Of all the lies of the Republican Party, few are so pernicious as their claim that regulation of business kills jobs. It's an easy lie for many people to believe, because it fits into a simple soundbyte, has a certain plausible logic to it, and has powerful corporate interests pushing it every day. One of its worst aspects is that it has seduced many "moderate" Democrats, to the point where a great argument can be made that belief in this lie was the major failing of the Clinton Administration. In fact, the exact opposite is true: Deregulation of business has been the biggest job killer of the last 20 years.
This is a message progressives need to hammer home every day - not arguing that regulation isn't so bad, but rather that regulation is the biggest job saver at our disposal. A searing article from Economist William Black, writing at The Huffington Post, outlining the entire, sickening case of how deregulation has cost millions of jobs in this country. More on the other side.
William Black is more than your run-of-the-mill economist; he is a brilliant, non-partisan expert on white collar fraud, having been Executive Director of the Institute for Fraud Prevention from 2005-2007. Here are some of the key points Black makes which shows how the financial crisis and the resulting job losses were a direct result of deregulation:
- The recent financial crisis was spearheaded by mortgage fraud through "Liar's Loans" - anti-regulators were in key leadership positions, meaning no vigorous regulators were there to immediately order banks to end this practice, as had happened earlier
- Federal regulators (or should I say anti-regulators) federal regulators actively prevented state efforts to protect the public from predatory and fraudulent loans.
- Recent financial crises - the S&L crisis, the Enron fraud and the current financial crisis were all permitted by accounting fraud. Accounting fraud occurs in environments where vigorous regulation is absent.
Note that none of what Black is saying is new, but it makes a handy guide to how deregulation is directly tied to job loss. Read Black's article to find out more. And speak out wherever you can about the job destroying effects of deregulation. Many of us know the story about Greenspan and Company, the repeal of Glass-Steagall, the failure to regulate the derivatives market, and so on, and their role in the financial crisis.
But all of this led to rather feeble reforms being passed, even when we had a Democratic Congress. We've got to do a better job of communicating the effects of deregulatory hanky panky on the issue that matters most right now: Jobs. Only when "deregulation" and "job losses" start going hand in hand in the public's vocabulary will the regulations required to preserve our future stand a chance of being enacted.
Further reading:
Accounting woes: Fox guarding the henhouse
Paul Volcker on deregulation
Summers, Rubin and the Clintonites
Deregulation leaves market open to flash crashes