Timmy on why VW should be fined

Another way to put this is that a market system works best if all in it are fundamentally honest. Humans aren’t, of course, which is why we do fine people $4.3 billion occasionally, pour encourager les autres.

35 comments on “Timmy on why VW should be fined

  1. America’s use of “fines” is simply theft with menaces. I am utterly unconvinced that VW did much that was wrong. Even if it did, I fail to see how shoveling money to the Left’s favorite charities is a useful remedy.

    It is also highly discriminatory. Non-American companies usually pay much less than foreign ones do.

    There should be no seizures without legal process. Nor should the the people doing the seizing benefit from the seizure. None of this is true for VW.

  2. Tim

    You could link this post with the death penalty string; the deterrence argument would surely work well here

  3. “Non-American companies usually pay much less than foreign ones do.” Yeah, and a larger fraction goes straight to the politicians. And maybe judges?

  4. The Chemistry… the chemical reaction inside an internal combustion engine is determined by Nature… decreasing CO2 emissions results in a concommitant increase in emissions of oxides of nitrogen also controlled by Government edict.

    The Choice: meet CO2 emissions or meet nitrogen oxides emissions standards.

    CO2 emissions being currently in fashion, they chose that and so had to fiddle emissions testing for oxides of nitrogen.

    So VW is fined by Government which caused the problem.

    Legislation cannot overturn Nature’s laws… King Cnut knew that but then he did not have the benefit of a modern education.

    As for the $4.3billion fine upon whom will that tax be incident?

    Workers?
    Consumers?
    Shareholders?

    I wonder.

  5. Honest fair play is needed between the principals in a deal.

    When gangs of thieving thugs hove into view spewing eco-freak lies that is another matter.

  6. Agree with SMFS, entirely. It’s theft with menaces.

    Tim is often found saying that tax which is due, according to the rules, should be paid. If you want more tax, change the rules. Unlike Murphy, who wants people to make vague moral judgements about how much tax people should pay.

    In this case, the regulators wrote the emissions standards and rules, and VW complied with them. That this made the regulators fools because they didn’t anticipate the inevitable results of insisting on a particular set of standards, doesn’t mean that VW should be fined; neither does it mean that VW should have held up its corporate hand and pointed out the regulator’s error.

    It just means the regulator is incompetent.

  7. markc,

    Two things: yes, the emissions testing rules were lazy man’s rules – run the thing on a fixed cycle on a dyno. It should have included a run over normal terrain, and some form of ‘if the results differ too much, we have a problem’ escalation clause.

    But the rules include a no-cheating clause. It was that rule that VW breached.

    And Mother Nature does let you have low CO and low Nox – but to get that you need a urea catalyst to treat the exhaust. VW didn’t, in the naughty vehicles.

    I have no problem with the gummint mandating (or stronly encouraging) good clean air. It’s obviously working – Western cities today are vastly better than a few decades ago. And we’re richer, en masse, and can afford to pay for it.

  8. But why are the UK government going along with the lie that VW don’t owe UK consumers compensation?

    The Consumer Protection (Amendment) Regulations 2014 introduced punitive damages for misleading sales and advertising in the UK that breaches EU consumer law.

    If the misleading action is proven then “the right to a discount” leaves the court no option other than to award the affected consumer a discount of 0%, 25%, 50%, 75% or 100% of the total cost of the vehicle or each hire payment. The implications could be massive.

    So why haven’t the government advised UK consumer about this or done anything else to see consumers compensated? Fishy?

  9. Excellent article, Tim. The regulations may be wholly misconceived; but if you cheat and dissemble to meet said regulations – in order to mislead the consumer and achieve market advantage – you should be punished. One of the most vital roles of a minimal state is to ensure a free and undistorted market.

  10. GM use dangerous airbags (knowingly), people die, not fined. VW cheat the emissions test, get fined $4bn.

    Its a shakedown of a foreign company, just like BP was after the Deepwater accident. The US legal and regulatory system is as biased against foreign companies as the most corrupt 3rd world state.

