Amid Turmoil, U.S. Turns Away From Decades of Deregulation

The housing and financial crisis convulsing the U.S. is powering a new wave of government regulation of business and the economy. Federal and state governments alike are increasingly hands-on in their effort to deal with failing businesses, plunging house prices, worthless mortgages and soaring energy prices. The steps add up to a major challenge to the movement toward deregulation that has defined American governance for much of the past quarter-century since the "Reagan Revolution" of the early 1980s. In fact, some proponents today of a bigger oversight role for government are Republican heirs to the legacy of President Reagan. The movement started by President Reagan has taken several hits. The 2001 terror attacks led to the nationalization of airport workers and the creation of the elephantine Homeland Security Agency, bucking decades of privatization of government functions. The corporate-accounting scandals early this decade that leveled energy trader Enron and communications giant WorldCom led to the Sarbanes-Oxley law in 2002, which reversed the pattern of the prior two decades of easing regulation of U.S. companies. Among that law's many provisions, chief executives had to accept legal responsibility for the accuracy of their firms' financial statements. Even if activism is on the rise, it doesn't mean a rollback of decades of deregulation of businesses ranging from airlines to trucking to telecommunications. Those moves have lowered the cost of goods and services across the economy. The degree of change will depend on who occupies the White House next January.