“It should be noted, however, that President Carter was not only the Great Humanitarian. He was also the Great Deregulator.”
There is little we can say about former President Jimmy Carter—who will lie in state in Washington, D.C. in the coming days and be honored with a National Day of Mourning on January 9th, after his passing on December 29th—that has not already been said elsewhere. He is widely regarded as a humble (he typically insisted on being called “Jimmy”), deeply humane, and upstanding citizen who was faithfully married to Rosalynn Carter for 77 years; who supported the civil rights movement early in his career; and who won the Nobel Peace Prize in 2002 for his efforts on behalf of the Carter Center to advance the cause of human rights. His humanitarian efforts have won him acclaim during what is widely considered a successful post-presidency.
His presidential term was marked by several controversies and a multitude of history-shaping developments, including the Camp David Accords, the Panama Canal Treaties, the beginning of the Soviet invasion in Afghanistan, the partial nuclear meltdown at Three Mile Island, the boycott of the 1980 Summer Olympics in Moscow, the ending of détente, the energy crisis in the aftermath of the Organization of Petroleum Exporting Countries (OPEC) oil embargo, stagflation, and the Iran hostage crisis. President Carter surely had his hands full. His lower position in presidential rankings, his flagging approval rating in office, and his decisive loss to Ronald Reagan in the 1980 presidential election provide evidence of how presidential scholars and contemporaneous voters regarded his performance.
It should be noted, however, that President Carter was not only the Great Humanitarian. He was also the “Great Deregulator.” Before President Ronald Reagan went on to define his own legacy by claiming that the government was not the solution but, instead, the problem, President Carter was paving the way for a long-lasting era of deregulation, one of three pillars—the others being privatization and free trade—that many associate with a decades-long process of “neoliberalism” that is more closely associated with President Reagan.
As recounted by Susan Dudley, a Distinguished Professor in the Trachtenberg School of Public Policy & Public Administration at George Washington University, President Carter ushered in this era by appointing the renowned Cornell economics professor Alfred E. Kahn as head of the Civil Aeronautics Board. Kahn oversaw the complete deregulation of airline fares. “In 1978,” Dudley writes, “President Carter signed the Airline Deregulation Act, clearing the way for the CAB to be abolished a few years later.” [Links original throughout]
Airline deregulation proved a success and “paved the way for deregulation in other transportation modes and in telecommunications.” By the end of his term, President Carter had “signed the Motor Carrier Act, which deregulated the trucking industry, the Staggers Rail Act, which introduced competition in rail rates, and the Telecommunications Act, which removed restrictions on long-distance phone service. These actions allowed new entrants into the markets, increased efficiency, lowered prices, offered consumers more choices, and likely contributed to declining inflation.” Indeed, as former Texas Senator Phil Gramm has argued, “[t]he Airlines Deregulation Act of 1978, the Motor Carrier Act of 1980 and the Staggers Rail Act of 1980 unleashed competition and spawned the invention and innovation that gave America the world’s most efficient transportation and distribution system.”
The connection to inflation is also important. The shock of inflation in recent years, with the Consumer Price Index reaching 9.1% year-over-year in June, 2022, reflects in part how long it has been since Americans have been burdened with a sizable and broad-based rise in prices across many goods and services in the economy. The last time Americans faced inflation this high was during the 1970s and early 1980s. As Christopher Hopkins points out, “early on [Carter] recognized that inflation was being stoked by anticompetitive government regulation, adopting a central tenet of conservative orthodoxy. His success at liberating competitive forces from the stifling bureaucracy deserves greater recognition.” In the case of deregulation of the airline industry, “[s]ince 1980, air fares have fallen by half after inflation and 90% of Americans have flown.”
President Carter also emphasized that regulatory policies should be guided by disciplined and transparent cost-benefit analysis. Dudley notes:
“His Executive Order 12044 required agencies to analyze the impact of proposed regulations and make those analyses publicly available. The order stressed practices that every succeeding president has embraced, including assessing the benefits and costs of alternatives. It also directed agencies to adopt the least burdensome approach to achieving regulatory goals and to embrace flexible regulatory alternatives and market mechanisms in lieu of traditional command and control regulation.”
As conveyed by Dudley, President Carter also signed “[t]he Regulatory Flexibility Act [which] required agencies to analyze the impact of their regulatory actions on small entities and consider effective alternatives that would minimize those impacts” and “[t]he Paperwork Reduction Act [which] created the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget to review and approve all new reporting requirements.”
While many commentators are quick to focus on the foreign policy aspects of his presidency or his much-discussed “malaise” speech in 1979, this deregulatory agenda is arguably among President Carter’s most enduring and important legacies. As Hopkins argues, “[w]hile Carter lost to Reagan in 1980, it is no exaggeration to say that Carter kickstarted the Reagan revolution that licked inflation and launched a generation of economic prosperity.” Among other notable decisions, such as nominating Paul Volcker to serve as Federal Reserve chairman (who subsequently tamed runaway inflation) and promoting the cause of clean energy (need we say more?), President Carter, like similar figures whose prescient stances stand the test of time even if they do not get the attention they warrant, likely deserves more credit than he gets as a man who was ahead of his time.
Jonathan Church is a contributing editor at Merion West.
