SEASONALLY ADJUSTED, 1986=100
OCT. 2016 2018 2019
SEPT. 2019
101.8
SOURCE: NFIB
SMALL-BUSINESS OPTIMISM INDEX
95
100
105
110
0
2
4
6%
CHANGE FROM PREVIOUS YEAR,
SEASONALLY ADJUSTED ANNUAL RATE
REAL PRIVATE NONRESIDENTIAL FIXED INVESTMENT
2017 2018 2019
Q3, 2019
1.3%
SOURCE: U.S. BUREAU OF ECONOMIC ANALYSIS
62
FORTUNE.COM // DECEMBER 2019
have changes to hot-button political issues such as contraceptive
coverage mandates in insurance and transgender student rights.
But for most businesspeople, those aren’t nearly as important as
the thousands of obscure but unavoidable rules and regulations
that multiply annually in the pages of the Federal Register—97,110
pages in 2016, an all-time high, which has come down to 68,082
last year. “Mariner radar observer endorsement,” “locomotive engi-
neer certification revision”—such rules make most eyes glaze over,
but each one is a big deal to businesses somewhere.
The Trump administration is using a novel strategy to guide
deregulation, detailed in one of Trump’s first executive orders. It
became known in the media as “one in, one out,” meaning an old
rule must be expunged for each new one added, but that isn’t how
it works. For decades major new rules have been evaluated on
projected costs and benefits. Trump’s executive order gave regula-
tors an annual budget for net new costs. The budget for 2017: $0.
Regulators went well beyond that, delivering almost $10 billion
in claimed savings. Budgets for fiscal 2018 and 2019 were more
ambitious, and government reports, plus estimates by outside
analysts, suggest regulators have saved a total of $42 billion in
net-present-value costs. The White House claims this approach to
regulation, if continued, will increase GDP by 1.0% to 2.2% over
the course of a decade.
It’s easy to dispute such claims, which are speculative by nature,
but businesspeople say they don’t need numbers. They noticed a
change almost immediately after Trump took the oath of office.
Regulators became less adversarial. Getting permits and approv-
als is quicker and easier. “The attitude shift was palpable,” says
Andrew Liveris, former CEO of Dow Chemical. “The tone is set
from the very top office, and the tone shift was noticed by all the
regulatory agencies.” Parts of Trump’s business deregulation have
enraged opponents, but businesspeople on the whole are grateful
for it. They’d like to see it advance even faster.
taxes
TRUMP DELIVERED ON THE OTHER PART of his promise to business, lower
taxes, when he signed a once-in-a-generation tax overhaul, the Tax
Cuts and Jobs Act, at the end of 2017. The debate in Congress was
bitterly partisan—no Democrats in the House or Senate voted for
the bill—mainly because of changes to the individual income tax.
The TCJA lowered the top tax rates on ordinary income as part
of changing the tax brackets and broadly lowering rates, and it
limited deductions for state and local taxes, which angered legisla-
tors from high-tax states. But the part of the bill that reworked
corporate taxes was a different story.
It’s hard to imagine a time when any major change in economic
policy could attract bipartisan support, but both parties had agreed
is going to substantialy [sic] reduce taxes and
regulations on businesses,” he tweeted six weeks
before inauguration. In his first year as Presi-
dent he earned the approval of businesspeople
in large part by keeping those twin promises.
deregulation
WIDELY UNDERAPPRECIATED is the importance
of his deregulation agenda—regulatory relief,
as supporters call it—which plays out mostly
below the radar. A few rollbacks of environ-
mental rules have made it to the front page, as
Confidence Game
After a flush start, economic cheer
has declined—leading many business
leaders to reduce investments.
WHY TRUMP IS BAD FOR BUSINESS
