Carter’s Greatest Achievement Was Deregulation

In airlines, trucking, beer, energy, he let free enterprise work

President Carter as photographed by Ansel Adams. National Portrait Gallery, Smithsonian Institution; gift of James Earl Carter, Jr.

The iconic images of Jimmy Carter’s presidency mostly relate to the Middle East. The signing of the Camp David accords brought peace between Egypt and Israel, though their full potential was never achieved, in part because of the assassination of the Egyptian leader Anwar Sadat. The failed effort to rescue the U.S. hostages held by revolutionary Iran underscored the deterioration of American military capabilities. Even the long lines at American gas stations traced back to the Middle East and the power of the cartel known as OPEC, or the Organization of the Petroleum Exporting Countries.

The Middle East has had a way of entangling subsequent presidents, too. And Carter kept a hand in, with an anti-Israel tilt, in his post-presidency, so it’s natural to think of all that first. Yet too often overlooked are Carter’s successes, mainly as they related to deregulation and domestic policy. They are worth remembering as Carter is mourned after his death yesterday at age 100.

In October 1978, President Carter asked a rally, “Do you want a government that will get the regulatory agencies’ and government agencies’ nose out of the private sector’s business and let our free enterprise system work in the United States? Well, that’s the kind of government we’re trying to bring you in Washington."

What was he talking about?

The biggest achievement was in air travel, where Carter worked with Congress to pass the Airline Deregulation Act of 1978, which led to lower fares, the abolition of the Civil Aeronautics Board, and the rise of discount carriers like People Express and Southwest that democratized air travel with no adverse effect on safety. There were lots of contributors—Senator Edward Kennedy and his then-aide Stephen Breyer, Cornell University economist Alfred Kahn, and Southwest Airlines co-founder Herb Kelleher all played important roles—but it was a Carter accomplishment.

The shutdown of the Civil Aeronautics Board may seem arcane or obscure, but it is no small thing. The agency had existed for 46 years and at its peak employed 840 people. It’s hard to shrink anything in Washington, let alone eliminate it entirely. If Elon Musk and Vivek Ramaswamy want a precedent for their Department of Government Efficiency, the airline deregulation story and the abolition of the Civil Aeronautics Board would be a fine place to start.

Yet while airline deregulation is the best known example, it is not the only one. Carter also passed the Motor Carrier Act of 1980, deregulating trucking. Air cargo, railroad freight, even to some extent banking and energy (via the Public Utility Regulatory Policies Act of 1978) saw bureaucracy rolled back during the Carter years, paving the way for the growth of FedEx and alternative energy.

In 1978 Carter also signed a law legalizing home brewing of beer. As Reason has reported (“Jimmy Carter Sparked a Craft Beer Explosion by Getting Government Out of the Way,”), that helped to unleash the craft beer revolution by allowing entrepreneurs such as Jim Koch of Samuel Adams and Ken Grossman and Paul Camusi of Sierra Nevada to experiment, legally, with recipes at home.

In a 1980 debate with Ronald Reagan, Mr. Carter said, “I share the basic beliefs of my region [against] an excessive government intrusion into the private affairs of American citizens and also into the private affairs of the free enterprise system. One of the commitments that I made was to deregulate the major industries of this country. We’ve been remarkably successful, with the help of a Democratic Congress. We have deregulated the air industry, the rail industry, the trucking industry, financial institutions. We're now working on the communications industry."

There were some encouraging signs from Carter on other fronts, too.

On taxes, Carter signed into law (albeit reluctantly) the Steiger Amendment, named for William Steiger, a Republican of Wisconsin. That cut the capital gains tax to 28 percent from the effective 49.875 percent rate to which it had been increased under Nixon and Ford. It was a prelude to the tax-cutting that spurred growth under President Reagan.

On education, Carter ran in 1976 on a platform that promised “parental freedom in choosing the best education for children.” He sent a letter to Catholic school administrators acknowledging, “in many areas of the country parochial schools provide the best education available…Therefore, I am committed to finding constitutionally acceptable methods of providing aid to parents whose children attend parochial schools.” I tell the story of Carter and Catholic schools in a new piece out this morning at Education Next, “Carter’s Winning 1976 Platform for Education Backed ‘Parental Freedom in Choosing.’”

On religion, Carter’s devout Christianity, visible in his work as a Sunday-school teacher and building houses with Habitat for Humanity, was a pushback against secular trends in contemporary American culture and in the Democratic Party in particular.

The point isn’t that Mr. Carter was perfect (he wasn’t), or that the voters were wrong to replace him with Reagan (they weren’t). But, especially as it relates to the deregulation accomplishments, it is worth recalling that there was a time not so long ago when Democrats and Republicans worked together for common-sense, free-market-oriented reforms that, when tested, worked.

These changes spawned dynamic innovation and growth that built fortunes and that also benefited consumers who could fly, receive packages, or drink beer with more choices and better value. All that is something to remember too as Americans mourn President Carter on the eve of a new administration in Washington.