Why the Majors Love Mandates

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I’ve written previously about the add-on cost of government-mandated “safety” equipment such as multiple air bags and (most recently) stability control, tire pressure monitors and (soon) back-up cameras and (very possibly) in-car Breathalyzers, too. It’s hard to pin down the exact per vehicle cost of these things – chiefly because they’re not listed as individual options but rather folded into the “base price” of the vehicle – but a reasonable estimate is probably around $2,500 or so at the point of sale (this naturally includes mark-up).

But the aspect I’ve not written about is the opportunity cost imposed by these mandates. The stifling effect, in other words, on what-might-have-been.

And also, the probable fact that the major car companies are happy about both of these costs – the additional built-in profit-per-car as well as the stifling effect.

As the nattily dressed hitman in Pulp Fiction put it, allow me to elucidate:

Let’s say you are a bright backyard engineer – maybe even an actual engineer. You like to design things and one day hit upon the notion that maybe your design for a new car would be something people might be interested in. That you could do it better or less expensively or just more interestingly than the established players in the field.

Sixty-odd years ago, a guy named Preston Tucker had such an idea. So, like Tucker, you get to working in the garage out back. The project begins to come together and as word spreads, you discover that yep, there are people interested in what you’re doing.

Unfortunately, some of those people are employees of the government.

Specifically, the Department of Transportation and the Environmental Protection Agency. They will swoop in with turgid – and then threatening – demands that you sell no cars to the public (no matter how much the public may want those cars) until those cars have complied with every line-item regulation in their repertoire of regulations and codes. Oh, and not just that. Even if by some miracle your new car produces less pollution than a new Prius – even if it is more crashworthy than a new Mercedes S-Class – you will still be required to demonstrate it to their satisfaction. Which if you’re not familiar with the way a car company complies with federal ukase involves (for example) destroying dozens of brand-new cars in various types of crash tests to placate Uncle Sam’s minions.

And who can afford to destroy a dozen perfectly good brand-new cars? A major automaker can – but not you.

This one thing alone likely will (and in fact does) constitute a crippling obstacle that will make it economically impossible for you to sell your new car to the public. Even if, like the ’48 Tucker, your car is actually more advanced and innovative than the cars being sold by the majors.

Maybe you’ve figured out a way to cut the weight down to 1,600 pounds by using a spaceframe and lightweight composites – and so the car gets 80 MPG. Maybe you found out, after doing some surveys of potential customers, that a simple, light, fuel-efficient car was very much desired. One that didn’t come with $2,500 (or more) worth of government-mandated “safety” equipment but which did cost $2,500 less than a car with those items.  So you decided to try to build it – knowing they (the buyers) would come.

Instead, the government came.

Down. Hard.

First you’d be shut down; probably fined – then possibly jailed. If you declined to pay the fine or (much worse)  had the insolence to continue building cars the public – vs. the government – actually wanted to buy as opposed to forcing you to build.

And that is very likely just what the established car companies want – which is why the established car companies have become such big boosters of whatever the latest “safety” technology happens to be – and even supine in the face of potentially crippling mandates (to smaller competitors, anyhow) such as the recently enacted federal rule that will require all new cars to average 50-something MPG (while also complying with all the existing federal ukase that has driven the weight of the average new car up by 500 pounds, on average) within a few years from now. All without any real concern about such doesn’t-matters as how much it will end up costing. Because of course, they aren’t the ones paying the bill.

We are.

Walking arm in arm, the major automakers and their friends in Washington know they serve one another’s best interests now.

And their interests include keeping you and any other subversive tinkerer off the field. They want the market cornered.

And you, too.

Once you grasp the nature of this symbiotic relationship you will understand why there hasn’t been a single successful new car company (outside of politically correct and wholly government-subsidized efforts such as Tesla Motors, producer of the $100k electric Edsel) in decades – and a winnowing of the previously existing herd down to a handful of enormous cartels that are (drum roll, please) “too big too fail.”

These cartels enjoy a 1-800 line (via the police power of the state) to your wallet and mine – directly and indirectly. They also enjoy protection – from competition, especially.

It’s part of the reason why they (the cars) all look just the same, mostly drive just the same – and force-feed you the same “features,” too. Because there’s no legal alternative, no third option. It’s Tweedledee or Tweedledum. In politics and cars.

Independents need not apply.

Throw it in the Woods?

