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Government Policy Toward the Automobile Industry: Social Constraints, Economic Conditions, and Interest-Group Power

Published online by Cambridge University Press:  14 October 2011

Stan Luger
Affiliation:
University of Northern Colorado

Extract

The changing patterns of federal government policy toward the automobile industry provide fruitful material for analyzing how economic power is translated into political power. Government policy toward the auto industry involves an extensive number of decision-making points, and policy-makers are confronted with the nation's largest industry and the largest industrial corporation in the country (GM). This article examines government policy toward the auto industry from 1918 to 1988, focusing on the social constraints limiting the industry's political influence and the economic conditions that increase the vulnerability of government officials to industry lobbying.

Type
Articles
Copyright
Copyright © The Pennsylvania State University, University Park, PA. 1992

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References

Notes

1. See, for example, Ornstein, Norman and Elder, Shirley, Interest Groups, Lobbying and Policymaking (Washington, D.C., 1978).Google Scholar

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6. A number of empirical studies by free-market economists following the Chicago school of George Stigler and Sam Peltzman argue that “regulation will tend to be more heavily weighted toward ‘producer protection’ in depressions and toward ‘consumer protection’ in expansions.” Peltzman, Sam, “Toward a More General Theory of Regulation,” Journal of Law and Economics 19 (1976):CrossRefGoogle Scholar. By correlating the number of actions taken by regulatory agencies seen as anticonsumer with changes in the growth in the GNP, they conclude that this position is empirically verified. (See, for example, Shughart, William II and Tollison, Robert, “The Cyclical Character of Regulatory Activity,” Public Choice 45 (1985): 303–11).Google Scholar Besides the problem of aggregating decisions of varying magnitudes, this approach is of little help in explaining the development of new regulatory concerns or changes in political strategies.

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11. Nader, Unsafe at Any Speed, 140. In 1980, for instance, 51,000 people died in car accidents and approximately four million individuals suffered injuries, 250,000 of them seriously. Car accidents are the largest killer of Americans under the age of thirty-four and the largest cause of paraplegia and quadriplegia. According to a 1979 Office of Technology Assessment report, approximately two million Americans have died and nearly 100 million have been injured in car accidents, more than triple the combat losses suffered by the United States in all wars.

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14. See Bollier and Claybrook, Freedom from Harm, for estimates on the benefits of regulation.

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20. Ibid., 88.

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23. Department of Transportation, The Auto Industry 1980.

24. The White House, Office of the Press Secretary, “President Reagan's Program for the US Auto Industry,” 6 April 1981.

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26. Ibid., 1535.

27. Motor Vehicle Manufacturers Association v. State Farm, 463 US 29.

28. 49 FR 28,962 (1984). This action guaranteed more litigation, as well as an intensive industry lobbying effort directed at the states. Its effort is an example of the unique lobbying techniques available to large corporations. The industry created a nonprofit group, Traffic Safety Now, Inc., through its trade association to lobby states to enact mandatory seat-belt laws. Reportedly the industry planned to spend $15 million annually on lobbying. Dwarfing the resources available to safety advocates, the industry combined fairly standard one-on-one lobbying techniques by some of the industry's best-known personalities, including Lee Iacocca, with a far more unusual tactic. Opponents charged that GM told states they would not be considered as possible sites for its new Saturn plant unless they passed a mandatory usage law.

29. 52 FR 10,096 (1987).

30. 50 FR 40,528 (1985).

31. 50 FR 40,538–9 (1985).

32. Helen Kahn, “More Makers Seek CAFE Relief,” Automotive News, 11 March 1985, 11.

33. U.S. Congress, Senate Committee on Energy and Natural Resources, Automobile Fuel Economy Standards. Hearings before the subcommittee on Energy Regulation and Conservation, 99th Cong., 1st sess., 14 May 1985, 264.

34. Ibid., 74.

35. In June 1989 Ford did just this.

36. U.S. International Trade Commission, Certain Motor Vehicles and Certain Chassis and Bodies Therefor, Report to the President on Investigation TA 201–44, US ITC Publication 1110, 3 December 1980.

37. Crandall, Robert, “Import Quotas and the Automobile Industry,” The Brookings Review (Summer 1984): 12.Google Scholar

38. HR. 1234, 98th Congress.

39. U.S. Federal Trade Commission “General Motors Corporation, et al.,” FTC Decisions vol. 103, 11 April 1984.