The New York-to-Detroit blackout was one of those brief, sensational moments of chaos that leave behind a resonant political message. There have been many such moments in the past few years, when "efficient markets" turned on a gullible citizenry and delivered brutish reprisals: when California's deregulated energy market, led by Enron, scammed consumers for tens of billions in a manipulated price run-up; when the stock-market meltdown ate the baby boomers' retirement savings; when newly created megabanks like Citigroup and JP Morgan Chase duped their retail customers and masterminded gross financial frauds for companies like Enron; when the public's "trustee" of the broadcasting airwaves, the FCC, granted still greater concentration for the major media conglomerates. One way or another, people and politicians rebelled.

The common message of these events is the end of an ideological era. The long-running conservative imperative for deregulation has been a driving idea for thirty years. The public interest embedded in economic regulation was nullified by law, the marketplace set free to work its "magic." Great changes swept across business and financial sectors as a result, many new doors were opened for technological advancements. But an ugly corollary always accompanied the triumph of markets: Left unprotected by legal guarantees and restraints, the people are ignored, abused and screwed, then often have to pay to clean up the mess. Many more people understand this now, more concretely and universally than at any time since the 1970s, and politics is beginning to respond (even right-wingers mobilized against the FCC's giveaway). The Bush crowd will never give in to reality (yet another reason to toss them out next year).

A new moment has arrived, nevertheless. Political awareness may shift gradually, but it's time to think anew and ask how the regulatory system can be repaired, restored, reformed to carry out the public goals that were systematically dismantled. Where are the left-liberal thinkers with new concepts? Environmentalists, for instance, have created voluntary enforcement agencies like the Forest Stewardship Council, which could be prototypes for redesigning more effective government regulatory agencies.

The exploration must begin by recognizing how and why the old regulatory systems failed. The politics of deregulation was not driven by corporate greed alone (though greed was always a hearty motivation). The old liberal order is not going to be re-enacted--and shouldn't be, because the old order broke down for its own reasons. To be politically viable, a new regulatory system must overcome the old system's failures.

Regulatory agencies that focused on a single sector were always vulnerable to capture by the regulated industry itself, whether they were banks or coal companies or electric utilities. The regulatory rules were also sometimes oblivious to big economic changes and thus in effect rendered obsolete by new technologies like computerization or by persistent disorders like inflation. Regulatory legislation was typically compromised by putting off the hardest decisions--assigning fundamental choices to remote regulators who would be highly susceptible to industrial pressures or White House muscle. Right now, the Bush team is rolling back, by executive fiat, clean-air legislation enacted thirty years ago. Many regulatory laws of the modern era were not laws in any real sense, but more in the nature of wishful political promises. Many, like Superfund cleanups and eliminating hazardous chemicals, remain unfulfilled goals.

Above all, what was lost and forgotten over many years was the original genius of New Deal reforms--the understanding that social protections and economic well-being are not separate and incompatible but public values that can and should work together. A banking system cannot be sound if it is dominated by a few behemoths that regard themselves as above the law or if millions of Americans are left "unbanked" because they can't afford the sky-high fees of a checking account. A telecommunications industry cannot be healthy if it shuts off ownership and access to the diversity of Americans. The electricity sector cannot be efficient when it breaks down catastrophically and bilks its own customers.

The design questions will be hard to answer, so it would be healthy to start some lively arguments over competing approaches. The hardest part, however, is reclaiming the ethos of shared social values as central to economic prosperity. Deregulation essentially boosts returns by throwing some people over the side--usually people in the bottom half who get priced out--but during hard economic patches those "liberated" industries are always back at government's door, demanding assistance. This is a rotten bargain for society. As the public at large gets the meaning, the mood will be ripe for demanding a new deal.

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