Do Corporations Have an Inside Track With This White House Pair?

WASHINGTON–The White House inflation policy invites superficial caricature and general condemnation. After pushing Congress hard for higher energy prices, including a massively inflationary natural gas bill, the Carter administration is about to go after its own health and safety regulators in a major way.

Leading the charge is Charles Schultz, a born-again anti-regulatory economist, and Barry Bosworth, a young economist who believes that regulation imposes too many unproductive costs on business.

Carter’s health and safety regulators are under increasing pressure from Schultz and Bosworth and their assistants to cut down their regulatory mission. Tensions are rising between the two groups. On the periphery is a Washington corporate attorney, Lloyd Cutler, who is urging greater presidential control over the regulators. Schultz, Bosworth and Cutler do not spend their days agonizing over the victims of dangerous drugs, food additives, hazardous vehicles, cancerous expenditures–some real, some fancied–that are associated with these human casualties. They are not concerned so much with the involuntary expenditures of consumers as a result of being harmed or defrauded in the marketplace.

Of course, they put forth theories to shield their indifference or callousness. Cutler’s theory is that the president should intervene and shape these policies more aggressively to provide what he calls a more balanced policy result. It appears to Cutler that agencies like the Food and Drug Administration or the Occupational Safety and Health Administration are too single-minded in their life-saving objectives.

There are lawyers who will challenge the legal propriety of such presidential intervention and the process that is supposed to be quasi-judicial, reasonably independent, and on the merits.

Other observers will recall an October 1971 memo by former President Nixon’s Office of Management and Budget ordering greater White House control which helped lead to the back-door political corruption that traded presidential campaign contributions for life-saving regulatory standards.

As for Schultz and Bosworth, their performance is more pathetic. Whether due to their own predisposition or inability to stand tall, their inflation fighting choices are highly skewed.

For example, fighting inflation might be thought to include a tough scrutiny of huge federal subsidies to business. They are not engaged in the quest.

Fighting inflation might include pushing the regulators to stop delaying or ignoring needed regulation in such areas as auto safety, auto repair, health costs, and bank abuses. Schultz and Bosworth never urge speedier adoption of anti-inflationary regulations. Rather they restrict their efforts to block, dilute or delay the long overdue regulations that are forthcoming.

Fighting inflation should direct attention to what economist Gar Alperovitz calls the “four necessities”–namely, energy, food, housing, and health care. President Carter’s inflation message is not giving these family budget squeezers high priority.

Fighting inflation would include tough anti-monopoly and corporate crime enforcement. These programs are not priorities for Schultz and Bosworth.

The list could go on, but the lesson is clear. Unless President Carter turns his attention closely to this problem, his advisers will be placing him in a politically exposed position.

He will be expected to pass on major health, safety, and economic regulations issued by his appointees in the regulatory agencies. The White House will be flooded with detailed work and corporate political pressures that it is neither equipped to perform nor able to resist properly.

President Carter did his office no good recently when he allowed himself to become so closely involved in the textile industry’s effort to weaken the cotton dust health standard for the workers. Schultz and Bosworth were involved in bringing the president into this controversy.

If presidents do not like the regulators, they can replace them. But to put the White House into the regulatory process, while it avoids confronting far more significant anti-inflationary policies which might step on big business’ toes, is a confession of both failure and cowardice.

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