“I was born to regulate. . . . So long as I’m regulating, I’m happy.”
—Marthe Kent, an Obama OSHA regulator1
In May 2016 Trump held the first meeting of the Economic and Business Policy Council. This was a highly impressive group of respected CEOs of highly profitable companies. They were leaders of banks, manufacturing companies, technology firms, retailers, construction companies, and energy companies—to name a few. The meeting took place in the master conference room a few floors down from Donald Trump’s office in Trump Tower. Steve and Arthur were the economists invited to the session.
One of the major conveners of that meeting was Harold Hamm, the billionaire founder and chief executive of Continental Resources. Harold was the epitome of the American dream. He grew up in rural Oklahoma with eight brothers and sisters in a home without plumbing. He left home at 17, got involved at the lowest rungs of the oil and gas business, and built up the drilling business at a swift and steady pace. His major breakthrough was to be the first wildcatter to drill wells in North Dakota using the new techniques known as horizontal drilling and hydraulic fracturing. He owned many of the most productive wells in the center of the Bakken Shale and made a fortune drilling the seemingly endless pool of shale oil and shale gas.
Trump loved Harold and his rags-to-riches story from the start. The two could not have been more different, one a suave New York real estate developer who loved to hear himself talk and the other an unsophisticated, taciturn Okie whose favorite pastime wasn’t golf but quail hunting in the remotest areas of southern Texas. Hamm wrote one of the first big checks for Trump and his allied PACs, and he stood by Trump during the mountains and the valleys of the campaign. Almost immediately he became a valued confidant.
The two of us attended the meeting as Trump’s economic gang, and let’s just say we were easily the poorest people in the room by a few zeroes on our tax returns. At this meeting Trump boasted that he was going to “win on the economy because for eight years Obama hasn’t known what he is doing and knows nothing about business.” He pledged that he would be “the greatest pro-business president ever,” which was like hearing a Pavarotti aria to these assembled businessmen and -women.
Then after a five-minute greeting along these lines, Trump said to the 25 or so CEOs, “I want to hear from you. How can we help your businesses grow and prosper and create jobs?”
He sat back and listened intently, then queried these executives for almost an hour and a half. We had originally suspected that he would stick his head in, say hello, and then politely leave and have the campaign staff—that is, us—listen to their stories and advice. It turns out that Trump can be a very good listener when he wants to be.
Everyone was asked to pinpoint the one thing the feds could do to make their lives easier. We thought that they would mostly say cut taxes. Some did, but not most. The number one concern of the bankers, builders, techies, energy suppliers, coal producers, manufacturers, hospital administrators, and media magnates was simply this: please get the government off our backs. As one coal executive put it: “We are being strangled by regulation and red tape. If you want to make America great again, please put a muzzle on the regulators.”
They complained about everything from the Dodd-Frank bank regulations to the EPA’s Clean Power Plan rules, to OSHA, the FDA, and the Labor Department stifling their growth and profitability. It wasn’t just the laws themselves, but the Obama regulatory zealots who were universally hostile to business—especially the fossil fuel industry—and seemed intent on shutting down companies, not helping them comply with the thicket of often-contradictory rules.
All this had a big impact on Trump’s thinking as he devised his economic game plan. We had told him in our briefings that the regulatory burden had the economic impact of a second income tax. Our friends at the Mercatus Center had crunched the economic impact numbers of the deadweight loss of regulation, and they estimated just shy of $2 trillion of lost output per year due to compliance costs—which was a little more than the federal income tax raised each year. Those costs had exploded under Obama. As one of the CEOs said at the meeting, “The Obama regulators treat us like enemy combatants.” But hearing this directly from the nation’s major job creators seemed to hit Trump in the forehead with the force of a sledgehammer.
It was not long after this revelation that Trump began to deliver a new and memorable line on the campaign trail. “For every new regulation my agencies create, we will have them repeal two. The number and cost of regulations will go down in my administration,” he pledged.
