Alan Greenspan; Milton Friedman; Donald Trump (AP/Getty/Salon)

Robert Reich: The dangerous myth of deregulation

Trump’s binge of deregulation is just another form of trickle-down economics


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Robert Reich
September 13, 2018 11:30am (UTC)
This originally appeared on Robert Reich’s blog.

Trump and his appointees are on a binge of deregulation that masks another kind of trickle-down economics, where the gains go to the top and the rest of us bear the risks and losses.

They say getting rid of regulations frees up businesses to be more profitable. Maybe. But regulations also protect you and me — from being harmed, fleeced, shafted, injured, or sickened by corporate products and services.

So when the Trump administration gets rid of regulations, top executives and big investors may make more money, but the rest of us bear more risks and harm.

After heavy lobbying by the chemical industry, for example, the Environmental Protection Agency has scaled  back the way the government decides whether some of the most dangerous chemicals on the market pose health and safety risks. Which may increase the profits of the chemical industry but will leave the rest of us less protected from toxins that can make their way into dry-cleaning solvents, paint strippers, shampoos and cosmetics.

Scott Pruitt may be gone from the EPA, but Trump put a former coal executive in his place. Which means the EPA will continue to try to repeal the Clean Power Plan, a regulation that set the first-ever limits on carbon pollution from U.S. power plants. If it’s repealed, wealthy shareholders may do better, but most of us will bear the costs of more carbon dioxide in the atmosphere, and faster climate change.

Trump’s Education Department under Betsy DeVos has stopped investigating for-profit colleges. Which may result in more profits for the for-profits, but leaves many young people and their parents more vulnerable to fraud.

Trump’s Labor Department is reducing the number of workers who are eligible for overtime pay. And it’s proposing to allow teenagers to work long hours in dangerous jobs that child labor laws used to protect them from. Again, more profits for business, more cost and risk for the rest of us.

Trump is weakening banking regulations put in place after the financial crisis of 2008, even rolling back the so-called Volcker Rule that prevented banks from gambling with commercial deposits. The result: More profits for the banks, and more risk on you and me.

Trump’s gang of industry lobbyists and executives who are busy deregulating the same industries they once represented will no doubt do very well when they head back into the private sector.

But the rest of us won’t do well. We may not know for years the extent we’re unprotected — until the next financial collapse, next public health crisis, next upsurge in fraud, or next floods or droughts because the EPA failed to do what it could to slow and reverse climate change.

Don’t fall for it. Trump’s binge of deregulation is just another form of trickle-down economics — where the gains go the top, and nothing trickles down except risks and losses.

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Robert Reich

Robert B. Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies. He served as Secretary of Labor in the Clinton administration, for which Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century. He has written 15 books, including the best sellers "Aftershock", "The Work of Nations," and"Beyond Outrage," and, his most recent, "The Common Good." He is also a founding editor of the American Prospect magazine, chairman of Common Cause, a member of the American Academy of Arts and Sciences, and co-creator of the award-winning documentary, "Inequality For All." He's also co-creator of the Netflix original documentary "Saving Capitalism."

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