Letters

We welcome letters from readers, particularly commentaries that reflect upon or take issue with material we have published. The writer’s name, affiliation, address, and telephone number should be included. Because of space limitations, letters are subject to abridgment.

 

Government v. The Terminally Ill

Sue A. Blevins’ article, "FDA: Keeping Medication from Cancer Patients" (last issue) makes a cogent and compelling case for reform of FDA regulations that restrict freedom of informed choice by the terminally ill. The plight of Dr. Stanislaw Burzynski, well explained in the article, is multiplied manifold by the plight of the terminally ill who seek access to his treatment but are denied that access by their government. The problem of denied access affects all clinical trials of cancer drugs, not just Dr. Burzynski’s. Albeit Dr. Burzynski’s case presents a uniquely reprehensible conflict of interest: the very government officials who preside over his clinical trials are witnesses in the government’s case against him—so much for scientific objectivity.

The Burzynski patients are a subset of an even larger body of terminally ill people who are denied the right to choose the kind of weapons they wish to employ against presumably incurable diseases. Given little hope for survival by the conventional establishment, those who suffer from cancers unresponsive to chemotherapy and radiation are nevertheless locked into a state of hopelessness by our government. The FDA denies them the freedom to explore options and mandates instead that they continue receiving the very same chemotherapy and radiation regimens that have not worked. The government’s inflexibility forces the weakest, most vulnerable among us to relinquish their liberty at the very time when they need it most, in their final struggles for survival against diseases said to be incurable.

Dr. Burzynski’s antineoplastons are administered in clinical trials that involve several hundred patients. Peptides and peptide metabolites in the drugs are believed to alter specific genetic functions, activating tumor suppresser genes and turning off oncogenes that cause cancer cells to divide uncontrollably. Several patients with brain tumors and some with melanoma have experienced remarkable results. Some have had their tumors shrink by 50 percent or more; others are in complete remission. While not all who have been treated with antineoplastons have experienced those results, the numbers that have are far greater than can be explained through theories of spontaneous remission. The typical patient at the clinic has exhausted all approved therapies and faces certain death absent a chance of survival from an experimental drug. While fraudulent remedies abound, there are many drugs undergoing clinical trials that hold promise for the terminally ill. It is reprehensible for our government to stand in the way of competent, fully informed patients by assuming the role of parens patriae.

Once apprised of the known risks and benefits of conventional treatments and the alternatives, the terminally ill should be allowed the freedom to choose what drugs to ingest based on fully informed consent, whether those drugs are FDA-approved or not. That is the intent of H.R. 746, the Access to Medical Treatment Act. The law would cut through bureaucratic red tape to allow seriously ill patients and their physicians the freedom necessary to battle disease without federal interference.

Treatments for terminal illness that are undergoing clinical trials should be open to any competent, terminally ill patient based on the exercise of fully informed consent. Once apprised of the known risks and benefits of conventional treatments and the alternatives, each patient should be free to wage war against a terminal illness with his or her weapons of choice. That freedom of choice is central to each patient’s personal dignity, autonomy, and control over his or her biological destiny. Depriving patients of that freedom robs them of influence over their mortality and transforms them from animate beings with free will and hope into captive automatons, victims of the state, locked in a governmentally predetermined treatment regimen aimed inexorably at death.

Under FDA regulations, patients must meet protocol requirements or they are ineligible to receive an experimental drug. Thus, if the protocol applies only to patients with a glioblastoma (brain tumor), stage IV, then those with another terminal brain tumor or a glioblastoma not in stage IV, may be rejected (regardless of the clinical need the patient has for an alternative). The FDA does have a single patient exception, a so-called compassionate treatment exception. Unfortunately, the agency allows the exception only if it determines that all approved therapies for the disease have been exhausted and the patient would not be subjected to what it deems an unreasonable or significant risk of illness or injury (21 C.F.R. 312.42(b)). Nowhere does the patient’s freedom of choice factor into the bureaucratic equation. Moreover, while a patient’s body is being ravaged by cancer, he or she must wait for the bureaucrats to second guess his or her physician’s judgment and render an opinion, a process that can take several weeks or even months.

At root, the freedom of each citizen to elect a treatment of choice in combating a terminal illness is a basic liberty. Liberty within the meaning of the Fifth and Fourteenth Amendments to the Constitution, encompasses bodily integrity, a right to control one’s person. Liberty encompasses personal, life-affecting decisions such as whether to refuse unwanted drugs or to refuse unwanted medical treatment necessary to sustain life. It would be illogical in the extreme to hold, on the one hand, that a person has a constitutional right to refuse treatment needed to sustain life (Cruzan v. Director, Missouri Department of Health, 497 U.S. 261 (1990)) and, on the other, that a person has no constitutional right to receive a treatment that may sustain life.