Now, a skeptic might reasonably say: Of course a bunch of rich business owners are against regulation, for the same reason cats don’t like bells put on their collars. We have health, safety, and environmental regulations precisely because we can’t trust business to act responsibly. And in many cases that’s absolutely true.
In many conversations we had with Trump, he would get a stern, no-nonsense look on his face and say, “We’re going to make sure we have the cleanest air and the cleanest and safest water ever. I want beautiful water.” No argument here from us.
What we were talking about was cutting regulations whose costs far exceeded their public benefits, and finding ways to protect the health and safety of the public and the planet but at lesser cost to everyone. As economists, we wanted to find ways to make sure that the benefits of regulation exceeded the costs, and we had hundreds of examples where that wasn’t the case.
Killing Coal
The three of us had spent a lot of our careers assessing the costs of regulation, so we knew what the economic models and theories were telling us. Regulations hurt jobs, incomes, and American competitiveness. But it wasn’t until we traveled with and for Trump to beleaguered areas of the country where people were hurting and their livelihoods had been lost that we really observed firsthand how the iron fist of the regulatory state could crush whole towns and communities.
The most heartbreaking example was when we traveled to coal country: mining towns in West Virginia, Ohio, Virginia, and Pennsylvania, to name a few. On one memorable visit to Charleston, West Virginia, the annihilation of small coal communities was a depressing sight to behold. Where mining was once in full swing with second- or third-generation miners, truckers, and construction crews that worked hard and long hours for an honest day’s paycheck, the mines were now mostly shut down and people stood in unemployment lines. Many had become addicted to methamphetamine and opioids, and they sat on the porches of their tiny homes in the mountains with nothing to do. In work there is dignity, personal gratification—a raison d’être. In idleness and layoffs there are depression and feelings of worthlessness. Suicide rates soared, schools and playgrounds and malls were shuttered, half of the homes (many of them were trailer homes) were abandoned. The scene in these towns looked like what you would see in a third-world country, and it brought back the imagery of despair from The Grapes of Wrath. No one smiled. The main places of commerce seemed to be the liquor stores and the pawnshops. People’s life savings were in their homes, as low in value as they might be, so the logical choice of moving to where the jobs were was a money-losing last resort.
Now, we believe in the free market idea of creative destruction. There is a life cycle in businesses and industries that is conducive to growth and higher living standards over time. Old industries—from horse-and-buggy producers, to rotary phones, to DVD players, to typewriters—are replaced with better, cheaper, faster devices. This is called progress.
But what we were witnessing wasn’t creative destruction. This was a planned governmental purge. Yes, the surge in output of cheap natural gas put a huge dent in the rival coal industry. But coal has been on a long track of becoming much cleaner and much cheaper. Coal can compete with natural gas on a level playing field. (We laughed at liberals whose cavalier response to the dying coal industry was that we must let market forces play out. But they were willing to spend tens of billions of dollars a year on green energy subsidies to wind and solar power—which in most markets are about three to four times more expensive than coal.) But Obama and his green allies were on a crusade to crush the coal industry as part of their grandiose plan to save the planet. They had no reservations about sticking a knife into the back of an industry that even at its low point employed hundreds of thousands of workers and supplied one-third of America’s electric power.
They were willing to allow these communities to die. We often observed that it is highly doubtful that the university professors, the journalists, and the billionaire donors to Greenpeace and the Sierra Club would have been nearly so committed to combating global warming if it were their own jobs, their families, their communities, and their life savings that were going to be destroyed. Global warming alarmists were so committed to their cause that there was no limit to how many of other people’s jobs would have to be sacrificed at the green altar. If they ever cared to leave their homes in Beverly Hills and Harvard Square and visit the human misery their jackbooted regulatory policies were causing, would it have changed their minds? Killing coal squashed the spirit and savings of hundreds of thousands of families—needlessly. Trump stood with these workers and promised to rebuild American coal.
Hillary, meanwhile, promised more government welfare benefits, retraining funds, and education dollars for the victims of the war on coal. But when she was with her donors, she promised to kill every coal job in America, which elicited howls of approval. What humanitarians!
