Political revolutions don’t come around often: Margaret Thatcher in Britain in 1979, the fall of the Berlin Wall in Eastern Europe in 1990, the Contract with America in 1994. Revolution presents an opportunity for change, but many more opportunities for failure. Even those revolutions had a mixed record of sustained success (Eastern Europe got dragged into the EU bureaucracy, and the Contract with America fizzled). So if the new powers in Washington, D.C. really aim to drain the swamp, they better give the plug a swift and forceful yank. Here are some Washington failures to flush down the drain first.
Repeal the Dodd-Frank “financial reform” law and tell the head of the Consumer Financial Protection Bureau, Richard Cordray, “You’re fired!” The Dodd-Frank Act was meant to prevent another financial crisis, but its main burden fell not on Wall Street but on Main Street and consumers. Community banks have been merging and closing because of the burden of over-regulation stemming from Dodd-Frank. And Cordray has issued a slew of regulations that would make it harder for working people to have access to credit.
Pulling the plug on such a bad law won’t be easy for President Trump. Wall Street lobbyists want Dodd-Frank kept in place because big banks have invested a lot in compliance, while those compliance costs fall most heavily on community banks. Getting rid of Dodd-Frank, or at least its most burdensome provisions, will ease the burden on small banks, get credit moving again, and restore opportunities for small businesses and entrepreneurs.
The president and Congress should also cancel labor regulations like the Department of Labor’s overtime rule and the National Labor Relations Board’s joint employer and ambush election rules. The overtime rule will cost working families about $2 billion a year, according to a Congressional Budget Office study, as employers cut back on hours. Joint employer status would cause franchise operators like McDonald’s to have to control working conditions in each franchise, turning small business owners into middle managers. The ambush election rule allows unions to force quick decisions on unionization, without firm management being able to pull out its side of the case. Taken together, these rules and those like them raise the cost of employment, stopping new hires. The new president’s Labor Department must send a clear signal that it wants employers to hire people, and Congress can help by cleaning up the law.
Strategically abolish a government department - or several. It’s hard to do. But perhaps President Trump can succeed where even President Reagan failed. We don’t need a make-work department like the Department of Commerce, which exists mainly to channel subsidies to politically favored groups and to act as the nation’s weatherman. (Commerce’s largest budget item is for the National Oceanic and Atmospheric Administration.) Put bureaucrats on notice that their job is to serve the public, not the other way around. Privatize government functions wherever possible to better serve the needs of the people and to slim the size of the federal government. There’s no reason why the federal government needs to run commercial passenger rail like Amtrak in this country, for instance.
President Trump will have an enormous opportunity to reduce the size and burden of government bureaucracy. Maybe he’s the chief executive who finally thinks big enough to get that job done.