When the state denies a terminally ill patient freedom to elect a course of treatment, deprives that patient of bodily integrity, robs that patient of control over his or her person, and effectively dictates one therapy, there is little left of liberty. The state thus plays God and effectively prescribes death through a slow, painful, and inhumane series of government-approved treatments that, although officially sanctioned, do not work. As Justice O’Connor presciently observed in her concurrence in Cruzan, "A seriously ill or dying patient whose wishes are not honored may feel a captive of the machinery required for life-sustaining measures or other medical interventions. Such forced treatment may burden that individual’s liberty interests as much as any state coercion."

For the sake of all terminally ill Americans, we may only hope that for once either Congress or the Courts will get it right. Congress should pass the Access to Medical Treatment Act immediately and the Supreme Court should seize the opportunity presented in the Glucksburg right-to-die case (now pending) and recognize that the terminally ill do have a constitutional liberty right to elect a course of treatment.

 

Jonathan W. Emord
Attorney, Emord & Associates, P.C., counsel to the Burzynski Patient Organization

 

Misplaced Blame for Air Bag Debacle

Sam Kazman is to be commended for pointing out the dangers of air bags ("NHTSA Air Bag Mandate Misfires," last issue). When he addresses the source of the problem, however, Kazman never suggests (even obliquely) that the problem arises from the defective design of air bags. Instead, he goes on a tirade against the National Highway Traffic Safety Administration and consumer advocates for allegedly forcing air bags on the industry.

The culprit, Kazman concludes, is the "NHTSA air bag mandate." But there never was an NHTSA air bag mandate. The 1997 model year is the first year that automakers are required to have air bags in their vehicles, and the requirement comes from a 1991 federal statute, not an NHTSA regulation. For marketing reasons, the automakers voluntarily put eighty-two million air bags in the stream of commerce prior to the 1997 effective date of the statute. In so doing, they opted for a cheap design that they knew was dangerous (particularly for children) and then failed to warn of the terrible dangers.

In 1981, General Motors assured NHTSA that any prior safety problems with air bags had been resolved. In subsequent hearings before Congress on the proposed mandate, the automakers never disclosed any safety problems; they were already vigorously marketing air bags when the hearings were held. Kazman’s suggestion that the air bag debacle is due to the paternalistic zeal of NHTSA and consumer advocates is simply incorrect.

In their stampede to introduce air bags on a massive scale in the 1990s, the automakers rejected a safer design developed fifteen years earlier by General Motors. That system had a gentler deployment in low speed collisions and a more aggressive deployment in high speed collisions. The system worked beautifully. NHTSA reported in 1980 that no children were known to have been injured in these "dual deployment" systems. As recently as 1995, GM bragged in sales literature that its 1974 air bags "have deployed perfectly when triggered almost twenty years later," and "are still working today."

The safety benefits of the dual deployment systems were repeatedly pointed out by NHTSA. Between 1975 and 1977, Calspan (under NHTSA contract) researched and tested air bags and found that variable inflation levels would "reduce the effects of rapid inflation on an out-of position occupant, such as a small child." In 1980, David J. Biss of NHTSA, and others, circulated a paper stating, "there are relatively few deaths and serious injuries below 17 mph" and that in these lower speed collisions "it is probably not appropriate to inflate the bag with the same level of deployment energy that is required for crash protection at speeds above 30 mph where the majority of societal benefits will occur." In 1980-81, Minicars, Inc. (also under grant from NHTSA) conducted crash tests and concluded that dual inflation systems "could significantly reduce injuries to forward positioned children, yet still maintain high performance levels for adults in severe crashes." The Dole Regulatory Impact Analysis of 1984 also reported that mis-positioned occupants could be protected by dual deployment systems.

Incredibly, however, the industry turned its back on the dual deployment concept. When it reintroduced air bags in the 1990s, it opted for an extremely dangerous (but cheap) single deployment design. This system kicks like a mule in every deployment, regardless of whether it is a high speed collision (where aggressive deployment is required) or an 8 mph fender bender (where it is not). The industry either should have retooled the dual deployment concept or raised the deployment threshold of their single deployment systems to 18 mph.

The American automakers also ig-nored the safety features of the passenger-side airbag marketed by Mercedes-Benz since 1988. Their system has two deployment thresholds depending on the passenger’s belting status. If the passenger is unbelted the system fires in a 12 mph collision. If the lap belt is buckled, the systems will not fire unless the collision is 18 mph or greater.

