AS INVESTIGATIONS are now revealing, there were laws that should have prevented the BP oil blowout, but the oil companies kept getting waivers from the Minerals Management Service, which was thoroughly tamed by the petroleum industry and its political allies in Washington.

The government’s supervision of the oil drilling industry was particularly corrupted under the direction of Vice President Dick Cheney, the former chief executive of Halliburton who ran the Bush administration’s energy task force. But restoring vigilant supervision evidently was not a priority for the Obama administration either.

The same hijacking of the regulatory apparatus occurred on the financial front. Ample laws could have prevented the speculative collapse if they had been enforced, including requiring banks to use sound underwriting standards, preventing credit rating agencies from bestowing triple-A ratings on junk, or keeping derivatives in check. The regulatory defaults spanned the Clinton and Bush administrations.

At issue are two interconnected failures of the economy and politics: what economists call market failure, and what political scientists call regulatory capture — and their cause and cure.

The financial and oil blowouts were spectacular cases of markets failing to price risks correctly. While market fundamentalists still insist that all markets eventually correct their own errors, fewer economists maintain that view in the face of recent events.

Oil companies pursuing short-term gains did not invest enough in safety precautions, and their shareholders didn’t care. Only government could compel action — but it failed to act.

Financial markets priced risky securities disastrously wrong. How could mortgages — whose distinguishing feature was that they were unlikely to be paid back — possibly have been converted into investment-grade securities?

There is a revealing expression in the world of hedge funds that you won’t find in most economics textbooks — “IBGYBG,’’ or “I’ll be gone, you’ll be gone.’’ Translation: by the time the dumb money finds out that it has been sucker-punched, we’ll both have made our fortunes and we’ll be out of here.

The ordinary forces of supply and demand that accurately price tomatoes can’t fix market myopia when it comes to pricing complex financial securities or risks of a drilling rig explosion.

But to say that market failures require government regulation is only the beginning of the story — because regulation requires competent and honest regulators. And if private business invests serious money in the corruption of regulation, then a market incentive trumps government’s capacity to correct the market’s mistakes.

So who keeps the regulators honest? The answer takes us back to politics.

More than half a century ago, the late economist John Kenneth Galbraith coined an important concept — “countervailing power.’’ Big business, Galbraith observed, had immense economic influence. But countervailing forces such as the trade union movement or activist citizens groups could neutralize that economic power by harnessing government to keep business’s less savory tendencies from overpowering its benign ones.

But that was then. Despite a seemingly formidable environmentalist movement, the oil industry overwhelmed its regulators. Americans for Financial Reform, the coalition of consumer groups pushing for better banking regulation, is outspent by Wall Street lobbyists by at least 100 to one.

There has been a lot of commentary lately contending that we have a tendency to underestimate risk. Truly catastrophic events occur only rarely — they are “black swans.’’ In the meantime, a lot of money can be made by betting that disaster won’t occur, or that it will occur on somebody else’s watch.

But who, in this account, is “we’’? In fact, plenty of voices in the wilderness were warning against the risk of a catastrophic oil blowout, or a financial one. These critics did not lack prescience or insight. What they lacked was political power.

It’s true that technologies, both financial and oleaginous, are becoming ever more complex; and this does create new kinds of risk. But the cure is less technical than political.

Citizens need to act more vigorously to restore Galbraith’s countervailing power. Otherwise, private business acting in its short run self interest will ruin us twice — once when private markets pay no heed to the risks they are imposing, and a second time when they corrupt our regulatory institutions.

Robert Kuttner’s new book is “A Presidency in Peril.’’ He is co-editor of The American Prospect and a senior fellow at Demos.

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