With the Boston Marathon bombing just happening it was easy to attribute the West Texas fertilizer factory fire and explosion to terrorism, but now with some facts coming out it is clear that sheer negligence was the cause. Texas has a hands off bias when it comes to government regulation and this accident is sure to cause for a call for more and tighter regulation. But regulation without skin in the game to compensate victims is more than useless because it gives the illusion of protection.
The video taken by an onlooker from what appeared to be about a half mile away from the flaming factory which then explodes and leaves the voice of a child in the truck pleading to get out with the camera blacked out lense down on floor, left no doubt that what ever that factory was mixing up required extreme vigilance and process control. Something that required a $100 million bond at least to be posted and the company posting the bond protecting its liability by making sure the facility was run by the book. This is so much better than depending on OSHA, a brow beaten agency in Texas I am sure, who last visited the facility in 1985.
The importance of having a deep pocketed holder with sufficient assets to compensate all the victims is very clear today on the third anniversary of BP's offshore oil rig disaster in the gulf. What if the rig had been owned and operated by some $75 million dollar limited liability operation allowed by Congress instead of the multi billion dollar corporation with assets and shareholders in the United State that is BP? The fact that there was a government entity, another brow beaten agency to be sure, reviewing the plans for the oil drilling on that rig compensated no one. So who is compensating the victims of the West Texas disaster?
John Hasnas "Have Markets Failed" at the following You Tube REASON TV Link http://www.youtube.com/watch?v=9cR5NWkWMzw is a very good clarification of free market, common law, tort law and legislated law where he uses BP as an example of legislated law providing the insurance required for the risky off shore drilling venture. In this particular case common and tort law pretty much trumped legislated law to the point that no management or stockholder should believe the risk can be controlled by just insurance.
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