The automakers exacerbated the dangers of their single-deployment, low-threshold systems by mounting the air bags on the front of the dash. Honda, Nissan, and Subaru, all of which top-mount the bag so that it is fully inflated before it reaches the occupant, have seen no child air bag deaths.

Finally, automakers failed to provide adequate distance between the occupant and the deploying air bag. That could have easily been accomplished by internal tether straps that arrest the forward excursion of the bag by locking the passenger seat in the rear-most position and by equipping shoulder straps with pre-tensioners (a device that yanks the slack out of the shoulder strap before the air bag deploys).

Faced with having to explain themselves, the automakers have made the specious argument that the air bag crisis is caused by the federal air bag performance requirements. The standard requires that air bags protect an average size unbelted male in a 30 mph collision. They cannot do that, they say, without killing children in fender benders.

That argument, of course, is nonsense. It carried the day, however. NHTSA recently changed the air bag test protocol to allow for 25-35 percent depowering of air bags. Both NHTSA and the industry acknowledge, however, that this will reduce the child deaths by only 50 percent (from a projected a 140 a year down to 70). Moreover, depowering will, according to NHTSA, cause up to twelve hundred additional deaths per year to unbelted teenagers and adults, who need aggressive deployment in high speed collisions.

Kazman is correct that there is an air bag problem. Passenger side air bags are killing twice as many children as they are saving and have already claimed forty children. The deaths include horrible cases of decapitation, broken necks, and instant brain death (the last being the fate of my daughter in an accident with an impact force of 9.3 mph). The blame lies not with the regulators or the consumer advocates, however. It rests squarely on the shoulders of an industry that cut costs at the expense of public safety, and then failed to warn of dangers it knew existed.

 

Robert C. Sanders
Director, Parents’ Coalition for Air Bag Warnings

 

Narrow Account of Air Bag History

Sam Kazman’s article is a selective and biased review of the air bag mandate’s history. Much of the article zeroes in on the role of Joan Claybrook, administrator of the National Highway Traffic Safety Administration from 1977 through 1980. The air bag debate, however, did not begin or end during Joan Claybrook’s tenure at the NHTSA.

Air bags were initially developed in the late 1960s. Lap belt use was about 20 percent. Shoulder belts (in few cars and separate from lap belts) had a very low use rate of 2 to 5 percent. Lap/shoulder belts were not required until the 1973 model year.

Air bags were designed to protect people in frontal crashes, the most common crash resulting in death or serious injury. It was recognized, however, that lap belts would still be necessary for other types of crashes. At that time, there was hope that additional automatic restraints would be developed to protect occupants in side impact, rear impacts, and rollovers. Early NHTSA rulemaking proposals reflected the hope for automatic protection in all crash modes so that belts would no longer be required. However, the technology necessary to implement passive protection did not exist. So the idea of replacing manual belts with fully passive systems became moot.

The emphasis shifted from air bags as a fully passive system to air bags as protection solely in frontal crashes. The government never proposed air bags as an alternative to safety belts. In fact, the NHTSA would have required at least a lap belt in vehicles equipped with air bags. When automatic belts were developed and promoted by automakers as alternatives to air bags, the idea of bags and belts as alternatives took hold.

Air bags were expected to provide automatic protection for both belted and unbelted occupants in serious frontal crashes. That expectation has been met, but as the Kazman article and much recent reporting emphasize, not without some serious problems. Do these problems mean air bags were oversold, as Kazman claims, during the more than twenty years of debate in Washington? Yes, there was some overselling, but there was also underselling by air bag opponents. For years, air bag advocates and air bag opponents have debated intensely. In such a climate, it is not surprising that some claims by both sides have proved unjustified. But Kazman’s examples are very selective. He states, "their performance has been significantly lower than the NHTSA promised." To make this point, he cites 1977 NHTSA estimates of air bag effectiveness. Those estimates predicted that air bags would reduce the fatality risk among unbelted occupants by 40 percent, much greater than current effectiveness estimates.

Why does Kazman use 1977 effectiveness estimates? The NHTSA had revised them by 1984, when the agency issued its final rule on automatic crash protection. In that notice, the estimated effectiveness of reducing fatality risk among unbelted occupants was 20 to 40 percent. The broad range reflected the uncertainty of estimates based on crash test information, the basis of the 1984 numbers. Incidentally, current estimates for air bag effectiveness in reducing fatalities among belted occupants is almost exactly the value projected in 1984.

