The Accelerating Cost of No New Taxes, Part 7

Connect the dots. Policy, problem. Policy, success. Politicians seldom do it. Journalists do it way too seldom.

Toyota is suddenly stumbling all over itself to find the reputation for quality that it has dropped and stepped on. Not so suddenly, turns out. The regulators — what a surprise — were asleep at the switch, those who still had jobs after the Bush administration’s cutbacks saved us from the evils of big government. Leaving safety in the hands of industry. Essentially unregulated.

The New York Times has a story today showing that Toyota’s problems were hitting the radar screen of the National Highway Traffic Safety Administration years ago — but there were few regulators watching those screens, and, because of budget cuts, problems weren’t pursued.

And accelerators stuck. And people died.

From the Times story:

Six times since 2003 in fact, the safety agency opened inquiries into possible Toyota safety problems, and six times it closed them without any significant action.

In 2008, for instance, the agency examined a request from the owner of a Toyota Tacoma pickup to investigate “sudden and uncontrolled acceleration.” After a preliminary review, the safety agency concluded in a memorandum given to House investigators that: “In view of the need to allocate and prioritize N.H.T.S.A.’s limited resources to best accomplish the agency’s safety mission, the petition is denied.”

In recent years, the agency has dealt with financing and staff cuts in some areas. The Transportation Department announced last week that the administration was seeking money for 66 new positions.

Actions have consequences. We debate often on this blog which is worse — unrestrained government or unrestrained business. Neither is good for America. I just don’t get those who consistently say government is the problem and the marketplace will regulate itself.

From the days of child labor and tainted meat and shoddy army uniforms to too-few cops and inspectors now, we’ve seen that taxes –carefully spent — can support the common good. Taxes and government are not always the problem.

Do we miss you yet, W? Oh, we have hardly begun to fully understand the ways you’ve damaged this country, bubba. And the bill keeps coming due.

— Bruce Benidt

15 thoughts on “The Accelerating Cost of No New Taxes, Part 7

  1. Newt says:

    Try as desperately as you are trying, the blame-it-on-Bush thing doesn’t fly any more.

    Toyota-gate is the biggest non-story, propagated by government-owned car makers, to vilify the best automotive brand the world has ever known.

    Show me the dead bodies. Show me the number accidents.

    NO DATA FROM NHTSA ON ANY OF THESE. You won’t find it.

    I like the way the NYTs describes the faux crisis: “possible Toyota safety problems.”

    Thanks Bush, for not raising our taxes to inflate car prices with needless fixes for imaginary problems. Yes, we do miss him.

  2. Mike Kennedy says:

    Well, with this government’s poll numbers, policies and popularity dropping faster than a hiccup, who else will liberals blame?

    The old canard about Bush not being a regulator dies hard. But it’s simply false. Fabrication. An political urban myth.

    True, there was a decline of 13 percent of new regulatory rules under Bush. However, that isn’t the total measure of regulation. The Bush administration spent more taxpayer money on issuing and enforcing regulation than any administration in U.S. history.

    Authors of a recent Reason magazine article point out the Bush administration increased spending on regulations by 62 percent, adjusted for inflation, compared with 31 percent for Clinton.

    The federal register, which lists all new regulations, increased from 64,438 to 78,090, an all time high, under Bush.

    Finally, spending on banking and finance regulations under the Bush administration increased by 29 percent under Bush while dropping by 3 percent under Clinton.

    Now, we can debate Congress’ role in all of this during those time periods, but it is clear that the favorite liberal tactic of “blame Bush” is wearing thin on the public, as facts show it should.

    Bush made a number of mistakes, but let’s credit him for the ones he actually made.

  3. Joe Loveland says:

    Maybe I’ll change my mind after learning more, but I’m not ready to blame conservatives and deregulation for Toyota. Banks, yes. Toyota, not yet.

    In terms of reliability and safety, Toyota is, by all measures, one of the top few car companies in the world for several decades running. That record is impressive, and should color how we view their ability to right the ship. A plastic doo-dad thingy went bad and Toyota and regulators maybe didn’t recognize it as fast they should have. But sometimes plastic doo-dads just are a nanometer off, even when world class engineers do their very best to develop and rigorously test them, and regulators are doing their best to be responsive to issues. Mechanical issues happen.

