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One of the most important legacies the Trump administration will leave behind is the mountain of regulatory red tape taken off the books. This red tape reduction contributed greatly to the expansion of our economy, the growth of the stock market, and the reduction in unemployment. This has been a key part, if not the cornerstone, of fulfilling the president’s promise to “drain the swamp” in Washington.
Sadly, most, if not all, of these gains were wiped out by the exogenous economic shock posed by the coronavirus pandemic. Policymakers are scrambling to figure out how to keep the economy from plunging closer and closer to another depression. The answer is right in front of their eyes. The administration simply needs to do the same thing that got the economy to such historic heights in the first place: get the federal government out of the way.
President Trump promised at the outset that he’d ensure at least two regulations were repealed for every new one implemented. Thus far, his administration has far exceeded that number. Roughly eight regulations have been repealed for every one implemented. These actions have slashed regulatory costs by roughly $50 billion, a number expected to jump to almost $220 billion once all major actions are fully implemented, according to the White House.
Despite this excellent progress, it is only a small drop in the bucket compared to the nearly $1.9 trillion in regulatory costs borne by consumers every year. When the economy is as beleaguered as it is right now, taxpayers simply cannot afford to have this massive boot on their necks. This is also especially true for those workers on the front lines of fighting this virus. Thankfully, there is plenty that both the Trump administration and Congress can do to mitigate the effects of the coronavirus. One of the most intuitive steps is to rein in the behemoth that is the Food and Drug Administration.
Nobel-winning economist Milton Friedman recognized the irreparable harm that the FDA does to our nation every single day, “The FDA has done enormous harm to the health of the American public by greatly increasing the costs of pharmaceutical research, thereby reducing the supply of new and effective drugs, and by delaying the approval of such drugs.” At a time where the approval of tests, vaccines, and remedies is literally a matter of life and death, we cannot afford to have such an entity blocking the path forward.
Efforts by researchers earlier this year to detect the virus were stifled by the FDA and the Centers for Disease Control and Prevention. The FDA was so busy focusing on the minutiae of testing procedures and location that it greatly set back the effort to contain the virus. It’s also worth mentioning that broad swathes of FDA resources have been dedicated to the fight against flavored e-cigarettes when the focus could have been toward setting up a comprehensive plan of action to fight a pandemic. One can’t help but be reminded of the immortal words of C.S. Lewis: “A tyranny sincerely exercised for the good of its victims may be the most oppressive. ... Those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience.”
The FDA operates in the name of public safety but actually makes that objective harder to achieve. The agency needs to abandon its precautionary mode of operation and block progress only if there is sufficient demonstrated harm.
There are concrete proposals in other areas of the economy that can help get our nation on its feet again.
For example, the notorious Jones Act should be repealed during this emergency, perhaps permanently. This measure mandates that shipping between U.S. ports be done exclusively by U.S. flagships. The Jones Act has been waived during times of crisis before. Leaving it in place only limits our ability to deliver critical materials and services around the country. It might also lessen the need for bailouts in shipping-heavy industries, namely the cruise industry.
People are also struggling to save during these tumultuous economic times. Many are being forced to draw from savings accounts or stock portfolios that haven’t been touched in years. Others are trying to put away what they can in order to retain some semblance of security when this is all over.
Sadly, a little-known section of law adds uncertainty to the mix: escheat law.
This is a state requirement that financial institutions report when finances go “unclaimed” for an extended period of time (usually five years). At that point, the state can then take custody of such assets until the owner explicitly asks for it back. Unfortunately, many stock owners learn the hard way that escheated property doesn’t accrue value and that the savings they thought they had were never there. States routinely take tens of billions from citizens every year.
Because this is done at the state level, it would be tricky for Congress or the Trump administration to outright ban this practice. Short of that, the federal government can institute “equitable escheatment” across the country.
This would ensure that only the state where the property owner lives can escheat their assets. Instead, states such as Delaware and New York escheat property from residents across the country because that’s where corporations such as E-Trade are based. This would decrease the incentive and ensure people don’t have to chase down their property across 51 different jurisdictions. These are just a few of the many options federal policymakers have at their disposal to help our economy and taxpayers during this trying time.
President Trump has repeatedly promised to cut red tape. There is perhaps no time that that mission has become more critical than right now.
Dan Savickas is the regulatory policy manager at FreedomWorks.