All In   |  April 08, 2013

Margaret Thatcher’s history of deregulation

Britain's former prime minister Margaret Thatcher, who died Monday at 87, deregulated Britain's financial services industry. MSNBC host Martin Bashir and Cass Sunstein, who was head of the White House's office of regulatory affairs, join Chris Hayes in discussing whether the impact of that decision can still be felt across the Atlantic.

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This content comes from Closed Captioning that was broadcast along with this program.

>>> martin just talked about deregulation, particularly in the financial sector . the unleashing of the city of london and part of the reagan -thatcher access is this legacy of deregulation and this is something carter started in the late '70s. economies were too regulated, they had to be deregulated and there's an argument that we reaped the rewards of that in the great crash in 2007 . as someone who has been doing the daily work of regulation, how to you see that trajectory?

>> well, i think the idea that there's regulation and some people love it and there's deregulation and other people love that, that's a disservice to the real issues we face. and i think the best part of reaganism, which really has some continuity across democratic administrations too and it's consistent with margaret thatcher 's thinking was we want to pay very careful attention to costs and benefits . we don't want to cheer at regulation or cheer at deregulation and just have our citizens be in some sort of fistfight. we instead want to look very carefully at consequences. reagan 's great idea about regulation was to get really as empirical as possible. now, it's not necessarily the case that he or margaret thatcher delivered fully on that promise, but it's a great aspiration.

>> but wait a second. it's the regulated industries who want that. let's just be clear. it is -- the evaluation of costs and benefits , right, becomes a means, an on stack el for imposing regulations.

>> not so. the obama administration issued regulations. the bush administration actually issued more than 2,000. under the obama administration the net benefits of rules have been over $91 billion and a lot of that is not deregulatory savings for companies. the bulk of it includes lives saved.

>> health benefits .

>> health benefits . so cost benefit analysis helped reagan get rid of lead in gasoline and that's because the health benefits of getting rid of lead in gasoline way outweighed the costs.

>> i'm interested that you say reagan 's analysis is empirical. does that suggest that he did the analysis before he executed the strategy? because in thatcher's case she did not.

>> it was an ideological --

>> absolutely from the outset.

>> the aspiration from the reagan framework taken most sympathetically was evidence-based. i wouldn't want to say that everything that was done in any administration, certainly president reagan 's or prime minister thatcher's was evidence based . but the french theorist said that hypocrisy is the tribute vice pays to virtue. if we look at evidence as our guiding star , at least we know what virtue is.

>> martin, bruce bartlett wrote this piece where he looks add taxes and spending. you see selling things off to the private sector , deregulation. what does that say to you -- what was the real battle there? was it about bigger or smaller government or was it about what the government does and who it serves?

>> i think there was a chronological link so it wasn't ideological small and big. it was also that she wanted to define herself and her leadership as very different and in contrast to what had preceded her and that involved a lot of things that the government owned, like transportation and railway services, public utilities . and she found those to be in her view malfunctioning and not delivering. so what she did was she said well actually what we need to do is have things that function, and she believed that they would function very, very well if they were deregulated and denationalized. one of the interesting things, the great academic who passed away a couple of years ago, tony jott, wrote a brilliant book on post-war britain and he actually did a whole analysis of the british railway system and showed that its inefficiencies and its costs are now worse than they were --

>> exactly.

>> -- as a nationalized industry .

>> and we have seen privatization as a cure for many things that often does not deliver, even when it's moving off of is in fact --

>> chris, one of the things that was most angering to british people was to see individuals making huge sums of money as a consequence of taking the national silver and then delivering a service that was actually mediocre compared to what it was when it was owned by the government.

>> to quote someone, that's the cost that price pays to virtue. that was great.

>> thank you.