    I’m all for probing the doo-dad and regulatory system to look for improvements. But I’m not sure, yet, if I can blame conservatives and deregulation for this one. It is a reminder why strong regulation is needed though.

    1. Newt says:

      Joe, you shouldn’t blame conservatives for banks either. The top recipients of financial sector campaign donations are:

      Rank Candidate Office Amount
      1 Schumer, Charles E (D-NY) Senate $2,229,149
      2 Gillibrand, Kirsten (D-NY) Senate $1,213,200
      3 Crist, Charles J Jr (R-FL) $1,138,193
      4 Reid, Harry (D-NV) Senate $1,076,410
      5 Portman, Rob (R-OH) $835,600


      Where your outrage should be is with government-owned Fannie-Freddie and Congress that forced lenders to make loans to uncreditworthy homebuyers.

      Remember, there could be no credit default swaps without bad home loans. And there wouldn’t be bad home loans if Congress hadn’t pushed them.

  4. Joe Loveland says:

    Money flows to power, and those folks are getting banking industry money now because they are in the majority party and are senior members of the committee that matters to the industry…and/or have a lot of financial services in their district. When Republicans gain the majority, the money flows to them. Sign of the times, seniority, committee assignments and political winds, not necessarily of fealty to the industry.

    I think there’s a pretty good argument that deregulation didn’t help things. But has a pretty good inventory of people and organizations who bear a share of the blame:

    As The Economist magazine noted recently, the problem is one of “layered irresponsibility … with hard-working homeowners and billionaire villains each playing a role.” Here’s a partial list of those alleged to be at fault:

    The Federal Reserve, which slashed interest rates after the dot-com bubble burst, making credit cheap.

    Home buyers, who took advantage of easy credit to bid up the prices of homes excessively.

    Congress, which continues to support a mortgage tax deduction that gives consumers a tax incentive to buy more expensive houses.

    Real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes.

    The Clinton administration, which pushed for less stringent credit and downpayment requirements for working- and middle-class families.

    Mortgage brokers, who offered less-credit-worthy home buyers subprime, adjustable rate loans with low initial payments, but exploding interest rates.

    Former Federal Reserve chairman Alan Greenspan, who in 2004, near the peak of the housing bubble, encouraged Americans to take out adjustable rate mortgages.

    Wall Street firms, who paid too little attention to the quality of the risky loans that they bundled into Mortgage Backed Securities (MBS), and issued bonds using those securities as collateral.

    The Bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market.

    An obscure accounting rule called mark-to-market, which can have the paradoxical result of making assets be worth less on paper than they are in reality during times of panic.

    Collective delusion, or a belief on the part of all parties that home prices would keep rising forever, no matter how high or how fast they had already gone up.

    1. Newt says:

      This list is insufficient in many respects, and none of these is weighted.

      The core reason for the meltdown is that bad home loans were made by lenders under threat by Congress.

      The Bush administration implored Congress to regulate Fannie-Freddie more tightly for a period of years, but Barney Frank, Maxine Waters, et al called them racists.

      1. Newt says:

        If only we had higher taxes, the housing crisis would have been averted. Am I the only one to see the illogic behind the assertion that higher taxes results in greater protection of the public?

    2. Mike Kennedy says:

      Joe, that is a pretty comprehensive list and one that, I think, focuses most of the blame on all the parties responsible.

      Newt is right that some weighed more than others (mark to market accounting turned a crisis into a bona fide catastrophe).

      However, the Economist got it right. It did, however, minimize some blame. Quite a number of homeowners, agents and brokers flat out lied about income, assets etc.

      Both power hungry politicians and greedy Wall Street chiefs both had a hand in this fiasco, but without all the easy money in the system, it would have been more difficult for this blow up to occur and had mark to market accounting rules been suspended, much of the trouble could have been avoided.

  5. The quote you pulled above makes reference to “limited resources,” but I have no reason to believe that response would have been any different if the agency had a budget that was 10 percent, 20 percent, 80 percent higher. That strikes me as a polite “Sorry, but there’s no there there” response more so than a “We don’t have enough money and manpower to investigate your complaint.”

    Reading the full Times article — seeing references to “the safety agency has become too close to the industry it is charged with regulating” and “the agency’s limited use of fines or subpoenas against auto manufacturers” and “a dearth of technical expertise” and “did not act aggressively in its dealings with the company’s leaders” — I get the impression it’s an issue of ineptitude, apathy or plain corruption more than it is an issue of taxes and resources and a need for “stronger government.”

