The open secret to our success.
If you want to start a business, the World Bank says you’d do better to move to Canada than setting up shop here in the U.S., 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 United States Chamber of Commerce.
While the media obsess about Russian conspirators, people who make things for a living — whether burgers, bridges, or buildings — see that the real story unfolding in Washington, D.C., is the unprecedented pace of deregulation. It’s helping to fuel the stock market’s record-shattering optimism. And 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 U.S. ranked third among all nations as a place to do business, but since then, the U.S. has plummeted, 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 Donahue 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 U.S. 17th in the world, our lowest-ever ranking, below Chile and former Soviet states like Estonia, Lithuania, and the Republic of 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 business as the notoriously complex Dodd-Frank financial regulations and more than ten times as much as the Sarbanes-Oxley financial reform. The impending repeal of the Obamacare employer mandate will liberate employers 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’s 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 President 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 infrastructure spending to jumpstart the economy.
Investors are banking on Trump meeting his target to get the nation growing at 3 percent again, a rate not seen in 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.