The many sins of deregulation

By Harold Meyerson
Thursday, August 26, 2010

Who's afraid of a little egg? Of late, anyone who eats them, at least since the announcement of massive recalls of the salmonella-tainted spheroids.

The deregulated chickens have come home to roost. The Food and Drug Administration, the New York Times reported Wednesday, considered mandating the vaccination of chickens with anti-bacterial shots -- and decided against it. Instead, the vaccinations are merely recommended. In Britain, where such vaccinations have been required for egg vendors who wish to put an industry-standard label on their eggs, the incidence of salmonella in eggs has dropped 96 percent.

A diagram of our egg-safety bureaucracies could be presented as an illustration of the old question of whether the chicken or the egg comes first. The Agriculture Department oversees chickens and grades eggs for their quality. The FDA is responsible for the safety of eggs in their shells. The FDA inspects egg farms after an outbreak of egg-borne disease has been detected -- not before.

Nor is this mish-mash confined to eggs. Responsibility for food safety in general is divided, often along lines as arbitrary as those that segment the eggs, between the FDA and the USDA. And the faith in deregulation still lingers, if the FDA's reluctance to require the vaccinations is any evidence. The FDA, for example, can't mandate a recall of diseased food; it can do no more than try to persuade the responsible company to recall the product on its own.

A new food-safety bill, which would give the FDA the power of mandatory recall and would otherwise strengthen food-safety regulation, has passed the House but is stalled in the Senate. (My laptop, after I've written the words "has passed the House but," automatically slots in the words "has stalled in the Senate.")

Meanwhile, moving from land to sea, The Post's Juliet Eilperin and Scott Higham have laid out the dismal history of the late and unlamented Minerals Management Service (MMS), the Interior Department agency charged -- absurdly -- with both the promotion and regulation of mining and oil drilling. The agency was the creation of Ronald Reagan's zealously anti-environmental interior secretary, James Watt, who structured it to lease public lands to oil and mining companies and regulate them as well -- which meant, of course, not very well at all.

So great was pressure to deregulate business that under the Clinton administration, the MMS embraced "performance-based regulation," by which the companies themselves largely set the standards they would labor under. Today, Eilperin and Higham report, Clinton Interior Secretary Bruce Babbitt laments that shift. There should be "no place for performance-based regulation," Babbitt told them, "because of the high risk."

But the deregulatory sins of the Clinton administration were as nothing next to those of its successor. George W. Bush established the National Energy Policy Development Group, chaired by Dick Cheney, who convened a series of private meetings with energy company CEOs. The panel recommended, among other things, the expansion of deepwater drilling -- a recommendation the president embraced, with consequences that have been plain for all to see since the great gulf blowout.

Are we keeping count? That's inadequate regulation of food, energy -- did I mention banks? And yet, if we listen to Republican legislators, the U.S. Chamber of Commerce and kindred souls, we hear that America suffers from too much regulation and is not sensitive enough to the concerns of business.

Indeed, these are precisely the arguments invoked by those who oppose the nomination of Elizabeth Warren to head the new Consumer Financial Protection Agency. The problem with Warren, some argue, is that in her advocacy for consumers, she will not be sufficiently solicitous of the banking industry. She needs to also be concerned with ensuring the banks' profit margins, we're told -- just as the MMS was concerned with the well-being of the oil industry, and as the food-safety bureaucracy has at times looked out for agribusiness revenue while scanting its own mandate.

The purpose of regulation, of course, is to protect the public. If the Republicans and the chamber don't like that, they can suck a deregulated egg.

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