  11. It’s just a cost of doing business, there’s still loads of potential profit to be had if they set up a manufacturing plant in the US

  12. “One of the most vital roles of a minimal state is to ensure a free and undistorted market.”

    And imposing eco-freak crap is “a free and undistorted market” Theo?

    I think not.

    VW should have told the EPA to shove their regs . But since Uncle Scum has lots of thugs with guns, subterfuge was the next best thing.

  13. Ironman, I note you’re use of irony. I’m sharp, like that. But your analogy is flawed by the absence of the process in the VW case, by contrast with its existence in the case of the mass murderer.

  14. “The US legal and regulatory system is as biased against foreign companies as the most corrupt 3rd world state.” Aye, and still executives keen to make their names decide to enter the American market at the future expense of the shareholder.

    Some days politicians elsewhere will begin to decide “Fuck this, the Russkis and Chinks would be more reliable allies than this shower”.

  15. “For decades we’ve been favouring diesel engines because of the fuel economy. That means cheaper driving of course, a good thing, and also less in the way of CO2 emissions per mile driven.”

    Well we were “nudged” in that direction by Governments and now its our fault for buying them.

    “It’s one of those better, faster, cheaper engineering problems, pick any two of the three, that’s all you’re allowed.”

    I like the word trilemma for these cases.

    “As for the $4.3billion fine upon whom will that tax be incident?

    Workers?
    Consumers?
    Shareholders?”

    Given its a cut-throat market and VW has lost a lot of good will and VW unions are quite strong I think (hope) most of it will fall where it should, on the shareholders hopefully in the form of lower dividends and share price. They approved the managers who got them in to this mess so they can pay.

  16. on the shareholders hopefully

    If I’m not mistaken the shareholders are primarily the unions, the Land of Lower Saxony (Niedersachsen), the Piech family, and Qatar. Between them they control almost 90% of the voting stock. Except for (possibly) Qatar, they deserve what they get.

    Of course the minority shareholders are not pleased. But then of course they invested in an enterprise in which they had absolutely no say.

  17. Ecksy
    Yes, the regulations are largely eco-freak crap. But VW did not obey the regulations and so deceived consumers, which is not on. Even bad regulations have to be obeyed: VW cannot pick and choose which regulations it will implement.

  18. Has there been an EPA campaign to see what the difference between “on rig” tests and actual “on road” is like for all manufacturers?

    just saying…

    Like EPA left VW on the shelf for 18 months + until it became expedient to distract from elsewhere.

    VW do actually only have themselves to blame for the final outcome ….

  19. Theophrastus – “Even bad regulations have to be obeyed: VW cannot pick and choose which regulations it will implement.”

    Increasingly everyone ignores regulations. There are too many of them for a start. Someone in the US wrote a book called Three Felonies a Day based on the estimation that the average person commits three felonies a day. I doubt Britain is much behind.

    Put it this way, there are supposed to be some 2,500 pages of relevant regulations to opening a sandwich shop in the UK. How many restaurants do you think are obeying all of them?

  20. The problem is that all manufacturers have been taking the piss out of regulations and standardised testing for years.

    For example, one chap I was talking to at a party used to work as an engineer for a number of car firms. He regaled us with stories of sending new cars for standardised emissions and fuel economy testing with the engines filled full of thin sewing machine oil rather than engine oil, to reduce drag and get a better result.

    Another story I heard was that back in the 80s SAAB would sell their 900s in the US with a “diet” clean ECU fitted from the factory, but they’d swap it out for a “full fat” ECU at the first service…

  21. “Even bad regulations have to be obeyed: VW cannot pick and choose which regulations it will implement.”

    No Theo.

    There comes a point where enough has to be enough or there will be nothing worthwhile left standing.

    There are of course the practicalities — Uncle Scum and the thugs will not go easily away. But co-operating with your own destruction just makes it more certain.

  22. I would have some sympathy with VW were German industry giants not responsible for most of the overbearing regulation that the EU foists on the rest of us. I wonder how much senseless, expensive EU regulation VW has lobbied for and/or approved?

  23. Shouldn’t we also be finding the people/government that pushed the UK consumer into buying diesel cars?
    if not why not?

