A central lesson of the 2008 financial crisis is the danger of regulatory capture. Banks and other financial institutions, such as Fannie Mae, upon which society depended for basic economic services consistently underestimated and, at times, understated the risks of their profit-seeking operations. Many government agencies tasked with curbing such tendencies did not do so, in part because they – and the ultimate authorities in Congress –had fallen under industry’s sway. A devastating crash resulted.

The analogy between that history and the crisis surrounding Boeing, America’s preeminent manufacturer of civilian passenger jets, is not precise, but it is instructive. Out of commercial motivation – competition with its European rival, Airbus – Boeing urgently developed the 737 Max airliner in 2011. A key innovation was anti-stall software known as MCAS, which Boeing designed to operate based on data from just one sensor, rather than redundant systems, even though this could mean that one flawed set of inputs might baffle pilots and doom a jet.

Just such a disaster scenario did occur, not once but twice, first in Indonesia in the fall of 2018 and again in Ethiopia this past March. The combined death toll of 346 forced Boeing to ground its worldwide fleet of 737 Max planes – until early 2020, probably – and to endure withering scrutiny from the media, pilots, airlines and, this week, committees of the House and Senate. Boeing has lost billions in stock market value and sales.

It’s a convoluted and technically complex tale, but the gist is that Boeing failed to act on information it had that could have prevented the disasters. Concerns about MCAS, the adequacy of pilot training and other safety-related issues were raised more than once in the company prior to the first crash. Boeing’s top executive, Dennis Muilenburg, apologized to victims’ families in emotional testimony this week. He was less effective in explaining how it could have been that he did not respond aggressively and personally to a Boeing test pilot’s text-message warnings about the MCAS as early as 2016.

Nothing fundamental changed despite the warnings; even after the second crash, in Ethiopia, Boeing tried to deflect blame and resisted grounding the 737 Max fleet until regulators around the world barred it from their airspace. Only then did the Federal Aviation Administration say that it, too, would bow to safety concerns – a major blow to the international prestige and credibility of U.S. regulators.

A more aggressive FAA might have forced Boeing to act earlier, as part of the certification process for the 737 Max. Over the years, however, the giant company, which garners a quarter of its $100 billion-plus annual sales from the Pentagon and deploys a small army of lobbyists in Washington, had prevailed upon lawmakers to allow its own employees to take on more and more of the technical work involved in obtaining FAA certification. Semi-self-regulation appeared to be working fine – until, inevitably, appearances proved misleading. It’s appropriate for Congress to hold Boeing and its executives accountable, but preventing another disaster will require lawmakers themselves to enact a swift, and fully funded, restoration of regulatory capability and credibility.

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