The GM Scandal Is Worse Than You Think
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The GM Scandal Is Worse Than You Think

And by "you" I mean the media.

Here’s another reason why government should never own a business.

In February 2010, the Obama Administration’s Transportation Secretary Ray LaHood told America, without a shred of evidence, that Toyota automobiles were dangerous to drive. LaHood offered the remarks in front of the House Appropriations subcommittee that was investigating reports of unintended-acceleration crashes. “My advice is, if anybody owns one of these vehicles, stop driving it,” he said, sending the company’s stock into a nosedive.

Even at the time, LaHood’s comments were reckless at best. Assailing the competition reeks of political opportunism and cronyism. It also illustrates one of the unavoidable predicaments of the state owning a corporation in a competitive marketplace.  And when we put LaHood’s comment into perspective today, it’s actually a lot worse. Not only did the Obama administration have the power and ideological motive to damage the largely non-unionized competition, it was busy propping up a company that was causing preventable deaths.

No one is innocent, of  course, but not everyone is bailed out. So Toyota, after recalling millions of cars and changing parts and floor mats even before LaHood’s outburst, and after years of being hounded by the administration, recently agreed to pay a steep fine for its role in the acceleration flap. This, despite the fact that in 2012, Department of Transportation engineers determined that no mechanical failure was present that would cause applying the brakes to initiate acceleration.  The DOT conducted tests that determine the brakes could maintain a stationary car or bring one to a full stop even with the engine racing. It looked at 58 vehicles that were supposedly involved in unintended acceleration and found no evidence of brake failure or throttle malfunction.

Eric Holder kept at it, though, and Toyota finally agreed to a $1.2 billion settlement (it has around $60 billion in reserves) to make it go away. Though it looks like the company doesn’t think the fight is worthwhile, for all I know it’s guilty. I’m certain, though, that General Motors is. It announced this week that it too was recalling over a million vehicles that had sudden loss of electric power steering. This, after recalling nearly 3 million vehicles for ignition-switch problems that the company knew about since 2001 and are now linked 13 deaths.

GM has apologized. But does anyone believe the Obama administration took as hard a look at GM as it did Toyota? As early as 2007, the National Highway Traffic Safety Administration knew that there may be problems with airbags but never launched a formal investigation. The National Highway Traffic Safety Administration’s acting chief David Friedman testified that GM never told them that faulty switches were at the root of the airbag problem. Fine. Before plowing billions of tax dollars into saving the United Automobile Workers, did the Car Czar or any other Obama officials take extra care to review DOT records to insure that taxpayers would not be funding the preventable deaths of American citizens? Would DOT or Holder exhibit the same zealousness for safety when it came to GM as they did when it came to Toyota? In the midst of the bailout debate and subsequent “turnaround,” news of a coverup and major recall would have been a political disaster.

So it’s difficult to understand why this isn’t a huge scandal. If every obtuse utterance by an obscure Republican congressman gets the media juices flowing, surely the possibility of this kind of negligence is worth a look. Can anyone with access to the administration ask some of these questions?  Because if you take credit for “saving” a company (actually, an “industry,” as no one would ever driven again if Obama hadn’t saved the day) you also get credit for “saving” the real-life unscrupulous version of the company. “I placed my bet on American workers,” Obama told union workers in 2012. “And I’d make that same bet again any day of the week. And now, three years later that bet is paying off.” Betting $80 billion of someone else’s money to prop up sympathetic labor unions isn’t exactly fraught with political risk. Unless it turns out that your administration was less concerned about the safety defects of the company you owned than the company you disliked. That would be corruption.

David Harsanyi is a Senior Editor at The Federalist and author of the The People Have Spoken (and They Are Wrong): The Case Against Democracy. Follow him on Twitter.

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