As the nation remembers Ronald Reagan on the centennial of his birth, we at AEI recall his first appearance here. In 1975, former Governor Ronald Reagan spoke at a two-day conference on regulatory reform. He participated in an AEI Roundtable discussion at the end of the conference with Senator Hubert Humphrey, Ralph Nader, and others. The themes that Reagan would use in his 1976 and 1980 presidential campaigns were on full display in the exchanges. His thoughts were clear as he sparred forcefully with Nader and Humphrey.
Responding to a distinction Nader made between health and safety regulation and economic regulation, Reagan said, “We get onto dangerous ground when we allow government to decide what is good for us. In the field of health and in the economic field, government has grown to such an extent that I am afraid it is showing a lack of respect for the average citizen. With government fostering the idea that the citizen cannot even buy a box of Post Toasties for himself without being cheated, one wonders how voters are supposed to be able to pick the government people who are wise enough to make all these decisions for them? When government starts showing a lack of respect for the people, the people soon start showing a lack of respect for government.”
In that exchange, Reagan used an anecdote that is reminiscent of President Obama’s discussion of salmon regulation in his recent State of the Union address. “Just recently the Department of Health, Education, and Welfare [now Health and Human Services] came into a hospital in Ohio and said the plastic liners had to be taken out of the waste baskets because if one of them caught fire the noxious fumes would be injurious to the patients. But the plastic liners had been used only because the Occupational Safety and Health Administration had said they were necessary” to protect workers from contamination.
Nader pushed back, citing examples of drug companies that didn’t warn people about the adverse effects of certain medications. But Reagan was unmoved.
“For every case of a drug that slipped by the Food and Drug Administration and has been harmful to some people, there are dozens of cases of the Food and Drug administration going too far.” He then went on to make an argument about the “drug lag,” noting that the FDA had failed to approve drugs that had been proven effective in other countries, saying that thousands had suffered or died here because they have been denied these drugs.
In responding to the growth of regulation, Reagan discussed the staggering paperwork required by government and its deleterious effects on small business. He also noted that “regulation has led to an interlocking bureaucracy” with a bureaucracy in government “now being matched by a bureaucracy employed by business to do business with the bureaucracy of government. The two bureaucracies are feeding on each other and neither one of them want the other to go away because in a sense they employ the other.” He and Nader agreed on that point, but Reagan pushed on, saying that “We are the most regulated society this nation has ever seen, and we are paying for it not only in the coin of the realm, but also in a greater loss of freedom than any of us realize. We have moved a great distance from the system that originated in this country, a system that was based on the ultimate in individual freedom consistent with an orderly society.”
Reagan responded forcefully to Senator Humphrey’s point that revenue sharing would enable states and localities to address their needs better. “The federal government,” Reagan said, “has usurped the revenue that ought to remain where it was raised, at the state and local level. Revenue sharing would not be necessary if we left the revenue at the local level and restricted the federal government to those tasks which properly belong to it.”
While voicing some criticism of the Civil Aeronautics Board, Senator Humphrey made a point that the government had to keep the agency because “if we left the matter to the marketplace,” small towns in his state would not continue to get air service. To this, Reagan responded, “If the CAB were done away with and smaller towns lost some of their mainline service, the marketplace would find that there was business for a certain type of airline to go into those communities and would provide it.” And with the CAB’s demise, so it has.