The failure of public policy should be assigned as much blame if not more than the machinations of the diesel-bus industry for the substitution of inferior motor buses. It was, after all, the regulatory agencies modernization requirements that contributed to transit companies unmanageable debt load and inability to adapt in a constrained purchasing environment. It was also franchise requirements for service expansion that prompted widespread installation of buses in the first place and that made their continued purchase economical to transit companies in light of their other debts and obligations. Modernization requirements were in many cases the straw that broke the camel's back, forcing transit companies to provide service improvements and extensions that were economically so prohibitive that the companies had no choice but to implement full-scale motorization.Check out the rest of Bianco's article here.
Public policy also encouraged expansion of the automobile industry. The highway planning of this period is the prime example of how public policy continued to accommodate and facilitate the automobile. As far as mass transit was concerned, there was wide consensus that motor buses could easily operate on the great new superhighways; electric streetcars and trolleys could not.
If you are still not convinced of GM's innocence, check out Cliff Slater's article. Slater, who is not an academic but has an interest in the economic history of public transport in the U.S., has this to say:
The issue is whether or not the buses that replaced the electric streetcars were economically superior. Without GM's interference would the United States today have a viable streetcar system? This article makes the case that, GM or not, under a less onerous regulatory environment, buses would have replaced streetcars even earlier than they actually did.Check out the rest of Slater's article here.