  6. Mike Kennedy says:

    As one analyst pointed out, autos are now run by such a sophisticated networks of microchips and related technologies that there are bound to be some bugs inherent in some of the systems. This could be one of those cases, and the other auto manufacturers shouldn’t get too full of themselves because it can and probably will happen to them, as well.

    There is no bigger believer in technology than me, but there are risks. There are risks in everything we do. That doesn’t mean the benefits don’t heavily outweigh the risks. They do. The technology we have in our lives is miraculous.

    However, it is virtually impossible to eliminate all risk with more regulations.

    “Shit happens” and will continue to happen whether thousands of government workers are empowered or not.

    I just flew a four seater plane this afternoon for the first time solo — no instructor, only radio communication with the tower during four takeoffs, patterns around the airport and four landings. The engine could have malfunctioned, and as the pilot in command with a whole 19 hours of air time under my belt, it is my risk, my responsibility and my job to remain cool if something goes wrong.

    A risk, yes. But I wouldn’t trade the reward and the feeling I have right now for anything.

  7. Kennedy, congrats on the flying deal. Gutsy, fun.

    Now, should there be a tax-supported FAA? Why the hell should I pay for air traffic controllers to support your hobby, man? Let’s let there be freedom in the skies. After the Wright brothers, the Nativist Party no doubt railed against the big-government takeover of the skies. Let the free fliers sort themselves out.

    But seriously, Mike, you are no fun at all to argue with. Reminds me of our family dinner table during the Vietnam war. My brothers and I argued with passion and drama and conviction and volume against LBJ taking us neck deep in the big muddy. And my dad — sheeeit, he used facts and knowledge and information.

    Now, of course, there are facts, and there are facts. And there are flows of logic and there are logic pile-ups. So when you argue in your first response here the Dubya spent more on regulation than Mr. Bill did — are you really saying that more government spending equates to more effectiveness? Hello? You guys who say government spending is wasteful and unAmerican? Really? I don’t think you can have it both ways.

    Now no fair coming back with facts, man.

  8. Mike Kennedy says:

    Thanks, Bruce. My wife thinks it’s gutsy, as well, but it really is about as safe as travel gets. My 172R Cessna four seater has a fatal accident rate of commerical airliners — so safe in fact I am buying one next week.

    Actually my 18 year old son is a few hours from his pilot’s license; so we can fly together (I’m not just buying one for myself).

    Who said hobby? I’m using this to fly to company meetings, visit clients etc. Yep. Those trips are legitimate business expenses.

    I am sorry if I meant to imply that more spending means more effectiveness. I didn’t mean that. However, we do need more facts, then, about how Dubya gutted regulations if we aren’t using a measure of spending.

    Now I am open to being persuaded. In fact, I love to be persuaded. That’s why I am an easy mark for a good sales person.

    As far as the FAA, I fly by visual flight rules so the government controllers only come in to play at towered airports like mine here in St. Cloud. I could fly from one small town to another to another without ever needing the FAA but I don’t think most people traveling in commerical airlines would want to be without it.

    I am not anti government. I am anti “government is good and business is bad.” Both need each other. Both need limits. One is motivated by money. The other by power. Both are forms of greed.

    Reasonable people, however, can debate the whether government plays too big a role or not big enough. At the rate this is going, most people will be government employees in the future. Look at who is hiring the most people and experiencing job growth in tough times. It ain’t the private sector.

  9. Paul Gustafson says:

    Hey Newt,

    In your economics lessons for liberals here, you neglect to mention the Iraq War. I’m not suprised. It was a close-to-a-trillion dollar mistake.

    It did not achieve the claimed purpose: making us safer from terrorists. In fact, it spawned more terrorists.

    Now, there was a needless cash cow. And, in true Republican fashion, it was not paid for. Dubya and Dick Cheney just put it on the American credit card. And, who pays for that? Your grandchildren.

    Do the Math on that one for me…..

  10. Newt says:


    I’m glad to see you have the courage to actually utter the word “terrorist,” unlike our gutless Homeland Security Directress.

    The cost of the Iraq war is no less a travesty (financially and otherwise) than Tarp I and Tarp II and Stimu-less Package I.

    At least I have the cajones to admit all four expenditures were needless and totally ineffective. How bout you?

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