Another Take-Down Of “The Sack Of Detroit”, This Time Much More Comprehensively – A Primer On Regulation

My take down of Kenneth Whyte’s “The Sack of Detroit – General Motors and the End of American Enterprise” was only based on an interview in Bloomberg. That was more than enough for me to know that this author got it all wrong. But if you want to read a really good review, and one that examines the phenomena of Ralph Nader and the whole subject of government regulation, which are both quite different than commonly assumed,  the New Yorker has just posted it online. It’s not just a review, but a thorough examination of the issues that inform (or not) the book. The historical facts and issues are very different than how not only Mr. Whyte represents them, but how most Americans understand the Nader era, which actually coincided with the greatest deregulation of industry in American history.

Ralph Nader is one of the more misunderstood personas, especially among automobile enthusiasts, as he’s so commonly seen as the killer of the Corvair and the instigator of draconian regulation. Not only is that not true (the Mustang essentially killed it), Nader’s whole approach and goals are typically misunderstood, and commonly framed in the stereotypical left-right, Democrat-Republican divide. That grossly misrepresents the complex issue of government regulation. Nader was actually an avid anti-regulation advocate, as were many liberals/Democrats in the ’60s and ’70s who wanted to get the government out of the many businesses it actually did regulate very intensely, such as airlines, railroads, trucking. utilities, radio, tv, banking, and others. And by regulation, this means actually controlling key aspects of those industries, by setting rates and fares, interest rates, routes, etc..  Jimmy Carter, also commonly misunderstood, was the biggest destroyer of government regulations ever.

Nader was about something different and new: consumer advocacy. That’s quite different than regulating industries. It means holding industries accountable for the direct consequences to the consumer, but in an essentially unregulated and competitive business atmosphere. Which makes Whyte’s premise that Nader and his movement killed GM and American Enterprise utterly absurd. Nader was all for an unregulated market, but he was for corporate responsibility for their products, and for safety standards, if that’s what it took. That’s something quite different.

If you want to a good primer on this subject, this is highly recommendable reading.