What’s Really Driving the Toyota Controversy?
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What’s Really Driving the Toyota Controversy?

by Don Watkins and Yaron Brook | March 26, 2010

How many Congressmen does it take to identify the cause of a runaway Toyota Prius? No, it’s not a trick question. Yesterday a Congressional panel issued a draft report on a case of supposed runaway acceleration reported last week in San Diego.

Why wasn’t that left to the objective assessment of the police and courts? The answer to that question was made clear during last month’s Congressional hearings on the Toyota recalls.

In February Toyota execs were hauled in front of Congress, purportedly so that renowned auto experts like Henry Waxman could determine the cause of reported cases of unintended acceleration and evaluate Toyota’s alleged failure to respond.

The hearings had the fingerprints of politics all over them. Indeed, it was uncanny how easily a careful observer could predict whether a given Congressman would defend or deride Toyota. Just take stock of which pressure groups dominate his district.

Would you believe that Rep. John Dingell of Detroit was highly critical of Toyota? Or that Henry Cuellar, whose district is home to thousands of Toyota employees, came to the car company’s defense?

The whole spectacle is a rogues’ gallery of pressure groups descending upon Washington.

The United Auto Workers union showed up hoping to use Toyota’s problems as leverage to force the company to keep open its sole UAW factory. Rumor has it that some in the UAW camp even hope to unionize all of Toyota’s U.S. factories.

The trial lawyers are drooling at the prospect of parlaying Toyoda’s apology into hundred-million-dollar awards. No need to wait for the evidence to come in, either — they have their own “experts” who already “know” Toyota is covering up pedals of doom.

And then there’s the Detroit lobby, which is hard to distinguish from the government itself now that the government holds a 60 percent stake in General Motors. Even if concerns about an electronic problem in Toyota’s pedals turn out to be baseless, domestic manufacturers stand to benefit by prolonging the parade of bad publicity.

Anyone who thinks Toyota’s executives were summoned to Congress to discuss the evidence concerning Toyota’s pedals has missed the point. Regardless of what we ultimately discover about Toyota, this was about a horde of pressure groups seeking to impose their economic agendas via political power. But pressure groups are only a symptom. The cause is the government’s power to intervene in the market to pick winners and losers.

In the auto industry alone, the government controls everything from whom car companies can hire (unionized employees) to what kind of vehicles they must build (hybrids). And elsewhere it decides which businesses are “too big to fail,” which industries “deserve” massive subsidies, and which unproven technologies warrant billions of taxpayer “investment.” That’s a recipe for pressure group warfare.

This is not what Madison and Jefferson had in mind. Their vision was of a strictly limited government, which would perform one basic function — guard individual rights. Its role was to protect the individual’s rights to life, liberty, and property from infringement by thugs and frauds, while otherwise leaving people free to produce and trade in a free market. In the original American system, it’s the job of the market to pick winners and losers, and the job of the courts — not Congress — to arbitrate disputes, such as that between Toyota and drivers harmed in accidents.

The truth is Toyota’s troubles should not be a political issue. On a free market, Toyota would have to address the real or alleged problems with its cars and work to restore its reputation with consumers, or suffer the consequences. And if the company were proved in a court of law to be guilty of negligence, it would be held accountable. In any case, there would be no need for the circus now taking place, with all its sordid political posturing and favor-trading.

So here’s a proposal. Make Washington come up with a plan to disentangle government from the economy. It might even start with a Congressional investigation.

About The Authors

Don Watkins

Former Fellow (2006-2017), Ayn Rand Institute

Yaron Brook

Chairman of the Board, Ayn Rand Institute