Topic: Regulatory Studies

What We Know About Fatal Tesla Accident

Numerous media stories have reported the first fatality in a self-driving car. The most important thing to know is that the Tesla that was involved in the crash was not a self-driving car, that is, a car that “performs all safety-critical functions for the entire trip” or even a car in which “the driver can fully cede control of all safety-critical functions in certain conditions” (otherwise known as “level 4” and “level 3” cars in the National Highway Traffic Safety Administration’s classification of automated cars). 

Instead, the Tesla was equipped with an Advanced Driver Assistance System (ADAS) that performs some steering and speed functions but still requires continuous driver monitoring. In the NHTSA’s classification, it was a “level 2” car, meaning it automated “at least two primary control functions,” in this case, adaptive cruise control (controlling speeds to avoid hitting vehicles in front) and lane centering (steering within the stripes). BMW, Mercedes, and other manufacturers also offer cars with these functions, the difference being that the other cars do not allow drivers to take their hands off the wheel for more than a few seconds while the Tesla does. This may have given some Tesla drivers the impression that their car was a level 3 vehicle that could fully take over “all safety-critical functions in certain conditions.”

The next most important thing to know about the crash is that the Florida Highway Patrol’s initial accident report blamed the accident on the truck driver’s failure to yield the right-of-way to the Tesla. When making a left turn from the eastbound lanes of the highway, the truck should have yielded to the westbound Tesla. Still, it is possible if not likely that the accident would not have happened if the vehicle’s driver had been paying full attention to the road.

Mobileye, the company that made the radar system used in the Tesla, says that its system is designed only to prevent a car from rear-ending slower-moving vehicles, not to keep them from hitting vehicles laterally crossing the car’s path. Even if the sensors had detected the truck, automatic braking systems typically can come to a full stop only if the vehicle is traveling no more than 30 miles per hour faster than the object. Since the road in question is marked for 65 miles per hour, the system could not have stopped the Tesla.

Thus, the Tesla driver who was killed in the accident, Joshua Brown, probably should have been paying more attention. There are conflicting reports about whether Brown was speeding or was watching a movie at the the time of the accident. Neither were mentioned in the preliminary accident report, but even if true it doesn’t change the fact that the Tesla had the right of way over the truck.

Just two months before the accident, Duke University roboticist Missy Cummings presciently testified before Congress that auto companies were “rushing to market” before self-driving cars are ready, and “someone is going to die.” She didn’t mention Tesla by name, but since that is so far the only car company that allows American drivers to take their hands off the wheel for more than a few seconds, she may have had it in mind.

Tesla’s autopilot system relies on two forward-facing sensors: a non-stereo camera and radar. Tests by a Tesla owner have shown that the system using these sensors will not always stop a vehicle from hitting obstacles in the road. By comparison, the Mercedes and BMW systems use a stereo camera (which can more quickly detect approaching obstacles) and five radar sensors (which can detect different kinds of obstacles over a wider range). Thus, in allowing drivers to take hands off the steering wheel, Tesla may have oversold its cars’ capabilities.

The day before information about the Tesla accident became publicly known, the National Association of City Transportation Officials issued a policy statement about self-driving cars urging, among other things, that drivers not be allowed to use “partially automated vehicles” except on limited access freeways because “such vehicles have been shown to encourage unsafe driving behavior.” While this would have prevented the Tesla crash, it ignores the possibility that partial automation might have net safety benefits overall.

A few days after the accident became publicly known, NHTSA announced that traffic fatalities had increased by 7.7 percent in 2015, the largest increase in many years. As Tesla CEO Elon Musk somewhat defensively pointed out, partial automation can probably cut fatalities in half, and full automation is likely to cut them in half again. State and federal regulators should not allow one accident in an ADAS-equipped car to color their judgments about true self-driving cars that are still under development.