This story is a microcosm of the effect of a heavy-handed, destructive regulatory state. Those who are most victimized by regulatory tyranny are the lowest-income Americans who face higher prices, more unemployment pink slips, and destruction of their communities, whether in rural America or inner cities like the war zones of Detroit, Baltimore, and Newark. Regulation is not an evenly distributed tax on America, it is a highly regressive tax that punishes the poorest Americans the most. More and more working-class voters recognized this high cost to their families. Trump got it. Hillary and the liberals continued to pretend that regulators are your friends.
If It Moves, Regulate It
One of the men on Capitol Hill who played a lead role for Trump on the deregulation front, responsible for the legislation to roll back Dodd-Frank, was Jeb Hensarling of Texas. We had worked for years with Hensarling and at one point had supported him to be elevated to Speaker of the House, after Denny Hastert of Illinois left that post. Hensarling is one of the most talented and sharp-witted congressmen we have ever met, and he understands economics, having served many years earlier as an aide to Senator Phil Gramm of Texas—who in an earlier life was a distinguished economics professor. (Yes, people who understand that demand curves slope downward and that if you tax something, you get less of it are sometimes elected to Congress.)
In the fall of 2017, Hensarling wanted to meet with us for some help on the financial deregulation bill he had authored.
We asked him why he thought the economy and stock market had boomed so rapidly since Trump’s election. Hensarling quipped: “The answer to that is easy: on November 7, 2016, the beatings stopped.” We laughed, but there was so much truth to this.
Obama and his regulatory SWAT team had for eight years intimidated and beaten down business with an avalanche of regulations and hyper-enforcement that was likened to the Brooklyn Mafia. This blanket of fear that hung over manufacturers, drug companies, energy and chemical producers, tech firms, insurance companies, banks, and small businesses stunted growth. If you see the guy down the street getting mugged, you’re not likely to travel down that avenue. At least the Mafia took only 10 or 15 percent and didn’t shut you down. The intimidation game, as our friend Kim Strassel of the Wall Street Journal described it, was as much a growth killer as the laws and regulations themselves. In The Wizard of Oz, the Munchkins come out of hiding to dance and sing only when they are absolutely certain the Wicked Witch of the West is dead. For many businesses, the feeling after the election of Trump and the ouster of the Obama regulators was “Ding Dong the Witch Is Dead.”
Consider first the raw numbers. By the end of Obama’s presidency, there were 2.1 million civilian employees of the federal executive branch—mostly regulators and other busybodies—people who are most assuredly not “here to help.” That’s about 235,000 (13 percent) more full-time employees than there were in 2007. The boost in executive branch employment was undoubtedly spurred by the growth of the federal regulatory burden over that same period.
We see this in the overall number of regulations, which is an imperfect but highly instructive measure of federal red tape for businesses to get tangled up in. If we look at pages in the Federal Register, we see a steady rise in the pace of rule-making. Thankfully, the level still hasn’t exceeded the number under the worst regulator of all time—Jimmy Carter—but the regulatory switch was definitely turned on in the Obama administration. George W. Bush was no great shakes on the rule-making front either. His 2007 energy bill regulated everything from fuel-efficiency standards to lightbulbs to air conditioners and refrigerators.
Even more telling was the enactment of major regulatory rules with a cost to the economy of more than $100 million. These aren’t nuisance regulations, they are the major job and prosperity killers. At the top of the list was the aforementioned Obama Clean Power Plan law that crippled the coal industry and added huge costs to utilities.
An influential 2017 analysis by Jason Pye of Freedom Works, a grassroots conservative watchdog group, found that under Barack Obama there were well over 500 new regulations with costs to the economy of more than $100 million each!2 Altogether these regulations added a minimum of $50–100 billion in costs to the U.S. economy. Pye checked to find out how many of these expensive regulations were approved by Congress—which under our Constitution is the branch that’s supposed to make the laws. The answer was exactly zero. Trump is pushing a reform called the REINS Act, which would require a positive vote by Congress before any regulation with a price tag of more than $100 million goes into effect.