The 1984 estimates were derived from crash tests with instrumented dummies. It should not be surprising that some of the effectiveness estimates differ from real-world crash numbers. Now we know that occupants (usually unbelted) who are very close to, or on top of air bags are at greater risk of serious injury than dummy testing predicted. In the 1984 rulemaking notice, the NHTSA pointed out concern involving "the technical problem of out-of-position occupants of small cars." However, at that time it was believed that "the safety benefits are greater for an out-of-position occupant with an air bag than without one." This assessment was optimistic. The NHTSA has changed its air bag requirements to allow less powerful inflators. The NHTSA based the change upon scientific evidence that less powerful inflators will reduce problems for out-of-position occupants. It did not base it, as Kazman claims, "on public outcry and Congressional pressure."

Kazman asserts "that if we had known in 1977 what we know today, the air bag mandate would not have survived politically." To what air bag mandate does Kazman refer? In 1977, the NHTSA issued a rule that would have required new cars (beginning with 1982 models) be equipped with automatic protection for frontal crashes, either air bags or automatic seat belts. That was not the first NHTSA rule proposing automatic crash protection; like its predecessors, it never took effect. It was first delayed in 1981. Later that year the NHTSA rescinded it altogether. After a legal challenge that reached the Supreme Court, it was revised, then reissued in 1984. The rule required a phase-in of automatic restraints to begin with 1987 models. That rule was not issued by Joan Claybrook or by any other Democrat but by Elizabeth Dole, a Republican.

The 1984 standard was not an air bag mandate. The mandate requiring air bags was issued in 1991 by Congress, not by the NHTSA. The Intermodal Surface Transportation Efficiency Act of 1991 directed the agency to require air bags in virtually all cars by the 1997 model year (1 September 1996) and most light trucks by the 1998 model year (1 September 1997). At the time, the mandate was not controversial. The majority votes in both the House and the Senate were overwhelming. Besides, the law required what auto manufacturers were already planning due to very strong market demand.

Kazman believes there is now a strong "public reaction against a rule once deemed reaction-proof." What is the basis of that statement? Despite a prolonged period of overwhelmingly negative media coverage, all recent opinion polls indicate strong public support for air bags, albeit somewhat less than earlier. And when was the automatic crash protection rule "deemed reaction-proof?" That rule was first proposed in the early 1970s, it was on-again, off-again for more than twenty years, and it was not finally issued until 1984. Air bags were not mandated until 1991.

The bottom line is that air bags are saving lives and preventing serious injuries. In the case of serious head injuries, for example, air bags plus belts double the protection afforded by belts alone. Air bags have saved more than seventeen hundred lives, but there are some serious side effects for out-of-position occupants. Federal requirements are changing to allow design improvements that will reduce those problems. And suppliers and automakers are improving air bag design.

Today the safety community and automakers are united in the belief that air bags and lap/shoulder belts, together, provide the most effective crash protection. Increasingly, belts and air bags are being designed to perform together as a system, so that either one alone offers significantly less protection than the combination. If air bags become options, as Kazman desires, the important benefits derived from optimized belt/bag systems would disappear as manufacturers returned to more conventional belt designs.

 

Brian O’Neill
President, Insurance Institute for Highway Safety

 

Bar Fears Alternatives

In his article "Lawyer Fees Too High?" (last issue) George Leef incisively demands revocation of unauthorized practice of law (UPL) statutes in the states and cites the arguments for it, some of which go back for decades. State Bars are increasing their UPL statute enforcement budgets and boosting efforts to close down Independent Paralegals (IPs) who assist people in simple cases such as wills, guardianship, name change, and bankruptcy.

Millions of people who cannot afford an attorney can proceed on their own if they have basic information, the right forms, and a typing service. Truly helpful IPs explain the legal procedure and the definitions of terms, and they tell the customer what to expect if they have a court appearance (as in divorce or bankruptcy, for example).

That is precisely what UPL statutes prevent. And the Bar invokes those statutes if a paralegal says anything by way of information to the customer.

There are different approaches to ending the UPL monopoly, and some have a better chance than others of getting through state legislators. At HALT we have been working on the topic for years and see at least three choices:

1. Outright revocation of UPL (leaving only the rule that non-lawyers cannot call themselves lawyers). That is the hardest to sell politically, given that on average 35 percent of state legislators are lawyers and the key judiciary committees are usually lawyer-dominated. Besides, lawyers would generate publicity against revocation that could scare the public with horror stories of scams, frauds, and risks. It is, as Leef says, the right thing to do, but in a public battle the Bar has more resources than anyone and they would bring out all their big guns.

2. Redefine "practice of law." Right now, the concept of "practice of law" and "legal advice" are vague. IPs do not know what might be a violation. Interpretations by courts tend to leave little flexibility for IPs. In a Connecticut case, a paralegal who simply took a questionnaire from a customer and returned a computer generated form (using lawyer-designed software) was adjudged to have practiced law through the mere act of handing over the completed document with the implication that it was valid.

