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Published Date:04-07-2017
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GOOD RULES 10 STORIES OF SUCCESSFUL REGULATION JAMES L ARDNERINTRODUCTION In the school of brutally hard knocks, America has relearned something about the business world: it needs rules. When we let corporate and financial insiders decide large questions of right and wrong for themselves, we invite trouble. The most devastating financial crisis since the Great Depression, the biggest mining disaster in four decades, and the worst undersea oil leak (and one of the worst environmental tragedies) ever have driven that point home. This report documents another under-appreciated lesson of our national experience - that good rules and ef - fective enforcement are within our power to achieve. It may be hard to look past the cascade of calamities; but if we make the eo ff rt (and turn down the volume knob on the cynical voices telling us to expect no better), a more hopeful story comes into view. That story is one of daunting health, safety, and environmental problems overcome or eased by acts of federal, state, and local rule-making; of measures that have saved lives, prevented sickness, empowered workers and consumers, spurred innovation, and advanced the common good. HOW REGULATION CAME TO BE e U Th nited States was never, as some imagine, a land of unfettered commerce. Professional licensing, patent protection, rudimentary building and zoning codes, laws against the adulteration of meat, bread, and flour – these and other forms of regulation go back to the days of the Founders and before. But there have been times, like our own, when innovation and new business practices and institutions got far ahead of the rules. After the Civil War, the new technologies of oil, steel, rail - roads, and electricity, and the giant corporations in command of those discoveries, overwhelmed the simple (and mostly state and local) regulation of the pre-industrial age. Out of that pe- riod of convulsive change came the first great wave of modern 1905: A Meat Packing Plant regulation. It included measures addressing the unsanitary practices of the meat-packers; the price-fixing and secret deals of the railroads; the exploitation of child labor in garment factories, mines, and other gritty and dangerous fields; and the brute power of the huge industrial combinations known as “trusts.” Victories did not come easily. Nor did they come from on high, as edicts handed down by an elite. Time and again, the back-story of reform involved ordinary citizens banding together to call for action, industries resisting fiercely (or trying to co-opt the process), and elected oc ffi ials responding slowly, often only after a galvanizing tragedy like the Triangle shirt-factory fire of 1911, which led to passage of some of this country’s first occupational safety laws. Modern regulation arose out of crisis and struggle, but also, just as importantly, out of the momentum of accomplishment. By the middle decades of the twentieth century, Americans could look around and see an encouraging number of places where rules had been implemented and conditions had improved. This country’s successful experience with regulating the meat industry inspired a similar approach to the chicanery of the old- time pharmaceutical world. Airline safety regulation provided a template for auto safety regulation. 10 STORIES OF SUCCESSFUL REGULATION 12 GOOD RULES Such laws exist today because people fought long and hard for them. And they exist because of the benet fi s they have brought in one realm of life after another. Work-free weekends; childproof medicine caps; cleaner rivers and lakes; reduced teen smoking; infant car seats that do not crumple in accidents; civil-rights protections for people of color, women, and gays – that is just some of what we have gained as a nation through rules devised and enforced by the imperfect institutions of American democracy. DIFFERENT SITUATIONS, DIFFERENT SOLUTIONS Good rules come in many shapes and sizes. Some of the measures described in these pages follow a “o Th u Shalt Not” model (banning the use of DDT as a pesticide, for example). Some are affirmative (requiring seatbelts and airbags in automobiles). Some set a floor (the minimum wage); others set a ceiling (on the power-plant emissions responsible for the problem of acid rain). A few of these stories turn on the eo ff rts of a social movement to win passage of a piece of landmark legis - lation, such as the Americans with Disabilities Act. Others involve a series of measures taken over a span of years. The gains against cigarette smoking came through an incremental and opportunistic approach, including higher taxes and local and state smoking bans that applied at first to public buildings, later to private workplaces, and eventually to restaurants and bars. This was how a loose coalition of activists, public health specialists, and policymakers made headway against a politically powerful industry tapping into a strong national commitment to personal liberty. Developing good rules, like developing good products, takes persistence and flexibility, not just in getting policies adopted but in getting them right. Rule-makers have sometimes been strikingly creative, devising measures (like the National Do Not Call Registry to address the problem of aggressive telemarketing) that achieve important results with a nudge rather than a shove. With the Home Mortgage Disclosure Act of 1975 and its sequel, the better-known Community Reinvestment Act of 1977, Congress found a way to use disclosure to prod mortgage and small-business lenders into a process of self-examination; by shedding light on the insidious practice of “redlining,” these laws empowered citizen groups to work with banks to change their practices. Reformers arrived at this imaginative formula after an earlier set of civil-rights 1 and fair-lending laws had failed to do the job. RULES NEED TO EVOLVE When the business world moves on and regulation stands still, progress can unravel. We have seen it hap- pen with the body of rules that used to govern the world of banking, lending, and securities. Developed in response to the financial meltdown of 1929-33, those rules gave America a long respite from the financial panics that had been regular and terrible occurrences as far back as anyone could remember. For nearly half a century, we had a stable financial economy – one that served the needs of the real economy, not just its own. e s Th uccess of financial regulation rested on a set of basic ideas (involving transparency, leverage limits, and capital reserve requirements, among other things) that stood the test of time. Written for a simple universe of regulated institutions and products, however, the regulations of the 1930s did not anticipate the private-label mortgage securities, o- ff balance-sheet accounting, credit default swaps, and other novel - ties introduced by the financial go-getters of the 1980s and ‘90s. And instead of moving to close the gaps, oc ffi ial Washington bought into the go-getters’ characterization of their innovations as risk-management tools that made rules unnecessary. e t Th heory of deregulation is to let markets function “freely,” without “government intervention.” In prac - tice, regulated industries have often been permitted to pick and choose, keeping the forms of intervention they like and dispensing with the rest. Financial regulation was a two-way street, with banks receiving extensive public support (in the form of, among other things, deposit insurance and low-interest Federal Reserve credit) in return for their acceptance of a set of safety and public-service requirements. Under the banner of