Even The Washington Post Recognizes that Bureaucratic De-Regulation is a Good Thing

Jose Nino Comments

One of the more unheralded facets of the Donald Trump administration has been deregulation. Even mainstream outlets like the Washington Post are acknowledging this.

The White House released a new report that demonstrates the negative effects of regulations on economic activity. It correctly states that excessive regulatory costs are passed on to consumers through the form of higher prices or lower wages for workers. Many advocates of a strong administrative state argue that we need regulations to protect consumers from so-called market failures such as pollution and consumer fraud. They also think that deregulation disproportionately benefits lobbyists and industry groups.

However, this line of reasoning is fallacious. “Market failures” can still be addressed by civil society and even market innovations.

When regulations are now in the equation, unintended consequences begin to creep in. In fact, one of them is increased barriers to entry for small businesses. Large businesses can handle the compliance costs of handling regulations, whereas small businesses often have to close their doors simply because the burdens are too much.

The White House’s Council of Economic Advisers (CEA) confirmed the massive costs of certain regulations. It specifically studied 20 regulations that the administration opposed or repealed. These included access to the Internet and certain labor rules. Put together, the total costs of these 20 regulations are about $235 billion. The study from the CEA claims that after three to five years after the deregulation sets in, families could receive windfall benefits of $3,100 per household.

This is just scratching the surface, however.

The Competitive Enterprise Institute (CEI) estimates that federal regulations cost $1.9 trillion for the entire American economy. This regulatory maze is a major hindrance to economic growth. One could only imagine the type of economic benefits American households would receive if even half of that regulatory apparatus was picked apart.

Indeed, it is fashionable to talk about American tax policy these days. After all, the U.S. tax code is cumbersome and a clear infringement on the property rights of peaceful individuals and business owners. However, direct taxation only scratches the surface of economic infringements. The state has become so massive and all-encompassing, that there are multiple layers of government control. The regulatory state represents one of the most notable ways that government tries to micromanage our lives.

One of the silver linings of the Trump administration has been its recognition of the bureaucratic rigmarole that most Americans must put up with. For that reason, Trump should be commended for his Executive Order to reverse Obama-era regulations. However, our work is far from over. The Trump administration should take more radical steps in defunding bureaucracies and repealing bad bureaucratic ordinances.

All in all, Trump should avoid the complacent nature of previous generations of Republicans that pass marginal or incremental reforms, and then stop working to reduce the size of government once comfortably in power. The best defense is to continue going on offense.


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