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By now, everyone who follows the news in America has observed our government heaping scorn on Toyota because of suspicions that design flaws in their cars lead to "Sudden unintended acceleration." Judging from the welter of words coming out of Washington, one could be forgiven for thinking that Toyota cars are uniquely subject to this problem, but that's simply not so. The Wall Street Journal reported on Feb 25, p A7:
Congress this week has begun wading into an issue that has vexed the auto industry for decades: Is sudden acceleration caused by driver mistakes, or by problems with cars?
The consensus among industry executives and federal safety regulators, embodied in a 1989 report by the National Highway Traffic Safety Administration, is that most cases of sudden acceleration result from drivers hitting the gas pedal when they meant to hit the brakes. [emphasis added]
Sudden acceleration is an old problem: it's been around "for decades", long predating Toyota's entry in to the American market. Generations before it became a useful political cudgel, the government studied the problem and concluded that driver error accounted for most cases of sudden acceleration.
Not only that, Toyota has a good record with respect to recalls and other defects:
From 2004 to 2009, based on NHTSA data, Ford had 2,806 complaints, compared with Toyota's 2,515. General Motors Co. had 1,192. A study by Edmunds.com, an independent market-research Web site, found that based on the number of vehicles on the road, Toyota ranked 17th in recalls, with Land Rover, recently acquired by India's Tata Motors Ltd., having the most.
The usual suspects are viewing with alarm:
Consumer-safety advocates and plaintiff attorneys are concerned that Toyota and the NHTSA are fixated on mechanical explanations and haven't adequately looked into the vehicles' electronics. [emphasis added]
It's always wise to carefully consider alternative potential explanations, but safety experts are looking in a totally different direction. They consistently blame human error:
Safety regulators, human-error experts and auto makers say driver error is the primary cause of sudden accelerations, and if there are no error codes in the electronics, there is no evidence to support an electronic failure.
"Many, if not all, are pedal errors," said Richard Schmidt, a leading expert on human error, said of Toyota's sudden-acceleration complaints. "There are all of these hypotheses flying around-the computer went haywire and it was left without a trace of evidence. What's the evidence?" [emphasis added]
The problem has been around for as long as car-wreck statistics have been kept. The government long since studied the problem and blames human error for most cases. Some of the highest-profile Toyota incidents involve drivers who are elderly or with health issues that might plausibly affect their performance behind the wheel. Do Toyotas sometimes abruptly accelerate? Sure they do - and so do Fords, GMs, Lamborghinis, and even the occasional Yugo though you'd hardly be able to tell.
Why, then, all the fuss, feathers, and furor over sudden acceleration and Toyotas specifically?
First, the Wall Street Journal notes that "plaintiff attorneys," the Democratic party's major paymasters, are following the testimony closely. This publicity will make it easier for them to recruit people for lawsuits against Toyota. Then once they've collected a large client base, whatever information the hearing committee collects will save them money running down data. We can expect more lawsuits complete with bogus science - if the full power of the Federal government can't find any evidence of electronic malfunction, how can an attorney, not matter how well funded by earlier settlements?
Second, the Obama administration's popularity is dropping like a rock. From sky-high polls at his inauguration, Mr. Obama has messed up so badly that people are talking seriously of the Republicans capturing both the House and Senate this November. Politicians in that situation will do anything at all to distract voters from their failures.
At a maximum, sudden acceleration in Toyotas has led to 34 deaths since 2000 according to the National Highway Traffic Safety Administration, putting it somewhere between slipping in the bathtub and being struck by lightning as a Leading Cause of Death. By way of comparison, roughly 40,000 people die in highway accidents every year. Even if all the Toyota fatalities had occurred in one year, which they didn't, that would represent less than 1/1000 of all automotive fatalities.
If the government were really concerned about safety, they'd address the other 40,000 deaths, but that's not the point. The point is to distract voters and to enrich their union supporters.
Since Toyota plants are not unionized, every Toyota sold is that much dues money that doesn't go to the United Auto Workers. Every Toyota sold is that much money that the UAW can't use to help Democrats this coming November. Barack Obama famously fired GM's CEO; in effect, he now is the CEO of "Government Motors." Is it any wonder he's using his power to promote his company and hamstring the competition?
The real reason for the media circus is found in an internal Toyota memo which was discovered by a subpoena from the House Oversight and Government Relations committee. Toyota cited the "changing political environment" as a real problem and anticipated a "more challenging regulatory" environment under the Obama administration. They also worried about "massive government support for Detroit automakers," and said that the NHTSA "new team has less understanding of engineering issues and are primarily focused on legal issues."
In summation, the document characterized the Obama administration and Democratic Congress as "activist" and "not industry friendly." Truer words were never spoken!