Legislators and the public can perceive that people who want to handle their own cases need some information and some help. The notion that the courts can hand a customer detailed instructions describing the process, but that a human non-lawyer cannot verbalize those instructions to those with language or reading problems, is not a convincing proposition.

If the definition of forbidden "legal advice" excluded giving basic information about the law and procedures, it could no longer be applied to those who give basic information about pursuing legal remedies. There are materials available in the form of detailed self-help law books or government publications for all the areas mentioned above in which IPs practice. Yet, IPs are susceptible to UPL statutes if they communicate such information. Legal advice should be limited to applying the rules and procedures to the specific facts of an individual’s case.

The distinction is clear. Lawyers can apply the rules to your specific case, formulate strategy and shape complex arguments. IPs can show you the rules, explain them, but not tell you what to do or advise about strategy. Customers needing that level of help would be referred to lawyers.

3. Certify independent paralegals with education and training requirements and a strong consumer protection scheme. Those certified are permitted to give information that falls short of legal advice.

That approach is the hardest to attack since it has consumer protection built in, and leaves lawyers with their licensed occupation. It defeats the lawyer arguments that the public has no remedy against unlicensed practitioners, as compared to the lawyer discipline system that provides a remedy against lawyer mistakes (a claim that, as Leef points out, is greatly exaggerated). It also meets a concern of many consumer groups who support the idea of IPs, that if the occupation is cast open, unqualified people will jump in and do harm. Studies show that harm from IPs is rare, but that is partly because only the bold go into the occupation now, and the fear of UPL charges makes them terribly cautious.

IPs in California, where there are an estimated two thousand, have started the groundwork for self-regulation, the usual prelude to official recognition through licensing or certification. They have a Code of Conduct that is superior to lawyer’s Rules of Ethics in that it specifies responsibility (IPs should insure that customers know the meaning of the procedure they are undertaking, are told how to complain about the services, and are given an automatic refund upon dissatisfaction). The state-wide IP organization holds conferences, has a newsletter, and conducts training events. When the laws change in any areas of common practice, the information is passed to members, and training audio tapes may be distributed.

Beyond those three approaches, another school of thought is to do nothing and let nature run its course. The argument is premised on faith in market forces and distrust of regulatory schemes that often drive up prices and limit services without protecting consumers. There is evidence that given time it would work. Bar leaders have been heard to say that the IP movement cannot be stopped, and where the numbers of IPs have reached critical mass, it seems to be true. In Florida and California, sufficient numbers exist to challenge bar efforts to staunch the tide. Also, public attention to the issue augurs poorly for the Bar. In California, one lawyer specializes in defending IPs. In Florida, an IP company has eleven branch offices around the state and can afford to defend against UPL prosecutions and appeal unfavorable decisions, postponing Bar enforcement for years.

HALT favors actively pursuing any or all three of the remedies because the progress of natural forces is so slow, and the current need so compelling. The American Bar Association says that over one-hundred million people a year have unmet legal needs, and with cuts in legal services, the thirty million poor are even worse off than before. The Bar does not purport to have a solution, but is frightened of the consequences of allowing choice. George Leef’s arguments for revocation cannot be refuted. If the Bar had a better sense of its self-interest in the forum of public opinion, it would listen and act.

 

William R. Fry

Executive Director
HALT-An Organization of Americans for Legal Reform

 

Bureaucrats and Deregulators Agree to Argue

Asking any number (n) of moderately well-informed regulation students to assess the past two decades of our continuously-reinvented regulatory reform initiatives is likely to elicit at least n+1 characterizations of the progress. Murray Weidenbaum’s "Regulatory Process Reform" in the Winter issue contains a useful perspective on a broad and important sweep of history, providing much helpful evidence. Yet reading OMB’s own recent and much more upbeat self-appraisal ("More Benefits, Fewer Burdens," December 1996 Report to the President) makes one wonder whose spectacles need better lenses. Either the system is ramshackle and drifting, or our regulatory world is fast improving.

Disagreement is natural and probably desirable when it comes to public policy objectives and priorities, and elections are supposed to sort such matters out. So a bit of lurching from one course to another is expected as administrations come and go. It is, moreover, no surprise that every participant will discern notable strengths in his or her team’s own record. In my judgment, the incompatibility of those (and other) contrasting readings of recent history is overly large because of the primitive nature of our measuring rods.

It is unfortunate that so little headway has been made in achieving agreement on a metric for regulatory performance in the aggregate. Not even a quasi-official account of the costs or benefits of the voluminous rules issued by our sixty-plus regulatory agencies exists. That systemic weakness has attracted very limited attention. A one-shot regulatory cost accounting requirement did become law in the fall of 1996, calling upon OMB to publish a set of aggregate estimates by September 1997. However, no resources have been appropriated for the necessary data collection, which increases the challenge facing OMB.

