Jimmy Carter

When Democrats Loved Deregulation

Jimmy Carter, Ted Kennedy, and 1970s Jerry Brown understood that government regulations hurt the little guy while enriching big-business incumbents.

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When President Donald Trump bragged in his first State of the Union address about cutting red tape, the Democratic response was no surprise. "Deregulation," warned Center for American Progress Senior Advisor Sam Berger in Fortune, "is simply a code word for letting big businesses cut corners at everyone else's expense."

But many leading Democrats had the opposite view in the 1970s. Then, at the dawn of the deregulation era, left-leaning politicians and economists understood that excessive government management of industry let the big-business incumbents get away with lousy performance at the expense of competitors, taxpayers, and consumers. The leading figure in that fight to cut red tape and shut down entire federal agencies was none other than Jimmy Carter.

It was Sen. Ted Kennedy who held extensive Senate hearings in the early '70s, with testimony from the likes of Ralph Nader and liberal economist Alfred Kahn, about the benefits of lifting state controls on the airline industry. The resulting Airline Deregulation Act of 1978, signed by Carter, killed the Civil Aeronautics Board—a federal agency that decided which airlines could fly where, and even what they could charge. The new competition to the old airline cartel reduced fares, expanded destinations, increased safety, and made air travel an option for those of us who aren't rich.

Carter also lifted stifling government oversight of the rail and trucking industries under a Democrat-controlled House and Senate. The result? Competition intensified, prices dropped, and consumers saved more money on everyday products.

In 1978, President Carter signed a bill that lifted Prohibition-era criminal restrictions on home brewing. The legalization of do-it-yourself beer production unleashed a boom of experimentation, paving the way for the craft beer revolution that is ongoing to this day. The year that Carter loosened the rules, the U.S. was home to a mere 50 breweries. Today there are well over 5,000. In two generations of beermaking, America went from global laughingstock to world leader.

The governor of California during Carter's presidency was none other than Jerry Brown, then known as "Governor Moonbeam" for his far-out musings, glittery social life, and lefty politics. Yet Brown, too, could be a fiery skeptic of government. In his terrific second inaugural address in 1979, Brown stated that "many regulations primarily protect the past, prop up privilege or prevent sensible economic choices."

But even while some sectors were unleashed four decades ago by far-seeing Democrats and Republicans alike, too many governments at the local, state, and federal levels have forgotten those lessons, and instead imposed entirely new categories of regulations. Occupational licensing, which applied to about one in 10 jobs 40 years ago, now impacts one in three. Arizona will put its citizens in jail for six months for operating a blow dryer without a license. Texas wants to make it a criminal offense to buy unauthorized pecans. And Washington, D.C., wants to require that all daycare providers have a college degree.

The aggregate cost of these regulations is staggering. Last year, according to the pro-free markets Competitive Enterprise Institute, federal regulations cost Americans $1.9 trillion—or around $15,00 per household. And while President Trump has cut the number of pages in the Federal Register by about one-third since he took office, there are still some 67 federal departments, agencies, and commissions currently working on more than 3,000 new regulations. It seems you can't stop the regulatory state, you can only hope to contain it.

As Alfred Kahn and his liberal contemporaries could have explained, licensing boards and other regulatory bodies tend to be dominated by industry incumbents who are mainly interested in protecting their own turf. Regulation is the friend, not enemy, of big business.

So how did the party of Jimmy Carter and sideburns-era Jerry Brown become the ideological home of Elizabeth Warren and Alexandria Ocasio-Cortez? One explanation may be that Democratic support for deregulation back then was born out of a sense of nearly hopeless desperation in the face of stagflation. Cutting red tape to foster dynamism was about the last move politicians had left.

Our long economic expansion and stock-market boom will soon come to an end, imposing limits on government precisely at the moment when it's asked to do more. When that day of reckoning comes, the best questions for lawmakers of both parties to ask may just be: What would Jimmy Carter do?

Written by Matt Welch. Produced and edited by Alexis Garcia. Camera by Meredith Bragg and Todd Krainin.

Photo credits: Jimmy Carter Library, Arthur Grace/ZUMA Press/Newscom, Dennis Brack/Newscom, Everett Collection/Newscom, Ron Sachs/CNP/MEGA/Newscom, Brian F. Alpert/ZUMA Press/Newscom, Paul Harris/Pacific Coast Nes/Newscom, Bee Staff Photo/ZUMA Press/Newscom, Dennis Brack/bb51/Newscom, Jonathan Bachman/REUTERS/Newscom, Rick Friedman/Polaris/Newscom

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  1. Maybe before they got all hopped up on control. But now they’ll be chasing that control dragon until it leads them and us into financial ruin.

  2. TreasonNN.com: Be more like Jimmy Carter!

    1. Your membership card is expired, sir.

  3. “When Democrats loved deregulation” was back in the day before PACs and crony capitalists weren’t able to (legally)funnel millions of dollars to “friendly” legislators. There’s no Team Red and Team Blue, it’s just Team Green.

  4. >>>But many leading Democrats had the opposite view in the 1970s.

    Many “leading Democrats” wtf simply had not yet mastered power through regulation.

