The Radical Anti-Government, Anti-Regulation Revolution Quietly Continues

Political policies that try to reduce unneeded regulation and increase efficiency of needed regulations is rational and probably appealing to most people. Of course, the pragmatic concern about deregulation is that it tends to happen behind closed doors or otherwise flies under the public’s radar. Such deregulation is typically designed to reduce government regulation for the purpose of bolstering private profit, arguably at the expense of the public interest most of the time. That accords with the fact that American two-party politics is a pay-to-play system. Most of the payers are players who want more money and power. Regard for the general welfare or public interest are usually an impediment, not a priority.

It’s a matter of morals - the public interest is subversive

Nobel laureate and economist Milton Friedman, believed that anything that needlessly reduces profits for a business is immoral. He argued that the best type of CEO was not one with an enlightened social conscience. Instead, he saw CEOs with an enlightened social conscience as “highly subversive to the capitalist system.” There’s not much room for ambiguity in language like that.

An interesting instance of how toxic that rational, pro-public interest regulation appears to be to most businesses merits mention.

The 737 Max airplane story

An article in the New York Times discusses a fairly new law, the F.A.A. Reauthorization Act of 2018. That law further cripples the ability of the FAA (Federal Aviation Agency) to evaluate new aircraft for safety and other aspects of new aircraft operations. The safety of the now grounded Boeing 737 Max airplanes were evaluated under older less restrictive laws. That limited led to the failure of regulators to spot flaws in the safety system of 737 Max aircraft. The planes were grounded after two fatal crashes some months ago that killed a total of 346 people.

In the drafting of the 2018 law, Boeing and allied interests were able to insert a couple of paragraphs that gave companies more power to challenge regulator safety concerns. Companies had been lobbying the federal government for many years to get regulators out of the airplane evaluation process as much as possible. They has significantly succeeded even before the new 2018 law was passed. The new law makes it yet harder for government regulators to counteract companies’ power to reject regulator concerns.

Under older law, the FAA did not fully analyze the automated safety system. Boeing played down its risks. Then, late in the plane’s development, the system was made to be more aggressive. Those changes that were not even submitted in any safety assessment to the FAA. The newer law shifts even more power to companies.

The NYT investigation for this article included reviewing documents from a group representing safety inspectors. The group argued that the new 2018 law would allow regulatory intervention only after a plane crashed “and people are killed.” That is precisely how it played out on two occasions. While the 2018 bill was being written, the FAA criticized the law would because it would “not be in the best interest of safety.”

Since the law passed in 2018, at least some democrats in the House had to vote for it. Also, most democrats in the Senate supported the bill, which passed there by a 93-6 vote.

This situation exemplifies the persistence and stealth that modern pay-to-play deregulation looks like and what it can lead to. In essence, ‘deregulation’ is cover for corruption and quiet passage of laws that harm the public interest more than they help it. In the case of the 2018 law, the further gutting of FAA review authority was probably embedded in other measures that were seriously needed for the FAA to function properly. That is how special interests leverage their campaign contributions (free speech rights) to get what they want. And, if special interests backed by money don't get what they want one year, they will keep trying for decades to get what they want sooner or later.