Money / Politics

Trump Deregulates, Economy Accelerates


As we enter 2020, the Trump Administration’s deregulation campaign just intensified in two pivotal sectors – labor law and environmental regulation – and our economy continues to accelerate accordingly. 

It wasn’t supposed to be this way, of course. 

Leftists warned us from the moment that Donald Trump announced his candidacy in 2015 that he presents a clear and present danger to our economy.

According to them, Trump would foolishly reverse the Obama Administration’s masterful eight years of increased regulation, higher taxes and more government control, introducing a new era of heartless capitalism that would benefit only the wealthy at the expense of everyone else. 

Paul Krugman, the oft-discredited economist and New York Times columnist who somehow remains leftists’ go-to expert, literally predicted on election night 2016 as markets temporarily dipped that they would crash and literally “never” recover: 

It really does now look like President Donald J. Trump, and markets are plunging…  If the question is when markets will recover, a first-pass answer is never…  Under any circumstances, putting an irresponsible, ignorant man who takes his advice from all the wrong people in charge of the nation with the world’s most important economy would be very bad news.  What makes it especially bad right now, however, is the fundamentally fragile state much of the world is still in, eight years after the great financial crisis…  So we are very probably looking at a global recession, with no end in sight.  I suppose we could get lucky somehow.  But on economics, as on everything else, a terrible thing has just happened. 

It’s now 2020, Mr. Krugman.  We’re still waiting for your brilliance to somehow manifest itself in reality. 

Instead, we’ve experienced so many consecutive market highs that new records have assumed a “ho, hum” quality. 

In addition to those ongoing record market highs, and contrary to Krugman’s assurance, we now enjoy record levels of employment, unemployment rates unseen in 50 years and approximately one million more open jobs than there are unemployed Americans, which is unprecedented. 

Moreover, contrary to lazy leftist assumption, those at the bottom have benefited most under Trump’s economic agenda.  During the Trump presidency, wages for the bottom 10% have risen almost 6% each year, compared with just 2.4% during Obama’s second term leading into it.  Wages for the middle classes have increased a full percentage point higher under Trump than under Obama. 

Perhaps most notably, and conspicuously contradicting leftist sloganeering, the poverty rate for both Black and Hispanic Americans now stand at record lows. 

It’s getting harder and harder to remain a class warrior in America today, yet the political left desperately persists. 

And what led to this state of affairs, the healthiest economy in human history? 

Precisely the economic agenda that naysayers assured us would lead to catastrophe, just as they did during Ronald Reagan’s presidency:  We’ve lowered taxes and reduced government regulation on everything from internet service to energy policy, and everything in-between. 

Continuing that inertia, the Trump Administration has begun 2020 with two important new deregulatory initiatives that the mainstream media naturally avoided highlighting. 

First, the Labor Department this week reversed the Obama Administration’s 2015 “Joint Employer Rule,” one of the most egregious abuses of the Obama National Labor Relations Board (NLRB). 

For decades, federal labor laws rightfully applied a common-sense, real-world standard to determine when an employer could be held liable for violation of employees’ legal rights.  Namely, until 2015, only companies that exercised direct, actual and immediate control over the workplace in question would be held accountable. 

Late in the Obama tenure, however, the NLRB upended that standard by ruling that even companies exercising “indirect control” of other companies’ employees could now be sued as so-called “joint employers.”  That reversal naturally introduced needless uncertainty into the nation’s employment sector, especially for the nearly 800,000 franchisees across the U.S. who create millions of jobs. 

It’s unfair and indefensible to hold businesses liable for employees over whom they exercise no direct control in hiring or supervising, or whose wages and working conditions they do not determine.  Now that the Trump Administration has reversed the Obama Administration’s scheme, business and job growth will accelerate further. 

Second, last week the Trump Administration updated environmental laws that needlessly delay large construction projects.  Bureaucratic environmental impact studies can take several years, costing our nation’s economy trillions of dollars.  But by finally updating the National Environmental Policy Act of 1970 (NEPA), the Trump Administration reform limits environmental impact statements to two years and 300 pages for large construction projects, or one year and 75 pages for smaller projects.  The reform also clarifies applicable legal definitions, among other improvements, so construction sector workers and Americans who benefit from their work can thank the Trump Administration for ensuing growth. 

The economic surge we’ve experienced under President Trump is by now too enduring and too pronounced to be attributed to blind luck.  Nor can it be attributed to inertia from the Obama years, which were better characterized by malaise and uncertainty, because Trump didn’t maintain Obama tax and regulatory policies, but rather reversed them across the board. 

As November 2020 approaches, Americans must ask themselves whether they want to maintain the current economic approach that has created unprecedented prosperity, or return to the preceding decade of stagnation.  Leftist class warriors from Bernie Sanders to Joe Biden to Paul Krugman probably won’t like their answer. 

Reprinted with permission from - Center For Individual Freedom - by Timothy H Lee

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