Deregulation: some corporate leaders cheer, others urge caution
The Reagan administration is pledged to create a more congenial business climate in the United States by slashing red tape. Indeed, in the little more than one year that the President has been in office, scores of regulations already have fallen or been relaxed with more certain to follow.Skip to next paragraph
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Therefore the captains of industry ought to be reacting with unrestrained enthusiasm, right?
Not necessarily, as it turns out.
Some of these leaders call for even faster action from Washington. But others urge caution, and some even see new hazards for business if the administration's proposed ''new federalism'' comes to fruition.
Earlier this month, in an address in Los Angeles, Texaco chairman and chief executive officer John McKinley scored ''the religion of regulation'' as ''the most troubling issue facing American business today'' and for ''rarely attempting to promote productivity or start new enterprises.'' But he also cautioned that ''business should not oppose all regulations per se.''
Ford Motor Company vice-president H. L. Misch maintains that some easing of the controls on American business is necessary, but ''we don't want to throw the baby out with the bath water.''
And, says Breck Arrington, manager of governmental issues for Atlantic Richfield Company, ''I think the idea that all of business views everything that the Reagan administration does as benign is simply not the situation.''
On the other hand, Standard Oil of California president J. R. Grey notes that before Mr. Reagan's inauguration, ''We could count somewhere like 1,000 people on our payroll who were there to respond to regulatory requirements. These are being diminished quite dramatically.''
These men are typical of the leaders of major US corporations surveyed by the Monitor on their reactions to the Reagan administration's deregulatory efforts.
* The time was right for a comprehensive new look at regulation, but some of the credit for reform belongs to Reagan's Democratic predecessor, Jimmy Carter.
* What ought to be changed is the ''methodology'' of regulation rather than its purpose.
* Industry could have lived with existing rules, but the administration's efforts are already having a positive effect on producer and consumer alike.
At the turn of this century there were only six regulatory agencies in the federal government. By 1970 that number had grown to 36, swelling to 56 before Reagan assumed office. Murray Weidenbaum, chairman of the Reagan Council of Economic Advisers, estimated last fall that the cost to industry of federal controls was $100 billion a year.
Reagan named Vice-President George Bush to head his Task Force on Regulatory Relief, and the panel soon began hearing from individual businesses, trade groups, and associations across the United States, all of them identifying rules and other controls they viewed as burdensome.
Atlantic Richfield alone sent the Bush commission ''two books'' of suggested modifications to federal rules. Ford offered ''30 to 35'' suggestions that, if adopted, would have saved the company an estimated $550 million in ''cost avoidance,'' Mr. Misch says. The New England Council, an association of businesses and industries, polled its members and identified more than $6 billion worth of existing or proposed federal rules having ''the greatest adverse impact'' on firms in the region annually.
By year's end, according to administration estimates, business had been spared nearly $2 billion in operating costs by the dropping or relaxing of certain federal controls.
Other regulations require congressional action if they are to be amended or dropped, a prospect that may have been enhanced with the advent of a new Republican majority in the Senate. One of the chief targets for amendment, at least in the view of some legislators as well as the oil, steel, automobile, and other industries, is the Clean Air Act, which is due for review later this year.
''Most thoughtful observers would say that we had gone about as far as we could possibly go in terms of the very heavy overlay of federal regulation and oversight and economic monitoring, and that there would have to be an attempt to rethink this,'' says Mr. Arrington of Atlantic Richfield. ''Because of the ideology of this particular administration, they probably make it with more enthusiasm than maybe a more centrist administration would have.''