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When the Trump White House talks about boosting economic growth, it’s not all tax cuts, tax cuts, tax cuts. Officials also mention the administration’s ongoing deregulatory push as a big part of why Trumponomics will turn a Two Percent Economy into a Three Percent or Four Percent Economy. President Trump himself has cited deregulation as one of his biggest accomplishments so far.
But a new analysis by Bloomberg gives reason for skepticism, at least if you define “deregulation” as actually, you know, removing regulations currently in effect. Not much of that seems to be happening yet. “Only a handful of regulations have actually been taken off the books,” Bloomberg finds.
Rather, what Team Trump apparently means by deregulation is more of a regulatory pause. The Trump administration claims, for instance, that it has withdrawn 469 pending regulations. But of those, Bloomberg finds, 42 percent were “as good as dead already” in that the Obama administration had no plans to implement them.
On the other hand, the administration does seem to be successfully slow-walking the adoption of new rules through its regulation-oversight arm, the Office of Information and Regulatory Affairs, as the above chart shows. And in an October analysis, The Economist declared: “The flow of new rules is suddenly a dribble. Since Mr Trump was inaugurated the number of regulatory restrictions has grown at about two-fifths of the usual speed.”
And as the newspaper goes on to note, rule-making under Trump is almost certainly less than it would have been under a Hillary Clinton administration. It’s also worth noting that a pretty big event in deregulation is likely to happen later this week when the FCC is expected to repeal “net neutrality” Internet rules put in place during the Obama years.
Still, if the economy’s sluggish growth is partly the result of regulatory burden, it is puzzling to see how merely not making the burden worse is already a big boost for growth.
Then there’s this: Is the sort of deregulation that Trump and the Republicans have been discussing really the sort that will boost growth? Among the areas that come to mind are land-use regulation, labor market regulation, and intellectual property. These issues are the focus of the book The Captured Economy, whose authors, Brink Lindsey and Steven Telles, I recently interviewed on my podcast. (Check back for transcripts later this week.)
As it happens, there is a new NBER working paper on one harmful form of labor market regulation, occupational licensing rules. From “Is Occupational Licensing a Barrier to Interstate Migration?” by Janna Johnson and Morris Kleiner: “Based on our results, we estimate that the rise in occupational licensing can explain part of the documented decline in interstate migration and job transitions in the United States.”