Editor’s Note: This piece, by John Carr, originally appeared at the National Motorists Association blog.
Wayne Crews recently posted an editorial on cost-benefit analysis and regulations. It’s worth a read.
In the 1970s the Carter administration prohibited speedometers from indicating speeds over 85 miles per hour. The idea was around before Carter, but his people implemented it.
Regulations require some justification. The justification was, people might not drive fast if they didn’t know how fast they were going. After some hand-waving and pulling numbers out of orifices it’s possible to fabricate a number of accidents and deaths per year prevented and call that the benefit of the regulation.
As part of Reagan’s regulatory reform the speedometer rule was scrapped. Rescinding a regulation requires some justification. The justification was that there was no real evidence that limiting indicated speed would reduce or had reduced driving speed.
An ineffective regulation is harmful because it imposes costs with no benefits.
Under the laws governing agency rulemaking, both Carter and Reagan were right. NHTSA, the agency responsible for car safety rules, does not have to prove its case beyond a reasonable doubt. It must show that there is some reason to believe a regulation would be good.
It was not impossible that the speedometer rule might have an effect, and it was also not impossible that it would not. When in doubt, do you regulate or leave the market alone? The greatest power of the presidency in domestic policy is the ability to tip the balance of bureaucratic decision-making.
Personally, I think the rule was silly. I don’t exceed 85 for the thrill of watching the needle land on 90. I don’t believe my car will explode or crash because I ran out of numbers. Anecdotal evidence suggests the limit was mostly an excuse for drivers to honestly tell cops they didn’t know how fast they were going.
An agency left to review itself will conclude it is doing a good job. In more recent years NHTSA has gone on to make up numbers on speed, alcohol, seat belts, and airbags.
To create an appearance of serious thought it pays for outside reports and quietly makes sure those reports justify the government agenda. The Parker report on speed limits was initially suppressed by NHTSA because it did not support low speed limits.
Where the costs and benefits are easily calculable and and comparable, it may be sufficient to have a separate agency audit the numbers. When the costs or benefits are hard to determine, the decision is a political question and the agency’s role should be limited to making recommendations.