By James F. Cotter

Regulation of industry seems to have gone out of style in the Reagan era, perhaps in part because of President Carter’s Hooverian   bungling of the economy;  and the anti-regulatory attitude actually continued until the nation was beset by its current economic slump.  Back then, the spirit of deregulation appeared to take on a life of its own.  Even President Clinton joined in, signing into law the Gramm-Leach-Bliley bill, which overturned Glass-Steagall, in November 1999.  This was only one example of our government’s failure to heed the lessons of the past.

President Reagan’s admiration for Calvin Coolidge was evident in his economic policies.  Deregulation was a central tenet of Reaganomics.  (1), (2)  In college, I penned the following observation about Reaganomics in an opinion piece in a  campus newspaper  a few days before Reagan’s landslide re-election:  “Reagan’s skewed sense of priorities has resulted in hefty tax breaks for corporations and the rich.  The poor are worse off than when Reagan took office.”  I also noted,   “The results of the president’s economic mismanagement are likely to be felt for a long time.” (3) I didn’t know it would be this long.

During the 1980 campaign, Reagan deplored the deficit.  Once elected to the presidency, he joked that the deficit was big enough to take care of itself.  Actually he created deficits larger than any the nation had ever seen before.  Bank failures tripled during his first term, and unemployment reached nearly 11 percent.

“Deregulation became a  watchword  of the Reagan administration,” according to Grolier Encyclopedia on-line.  “But critics charged that reduced regulation created hazards to public health and safety.” (4)

In The Role of a Lifetime, Lou Cannon writes, “OMB led the deregulatory charge, seeking to accomplish through executive action what another administration might have attempted  through the legislative process.” (4)

This mindless mania for deregulation may now be a thing of the past.  In the wake of the economic crisis, and specifically the incomprehensible failure of the Securities and Exchange Commission to nail Bernie Madoff years ago in spite of numerous warnings, particularly those of Harry Markopolis, the push for deregulation as an end in itself, or because it is “the thing to do,” may be a spent force.

This is not to say that deregulation is never a good idea.  But a sensible approach to it would entail a consideration of history and a realistic assessment of current realities, including the fact that unbridled greed is always destructive.

REFERENCES

1.      http://www.answers.com/topic/reaganomics

2.      http://www.reference.com/browse/Reaganomics?jss=1

3.      The Ram Page,  Nov. 1, 1984

4.      http://www.ontheissues.org/Celeb/Ronald_Reagan_Government_Reform.htm

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