Can Deregulation Work?

How successful is the president's recently announced deregulatory initiative likely to be? Based on my experience at two regulatory agencies (the Federal Trade Commission and the Consumer Product Safety Commission) during the Reagan years, I am not optimistic.

President Reagan was serious about deregulation and appointed agency heads--Jim Miller at the FTC, Terry Scanlon at the CPSC--who were also serious. In turn they appointed determined managers like me, and they backed us up.

We did some good, but it was not easy. The permanent staffs of the agencies were always interested in more regulation, either because of self-selection or because promotions and power increase in a larger agency. It also helped that we deregulators (generally economists) were not usually interested in permanent government positions, because reducing the power of the agency is a sure way to make enemies.

Although my mandate was to cut back, I spent more time fighting new proposals than getting rid of old ones. The staffs wanted more, not less. Whenever I met acquaintances from other agencies the invariable comment was "You won't believe what they want to do now." ("They" were the permanent staffs.)

The current regulatory agencies are not going to hire or promote people like me. Without managers with a strong interest in deregulation and with the backing of senior administrators, there will be no serious power to buck the staffs. The current executive order seems to impose cost-benefit analysis, but it has enough loopholes ("equity, human dignity, fairness") so that agencies will be able to do whatever they want.

Deregulation was hard even under Reagan. I am afraid it will be impossible under Mr. Obama.

Paul H. Rubin is an adjunct scholar at AEI.

Photo Credit: Official White House Photo by Pete Souza

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