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Ted Kennedy, Deregulator

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"Ted Kennedy, Deregulator"

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One essentially irreplaceable role that Ted Kennedy played in the United States Senate was that he was such an iconic figure of American liberalism that he had the credibility necessary to stare down Democratic-leaning interest groups when their narrow interests subverted broader progressive goals. The most recent case of this was in Kennedy’s work on the No Child Left Behind Act that substantially increased school funding and focus on the educational needs of poor and minority students, but tended to antagonize teacher’s unions.

A related story, however, comes from the now-unknown story of trucking deregulation. For decades, it was extremely burdensome for anyone to get into the business of shipping anything, because incumbent stakeholders could use the regulatory apparatus to block you from entry. The result was severely limited competition and, consequently, higher prices for just about everything. But eventually things changed:

Both the Teamsters Union and the American Trucking Associations strongly opposed deregulation and successfully headed off efforts to eliminate all economic controls. Supporting deregulation was a coalition of shippers, consumer advocates including Ralph Nader, and liberals such as Senator Edward Kennedy. Probably the most significant factor in forcing Congress to act was that the ICC commissioners appointed by Ford and Carter were bent on deregulating the industry anyway. Either Congress had to act or the ICC would. Congress acted in order to codify some of the commission changes and to limit others.

The Motor Carrier Act (MCA) of 1980 only partially decontrolled trucking. But together with a liberal ICC, it substantially freed the industry. The MCA made it significantly easier for a trucker to secure a certificate of public convenience and necessity. The MCA also required the commission to eliminate most restrictions on commodities that could be carried, on the routes that motor carriers could use, and on the geographical region they could serve. The law authorized truckers to price freely within a “zone of reasonableness,” meaning that truckers could increase or decrease rates from current levels by 15 percent without challenge, and encouraged them to make independent rate filings with even larger price changes.

A similar tale can be told about airline deregulation.

The moral of the story isn’t that “regulation is bad” but that progressive politics at its best isn’t about bigger government but about attacking privilege and power. At times that requires more government and more regulation (right now we badly need more regulation of polluters whose carbon dioxide emissions are threatening the viability of the planet) but at times the forces of privilege and power are using existing regulatory structures to re-enforce their own position. Kennedy, rightly, saw no contradiction between his record as a deregulator and his record as a champion of the little guy.

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