The Ups and Downs of Deregulation

Ma Bell felt its wrath. So did the airline industry. More recently, the trend towards deregulation has honed in on the utility companies around the nation. California became one of the first states to deregulate its power market, and it saw a steep rise in prices and rolling blackouts as a result. Enron was essentially a product of deregulation. But still the power companies themselves are still heavily lobbying to open up the power grid to competition, because it would mean less interference from the government. Deregulation has had a somewhat rocky past. But this hour's guest, Alfred Khan, who oversaw the deregulation of the airline industry, says the best thing that government regulators can do is get out of the way. Does deregulation work? Or do we need more governmental control to ensure that businesses play by the rules?

Guests:

Alfred Khan, Professor emeritus of political economy at Cornell University, special consultant to National Economic Research Associates

Dean Baker, co-director of the Center for Economic and Policy Research in Washington