14 - Regulating Deregulating, Identity Politics, Conclusion...

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Regulating and Deregulating 04/30/2014 ° One of the major things that americans inherited from the Reagan era was some kind of confusion of what counts as big/small government. So on one hand you had HUGE tax cuts, 1986 slashings, tax cuts, domestic spending cuts BUT also huge budget deficit (due to big defense spending, capped by strategic defense initiative). Similar confusion about regulation: business regulation slashed, BUT big expansion of government in personal life (welfare policy that was intrusive, jails) ° ° Endless rhetoric about government in Reagan era. Issue was “what got regulated? How? And in who’s interest?” these contradictions did not get any clearer (AIDS epidemic) ° ° I. Deregulation, removing govt control on business ° Two big moments: carter association, Reagan association ° Carter: AIRLINES (1978) ° Initially treated like utilities (therefore lots of regulation), required to serve smaller markets (subsidized lesser trafficked routes) this kept fares HIGH but STABLE ° Deregulation was fabulous for people who lived in big cities: WAY cheaper air travel, terrible for those who lived in small towns ° A lot of old airlines started to disappear ° Big success was southwest, never part of the regulation (only flew in texas). They are now largest domestic airline ° Not good for unions. The impact on unions was incidental (NOT intentionally anti union) ° Reagan WAS antiunion ° Many air traffic controllers went on strike. All fired ° Signaled to companies that there was a change in governments attitude towards towards unions ° New militant anit-union environement ° ° A. Environment ° Reagan: goal was to eliminate regulations that interfered with businesses (less efficient, less profitable) ° From business, more profitable to not comply. You make more money if you skimp on safety equipment. If you decrease regulations, businesses can make more money
° Same as polluters ° Compliance of regualation = inefficient = burdensome ° The way it was done was budget and staff cuts for “monitors” of the regulations. Agencies couldn’t enforce ° WHY is there an EPA? ° Established in 1970s after environmental disasters in the 60s ° Santa Barbara oil spill in 1969 ° Cuyahoga River Fire 1969 ° Love Canal. Subdivision of houses built on toxic waste dump. In the 70s, trees started turning black, ground seepage, birth defects, miscarriage ° Three Mile Island Nuclear Accident, 1979. Big expansion in nuclear in 1974 (42plants) ° Reagon responded with full speed ahead for nuclear ° Regan thought that clean air act was stupid ° Reagan did whatever he could to deregulate. Regulations were a BURDEN ON BUSINESS ° Deregulation of financial ° Stop anti trust enforcement ° Allowed mergers created large conglomerates ° Specialist investors (corporate raiders). Pioneered leverage buyout ° What is that? Championing the shareholders. It brought unproductive assets into the market (make them productive!) BUT it made many people redundant ° Savings and loans ° Small banks. Consumer banking. The idea was that you didn’t profit

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