Murray Weidenbaum and OMB (vintage 1996) do agree that headway has been made in accepting tradeoff discussions which consider whether particular major new regulations should be added. Currently, the vigorous debate over the EPA’s air quality proposals to tighten ozone and particulate regulation demonstrates at least one thing. Even when a regulatory statute (in this case, the Clean Air Act) is hostile to benefit-cost analysis, all parties at least agree to argue about incremental benefits and costs. Decisions continue to fly in the face of benefit-cost findings, but at least the terms of debate are changing for the better, offering some hope that decision-making might eventually improve correspondingly. Weidenbaum is right to be more skeptical than OMB as to the pace of the progress on incremental decisions, but at least the measurement system is clear. "How-to" manuals abound on benefit-cost analysis for particular regulatory proposals–it’s just a matter of being sure they are used properly. Of course it wouldn’t hurt to have more systematic audits of whether actual results correspond to the up-front projections.

The more intractable problem is how best to gauge overall effects. Here we lack a manual. By my calculation, the nation annually faces regulatory compliance costs in excess of $600 billion. The government continues adopting new rules without any explicit consideration of how they affect that total, a practice long since abandoned for its own spending programs. When spending other people’s money, government acts as though no overall budget constraint exists, so long as that spending is hidden in the product prices that firms increase to cover regulatory compliance costs.

If the government continues to appropriate no funds to establish a sound accounting framework for aggregate regulatory costs and benefits, our public policy will drift. We won’t have any basis for saying that $600 billion in annual costs is better or worse than $900 billion or $300 billion. No one thinks it peculiar that mutual fund investors often pay upwards of one percent of their holdings annually to compensate the fund managers and pay for aggregate accounting. It seems to me a lesson for government may be hidden there somewhere.

 

Thomas D. Hopkins
Arthur J. Gosnell Professor of Economics, Rochester Institute of Technology

 

Safety Politics: A Risky Business

The explosions and plane crashes of recent years are disturbing in several re-spects. First, the loss of human life is tragic. Second, there is a heightened level of anxiety that the vicious events will be repeated. A third disagreeable development is Washington’s move toward limiting our freedoms under the guise of protecting us.

Two events in history hold very important lessons for those who will listen. One was the capsizing of the lake steamer Eastland in the Chicago river in 1915 and the other occurred on 7 July of last year when an engine exploded on a Delta Airlines flight during take off from Pensacola. Both incidents occurred in the wake of other disasters which spawned political reactions that turned out to be deadly in their effects.

The first case in point was the loss of 1,425 lives when the Titanic sank on 14 April 1912 and the subsequent loss of 844 persons when the Eastland capsized in the Chicago River on 24 July 1915.

The Titanic sank on her maiden voyage with many distinguished passengers on board, a fact that heightened the postmortem uproar. There developed a perception that insufficient lifeboats were available for the passengers and crew. That spawned a political movement called "boats for all." That, despite the fact that lifeboats on the Titanic could carry 1,178 persons, well in excess of the 705 passengers and crew who were actually saved.

The "boats for all" movement eventually led to the enactment of the La Follette Seaman’s Act of 1915 and that was a contributing factor in the subsequent capsizing of the Eastland.

It was erroneously asserted by the press and the politicians at the time that the capsizing was due to two other factors: (1) the ship was thought to be resting on an obstruction and the tug pulled it over and (2) the passengers on the top "hurricane" deck supposedly surged to port to look at a passing ship. Subsequent inspection of the riverbed revealed no obstruction. As for the passenger surge, it did not happen largely because the rain had kept all but about 175 people below decks.

It took eighty years and an economist, of all people, to get the story straight. George Hilton in his 1995 book Eastland: Legacy of the Titanic, lays out a compelling case. He shows conclusively that the extra lifeboats and life rafts required in the wake of the Titanic disaster made ships like the Eastland top-heavy and unstable. Just twenty-two days after the extra boats and rafts were installed on the Eastland and the first time a capacity load of twenty-five hundred passengers were on board, it capsized, resulting in Chicago’s worst disaster in terms of loss of life. Ironically, the capsizing happened so fast that there was insufficient time to load and launch the lifeboats.

The 11 May crash of ValuJet’s flight 592 in the Florida Everglades was also a terrible disaster. It killed all 110 people on board. Like the Titanic disaster, the political opportunists quickly jumped into the ValuJet controversy. They claimed that because of deregulation, safety at low-fare airlines is compromised in favor of higher profits. Apparently, those critics believe the absurd notion that a firm makes more profit by killing its customers.