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  37 comments for “Why the Majors Love Mandates

  1. methylamine
    September 12, 2011 at 4:33 pm

    Yep, the same game writ small in automakers.

    Here’s how it’s played, in XXX simple steps:
    1) create a (initially small) State with a monopoly on coercion, force, and violence
    2) create free-market companies that make things people want
    3) insert Clovers demanding “safety”–but not willing to select it or pay for it themselves
    4) create State laws mandating “safety”
    5) watch companies get hurt, get smart, and start “lobbying” the State
    6) the end-game: established companies actually write the laws which they pay their owned legislators to implement
    7) rinse, repeat, until the government and corporations are indistinguishable, well-fed, and the citizens are starving and benighted.

    It works the same in pharmaceuticals, medicine, banking, real estate, construction, chemicals, cars, and all the other captive industries.

    I laugh when people blame the free market for the crash(es); we haven’t had a free market in America for about fifty years…with one exception, computers. And look how much further THAT industry has come than all the others!

    • methylamine
      September 12, 2011 at 4:36 pm

      Oh forgot to add another favorite fascistic government-industry collusion: Education

      Talk about a total loser; Publik Skewls, where more money is never enough to staunch the flow of illiterate Clover effluvium.

      But that’s kind of their purpose, isn’t it?

      • Boothe
        September 12, 2011 at 4:55 pm

        Methyamine, I’m pretty sure what you just described is the Publik Skewls sole purpose nowadays. :(

        • Edward King
          September 14, 2011 at 9:33 pm

          I don’t know if any of you have read any John Taylor Gatto, but indoctrination and conformity of thought have always been the goal of compulsory education. Ask yourselves this, why is it that a student can be failed based solely on lack of attendance regardless of his academic standing? If the goal was simply education, then how such education happened to be achieved would be irrelevant.

          • BrentP
            September 15, 2011 at 1:10 am

            Also see “The Deliberate Dumbing Down of America” Gatto’s book is “The underground history of american education” Both books are free online. I’ve read all of Gatto’s and most of the other.

            When I bring up facts in the books people think I’m insane. What got reading those books was my own experiences in the government schools. To understand it. I would not subject a kid to a government school with the exception of a very very small town of like minded people.

          • Edward King
            September 15, 2011 at 3:18 am

            When people hear about the nefarious deeds of others, their response (as per their indoctrination) is to assume that one is a conspiracy theorist, a pejorative bandied about to silence thinking and dissent. If one points to the long history of people trying to gain control of society using historical facts, they immediately shut their minds off because we all know public schools have a noble purpose, with public school teachers being some of the noblest people on earth.

            Anyone who has any understanding of history can find evidence that compulsory school education has never been about education, but about destroying the bonds between parents and their children. It is often said that the family is the foundation of human society, and what better way to destroy or radically change society than to corrupt the family.

            Taking control of the minds of children from a young age instills a kind of foolish rebelliousness into children. They began to take on the values of their teachers and friends, while holding the views of their parents with suspicion. All to the better for the would be controllers.

            I am not trying to imply that questioning ones parents or authority in general is a bad thing. I am all for independent thinking. But, society elevates certain members of society as being worth greater respect, and therefore, their opinion holds greater weight. For example, many of the commentators on this website may not have fancy degrees or prestigious jobs, and so our opinions will be discarded without a second thought. Not because our arguments are weak or our facts are wrong, but because we lack the credentials that would give weight to our arguments.

            This is exactly what our masters have had in store from the beginning. Only when one knows the history of the society in which he or she lives in as well as the structure of logical thought ( a subject that will never be taught in public schools) will we be able to reverse the insidious damage that public schools have wrought.

  2. babydriver
    September 12, 2011 at 7:21 pm

    With the way the schools have eliminated God from the classroom I would say it is their soul purpose as well.

    • Gil
      September 14, 2011 at 7:56 am

      If God really exists then he could smite the non-believers and save His people.

      • Boothe
        September 15, 2011 at 4:37 am

        Actually Gil, “God” (if that’s what you prefer to call the Entity that encompasses All That Is) has set up a system that does indeed punish those who are rebellious against Natural Law and act immorally. He does so through Nature on a large scale and through all manner of personal repercussions at the individual level. Hence the age old axioms of: “What comes around goes around”; “You reap what you sow”; “Any action has an equal and opposite reaction”.

