Regulators Intentionally Asleep At The Switch

Regulatory Capture

If you have any doubts about this subject I would suggest reading RAILROADS TRIUMPHANT by Albro Martin. The Interstate Commere Commission was NOT captured by the industry. It was captured by agrarian interests because of the wide-spread belief that railroad rates were unfair. The I.C.C. was so dominaed by shipper interests that Prsident Taft tried to interpose a "Commerce Court" to deal with the inequities. Unfortunately, the Commerce Court was short-lived mainly due to the progressive movement which elected Wilson. It didn't help matters when a Commerce Court justice was impeached.

If you take the time to go through the voluminous history of the ICC decisions you will find that the shippers were always the winners. Today, deregulation under the "Staggers Act" has provided a somewhat level "playing field", but the same forces are still in play. Most of railroad critics have no conception of the cost of rail transportation, either in cost of fixed-plant or operating costs. I sometimes wonder if the I.C.C. should be ressurected.

John Marshall of OR @ Jun 24, 2009 22:07:12 PM