Opinion

Jimmy Carter, Deregulator

REUTERS/John Amis

Joanne Butler Contributor

With the many “pre-eulogies” of President Jimmy Carter, here’s mine: he actually deregulated a major sector of the U.S. economy. Yes, Carter did create the Energy Department, cobbling a bunch of energy-related agencies together (similar to George W. Bush’s creation of the Department of Homeland Security). But Carter’s deregulation of the transportation sector remains significant and historic, but unlikely to be noted by the mainstream media at the last.

Did you just get a tweet about an airline flash sale? Thank Jimmy Carter.

Have you ever shopped for the cheapest way to ship a product? Thank Jimmy Carter.

Let’s start with the airlines. The Civil Aeronautics Board was formed in 1938 and, consistent with FDR’s command-and-control policies, used to set prices for passenger air travel. (Note: the National Transportation Safety Board, established in 1967, handled safety issues.)

If you were flying from D.C. to Los Angeles, it didn’t matter what airline you flew, it was always the same price. And if you missed your flight on Airline A and Airline B had the next flight out, you could hand your ticket to Airline B’s gate agent and get a seat. The trade-off for this benefit was: no discounted tickets, no no-frills airlines, no flash sales, etc.

This regime came to an end with the 1978 Airline Deregulation Act, signed by – Jimmy Carter. The Act required the Civil Aeronautics Board to close its doors in 1985. Granted, the effort to deregulate the airlines began in the Nixon administration, but came to fruition in the Carter years. Oddly enough, Senator Ted Kennedy supported deregulation – a stance I doubt he would have taken later in his career, as his left-wing viewpoint ossified.

As for shipments via trucks – that was governed by the Interstate Commerce Commission. Although the Commission began in Grover Cleveland’s administration, it got into the price-control business in 1935, under FDR.  

Similar to the situation with airline tickets, the Commission set prices for shipping goods. It didn’t matter which trucking company you chose, they all had to charge the same price.  

Thus, if a manufacturer was shipping 500 pounds of bolts from Baltimore to Albuquerque, the shipping manager would look up the price in the freight rate book, and call his/her favorite trucking company. Trucking companies could compete based on customer service quality, but that was all they could do.

Today, the shipping manager can get quotes from various trucking companies, or the manufacturer can enter into a contract with a trucking company, with negotiated prices.

As with airline deregulation, the effort to end surface transport price controls began under President Nixon, and came to fruition with the Motor Carrier Act of 1980. For fans of smaller government, Carter’s signing statement is worth reading. Here’s a quote:

All the citizens of our Nation will benefit from this legislation. Consumers will benefit, because almost every product we purchase has been shipped by truck, and outmoded regulations have inflated the prices that each one of us must pay. The shippers who use trucking will benefit as new service and price options appear. Labor will benefit from increased job opportunities. And the trucking industry itself will benefit from greater flexibility and new opportunities for innovation. 

The Commission was abolished in 1995; by then, its mission had changed to resolving disputes between carriers and customers plus oversight regarding mergers (now handled by the Surface Transportation Board).

Now let’s return to the main, shocking idea: a Democrat president ending two FDR programs!

Perhaps it wasn’t so shocking back then. In 1976, candidate Carter talked about eliminating agencies, balancing budgets, and favoring private enterprise over government – while admitting these were conservative ideas! See for yourself at minute 4:28 at this C-Span collection of Carter-Ford campaign ads. Bernie Sanders was living in Vermont in 1976; if he saw this ad, his socialist soul surely was enraged. Hillary, meanwhile, was in Arkansas, enduring her first year of being married to Bill.

Why am I making a big deal about Jimmy Carter and deregulation? Over the decades, presidents of both parties have talked about streamlining and/or shrinking government, but our government continues to grow. Jimmy Carter did something about it, and two laws with his signature are testimony to that fact.

So go in peace, Jimmy Carter. And, reader, the next time you get a tweet about an airfare flash sale, save a kind thought for him.