How Good Are Companies at Self-Regulating?

According to this they're very good at discovering what will hurt people. It's just...they don't care:

"The sordid saga of elevated formaldehyde levels in the trailers supplied to Katrina victims is the kind of incident that makes you shake your head in awe at the shameful behavior of damn near everyone involved: The trailor manufacturers knew their products had unsafe levels of formaldehyde. One company, Gulf Stream Coach, even conducted internal tests on the issue back in 2006--but then hushed up the findings as "irrelevant" since FEMA apparently already knew about the problem.

"FEMA, meanwhile, did nothing with its knowledge--except reject Gulf Stream Coach's later offer to run addtional tests.

"Better still, corporate chiefs (and some Republican congressmen, of course) are now insisting that the trailer makers, despite knowing that their products were unsafe, should not bear any of the responsibility, because the government should have been clearer in establishing binding, consistent air-quality standards. "Instead of beating up manufacturers, we ought to give them a little vote of confidence," recommended Indiana's Dan Burton, citing the dearth of formaldehyde complaints pre-2006.

"Whatever else this line of argument accomplishes, it certainly draws into question that whole notion of self-regulation by industry. These manufacturers knew their products posed a health hazard. They had even conducted tests to prove it! But they apparently didn't feel compelled to do anything about the risk, because they hadn't been specifically ordered to by the federal government. Can't you just hear the board meeting debate now: Well, if the government isn't going to tell us exactly how far we must go to stop poisoning consumers, why on earth should we bother to try?

Katrina and FEMA: the disasters that keeps on hurting.