Commentary
In the popular mind, the economics of President Jimmy Carter is tragically linked with inflation, stagnation, and malaise. That’s not his rightly understood legacy, however. He signed several enormously important steps toward deregulation in a range of areas from trucking to telecommunication to airlines to the energy sector.
Much of this activity did not pay immediate returns but they set up conditions that later created the 1980s economic boom. Today Ronald Reagan gets all the credit. It’s not entirely true. Even Paul Volcker at the Fed who crushed inflation finally was appointed by Jimmy Carter. And the industry boom that followed owes much to Carter himself.
Among the lesser known deregulations he undertook concerns home brewing. A legacy of prohibition still imposed restrictions, leading the United States to have only a few breweries and all the same kind of light lager. That’s how the U.S. developed a reputation for having the lamest beer in the world. In many parts of Europe, beer is served with a glass of water. In the United States they had long been combined into a single drink.
Carter’s brother Billy had an interest in home brewing so perhaps that is what led him to sign legislation in 1978 that took away the last vestiges of control. The result was a gradual explosion in the number of beers made and sold in the United States.
What you see at restaurants and beer stores is nothing like what would have been there before 1978. The choices are seemingly infinite. Most are absolutely delicious.
As with all things before deregulation and freedom generally, we had no idea what we are missing. This is the thing about regulations. They forestall options and limit growth but no one knows it. Once freedom arrives and the choices emerge, and whole new industries are made, we are amazed at how we got along before the release of the hand on the throat.
Deregulation gets a bad rap today because of how it came to be applied in the world of finance. We can argue about that. That issue is complicated by how it gets mixed up with the issue of money expansion, debt creation, and the moral hazard of too-big-to-fail policies.
In other industries, the issue is more cut and dry. It is about freedom, competition, and the right to try. Here is where Carter succeeded. He restored competition as an economic force in multiple industries, thus increasing supply and reducing price.
In energy pricing, telecommunications, trucking, and airlines, Americans were exposed to free enterprise for the first time in generations, and it made a huge difference in economic growth and quality of life generally. In beer, the effects were glorious.
Now craft beers are a way of life.
Carter signed H.R. 1337, which contained an amendment sponsored by Senator Alan Cranston. This amendment created an exemption from taxation for beer brewed at home for personal or family use. This bill effectively lifted a federal prohibition on home brewing that had been in place since the end of Prohibition in 1933, allowing people to brew beer at home without paying excise taxes.
This jumpstarted an entire industry. There were fewer than 100 breweries in the United States in 1975. Now there are probably more than 10,000, as every city has many and many small pubs have their own beer that they make. It’s impossible to keep up, and quite thrilling now to try this and that and judge them all based on one’s personal taste.
Not being much of a fan of beer, I had under-appreciated the extent to which regulations had ruined the product in the American experience. No American had ever even heard of an IPA or an unfiltered beer or the many varieties of ciders available now.
Today there are experts on all these items everywhere, and people act like they have always been around. Not so. It was the Carter presidency that made it all happen.
And that is an odd thing for this famous teetotaler to have done. But then again, he was a believer in peace and fairness and had an open mind on many policy issues.
I’m old enough to recall all the screams for war with Iran which Carter resisted. He simply would not pull the trigger. Eventually Iran released the hostages without a war. That took real courage at the time, and he should be commended for this. It contributed to his reputation for being weak, but was it really weak to resist the war drums? Doing so requires a special kind of courage.
His later charitable activities in building homes is also meritorious. Despite the reputation he had as a failed president, there are many ways in which his term was a triumph of humility and change for peace and enterprise.
Of course the loss of the presidency in 1980 was a devastating blow against the Democratic Party. His loss to Ronald Reagan, however, owed much to how the third party candidate, John B. Anderson, split the Carter base and essentially contributed decisively to the Reagan win.
Reagan then received much of the credit for economic recovery after 1982, even if the conditions for that very thing were mostly created by Jimmy Carter.
It’s an odd habit Americans have of attributing all economic conditions to the policies of a single president, even though in our rational brains we surely know that economic policies and economic effects are separated by years, sometimes even half a decade.
The Trump administration seeks to revive deregulation including the abolition of whole regulatory agencies. In pursuing this task, it can take inspiration from an unlikely source, Jimmy Carter himself. He wisely put ideology aside and sought fairness and enterprise instead, and left the world better off as a result.
Trump can continue where Carter left off, while getting rid of other regulatory controls that have crept in over these last forty years. As with all things, more freedom is usually the best answer to the question of what should be done next.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
Source link
Add comment