deregulation, congressional leaders and administrations of both parties removed many of the restraints, but left the guarantees and supports in place, allowing the industry to develop a set of wildly speculative new products and practices that put the whole economy at risk. We are living with the results. RULES NEED TO BE ENFORCED In addition to the disasters in mining, drilling, and finance, Americans have witnessed a series of defaults involving auto, food, and drug safety, clean air and water, and labor and workplace pro- tections. In case after case, the breakdowns have been ones of enforcement as well as rule-making. Some of these failures have been scandalous. Two years before the Minerals Management Service had to answer for its lax supervision of offshore drilling in the Gulf of Mexico, mining interests secured favorable rulings from regulators, who (according to an inspector general’s report) had “frequently consumed alcohol at industry func- tions, had used cocaine and marijuana, and had Oil from the BP spill washed up on the beach. sexual relationships with oil and gas company 2 Credit: Flickr/USFWS/Southeast. representatives.” It is certainly fair to wonder whether BP might have taken greater care in the Gulf if it had been dealing with a more credible watch- dog. But while the seamy tales get the most attention, the deeper problem may be the one known as “cogni- tive capture,” in which regulators adopt an industry’s priorities and concerns as their own. For much of the past two decades, leaders of the Food and Drug Administration have boasted about the accelerated approval of new pharmaceutical products – gains achieved, we know now, partly by cutting back on the 3 monitoring of products already on the market. Unsurprisingly, this period has also been marked by a growing number of product recalls. In the world of financial regulation, too, regulators have often defined their mission as one of stimulating innovation rather than protecting the public. Not only did federal bank regulators fail to stand up for the victims of predatory mortgage lending, they did the predators’ bidding by telling state agencies that only 4 Washington, which had failed to act, had the authority to act. Stories like these (and there have been disturbingly many) feed a sense of despair. But regulatory capture, whether sordid or subtle, is not inevitable. The great majority of the people who go to work for watchdog agencies are looking for a chance to serve the public good. When cynicism sets in, as Rena Steinzor and Sidney Shapiro observe in their 2010 book The People’s Agents and the Battle to Protect the American Public, it tends to start at the top – often with hostile second-guessing and deal-making by politically- appointed managers, White House overseers, and congressional committee leaders. Some agencies have been beaten down by years of systematic underfunding and understaffing. e Th Wages and Hours Division of the Labor Department, for example - charged with enforcing federal child-labor, minimum-wage, and overtime-pay rules - has fewer than a thousand field investigators working across the country; that is just slightly more than it had in 1941, when the number of covered workers was about 5 ten percent of today’s figure. 10 STORIES OF SUCCESSFUL REGULATION 34 GOOD RULES e C Th onsumer Product Safety Commission is another agency with a huge mission and a woefully inad - equate staff - now down to 400, half the number of people employed by the CPSC at the time of its found - ing in 1973. Consider just one of the commission’s responsibilities – dealing with the problem of lead paint and other toxic chemicals used in toys imported from China, where there is little or no oversight of such things. In 2007, a year that saw the recall of millions of such products, the CPSC had one three-day- a-week field inspector assigned to the ports of Los Angeles and Long Beach, California, where Chinese 6 imports were being unloaded at the rate of 15 million ship containers a year. BEYOND DISASTER As far back as many Americans can remember, free-market conservatives have been a loud voice in our national discourse. Amplie fi d by a galaxy of lobbyists, pundits, and well-funded think tanks, their ideas continue to exercise a powerful hold. e c Th alamities of the past few years have stirred widespread calls for stronger oversight of the industries where things have gone glaringly wrong. And yet, when the discussion gets down to cases, the tough talk often fails to translate into tough action. Even many on the pro-regulation side of the debate seem to assume that the best regulation is the least regulation – just enough to guard against disaster, or, at least, against another disaster of the type that is freshest in our memory. Washington has begun to absorb the lessons of regulatory failure, in other words, but has yet to wake up to the lessons of success. Good rules can, in fact, help prevent disasters; they can even provide a measure of protection against the mood swings that become known as booms and busts when they seize the economy as a whole. They do so by protecting us (businesses and consumers alike) against the temptation to take long-term risks for short-term gain. But, in the process, good rules also help create stable markets in which the energy and imagination of the business world are directed toward products and services of lasting value. u Th s, the financial reforms of the New Deal era did not just end the avalanche of bank failures that had greeted President Franklin Roosevelt on his arrival in oc ffi e. They brought an end to the era when many Americans thought it was safer to keep their money under the mattress. From the 1930s until the ag- gressive deregulation of the 1980s and ‘90s, the banking and securities industries grew and prospered, unspectacularly but sustainably. Drug safety regulation had a similarly positive ee ff ct on business. In the largely unregulated environment of the 1920s and ‘30s, anyone with a bathtub and a chemistry set could set up shop as a pharmaceutical company, and the honest firms found it hard to compete with the hucksters. It was only after passage of the Pure Food and Drug Act of 1938 that the U.S. began to have drug makers with labs, scientists, and a 7 real interest in understanding and documenting the ee ff cts of their products. THE CHALLENGE After three decades of deregulation in its various forms, America faces policy challenges on many fronts. e Do Th dd-Frank law of 2010 marked a first step, no more, down the road of meaningful financial reform. Beyond the urgent concerns over mine and oil-rig safety raised by the tragedies in West Virginia and the Gulf of Mexico lie a host of long-term energy and environmental questions. One of them – climate change caused by greenhouse gas emissions – may be the toughest and most far-reaching issue ever to make its way onto this country’s, or humanity’s, policy agenda. Whether we’re talking about global warming or financial derivatives or infected eggs, progress will depend not only on the enactment of new rules but on the reinvigoration of public institutions sue ff ring 8 from what former EPA administrator William Ruckelshaus has called “battered agency syndrome.” Across the spectrum of industries and issues, agencies and oc ffi ials will need to find the courage to stand up to special interests armed with judicially approved powers to spend huge of sums of money supporting the leaders they like, attacking those they don’t like, and spreading a new cloud of fear about “wasteful,” “burdensome,” “job-killing” regulation. e o Th bstacles are daunting, but no more so than those facing the forces of reform at the outset of some of the struggles described in this report. Time and