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In February, General Motors (GM) began a recall that has grown to include 2.6 million vehicles due to the installation of a defective ignition switch The switches caused the ignition key to move from a running position to an accessory or off position while the car when moving and the sudden loss of power steering, as well as the disabling of power brakes and airbags caused at least thirteen people to lose their lives. GM has come under fire for the recall since the company was first made aware of the problem in 2001 and decided that it did not warrant taking action. There is also evidence that federal regulators were aware of the faulty ignition switches but failed to do due diligence in investigating GM. Additionally, since the company is not legally liable for accidents that occurred with its products before 2009 due to the bankruptcy filing, there are questions about whether GM was forthcoming to federal officials about the switches when it was bailed out. The incident has been dubbed “Switchgate” by some of the media and the company’s new CEO (as well as first female CEO) Mary Barra is now tasked with defending the company to Congress and restoring faith in a company that has seen its share of the American market decline over the last forty years.
This topic brief will describe the roots of the current GM recall, break down the testimony of GM and federal regulators before Congress, and then analyze how GM and the federal government may respond to the scandal and the political and economic implications for the parties involved.
Readers are also encouraged to use the links below and in the related R&D to bolster their files about this topic.
In modern times, American policymakers have loved to declare war against a social or medical problem. In 1964, President Lyndon Johnson declared a war on poverty. In 1971, President Richard Nixon declared simultaneous wars against cancer and illicit drugs. And President George W. Bush declared a war on terrorism after the September 11th attacks. Fighting an idea or a long-term problem usually opens policymakers up to criticisms that such wars are unwinnable and unfairly raise public expectations. The war on drugs is a case in point, as the United States has committed billions of dollars over the last forty years to halt the use and smuggling of illicit drugs. In fact, prior to September 11th there were concerns that American forces would become involved in the Colombia civil war between its government and the FARC, a group of communist rebels that use the drug trade to bolster their coffers. The war on drugs has been criticized for punishing low-level offenders, which has had a disproportionate impact on minority males, and largely failing to solve America’s drug problem. Recently, heroin use in the United States has become a significant problem as the federal government has cracked down on prescription drug abuse and two weeks ago, on March 10th, Attorney General Eric Holder stated that the United States facing an “urgent public health crisis” concerning heroin. The death of Academy Award-winning actor Philip Seymour Hoffman last month due to an overdose of heroin and other drugs has also contributed to raising national awareness about this issue.
Since the 1980s, when a deregulatory climate emerged in Washington D.C., American media companies have launched consolidation efforts to buy up smaller competitors to expand market share, taken control of national and local television stations, and merged with telecommunications companies to acquire a share of the nation’s Internet market. The proposed $45.2 billion merger between Comcast and Time Warner Cable, which would combine the nation’s top two cable companies, both of which also provide Internet access, has alarmed consumer advocates that worry it will harm consumers through higher prices and selective access to content. The principle of net neutrality, whereby all Internet content is treated equally by Internet Service Providers (ISPs), was established by the Federal Communications Commission (FCC) in 2010 to ensure that large media conglomerates could not prejudice certain forms of Internet content over others. However, in January a federal appeals court ruled that the FCC had no statutory (lawful) authority to enact those net neutrality rules based on the way that it has classified ISPs. A recent deal that Netflix, a streaming and DVD-based movie distribution service, made with Comcast is seen by consumer watchdog groups as the beginning of a “pay-to-play” Internet where content distributors will be forced to pay ISPs to access their networks or acquire satisfactory Internet speed so that they do not lose existing customers.
For the last three decades, U.S. policymakers have grappled with the problem of illegal immigration, whereby immigrants from all parts of the world (not just Mexico) come to the United States and live and work without securing legal documents that allow them to do so. In 1986, the United States thought it could solve the problem with an amnesty package, but the number of illegal immigrants has increased since that time and it is estimated today that there are 11-12 million illegal (also called “undocumented” by immigration groups and their allies) immigrants in the U.S. today. In fact, studies have shown that since the 1990s, illegal immigration in the United States has largely outpaced legal immigration. Deporting all of these people would be taxing for the federal government and be a public relations nightmare. As a result, the federal government is caught in a tough position of how to deal with these 11-12 million people while ensuring that future waves of unlawful immigration do not happen again. In 2012, President Barack Obama promised action on immigration reform to address this issue and although the Senate passed a bipartisan immigration reform bill last June, the Republican dominated House has yet to do the same and has refused to take up the Senate bill. Due to the growing Latino population in the United States (although again, I would caution extempers that illegal immigration is not exclusively a Latino issue), immigration reform is likely to be a hot button political and social issue for quite some time and extempers need to have a firm grasp on the legislative history and possibilities of reform to answer questions about this subject.