First Vice President Biden — for whom the $37.7 million Amtrak station in Wilmington, Delaware is named — touts an administration plan to spend $53 billion on high-speed rail.
Now, at the behest of two Democratic lawmakers, Senator Schumer and Rep. Nydia Velazquez, the National Transportation Safety Board is launching "a comprehensive review of the discount bus industry and the safety regulations governing it."
It's a little strange that the review is announced not by the NTSB but by the politicians who called for the review. And it sure seems like the federal government is doing what it can to hurt the bus industry — not only spending $53 billion to subsidize high-speed rail, a competing form of transportation, but also tightening regulations on the bus industry.
On the other hand, the New York Times article reports that "The inquiry will examine, among other things, the effectiveness of the Federal Motor Carrier Safety Administration, the agency charged with overseeing the tour-bus industry. The agency has been criticized for failing to enforce its own regulations."
Now there is a promising field of inquiry. Last month's fatal bus crash, after all, took place despite the fact that there are dozens of federal regulations governing buses, covering everything from civil rights and smoking to brakes and hours that a driver can be on duty. Much as the radiation leak at the Japanese nuclear reactor took place at a facility highly regulated by both the Nuclear Safety Commission of Japan and Japan's Nuclear and Industrial Safety Agency. A new paper from the Brookings Institution's Daniel Kaufmann notes:
Regulatory failure occurs when the regulatory system is deeply flawed – such as when it over- or under-regulates or when the regulatory design is based on "old science". Regulatory failure also happens when agencies inadequately fulfill their oversight, supervisory and enforcement functions. Failures by regulatory agencies can go undetected for some time until they are exposed by a crisis, such as the BP oil spill in 2010 and the financial crisis that originated in Wall Street in 2008. When assessing regulatory failure, it is important to distinguish between at least three different types of failure: lack of resources, mismanagement and poor technical expertise, and capture of the regulator by the regulated. Episodes of regulatory failure result from different combinations of subpar performance in some or all of these components.
Connecting the bus accident, the BP oil spill, the Japan nuclear reactor, and the financial crisis all as episodes of regulatory failure is a big idea with consequences. One such consequence: rather than responding to each episode separately with new regulations or investigations of individual industries — offshore drilling, interstate buses, nuclear energy, finance — it's worth taking a step back and asking some more general questions about government regulation. What are the goals of the regulations? What are the costs and benefits? Are the promised benefits, such as safety, real, or are they just an illusion? Is there something about government regulation that makes it inherently less effective than other possible alternatives?