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Jimmy Carter’s One Big Success: Deregulation

Jimmy Carter is in hospice care and so the death of the 39th president is likely imminent.

Carter was not a successful president, but in honor of his service to the country, we thought we would celebrate one of the things that he got right: deregulation.

Carter deregulated oil (partly), trucking, railroads, airlines, banking, and beer. A famous study by Robert Crandall of the Brookings Institution found that these deregulation efforts have saved American consumers hundreds of billions of dollars.

Example: In 1974, it was illegal for an airline to charge less than $1,442 in inflation-adjusted dollars for a flight between New York City and Los Angeles. Today, you can often buy a ticket for under $300 round-trip.

The Carter Administration also modified the prudence standards governing ERISA – a move that made it possible for pension funds to begin investing in something other than conservative, blue-chip stocks. This little change proved to be the spark that ignited the U.S. venture capital industry, which has given birth to many of America’s best-performing companies over the past 40 years.

In banking, Carter repealed a New Deal-era law that capped the interest rate banks could offer depositors at 5.25 percent. Amid an 11 percent inflation rate under Carter, consumers were getting hammered by the much lower interest rate available at banks. As people moved their money elsewhere, a credit crunch followed, as banks didn’t have the reserves to make loans. Repeal unleashed the banking sector to provide the credit needed to finance corporate growth and job creation.

“We really need to realize that there is a limit to the role and the function of government,” Carter said in 1978. “Bit by bit we are chopping down the thicket of unnecessary federal regulations by which government too often interferes in our personal lives and our personal business.”

If only Democrats today would remember and act on the deregulation precedents of Jimmy Carter.

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