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Boeing woes the latest impact of deregulation; lack of oversight

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Steve Kannon
Steve Kannonhttps://www.observerxtra.com
A community newspaper journalist for more than two decades, Steve Kannon is the editor of the Observer.

The story of the fox and the henhouse is supposed to be a cautionary tale. Unfortunately, it’s been taken as a roadmap for government regulation.

The latest example of that perilous course is the worst-case scenario: fatal airplane crashes, namely last fall’s Lion Air incident that claimed 189 lives and the 157 people who died aboard an Ethiopian Airlines flight. Both involved Boeing’s new 737 Max 8 aircraft, which were subsequently grounded due to safety concerns.

There’s much talk now about how government deregulation and lack of oversight led to the company essentially being responsible for ensuring the safety of its own new technology. It’s a common occurrence across many industries, with governments ceding control due to both ideological and financial considerations.

Deregulation is a mantra on the right. That the philosophy is entrenched was made apparent by the lack of response following the financial sector meltdown a decade ago. Unfettered by bothersome rules, the industry spun evermore intricate financial instruments, greed making everyone ignore that the system had become a house of cards.

The same principle of allowing the sector to police itself applies to industries where safety is – or should be – a paramount concern. Think, for instance, of tainted food issues that have arisen, including the listeriosis outbreak a decade ago that claimed the lives of 22 people in this country. Experts suggested cutbacks at the Canadian Food Inspection Agency (CFIA) and government policies allowing for self-policing on the part of the meat industry, played a part in the listeria contamination at a Maple Leaf Foods plant going unnoticed.

In the case of the new Boeing planes, today’s issues can be traced back to ideologically driven changes at United States Federal Aviation Administration, argues James. E. Hall, a former chairman of the National Transportation Safety Board.

“The roots of this crisis can be found in a major change that the FAA instituted in its regulatory responsibility in 2005. Rather than naming and supervising its own ‘designated airworthiness representatives,’ the agency decided to allow Boeing and other manufacturers who qualified under the revised procedures to select their own employees to certify the safety of their aircraft. In justifying this change, the agency said at the time that it would save the aviation industry about $25 billion from 2006 to 2015. Therefore, the manufacturer is providing safety oversight of itself. This is a worrying move toward industry self-certification,” he wrote in an opinion piece published last week in the New York Times.

Reporting by the Seattle Times in Boeing’s home state found that the safety analysis the company delivered to the FAA was flawed. At issue specifically is a flight-control system known as MCAS (Maneuvering Characteristics Augmentation System) that may be implicated in the two crashes.

“A former FAA safety engineer who was directly involved in certifying the MAX said that halfway through the certification process, ‘we were asked by management to re-evaluate what would be delegated. Management thought we had retained too much at the FAA,’ the paper reports.

‘There was constant pressure to re-evaluate our initial decisions,’ the former engineer said. ‘And even after we had reassessed it … there was continued discussion by management about delegating even more items down to the Boeing Company.’

“Even the work that was retained, such as reviewing technical documents provided by Boeing, was sometimes curtailed.”

It’s no coincidence the U.S. was the last country to ground the 737 MAX, as the impact on Boeing was put ahead the safety concerns. Nor is it surprising that governments look to protect business interests, especially national ones – SNC-Lavalin, anyone? – as corporations have spent decades buying up politicians and lobbying against the common weal. Deregulation is one of the key ingredients of selling out the public to the highest bidder, safety and welfare be damned.

There’s an ideological aspect to this decline, but in the end it boils down to money.

Those who argue that regulation only hinders capitalism – often the same people who wrongly equate capitalism with democracy – miss the point of a so-called free market. The idea of a free-market economy is to let the market decide what will be made and in what quantity, rather than the central planning of the communist system, for instance. It doesn’t, however, mean free from regulation. How many people would argue that business should be “free” to use slaves or child labour? That was once the case in the West, but has been regulated out of the mix.

Once we’ve established that the market is an artificial construct that we’ve devised, we’re free to shape it in such a way that it provides only benefits to society, not harms. The deregulation that fuelled the corporatism of the last few decades – think of the rise of globalization, monopolies and oligarchies and the resultant decline in our quality of life – followed a postwar boom that was shaped by a market system that was devised with the broad public in mind. It wasn’t perfect by any means, but far more equitable than is the case today. Deregulation killed that. New regulations controlling the excesses of the financial sector are needed to put us back on track. The same goes for removing corporate influence in the political system.

The system of trickle-down economics is what we’ve been living with for more than three decades … and paying the price for. It’s founded on the belief that what’s good for the wealthiest classes is good for everyone. Bank profits are at an all-time high, financial services are raking in billions and corporations have rebounded nicely. For the bulk of us, however, unemployment remains high, personal debt levels soar and the standard of living falls … much like planes when there’s a dearth of oversight.

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