The Federal Aviation Administration nonetheless grounded ValuJet on 17 June citing vague safety and maintenance concerns. That was a similar action, in economic terms, to the pre-crash order by the FAA to limit ValuJet expansion to other airports. Both actions serve to restrict competition. But they do little or nothing to improve safety. Indeed, reducing competition might actually have worsened passenger safety.

The grounding came at a very bad time. The summer travel season was near its height. The Olympics were beginning to attract athletes and spectators to Atlanta, ValuJet’s home base. The temperatures were warm throughout the South which always make takeoffs more difficult. Moreover, the hurricane season was just starting. Indeed, Bertha hit North Carolina on 12 July. All of that put a strain on the capacity of other airlines to carry ValuJet’s passengers.

When systems are stressed to capacity, even small flaws can be magnified into serious consequences. On 6 July, a flight from Pensacola to Atlanta operated by ValuJet’s hometown rival, Delta Airlines, was filled to capacity. As the flight was taking off, the engine hub fractured and flying turbine blades killed a Michigan woman and her twelve-year-old son. While the connection between those events cannot be proven conclusively at this time, it should not take eighty years to see that concentrating passengers into fewer airplanes does not improve safety.

We should not forget the connection between the Titanic and the Eastland nor the possible connection between the ValuJet and Delta incidents. We should not allow the crash of TWA flight 800 and the Olympic bombing in Atlanta to erode our freedoms and possibly in-crease the likelihood of other disasters.

There are strong incentives for airlines to provide safety for their customers and their employees. By contrast, the incentives for the political establishment are to produce policies which overemphasize minute dangers and to play down the value of generally safe operations. Those policies are not very effective and sometimes even counter-productive.

When the political system can do nothing to help, the best policy is to do exactly that, nothing.

 

Jim Johnston
Policy Adviser, Heartland Institute

 

Congestion Tolls Create Competition

Although I found Professor Shmanske’s "Bay Bridge Blunder" interesting (Regulation, 1996 No. 4), it was off the mark on several points.

Shmanske’s main thesis seems to be that the effort to implement congestion pricing on the San Francisco/Oakland Bay Bridge failed "due to the wasteful proposals for spending the money." In fact, however, the California legislature never got to the point of debating how the revenue from higher tolls should be spent. Ironically, the main reason that the legislators got cold feet was because of the overwhelming Republican victory in the 1994 congressional election. Key legislators feared that with such a resounding anti-tax, anti-government mood, the public would perceive a toll increase as nothing more than a new tax, and therefore any bill implementing even a trial toll would meet with certain failure. That could have been confirmed by contacting a few key members of the state legislature.

That experience teaches a lesson to advocates of cost-based pricing: road pricing is widely misunderstood and defies conventional political labels. In the 1970s, one of the most conservative members of California’s transportation board proposed higher road user-charges to reduce traffic congestion. Having read about his efforts in the paper, one citizen wrote a letter to the board member branding him a Communist!

Planners do stand guilty as accused for worrying about public involvement, equity, and about moving people (rather than just vehicles) on highways. Why the focus on public involvement? No publicly-owned bridge or highway in North America presently has congestion-based tolls. Thus, the Metropolitan Transportation Commission’s efforts were groundbreaking. MTC’s planners feared that pricing would be misunderstood by the press and public, therefore, they concentrated on reaching a consensus among toll policy stakeholders. Such a fear seemed amply justified by past history.

Shmanske’s assertion that "defenders of free markets" were deliberately omitted from the table is demonstrably false. He acknowledges that the Bay Area Council was part of the advisory group on road pricing but fails to point out that it is a corporate-funded organization representing business interests. It is true that many environmental groups were present in the discussions, but such groups are numerous and relatively powerful in the Bay Area. The hope was that environmental groups would be effective allies in building a constituency for congestion pricing, because of their shared interest in fair pricing.

Shmanske states, "The poor have no greater moral right to pollute or congest than . . . upper income groups." Of course, this argument can be reversed: do the rich have a greater moral right to pollute than the poor? If one accepts the former proposition but not the latter, then one must also assume that there is a perfect distribution of income in our society, a difficult position to defend.

As for the "rent seekers" who sought to spend the revenue generated from the higher congestion tolls, the intent of the entire demonstration of congestion tolls was to increase the overall capacity to move people in the Bay Bridge corridor. That is hardly a novel proposition. Thirty-five years ago, 60 percent of the Bay Area electorate voted to spend a portion of the revenue from bridge tolls to construct the parallel BART transit tube, and a subsequent election affirmed the public’s desire to spend twenty-five cents of every toll dollar on transit projects.

