This season’s episodes of Mad Men revolve around the ad agency’s efforts (in 1968) to design a campaign for a new Chevrolet product. On the show, G.M.’s executives are portrayed as cocky and dangerous. They make demands that the ad agency can’t meet and revel in changing their requirements on a whim.
And why not?
G.M. at the time sold more than half the cars in the world. The company could call the shots in just about any way it chose. Not just ad agencies, but consumers and governments seemed to bend to its will.
But G.M. stopped itself.
Instead of focusing on successful innovation, in its hubris G.M. introduced the poorly designed Chevy Vega. Chevy’s size and market share helped it sell plenty of Vegas, but the car’s many faults came back to hurt Chevy. For years G.M. spiraled downward toward its eventual bankruptcy in 2008. The market worked to humble the proud carmaker.
That won’t happen to the new G.M., better known as Government Motors. And that’s the problem.
Blogger James Pethokoukis recently wondered why we got Twitter, with its pithy 140 character wisecracks, instead of the flying cars we were promised on The Jetsons. He suspects that federal over-regulation is a big reason why.
Pethokoukis cites a new study by economists John Dawson of Appalachian State University and John Seater of North Carolina State University which estimates that federal regulations implemented since George Jetson first flew his car in 1962 have slashed real GDP by about two percentage points each year. “GDP at the end of 2011 would have been $53.9 trillion instead of $15.1 trillion if regulation had remained at its 1949 level,” the authors found.
The auto industry, of course, is a prime example of what happens when the government intervenes.
For example, consider fuel economy. Starting in 1974, the federal government attempted to improve fuel economy by introducing Corporate Average Fuel Economy (CAFE) standards. Bureaucrats would save consumers money by telling automakers how far their cars must go on a gallon of gas.