What About Government's Complicity in "Government Motors" Scandal?

Posted: Apr 03, 2014 9:50 AM

As its own new leader has acknowledged, there is no excuse for General Motors' failure to recall cars with faulty ignition switches, especially as it knew about the defect over a decade ago. No doubt the car company will pay a heavy price -- in terms of its public image, in terms of its stock price, and in terms of the civil (and possibly criminal) penalties it might face.

But what about the government's complicity in this debacle? Why isn't anyone in the press talking about that? Isn't preventing these kinds of events what we're paying (plenty of) tax money for the government to do?

Indeed, evidence was available to the National Highway Traffic Safety Administration beginning as early as 2005 that there were problems with GM Cobalts. So why was nothing done?

Note the contrast between the treatment of (unionized) GM and that of (non-unionized) Toyota. The Obama administration was plenty willing to open a highly publicized investigation into Toyota in 2010.

Two exit observations:

(1) This is illustrative of the problem with government that gets too big: No president is able effectively to keep an eye on all the sprawling bureaucracies that result, and they get handed over to a variety of bureaucrats. When the federal government starts doing too much that it shouldn't do, it diverts time, resources, and attention from competently doing the things it should do (like seeing about auto safety).

(2) More disturbingly, why was the government willing to talk down Toyota, while remaining mum about General Motors? Why did the government "pressure" Toyota into a recall, while GM was left to go on its merry way? Was it because GM was at that point "Government Motors" and the administration didn't want to endanger its own politically-risky investment -- thus creating a conflict of interest between its responsibilities as national safety monitor and as major investor? It would, after all, have been difficult for the President to brag about "saving" GM as part of his 2012 reelection "success story" if the public realized the company had been knowingly permitting Americans to drive unsafe cars.

Perhaps it's all a big, innocent mistake -- just more government incompetence as usual. But the press should be reporting on it. And Americans should realize, again, that it's an object lesson in why the government never has any business owning business.