Our Cost, Their Profit

As bad as the oil rig calamity in the Gulf of Mexico was last year, all the associated costs won't hurt BP as much as one might think. Why? Like most corporations and average citizens, BP had an insurance policy on the rig and that insurance will pay a significant portion of the damages caused by the explosion.

But the same is not true for TEPCO in Japan.

From the U.S. to Japan, it's illegal to drive a car without sufficient insurance, yet governments have chosen to run the world's 443 nuclear power plants with hardly any insurance coverage whatsoever.

Japan's Fukushima Dai-ichi nuclear disaster, which will leave taxpayers there with a massive bill, highlights one of the industry's key weaknesses — that nuclear power is a viable source for cheap energy only if plants go uninsured. The plant's operator, Tepco, had no disaster insurance.

Governments that use nuclear energy are torn between the benefit of low-cost electricity and the risk of a nuclear catastrophe, which could total trillions of dollars and even bankrupt a country...

Back when I was a semi-professional progressive activist, one of the issues we protested against and tried to educate people about was corporate welfare (CW). CW is defined as financial aid, such as a subsidy or tax break, provided by a government to corporations or other businesses, especially when viewed as wasteful or unjust. When out at a demonstration or educational event, one of the questions people asked me was: Can you provide an example or two of what CW entails?

Well folks, when government doesn't require an industry to purchase insurance to protect the public, that right there is a form of CW. It saves the industry oodles of money and, if a major accident or natural disaster occurs, the public, not the offending corporation, picks up the lion's share of the cost.

In other words, the corporation ends up saving twice: year in and year out which allows them to realize greater profits PLUS in the event of catastrophe.

Of course, as the snippet quoted above highlights, government REQUIRES average citizens to purchase insurance in several instances. If you or I choose to forgo this mandate, we are likely to face a fine, imprisonment or both. The reason why government has created these mandates is so that society, in general, doesn't have to pick up the tab for accidents we cause or are subjected to.

The very fact that the nuclear power industry is allowed legally to ignore this principle is a gross miscarriage of justice, not to mention that it is extremely unfair. While a vehicle accident might mean a total expense of several hundred thousand dollars up to a few million, a nuclear accident of almost ANY magnitude will wind up being in the billions or trillions of dollars.

Why should the public be on the hook for such astronomical amounts?

Answer: That's the way capitalism -- particularly DISASTER capitalism -- works!