Beware of Republican deregulation
“If the government would just get out of the way and free the power of the competitive market, we would have a much better economy.” It’s good political rhetoric.
The current Republican administration and their pals in the Republican legislature are repeating it over and over as a part of Governor Gianforte’s “Red Tape Reduction Initiative.” The problem is: What Republicans get when they push to eliminate regulations is often not what anybody wants.
The last time we heard this kind of rhetoric was during the 1997 legislature and passage of the bill that deregulated the Montana Power Company. The result was the bankruptcy of the state’s largest utility and years of chaos and steadily increasing power rates in Montana. The dams on Montana rivers were sold, the natural gas reserves, which had been dedicated to Montana citizens, were sold, and businesses were closed across the state. Our power rates went from some of the lowest in the country to the highest in the Pacific Northwest. It was the biggest economic disaster in the history of Montana.
The effort to deregulate was driven by the greed of the Montana Power Company combined with ideological blinders worn by the Racicot Administration and the Republican Legislature. No one in the rooms at the Capitol had any idea what the bill to deregulate Montana Power would do. They voted for it because it was presented as promoting competition and, therefore, would lead to lower prices. For the politicians involved it was as simple as, free markets are good and regulation is bad. We are still paying for their simplistic view of how the world (and the economy) work.
So here we are, almost 30 years later with a conservative Republican in the Governor’s office and a legislature composed of some of the most extreme right-wing legislators we have seen in decades. Once again, we are being treated to a lot of rhetoric about the power of the free market being hampered by regulations.
But the irony in all of this is that a “free market” cannot work without regulation by the government. Private enterprise needs a level playing field for competition to occur. Bad actors need to be policed (yes folks, there are greedy people out there who are willing to cheat to get ahead). If you go to an architect or a CPA, you want to know that person has the qualifications to do what he or she promises.
Someone needs to be sure that businesses are following the rules, or bad actors will have a huge advantage in the marketplace.
The Republicans apparently think businesses should be free to pursue their self-interest without regard for the public. They forget that big business, left to its own devices, has a long history of abusing the public trust and the community at large. From the Copper Kings, to Enron, to Martha Stewart’s insider trading, to the subprime mortgage collapse, the examples of greed over ethics in the world of private enterprise are many and consistent.
Most of us realize that our economy is far more complex than simple free-market capitalism. It is baffling that big business is now viewed as more virtuous than our public institutions. Economist John Maynard Keynes said it best: “Capitalism is the extraordinary belief that the nastiest of men for the nastiest of motives will somehow work for the benefit of all.” The Republicans in Helena would do well to heed these words before they set about dismantling regulations which protect the public.
Ken Toole is on the board of Big Sky 55+, a nonprofit group organizing Montana Seniors. He is the former Vice-Chairman of the Public Service Commission and former Chairman of the Energy and Telecommunications Committee in the Montana Senate.