again, history reminds us, Americans have fought for, and won, measures that changed our country and our lives for the better. And the benet fi s of those mea - sures have come, almost invariably, without the frightening economic costs predicted by their opponents. In 1974, the newly established Occupational Safety and Health Administration announced a set of rules to reduce worker and public exposure to vinyl and polyvinyl chloride – two resins identie fi d as major contributing factors to liver cancer. The ae ff cted manufacturers claimed at the time that they would have to spend a combined 90 billion, and terminate thousands of workers, in order to comply. Toting up the results a decade later, the Reagan administration found a signic fi ant decline in deaths from liver cancer, 9 achieved at a cost of 300 million (1/3 of 1 percent of the forecast) and zero jobs. History tells us to have cond fi ence, and, moreover, to raise our sights. Good Rules (as these stories show) are not a substitute for competition, innovation, or market forces; they merely help channel the forces of the market in more positive directions. The ban on vinyl chloride (like similar phase-outs of hydro- u fl orocarbons and other dangerous chemicals) stimulated the development of more ec ffi ient and safer technologies. When rules address problems of wide public concern, they help establish bonds of trust between buyers and sellers; over time, that benet fi s businesses as well as their customers, workers, and neighbors. Ee ff c - tive consumer protection rules enhance economic ec ffi iency, reducing the amount of time we need to spend checking out the things we buy or the people we buy from. By assigning a measure of investigative responsibility to public institutions, good rules make it possible for a civic and commercial life to evolve without the high psychological and real expense that people incur when they are forced to defend their interests one transaction at a time. Well-conceived regulation is much more, then, than just a way to keep markets from going off the rails. As much as the physical infrastructure of roads, bridges, telephone networks, good rules are part of the foundation on which a strong and healthy economy and society depend. 10 STORIES OF SUCCESSFUL REGULATION 5BUILDING CODES AND CONFLAGRATIONS. THE AMERICANS WITH DISABILITIES ACT. It wasn’t just Chicago; New York, Twenty years after its 1. 2. Philadelphia, Charleston, St. Louis, enactment, America’s streets, Boston, Seattle, and Atlanta had theaters, restaurants, and downtown-destroying fires too. workplaces are far friendlier to Then, one by one, America’s cities people with disabilities. It might not faced up to the need for serious have happened without the rules of safe construction. partnership of a famously liberal Democrat and a staunchly conservative Republican. CAR SAFETY. BANNING DDT. Americans drive three times as Until Rachel Carson blew the 3. 4. much as they did when auto safety whistle, chemical and agribusiness regulation began. Yet even the companies could spray almost absolute number of fatalities has anything they pleased onto fallen – from 54,000 in 1972 to under America’s food and farmland. One 34,000 in 2009. Taking distance into favorite pesticide of the 1950s and account, the progress is even more ‘60s, remarkable - from 4.2 deaths per dichlorodiphenyltrichloroethane, million miles in 1972 to about 1.16 was decimating bird and fish deaths per million miles today. populations as well as a host of small flying and crawling creatures. THE FAIR LABOR STANDARDS ACT. “DO NOT CALL.” In one law, the U.S. banned Regulation is often stereotyped 5. 6. child labor, established a minimum as rigid and cumbersome. Here, wage, and made the 40-hour week a Congress and the Federal national standard. Communications Commission developed a light-touch answer to the problem of aggressive telemarketing. CIGARETTE SMOKING. THE COMMUNITY REINVESTMENT ACT. Stymied in Washington, anti- After sweeping civil rights and 7. 8. smoking forces shifted their efforts fair lending laws failed to address to the state and local level. Today, the problem of “redlining,” thanks to higher taxes and smoke- congressional leaders devised a way free zones (starting with public to use disclosure to prod lenders buildings, ending with restaurants into a process of self-examination and bars), just a fifth of all high and reform. school seniors smoke, down from a third in the mid-1990s. ACID RAIN. DRUG PRE-TESTING. In 1966, a graduate student Thalidomide caused an 9. 10. dreamed up a new approach to the estimated 12,000 birth deformities. problem of “externalities” – the Isoproterenol inhalers led to the costs that industries offload onto deaths of 3,500 asthmatic children. society. Why not develop a system Aminorex, an appetite suppressant, of permits, and let companies buy caused pulmonary hypertension and sell the right to pollute? Three and more than two dozen fatalities. decades later, when Congress finally In each case, other countries gave the idea a try, results came suffered while America was largely quicker and less expensively than almost anyone expected. spared, through the diligence of the Food and Drug Administration. 10 STORIES OF SUCCESSFUL REGULATION 78 GOOD RULES 1. THE G R E AT FIR ES Building Codes and Conflagrations A cow knocks over a lantern – the Great Chicago Fire of October 1871 may not have started just that way. But the legend of Mrs. O’Leary’s cow captures a forgotten truth about urban America from colonial days into the early twentieth century: it was a world where small fires caused by chance accidents could grow and spread and end up destroying hundreds or (in Chicago’s case) thousands of homes and businesses. “e a Th ppearance of things is awful nothing but an immense forest of walls, and chimneys is visible, and desolate heaps of brick and mortar,” one reporter wrote Chicago, the Morning After after the fire that leveled more than a quarter 10 of Pittsburgh in 1845. In St. Louis four years 11 later, the losses included 23 steamboats and most of the city’s riverfront. In Baltimore, the Great Fire of 1904 consumed more than 1500 buildings spread over 70 city blocks; in some places, the devastation was so complete that oc ffi ials had to plant poles in the ground to remember where the streets and sidewalks 12 had been. “FIRE TRAPS EVERYWHERE AND ANYWHERE” e G Th reat Fires (New York, Philadelphia, Charleston, Boston, Seattle, and Atlanta had them, too) laid down a challenge to a nation in hot pursuit of the economic, social, and cultural benet fi s of city life: could we figure out a way to have urbanization without conflagration? Each fire was a story unto itself, and often people could point to some fluke turn of events that seemed unlikely to recur. The Great Fire that ravaged 65 acres of downtown Boston in November 1872, to take one example, might never have reached those terrible proportions if the city had not experienced a coin- cidental outbreak of equine flu, compelling humans to fill in for the horses that normally pulled Boston’s 13 fire engines. Nevertheless, in Boston and elsewhere, tragedy awakened a sense of vulnerability and a mood of resolve. e m Th ost obvious problem was an inadequate firefighting capacity. Seattle was one of a number of cities inspired (after its Great Fire in 1889) to establish a professional fire department, rather than continuing to rely on ragtag neighborhood volunteers. In New York, the Great Fire of December 1835 called attention to the need for a public water system with underground mains and fire hydrants. Accustomed to drawing water from the East River, New York firefighters had found it frozen solid as a result of an unusual cold spell. After the destruction of 17 blocks of lower Manhattan (including the last remaining vestiges of the original Dutch settlement), the city and state forged ahead with construction of a set of aqueducts to 14 deliver water from northern Westchester County to a reservoir in what is now Central Park. But the biggest problem, and the most politically dic ffi ult, involved building methods and materials. In one city after another, the Great Fires inspired calls for rules of safe construction in crowded areas – rules that would cost money and trespass on what some citizens considered to be their unqualie fi d rights as property-owners. And people were being asked to make these hard choices in order to reduce the likeli- hood of an infrequent peril that was usually far THE AG E OF CONFL AG R ATION from their minds. By the mid-1800s, a number of cities had adopted YEAR CITY LOSSES measures declaring their downtown areas o- ff limits to wooden construction. The rules were 1835 New York 674 buildings spread over 17 not well enforced, and they applied only to new blocks of lower Manhattan. buildings, not existing ones. Even so, many urban 20 million in damage. 