April 3, 2013
New Public Citizen Book, ‘Reality Check,’ Makes the Case for Regulations
WASHINGTON, D.C. – A book by Public Citizen’s Taylor Lincoln, released today, provides an in-depth look at how deregulation derailed the economy and puts forth a series of case studies that counter allegations made against public protections in recent years.
The book, “Reality Check: The Forgotten Lessons of Deregulation and Unsung Successes of Sensible Safeguards,” chronicles the damage caused by insufficient oversight of mortgage lending, financial derivatives, commodities and residential electricity services. The book illustrates that even the bailed-out mortgage buyers Fannie Mae and Freddie Mac, which were often incorrectly portrayed as government agencies, succumbed because of a shortage of government oversight.
“Four years ago, hardly anybody disputed that the housing bubble and financial crisis cried out for better regulation, but that lesson was soon forgotten,” said Lincoln, research director for Public Citizen’s Congress Watch division. “We hope that our book will provoke a more thoughtful debate moving forward.”
The book was released at a symposium held at Public Citizen’s Washington, D.C., headquarters. Lincoln led a discussion with Neil Barofsky, a federal prosecutor who was chosen to serve as the special inspector general overseeing the $700 billion Troubled Asset Relief Program; Brooksley Born, former chairperson of the Commodity Futures Trading Commission; and former U.S. Rep. Brad Miller (D-N.C.), who was instrumental in creating the Consumer Financial Protection Bureau.
“This book gives the debate over regulations a new twist and should help put to rest the corporate-fueled myths that have been fed to an unsuspecting public,” said Lisa Gilbert, director of Public Citizen’s Congress Watch division. “We hope that ‘Reality Check’ helps ensure that the lessons about the importance of public safeguards are never again forgotten.”
In addition to highlighting lessons learned concerning deregulation, the book aims to debunk myths that have flourished in recent years about how safeguards work.
Contrary to claims that new rules are written by civil servants with little oversight, the book provides case studies illustrating that federal agencies are among the most regulated entities in the United States. Agency obligations have slowed the rulemaking process to a crawl.
For instance, the book recounts a 12-year saga surrounding the effort to complete a much-needed and uncontroversial update to a rule on the operation of cranes. More broadly, the book documents that delays in completing workplace rules concerning well-understood hazards have resulted in tens of thousands of avoidable illnesses and injuries.
Members of Congress often accuse agencies of handing down rules willy-nilly without oversight. But the rulemaking process has become so cumbersome that agencies fail to meet deadlines set by Congress nearly 80 percent of the time.
Meanwhile, the allegations surrounding public safeguards have kept many in the public arena from understanding that such rules tend to be well-crafted. A series of case studies in the book shows that regulations have a remarkable track record of success. Not only do rules tend to exceed their public protection objectives, they often do so at a fraction of predicted costs and to the benefit of industries that earlier fought mightily to stop them.
Finally, the book revisits the oft-recited trope that regulations are responsible for “killing jobs.” Numerous studies have found that new public safeguards have a beneficial effect on employment. Meanwhile, surveys have consistently found that small businesses rate regulations low on their list of concerns when contemplating whether to hire new employees.