Regulations Ensure Economic Prosperity, Prevent Catastrophes and Protect American Families
On Monday, Oct. 2, President Donald Trump is expected to deliver a major address pushing for deregulation. Trump and the Republican Party’s attacks on regulation are hurting regular Americans and setting the stage for large-scale deregulatory disasters. Their deregulatory push is premised on a series of demonstrably false claims about the costs of regulation, defies public opinion and major campaign promises, and represents a craven attempt at self-enrichment and payback to corporate donors. In fact, robust regulation and enforcement are essential to economic prosperity.
We urge you not to simply pass on Trump’s bogus claims and distortions to your readers without challenging them on empirical grounds. Public Citizen is providing you with information in this memo so you can challenge his falsehoods with the truth.
What’s driving this deregulatory push is crystal clear: corporate greed. As a forthcoming Public Citizen report will show, Trump’s business empire will profit from the deregulatory measures his administration is pushing. Furthermore, Trump’s Republican enablers in Congress are eager to repay the more than $1 billion in campaign contributions and lobbying spent by corporate interests hostile to regulation.
Voters did not ask for this deregulatory push and do not want it. Polling consistently shows that Democrats, Republicans and Independents by overwhelming margins want more protective rules and tougher enforcement – whether the question is framed in general terms or addresses specific regulations. We saw this illustrated most clearly during the spring, when Republicans used the Congressional Review Act to repeal 14 Obama-era regulations – provoking widespread public outrage over the repeal of broadband privacy safeguards, worker health and safety rules, and clean water protections. Perhaps that’s because these actions directly contradict promises made by candidate Trump to stand up for regular workers, rein in Wall Street and drain the swamp.
WHAT’S IN THIS MEMO
Trump’s deregulatory push is premised on a series of false beliefs, distortions and discredited studies that do not stand up to even the most basic scrutiny. Some of the president’s advisers and allies have admitted as much or have taken active steps to cover up the truth.
False Claim #1: Regulations cost too much.
The Washington Post’s fact checker and Politifact have debunked the outlandish claims made by Trump and Republicans regarding regulatory costs. Most industry-backed studies are not scientific or peer-reviewed, exaggerate the costs and omit the benefits side of the ledger. The facts are that major regulations produced up to $800 billion in net benefits over the past decade – up to 12 times the costs – according to the U.S. Office of Management and Budget’s (OMB) latest figures. The Trump administration evidently considered OMB’s reports so damaging to its case that it took steps to hide these reports from the public upon taking office.
The Bottom Line: The benefits of regulations vastly outweigh the costs.
False Claim #2: Cutting regulations creates jobs and grows the economy.
White House Legislative Affairs Director Marc Short admitted on an April 5 press call that repealing regulations does nothing to create jobs or grow the economy. This truth was echoed by coal industry executives (close allies of the president) who acknowledged that repeal of the stream protection rule and other climate change measures like the Clean Power Plan would do nothing to bring back coal jobs. What’s more, Americans have seen firsthand that cutting regulations can lead to economic devastation. The deregulation of Wall Street in the 1990s and 2000s led to the financial crisis of 2008 and the Great Recession, which cost Americans up to $14 trillion, destroyed 8.7 million jobs and caused pension funds for workers to lose nearly a third of their value.
The Bottom Line: Regulations are essential to a prosperous economy and can even create jobs.
We do not have to choose between jobs and commonsense safeguards that protect our pocketbooks, homes and workplaces. A sound system of regulatory safeguards not only is compatible with economic prosperity, innovation and entrepreneurship – it is essential to them. New standards create jobs by encouraging innovation. They create opportunities for savvy entrepreneurs to enter the market and out-compete established players, while encouraging incumbents to innovate and exceed even the highest standards.
Regulation also protects those who work hard and play by the rules from those who cheat and cut corners. It does so by keeping the playing field level for small businesses and entrepreneurs who are honest and responsible and by holding bad actors accountable. Indeed, strong regulation can restrain anti-competitive behavior from industry incumbents – keeping markets open to competition from new entrants and startups. Here’s one example. When antitrust regulators at the U.S. Department of Justice stepped in to block a merger of AT&T and T-Mobile, it led to a surge of price competition in the telecom industry. Wireless carriers slashed prices while offering more services, saving consumers tens of billions.
