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State Capture by “Main Street”?: The Toyota Saga Accelerates
By Kaufmann | February 11, 2010 No Comments »
A few days ago I argued that one ought not point a finger at Toyota alone for the ‘sudden unintended acceleration’ (SUA) woes in their vehicles, and suggested that the problem also reflects the failure of the US Government regulatory agency (NHTSA) to do its job. At that time I provided incipient evidence that there may be elements of regulatory capture by the car maker, in fact. In the meantime, further evidence has been emerging about it.
Further, we know now that there will be a plethora of upcoming Congressional hearings on this. But key members of the Congressional Committees for these hearings have important interests vested with the car maker, yet so far they have not indicated that they intend to recuse themselves from the hearings…
In today’s longer opinion piece at Brookings on this Toyota SUA issue (here), I argue that the complex politics in the relationship between the industry and the government regulator, and between the industry and Congress, require a much deeper look and merits particular monitoring by public interest groups and the media. Further transparency measures and timely disclosure of data and financial interests are also needed.
Just like it was wrong to address the fundamentals of the banking crisis by only looking at technical mistakes by bankers and policy-makers (and undue focus on narrow technocratic solutions), it would also be a mistake here to focus merely on a quick ‘mechanical pedal fix’ by Toyota.
Strengthening regulatory agencies, which ought to be better protected from political influence and capture from industry, is an important objective if serious future mishaps are to be avoided. And the broader dilemma of of the nefarious effect of money in politics and how legislators can be unduly influenced by the powerful few cannot be ignored either, however thorny the challenge of making progress in this area may be.
Topics: capture, financial crisis, Regulation & Security, Rule of Law, Transparency | | Read and Submit Comments