Reality check: Feds vs. business

By Howard Kurtz
Washington Post Staff Writer
Tuesday, June 22, 2010; 9:35 AM

It's time to move beyond Joe Barton's political face-plant.

Yes, it was quite amusing to watch the congressman's righteous indignation, prompted by the Obama administration's awful mistreatment of BP, fade when his own party leaders engaged in the very act of which he had accused the president: extortion. Suddenly, to hang onto his committee seat, Barton was very sorry that anyone had the impression he believed the oil giant had been unfairly pressured into providing $20 billion for the Gulf oil spill's victims.

But the Texas Republican wasn't going off on a half-crazed tangent. He was giving voice to a philosophy embraced by a sizable faction of the conservative movement and the Gingrich wing of the GOP: Activist government is strangling business. (Newt also said the Obamaites were extorting BP.)

In recent generations, there has rarely been a more vivid example for the opposing camp than the murky oil washing up on beaches and marches, thanks to a permit that should never have been issued.

For 35 years, proponents of federal regulation have been on the defensive. Few remember it now, but Jimmy Carter pushed for deregulation, most notably of the airline industry. Ronald Reagan told us government was the problem, not the solution. Bill Clinton was more of an activist-government type, but he also presided over the loosening of banking restrictions that helped produce the Wall Street meltdown. George W. Bush also thought government's hand was too heavy, which gave us an SEC that dozed through the Madoff scandal, a FEMA that was out to sea during Hurricane Katrina and an MMS that allowed oil companies to write their own inspection reports.

Of course, too much government regulation can strangle businesses, kill jobs and boost prices. The trick is finding the right balance.

But evidence that corporations were flouting the federal cops on the beat rarely changed the tenor of the debate. Yes, the Enron and other accounting scandals of the early 2000s led to legislation, but even after the great banking collapse and the charges against Goldman Sachs, Congress is still debating legislative fixes. A series of mine collapses doesn't seem to have changed much. The Toyota accelerator deaths don't seem to have changed much.

Candidates continued to run against Washington. Who, after all, trusts government anymore?

Barack Obama brings a more aggressive approach to business. He took on the health-care industry, and his hard-fought legislation is still seen in many quarters as government run amok. He took on insurers such as WellPoint for excessive premium increases. Now he is vowing to boost oversight of oil drilling -- something he failed to do in the past year and a half -- even as many Americans believe he has been too deferential toward BP.

In the abstract, government regulation sounds onerous. But when an offshore rig explodes, people want to know why the regulators weren't doing their jobs.

Maybe Obama is going too far. This is a debate we need to have. This is a debate the media need to have, rather than just playing the video of Joe Barton embarrassing himself.

John Aravosis of Americablog told me in a conversation the other day that such coverage might be too "boring," too Atlantic Monthly, for most Americans. I disagree. If we can't find a way to make such fundamental issues compelling, we ought to find another line of work.

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