The Year of Deregulation

Cutting red tape is becoming all the rage.

 

1. Why 2025 Is Poised to Be the Year of Deregulation

President Trump’s push to streamline the process for rebuilding wildfire-ravaged Los Angeles highlights the growing momentum behind the broader deregulation movement.

The moment: At a press briefing with Karen Bass on Friday, Trump grilled the L.A. mayor on the delays in letting residents start reconstruction efforts.

  • Bass said the city first had to “make sure that [we are] getting rid of the hazardous waste,” prompting a tirade from Trump on the burdensome nature of permitting and environmental review processes.

  • At another point, Trump urged Bass to use her “emergency powers” to lift regulations.

California Gov. Gavin Newsom on Saturday: “I agree with President Donald J. Trump that permitting requirements should not hinder a speedy recovery for LA wildfire victims to restore their homes and businesses — which is why I have already waived state environmental regulations and directed agencies to identify opportunities for further streamlining.”

Zoom out: Deregulation is gaining steam on multiple fronts in the second Trump era.

Finance: Efforts to roll back regulations in the banking and financial sectors are gaining traction, much to the approval of Wall Street leaders.

  • The appointment of Paul Atkins, a known supporter of cryptocurrency, to lead the Securities and Exchange Commission hints at a regulatory environment that may favor the crypto industry's freer, less regulated framework over traditional financial systems.

  • Meanwhile, trustbusting Federal Trade Commission chair Lina Khan's departure from the agency could pave the way for a business landscape with far less government oversight.

Environmental policy: The Trump administration has taken significant steps to roll back environmental regulations, such as exiting the Paris Climate Agreement, scrapping Biden's electric vehicle mandate and opening up more areas for oil and gas extraction.

Government: Trump efforts to streamline government operations include reassigning or dismissing hundreds of civil servants and issuing executive orders to reduce bureaucratic influence.

Taxes: The Trump administration’s executive orders on tax policy focus on simplifying regulations and reducing oversight by freezing new and pending regulations and imposing an indefinite hiring freeze at the IRS.

Bubba’s Two Cents

The primary purpose of government in many ways is regulation. It’s just a fact that one of government’s main roles is to set boundaries and dictate the rules by which we play.

However, the backlash we’re seeing has come about because government regulation has become too cumbersome. Ambitious infrastructure projects like the California High Speed Rail have become relics of the past in large part because regulation (in the form of things like costly environmental reviews) makes it damn near impossible to build stuff these days. And don’t get me started on the out of control budgets and spending.

Even New York Times liberals have started to voice frustration about all the red tape. The corrective is long overdue.

P.S. - Worried about the government cutting too much? I thought Elon Musk recently had an interesting perspective on this: "You may have to add [parts or processes] back later. In fact, if you do not end up adding back at least 10% of them, then you didn't delete enough."

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