2 known fatalities. leaders thought that in principle they had found the answer, and Chicago’s fire seemed to fit right in with that conclusion. 1845 Pittsburgh Roughly 1,000 buildings. Chicago was a boomtown. Its downtown area not 1849 St. Louis 430 buildings and 23 steam- only had a good many wooden buildings; it had boats. wooden streets and sidewalks as well. In residen- tial sections of the city, many of Chicago’s 300,000 1850 Philadelphia 400 buildings. 39 fatalities. people lived in flimsy shacks, representing a form of homeownership without land ownership. (Families would sometimes move these dwell- 1861 Charleston 600 structures, including ings from one site to another if a property owner every public building in the city. 7 million in total demanded too much rent.) On its race downtown losses. from the O’Leary’s neighborhood, the Chicago Fire ate up more than 15,000 wooden structures, 1871 Chicago 17,450 structures, 250-300 leaving nearly 100,000 people homeless. deaths, nearly 100,000 people homeless. Damage Easterners were horrie fi d by the news of Chicago’s estimated at 196 million. tragedy. Many, however, consoled themselves that such a thing could never happen to their cities, 1872 Boston 776 buildings. 73.5 million where brick and stone were already becoming the in damage. 14 deaths, norm. Even many Chicagoans thought they had including 11 firefighters. brought their tragedy on themselves by erecting “fire traps everywhere and anywhere, on every 1889 Seattle Most of 25 downtown fifty feet of ground in 30 square miles of popu - blocks. 15 lated area,” as the Chicago Tribune put it. Then, just a year later, Boston’s fire clouded the picture by burning through block after block of buildings 1904 Baltimore More than 1,500 buildings over 140 acres. 29 million in that had been touted as fireproof. insurance claims paid. LEARNING FROM DISASTER 1917 Atlanta Nearly 2,000 homes, busi- Masonry-frame buildings, Boston found, could be nesses, and churches. 10,000 people left homeless. 1 firetraps too, if they had wooden roofs, walls, cor - known fatality. nices, bay windows, and other adornments. Roofs were a key issue for Boston. Many of the city’s 10 STORIES OF SUCCESSFUL REGULATION 910 GOOD RULES commercial buildings were crowned with elaborate French mansard roofs, which were not only wooden in themselves but served as lids for attics that local merchants liked to stuff full of lightweight, flammable goods. A tax exemption for attic storage encouraged this practice, which, like Chicago’s wooden streets and sidewalks, could almost have been designed to spread fire from one building to the next. To make matters worse, downtown Boston was a maze of narrow streets, laid out in colonial times. Un- able to grow outward, businesses had expanded upward; after the fire, a panel of inquiry lamented the “great height” of some of the newer buildings, which stood five and six stories instead of the customary two or three. The panel also pointed to the narrowness of the streets, which had made it easy for the fire to spread and (along with the horse-u e fl pidemic) hard for firefighters to move and operate ee ff ctively. Yet even when they succeeded in getting equipment to the scene, Boston’s firefighters often found that they 16 lacked ladders tall enough, or water pressure strong enough, to reach the highest flames. After Boston, fire-safety experts began to think outside the box - about factors of land use, density, stor - age, and a concept that became known as the “fireload,” or the total amount of combustible material in a given area. Gradually, they came to understand the ways in which the fire hazard had been aggravated by new technology, including oil-fed boilers, open-flame appliances, electricity, and elevators. e b Th uilding where Baltimore’s fire began had an elevator, and, in keeping with common practice at the time, an unenclosed elevator shaft. Functioning as an ersatz chimney, the elevator shaft sucked the flames of a small basement fire upward, allowing it to find an additional source of fuel. Firefighters, summoned quickly to the scene by a thermostat-triggered alarm, saw smoke pouring down from the elevator shaft. Moments later, they heard a tremendous explosion. The fire had blown the roof o, c ff reating a shower of gas, smoke and firebrands that set the whole neighborhood on fire. Although no one could say for sure what had caused the blast, businesses in the area routinely stored such things as kerosene, fertilizer, chemicals, cotton, and grain side-by-side. Despite the eo ff rts of more than 1,200 firefighters, including teams from Philadelphia and Washington, Baltimore’s fire wound up gutting 86 blocks, including many of the city’s leading banks, hotels, newspapers, and retail emporiums. The 17 Baltimore Sun called it “a catastrophe which is without a parallel in the history of this city.” AN UNCELEBRATED VICTORY Each fire produced a jolt of political will. Then, as time passed, people would begin to think more about the immediate cost of measures they were being asked to take in the name of averting a distant peril. In Boston, according to one contemporary account, a “clamoring clique of builders and lumbermen” persuaded the state legislature to drop some of the tougher rules (calling for brick-enclosed elevator shafts 18 and self-closing hatches, for example) from an omnibus reform measure. In Chicago, the biggest objec- tions came from working-citizens after they learned of a proposed all-out ban on wooden construction. Chicago’s aldermen quickly backed off when hundreds of protestors stormed City Hall to voice their op - position to a measure that, many said, would put the cost of homeownership beyond their reach. “Instead of enjoying the blessings of independent homes,” one protest group declared, “our laboring people would be crowded into those terrible tenement houses which are the curse of eastern cities.” (In Chicago and again in Boston, a second fire followed a few years later, causing the pendulum of public opinion to swerve 19 back toward reform.) e e Th ventual walk never quite matched the original talk. Yet one after another, American cities addressed the safety problems of roofs, floors, windows, and interior as well as exterior walls. They drafted rules calling for fireproof boiler rooms and enclosed elevator shafts and staircases; they widened downtown streets and took steps to isolate industrial from residential areas. And they incorporated their rules into comprehensive building and safety codes, finally giving inspectors the power to monitor compliance and impose penalties