        Individuals that violate the rights of their fellow humans will invariably have personal problems that may or may not be apparent to the rest of us (or even themselves), but what we frequently see is their material gain from their unscrupulous activities. What we usually don’t see is their unhappiness, loneliness, paranoia and despair. When entire cultures embrace and approve of systems and laws that exploit and abuse the many for the benefit of the few, their civilization is doomed. Greece thrived as long as it was moral, so too Rome. Once these great cultures became depraved, they failed. So too with countless other cultures that are no longer with us.

        Sometimes it takes decades or even centuries for the evil works of men to bear fruit (God is long suffering), but you will reap the fruit of your works rest assured. The United States has embraced depravity on so many levels now that unless we renounce the violation of individual rights of the many for the benefit of the few and turn from our current path in heartfelt sorrow for what we have allowed(the code word for that, Mr. Clover, is “repent”, look the meaning up) we too are doomed as a society and system of governance.

        Guess what, since the world’s economy is so inextricably tied to the fraudulent U.S. fiat dollar (every country benefiting from fractional reserve banking and social welfare programs vs. honest money, innovation and hard work), even you in Australia will suffer the consequences when “what comes around goes around”.

        This is just my humble opinion based on millenia of recorded human folly and failure. You have a free will, go ahead, prove me wrong.

  3. dom
    September 12, 2011 at 10:54 pm

    Excellent write-up. Sickening facts!

  4. jay
    September 12, 2011 at 11:50 pm

    Regulated industries may squawk about certain regulations, but they generally like the concept. Keeps play to the old boys club and prevents entrepreneurial startups from stirring the pot.

    • dom
      September 13, 2011 at 12:02 am

      Sounds like the regulation in the auto industry has completely blocked/locked it. What would the economic term be for such a thing? It’s beyond a barrier to entry!

      • September 13, 2011 at 9:49 am

        “Corporatism,” state capitalism – or even fascism. Most people associate the latter term with the Nazis and racialism, but it was coined by Mussolini, who was lauded for “making the trains run on time.” Basically, it is the merger of big business with big government into cartels; the use of the police power of the state to protect these cartels and stifle competition. Think “Old Boy Network” on a vast, nationwide scale.

        FDR copied Mussolini’s program with his NRA and other such things – and as Brent point out, the country has been in the thrall of fascism or at least fascistic-leaning for generations.

      • September 13, 2011 at 12:38 pm

        Also, same deal in other areas. For example, I was thinking it would be a sure-fire moneymaker to open a small take-out Chinese place here in our rural town (you have to drive 35-40 miles just to get to a mall of any kind). But the cost/hassle of dealing with the endless regulations, permits, fines and fees is too daunting for me to even consider trying.

        Another example of opportunity cost.

  5. BrentP
    September 13, 2011 at 12:13 am

    The nation fell in love with fascism in the 1930s. It embraced the Rockefeller concept that competition is a sin. Meanwhile the government schools started teaching that government protects us from evil corporations. It has never done anything of the sort.

    The evil corporations have always had a partner in government. Every single horrible thing we are told these companies will do to us without government required government be in partnership with them to do in the first place. Government not to do its minimal job to protect rights (including property) and fairly settle disputes. Monopoly, treating workers badly, pollution, and so on all require government partnership. Government to at the very least look the other way and not do the very minimum expected of it. At its worst, sanction or commit murder for its partner corporations.

    But what is worse than creating cartels and monopolies of insiders is that making a deal with government is making a deal with the devil. In the long run all companies that go this route fail. They end up as property of the government or out of business due to some new technology that regulation couldn’t stifle fast enough. As industry after industry falls people become more impoverished.

    • methylamine
      September 14, 2011 at 1:00 am

      @Brent:

      YES! Exactly–evil corporations don’t stay in business long unless they’ve cozied up to Big Brother State first.

      I’m totally opposed to antitrust laws, because in a truly free market monopolists are eventually driven out by newer, more innovative approaches. Look at the Kodak/Fuji duopoly; they didn’t need to be broken up because digital photography wiped the floor with their dried-up carcasses. Other examples abound.

      Likewise–as the stifling of competition drives prices ever higher and innovation ever lower, while killing the entrepreneurship that would bring life back to the system, EVERYONE is poorer…even the bastards at the top.

      This always amazed me when contemplating the Soviet system; the high muckety-mucks of the Soviet Union, though much richer than their countrymen, still had to drive around in craptacular Zil “limousines” that compared dismally to even a Camry. What was the point?

      The point was power–the drug of choice for sociopaths.