Twenty-Two to One
One of Trump’s first actions as president was to honor his promise to repeal two existing regulations for every new one. He signed Executive Order 13771 within his first few weeks in office.
This order also mandated that there could be no increases in net regulatory costs for fiscal year 2017 and was extended for 2018.
The results are in, and the deregulation effort has been an over-the-top success. Thus far, instead of two repeals for every new rule, the ratio has been closer to “twenty-two for one.”3 According to the same report, these combined actions saved $8.15 billion in government spending—which doesn’t include the billions saved by consumers and companies.
The administration also successfully eliminated, delayed, or streamlined 1,579 regulatory actions that were left “in the pipeline” by Obama regulators for future implementation. They were tossed into the trash cans.
Trump recently announced that he has upped the ante and now wants three regulations repealed for every new regulation. Our friend Mick Mulvaney of the Office of Management and Budget (OMB) tells us this alone will save businesses and consumers and workers just short of $10 billion.
Below we highlight several priority areas where Trump has made a difference in getting government snoops off our backs.
Killing Community Banks
Washington operates under the principle of the law of unintended consequences. Laws and edicts often have precisely the opposite effect of what the politicians hoped for.
Exhibit A was the Dodd-Frank law, which was supposed to reduce the risk of another financial meltdown as we saw in 2008 and 2009. Yes, we all want to prevent that kind of financial trauma from ever happening again. But one of our most persistent pieces of advice to Trump was to repeal most, if not all, of the 2,300-page Dodd-Frank.
One of the cruelest ironies of the financial regulation bill of 2009 signed into law by Obama was that the two principle authors of the bill—Barney Frank of Massachusetts and Chris Dodd of Connecticut—were in no small part the arsonists who started the fire in the first place.
Obama and the Democratic Congress said they were taking aim at the big banks in order to prevent such a catastrophe from happening in the future. But instead the bill has made big banks bigger, and their ammunition wiped out small community banks throughout the country—even though small banks posed no “systemic risk” to the financial system and had nothing to do with the 2008 crisis.
The same banks that were described as “too big to fail” are now bigger than ever before. The top five largest banks now control 44 percent of U.S. banking assets. The consolidation of major banking institutions (funded in part by taxpayer dollars) comes with added risk to our economy, and at the expense of smaller banks nationwide.
Meanwhile, the number of banks in the United States continues to fall precipitously. The days of the Building and Loan that was run by Jimmy Stewart in It’s a Wonderful Life are over.
Why has Dodd-Frank contributed to consolidation and empowered the “too big to fail” banks? Rescinding this law would make life a lot easier for smaller community banks, which do not have the economies of scale to keep up with intense regulations.
Arthur summed it up well in a study he authored on the excessive regulation of the automobile industry in the late 1970s. It’s amazing how some things don’t change:
All regulations create a wedge between prices paid by consumers and the prices received by producers. When compliance with a regulatory wedge involves a common or fixed cost, it is equivalent to a lump sum tax. As a result, there is a differential impact on the profitability of large versus small firms. This differential increases for industries characterized by economies-of-scale production.4
To give you an idea of the cost, the six largest banks in the United States spent a combined $70.2 billion on regulatory compliance in 2013. As many as one in five people on Wall Street’s job is to make sure nobody is violating the 20,000-plus pages of bank regulations. Just imagine the burden on community banks that do not have the funds to hire compliance analysts. It is clear that community banks have been on the decline, and fresh regulatory burdens over the last eight years have not helped.
While big banks have the money to hire scores of experts and compliance officers who can deal with new regulatory red tape, many small community banks lack the resources to comply with additional government regulations. As one would expect, this legislation has caused the big banks to get bigger and forced small banks to close up shop. A study from Harvard University found that since “around the time of the Dodd-Frank Act’s passage,” the “community banks’ share of assets has shrunk drastically—over 12 percent.”5 While small banks should be the backbone of personal and small business loans in our communities, they are bearing the brunt of the damage caused by the Dodd-Frank bill. Many small businesses have complained of a credit squeeze that is inhibiting business start-ups and expansions—which means fewer jobs. The demise of community banks is one explanation for this lending freeze in small towns across the country.
