has "privatized" its public realm to an amazing extent.

    So a robust public real, the good public policy, and good governance is possible, but not if you condemn it as dishonest from its inception, at least IMHO.

    Which reminds me, have you read Gary Sick's "October Surprise"?