      • Gil
        September 14, 2011 at 8:02 am

        And pray tell what is an “evil corporation”? Wage slavery doesn’t exist for Libertarians not to mention pollution need not always violate property rights.

        P.S. I don’t think power is a drug or something wrong per se but something Libertarians should aspire. It’s just like guns – you many want to own one or not but many criminals do.

        • Fritz
          September 14, 2011 at 3:30 pm

          Corporation is a legal term established by the state to protect itself, and it’s financiers through limited liability and legal immunity.

        • methylamine
          September 14, 2011 at 6:43 pm

          @Gil:

          ?? What?

          Refill your meds. Then formulate an actual question.

        • Boothe
          September 15, 2011 at 3:11 am

          Gil, as Fritz so aptly pointed out, a corporation is a fiction; it is a legal construct designed to shield its owners / operators from torts that would otherwise strip them of their personal property when they do things that are legally actionable. You need to understand that when we refer to “evil corporations”, the implied concept is that the men behind the corporations are evil. The corporation cannot be evil because in reality it is nothing more than a government approved piece of paper that serves as an aegis for its “officers”.

          Minimum wage laws were encouraged by large corporations because they could afford to pay, when “mom & pop” operations could not. This effectively eliminates their small competitors and drives workers to the corportations who can then decide who works full time, what benefits (if any) that they get, can limit vacation, sick leave, etc. It is also men behind the large banking corporations that have devalued our currencies and lent the credit to our governments thereby ruining the economy pretty much worldwide. Our corporate masters have devalued the fiat money to the point that even fast food restaurants can scarcely hire anyone for the legally established minimum wage because hardly anyone will work for such a mere pittance.

          Gil, rest assured power is indeed a drug. Having people bow down to you, bring you gifts, tell you how great you are, literally go off to war and to their potential death for you is an extremely powerful drug for soem people. Once people of this persuasion have tasted power and the endorphins the experience brings, they will literally do anything to keep that power and expand it if possible. Anything, that is, up to and including murder. Hence this lust for control over the rest of us is why men in power, both corporate and state, want to be the only ones with guns. How does it feel to be a disarmed serf Gil? Isn’t it just a little like being in the penal colony your continent was originally used for by the British empire? Gil, I think maybe you’re suffering from Stockholm Syndrome toward the state. Methylamine’s right, go back on your meds, turn on the TV and return to the Matrix; reality is too hard for you.

          • Gil
            September 15, 2011 at 5:04 am

            It’s amusing to wonder how many Libertarians would be willing to work for $1 an hour if the economy was a truly free market? People don’t want to work for a pittance? Who knew?

            Note what I wrote – if you don’t take power someone else will and like Eric Cartman most psychopaths will take the power that non-psychopaths aren’t taking. Libertarians should understand this when they call gun control “victim disarmament”.

          • Fritz
            September 15, 2011 at 5:34 pm

            I doubt anyone would want the work performed for $1 an hour… But I would, and less, in the right field. Kind of like, oh, I dunno, an internship?

          • Boothe
            September 15, 2011 at 6:53 pm

            Gil, a lot of folks would gladly do highly skilled labor for a dollar an hour if they were paid in pre-1965 Constitutional silver coin…….

          • dom
            September 15, 2011 at 8:12 pm

            1964 and earlier silver quarters are worth about $8. That would put the $1 an hour wage at $32 and hour. Not bad!

    • Owen Kellogg
      September 18, 2011 at 7:26 pm

      I don’t think this could be said any better, well done.

      • September 18, 2011 at 11:12 pm

        Thanks, Owen!

  6. Fritz
    September 13, 2011 at 10:39 pm

    Yep. And the damn “motorheads” can’t get it through their heads. They still defend their brand. So asinine. Like the issue with Skylines and importing cool stuff. It’s always “just a bunch of stupid 20 year olds” or some such mindlessness. When in reality, Mercedes-Benz led the charge against grey market importation in the 80s, openly! If that one law were changed, I think the auto makers would collapse in a year, tops. But there’s no solidarity in the automotive community except wheelgap=bad.

    • dom
      September 13, 2011 at 10:45 pm

      Dang you got me thinking about the Skyline again. My favorite car for sure. You can pick a few year old one up for damn near nothing in Japan. If you want one here you’re looking at whatever it costs + shipping + 20k (to make it safe) and it’s yours. What a joke!

