One of the big applause lines for Donald Trump on the campaign trail was his promise to eliminate regulations. Like so many of his applause lines, his loyal supporters often had no idea how what they were applauding would actually affect their lives. The main thing they know is that if it is government regulation and if it is government anything, it must be a liberal thing and probably something to do with Barack Obama—good enough reason for them to oppose it. So, what does it really mean when Trump talks about eliminating regulations?
We can all come up with some dumb or apparently dumb regulation to make fun of. One of the favorite regulations to ridicule is the law that says you can’t remove the tag on your mattress or pillow. So, how dumb is that? Well, first of all, you can rip the tags off. The law is there to protect you, the consumer. In the past, mattresses and pillows were made with some inexpensive and dubious materials that might be toxic, harbor bacteria and possibly various larvae. The government stepped in and mandated that a tag had to be put on the products to inform the buyers what is in their pillow or mattress. Putting a tag on the pillow became the law, but there were no laws against then ripping off the tag as some dodgy manufacturers would do. If the manufacturers didn’t rip off their own tag, then some salesperson would often rip off tags from the products with dangerous stuffing. So, a law was made against ripping off the tag until it was sold to the end user, the consumer. We, the consumer, can rip off our own tags, but we can also feel confident knowing what is in the pillow that we rest our heads on each night.
Trump’s Plans for Regulation
Most regulations have a good reason for their existence. They may sometimes be clumsy and inefficient, but yet they are usually directed to trying to protect our wellbeing. When Trump talks about eliminating regulations, he is clearly referring to regulations that would save producers money and probably make our lives and the lives of our children a little more dangerous. He wants to eliminate regulations that would result in rising levels of air pollution causing more respiratory illnesses and more cancer. He wants to ease regulations on food producers and processors that will result in more cancer, heart disease, high blood pressure and diabetes to name just a few of the health issues. He wants to cut regulations on manufacturers and contractors so we will end up with many more workplace injuries and deaths and more consumers of these products suffering injuries and deaths. He also wants to target regulations that would make it easier for landlords to gouge their tenants and rent them dangerous spaces with toxic problems such as chipping lead paint. Talking about improving regulations is something we all could support, but wholesale elimination of regulation is a bad idea.
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Trump talks about lifting the burdens of the Dodd-Frank banking regulations so financial institutions can go back to the unethical practices that brought us the Great Recession, which caused many of his supporters to lose their jobs or their homes. Wells Fargo, for example, was just fined $185 million for defrauding its customers. With fewer regulations, banks like Wells Fargo will be able to defraud more customers with no fear of any significant consequences. On the investment front, when you hire a financial advisor, you assume that he or she is working in your best interest with your money. Trump wants to get rid of the regulations that require financial advisors to work in your best interests, to be transparent with you and to not have conflicts of interest that put their profits ahead of your best interests.
Will It Create More Jobs?
Will the elimination of all of these regulations create more jobs? Maybe or maybe not. What it will do is benefit the sleazy companies that will cut every corner and make cheaper, less safe and less healthy products. It will hurt or kill off the decent, honest businesses whose owners are trying to provide a healthy and safe product or service for their customers. So there may not be more jobs, but a shift of jobs to less scrupulous businesses that will make greater profits and pay lower wages.
Also, if you look at the parts of our country that have some of the most sophisticated regulations, like California or, closer to home, Madison, Wis., they are also the places that have some of the most robust job creation, lowest unemployment rates and highest per capita income. So, for those of you who applaud the elimination of regulation, be careful what you wish for.
