Damn regulators messing with free enterprise again

[halik]

http://www.bloomberg.com/news/2012-05-31/chinatown-bus-companies-shut-down-in-federal-safety-sweep.html

Free market would've taken care of this, obvi

 

[tydas]

The free market would have responded, albeit after a dozen people were killed in an accident...

 

[halik]

The free market would have responded, albeit after a dozen people were killed in an accident...

"In 2011, at least 28 people died in fatal crashes, including three in an 11-week period..."

Welcome to the wonderful world of informational asymmetries and game theory equilibria that don't exitst in Libertopia.

 

[tcG]

Statistics about human lives: the bottomless wellspring for justification of government intervention...

 

[Atreus21]

Statistics about human lives: the bottomless wellspring for justification of government intervention...

hee hee.

 

[GodisanAtheist]

I think that Ben Franklin quote about essential liberty for temporary safety applies here. If you're not willing to die so that businesses maintain the right to maximize profits then get the fuck out of our country.

 

[Double Trouble]

This looks like an example of a situation where, because of incomplete or obscured information, the customer can't make an informed decision, and the normal market mechanisms don't work to resolve issues.

If there is no real competition, customer information is inadequate or incomplete, or the customer simply isn't capable of distinguishing, the market mechanism breaks down and government involvement makes sense.

I have no problem with government regulation and involvement where it makes sense. The question isn't "should there be government regulation", the question is "how much, and in what way".

 

[ShawnD1]

This looks like an example of a situation where, because of incomplete or obscured information, the customer can't make an informed decision, and the normal market mechanisms don't work to resolve issues.

One could argue that the lack of information is a direct result of government intervention. I've never taken a bus between cities, but if I did, I would assume the bus is ~safe because there is a government body responsible for this. The only way to be safe is to do one of the following:
1) strictly enforce safety standards; shut down everyone who is not in compliance
2) remove all enforcement of safety standards and make it known that people need to look out for their own safety

I don't want to research every damn thing I touch, so I would rather go with #1.

 

[nehalem256]

One could argue that the lack of information is a direct result of government intervention. I've never taken a bus between cities, but if I did, I would assume the bus is ~safe because there is a government body responsible for this. The only way to be safe is to do one of the following:
1) strictly enforce safety standards; shut down everyone who is not in compliance
2) remove all enforcement of safety standards and make it known that people need to look out for their own safety

I don't want to research every damn thing I touch, so I would rather go with #1.

I recall someone suggesting that FDIC insurance should be eliminated because it encouraged people to put their money in bad banks, becauase it was safe anyway.

I guess they figured average people would be able to understand a bank balance sheet... something that judging from the financial crisis even professionals were unable to do.

 

[Charles Kozierok]

This looks like an example of a situation where, because of incomplete or obscured information, the customer can't make an informed decision, and the normal market mechanisms don't work to resolve issues.

Or it is a situation where customers make a decision to prioritize saving money over safety. Now they no longer have that option.

In theory, it's not really any different than deciding to save $800 on a new car by not getting anti-lock brakes. In practice, of course, the optics are far worse.

Whether it is society's appropriate role to remove cost/safety tradeoffs is the big debate.

If there is no real competition, customer information is inadequate or incomplete, or the customer simply isn't capable of distinguishing, the market mechanism breaks down and government involvement makes sense.

There's plenty of competition. It just costs more.

No matter what the product or service, there will always be people who will prioritize saving money over other benefits.

 

[Fenixgoon]

what exactly has made these buses unsafe? the operators themselves? the maintenance condition of the buses?

 

[werepossum]

Statistics about human lives: the bottomless wellspring for justification of government intervention...

True, but that doesn't mean that government intervention is necessarily always bad. The more people one can pack into a vehicle and the more potential damage that vehicle can do to others, the more sense it makes to allow government to burn some of our societal wealth trying to prevent some of our societal wealth to be destroyed in burning buses. Government should certainly be watched to make sure it doesn't overstep its bounds, but making sure buses, trains, and planes are reasonably safe seems to me to be a wise bit of socialism.

 

[ShawnD1]

I recall someone suggesting that FDIC insurance should be eliminated because it encouraged people to put their money in bad banks, becauase it was safe anyway.

