December 31, 2024
Regulatory Reform: Jimmy Carter & the SEC
Former President Jimmy Carter passed away over the weekend, and as I read some of the tributes to him, I thought it might be interesting to see if I could find some information about how he dealt with the SEC during his tenure. What I found was a reminder of just how differently policy makers approached securities regulation during that era. Here’s an excerpt from an SEC Historical Society article on the agency’s evolution during the period from 1973-1981:
President Carter’s view of the SEC and its role as a regulator of the markets stands in sharp contrast to his other initiatives to regulate the economy. Although willing to consider price and wage controls, President Carter took a hands-off approach to the SEC.
His archives provide clues as to why he took that approach. The public worries about inflation meant that that issue would remain the single most important of his Presidency. But nearly as important was Carter’s belief that the SEC was a non-partisan agency, and that once he made his appointments, he should refrain from attempts to influence its policies. He respected the SEC and its staff and believed that the SEC and the markets could manage without his political influence and interference. After appointing [Harold] Williams as SEC Chairman, Carter remained mostly neutral on SEC regulatory matters.
In light of the increasing politicization of the securities regulation process that we’ve witnessed over the past couple of decades, Carter’s non-partisan, technocratic approach seems rather quaint. Even so, it’s an approach that I think we should aspire to return to – and putting a stop to the practice of using the agency to accomplish political goals that the party in power can’t achieve through legislation would be a good first step in that direction.
– John Jenkins
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