Can the Obama Administration Renew American Regulatory Policy?

Abstract

Stephen Skowronek’s The Politics Presidents Make argues that presidential administrations can be organized into sequences defined by distinctive paradigms of governance: one president defines or “reconstructs” a new approach to government (e.g. Jefferson, Jackson, Roosevelt) one or more successor presidents extend or “articulate” that approach (Monroe, Polk, Lyndon Johnson), and then one or more presidents continue the approach past its period of effectiveness, which constitutes a “disjunction.” (Quincy Adams, Pierce, Carter). Within this framework, Ronald Reagan’s Administration could be regarded as a reconstruction, with the Clinton Administration being an articulation and the second Bush Administration a disjunction. Regulatory policy was one of the defining features of Reagan’s reconstruction, with its principal pillars being deregulation, cost-benefit analysis and privatization. These remained the organizing principles of regulatory policy through the two Bush Administrations and the Clinton Administration as well.

It’s too early to tell whether the Obama Administration will represent a new reconstruction, in Skowronek’s sense, but some reevaluation of the prior paradigm seems to be underway. New Public Governance provides a possible model for a true reconstruction. This approach to public law and regulation has already defined itself as moving beyond deregulation and can readily be interpreted as moving beyond privatization as well. It envisions complex, cooperative relationships between government and private actors that are in some sense orthogonal to the public-private dichotomy that underlies the concepts of regulation and privatization. The article uses the Dodd-Frank Wall Street Reform and Consumer Protection Act to explain how the Obama Administration could reconstruct regulatory policy. While the Act itself does not seem to move very far beyond traditional command and control regulation, its provisions are capacious enough to allow the regulatory agencies to do so. By drawing on the insights of New Public Governance, these agencies might well be able to craft regulations that would be more effective in the complex, demanding world of modern finance.

Keywords: Administrative Law, Regulation, Financial Services, Public Law, Presidential Policy