Dodd-Frank was also a classic catch-22—the kind that only government could think up. Under the 1970s-era Community Reinvestment Act, Congress hoped to radically discourage bank “redlining”—a practice in which banks simply would avoid approving mortgages in communities with certain zip codes that have high percentages of minority residents. So Congress forced banks to make loans in these low-income communities. They were called Community Reinvestment Act (CRA) loans, and they were intended to reduce discriminatory lending practices by banks. In some cases banks had to lower their underwriting standards to ensure that the minority applicants were eligible for the loans. What is also clear is that the CRA created a culture in bank lending offices to issue loans with very relaxed underwriting standards to fill “quotas.”
But then when the mortgage industry blew up in 2007 and 2008, Messrs. Dodd and Frank and many other liberal activists accused the banks of “predatory lending”—which was a practice by mortgage writers to make loans that low-income and often minority home purchasers could not afford to pay over time. To be sure, there were exotic and misleading “balloon loans” with low interest rates at the beginning of the loan period that rose over time—thus putting huge unexpected costs onto the backs of unassuming home buyers. Millions of those loans went into default, in part because of unsavory lenders. The lenders didn’t care, because Fannie Mae and Freddie Mac provided 100 percent repayment guarantees.6
This left bank loan officers hanging from the horn of a dilemma. If a minority couple came in for a loan and the officer denied the loan, the bank could be accused of discriminatory lending policies and face severe penalties. But if the officer decided to approve the loan to comply with the CRA, the bank could now be accused of predatory lending practices. For several years after the housing recession, banks swung the pendulum back in the direction of making it very difficult for even qualified borrowers to get loans. The locks on the barn door were secured long after all the animals had fled.
At the time of this writing, Trump is pushing for the repeal of Dodd-Frank’s lending requirements, and he and Hensarling have already won some reforms. In its place and to prevent the need for more bailouts, Washington should concentrate on breaking up Fannie Mae and Freddie Mac, which were at the epicenter of the crisis and required the biggest bailout in American history. A new replacement law for Dodd-Frank would limit Fannie and Freddie mortgage guarantees to the median home price in each metropolitan area, so that the program would help low-income and first-time home buyers, make mortgage lenders responsible for the first 20 percent of losses on a mortgage default (to ensure good underwriting practices), and, most importantly, require a minimum down payment of 10 percent on all federally guaranteed mortgages.
Audits of the mortgages that failed indicate that almost 90 percent of the defaults were of loans with down payments of less than 5 percent. With little skin in the game, homeowners whose homes fell in value by more than the down payment had a financial incentive to default rather than pay their monthly mortgage payments—and that’s what millions did.
These simple measures could do more to prevent another real estate meltdown than all the Dodd-Frank rules—times ten. But Trump’s housing department should be paying close attention. The feds are back to providing 100 percent taxpayer guarantees on 3 and 4 percent down payment loans again. Washington has learned nothing from the housing crisis.
Real Affordable Healthcare
On healthcare, Trump’s major regulation reform so far was ending the Obamacare individual mandate penalty on those who can’t afford Obamacare plans. This has liberated an estimated 10 million Americans—mostly young workers—from paying a tax of up to $1,000 a year for failing to purchase insurance they can’t afford. The average income of those hit by the tax was less than $40,000 a year, so this was a highly regressive Obama-era tax. We thought Obamacare was supposed to help, not burden, these families.
Trump has also made it a regulatory priority to allow Americans to reduce their insurance costs by allowing for the sale and purchase of health plans across state lines. In some states an insurance package for a family of four can be twice as expensive as one that could be purchased in a nearby state—mostly because of onerous regulations. Trump also will allow Americans to buy short-term health plans outside Obamacare. This will make affordable health insurance available to lower-income Americans.
