The contrast between the Trump Administration and its predecessor is nowhere more apparent than their approaches to regulation. Whereas the Obama Administration saddled business with a record 600 major, new regulations, the Trump White House has cut 22 for every new regulation issued. And the pruning has just begun.
A businessman understands the cost of regulation
Investor’s Business Daily reports that Donald Trump entered office promising to trim two regulations for every new one issued. One year in, only three major rules have been issued compared to 67 cut, resulting in $8.1 billion in cost savings.
In eight years the Obama Administration unleashed a hailstorm of rules that resulted in $100 million in new regulatory costs to the economy every three days. The economy groans under the burden of $1.9 trillion in regulatory costs each year. Obama surrounded himself with likeminded lawyers and activists rather than men and women who had operated a business and managed a payroll. Trump brings experience doing those very things to the Oval Office and the economy should benefit.
Indeed, even with just the initial lightening that Trump has accomplished in his first year, and the promise of much more to come, business optimism is rising sharply. In December Trump provided a stark visual picture of the suffocating weight of regulation, standing a beside a mountain of paperwork representing the 185,000 page of current regulations, and a smaller, 20,000 pile representing the load of the 1960s which he said is his ultimate reduction goal.
It is a worthy goal for which to strive, if difficult to achieve. While he was governor of California and later as President, Ronald Reagan learned that bureaucracy vigorously resists any attempt to pare it back. Reagan also sought ambitious regulatory reduction, accomplishing much, if not all of his agenda. Nevertheless, the cuts in rules and taxes fueled the Reagan boom of the 1980s.
Besides putting more personal income back into taxpayers’ pockets, the cut to the a 21% corporate tax rate will free up capital for companies to invest in product development and hiring more employees.
Having just achieved major tax cuts and with regulatory slashing already underway, Trump could preside over a return to a robust, Reaganesque economic boom.
Our investment philosophy stands ready to help you
We urge you, if you haven’t already, to purchase Jerry’s book, “From Boom to Bust and Beyond” and read it. Written in 2009, it has accurately portrayed events of the last decade. We are coming out of the Economic Winter he predicted and now stand on the cusp of the coming Economic Spring. It will bring a booming economy, but also a renewal of stiff inflation the likes of which we haven’t seen since the 1970s.
We also urge you to sign up for our next Investor Training Conference by registering here.
At Cornerstone Financial Services, we study the large trends that affect our clients’ financial future and we position them to reap the rewards of these major economic factors. We call it Big Wave Investing and we’d like to put it to work for you.