The deregulation myth

Watching Pam Stout's appearance on The Late Show with David Letterman to discuss the Tea Part movement, I just wanted to pull out my hair when Letterman made this remark (2:40 mark on the video clip):

"Now here's my impression of the global fiscal collapse: that Republicans in power previously for eight years deregulated banks and that was a contributory factor. So the question is, where were people like yourself and other Tea Party members when they saw that begin to happen -- why didn't we have that organization earlier?"

Stout basically agreed with Letterman's premise, stating something to the effect that she started becoming upset about Washington's actions a few years ago and that recent events -- the bailouts and overspending -- served as a tipping point.

The response she should have given is that Letterman -- who I think actually gave a pretty fair interview -- had obviously drunk deeply from the Kool-aid which holds the Bush era was one of rampant deregulation. The facts are these:

• The Republican-controlled Congress passed, and President Bush signed, the Sarbanes-Oxley Act which was a huge new regulatory burden on business. The legislation was so onerous it prompted Sen. Chuck Schumer, a liberal Democrat and confirmed statist, to publish an opinion column in the Wall Street Journal expressing worry over overregulation and calling for a reexamination of Sarbanes-Oxley.

• Indeed, during the Bush Administration more than 30,000 new rules were implemented -- over 3,800 in 2008 alone -- with very few repealed. Compliance costs are estimated at $1.2 trillion.

• Both the staff and budget of the Securities and Exchange Commission reached historic heights during the Bush Administration.

This deregulation mantra needs to be exposed for the myth it is.