256 PART ThRee • InsTITuTIons oF AmeRIcAn GoveRnmenT
Capture
The act by which an
industry being regulated
by a government agency
gains direct or indirect
control over agency
personnel and decision
makers.
Government
Corporation
An agency of government
that administers a
quasi-business enterprise.
These corporations are
used when government
activities are primarily
commercial.They contend that many agencies have
been captured by the very industries
and firms that they were supposed to
regulate and therefore make decisions
based on the interests of the indus-
try, not the general public. The results
have been less competition rather
than more competition, higher prices
rather than lower prices, and fewer
choices rather than more choices for
consumers.deregulation and Reregulation.
During the presidency of Jimmy Carter
(1977–1981), significant deregulation
(the removal of regulatory restraints—
the opposite of regulation) was initi-
ated. For example, Carter appointed
a chairperson of the Civil Aeronautics
Board (CAB) who gradually elimi-
nated regulation of airline fares and
routes. Deregulation continued under
President Ronald Reagan (1981–
1989). During the administration of
George H. W. Bush (1989–1993), calls
for reregulation of many businesses
increased, and several new regulatory acts were passed.
Under President Bill Clinton (1993–2001), however, the Interstate Commerce
Commission was eliminated, and the banking and telecommunications industries, along
with many other sectors of the economy, were deregulated. At the same time, there was
extensive regulation to protect the environment, a trend somewhat attenuated by the
George W. Bush administration.
After the financial crisis of September 2008, many people saw inadequate regula-
tion of the financial industry as a major cause of the nation’s economic difficulties. During
President Barack Obama’s administration, therefore, reregulation of that industry became
a major objective. After intense debate, Congress passed a comprehensive financial indus-
try regulation plan in 2010.
Americans have had conflicting views about the amount of regulation that is appro-
priate for various industries ever since the government began to undertake serious regula-
tory activities. Many people find regulation to be contrary to the spirit of free enterprise
and the American tradition of individualism. Yet in cases such as BP’s Deepwater Horizon
oil spill disaster in the Gulf of Mexico in April 2010, citizens of all political stripes were out-
raged to learn that the relevant regulatory agency at the time, the Minerals Management
Service, had failed to do its job.Government corporations
Another form of bureaucratic organization in the United States is the government
corporation. Although the concept is borrowed from the world of business, there are
important differences between public and private corporations.A mail clerk helps a customer in Fairfax, Virginia. The U.S. Postal Service,
a government corporation, is currently taking a large loss on its operations. Still,
the United States enjoys one of the lowest rates for domestic letter postage in the
industrialized world—$0.46. The equivalent rate in U.S. dollars is $0.78 in Britain,
$0.77 in France, and $0.80 in Japan. (Andrew Harrer/Bloomberg via Getty Images)Copyright 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
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