Regulation Makes a Comeback

It has been an article of faith among conservatives that more regulation is always bad and that government should seek instead to deregulate. The events of the last few weeks are moving the public sharply in the other direction. Regulation, out of fashion for many years, is making a comeback.

Consider these data from a just-released Los Angeles Times/Bloomberg poll. When asked whether lack of regulation is partly responsible for the current financial and housing crisis, an overwhelming 73 percent of the public agreed, compared to just 19 percent who disagreed.

Chart One

Just how important is increased regulation to the public? Well, when the public was asked in the same poll what economic issue was most important for the presidential candidates to address, more selected “strengthen regulations” (26 percent) than any other issue, including unemployment (15 percent) and even housing foreclosures (13 percent).
Chart Two

It looks like this is goodbye to the anti-regulation politics that go back to the Reagan era. The LA Times poll illustrates this by providing data that compares views on regulation today compared to views in 1981, the year after Reagan was elected. In 1981, the public thought there was too much, rather than too little, regulation, by a wide 54-18 margin. Today, it’s almost reversed: 45 percent think there’s too little regulation of business, compared to 27 percent who think there’s too much.
Chart Three

Of course, progressives were for increased regulation of business, especially in the financial area, before it was cool. But we welcome everyone else on board (including any conservatives who are now seeing the light).