During the greater part of his tenure, President Obama was addressing some important issues that to some extent diverted his attention away from “transforming completely” our economic system. But he was affecting important public policy issues and causing problems that President Trump wanted to overcome by setting aside the many of the executive orders President Obama had introduced.
During the presidential election campaign already well underway in 2019, democratic candidates, some among the self-proclaimed socialists and some strongly under their influence, made it clear that their objective was to further the socialist agenda of President Obama. The direction the country takes will become evident by 2022.
Why Does President Trump Want to Deregulate the U.S. Economy?
President Trump launched a deregulation initiative in his first days in office. Why? Because as a successful businessman he had lived with the commercial regulations of government bureaucracies and their costly intervention in the nation’s business life.
Those who have studied bureaucracies and those who have had to respond to bureaucratic demands are aware of the nature of this problem. Many creative agents populate bureaucracies; although many are well educated few have any significant experience in business. Their job is to think of ways to control businesses and their environment so that corporations won’t exploit their workers or their consumers. They can implement regulations with the force of law, although their abilities to generate such commercial regulations are usually in violation of constitutional principles, which mandate division of governmental powers.
The legislature, not the bureaucratic agencies, is responsible for the creation of laws. We have developed a huge bureaucracy of federal agencies in this country and they are responsible to the president, who is responsible for the implementation – not the creation – of law. Unfortunately the agencies have come to gain power not only in administering laws, but also in creating the rules and regulations they wish to impose. But they also adjudicate the implementation of their laws. Affected parties needing to litigate problems arising through the implementation of regulations discover that the agencies themselves, rather than just the courts, can issue judgments and sanctions, etc. Thus, all the powers of governance are wielded by the departmental bureaucrats despite the constitution’s mandate for a division of powers among the branches of government.
Cutting the Red Tape – Deregulation
The government agencies aspire to cut pollution, manage problems of human resources, promote product quality and safety, affect the prices of products and services, and have an impact on about every conceivable aspect of economic life. The cost of implementing the endless stream of ideas with which the bureaucrats hope to control every aspect of our commercial lives is excessively high. It is estimated to be about two trillion dollars, or about 12% of the entire economy spent every year on dealing with regulations. The Office of Management and Budget found that President Trump had reduced regulatory costs in his first two years by $33 billion. The report indicated he cut 12 rules for each new rule adopted. President Obama added in excess of 22,000 new regulations.
But Isn’t Some Regulation Necessary?
The answer to this question is straightforward. Of course it is! As long as human imperfection exists in the economy, there must be rules and oversight to insure honest and competent performance of a nation’s productive forces. But such oversight can very soon become excessive. The answer is that there should be competition to force producers to bring quality products to the market without negative secondary effects. When government protects competition by thwarting monopolistic forces – opening markets to foreign competition, reducing barriers to entry in all markets, and refusing to grant special favors to would-be monopolists – the economy will require less regulatory intervention. Promoting competition is better than drowning the economy in regulations.
The Culture of Bureaucracy
Bureaucracies, which often make mistakes, develop a culture that attempts to protect them from taking responsibility for those mistakes. They develop practices to protect themselves from being discovered by the public in their mistakes. They develop job protections through their relationships with legislators so that they cannot be fired. The objective of the bureaucratic leader in government is to grow the bureaucracy, take on more tasks and projects, and to gain power and influence. Salaries are not related to performance, since performance is difficult to measure. Governmental salaries are thus related to seniority.