    Discuss.

  24. “Even bad regulations have to be obeyed: VW cannot pick and choose which regulations it will implement.”

    No, that’s where the right to civil disobedience comes from. You *do* have a right to refuse to obey a law or regulation you do not agree with, with the collerary that by doing so you fully accept that you will be prosecuted for doing so. It’s the acceptance that you will be punished that is the price you pay for highlighting the bad law/regulation.

    It really gets my goat when protesters complain about being arrested and prosecuted as a result of their protesting. But that’s the whole point! You sell your liberty to buy the publicity of the bad law. If there was no cost to protesting a bad law then it wouldn’t be a protest.

  25. dearieme,

    > Aye, and still executives keen to make their names decide to enter the American market at the future expense of the shareholder.

    HSBC’s response to the disgusting FATCA legislation was to pull all their business out of the US. Good for them. Every other bank and the EU and our own government all capitulated, the supine fuckers.

    What I hateabout fines like this is the way they go into the state’s coffers. Why? Surely, logically and ethically, some of this should go to people who bought VWs?

  26. jgh:

    I agree about civil disobedience. VW could in theory have disobeyed the regulations and said so publicly — which would have involved huge reputational damage, various sanctions and then enforcement action — or it could have met the regulations. But it did neither: it pretended to comply with the regulations, and so it deceived its customers and dishonestly achieved a competitive advantage in the market for vehicles.

    Also, Tim N, above, points to the hypocrisy here. VW has lobbied the EU Commission and national governments elsewhere for the introduction of numerous regulations with the aim of restricting opportunities for new entrants to the car market (thus disadvantaging the consumer). Then VW decided to disobey secretly certain regulations, and they now find themselves hoist with their own petard.

    SMFS
    there are supposed to be some 2,500 pages of relevant regulations to opening a sandwich shop in the UK. How many restaurants do you think are obeying all of them?

    The vast majority of them, as the regulations are enforced strictly. I know because I’ve run a business with catering outlets. Restaurant owners, while jibbing at some of the detail, generally welcome the regulation – outbreaks of food poisoning being very bad for the sector as a whole. And meanwhile the number of eateries in the UK continues to grow, so the regulations can’t be too onerous.

    Granted, though, levels of regulation in other parts of life are dementedly high. I doubt the need for the 50+ pages of guidance and regulation governing the use of glass in internal doors in sheltered housing for the elderly.

  27. Rhyds

    a pal of my dad who is an obsessive fuel counter bought a new Kia Picanto. Joy! – for the first six months he was getting 75mpg+ – it went in for the first service and the consumption plummeted to 50mpg-ish.

    Yes – the dealer “upgraded” the ECU firmware.

  28. Did VW not do what they did because of the government initially intervening in the market by way of emissions regulations?

    You can have a free market or you can have a market with government intervention. You can’t have both.

  29. @ jgh
    Quite! Coincidentally just had an email from an old friend I hadn’t seen for 50 years who missed a lecture when he got arrested for picketing the South African Embassy in a “Free Mandela” protest: he was subsequently released wihout charge because his protest was perfectly legal but the cops didn’t understand that and he fully expected to be arrested because he didn’t expect the cops to know the law well enough. He was punished for opposing his government even though it wasn’t illegal.

  30. @ Bucko
    Well, up to a point Lord Copper.
    VW fiddled the emission readings to apparently comply with US regulations, BUT they then lied to their customers: for the latter they deserve a bloody nose.

  31. Bucko

    “You can have a free market or you can have a market with government intervention. You can’t have both.”

    Market freedom admits of degrees.

  32. John77

    “VW fiddled the emission readings to apparently comply with US regulations, BUT they then lied to their customers: for the latter they deserve a bloody nose.”

    Exactly! However undesirable or misconceived the regulations, VW WAS DISHONEST, and that is what they are being punished for. VW is not a martyr to eco- bullshit.

  33. “And Mother Nature does let you have low CO and low Nox – but to get that you need a urea catalyst to treat the exhaust.”

    VW took the piss by not using the piss.

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