The Constitution Protects Against NIMBYism

It should surprise no one that the government isn’t particularly good at respecting property rights. Still, the Constitution requires that property owners be provided with “due process of law” against arbitrary and unjustified deprivation of their right to put their property to beneficial use. According to several federal appellate courts, however, landowners lack such protections unless they show that they have a statutory “entitlement” to use their land.

This is circular Humpty Dumpty logic. Indeed, that approach impermissibly presumes the legitimacy of restrictions, without considering whether they are lawfully applied.

Most recently, the New York-based U.S. Court of Appeals for the Second Circuit employed the “entitlement” theory to deprive a small developer of its right to upgrade run-down apartment buildings. The NYC Landmarks Commission deprived Stahl York Avenue Company of its property rights by designating these nondescript buildings as landmarks—this despite a previous ruling that these exact buildings lacked any architectural or cultural merit worth preserving.

The Social Security Administration Shouldn’t Be Deciding Who’s Too “Mentally Defective” to Own a Gun

Unable to legislate new restrictions on what kind of arms can be sold, the government has embarked on a long-term effort of adding an untold number of Americans to “no buy” lists—based on the unfounded conjecture that they pose a “danger” to others—and deprive them of a fundamental constitutional right. The Gun Control Act of 1968 and NICS Improvement Amendments Act of 2007 requires that agencies with pertinent records on who is or is not “a mental defective” disclose those records to the attorney general so those people can be excluded from purchasing arms through the National Instant Criminal Background Check System (NICS).

The Social Security Administration (SSA) has proposed a new regulation that would create a process for transferring the records of those who seek a “representative payee” (legal proxy) under Social Security disability benefits programs to NICS, so that they may be considered a “mental defective” and thus lose their Second Amendment rights. The proposed SSA rule is arbitrary—there’s no evidence that someone who needs help with SSA paperwork can’t be trusted with a gun—and inconsistent with the regulatory and statutory scheme, not to mention blatantly unconstitutional.

Accordingly, for the first time ever, Cato’s Center for Constitutional Studies, with the help of law professors Josh Blackman and Gregory Wallace, has filed a public comment objecting to the rule on 10 different grounds. No one disputes that the government has an interest in keeping guns out of the hands of those who could harm themselves or others, but depriving a constitutional right requires due process of law. Under existing law, the root requirement of the Fifth Amendment’s Due Process Clause is that an individual receive a hearing before she is deprived of a constitutional right by a federal agency, one where the government must justify its restriction.

Postal Reform: Timid Americans and Bold Europeans

The U.S. Postal Service (USPS) has lost more than $50 billion since 2007, even though it enjoys legal monopolies over letters, bulk mail, and access to mailboxes. The USPS has a unionized, bureaucratic, and overpaid workforce. And as a government entity, it pays no income or property taxes, allowing it to compete unfairly with private firms in the package and express delivery businesses.

As we discussed yesterday at a Cato forum on Capitol Hill, the USPS needs a major overhaul. It should be privatized and opened to competition.

But instead of reform, congressional Republicans are moving forward with legislation that tinkers around the edges. Their bill adjusts retiree health care, hikes stamp prices, and retains six-day delivery despite a 40 percent drop in letter volume since 2000. The bill would also create “new authority to offer non-postal products,” thus threatening to increase the tax-free entity’s unfair competition against private firms.

The Democrats overseeing postal issues are happy as larks with the GOP bill, which appears to be a victory for unionized postal workers. You might wonder what the point of electing Republicans to Congress is if they are just going to let Democrats run the show in defense of unions and monopolies.

Republicans see their party as the one favoring free enterprise and competition. Yet those pro-growth goals are obliterated in America’s tightly regulated postal monopoly. When it comes to the postal industry, federal law defends bureaucracy and bans entrepreneurship, and the GOP seems to have no problem with that.

GE Capital: Smaller Is Just Better

Earlier this week, the Financial Stability Oversight Council (FSOC) removed GE Capital from its list of systemically important financial institutions (or SIFIs).  How big a deal is this?  Big.  And not so big.  And a little bit scary.  Let’s back up a bit to see why.

