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April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review June 7, 2010 / 25 Sivan 5770

Duped by success

By Robert J. Samuelson




http://www.JewishWorldReview.com | An intriguing aspect of the BP oil spill is that, before the accident, deepwater drilling seemed to be a technological triumph. About 80 percent of the Gulf of Mexico's recent oil production has come from deepwater operations, defined as water depths exceeding 1,000 feet. In 1996, that was 20 percent. Jack-up rigs, which are oil platforms on stilts in a few hundred feet of water, have given way to the "mobile offshore drilling unit" (MODU). It keeps its position through the interaction of global positioning satellites and on-board engines that activate directional propellers to offset ocean currents and wind.

Seismology and submersible robotic technology have also advanced. The Deepwater Horizon rig was not testing new limits. It was drilling in about 5,000 feet of water when others have approached 10,000 feet. The safety record was good. The American Petroleum Institute, the industry's main trade group, says that since 1947, oil companies have drilled more than 42,000 wells in the Gulf of Mexico and recovered about 16.5 billion barrels of oil. Against that, spills totaled about 176,000 barrels from 1969 to 2007. In a typical year, it was a few hundred barrels. By contrast, recent production is about 1.6 million barrels a day.

Cost-cutting by BP, careless rig operators and lax regulators have all been fingered as plausible culprits in the blowout. President Obama has appointed a commission to investigate the causes, and the Justice Department has launched a criminal investigation. There will be extensive analyses. But the stark contrast between the disaster's magnitude and the previous safety record points to another perverse possibility: The success of deepwater drilling led to failure. It sowed overconfidence. Continuing achievements obscured the dangers.

This pattern applies to other national setbacks. Consider the financial crisis. It was not the inherent complexity of subprime mortgages or collateralized debt obligations (CDOs) that caused the crisis. It was the willingness of presumably sophisticated investors to hold these securities while ignoring the complexity and underlying risks. But this behavior was understandable at the time.

The economy seemed to have become less risky. High inflation had been suppressed. Since 1982, there had been only two relatively mild recessions, those of 1990-91 and 2001. Economists talked of the "Great Moderation." The stock, bond and foreign exchange markets had become less volatile; day-to-day price movements were smaller and less erratic. One study of the 2004-06 period found that stock market volatility in seven advanced countries had dropped about a third from historical averages and that bond market volatility was down almost a fifth.

Well, if the economy and markets had become less risky, then traders and investors could take what once would have seemed greater risks to increase profits. They did -- and created new vulnerabilities for markets and the economy. The belief that past economic and financial instability had been quelled encouraged future instability.

Or take the Toyota scandal. Few auto companies enjoyed as envious a reputation. Toyota consistently did well in surveys of reliability and customer satisfaction. This success -- and the resulting image inside the company and among government officials -- helps explain why Toyota reacted so slowly to problems with its accelerators and why government officials were not more assertive. Problems were minimized because they seemed out of character for Toyota.

One theory of the oil spill is that the deepwater technology is inherently so complex and dangerous that it can't really be understood or regulated. The safety record before the BP spill seems to rebut that. The problem is that the system broke down. Careless mistakes were made. Or regulators were co-opted by industry. Judgments were botched. Something. The post-crisis investigations will presumably fill out the story. But they may miss the larger question of why.

No one has yet suggested that the blowout reflected a previously unknown geological phenomenon -- something in the oil formation -- or a quirk of technology that no one could have anticipated. Perhaps studies will reveal one or the other. But the prevailing assumption is that this accident was preventable, meaning that human error was responsible There's a cycle to our calamities or, at any rate, some of them. Success tends to breed carelessness and complacency. People take more risks because they don't think they're taking risks. The regulated and the regulators often react similarly because they've shared similar experiences. The financial crisis didn't occur so much because regulation was absent (many major financial institutions were regulated) but because regulators didn't grasp the dangers. They, too, were conditioned by belief in the Great Moderation and lower financial volatility.

It is human nature to celebrate success by relaxing. The challenge we face is how to acknowledge this urge without being duped by it.

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05/31/10: Why Obama's poverty rate measure misleads
05/17/10: Wake up, America
03/22/10: The maestro's misconceptions
03/15/10: Obama's illusions of cost-control
01/14/10: In the aftermath of the Great Recession
12/29/09: Democracy's demolition derby
11/30/09: Bipartisan threats against the institution that saved America from depression
09/14/09: Give It to Us Straight
09/07/09: Bad Future for Jobs?
08/24/09: A Rail Boondoggle, Moving at High
08/10/09: Championing the Status Quo
08/03/09: We'll remain in denial, prisoners of wishful thinking, until the fateful reckoning arrives in the unimagined future
07/27/09: Obama's misleading medicine
07/13/09: Americans' self-indulgence hurts us
07/06/09: Economists out to lunch
06/29/09: Panics ‘R’ Us!
06/08/09: Flirting with deflation or inflation? Now the economy might be at risk of both
05/25/09: A ‘crisis’ America needs
05/18/09: Will somebody finally say that Obama is irresponsibly mortgaging our future?
05/04/09: The Bias Against Oil And Gas
04/27/09: Environmentalists maximize the dangers of global warming while pretending we can conquer it at virtually no cost
04/20/09: Our Depression Obsession
03/23/09: Geithner treads a line between financial paralysis and populist resentment
03/23/09: American Capitalism Besieged
01/06/09: The limits of pump priming
12/29/08: Humbled By Our Ignorance
07/31/08: The homeownership obsession
07/24/08: A Depression? Hardly
07/17/08: Why isn't globalization making the interconnected world more stable?



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