In the late 1970s, America’s freight railroads were collectively bankrupt, victims of a combination of rapacious unions, bad management and regulatory squeeze between long-distance truckers and well-organized shipping interests. Three decades later, they are financially healthy and delivering much better service. Consolidation, better management and some concessions from organized labor all played a part. But the key to the renaissance was the 1980 Staggers Act, which deregulated the industry and left the regulators the power to second-guess rates only when the newly created Surface Transportation Board determined that competition on a specific route was inadequate.
Now, with a prod from Jay Rockefeller, chair of the Senate Commerce Committee and friend of the coal industry, Daniel R. Elliott, the head of the board is making noises about rethinking the Staggers Act. Bad idea. Really bad idea. Too many people have apparently forgotten just how close the rail industry was to collapse before deregulation.