when rules were flouted.Insurers began to play a positive role, evaluating buildings and districts for fire safety, and basing their rates on what they found. Builders, who had fought many of the early measures, gradually adopted an “If you can’t beat ‘em, join ‘em” philosophy, forming regional alliances that developed so-called uniform codes, which came to serve as the starting point for many cities’ oc ffi ial codes. Working with industry groups, local oc ffi ials developed regulations that were intended to spur the adoption of innovative con - struction techniques, such as fire-resistant cladding of steel beams, which led to bigger and more widely 20 spaced buildings. e Th re was no Eureka moment. It was a long, fitful process, with decisions invariably shaped by percep - tions – or misperceptions - of the latest calamity. But by the early 1900s, huge multi-block fires had become increasingly rare, and soon they faded into history. Today, even history books have little to say about them. Chicago’s fire lives on, at least in the name of a soccer team. By contrast, few Americans have any knowledge of the succession of Great Fires that came before and after. Lost with the memory of those tragedies is a recognition of one of regulation’s most de - cisive victories: the complex set of measures that finally brought an end to the age when a dropped cigar, a spark from a coal furnace, or possibly even a cow knocking over a lantern could be the start of a fire capable of leaping from building to building and block to block and destroying in a matter of hours what had taken decades to build. POSTSCRIPT: FACTORIES AND EARTHQUAKES In the twentieth century, urban fire became a one-building-at-a-time phenomenon for the most part. But with buildings growing bigger and taller, the human cost of some fires was horric fi . In the Triangle Shirtwaist Factory fire of 1911, 146 garment workers died, some leaping to their deaths after the fire escape collapsed. The horror of that scene led New York City and State to develop a body of rules dealing with fire escapes, emergency exits, sprinkler systems, and other occupational-safety issues. Some of these trail-blazing measures became models for regulations 21 adopted by other jurisdictions. e U Th .S., unlike many countries, has left such questions largely to state and local governments working in partnership with industry groups. Builders sometimes complain about the need to navigate die ff rent rules in die ff rent jurisdictions; building inspectors and legislators are faulted for not enforcing the law honestly or evenhandedly. Yet this imperfect system, designed to bal- ance safety and economic practicality, has continued to produce important benet fi s around the country. Just as New York was a pioneer in factory safety, California took the lead in earthquake safety. e L Th ong Beach earthquake of 1933 served as a catalytic event. Five of the 115 fatalities were chil - dren trapped in collapsed school buildings; far more children would have died if the quake, which had struck in the late afternoon, had come along just a few hours earlier. Following that tragedy, California passed a law establishing rigorous safety standards for public-school construction. Since then, California’s many earthquakes have not caused a single fatal injury inside a school 22 building. California has also been a leader in making private buildings more earthquake- resistant. That body of regulation goes a long way toward explaining why fewer than a hundred people were killed in the Loma Prieta earthquake that struck the Bay Area in 1989 – a quake roughly 23 comparable in magnitude to the one that caused a quarter of a million deaths in Haiti in 2010. 10 STORIES OF SUCCESSFUL REGULATION 1112 GOOD RULES 2 . THE AM E R IC ANS WITH DISABILITIES AC T Opening Doors and Minds Senators Edward Kennedy and Orrin Hatch were a political odd couple - a liberal Democrat from Massa- chusetts and a conservative Republican from Utah who learned to work together and forged a friendship. At Kennedy’s memorial service in August 2009, Hatch recalled their mutual delight in discovering that if “the two of us, positioned as we were on opposite sides of the political spectrum, could find common 24 ground,” the rest of the Senate would often follow their lead. Hatch had a brother-in-law with polio. Kennedy had a sister who was mentally retarded and a son whose leg had been amputated as a result of bone cancer. In 1990, they joined forces in support of a bill extend- ing to disabled Americans many of the same protections that earlier civil rights laws had given to women 25 and racial minorities. A POWERFUL COMPROMISE e K Th ennedy-Hatch proposal was a trimmed-back version of a bill first introduced a year earlier. While the law, as enacted, sought to “provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities,” businesses with fewer than 15 workers got a blanket exemption, and larger employers were given time to adapt. No company would be asked to endure an “undue hardship” in order to accommodate a particular worker or job applicant. With these carefully negotiated concessions and the Hatch-Kennedy seal of approval, the bill passed the House and Senate by 26 overwhelming margins. e A Th mericans with Disabilities Act proved to be a huge breakthrough - for the disabled and for the country. The federal government had put its muscle behind the principle of universal design - the idea of adapting products, buildings, and public spaces to the needs of people with physical limitations. One leading disability activist, William G. Stothers, took stock on the tenth anniversary of the ADA’s passage: “Now I can go to the grocery store in my wheelchair and not be blocked by a turnstile,” Stothers wrote. “I can get on a bus that has a lift and go across town. I can go to a movie and not be limited to sitting in a corner at the back of the theater. I can go shopping and use an accessible fitting room. I can travel and find an accessible hotel room at my destination. I can go to the bathroom at the airport and use an acces - 27 sible stall if someone who is not disabled is not in there with his luggage.” INVISIBLE GAINS Like the other landmark civil rights laws of the past century, the ADA has begun to reshape attitudes as well as practices. A company may be listening to its lawyers when it starts down the path of compli- ance. But soon it starts to hear from front-line managers who have learned firsthand what workers with disabilities are capable of. In 2007, the Walgreen drugstore chain opened a distribution center in South Carolina that had been specially outt fi ted for workers with a range of disabilities. Employees with autism and cerebral palsy, among other conditions, now make up nearly 40 percent of the workforce at the facil- ity. Walgreen executives have been so pleased with the results that they have decided to build additional warehouses on the same model. The company has set a target of filling 10 percent of its nationwide distri - 28 bution jobs with disabled workers.Physical barriers may have been fated to fall before employment barriers. In a world of freer access, people with and without disabilities are increasingly likely to get to know each other. Familiarity dissolves preju- dice and transforms thinking on both sides of an increasingly blurry line between “them” and “us.” Some of the most striking changes in attitude can be found among children and young adults with disabilities. Growing up in a less segregated world, they expect more from society, but also from themselves. Slowly but surely, the ADA is opening minds as well as doors. POSTSCRIPT: COSTS AND BENEFITS Twenty years later, the ADA’s greatest ee ff ct has still been on access rather than