U.S. Representative Richard Armey; courtesy of the Carl Albert Center, University of Oklahoma
In 1984, President Ronald Reagan won re-election in a landslide. His long coattails brought a number of new Republicans into Congress, many of whom were strong advocates for relaxed federal regulation, which they believed would promote the natural economic competition of the markets. Their ethos, much like President Reagan’s, argued that federal regulations created enormous artificial and damaging impediments to economic growth.
One of the most prominent U.S. Representatives elected in 1984 was Richard K. Armey, a Texas economics professor. Representative Armey served in Congress from 1985 until January 2003, when he moved into a position as a national “Tea Party” advocate. During his Congressional career, Armey fought for increased deregulation of the market, including financial and banking interests.
An example of Representative Armey’s philosophy was his support of limits on securities litigation. He supported the Securities Private Enforcement Reform Act which proposed limiting joint and several liability so that it would apply only to knowing fraud, which he argued, would “protect the rights of investors in a freer and more efficient marketplace.” 12 Armey adopted the economic philosophy of deregulation which calculated the cost of every regulation, using an economic cost-benefit analysis. Where the cost to the economy outweighed the economic benefit of the regulation, Armey generally opposed the legislation.
The significant relationship each member maintains with their constituents, which are often detailed in their mutual correspondence on the issues, opens a window into the legislative process. While many Representatives and Senators respond with form letters due to the overwhelming number of letters, those letters nonetheless demonstrate the importance of creating a connection between the constituents and the representatives.
Representative Armey, perhaps because of his teaching background, always seemed to want to clearly explain his position, especially when it differed from the constituent’s. Responding to one constituent who opposed a bill that would have required sellers and underwriters of insurance to be qualified and subject to state consumer protection regulation, Armey defended his support for the bill as protection for state laws from federal usurpation. Employing his cost-benefit analysis, he advised the constituent, “I support increased competitiveness in the financial services market,” and noted that, in the past, “government interference has often only served to raise prices and restrict services to consumers.” 13 To another constituent, Armey made his argument that a bill reforming the system that allowed the proliferation of abusive securities litigation would eliminate “arbitrary and quixotic liability laws across the nation [that] have resulted in the imposition of excessive costs on a wide variety of goods and services. In fact, if the cost of liability were a tax, it would be one of the most onerous taxes that Americans face.” 14
Of the many thousands of letters Representative Armey received from his constituents, one concerned the 1992 banking reform legislation that would, nearly a decade later, reach fruition in the repeal of the Glass-Steagall Act. The constituent questioned whether it was a good idea to prohibit banks from affiliating with non-banking commercial enterprises. Representative Armey acknowledged the constituent’s concerns, but advised that the current bill “includes sufficient firewalls to prevent” any perceived problems, leading to “greater competition, and consequently, a healthier financial services industry and better prices and service for consumers.” 15 Always the professor, Congressman Armey took great pains to not only express his views but to explain his clear and consistent rationale for his positions.
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