Trump hit the gates running when he took office, and he has signed a slew of executive orders. He’s assaulting the problems that were so key to his campaign, and many were taken aback by the fervor with which he went to task.
So, just how much has he changed the system after a few short months? The answer is both surprising and mundane. Things are largely the same for now, but he has set the wheels of change in motion.
In fact I think the deregulation work he’s done already has the potential to have a huge impact on our country not just during his four or eight year term, but well beyond that. It’s why I tell people it’s his biggest and best accomplishment thus far. Here’s why:
Dodd-Frank
This financial legislation was a big deal, mostly because it was how the Obama Administration justified the massive Wall Street bailouts. The regulation was supposed to make it impossible for banks to lend so recklessly again, even though the subprime lending that caused the Great Recession was mandated by a Clinton-Era law.
The big issue with Dodd-Frank is that it bills banks and financial institutions for their own regulation, and that takes capital out of markets. Trump signed an order that ordered a review of this and other financial regulation. The order doesn’t change the current regulation, but it does mandate action by Congress, and changes are impending.
Obamacare
This is the other major issue you see on the news every day. Once again, the president does not have the individual power to overturn this legislation. Instead, Trump ordered his administration to “spare parties from hardship.” This is pretty open-ended, and like the situation with financial regulation, it’s really just a primer to get Congress in action.
In response, the GOP has already put forward a replacement for Obamacare. The first attempt is not expected to make it through the Senate, but things are moving as fast as the process allows, and it is very likely that healthcare costs can start going down as early as next year.
Oil
Unlike the other orders, this change was an actual bill, which means it was submitted by Congress and Trump signed his approval. The repeal that actually happened overturned an Obama regulation that required oil companies to fully disclose all payments involving foreign governments.
If this sounds a little obscure, that’s because it is. The bill was conceived in an effort to reduce corruption ties between American companies and foreign powers, but is has seen no tangible impact. This is in part because the bill doesn’t include any penalties for poor cooperation.
Mostly, it was neutered by the fact that previous legislation already handles financial exchanges between American oil and foreign powers. In the end, this bill only added regulatory costs to the companies targeted and the federal government. Repealing it will have no major impact on the industry, but it will save a few pennies on both ends.
Regulatory Policy
The biggest move by Trump so far has been his executive order promising a general reduction in regulation. The order mandates that the administration will remove two regulations for every new one they adopt. It also guarantees that new regulations will not put undue burdens on businesses in the affected industries.
While the order itself doesn’t immediately alleviate regulatory burden, it sets the stage for sweeping change. This order holds Trump to his campaign promises that he will use deregulation to spur the economy forward, and stock and job markets have responded dramatically to nothing more than his promise. The follow through is sure to put significant sums of money back in the pockets of businesses, enabling them to invest and expand.
On the Chopping Block
There are a slew of additional regulations that are on Trump’s agenda. He wants to change overtime rules to find a better balance of fairness for workers and business owners.
The oil industry will get several more reviews, potentially revising or repealing regulations in regards to waste management, resource harvesting and financial oversight. The impending financial reviews will cover much more than Dodd-Frank, and aside from Obamacare, health regulatory changes will get plenty of scrutiny.
In all, there are estimates that as much as $100 billion a year could be saved across all industries without repealing the most important regulations currently in place.
All of that pales in comparison to the most important impact of this reform. Trump’s two-for-one promise is a long-term solution to the presidential power creep introduced by Obama. Starting with Trump, presidents will have decreasing unilateral power over the people, especially in regards to economics.
The deregulation Trump has started may seem like only a few small steps and a humble beginning to an important process. As is often the case in politics, the details are meticulous and dry, but Trump is sticking to his initiative, and the potential benefits are large in scale.
Regards,
Ethan Warrick
Editor
Wealth Authority
