Deregulation

By the 1970s, economists across the political spectrum argued that price and entry controls in transportation and other industries raised costs and protected incumbents. Deregulation began as a bipartisan project under President Jimmy Carter. The Airline Deregulation Act of October 24, 1978, phased out federal control of fares and routes and abolished the Civil Aeronautics Board at the end of 1984, and the Motor Carrier Act and the Staggers Rail Act of 1980 loosened control of trucking and railroads. The Interstate Commerce Commission, the first federal regulatory agency, was abolished in 1995.

President Ronald Reagan made regulatory relief a central goal, using cost-benefit review, budget cuts, and appointments. Later laws deregulated telecommunications in 1996 and repealed limits on combining commercial and investment banking in 1999. After the 2008 financial crisis, critics blamed financial deregulation and Congress passed the Dodd-Frank Act in 2010, part of which was rolled back in 2018. President Trump ordered agencies in 2017 to repeal two regulations for each new one, and in January 2025 raised that to ten for one, while also directing agencies to identify rules that exceed their authority after the Supreme Court ended Chevron deference in 2024.

Studies credit airline deregulation with lower average fares and more travel, while noting fewer carriers and reduced service to some small cities. Supporters of deregulation say rules impose large hidden costs, stifle innovation and competition, and often protect established firms. Critics say deregulation has contributed to financial crises, safety lapses, and environmental harm, and that savings for industry can mean costs for consumers and workers. Most economists distinguish economic regulation of prices and entry, where deregulation has broad support, from health, safety, and environmental rules, where the debate is sharper.