Meat ax approach to regulation isn’t working

During the presidential campaign, Donald Trump said at one point that he would eliminate 10 percent of business regulations. At another point he promised to eliminate 90 percent of them. Since becoming president, he is promising to eliminate two existing regulations for every new one. These percentages and numbers seem to have been pulled from thin air, as Trump has provided virtually no reasoned explanation about what regulations should go and why they are bad for the economy.

One target of deregulation that President Trump has specifically identified is the Dodd-Frank Act. He proposes to eliminate or reduce it to a fragment, even though many of those who want greater regulation of business feel Dodd-Frank didn’t go far enough. Yet Dodd-Frank is the only legislative regulatory firewall created since the financial meltdown hit full force in late 2008.

The main argument of the Trump administration is that Dodd-Frank has severely restricted lending by financial institutions. However, according to the Federal Reserve, since October 2010 commercial and industrial bank loans have increased by 77 percent. Fred Cannon, global director of research at investment bank KBW, has warned against going back to a “no-doc(umentation), lowdoc, non-verifiable lending” regime.

Steve Bannon, senior counselor to President Trump, said at the Conservative Political Action Conference that atop Trump’s agenda is the “deconstruction of the administrative state,” meaning a system of taxes, regulations and trade pacts that the president and his advisers believe stymie economic growth. He said that even Cabinet nominees were selected with deconstruction in mind.

Rather than this meat ax approach to deregulation, with little or no attempt to explain why and how regulations must be eliminated, the U.S. citizenry needs and deserves a more precise approach, in which explanations are given of why removing certain regulations will be good for society. LAURI E. KALLIO Albuquerque