Monday, March 08, 2010

Who Issued that Toyota Recall?

The fact that the November 2009 recall of 3.8 million vehicles was initiated by Toyota — while the National Highway Traffic Safety Administration declined to reopen a closed investigation into potential Toyota defects — highlights the private sector's incentive to compensate for perceived problems. Worldwide voluntary recalls on the part of Toyota confirm this.
That of course, is TPS blogger Emily Schaeffer.

One unintended consequence of Congress parading Toyota executives around for political gain is that they are probably more likely to discourage the future discovery of problems rather than incentivize their up-front correction (on the margin, of course).


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