  5. Other article suggestions:

    When Democrats Were for the Working Class.
    When Democrats Used to be Liberal
    When Democrats Distrusted the State

    1. When Democrats supported individual rights
      When Democrats believed in due process
      When democrats believed in capitalism

      When Democrats thought America was worth preserving

  6. >>>Yet Brown, too, could be a fiery skeptic of government

    because his name forever triggers the song, “California Uber Alles” evidences at least one Californian was onto Jerry Brown as Authoritarian. not gonna post the lyrics.

    1. Deregulating makes you literally Hitler.

      1. “literally Hitler” does not get less funny.

  7. “”sideburns-era Jerry Brown”‘

    Or as I like to say, Ronstadt era Jerry Brown.

  8. Wow, this is one hell of a cherry-pick. Now do one where Obama was a free-market reformer.

    1. Jimmy Carter was right of center?he was a southern Democrat although Atlanta did have an important Ford factory so he might not have been as anti-union as most southern Democrats (as a senator LBJ was vehemently anti-union). Carter’s problem was foreign affairs and even after his presidency he ended up alienating successive presidents by butting into foreign affairs. Btw, Clinton hates Carter and blames him for his one loss in 1980.

      1. I know when I think of deregulation, I think of Jimmy Carter and Jerry Brown. What? Why are you looking at me like that?

        /sarc

  9. I remember Brown being relatively sane when he was mayor of Oakland, people thought they were getting that moderate liberal Brown when they voted for him for governor again, but what they got was the insane, control freak Brown. My grandpa put up money for and put up a museum for our small town in Northern California in the 1970’s, Jerry Brown when he was governor, showed up to the opening to thank him, my grandpa said Jerry wore a leisure suit with sandals and he seemed stone, nice but stoned. The picture of them together hangs on the wall of that museum to this day.

    1. Jerry Brown in the 70’s tried to tax business for each employee some paid some sued and won.Jerry Brown shut down all Highway building in California hence we have the awful traffic messes we have today. when Mayor of Oakland he eliminated the gang response teams now Oakland is a hell hole of gang activity again. Brown may have talked about deregulation but i didn’t see any mentioned in the article. Note the left still blames Reagan for airline and train deregulations why I don’t know?

      1. Note the left still blames Reagan for airline and train deregulations why I don’t know?

        They also blame Reagan for bank deregulation which led to the 2008 Recession/Housing Crisis, even though it was Clinton who repealed Glass-Steagall. But more broadly, it was Carter who did the most to set current monetary policy by appointing Paul Volker to the Fed.

        1. Didn’t Carter also give us the Community Reinvestment Act?

  10. The democrats now are on the other end where the government is to have the power to tell companies what they are to pay their employees and what benefits that they will give them and how much they will charge for their products. That is the reason that so many democrats have pushed for a $15 hr wage and every higher cost health insurance without and to increase the income tax the companies had to pay regard for the effect it would have on the viability of the company. I think that the house democrats will continue in that vane now that they have control of the house. With the proposals that many democrats campaigned on during the just finished election of medicare for all ($3.2 T/year), free college for all (cost unknown/year), and basic living income for everybody (cost also unknown/year) all this on top of the already over spent budget that the US has now will spell D-I-S-A-T-E-R for the US and in the long term for the world.

  11. Ralph Nader, champion of de-regulation and enemy of government interference in the marketplace? Was this before or after he was for getting cars banned, mandating 5 mph bumpers, CAFE standards, seatbelt buzzers and emissions controls?

  12. SO Carter would be a Libertarian by today’s standards
    And Richard Nixon would be a Democrat
    And Hubert Humphrey would be a Republican

    1. And J. Edgar Hoover would be a proud gender champion?

  13. Except…I found out yrs. later that most of the big deregul’ns in the Carter admin. were the fruit of reports of commissions that’d been inaugurated by the Nixon admin. I think it was Henry Manne I learned this from in a book of essays on the subject published by the Reason Found’n.

  14. These democrats, who favored deregulation, were obviously not indoctrinated into the true principles of socialist thought.
    It would only be later when the good guys took over and demanded micromanagement of not only business but the lives of all the little people as well.
    Today, we socialist can proudly say we have members of both dominate political parties that have joyfully embraced the ideas and practices of communal ownership between the government and the masses, government intrusion for the sake of advancing our beloved Glorious Peoples’ Revolution and ensuring our wonderful, wise and committed ruling elitist turds live a happy and fulfilling life as they further oppress and make millions, if not billions, of dollars off their well planned schemes to make themselves and their toadies rich and even more powerful.
    We should indeed bow down to a statue of Saint Karl Marx and give thanks to the sacrament he gave all of us, the redistribution of wealth and a caring, nurturing and politically correct government who steals from us, takes away our liberties and ensures our continuing slavery to the powers to be is a reality and not just some pipe dream.

  15. +1 point for the Democrats of the past.
    -1 point for R-McCain killing the repeal of Obamacare

    GOP total score for being the platform of limited government – 97%
    DNC total score for being the platform of limited government – 3%

    No problem giving credit where credit is due; but I afraid the DNC still has an entire ball field to cross to claim that kind of goal/victory even in the past with records of FDR’s “new deal” etc… etc.. etc…

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