employment. Despite the sweeping language of the statute, many jobseekers continue to be told that they are either “not disabled enough” to qualify for protection or, on the other hand, “too disabled” to qualify for a job. And yet, every year employers report an increased number of “accommodations” (adaptations made for the sake of employing someone covered by the statute), while surveys show a steady decline in the proportion of those with disabilities who perceive themselves as victims of 29 workplace discrimination. And the experience of most companies refutes the claims of those, like former Congressman Tom DeLay (R-Tex.), who opposed the law on economic grounds. “e c Th ost to the nation and the economy is going to be dramatic,” DeLay said at the time. “This 30 goes way beyond the bounds of reason.” In fact, the price tag for the typical accommodation has been under 100. Often, the ability to employ someone with a disability turns out to depend on something as simple as raising or lowering a desk, or modifying a dress code or work schedule. e Th re have been surprises on the benet s fi ide of the ledger, too. Ramps, curb cuts, and wheelchair lifts have made life easier for people with baby carriages and delivery carts. Color-coded stocking systems, designed for workers with reading or vision problems, have raised the ec ffi iency of ware - house workers generally. Thanks to a ramp or a wheelchair-accessible bathroom, many companies have discovered that they can hold onto an older worker (and her experience and knowledge) despite an illness or injury that would have spelled retirement in the past. We hear a lot about the unintended consequences of regulation. The story of the Americans with Disabilities Act reminds us that many of those unintended consequences are good ones. 10 STORIES OF SUCCESSFUL REGULATION 1314 GOOD RULES 3. C AR SAFET Y Good for General Motors and the Country At the end of 1955, the Ford Motor Company launched an advertising campaign that took consumers – and carmakers – by surprise. “You’ll be safer in a ’56 Ford” the company proclaimed. e ma Th n behind that message, Group Vice President Robert McNa - mara, was trying to extricate Ford from a fashion contest – a contest it had been losing year after year to General Motors. By promoting safety, McNamara hoped to forge a new bond with consumers and help Ford regain its competitive edge. Detroit did not think much of his chances. Ford was selling safety while General Motors sold cars, industry wags declared. Even as they ridiculed McNamara’s initiative, however, some high-ranking auto executives were rattled by it. One of the top people at GM reached out to a friend at Ford to suggest that the company reconsider. The Ford executive passed the word to his boss, Henry Ford II, who voiced his own doubts about the safety push. We do not know the details of the ensuing deliberations. We do know the upshot: After just five months, Ford did an about-face. As unexpectedly as the new campaign had begun, it ended; so, very nearly, did the automotive career of its champion. McNamara (later to serve as Secretary of Defense under Presidents Kennedy and Johnson) fell ill, took a month’s leave, and returned to his post a chastened man - and a 31 more conventional auto executive. AN INDUSTRY IN DENIAL McNamara’s mistake had been to point out the connection between car safety and car design. The an - nual highway death toll (39,628 in 1956) already exceeded the number of Americans killed in the Korean 32 War. Surgeons, insurers, and consumer advocates were beginning to take Detroit to task for pointy dashboard hardware, inadequate brakes, and a general emphasis on horsepower over control. Apart from Ford during McNamara’s moment of rebellion, however, the industry stood united in refusing to ac- knowledge responsibility. Safety, to hear the carmakers tell it, was the consumer’s lookout. Collisions were “accidents” – unpredictable and inevitable up to a point, and, beyond that point, a result of bad driving. e s Th olution was good driving – a message pounded home in the relentless public service announcements 33 of the Detroit-backed National Safety Council. What were the auto companies so afraid of? GM chief John Gordon, speaking among friends at an indus- try gathering in 1960, spelled it out: Once the public got the idea that the carmakers were in a position to do something about the problem, Americans would expect to see safety features in all cars; that, said Gordon, would mean regulation and an endless quest for the “foolproof” or “crash-proof” automobile. 34 Cars would become gawky, expensive, and unappealing.Safety regulation did come, but only after another five years of obstruction and denial – and after hun - dreds of people had been killed or maimed in low-velocity, one-car “accidents” involving the Chevrolet Corvair. The Corvair became the symbol of Detroit’s indie ff rence to safety. It was a vehicle so dangerous that one automobile columnist (a professed fan of the Corvair) dispensed tips for bringing it “back under control” after the “classic Corvair accident”: “a quick spin in a turn and swoosh – off the road back - 35 wards.” Concern for GM’s own reputation, to say nothing of the public good, should have dictated an early recall. Instead, the company turned out more than a million Corvairs over four years, playing hardball in one lawsuit after another. When the young Ralph Nader laid out the story in his 1965 book Unsafe at Any Speed, GM responded by investigating Nader rather than his allegations. A team of detectives received instructions to “check Nader’s life and current activities, to determine what makes him tick, such as his real inter- est in safety, his supporters if any, his politics, his marital status, his friends, his women, boys, etc., drinking, dope, 36 jobs, in fact all facets of his life.” RESEARCH BEFORE RULES e C Th orvair scandal led to congressional hearings (overseen by Connecticut Senator Abraham Ribicoff) and legislation (the Highway Safety Act of 1966), but to none of the travails that the carmakers envi- sioned. e H Th ighway Safety Act authorized a new federal agency, the National Highway Transportation Safety Agency, to make a study of the problem. By breaking the phenomenon of the auto accident down into three phases - pre-crash, crash, and post-crash – NHTSA scientists demonstrated that most accidents involved normal people driving in normal ways on normal roads. Safety features could make a huge dif- ference, their research showed, not just in the likelihood of an accident, but, even more strikingly, in the magnitude of injury that an accident was likely to cause. e N Th HTSA ee ff ctively became the safety research arm of the American auto industry. Working in partnership with Detroit designers and engineers, federal regulators helped conceive and develop a set of innovations that are standard in today’s cars. They include padded dashboards, collapsible steering columns, reinforced fuel tanks and roof structures, shatterproof glass, stronger brakes, and flexible, 37 standard-height bumpers. Few Americans today appreciate how much cars have changed as a result of safety rules – or how much safer they have become. All told, Americans drive nearly three times as much as they did in the early 1970s, yet even the absolute number of fatalities has declined – from 54,000 in 1972 to under 34,000 in 38 2009. With distance factored in, the progress is all the more remarkable - from 4.20 deaths per million miles in 1972 to about 1.16 deaths per million miles today. While auto safety regulation does not deserve all the credit (anti-drunk-driving initiatives may well have played a role), the evidence points to legally required improvements in car design and construction as the single most important factor. Seatbelts alone 39 save about 10,000 lives a year, the NHTA estimates. If markets were self-correcting, as many economists appear to believe, consumers would have been ask- ing for safer cars all along, and the auto companies would have been working hard to meet the demand. Unfortunately, most Americans had not even realized that some cars were safer than others; and while the industry had safety enthusiasts in its own ranks, it had ways of keeping them in line, as Robert McNa- mara discovered. 