The Real Crime Wave
By
Phil Mattera in the Dirt Diggers Digest
Donald Trump’s recent economic policy address portrayed an economy crippled by “overregulation.”
This came on the heels of his convention acceptance speech
depicting a country afflicted by a wave of street crime perpetrated by “illegal
immigrants.”
As with most of Trump’s statements, these comments took real
issues and distorted them to the point that that they no longer had much
resemblance to reality.
There is a regulation crisis in the United States, but the
problem is inadequate business oversight, not an excess.
And there is a crime wave taking place, but the culprits are not
immigrants but rather rogue corporations.
It was particularly odd that Trump chose to mention the auto
industry in his rant on regulation.
It has apparently not come to his attention that just about all
the major carmakers are embroiled in some of the biggest safety and compliance
scandals in the industry’s history.
Volkswagen exhibited contempt for the law in its long-standing
scheme to circumvent auto emission standards.
Since the brazen cheating came to light the company has been
scrambling to make amends. It had to agree to spend nearly $15 billion (mostly
to compensate customers) to resolve some of its legal entanglements, and it may
still face criminal charges with larger potential penalties. While the amounts
may seem high, VW is lucky it is being allowed to remain in business.
Then there’s the Japanese company Takata, whose airbags have
turned out to be deadly and now is reported to have routinely manipulated
test results of its products.
General Motors had to pay a $900 million fine and Toyota $1.2 billion, both for safety reporting deficiencies.
Electric car producer Tesla, which has taken advantage of a lax
regulatory regarding self-driving technology, now faces scrutiny in the wake of
several serious accidents involving vehicles operating on autopilot.
Automobiles are far from the only industry with serious
regulatory compliance problems.
In case we had forgotten the severity of the 2010 Deepwater
Horizon catastrophe in the Gulf of Mexico, BP provided a reminder recently when
it estimated that its legal and clean-up
costs will reach more than $61 billion.
And we must not leave out the banks. In a report I put out in June to accompany the
expansion of Violation Tracker, I found that since the
beginning of 2010 there have been 144 cases settled against major banks with
penalties in excess of $100 million each.
In all, the banks have had to pay $160 billion in these cases to
resolve allegations relating to a wide range of misconduct: mortgage abuses,
defrauding of investors, manipulation of foreign exchange markets and interest
rate benchmarks, assisting tax evasion, and much more.
Rampant corporate misconduct is one of the missing issues of the
presidential race, especially since Bernie Sanders dropped out. Hillary
Clinton’s website has some decent language on the subject but she
has hardly made it a central issue in her campaign.
In her convention acceptance speech she presented an upbeat
picture of American business, and her reference to the auto industry was not to
criticize its misconduct but to celebrate that it “just had its best year
ever.”
Neither Clinton nor Trump can be expected to be a crusader for
corporate accountability, but we need to make sure that whoever is the next
occupant of the White House feels pressure to rein in and not unleash big
business.