Keep Your Hands Off the Internet
Another big pro-consumer act was ending the Obama-era internet rule called “net neutrality,” which was likely one of the most controversial and publicly debated regulations in the history of the Federal Register. When it was finally rescinded in late 2017, FCC chairman Ajit Pai received numerous death threats, and many across the United States were furious. The regulation reclassified broadband as a utility, thus mandating that internet providers (Verizon, Comcast, etc.) could not charge content creators (Facebook, Google, Netflix, etc.) for their use of bandwidth in order to eliminate paid prioritization, and they also could not favor one content creator over another in their internet and cable packages.
However well intentioned, the regulation was far from a victory for internet users and instead represented another example of government deciding that it is a better judge of efficient action than the market.
Thanks to the new rules, internet providers will now be able to charge content producers for their use of bandwidth, and this has launched a new influx of cash investment to prevent internet traffic jams by creating better, faster, and cheaper internet. Verizon and AT&T have announced plans to spend billions of dollars to expand broadband access to millions more Americans thanks to this deregulation.
Our view, shared by Trump, is that if there is any area that is thriving without government interference, it is the internet. The innovation and proliferation of low-cost competitors have brought the internet and broadband connections to virtually every home, school, and business in less than two decades. That happened largely because the internet remained tax and regulation free.
A Groundbreaking Policy
Trump was always highly supportive of developing America’s abundant resources. He expressed frustration with bans on using our timber, our energy, our coal, and our mineral resources. We were with him solidly on this. We can create jobs, increase our national output, raise money for the government, and become less reliant on foreign nations for valuable and strategic resources, we told him in a memo during the campaign. He loved this idea. It fit nicely with the theme of “Putting America First” and would bring development to areas of the country that were economically depressed.
While most Americans are familiar with America’s vast energy resources, less well known is that we are also number one in the world in strategic mineral resources. But under Obama regulators, those resources remained in the ground and America became dependent on other nations for rare earth minerals.
As a matter of national security and economic development, it never made any sense for the United States to be highly reliant on China and Russia for strategic minerals. Our dependence on foreigners for these resources has had nothing to do with geological impediments. It is all politics.
A little history here is instructive. As recently as 1990, the United States was number one in the world in mining output. But by 2016, according to the U.S. Geological Survey, the United States was nearly 100 percent import dependent for at least 20 critical and strategic minerals (not including each of the “rare earths”) and other key minerals. We have grown totally dependent on imports for strategic metals necessary for everything from military weapon systems to cellphones, solar panels, and scores of new-age high-technology products.
Thanks to years of an inane anti-mining policy dictated by Washington, it takes seven to ten years to get mining permits here, versus two or three years in Australia and Canada. This has discouraged the kind of mapping and exploring that was done in the Old West when mining for gold, copper, coal, and other resources was common.
In December 2017 the Trump administration issued a long-overdue policy directive, called “A Federal Strategy to Secure Reliable Supplies of Critical Minerals.” The goal is to open up federal lands and streamline the permitting process so America can mine again.
This should immediately open up mining for a suite of 15 primary minerals that have been referred to as “the vitamins of chemistry.” They exhibit unique attributes like magnetism, stability at extreme temperatures, and resistance to corrosion—properties that are key to today’s manufacturing. These rare earth elements are essential for military and civilian use for the production of high-performance permanent magnets, GPS guidance systems, satellite imaging and night-vision equipment, cellphones, iPads, flat screens, sunglasses, and a myriad of other technology products.
We worked with Ned Mamula, a brilliant geoscientist and adjunct scholar at the Center for Science at the Cato Institute and one of the world’s experts on mineral resources. “Our mineral situation today is similar to our vulnerability to OPEC nations for oil and gas in the 1970s,” Mamula says. He showed us statistics from the government’s own assessments, which documented, as Mamula put it, that “No nation on the planet is more richly endowed with an underground treasure chest of these resources than the United States. We have hundreds of years of supply with existing mining technology.”