10 STORIES OF SUCCESSFUL REGULATION 1516 GOOD RULES OUT OF HIBERNATION Safety regulation was a success on its own terms. It also paid off in ways that no one anticipated. The American cars of the 1950s and ‘60s were known for their eye-catching fins and grills. “In the place of product innovation,” the maverick automaker John DeLorean recalled, “the automobile industry went on a two-decade marketing binge which generally oe ff red up the same old product under the guise of 40 something new and useful.” It was a formula for high prot fi s in the short-term, but big trouble in the long term. By the early ‘70s, European and Japanese cars were making inroads in the U.S. market. Some auto execu- tives tried to blame their woes on the cost of regulation. Safety rules “have really killed all our business,” Chrysler CEO Lee Iacocca complained to President Richard Nixon in a private (but tape recorded) White House meeting in April 1971. But it was a flimsy argument, as Iacocca later acknowledged. In the first place, both imported and American-made cars had to meet the same safety standards. More importantly, 41 as Detroit learned to make safer cars, it began producing better and more competitive cars. To meet federal safety standards, the automakers strengthened doors, fasteners, brakes, and roof struc- tures. In short, they made cars more durable. In a parallel development, government-mandated fuel ec ffi iency standards encouraged the development of cars that required less maintenance as well as fuel. (e p Th hased elimination of lead from gasoline would, in similar fashion, reduce the need for tune-ups and extend mue ffl r life.) Thus, in its eo ff rts to promote safety and reduce pollution, government actually helped the auto industry pull itself out of the style trap and begin to innovate again. Left to its own devices, Detroit might have gone on ignoring and suppressing its safety problems for decades. No less an authority than Henry Ford II admitted as much. “We wouldn’t have the kinds of safety built into automobiles that we have had unless there had been a federal law,” Ford said after his 42 retirement. POSTSCRIPT: THE LOOPHOLE YOU COULD DRIVE A HUMMER THROUGH In the mid-1980s, the cause of auto safety collided with the cause of deregulation. The result was the age of the sport utility vehicle. Two of the first modern SUVs, the Jeep Cherokee and the Ford Bronco II, had established a conspicuous record of rollover accidents. And rollovers, then as now, were the worst kind of accidents. While accounting for fewer than 1 percent of all car crashes, they figured in a quarter of the fatalities, which meant nearly 10,000 deaths a year.) By the time the issue arose, however, the NHTSA had become swept up in the anti-government fervor of the Reagan Revolution. Over the objections of the agency’s professional sta, i ff ts politically appointed leaders decided to treat SUVs as a separate vehicle type that should be exempted from normal passenger-car safety rules. Retired Major General Jerry Curry, the NHTSA’s director from 1989 to 1992, framed the question as one of per- sonal liberty. “I like to go o- ff road where I live,” said Curry, who had a house on a Colorado mountainside. “And I think people like me want that kind of vehicle… Is it more dangerous than a vehicle that is lower and wider? 43 Yes. I’ll take the tradeoff.” er Th e was one big hole in Curry’s logic. The growing presence of these high-riding, poor-handling vehicles on America’s roads had begun to change the safety equation for everybody, not just for SUV owners and passengers. A large SUV kills at an annual rate of 122 victims per million vehicles; by contrast, the Honda Accord’s rate is 21 victims. The biggest gap involves side collisions. These accidents are unusually lethal to begin with: if you’re rid - ing in a car that gets hit sideways, you are 6.6 times more likely to die than an occupant of the striking vehicle; and if the other vehicle is an SUV, the odds rise to 30 to 1, because its high hood, bumper, and solidest parts tend 44 to mash through the most vulnerable areas of a normal-size car, often hitting a driver in the head or chest.As SUVs sales took o, r ff ising from 750,000 in 1990 to almost 3 million in 2000, industry insiders were delighted, but, at the same time, a bit mystie fi d. Why were so many au ffl ent Americans living in suburbs rather than mountainsides eager to have a four-wheel-drive capability that they would scarcely ever use? Why were so many people willing to pay a luxury-car price for what was basically a passenger compartment bolted onto a pickup-truck underbody? Many of the early buyers had been male professionals and executives who liked the rugged-outdoors image of an SUV. (Some models came with jaw- like fenders and teeth-like grills.) Market re- search suggested that some of these people were eager to distinguish themselves from a demo- graphic known as “soccer moms,” who had be- come associated with mini-vans. But as time passed, SUVs acquired an insidious new attrac- tion: even many soccer moms decided that they would rather be inside an SUV than craning to see over one, or potentially involved in an ac- cident with one. The very characteristics that made them dangerous, in other words, became part of their appeal. And so, for nearly a decade and a half, the U.S. auto market became swept up in an arms race, with people buying bigger and brawnier vehicles, partly out of a new conception of safety: more for me and- less for you. Of course, nobody really came out ahead in this competition. SUV occupants might fare better in a crash with a smaller vehicle, but they were more likely to be in a crash in the first place - and more likely to have the especially dangerous experience of rolling over. Their size and shape, along with the predilection of many SUV owners for dark-tinted glass (which was illegal in passenger cars), contributed to yet another disproportionate risk – of running over pedestrians, especially small ones, who, in a disturbing number of cases, were the drivers’ children. e S Th UV craze eventually proved to be unhealthy for Detroit as well as for safety and the environment. (SUVs had been exempted from passenger-car fuel-economy rules, too.) When gas prices went up and the economy tanked, SUV demand tanked with it; General Motors and Chrysler became wards of the state in large part because they had very few compelling or even prot fi able products beyond SUVs. Although sales have plummeted in the last few years, America still has a remarkable number of SUVs and pickup trucks on its roads. That is the most striking die ff rence between the U.S. and, for example, Canada and Australia, two geographically similar countries with lower highway fatality rates than 45 ours. Twenty-five years after the first alarms were sounded, automakers are getting around to making safer SUVs, with more stable underbodies and lower bumpers. If fuel prices remain high (whatever the fuel), Americans may one day be able to go on the road in a normal-size car without feeling like minnows among whales and sharks. 