We geezers & geezerettes remember stagflation of the 1970s.
When President Carter took office in 1977, a multitude of new regulatory agencies—including the U.S. Environmental Protection Agency, Occupational Safety and Health Administration, Federal Energy Administration, U.S. Consumer Product Safety Commission, and more—were launching ambitious agendas. Traditional economic regulatory agencies, such as the Interstate Commerce Commission (ICC) and Civil Aeronautics Board (CAB) were also busy setting rates and conditions for trains, trucks, pipelines, buses, and airlines.
Could all this regulatory activity contribute to rising prices?
Evidence had been mounting over the previous decade that the economic regulatory agencies were susceptible to political capture by their regulated industries, and that price controls—supposedly aimed at protecting consumers from monopolistic pricing—seemed to accomplish exactly the opposite result.
Aha! Industries gained control of government officials of the regulating agencies.
Do we remove & replace those officials? Heck no!. We deregulate!
Airlines & trucking by Carter.
Well airline travel is cheap. But it ain’t a quality experience as seating is continuously downsized. I like air travel to a cattle car. Even If I have to travel 1500 miles; I’d rather drive. I haven’t been on a plane for 8 years.
The cheap airlines has a cost. A reduced number of airlines meaning less competition. Reduced employment as aircraft maintenance is done in foreign countries with cheap labor. Threat of strikes by pilots & flight attendants the only way they can obtain increased pay.
And cheap trucking has a cost also.
Trucking salaries have decreased by as much as 50% since deregulation, according to economist Michael Belzer. Unionization rates are far lower, too, falling from about 50% of all truckers to under 20%. And by doing away with regular routes and hours, employers can take far more advantage of drivers.
After Carter The Great Regulator & Supply Side Trickle Down president entered to further deregulate designed to incentivize investment.
After Reagan & Bush we got a financial deregulation with Billy boy.
Combine the above with Welchian financialization and deindustrialization and resulting rise of income inequality and rise of the value capital over wage. To say nothing of Congressional capture by corporate donations.
Globalization and deindustrialization had a cost to, first, US working class Americans. But that was ignored for 30 years until the opioids crisis and Covid hit that effected all Americans.
Perhaps deregulation was a rabbit hole we shouldn’t have gone down?