How much is it all worth? The U.S. Mining Association estimates more than $6 trillion in resources. We could be easily adding $50 billion of GDP every year through a smart mining policy. Trump wants to do for strategic domestic mineral production what his pro-drilling energy policy has done to vastly expand domestic supplies of oil, gas, and coal.
Environmentalists haven’t reacted positively to Trump’s executive actions here. They have threatened lawsuits and other legal obstacles to this pro–economic development mineral policy—just as they oppose more open drilling in places like Alaska and offshore.
Do we want Vladimir Putin or an increasingly militaristic China to hold the commanding heights on strategic minerals that could be the oil of the twenty-first century?
China’s leaders have been known to boast that the Middle East has the oil and China has the rare earth minerals. Wrong. America does—and Trump’s America-first resource policies are, for the first time in decades, letting companies go out and mine for them. In the end, this could be one of Trump’s most valuable deregulatory policies. The economic benefit could be in the trillions of dollars.
The Beatings Have Stopped
A secret to Trump’s economic success—and more significant than any single one of these regulatory rollbacks—is the message that the Trump administration is sending to businesses nationwide. The government isn’t here to slit your throat. This has created a new era of business optimism, and it started literally the day after the election.
The research foundation at the National Federation of Independent Business (NFIB) has a vast body of historical data on small businesses, and one item they attempt to quantify through their survey is optimism. In 2017 this survey recorded the highest annual average for optimism since 1983, the year that Reagan’s first round of tax cuts phased in. In 2018 the profitability of small businesses hit an all-time high as well.
We submit that much of this increase in economic optimism in the United States is directly tied to Trump’s aggressive federal deregulation effort. Small businesses (those with 50 or so employees) benefit the most here. That is because small and start-up firms experience disproportionately higher regulatory costs per employee compared to medium and large firms.
Of course, we can’t pretend that the upturn in optimism is entirely due to deregulation. After all, President Trump did sign a massive tax cut for small businesses into law. We’d say that made more than a bit of difference as well.
The Wrecking Ball
Here’s one final indication that all this regulatory reversal is working as planned. In October 2017, Time magazine published a cover story with a cartoon picture of Trump as wrecking balls decimating whatever comes into his path. The title blared: “The Wrecking Crew: How Trump’s Cabinet Is Dismantling Government.”7 The story warned that “while Trump is busy tweeting, these three people are undoing American government as we know it,” referring to Housing Secretary Ben Carson, Department of Education Secretary Betsy DeVos, and EPA director Scott Pruitt.
“If you look at these Cabinet appointees,” White House advisor Steve Bannon is quoted as saying, “they were all selected for a reason. And that is the deconstruction.” That’s for sure. We worked on the transition. We recommended many Cabinet and regulatory agency personnel to Trump. They were all people, with a few exceptions, dedicated to making government less costly, less intrusive, and more business and consumer friendly.
That same week, the New York Times ran a lead editorial complaining that Team Trump is shrinking the regulatory state at an “unprecedented” pace. The editorial praised Obama for erecting regulatory walls to new heights.8 These and other media reports have had all the subtlety of a primal scream. Pruitt is excoriated for allowing a deterioration of clean air and clean water rules.
At precisely the time these articles hit the newsstands, the stock market raced to new all-time highs of over 24,000 on the Dow, we had another blockbuster jobs report with another drop in the unemployment rate, and housing sales soared to their highest level in a decade.
Are liberal anti-Trumpers so ideologically blindfolded that they are incapable of connecting these dots? The Trump deregulation policy has smashed the regulatory state at a dizzying speed—and continues to do so. The same people who say that Trump doesn’t deserve credit for the economic revival because he hasn’t done anything significant yet are the ones complaining of Trump cutting down regulations at the speed of a sawmill.
After all this time, the media and the left-wing agitators still don’t get Trump. Loosening the noose of burdensome regulation is a way to resuscitate American jobs and prosperity. The two go hand in hand. Like taxes, the power to regulate is the power to destroy. One person we worked with closely during the campaign was Donald Trump Jr., and his response to the Time article was brilliant. He tweeted: “I consider it a compliment to what my father is trying to accomplish as president.”