Regulation is an investment in our future and in a world where businesses can thrive. Keeping our air and water clean is one of the best investments we can make. In 2010, Clean Air Act rules saved nearly 165,000 lives (PDF) – a number that will only continue to grow. By 2020, these rules will save 237,000 lives each year. Consider the words of Bill Mook, the owner of a small oyster farm in Maine, who recently wrote about how environmental regulation is essential to his economic survival:
“My business is wholly dependent on clean coastal waters. In 1998, I was nearly put out of business by a septic tank pumper illegally emptying his truck 150 yards from our hatchery intake pipe. But many factors – sometimes from distant sources – can seriously affect the productivity of the ocean ecosystem I rely on. For example, carbon emissions are causing acid levels in our coastal waters to increase as more CO2 dissolves in the water and freshwater runoff increases. Warming ocean temperatures are linked to the rise of pathogenic bacteria that can kill our oysters or make people sick. For us to avoid these threats and continue providing safe, healthy seafood to consumers, we must have clear, commonsense regulatory limits on pollution – period.”
Despite the pleas of small business, it’s not unusual for corporate executives and conservatives in Congress to predict doom and gloom over regulations, but they’ve been wrong every time. Our own history shows that public protections are compatible with corporate profits and that the costs of deregulation are painful.
Trump and the GOP’s deregulatory agenda harms American families and children. In an Aug. 10 press conference, six regular people from around the country explained the devastating consequences of lax regulation and enforcement, sharing their heartbreaking stories of loss and tragedy. Here are just a few of them:
- Amber Adamastos was denied justice due to a forced arbitration “rip-off” clause in her student loan contract. U.S. Senate Republicans are pushing to overturn a regulation that would ban forced arbitration clauses in consumer financial contracts, clauses that let companies like Wells Fargo and Equifax off the hook for wrongdoing.
- Chrissy Christofersen’s 10-month-old son was poisoned by salmonella in a toddler snack. Republicans are proposing legislation that would make it nearly impossible to issue new food safety protections.
- Timothy Frink’s three-year-old granddaughter was strangled to death by a venetian blind cord. Republican-backed legislation would grind consumer product safety regulation and enforcement to a halt.
This is what deregulation means for real people and real families. Their lives show the unspeakable cruelty of Trump’s lies. Please tell their stories.
The Wall Street financial crisis of 2008 was caused by weakening and repealing regulations that had kept America’s banking system sound for decades. Weak drilling safety standards resulted in the 2010 BP oil spill into the Gulf of Mexico that killed 11 workers, cost more than $50 billion and disrupted small businesses, working families and ecosystems all along the Gulf Coast. And in 2014, lax enforcement led to an estimated 10,000 gallons of toxic chemical waste leaking from a private storage facility into a major West Virginia river. Even now, more than 18 million Americans – including the residents of Flint, Mich. – are using water systems with lead levels that violate standards.
Our nation is facing a virtual epidemic of corporate crime and wrongdoing. From Volkswagen’s emissions cheating to Takata’s lethal airbags to Samsung’s exploding smartphones, the last thing we need is deregulation that lets giant corporations off the hook. The wave of fraudulent accounts and abuses at Wells Fargo and the woefully inadequate IT security safeguards at Equifax – as well as both companies’ use of forced arbitration clauses to evade accountability – are consequences of lax regulation.
Trump’s deregulatory push would set the stage for any number of large-scale disasters that could devastate entire communities and disrupt the lives of tens of millions of Americans. The tragic Grenfell tower fire in the United Kingdom that killed at least 80 people, including 24 children, was the result of a deregulatory initiative nearly identical to Trump’s one-in-two-out executive order. And the recent hurricanes in Texas and Florida demonstrated the need for chemical plant safeguards and flood mitigation standards recently repealed by the administration.
What this shows is that Trump’s deregulatory actions are already harming Americans. His plans to “deconstruct the administrative state” are laying the groundwork for future catastrophes either directly caused, or made worse by, a lack of strong and effective regulations.
The lessons of history are clear: deregulation is driven by corporate greed, dangerous for American families and potentially disastrous for our economy.
To speak with an expert on regulation, please contact Public Citizen’s press office.