University of Chicago economics professor Casey Mulligan, fresh off his one-year stint as chief economist with President Trump’s Council of Economic Advisers, has an interesting comparison of Trump vs. Reagan on economic deregulation.
Here’s the opening:
Thanks to a book written in 1986 by former Reagan CEA member William Niskanen, it is easy for an economist from the Trump CEA to rigorously compare economic policies and processes between the two presidents. On these pages I will compare regulation, trade, tax, spending/deficit, and “draining the swamp.” I will also look at policy processes and personalities.
The results surprised me and will likely surprise readers too. The amount of deregulation in health, banking, environment, and employment is far greater during the Trump years than the Reagan years. Telecommunications were deregulated by both presidents, but probably more so during the Trump years. Natural gas may be a deregulatory area where President Reagan exceeded, although it seems clear that natural gas benefits were not enough to outweigh the deregulatory benefits generated in the other areas during the Trump years.
The whole thing is interesting. His comparison on trade is yet to come. I expect that Trump will look way worse, but maybe Casey will surprise me. I always said, looking at Reagan’s record, that on trade, Reagan talked a good game but it was mostly talk. Maybe Casey will fill in the reasoning on that.
READER COMMENTS
JK Brown
Aug 2 2019 at 9:12pm
I’m reminded of Charles Murray’s May 12, 2016 appeal to Republicans to vote for Hillary at AEI
Without getting into the comparative defects of Clinton and Trump
As it happens, Trump has been a different president than historical Republicans or Democrats in that office. A difference many believe in as at least a slowing of the long march to the Zwangswirtschaft of the Nazis (Mises’ label, roughly meaning “compulsory economy) started with the New Deal and progressing through interventionism over the last 70 years.
Benjamin Cole
Aug 2 2019 at 10:59pm
If you want an unvarnished view of President Reagan and trade, read this from Mises Institute.
https://mises.org/library/ronald-reagan-protectionist
Reagan makes Trump look like a piker! The economy flourished under Reagan (and a D-party Congress, much of the time).
Both Nixon and Reagan applied quotas on auto imports. This is one reason today why large pick-up trucks, the best in the world, are still made in the USA.
Call me a free-trade skeptic. Free trade, as practised, reduces labor share of income, and is loved by snotty globalist elites. I say P.U.
Rex P
Aug 5 2019 at 2:16pm
The fact that protectionist policies resulted in the US making the best heavy pickups in the world is not surprising. No one said that every result of trade restrictions would bad. There has to be some good that comes from all that demography and good intentions. One or two cherry-picked examples does not imply that protectionism was a good thing. After all, I could spend my whole income on cars and have a different beautiful Corvette to drive to work every day. People could say, “He has the greatest cars.” But my kids would starve.
Mike Davis
Aug 3 2019 at 9:03am
Since I blame Trump for many bad economic policies, I give Trump full credit for deregulation and for Casey, who was an obviously good choice. With that said, though, we should remember that the regulatory state has grown enormously since Reagan, leaving Casey many more obvious targets for deregulation than Niskanen. It’s easier to pick low hanging fruit in an apple orchard.
Jon Murphy
Aug 4 2019 at 7:26am
You raise a good point and is likely partially correct, but let me add a wrinkle:
The more regulations there are, the more entrenched (eg special) interests there are. Thus, the Trump Administration could be facing more pressure. In this case, the arbitrary nature of the Trump government may be beneficial.
Mark Z
Aug 4 2019 at 2:32am
Trump had a more sympathetic (toward deregulation) Congress and Supreme Court (I think) than Reagan inherited. Likely an important factor.
Alan Goldhammer
Aug 4 2019 at 2:47pm
I’m sorry but some of Professor Mulligan’s “savings” are just a mirage. My ISP bill has not changed one iota since the FCC move; perhaps other people are experiencing savings. Also, Mulligan needs to more carefully look at state and local fees on ISPs and telcoms in general as I don’t see much of any change here and in some cases they increase.
The health insurance savings are another example of nothing happening except for co-pays and deductibles increasing across the board. My Medicare premium, which for those of you who are too young to take advantage, has increased and we have moved up into a higher means tested premium bracket. I serve on the board of a non-profit that provides health insurance to research fellows at a large biomedical research facility and serve on the health insurance subcommittee. Our costs, especial for RX drugs, are increasing year over year and we need to carefully calibrate deductibles and copays so that we can continue to provide good coverage (we self-insure to keep overhead costs to a minimum). This is not easy work and for all those who moan and groan about health insurance, I recommend you do some of this type of work so you have a firm understanding before criticizing stuff.
I believe I pointed out once before, that President Trump did nothing to improve the approval of generic drugs. This was accomplished through the reauthorization of the User Fee Act, giving FDA more resources for ANDA approvals and manufacturing facility inspections.
The Right to Try Act is useless in that manufactures have a limited amount of clinical trial investigational drugs.
Anyone who believes in a ‘safer cigarette’ is asking not to be taken seriously.
Car companies are bypassing the Trump EPA and negotiating with California on new standards.
………………..and so it goes.
Mark Z
Aug 5 2019 at 3:33pm
Whats your reasoning on ‘safer cigarettes’ not deserving to be taken seriously? The logic is pretty straightforward: the improvements in health from substitution of, say, vaping for cigarettes may outweigh the negative effects of people gaping who otherwise would not have smoked.
I see no reason to dismiss this hypothesis out of hand. Anti-e-cigarette regulations could indeed be net harmful if this is true. Don’t let the perfect be the enemy of the good.
Pierre Lemieux
Aug 5 2019 at 11:26pm
What Casey Mulligan writes is certainly worth reading. On the basis of your post, I was going to observe that it is much easier to deregulate the more regulations are already on the books when, skimming very rapidly through Mulligan’s article, I found an echo:
I think however it does not do justice to the difference that nearly four decades of galloping regulation (between when Reagan and Trump came to power–note that we don’t say “came to liberty”) can make. It’s not just the preceding president that is the proper comparison basis. Or did I miss something?
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