Congress Accelerates Out of Control
Understanding that government is not the main source of auto safety improvements
When the news broke about alleged safety defects in Toyota vehicles, official Washington was appalled. Transportation Secretary Ray LaHood accused the company of being "safety deaf" and said "they have a very bad business model."
Then there was the reaction from customers, the very people whose lives and safety are at stake every time they get in a car. In the first four months of this year, Toyota's U.S. sales did not fall, as you might expect. They rose by 12 percent.
Sticky gas pedals, sudden acceleration, alleged violations of the law, federal fines, multiple recalls—none of them sent Americans fleeing in panic.
It's true that the Japanese automaker has had to offer more sales incentives than it used to—$2,498 per vehicle in April. But that only shows everything is negotiable to car buyers. "This vehicle may speed dangerously out of control and kill me without warning?" they say. "OK, but I'm not paying sticker."
This surprising development might cause elected officials to reconsider the wisdom of getting in between automakers and consumers when it comes to safety standards. But no such luck.
Rep. Henry Waxman (D-Calif.), who chairs the Committee on Energy and Commerce, and Rep. Bobby Rush (D-Ill.), have introduced a bill to impose new federal mandates on top of the existing ones. Waxman attests that it "may be the most important vehicle safety bill in a generation."
It would demand brakes that can stop a car even if the accelerator is stuck, require a minimum stopping distance, and create rules for vehicle electronics. Automakers would have to install event data recorders, like the black boxes on airlines, to provide information about accidents. Congress may also impose a vehicle fee to pay for federal regulatory activities.
Toyota, like any human institution, has made its share of mistakes, some of them possibly inexcusable. But if it were truly deaf to safety, its vehicles would not rank better than average in driver death rates. It's hard to see how a bad business model could have made Toyota the largest producer of cars—or, as a 2008 survey found, the most respected company on the planet.
You would never know from Waxman and Rush that the government is not the main source of auto safety improvements. Profit-making corporations actually have a strong business interest in keeping their customers alive.
They can also make money by offering products that reduce rather than maximize the buyer's chances of dying in a fiery crash. Just as there are markets for auto style, power, versatility, luxury, and sportiness, there is a market for safety.
A lot of advances were not forced on a callous industry by Washington, as Dave McCurdy, president of the Alliance of Automobile Manufacturers told Waxman's committee.
He reminded members that "automakers have developed many of today's significant safety innovations without a government mandate, including anti-lock brakes, electronic stability control (ESC), adaptive headlights, side airbags and curtains, front passenger safety belt reminder systems and advanced collision avoidance features like lane departure warning, blind spot monitors and adaptive cruise control."
Those improvements are among the reasons that last year, the number of traffic deaths was the lowest since 1954—even though there are twice as many drivers, traveling four times as many miles, as there were back then.
If federal regulators have insufficient tools to prevent safety defects, as the legislation presumes, this dramatic improvement must be due to something other than government vigilance. That, in turn, suggests that when it comes to reducing highway bloodshed, we are better off relying on consumer demand and competition among carmakers. It calls for humility on the part of federal officials.
But humility is not the prevailing mood in Washington. Between Toyota's missteps and federal measures to help the industry, politicians are feeling even bossier than usual.
What they are inclined to forget is that mandatory vehicle improvements don't come free. Those black boxes, for example, could cost hundreds or thousands of dollars apiece.
New cars have more safety features than older ones, so someone who trades in an old vehicle is likely to increase her life expectancy. Regulations that raise the price of a new car shut some buyers out of the market. So tougher federal rules may have the perverse effect of leading to more traffic fatalities.
If so, don't expect Congress to hold a hearing.
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