07.16.2010 0

Toyota rapid acceleration case raises questions of government motives

Did the United States government deliberately use its regulatory enforcement power to damage Toyota, and benefit government owned General Motors?

Reasonable people are asking this question around the world, as the U.S. Department of Transportation’s National Highway Traffic Safety Administration’s early tests of Toyota’s supposedly sticky accelerators have found that driver error was the cause of the problem, not faulty parts.

Just six months ago, the Obama Administration’s public relations machine was in full gear deriding Toyota for putting consumers at risk, fining them more than $16 million, and declaring Toyota guilty for everyone in the world to hear. Lawsuits were filed, Congressional hearings were held, and most importantly Toyotas went unsold, while GM sales increased.

Now, it looks like this sudden acceleration problem was caused by, get this, drivers hitting the accelerator pedal rather than the brake, and Toyota owners not being smart enough to keep their floor mats from underneath the accelerator, causing it to stick in the fully-engaged position.

I guess that the government’s next step will be to require a safety yellow sticker on every dashboard that says, “Warning: Pressing down on the accelerator will result on sudden acceleration.”

The real issue here is that the very motives of the government are in question in publicly convicting Toyota before any real evidence had been collected.

Was the rush to judgment based upon the Obama Administration’s general dislike for every business, or was it based upon the need to jumpstart the sales of General Motors vehicles?

We will never actually know the truth.

Government control over functions that are rightly in the private sector like auto manufacturing leads everyone to wonder whether regulatory justice is truly blind, or are the regulators blinded from justice by the inherent conflict of interest of being competitors in the marketplace?

Imagine if a prosecutor and judge stood to benefit financially from the outcome of a case. That great oxymoron, legal ethics, requires that they not participate in the case in order to allow an indisputably, honest outcome to be achieved.

The foundation of our legal system is found in the Biblical Book of Deuteronomy which states, “Hear the disputes between your brothers and judge fairly, whether the case is between brother Israelites or between one of them and an alien. Do not show partiality in judging; hear both small and great alike.”

Beyond the moral implications of ensuring that everyone gets a fair, impartial judgment, the assumption that the U.S. government does not play favorites is foundational to our successful free enterprise system.

In many third world countries it is the norm for “favored” companies to receive government grants and other favored treatment over their private sector competitors. This expectation of an uneven playing field serves as a great disincentive to developing new business ventures that are separate from the government-controlled enterprises with the economy and people suffering as a result.

The very fact that the question could be reasonably asked about the U.S. government’s motives in the Toyota sudden acceleration case further undercuts the belief that winners and losers are created in our economy based upon innovation, guts, business acumen, hard work and a willingness to risk everything to achieve success. Instead, it reinforces the notion that who you know in DC, is more important than what you know in your business.

So long as the U.S. government has a car czar who oversees the activities at General Motors and Chrysler Corporations, every other auto manufacturer will always wonder whether these competitors are being tipped off to new regulations, and if they have any chance of getting a fair shake through the regulatory process.

Selling the federal government stake in GM and Chrysler is the only way to restore a belief that the many regulatory arms of the government are acting in good faith, rather than capriciously. This should be job one of the new Congress in 2011.

Rick Manning is the Communications Director of Americans for Limited Government and the former Public Affairs Chief of Staff for the U.S. Department of Labor.

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