One of the benefits of prices, of course, is that they act as a signal to induce greater supply and investment. For various reasons, it is unlikely that the private or public sector will provide a new parallel bridge in the near future; therefore, the only possible increase in supply is through increasing public transit use and ridesharing in the corridor. Thus, the "rent" was to be spent on indirect capacity increases that would also benefit those paying the higher toll.

I was sorry to see that Professor Shmanske failed to mention other kinds of pricing proposals that could have decreased traffic congestion on the bridge. One would be to fine motorists who run out of gas on the bridge, which happens about fifteen times a day. Under current Bay Bridge policies, tow trucks drive to the errant motorist and reward him with two gallons of free gas. I would propose instead that the motorist be fined $200, and that this penalty be publicized on signs preceding the bridge. Moreover, roughly 40 to 60 percent of all congestion nationwide is caused by "incidents" that are not part of day-to-day congestion. Traffic engineers know that a fifteen minute lane blockage can lead to several hours of congestion when traffic is extremely dense (as it is on the Bay Bridge).

May I also suggest one more Swiftian proposal? Since it is difficult to build multiple bridges, each operated in competition, why not auction off each of the seventeen toll lanes to the highest bidder? That way, there would be competition, and a variety of prices would be available to motorists who could trade-off congestion delays against the prices charged by independent operators. That is as close as we are likely to get to true marginal cost pricing in this corridor.

 

Steve Colman
Lecturer, San Jose State University

 

O’Neill Responds to Taylor

Jerry Taylor appears to use Lewis Carrol for design guidance in his letter to the editor ("Shocking the Opponents" Regulation, 1996 No. 4). In Taylor’s wonderland, he assumes the roles of King, Humpty Dumpty-and All the King’s Men.

Recall the conversation in Through the Looking Glass between Humpty Dumpty and Alice. First, Taylor takes the role of Humpty ("When I use a word, it means just what I choose it to mean, neither more nor less,") declaring he knows the difference between right and entitlement. According to Webster, Roget, and basic word structure, entitlement and right are synonyms. As King, he decides which are the good rights and which are the bad rights (i.e., entitlements). Taylor states, "I do not seek to reallocate entitlements as Richard O’Neill suggests; I seek to end them. Likewise, I do not advocate reallocating property rights; I advocate strengthening them where they do exist and creating them where they do not." He claims he will create and redistribute entitlements (rights) in a way he deems appropriate. Reallocating every property right that was obtained in an unsavory manner would be a daunting task indeed.

As King, not only will Taylor reallocate existing rights, but he will also allow the continued use of eminent domain to deal with the NIMBY crowd’s fight to preserve their property values. That is an astonishing statement for a libertarian. Eminent domain is a forced taking. Should property rights be obtained in that way? How does a libertarian redistribute rights obtained by eminent domain? Robin Hood took from the tax collector and redistributed to the less fortunate. Taylor has not yet revealed his scheme.

Choice is important, but Taylor’s efficient markets appear to happen in fine libertarian tradition. Would it make a difference who designed them? Even semi-deities have allowed government subsidies and auction design. Adam Smith allowed government subsidies for education. Milton Friedman designed government monetary policy and T-bill auctions, though he appeared to have a blind spot when it came to airline seats (J. Simon, "Origins of the Airline Oversales Auction System," Regulation, 1994 No. 2).

Taylor also appears to confuse a natural monopoly with a legal or franchised monopoly. The King issues royal charters (franchised monopolies). Natural monopolies are just that, natural, and cannot be changed by the King’s fiat one way or the other. The decision to regulate natural monopolies should not be automatic, but it should be a decision by the government (i.e., the people).

In his broad-based attack, Taylor does not include state regulation. Are state boundaries sacrosanct? Certainly as King, Taylor could deal with such a minor problem. It makes no economic sense for state boundaries to define market boundaries (except perhaps for Alaska and Hawaii). How do we ensure the Constitutional protection of interstate commerce if states are behaving badly? It is difficult to guess how the founding fathers would have dealt with electric markets since they emerged more than a century after they had died. Is it just Federal regulation Taylor abhors or did he just run out of space or time to abhor state regulation?

Taylor appears to be advocating drastic and immediate change, "I do not want to replace O’Neill in the electric-policy sandbox; I want to blow it up." No matter what the problem, you don’t just summon a cultural revolution. As the King’s Men, will Jerry be able to put things back together again? I am enclosing a Leggos set for Jerry to practice on. Does Jerry want to rule Sim City? We have added extra computer security to protect our Sim City project. Maybe I should start my training to become an antitrust, eminent domain, or property rights transfer clerk. Jerry, do you have any good books on the subject?

 

Richard P. O’Neill

Director, Office of Economic
Policy Federal Energy
Regulatory Commission


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