FSOC is a new entity created by Dodd-Frank.  Its members are the heads of the federal financial agencies, with the Secretary of the Treasury serving as Chair.  In comparison to other similar bodies, which only advise the president, FSOC has broad authority to act.  Chief among its tools is the ability to designate an entity as a SIFI, and to impose stringent oversight and regulatory requirements on it thereafter. 

The SIFI designation and attendant oversight have been promoted as a means to end Too Big to Fail.  Many people, myself among them, have questioned how labeling entities as systemically important and putting them under greater oversight can possibly end Too Big to Fail.  Isn’t a SIFI designation essentially the same as slapping a big “TBTF” label on the thing?  Well, here’s where GE Capital’s story gets scary.

Reason on the House GOP Health Plan: “Like Obamacare—Except, Possibly, Worse”

Echoing concerns I expressed last week, Reason’s Peter Suderman notices a problem with House Republicans’ new plan to replace ObamaCare:

As it turns out, the health care policy that Republicans might pursue looks, well, a lot like Obamacare—except, possibly, worse.

Rather than offer ObamaCare-lite, Congress should repeal ObamaCare and then make health care better, more affordable, and more secure by moving toward a market system.
 
Sen. Jeff Flake (R-AZ) and Rep. Dave Brat (R-VA) have introduced legislation that contains the building blocks of such an approach.

New In the Summer Issue of Regulation

The latest issue of Regulation magazine has been released on the Cato website.

The cover article, by Christopher Robertson and Jamie Cox Robertson of the University of Arizona, examines the extent of over incarceration in the U.S.  Why are so many innocent people convicted of crimes? They review recent scholarship that concludes that many types of evidence introduced by prosecutors to convince jurors of guilt, such as bite mark, fingerprint, and bullet analysis, are not scientifically reliable. The authors suggest various remedies to the wasteful incarceration problem including public rewards for attorneys who demonstrate that a prisoner should be released.

Researchers John Lott and Gary Mauser explore empirical research on firearms. They found that the findings of such research vary systematically with the disciplinary orientation of the authors.  A large majority of articles written by economists find that expanded legal access to firearms reduces crime and does not increase the suicide rate, and that gun owners who are approved for concealed-carry are less likely to commit crimes than ordinary Americans. In contrast Criminologists were more evenly divided on these questions.

Two articles critique regulatory rationales rooted in behavioral economics. In Infantilization by Regulation law professors Jonathan Klick and Greg Mitchell argue that protecting people from the effects of their choices reduces their ability to think critically about them.  Georgetown ethics professor John Hasnas explores how much liberty is preserved under modern “libertarian paternalism.” He then asks whether the insights of behavioral economics apply to public decisions, argues yes, and concludes that U.S. Constitution is an excellent example of choice architecture.

One of the most discussed topics in higher education policy is the rate of inflation in university tuition. Top William and Mary economists find empirical evidence that highly selective schools reduce financial aid to students who receive federal tuition support.

In our Briefly Noted articles economist Ike Brannon argues that cities harm transit riders by over-providing subsidized parking near street corners. Brannon and the American Action Forum’s Sam Batkins question whether expanded family leave policies would harm workers. University of California, Irvine emeritus professor Richard McKenzie shares the results of his survey that found servers at fast-casual restaurants would not support substituting higher hourly wages for the current tipped-wage system. Finally, University of Michigan professor Thomas Hemphill lays out a practical approach to reforming occupational licensing laws.

Book reviews include Free Market Environmentalism reviewed by Timothy Brennan, Robert Reich’s Saving Capitalism and Robert Gordon’s The Rise and Fall of American Growth reviewed by David R. Henderson, and Phil Murray’s review of Dani Rodrik’s Economics Rules.

 

My Working Papers column describes papers on cigarette taxes and food stamps, e-cigarettes and adolescent smoking, corporate inversions, and public housing and crime.