This month commemorates an important economic milestone for the nation — the 40th anniversary of the Staggers Act, the railroad deregulation legislation signed into law by then-President Jimmy CarterJimmy CarterBiden, Democrats see late opportunity in Texas Jimmy Carter celebrating 96th birthday at home in Georgia The Hill’s Morning Report – Pelosi, Mnuchin make last-ditch effort for COVID-19 relief deal MORE.

The law might not be widely known outside a small circle of transportation experts, but it is safe to say that all Americans continue to benefit from it daily. The remarkable success of the law enabled the market to accomplish what regulators could not. It spared the U.S. railroads from bankruptcy, increased competition, dramatically dropped shipping costs and saved consumers billions of dollars annually in lower priced goods.

To get a fuller appreciation of the success of these regulatory reforms, it is necessary to step back a half century to understand the stark conditions of the rail sector.

In the decades leading up to deregulation, the rail sector was largely controlled by the now defunct Interstate Commerce Commission. Back then, prices were established by regulators in ways that discriminated between who the rail operator was, the type of commerce being transported, the routes and final destination, and the length of the haul — all baking in subsidies for routes that would not be financially viable in a competitive marketplace.

After construction of the interstate highway system during the 1950s and 60s, the heavily regulated railroad industry found itself competing with a trucking industry. The trucking industry wisely cherry-picked the rails’ most profitable lines, which were set by regulators at higher prices in order to subsidize unprofitable lines. Because railroads were unable to change their calcified and government-mandated prices or abandon unprofitable rail lines, they were unable to complete

General Electric is once again in hot water with the Securities and Exchange Commission.



a clock on the side of a building: The U.S. Securities and Exchange Commission headquarters stands in Washington, D.C., U.S., on Thursday, Jan. 2, 2020. The federal appeals court in Manhattan today said the government may pursue insider-trading charges under a newer securities-fraud law not subject to a key requirement of the statute prosecutors traditionally use. Photographer: Andrew Harrer/Bloomberg via Getty Images


© Andrew Harrer/Bloomberg/Getty Images
The U.S. Securities and Exchange Commission headquarters stands in Washington, D.C., U.S., on Thursday, Jan. 2, 2020. The federal appeals court in Manhattan today said the government may pursue insider-trading charges under a newer securities-fraud law not subject to a key requirement of the statute prosecutors traditionally use. Photographer: Andrew Harrer/Bloomberg via Getty Images

The SEC warned GE late last month that it plans to bring an enforcement action over the company’s handling of an insurance portfolio, a filing on Tuesday revealed. GE had previously said the SEC was investigating staggering insurance losses of $6.2 billion.

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The warning, known as a “Wells notice,” advised GE that the agency could bring a civil enforcement action for potential violations of securities laws. Such a notice gives companies the opportunity to respond before a formal decision is made by the SEC.

In January 2018, GE shocked Wall Street by reporting the $6.2 billion loss in its portfolio of long-term care insurance. These policies, which protect against nursing home and assisted living costs, have been hurt by soaring healthcare costs and longer life expectancies.

GE warned at the time it would devote a whopping $15 billion to boost insurance reserves — and after that bombshell, the SEC began investigating the reserve increase and the process that led up to it, GE said.

GE shares fell about 4% Tuesday, leaving them down 45% on the year.

Insurance investigation

The scrutiny is focused on a legacy part of GE Capital, the finance arm that nearly ruined the company during the 2008 financial crisis.

The September 30 Wells notice said SEC staff may recommend penalties related to the “historical premium deficiency testing” for GE Capital’s insurance operations,