From the very beginning of his campaign, President Donald J. Trump made it clear that he intends to “win the economy.” Touting a pro-growth agenda, the administration is taking steps to cut so-called government red tape, and, with that, a series of repeals on regulations across various industries have been set into motion as his first quarter as the 45th president comes to completion.
Alex Geisinger, JD, a professor in the Thomas R. Kline School of Law, addresses a number of deregulation policies that claim to clear the red tape, spur growth and revive the American consumer:
By limiting the government’s regulatory capacities, President Trump aims to work hand-in-hand with the private sector to get companies to re-invest in America. Can consumers expect a low-regulation economy to spur growth and new opportunities?
For some reason, people think of regulation as impeding job and economic growth. In reality, empirical research shows that regulation does not create a net increase or decrease in jobs and economic growth. Rather, regulation simply moves jobs and economic growth from one area to another.
For example, environmental regulation may decrease jobs making cars but it also creates jobs for designing, manufacturing, installing and maintaining the equipment needed to decrease air and water emissions. Further, studies show that jobs are not moved overseas because of things like the costs of complying with environmental regulation. Wages — the average wage in China is about $9,000 per year — not regulation, are the main reason jobs leave the country.
Getting rid of regulation simply means that things important to the American people — like clean air and water; safe food, transportation and workplaces; quality education; consumer protection and many, many other things — are not going to be provided. This is not to say that many regulations couldn’t be made more efficient. But this requires re-regulation not deregulation. For years we have looked at ways to more effectively and efficiently regulate. We could, for example, use cap-and-trade regulation to protect the environment at a much lower cost to industry and the taxpayer. Yet congress has been unwilling to adopt these new regulatory forms at every turn, choosing instead to try to eliminate regulation altogether to the detriment of the American people.
The GOP plans to dismantle Wall Street regulations, including abolishing the Consumer Financial Protection Bureau. Those behind the Repeal CFPB Act, claim the CFPB has too much power. Would you say its regulations are handicapping growth and providing unnecessary burdens to financial institutions?
Almost anyone who has dealt with a bank, credit card company or other financial institution understands the power these groups have over the average person. The average person doesn’t have the time, money or expertise to fight the banks. The CFPB is empowered to protect consumers against “unfair, deceptive and abusive” practices. By giving consumers a voice and providing the resources to protect them against these types of practices, the CFPB serves as an important counter-balance to the financial industry.
Members of Congress have claimed the CFPB has too much power because its budget is not directly controlled by Congress (it is fixed as a percentage of the Federal Reserve budget) and it is not subject to direct control by the President. Many would disagree and, indeed, other entities enjoy similar protections but are not subject to the Congressional chopping block. Perhaps most telling, however, is that, even if there were some concerns with the CFPB, the proper way to protect consumers and deal with the concerns would be to revise the legislation creating and empowering the Agency. This is not what Congress is attempting to do. Rather, the Repeal CFPB Act gets rid of the Agency and the protection it affords to consumers completely.
While some claim the rollback on Federal Communications Commission online privacy rules will not jeopardize consumer data, but rather remove unnecessary rules and regulations that stall economic growth and innovation across the internet ecosystem – could consumers online habits still be at risk?
The law signed by President Trump removes protections that would have required individual consumers to opt out of privacy protections before internet providers would be able to sell their information. The internet providers argued that similar rules did not apply to Facebook and other entities and thus they were being singled out by the FCC. Those for the privacy rules argued that internet providers are different from Facebook and Twitter because we already pay for internet services and also because internet providers have complete and full access to all your information. By clearing the way for internet providers to collect all your internet information and share it, the new law provides a windfall to your internet service company and will undoubtedly make more information available to others without your consent.
President Trump signed the Energy Independence Executive Order to eliminate regulations on America’s energy industry. Will the creation of higher-paying jobs in shale energy and clean coal benefit the economy?
The prime focus of the Energy Independence Executive Order is the EPA regulations that comprise the Clean Power Plan. These regulations aim to decrease greenhouse gas emissions from the energy industry about 32% by the year 2030. A vast majority of Americans, including half the people who voted for Trump, desire climate change regulation. This Executive Order puts such regulation at serious risk. The premise for such deregulation, that high paying jobs in shale and coal (by the way, there is no such thing as “clean coal” when it comes to greenhouse gasses) will be created and the economy will benefit is simply false.
As I note above, environmental regulation does not really increase or decrease jobs. Moreover, regulation is not the reason we are losing coal jobs. Coal is simply not as economically viable a fuel source as it used to be. Separately, coal mining supports about 65,000 jobs in the economy. Clean energy supports approximately 3,000,000 jobs in the country. The Executive Order looks more like protection of dying industry than an attempt at boosting the economy.
With regulations occurring at the federal level – to what extent can the states become involved?
A number of states have now stepped up to fill the void being left by federal deregulation. For example, states like California and New York have started to become much more serious about regulating greenhouse gasses. Given the size of their economies, their efforts to regulate can have substantial impacts which reverberate throughout the country. The states can generally regulate many of the same things as the federal government unless the federal government passes a law that “preempts” state law. Don’t be surprised if at some point Congress and the president decide to stop these states from regulating climate change. While conservatives argue against federal overreaching and for state’s rights, this may be a case where political pressure from the fossil fuel industry will lead to such “defensive preemption.”
Media interested in speaking to Geisinger should contact Emily Storz at 2215.571.2705 or els332@drexel.edu
