A quick note on “deregulation,” which is the other half of the mantra, i.e., the phony growth recipe–“tax cuts and deregulation”–you hear endlessly repeated in uninformed DC conversations.
I’ve been in these conversations for decades and I have no idea what these people are talking about and neither do they. What, specifically, do they want to “deregulate?” What evidence do they have that to do so would be pro-growth? Obviously, they’re just hand waving.
To take a timely example, the House is about to vote on the “Choice Act” today, designed to repeal most of the regs in Dodd-Frank. The bill will likely clear the House but needs D votes in the Senate where, hopefully, it is likely to come up short.
Now, consider this, from yesterday’s WSJ, touting favorable conditions in financial and credit markets:
The banking system is more resilient because of the regulations since 2008, as firms shifted away from short-term borrowings without collateral…Instead, banks are issuing longer-term debt in the low-yield environment as a way to reduce rollover risk, the risk from having to replace maturing debt.
It’s one example of a regulation having its intended impact–I was there at the creation of Dodd-Frank, and I assure you, this was one of its targets–one that in this case, is boosting market stability and pushing back of the Minsky’esque risk underpricing that regularly occurs around this time in the cycle.
One could surely find counterexamples, and believe me, I’m sure there is brush to be cleared in our regulatory system. I’ll even go so far as to admit that Trump has a point re how long it takes to get infrastructure builds underway.
But sweeping allegations are meaningless. You’ve got to get down to cases, and when you do, you will find that many regulations are there for a good reason and they’re working as intended.