Quite frankly, I am amazed at how much push-back I have received to a basic point I have been making as the BP oil disaster gushes on. Is it possible that some ideologues are absolutely blind to irrefutable evidence? Here’s what I wrote ten years ago, when another case of corporate misfeasance was grabbing the headlines.
Have you checked the air in your tires lately?
That little question has become a matter of some urgency for owners of Ford Explorers recently, especially if the original, factory-installed Firestone Tires are still on the vehicle. As many as eighty-eight deaths in the United States and over one hundred worldwide are being attributed to faulty tires on these vehicles, and the ultimate toll in human life and property losses may well be much higher.
Industry officials are still refusing to acknowledge any specific defect in the tires, claiming, among other things, that the vehicle owners have failed to maintain adequate air pressure in the tires, which, they assert, is the cause of the many cases of tread separation for which both companies are facing numerous lawsuits. (That claim, of course, flies in the face of their simultaneous assertion that they do not know how or why the tires are failing.)
Ford and Firestone are also facing intense questioning by members of Congress, about which more in a moment.
This case, horrific and tragic though it may be, is also another case study in the ongoing debate between the two dominant conflicting philosophies in American politics. In a nutshell, it presents yet another opportunity to consider the relative merits of, on the one hand, the need for government regulation of commercial activity, and, on the other, the demand for unrestricted free enterprise in the business world. And, lest I be accused of hiding my personal bias, I willingly acknowledge to being in the camp of those who would regulate first and ask questions later.
What is it about government regulation that is so offensive? “Less red tape for business,” “get the bureaucrats out of the corporate boardrooms,” and “freedom is the cornerstone of capitalism” are just a few of the simplistic slogans offered by opponents of regulation. Their rhetoric sounds as American as the Declaration of Independence, and much of the opposition to regulation can be found in the same retro-conservative philosophy that opposes many government programs designed to assist those who cannot, without that help, assist themselves.
It is a mind-set that believes, with the fervor of a religion, in the sanctity of the individual (and by extension, the corporation) and the ideal of freedom (and its commercial analog, free enterprise). And there can be no denying that these concepts are at the heart of our constitution. But that same constitution also contains numerous provisions that allow for governmental interference with individual (and corporate) freedom. (The commerce clause, which allows for government regulation and control of companies that engage in interstate commerce, is the most obvious example.)
I note also, in passing, the seeming inconsistency on the part of those holding to this facet of American conservatism and their likely views on “family values,” wherein they tend to bemoan the lack of discipline, and presumably the rules and regulations that are part of strict parental control. It is indeed odd that many who decry permissiveness in the home seem all too willing to condone it in the business world.
But I should not digress, because we have now learned that the Ford/Firestone nightmare could have been prevented. As the New York Times reported last week, Congress looked at the problem of tire safety back in 1978 after an earlier run of defective-tire-related crashes and deaths. At the time, government regulators urged a tightening of federal tire standards, and Congress, with the Democrats then in control, went along with the recommendations.
Subsequently, as the Times reports, Carter administration officials began drafting new tire regulations, which, most observers now agree, would have caught the tread separation tendencies now being experienced. But these initiatives were quickly killed in 1981 by the administration of newly-elected President Ronald Reagan (whose vision, let us recall, was to unleash and unfetter American enterprise), and, until now, they have never resurfaced.
Which brings me to Mr. Robert Novak. On a recent edition of CNN’s “Crossfire,” Novak, the ultra-conservative syndicated reporter/columnist and ubiquitous talking head, admitted that there may well be a need for greater government regulation, at least when human lives may be at risk. He went on to claim to being shocked (yes, shocked!) to learn that the automotive industry had apparently abused its unregulated freedom at the cost of so many innocent lives.
I am at pains to understand how those who decry government bureaucracies can at the same time ignore corporate bureaucracies. Both are potentially pernicious, but whereas government bureaucrats have a more benign, non-profit motivation, corporate types are all about profit. This characteristic is at once the strength of capitalism (spurring, as it does, growth and expansion, research and development, employment and prosperity) and, if unchecked, its most unsettling weakness as well.
To comprehend that point, one must understand and accept that human nature is not saintly. It is marked, above all else, by selfishness, arrogance and greed. And these qualities, as we see time and again (recall the cigarette companies’ denials, the airline industries’ excuses, the pharmaceutical objections, the HMO protests), are the basis for many decisions that are not in anyone’s interests, save the corporate shareholders.
Left to their own devices, instincts and motivations, businesses (and the bureaucracies that they assemble) will develop their own internal rules and policies. Sometimes these rules and policies will produce wondrous advances for society. And sometimes, they will result in faulty tires, angry consumers and dead victims.
So Firestone and Ford are now engaged in finger-pointing and blame-shifting. What else did we expect? And Congress will now revisit the same regulations that the Carter administration initiated and the Reagan administration nixed. Eighty-eight lives later, we can only hope that Ronald Reagan’s vision is dimmed and that more conservatives like Mr. Novak will see the light.
Excellent article, Ed. I couldn’t agree with you more on this issue. The only thing I would add is this: I have noticed that there are a lot of people in this country who share the sentiment you described above – that government should stay out of the private sector, and the market should be allowed to operate free from government interference. Yet these same people were the ones that were in favor of the government bailouts.
If a person is a pure capitalist and supports a laissez-faire style of government, they have to be willing to live with the good and the bad. That means letting companies like AIG and GM fail. If companies know that they will be getting a government bailout because they are too big to fail, then you have the worst of both worlds. You have companies that are too aggressive and make loans to insolvent individuals and businesses like the banks and there is no real cost associated with those bad business decisions if the government will step in and bail them out.
I think that people should either support a laissez-faire government through and through and not bail out an AIG or a GM or Lehman Bros. etc and let those businesses fail or they should support government regulation and not let these businesses put themselves in the position they were in. I happened to fall in the second category. I agree with the Bush / Obama administrations that by letting these companies fail would be such a detriment to our economy that we can’t let them fail, but at the same time if they are going to get propped up by the government when times are bad, then the government should be allowed to step in when times are good to avoid letting these companies get in those dire situations.
The reason you are getting pushback is that this BP oil spill is not evidence that carte blanche governmental regulation is good and carte blanche deregulation is not good.
Deregulation of various industries has been very good for this county, voted for and signed into law by Democrats, Republicans and all Presidents from Nixon onward.
It is clear that the BP spill was due mostly to incompetence, recklessness, and downright negligence. If we need tighter regulations like mandatory blow out preventers, and/or mandatory relief wells for every offshore rig, then let’s do that. There will be plenty of support for it.
But sweeping generalizations that regulations are good and deregulation is bad, is simply not a rational conclusion.