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On Monday, January 30th, the current administration moved to reduce government “regulation.” Trump signed an executive order requiring all federal agencies to repeal two regulations for each new one proposed. At meetings with business executives from large companies he has promised to cut regulation by 75 percent.
“If there’s a new regulation, they have to knock out two. But it goes far beyond that, we’re cutting regulations massively for small business and for large business,” Trump said during the signing of the order. The administration stresses that the new policy is intended to help small businesses. Trump claims small businesses “have been treated very badly” and it is “virtually impossible to expand your existing business because of regulations.”
Reginald Ubergelt, President of United Pollution Producers, was reported dancing down Wall Street shouting, “Free at last, free at last, thank God Almighty, we’re free at last.” A spokesman for the National Strip Mining Association, which represents the “Fortune 10” international mining companies, said this will “hugely revitalize struggling small businesses. Trust me. I know. I am a businessman. I’m smart.”
An anonymous source inside JP Money Chase Sterns Lehman & Company said inside traders expect to have a banner year. “The word on the street is that selling short, ignoring the best interests of your clients, manipulating investment ratings, and “bundling” shaky junk bonds will increase in market share.”
Stock analyst Guy B. Wear expects big growth opportunities in some market sectors “We are bullish on deregulation. There is huge potential for value stocks in deregulated sectors. We will be moving out of declining industries like workers’ safety services, healthcare, and energy efficiency and diversifying into prosthetic devises, caskets, and mortuary service opportunities.” Investments in quack herbal supplements, gambling operations, over the counter pharmaceuticals, and used cars sales are expected to be especially strong.
“Getting rid of laws that shackle entrepreneurial spirit will create many jobs,” said John Sleezeball, CEO of Burger Barn International. “Free from burdensome wage and hours regulations we expect to hire 25% more children in the next year.” The National Chamber of Commerce praised the new policy saying, “profits will increase exponentially as wages and working conditions decline to be more competitive with Bangladesh and East Timor. This will bring many jobs back from overseas.”
The public sector is expected to benefit as well. The Association of American Local Municipalities believes this initiative will save local taxpayers millions. Their spokesman says, “For every new stop light we have to install, we will be able to remove two! The savings will be enormous!” Other savings for local taxpayers will be found by laying off local building code, zoning, health, and restaurant inspectors.
Senator Gus T. Foghorn (R-TX) praised the elimination of 2/3 of the laws regulating commerce, consumer protection, employment, natural resource use, civil rights, and most other legal relationships. Outside a $5000 a plate campaign fundraiser he commented, “the invisible hand of the free market is all the law we need, except for the Bible of course.”
But not everyone agrees. The Centers for Disease Control and Traffic Safety Administration expressed concern that eliminating 2/3 of our laws may have large negative impacts on public health and safety. The Congressional Budget Office study showed that in the long run the health costs, impact on property values, and costs of unintended consequences exceeds short term economic gain. CBO spokesman, Dork Bureaucrat said, “An ounce of prevention is worth a pound of cure.” Concerns by these agencies were echoed by the National Academy of Sciences, but administration officials discounted them as “fake news.” Press Secretary Sean Spicer said, “Science is a hoax.”
Many economists point out that policy decisions can have inconsistent impacts on the economy. There are always winners and losers. The “creative destruction” of the free market can be fickle. Lack of adequate government regulations can be bad for some industries like manufacturers of workplace safety equipment, pollution control technologies, renewable energy and red tape sales. Historically there have been many problems with “wild west” development, mining, logging, stock speculation, and fraudulent business practices.
University of Wisconsin Mukwonago Historian, Professor Wilber Bookishman, points out that regulations are good for most businesses. Laws and the courts create the “playing field” and provide the “rule book” for business and society. In his book “How to Kill the Competition and Succeed in Business” he says the “revolving door” and “regulatory capture” are proven tools for business growth. By controlling licensing, training, and consumer protection requirements, regulations can help maintain profits. He is quoted a saying, “deregulation could disrupt career ladders for many rising business and political leaders.”
In a 2016 report The Economic Research Institute points out that “regulations” have suffered from bad PR in recent decades. They are nothing more than laws needed to control antisocial behavior and promote the common good. But they have been unfairly vilified as the cause of many economic ills.
“Our research indicates regulations are simply rational responses to various social and economic problems. We have building codes because of past disasters like fires, collapsing buildings, and shoddy workmanship. We have environmental laws because in the past rivers were burning, children were being poisoned, and the smog was so thick you could cut it with a butter knife.”
Polls show the majority of working families do not favor the new policy. When provided with basic information on the impact to their lives, they support keeping regulations. But House Speaker Paul Ryan reacted, “Who the hell are these losers? They don’t make campaign contributions!”
Speaking for this “silent majority,” Phil Anderson, ace columnist for the prestigious Duluth Reader, summed up the issue. “This new policy is obviously ridiculous. But it is typical of many of this administration’s cornball ideas. One must either laugh or cry. You just can’t fix stupid.”