The Other Side of the Coin

I am writing in response to Eric Peters’ NMA “The Mushroom Cloud Expands” blog of October 5 about the VW emissions scandal. Mr. Peters is a proud libertarian who feels that government intrusion into our lives is usually misguided and sometime tyrannical. In the current case of VW he says the villain is the EPA, not VW. The true scandal, in his opinion, is the heavy-handed federal government. He says that the affected cars run better than they would if they had adhered to the standards, and he is right. He says that government safety standards (he often calls them “safety” standards) make cars heavier and more complicated than they could be, which in turn makes them more expensive to buy and operate, and he is right.

But he neglects to consider the other side of the coin. Lighter cars certainly perform and handle better than heavier ones but they would be less safe in a crash. Those mandated airbags, door bars, ABS brakes, etc., add weight but they also save lives. There are tradeoffs. There are always tradeoffs.

Upton Sinclair’s 1906 book The Jungle exposed the horrible and unsanitary conditions in the meat packing industry. Once again there were tradeoffs: lower costs and higher profits for the manufacturers, or safer food and working conditions. We, as a society, made a choice and created the FDA to regulate the food supply. In the 1960s the FDA did not permit the thalidomide drug into the US while it was being used overseas in less-regulated countries. The result was that we were spared the thousands of one-limbed and no-limbed babies, many of whom died, which occurred throughout the rest of the world.

Is there ever regulatory over-reach? Of course. There’s also regulatory under-reach: Hundreds of people died during the years that the National Highway Transportation Safety Administration didn’t react in spite of receiving many complaints about faulty ignition switches in GM cars.

Let’s consider the VW case. VW designed some of their diesel cars to emit lower emissions when being tested than when on the road. The effect is that emissions of Nitric oxide (NOx) were higher than legally allowed. NOx is a greenhouse gas 300 times more potent than carbon dioxide, and also a health hazard causing asthma, emphysema and bronchitis, and it can aggravate existing heart disease. The other side of that coin is that the cars get better fuel mileage and better performance than they would if they truly conformed to the regulations. Once again, there is a tradeoff to consider. Which is more important – better health or better fuel economy and performance?

A fair analysis of the VW situation requires looking at both sides of the equation, i.e. the tradeoffs involved, not merely one side as Mr. Peters does. Maybe diesels can’t be made to give adequate fuel mileage and performance while providing low emissions as well as their gasoline-powered brothers can. Maybe VW bet on the wrong horse and covered their tracks by cheating.

In our society we have a means to establish the balances we want: it is our government and its regulatory arms. If we don’t like the results we can replace the executive and legislative sides by voting to install people and policies we prefer. We do not have a society in which individual actors (VW, in this case) can unilaterally circumvent our laws.

It is very easy to complain about dim-witted bureaucrats. It is much more difficult to construct a balanced system which protects consumers while at the same time permitting innovation.

VW intentionally made millions of cars with a hidden ‘trick’ system designed to circumvent the regulations controlling dangerous emissions. People will be sickened and perhaps some will die as a result. Personally, I have no problem with this particular tradeoff: VW is the bad guy, not the US government.

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