Coyote Blog

If the Left is really as passionate as they say they are about taking on people and institutions who are anti-science, then they should be dedicating themselves to rethinking the current tort system.  Toyota may be facing $5 billion in settlements due to a defect that government reports and independent studies say is not there.

And recall NHTSA's performance during the furor almost four years ago over alleged runaway Toyotas. Its then-overseer, Transportation Secretary Ray LaHood, happily participated in congressional hearings designed to flog for the benefit of trial lawyers the idea of a hidden bug in Toyota's electronic throttle control.

When the agency much more quietly came out with a report a year later debunking the idea of an electronic defect, notice how little good it did Toyota. The car maker still found it necessary to cough up $1.2 billion to satisfy owners who claimed their cars lost value in the media frenzy over a non-defect. Toyota has also seen the tide turning against it lately as it resists a deluge of accident claims.

At first, opposing lawyers were hesitant to emphasize an invisible defect that government research suggested didn't exist. That was a tactical error on their part. In an Oklahoma trial last month involving an 82-year-old woman driver, jurors awarded $3 million in compensatory damages and were ready to assign punitive damages in a complaint focused on a hypothetical bug when Toyota abruptly settled on undisclosed terms.

In another closely-watched trial set to begin in California in March, an 83-year-old female driver (who has since died from unrelated causes) testified in a deposition that she stepped on the brake instead of the gas. The judge has already ruled that if the jury decides to believe her testimony, it is entitled to infer the existence of a defect that nobody can find.

These cases, out of some 300 pending, were chosen for a reason. Study after study, including one last year by the University of North Carolina Highway Safety Research Center, finds that elderly female drivers are inordinately prone to "pedal misapplication." If Toyota can't prevail in these cases, the company might be wise to run up the white flag and seek a global settlement that some estimate at upwards of $5 billion—quite a sum for a non-defect.

Apparently, Ray LaHood's personal preference is that no one talk in the car, even with a hands-free device (it is uncertain whether he is OK with us talking to fellow passengers.)

"I don't want people talking on phones, having them up to their ear or texting while they're driving," LaHood said this week calling for research on hands-free systems. Hands-free phone conversations are a "cognitive distraction,"

And because Ray LaHood is US Transportation Secretary, we may soon all be forced to abide by Mr. LaHood's personal preference.

I don't know any of the facts of the Toyota recall, so I don't know how pressing the sudden acceleration problems are.  But I found it an interesting conflict of interest that the recall was pressed on Toyota by their competitor:

Transportation Secretary Ray LaHood told WGN Radio in Chicago that the government pressed the company to stop building vehicles linked to the massive recall. LaHood said "the reason Toyota decided to do the recall and to stop manufacturing was because we asked them to."

The US Government, of course, owns a controlling interest of Toyota competitor GM.  One GM dealer had this comment

"Every dog has its day," said Jerry Seiner, who has a group of General Motors and dealers of other brands around Salt Lake City. "Maybe they'll take a second look at us instead of Toyota. . . . When Toyota stumbles, it's our opportunity."

I have decided there is something that is very predictable about the media:  they usually are very sympathetic to legislation expanding government powers or spending when the legislation is being discussed in Congress.  Then, after the legislation is passed, and there is nothing that can be done to get rid of it, the media gets really insightful all of a sudden, running thoughtful pieces about the hidden problems and unintended consequences of the legislation.  I remember that they did this with the ethanol mandates, when I summarized:

All this stuff was known long before Congress voted for the most recent ethanol mandates.  Why is it that the media, who cheerled such mandates for years, is able to apply any institutional skepticism only after the mandates have become law?

And now we are seeing it with the stimulus bill:

A federal spending surge of more than $20 billion for roads and bridges in President Barack Obama's first stimulus has had no effect on local unemployment rates, raising questions about his argument for billions more to address an "urgent need to accelerate job growth."An Associated Press analysis of stimulus spending found that it didn't matter if a lot of money was spent on highways or none at all: Local unemployment rates rose and fell regardless. And the stimulus spending only barely helped the beleaguered construction industry, the analysis showed.

With the nation's unemployment rate at 10 percent and expected to rise, Obama wants a second stimulus bill from Congress including billions of additional dollars for roads and bridges "” projects the president says are "at the heart of our effort to accelerate job growth."...

Even within the construction industry, which stood to benefit most from transportation money, the AP's analysis found there was nearly no connection between stimulus money and the number of construction workers hired or fired since Congress passed the recovery program. The effect was so small, one economist compared it to trying to move the Empire State Building by pushing against it.

Well, better late than never.  And actually moderately timely in this case because we are considering a second stimulus bill.  It even includes this insight which is almost NEVER raised in stimulus-related discussions:

"As a policy tool for creating jobs, this doesn't seem to have much bite," said Emory University economist Thomas Smith, who supported the stimulus and reviewed AP's analysis. "In terms of creating jobs, it doesn't seem like it's created very many. It may well be employing lots of people but those two things are very different."

Exactly.  Stealing $10 million from Peter so Paul can hire three more people doesn't net increase jobs until you understand what Peter would have done with the money.  One has to argue that the market did a poor job in allocating capital to Peter and that the government will employ this capital more productively (hah!)

Transportation Secretary Ray LaHood defended the administration's recovery program Monday, writing on his blog that "DOT-administered stimulus spending is the only thing propping up the transportation construction industry."

Well, as the article goes on to say, this turns out not to be the case.  But even if it were true, what industries were gutted by having their capital taken away so that one government-favored industry could be stimulated.

By the way, never underestimate the power of politicians to use every tool up to and including malfeasance to get more money and power for themselves (because that is exactly what the stimulus bills are -- a substitution of the markets with Congress in the capital allocation process).

It is also becoming more difficult to obtain an accurate count of stimulus jobs. Those who receive stimulus money can now credit jobs to the program even if they were never in jeopardy of being lost, according to new rules outlined by the White House's Office of Management and Budget.

The new rules, reported Monday by the Internet site ProPublica, allow any job paid for with stimulus money to count as a position saved or created.