I guess they figured average people would be able to understand a bank balance sheet... something that judging from the financial crisis even professionals were unable to do.

That's a good point. I'm not a bus engineer. I don't know shit about bus safety.

Similarly, I don't know anything about houses and that's why some people earn a living by doing house inspections. It's not practical to do a $400 bus inspection before taking a $50 bus ride, but it makes sense if the government had 1 person doing this inspection then applying the results to thousands of people. This is one case where free market private inspections will never happen. Even if they did have private people inspect it, where does that lead? I'm not going to read consumer reports to see which bus company is a death trap.

 

[kyp275]

what exactly has made these buses unsafe? the operators themselves? the maintenance condition of the buses?

all the above and more, think cheap chinatown-based chinese bus operators with poorly maintained buses driven by overworked unlicensed bus drivers.

you know, the epitome of safe travel

 

[Jhhnn]

what exactly has made these buses unsafe? the operators themselves? the maintenance condition of the buses?

Hard to say at this point.

I maintained buses for 17 years, and understand the situation better than most.

First off, both the equipment & the operators need to be DOT certified, and are often covered by state regs as well.

The equipment gets periodic inspections by the DOT, along with maintenance records & operator logs. Both maintainers & operators need CDL licenses, and are subject to random drug tests & rules about maximum number of hours worked. It's hard to say how well Chinatown operators conformed to any of that.

Greyhound? They're a near monopoly, thanks to their acquisition of Continental Trailways in 1987, and their pricing reflects that. They have small competitors in regional markets, but any who start to become large enough to compete effectively get an offer they can't refuse, and the owners generally take it. Operating costs are high & margins thin, so it's easy for Greyhound to squeeze out smaller competitors by cutting prices in select markets, making up the difference from other markets & higher prices after competitors are gone. It's hard to sue when you're broke, and something hard to prove in court, anyway. They also have a variety of ways to put the bone to workers & affiliates, applying them quite ruthlessly for decades.

Free markets? Just a transitional phase towards monopoly or carving up markets via collusion.

 

[Thump553]

The free market would have responded, albeit after a dozen people were killed in an accident...

How can free market response protect me, as a driver or passenger in another car, when a bus/18 wheeler comes crashing into me because of shoddy maintainence or bad driving/asleep driving by an operator well over his hours.

These guys share the road with the rest of the motoring public and can potentially cause huge amounts of damage. This is precisely an area where effective regulation and oversight is necesary and is to the benefit of all.

BTW, I make frequent trips to the Boston area and it's a rare trip that I don't see at least one of these chinatown buses broken down along the Mass Pike. I also remember a trip with significant cross winds seeing a chinatown bus literally rocking from side to side, almost lifting off its wheels while the driver was blasting along at or about the speed limit. None of the other large vehicles (18 wheelers or Greyhound buses) were doing that.

 

[sunzt]

The NTSB, in a separate investigation of a March 12, 2011 crash that killed 15 people in the Bronx, found the driver had been hired by a discount operator even though his license had been suspended 18 times and he’d been fired from two previous transportation jobs

Do you guys remember how 9/11 scared people out of flying?

Imagine that discount carriers kept crashing 7 times more often than non-discount carriers.... how would that affect the industry as a whole? In short, people would pretty much reduce flight travel as much as possible hurting businesses and the airlines.

 

[halik]

Wow my trollish o/p actually evolved into a cogent discourse, who would've thought.

As other have already mentioned, government is the business of addressing market failures like this. Whether it is asymmetric information and the obvious implausibility of customers make accurate assessment of the bus's safety or the negative externality to other motorists.

This is great by the way:

I think that Ben Franklin quote about essential liberty for temporary safety applies here. If you're not willing to die so that businesses maintain the right to maximize profits then get the fuck out of our country.

 

[fskimospy]

what exactly has made these buses unsafe? the operators themselves? the maintenance condition of the buses?

I was on a Chinatown bus up to Boston a few months ago and the driver was simply a maniac. I remember at one point he was tailgating a tiny hatchback so closely that I couldn't even see its rear lights from close to the front of the bus.

Then again we did make great time!