NCPA - National Center for Policy Analysis

Economists Wary Of New Regulatory Push Post-Enron

July 29, 2002

Although a recent Harris Poll found 82 percent of Americans supported "tough new laws" to reduce or prevent corporate fraud, many economists are urging caution in the rush to regulate the business community -- even those who 25 years ago were leery of too much deregulation. Moreover, politicians opposing a frenzy of new rules can be found in both major political parties.

  • University of California at Berkeley economist and former Clinton administration adviser Janet Yellen says she wants "thoughtful regulation and not an inadequately thought-out regulatory response to the problems of the moment."
  • "If you go around asking academic economists 'Do you think we should reregulate the airlines or trucking or any other deregulated industry?' you would get no votes," observes Alan Blinder, Princeton University economist and former Clinton adviser.
  • Lawrence J. White of the Stern School of Business at New York University asks: "Is deregulation a problem?" Then answers, "Not yet."
  • University of California-Berkley economist Severin Borenstein says of deregulation of electricity prices and variable time-pricing: "Market forces can produce a more efficient and environmentally sensible electric industry than we've had under regulation."

Sources: Louis Uchitelle, "Broken System? Tweak It, They Say," and "Looking for Ways to Make Deregulation Keep Its Promises," both in New York Times, July 28, 2002.

For NY Times text


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