The question arises, why would a high-level Toyota executive write such a potentially inflammatory memo even if it was intended only for internal consumption? Consider the position of Mr. Inaba, president of Toyota North America, whose name appeared on the memo's cover sheet. This firestorm blew up in his territory on his watch.
It's gotten so bad that his boss, the camera-shy Mr. Toyoda, great-grandson of the founder of the firm, has to risk a subpoena by traveling to the US to testify before a hostile US Congress. Mr. Inaba has a limited window of opportunity to tell his boss whatever Mr. Inaba thinks his boss needs to know to navigate the hostile currents of the hearing room. So what does he tell his boss? That the entire administration and Congress are anti-business.
Any American businessman knows that Democrats are anti-business by reflex and that American government employees don't care about putting a business into bankruptcy so long as their own livelihoods aren't hurt.
The attitude in Japan is quite different. Japan has had a stable government since Iyeyasu Tokugawa unified the country in 1600. The Japanese never had any notion of "inalienable rights" as Americans think of them - Japanese citizens had no rights that the rulers couldn't take away at any time. Despite having pretty much absolute power to set taxes as high as they chose, however, the government and its employees learned over time that their comfortable lifestyles depended on having a private sector which was prosperous enough to pay taxes, and thus that the taxes could only be raised so high.
History doesn't tell us how long it took Japanese rulers to learn that there were limits to taxation. If they took too much rice away from a farmer, for example, the farmer starved to death and there was nobody to farm next year. Dead men pay no taxes.
As the economy grew more complex, the government learned that wealthy merchants could pay more taxes than farmers could, but similar limits applied: if they taxed away all the profits, businesses would fail and there'd be no taxes next year. With the coming of international trade, the government learned that excessive taxation raised prices to the point that the goods couldn't be sold in foreign markets. Once again, excessive taxation reduced government revenue just as it does in America.
No matter how hard they try, no government can get enough income tax from a government employee's salary to pay the cost of having him on the payroll; the old USSR discovered this eventually. The only way to support the government in the style to which they'd like to become accustomed is to get money from elsewhere, which means the private sector. Over the centuries, the Japanese government has learned that the best way to increase government revenue is to help businesses increase sales and employment.
This attitude extends to the bureaucracy. When the Lexus first went on sale in the US, American car makers could not match the paint on the Lexus because there was no way to get the paint looking that good without violating EPA regulations. The Japanese EPA had similar regulations, but the Japanese bureaucracy recognized the value of letting Toyota create more high-paying jobs whose income could be taxed. The violations were more technical than substantive; they wrote a waiver which didn't harm anyone and let business be done. America's EPA, being more beholden to radical environmentalists than American workers, couldn't care less.
Mr. Toyoda has become accustomed to having the Japanese government cooperate with his efforts to be able to pay more taxes to the government and to hire more employees who can pay more taxes to the government. Not only that, every time Toyota wants to open a new plant in the US, state governments compete to out-cooperate adjacent states. State governments realize the value of having businesses locate in the state so their employees can pay income tax and sales tax.
Mr. Inaba had to get Mr. Toyoda to understand that the federal government, unlike the governments he was familiar with, was at heart truly anti-business. He also had to convey the point that Congressional hearings had nothing to do with finding the truth. Their purpose was to take peoples' mind off their anger at the Obama administration and to promote unionized car manufacturers over non-union Toyota.
The Japanese government and the Republican party have realized that unemployed workers pay no taxes and that bankrupt businesses pay no taxes either. This is an obvious-seeming concept that seems to have utterly escaped the current administration.
The last time we had such an anti-business President, Roosevelt kept yelling about how the rich had caused the Great Depression, spent lots of money to get the economy going again, and kept pushing up taxes. Like most Democrat leaders today, Roosevelt had no real concept of how money is earned; he had been born into wealth, and neither he nor his father ever had to earn a cent. People with money who actually knew how more is made were frightened by Roosevelt's massive tax and regulatory increases, decided not to invest, and the economy stagnated until World War II jumpstarted it.
Roosevelt never did learn that you can't be pro-jobs and anti-business at the same time; his intellectual descendants haven't figured it out either. Will it take a war to undo the bad effects of Obamanomics?
So far, the Obama administration has managed to finance its hideous deficits by borrowing. The experience of Greece shows that can go on only so long and, when the crisis hits, there'll be exactly two choices: either cut spending drastically or put taxes up through the roof.
The Toyota memo is entirely correct - we have an anti-business Congress and administration. Where do they think they'll get all the money they plan to spend? People who have money already know, and are stashing what they have offshore as quickly as they can shovel it while they still can.