Can Trump Top Carter's Deregulatory Wins?
Wednesday, February 19, 2025
At RealClear Markets, economist David Ozgo wonders if Trump can "become the next Jimmy Carter."
I am old enough to shudder from memories of inflation -- and economically literate enough to wonder if a demolition of tariffs anyone can understand is on tap.
Wrong.
Ozgo is writing a positive piece on Carter's underappreciated work as a deregulator, and includes analysis of how deregulation unleashed the potential of several major sectors of the economy:
The Airline Deregulation Act (ADA) was equally revolutionary in its impact. While Federal Express began in 1971, deregulation was deemed so important to founder Fred Smith that he eventually turned over day-to-day operations to subordinates and moved to Washington, D.C. to lobby full time for airline deregulation. Once the ADA was passed it allowed FedEx to purchase larger planes, move into more markets and allowed it to become the company we know today.It is hard not to get excited about what more deregulation might accomplish after Ozgo's whirlwind tour.
Freight is important. But, people are the most important cargo carried by any mode of transportation. The ADA allowed price competition, opened new routes and allowed new entrants into the domestic airline market. Since the ADA's passage the number of domestic passengers has grown more than fourfold from only around 200 million annually in the mid-1970's to over 850 million by 2022. By contrast, since 1975 the U.S. population has only gone up by 55%. We might all complain about getting stuck in the middle seat, but deregulation has made air travel possible for millions of Americans. [bold added]
That said, my excitement is dampened by my impression that Trump's pledge to deregulate isn't accompanied with a legislative agenda, and that Trump resembles Carter in other unfortunate ways.
Trump did not have much of a legislative agenda in his first term and seems even more addicted to the Executive Order than he was then. So what if he deregulates if it is all easy to undo?
And, don't forget that inflation and weak foreign policy doomed Carter to a single term, and undercut the value of deregulation. Similarly, Trump's foolhardy tariff trade war and destabilizing kowtowing to despots like Putin may cause economic and security problems that dwarf any good he manages to accomplish as a deregulator.
Only time will tell if we have Carter II, and which kind we have if indeed we do. I am not bullish, but I hold out hope to be proven wrong.
-- CAV