What does the Republican Party, led by Donald Trump, agree on? In addition to an enthusiasm for power, two things unite the conservatism of Stephen Bannon, the president’s consigliere, with the conservatism of Mitch McConnell and Paul Ryan, the Republican leaders in Congress. One is tax cuts, on which he has thus far been vague. The other is deregulation, which matters more to Republicans now than debt or deficits.
The president promised 「a historic effort to massively reduce job-crushing regulations」 when he spoke to a joint session of Congress on February 28th. Mr Bannon has announced nothing less than 「the deconstruction of the administrative state」. That project began with an executive order requiring federal agencies to get rid of two regulations for every new one they issue. It continued in early March when the White House proposed slashing the budgets of many federal agencies. Under Barack Obama, CEOs grumbled constantly about burdensome new regulation and more zealous enforcement of existing rules. Stockmarkets have soared, possibly on a belief that undoing all this will bring much faster growth.
Something has indeed dampened America’s economic dynamism. Startups are rarer, labour is less mobile and fewer people switch jobs than they did three decades ago. Regulation has shot up the list of small firms concerns since 2008. Yet there is a right way and a wrong way to deregulate. Markets need clear rules, enforced predictably. Less regulation is now always better: the freedom to dump toxic sludge into rivers will not improve American’s living standards. Republicans must ensure that they do the right sort of deregulation. There is little to be gained from crudely hacking at Mr Obama’s handiwork, while ignoring systemic problems that have led to a proliferation of rules, whoever is in charge.