      • Fritz
        September 13, 2011 at 11:12 pm

        Seriously. At least the MotoRex crash documents are declassified now. It enrages me to now end. High revs, turbo, I6, AWD if you desire, Coupe or Sedan… BTW, you can’t have any USA. Sorry! Here’s a 240SX. Other heartbreaking omissions from the US market:
        Alfa SZ/RZ
        Alpine A610/GTA
        S15 Silvia
        BMW E46 Hatch
        All the cool Australian HSV, Ford, Toyota etc. V8s
        Opel Speedster/Vauxhall VX220
        smart Roadster
        Ford RS200…
        It’s time to get pissed off and find out how to rid the Earth of the plagues known as the NHTSA and DOT.

        • BrentP
          September 14, 2011 at 12:25 am

          We can’t rid the earth of them because so many people are convinced that without them automakers would make cars that would randomly explode or crash or both.

          I’ve lost track how many times I’ve had to inform such people that automakers put safety items into cars long before government mandates but people didn’t buy them. This throws off their idea that companies willingly kill their customers. Then the control freak comes out with an argument that people won’t do what’s in their best interest unless forced.

          And there’s the problem. The doorway through which so many sociopaths take power. The empathetic and emotional people can’t become detached enough to understand that people make their own choices and sometimes they will be bad choices. The sociopaths mimic the emotions and the other people cheer on the freedom killing. Meanwhile libertarians are cold, uncaring, etc because we’ll try to convince someone not to do something stupid but ultimately won’t take away their freedom to do something stupid.

        • methylamine
          September 14, 2011 at 1:08 am

          Ariel Atom. Lotus Sevens.

          A very long list of cars that say “Devil may care!”

          Dammit, if I want to drive around in a box of razor blades it’s my life!

          We should apply the same tactics the motorcycle guys used to get rid of most states’ helmet laws to importing “dangerous” cars.

          Perhaps the spin should be something that will appeal to the Elitists’ Malthusian/Ehrlichian fantasies…

          “Let the plebes drive death-traps for population reduction!”

          Why slow-kill us with fluoride, GMO’s, and vaccines when they can off us by the dozen in gloriously fiery car crashes?

  7. Art Thomas
    September 13, 2011 at 11:16 pm

    For anyone who wishes to understand the history of the marriage of big business and the state and their efforts to stifle competition I recommend Butler Shaffer’s “In Restraint of Trade: The Business Campaign Against Competition, 1918-1938″, which can be read online at mises.org.

    Historian and ardent anticapitalist Gabriel Kolko in his book, “The Triumph of Conservatism”
    argues that competition in America was keen the first two decades of the 20th century until businesses turned to the law to curb competition. In “Railroads and Regulation,1877-1916″ he reveals the same desire to stifle competition amongst leaders in the railroad industry.

  8. DJ
    September 14, 2011 at 6:09 pm

    Excellent article Eric. Having spent many years in the retail car business, and having been awakened over a decade ago to economic, political, media, and globalist realities — your analysis is spot on.

    When it comes to personal transportation, I realize that what I would want to buy and drive will probably NEVER be made – small, light wieght two seater, low cost, extremely fuel efficient – and never made for all of the reasons you mentioned.

    The first generation VW 1-Litre car would have worked for me – but of course VW chose to never make it. Many other similar one-offs have come and gone over the years, never to be seen again.

    I’ve owned a Honda Helix scooter for many years, and I’ve been following Craig Vetter as he prepares to market his super aerodynamic body kit for it. I suppose ultimately to get even remotely close to what I want I’ll have to take an existing vehicle (like my Helix) and modify it.

  9. Fritz
    November 16, 2011 at 4:35 pm

    Finally got some steam behind a good one, fellas. I’d like to think I was a part of that, “spamming” libertarian facebook pages, getting some recognition on the import laws. So far, they have a 15 year rollback compromise, not too fond, but if it picks up we can push harder for full repeal:
    http://www.autoblog.com/2011/11/16/petition-started-to-change-gray-market-exemption-from-25-to-15-y/

    • Boothe
      November 16, 2011 at 6:25 pm

      Thanks Fritz! I just signed it. There’s also a petition to accept foreign crash testing that is comparable to or exceeds U.S. standards so we can get more economical and Eco-friendly cars onto the American market as well: http://wh.gov/j1F
      I think that one’s worth signing too.

      • Fritz
        November 16, 2011 at 6:37 pm

        Definitely, good looking out!

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