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It's Time to Start Paying Close Attention to the Mechanisms of the Deregulation Machine
It's time to start paying close attention to the mechanisms of the deregulation machine. For the past 30 years, the business lobbies have pushed Congress and the executive branch to disassemble the regulatory system that has protected us from the worst excesses of Wall Street and Big Business. The catastrophic effects of this dismantling are well known -- the misbehavior of Wall Street brought us the financial collapse, the global recession, and the dominance of the largest banks being both "Too Big to Fail" and their culpable executives "Too Big to Jail".
Despite negative public sentiment and the rise of the Occupy movement, the avarice on Wall Street arrogantly continues on. The big banks are now even bigger and more powerful than they were in 2008 when they were bailed out by the U.S. taxpayers.
The effects of deregulation stretch to all walks of life. The profit-driven practices of big corporations have led to the deaths and preventable illnesses of thousands of Americans every year. Roughly 60,000 die from workplace related diseases and injuries, 200,000 from medical malpractice and hospital-induced infections, 70,000 from air pollution and 100,000 from side effects from dangerous pharmaceuticals.
Where are the regulators? Often, they are unable to assert their power over these wrongdoings due to small budgets or weakened authority. Others are simply unwilling to act thanks to the "revolving door" -- imagine regulators being recruited from the very industries they are meant to police and having plans to someday return to those industries.
For all the talk of "hope and change", little of note has happened under President Obama to properly regulate Big Business. See Lisa Heinzerling's review of Simpler: The Future of Government by former Obama administration "regulatory czar" Cass Sunstein for an enlightening look at how regulatory efforts are stagnant under the Obama Administration and a do-little Congress. Heinzerling writes: "If this is the future of government -- legally suspect, politically unaccountable, preternaturally secretive -- I'd like to think we can do better."
The saga of deregulation is well illustrated by the fight to repeal the Glass-Steagall Act. Glass-Steagall was passed in the wake of the stock market crash of 1929 and was designed to stop commercial banks from engaging in risky investment banking. The banks attempted to undermine it for decades, finding new ways to subvert the law, such as using bank holding companies to conduct their investing. After several legislative attempts in the 1980's and 90's, the defense against the pro-business onslaught collapsed in 1999 when Glass-Steagall was finally repealed.
The repeal was heavily promoted by Bill Clinton and his Treasury Secretary Robert Rubin--formerly of Goldman Sachs -- who played a key role in the approval of legislation before joining Citigroup to make millions of dollars in a few months. His successor as Treasury Secretary, Larry Summers, hailing from Harvard and Wall Street, joined him as a member of the "oops oligarchy" whose decision to back a repeal of Glass-Steagall would place the United States on the road to unfettered casino capitalism.
When Congress ultimately passed the Gramm-Leach-Bliley Act, it once again granted big banks the freedom to gamble with other peoples' money for fast profits from speculation in securities and derivatives. Senator Phil Gramm of Texas, who was instrumental in the legislation, said of the occasion: "Glass-Steagall, in the midst of the Great Depression, thought government was the answer. In this period of economic growth and prosperity, we believe freedom is the answer." Gramm cashed in and joined the financial industry in 2002 and still has not recanted.
Legislative victories of the 1960s and '70s led to safer automobiles, cleaner air and water, safer workplaces and safer consumer products. It was a renaissance of progressive ideals that resulted in citizen power over corporate misconduct. But big corporations rallied in the following decades and have built a deepening corporate government -- a corporate state -- in Washington D.C.
Take Monsanto -- the seed production conglomerate has successfully fought off attempts by the federal government to require the labeling of genetically modified foods (GMO's) despite overwhelming consumer sentiment. Just last week, Monsanto gained another significant outrage with an un-noticed rider to a large appropriations bill that passed Congress, which allows agribusiness concerns to avoid court intervention by the people and continue to grow GMO crops that may be harmful. The rider was attached by Senator Roy Blunt (Mo.)
The dominance of the business lobby in pushing its agenda is augmented by heavily funded rightwing lobbying organizations and corporate think tanks that have long spread the ideological notion that government regulation is anti-business, anti-capitalism and even, in the words of Senator Gramm, anti-freedom. With the resources to promote their academics, lobbyists and pundits in the mainstream media, a powerful and subversive narrative has been created by the giant corporations.
Now law professor Thomas O. McGarity -- who works with the Center for Progressive Reform -- has just released a powerful new book on this subject titled: Freedom to Harm: The Lasting Legacy of the Laissez Faire Revival. The book explores, in meticulously researched detail, how big business regained its profitable supremacy over the public interest, health and safety and destroyed or undermined many hard-won protections of the twentieth century.
Regulation is a modest and necessary instrument of law and order. After decades of constant rejection of regulatory standards, Wall Street and Big Business have positioned themselves above the rule of law. What is needed now, more than ever, is a new wave of comprehensive regulation and enforcement that responds to the biggest problems of the day.
We must address the reckless behavior of Wall Street and the excesses of big corporations by placing more cops on the corporate beat and giving them the resources necessary to do their jobs. The alternative is allowing the gamblers on Wall Street and the grossly overpaid CEO's of multinational corporations to continue to take, shred or stall the remaining regulatory system and run our country into the ground.