Trump’s regulation-rollbacks have already set off an economic revolution
If you want to start a business, the World Bank says you’d be better off in Canada than setting up shop here in the United States, where mind-numbing government regulations smother entrepreneurs.
That was true, anyway, before Donald Trump became president. In his address to Congress last week, Trump announced that a “historic effort to massively reduce job-crushing regulations” is under way. In a mere six weeks, Trump and his Republican allies in Congress have rolled back 90 regulations.
And they’re just getting started.
Business leaders are cheering. “Relief is finally on the way,” says Thomas J. Donohue, president of the US Chamber of Commerce.
While the media obsess about Russian conspirators, people who actually make things for a living — whether burgers, bridges or buildings — see that the real story unfolding in Washington, DC, is the unprecedented pace of deregulation. It’s helping to fuel the stock market’s record-shattering optimism. And just in the nick of time.
By every measure, the United States has been sinking into economic mediocrity over the last decade because of excessive regulation.
When Barack Obama took office in 2009, the United States ranked third among all nations as a place to do business. Since then it has plummeted to eighth, according to the World Bank. Why? Eight years ago, it took 40 days to get a construction permit in the United States. Today, it’s double that.
Regulatory overkill started long before Obama. But Donohue calls the last eight years a “regulatory onslaught that loaded unprecedented burdens on business and the economy.”
The Heritage Foundation, which grades nations on economic freedom, now puts the US 17th in the world, our lowest-ever ranking. That’s below Chile, and former Soviet states like Estonia, Lithuania and Georgia.
Government bureaucrats here are choking us with compliance costs. Small businesses get hit hardest, because they lack legal departments and market clout to maneuver around the rules.
Unreasonable government regulations are second only to the cost of health insurance as the biggest challenge facing small businesses, according to the National Federation of Independent Businesses.
And we have ObamaCare to thank for both. Restaurateurs nationwide face 622,000 hours of work to comply with new menu-labeling rules. Physicians have to report 18 different clinical measurements on the patients they see or get whacked with penalties.
ObamaCare imposes almost three times as much paperwork on businesses as the notoriously complex Dodd-Frank financial regulations did, and more than 10 times as much as the Sarbanes-Oxley financial reform. The impending repeal of ObamaCare’s employer mandate will liberate companies to start hiring again.
On the campaign trail, candidate Trump’s pledge to repeal ObamaCare and “cut regulations massively” resonated. People struggling to operate businesses were seething with anger at how government regulators compel them to spend hours filling out paperwork and constantly changing their hiring and compensation practices. It’s a colossal theft.
Now, as president, Trump is following through: He’s appointing watchdogs for every federal agency to identify and cut any job-killing rules. He has also ordered agencies to dump two regulations for every new one added. And he’s working with congressional Republicans to undo the reams of last-minute regulations Obama added in his final days in office.
Deregulation will be key to a timely rollout of Trump’s infrastructure plan. Otherwise, it will be delay after delay. Big highway and bridge projects often require up to a decade of regulatory and environmental review and permitting before construction begins. These delays would thwart Trump’s plan to use such spending to jump-start the economy.
Investors are banking on Trump meeting his target to get the nation’s economy growing at 3 percent again, a rate not seen for years. Last week, the Dow Jones Industrial Average hurtled across the 21,000 mark for the first time ever.
The soaring market reflects expectations that Trump will slash corporate taxes. But investors are also buoyed by the pace of deregulation. Call it the biggest tax cut of all.
Betsy McCaughey is a senior fellow at the London Center for Policy Research.