10 STORIES OF SUCCESSFUL REGULATION 1718 GOOD RULES 4. DDT Some Things Should Be Banned e p Th eregrine falcon flew off the endangered species in 1999. Ten years later, the brown pelican was poised for the same journey. Once close to extinction, these remarkable birds are breeding suc- cessfully again, thanks to a momentous act of regulation, and, in the first place, to a terminally ill scientist’s determination to press on with her work. As a woman in a male-dominated profession, Rachel Carson had to make do with a junior role in the federal bureaucracy. Away from her job at what is now the Fish and Wildlife Service, Carson spent much of her adult life caring for an aged mother, an ailing niece, and the niece’s son, whom she eventually adopted. Only the unexpected success of her second book, The Sea Around Us , in 1951, allowed Carson to write full time. After a second bestseller, she decided to use her newfound freedom and clout to write a critical book about modern agriculture and its addiction to chemical pesticides. SPEAKING TRUTH TO POWER World War Two had produced a great array of super-chemicals, none more seemingly miraculous than dichlorodiphenyltrichloroethane, or DDT. During the war, the U.S. military had used DDT to virtually eradicate malaria on several Pacic i fi slands; Greece and Sardinia had achieved similar results. While other pesticides worked against one or two types of insects, DDT was all-purpose; spray it on a field or forest, and a host of small flying and crawling creatures would disappear. Many powerful people and companies did not want to hear any criticism of this wonder product. But Carson knew what she was up against, and she laid out her evidence meticulously. While Silent Spring is best known for its nightmarish opening chapter about a town gripped by death, much of the book is constructed in the manner of a legal brief. Step by logical step, Carson established the link between DDT and the decline of bird species. Sprayed on beans, peanuts, and tomatoes, among other crops, DDT had lethal consequences for fish as well as birds. Used to ward off Dutch elm disease, it killed the earthworms that ate fallen elm leaves, and the robins that ate the earthworms. In falcons and other birds, it produced thin-shelled eggs that broke before the chicks were ready to hatch. Carson was denounced as a hysteric and a Luddite. “If man were to faithfully follow the teachings of Miss Carson,” one chemical company executive commented, “we would return to the Dark Ages, and the insects and diseases and vermin would once again inherit the earth.” But her care paid off. A year after its publication in September 1962, Silent Spring came to the attention of President John F. Kennedy, and he asked his science advisors to investigate. They came back with a report that confirmed Carson in every important claim.BOOK, MOVEMENT, BAN e K Th ennedy administration proposed a gradual phase-out of DDT and other highly toxic pesticides. But in 1969, the Nixon Administration ordered a new study, which delivered a die ff rent verdict. A ban was not called for, said William Ruckelshaus, head of the newly formed Environmental Protection Administra- tion, because DDT had not been shown to cause direct injury to either human or animal health. His announcement set off a torrent of protest. Although Carson had died in 1964, her book had helped create the modern environmental movement. A lawsuit brought by the Environmental Defense Fund (formed in 1967 with a ban on DDT as one of its explicit goals) led Ruckelshaus to order yet another inquiry. Six months later, the agency changed its mind yet again, and the ban finally went into ee ff ct. In justifying this re-reversal, Ruckelshaus pointed to fresh evidence that DDT posed “a carcinogenic risk” to people. In truth, such a connection had not been proved. Carson, who had lived near an agricultural- research facility in Maryland, suspected her own cancer of being environmentally caused. But she was too careful a scientist to make such a claim when she appeared before a Senate committee a year before her death. The closest she came was an allusion to “the right of the citizen to be secure in his own home 46 against the intrusion of poisons applied by other persons.” It was only natural to suppose that DDT, which accumulated in the fatty tissues of organisms up and down the food chain, would be bad for people as well as birds and fish. But the country no longer needed to be convinced of that. By now, millions of Americans had become infected with Carson’s respect for nature and distrust of corporate science. The consequences of unloosing such a powerful and long-lasting chemical on the world were almost impossible to predict. That being so, most people were no longer will - ing to entrust such a decision to those who stood to prot f fi rom it. 10 STORIES OF SUCCESSFUL REGULATION 1920 GOOD RULES 5. THE FE DE R AL L ABOR STANDAR DS AC T Three Breakthroughs in One e m Th ines, mills, and factories of the late 19th century were unpleasant and dangerous places. Millions of Ameri- cans left home before dawn and returned after dark, and few had more than one day a week for a personal or family life. The length of the workweek was so onerous that the first great cry of organized labor was for shorter hours rather than higher pay. A number of states responded with laws that sought to define the proper length of a workday or work week. Few of these early statutes carried any teeth, though, and the ones that did were soon overturned by the courts. In a landmark 1905 ruling, the United States Supreme Court 1901 Rally for an 8-Hour Day declared that the Fourteenth Amendment (intended to protect the rights of freed slaves) barred interference in “the right of contract between the employer and 47 employees, concerning the number of hours in which the latter may labor…” SWITCH IN TIME e S Th upreme Court stuck to its guns for another three decades, applying the same logic to a series of early state minimum-wage laws. With the coming of the Great Depression, however, the laissez-faire pronouncements of the Court began to generate widespread resistance. In June 1936, the Supreme Court ruled 5 to 4 against a New York law calling for a statewide minimum wage of (at the time the case was brought) 14.88 a week. The case involved a Brooklyn laundry owner, Joseph Tipaldo, who had tried to circumvent the law by paying his workers the lawful minimum, only to have them kick back 4.88, so that they ended up with the 10 he considered appropriate. Since the workers were free to object to the kickbacks (and lose their jobs), the Court ruled that Tipaldo’s arrangement was a legitimate – and consti- tutionally sacred - contract. e d Th ecision set off a storm of protest. Campaigning for reelection, President Franklin Roosevelt cited the Tipaldo opinion as one of the outrages that justie fi d his call for a constitutional amendment adding as many as six new Supreme Court justices to the original nine. The ruling was also condemned by promi - nent Republicans, including ex-President Herbert Hoover. Congressman Hamilton Fish – memorialized in FDR’s jeremiad against a trio of obstructionists named Martin, Barton, and Fish – spoke of a “new 48 Dred Scott decision” condemning millions of Americans to economic slavery. Even one member of the Supreme Court itself seemed to have second thoughts. In March 1937, the Court ruled on a Washington State minimum-wage law. This time, Justice Owen Roberts shifted sides to join an unexpected new liberal majority in support of the measure. The decision, which signaled a more flexible attitude toward economic regulation, helped take the steam out of Roosevelt’s eo ff rt to expand the num - ber of judges and “pack” the Court with new nominees. Roberts’ unexpected vote became known as the 49 “switch in time that saved nine.”