No More Regulations! Companies Go Wild!

By Jack J. Kelly

 

President Trump has been on an Executive Order frenzy signing about one dozen edicts intended to jump start his policy agenda and deliver on his campaign promises (Editor’s Note:  In full disclosure, like most of you,  I had no idea what these Executive Orders meant until our www.ComplianceX.com  office guru, Maria Kesaris, told me about it:  “An executive order is a directive from the President that has much of the same power as a federal law. ezgif.com-resize (48)Executive orders do not require congressional approval. Thus, the president can use them to set policy while avoiding public debate and opposition. Presidents have used executive orders to direct a range of activities, including establishing migratory bird refuges; putting Japanese-Americans in internment camps during World War II; discharging civilian government employees who had been disloyal, following World War II; enlarging national forests; prohibiting racial discrimination in housing; pardoning Vietnam  War draft evaders; giving federal workers the right to bargain collectively; keeping the federal workplace drug free; and sending U.S. troops to Bosnia”).

Given all the hate emails I receive, for self preservation and sanity, I am including this disclaimer:  I am not interested in choosing sides or playing partisan politics. The only thing we care about is how these decisions impact your career and bank account.

In today’s executive action, President Trump fulfilled another campaign promise, and will “eliminate two regulations for every new one enacted“.   Trump said during the signing ceremony (by the way, the orders hilariously look like big menus), “We’re cutting regulations massively for small business and large business,” adding, “This will be the biggest such act our country has ever seen.”

It was unclear how the two-for-one special works.  Under the Administrative Procedures Act, the repeal of old regulations requires the same bureaucratic process as the adoption of new regulations, with agency analysis, legal review, public notice and comment.  Simply put, Trump’s answer is that,  “If you have a regulation you want, number one, we’re probably not going to approve it.”

ezgif.com-resize (47)Trump previously declared that he will eliminate “a little more than 75 percent” of the regulations now on the books.   There are some 80,000 pages in the Federal Register, where all federal rules are published.

President Donald Trump also outlined  many other areas he planned to target for changes to economic and regulatory policy.  Specifically, he took great delight in anticipated changes to the Dodd-Frank financial overhaul law, derisively saying,  “Dodd-Frank is a disaster”, and adding  “We’re going to be doing a big number on Dodd-Frank”.

 

Trump called it “the largest ever cut by far in terms of regulation.” The government sets a budget each year for what new regulations would cost the economy, companies and employers.  For fiscal 2017, Trump gives a budget of $0 for new regulations.  I’m not an accountant, but I don’t believe $0.00 goes very far.

 

No need to worry, “There will be regulation, there will be control, but it will be a normalized control”, Trump told reporters at the White House.

 

If this isn’t bad enough for our Compliance, Legal, Regulatory, Audit, Anti-Money Laundering, Dodd-Frank  friends and readers, (also, yours truly, me), Trump previously announced a broad hiring freeze for the Federal government, calling for an across-the-board employment freeze. The measure was designed, supposedly, to cut rapidly growing costs.  The workforce will decrease through attrition as those who depart will not be replaced.

ezgif.com-resize (46)As an Executive Recruiter I have seen what a hiring freeze does to a company. First, it creates a panic as to what is going to happen next. Then, worries abound about when the inevitable job cuts will happen. Also, anxiety is raised about decreased budgets and the lack of future growth potential.  The top “A” players are the first to leave. These are the highly capable and sought after professionals.  In this equation, they will leave to go to the private sector. We are then left with the “C” and “D” employees who either are unable to make the transition to the private sector or too apathetic to care about the lack of raises and promotions, and are just happy to collect their pay check and wait out their time until the pension kicks-in. As an Executive Recruiter I have seen what a hiring freeze does to a company. First, it creates a panic as to what is going to happen next. Then, worries abound about when the inevitable job cuts will happen. Also, anxiety is raised about decreased budgets and the lack of future growth potential.  The top “A” players are the first to leave. These are the highly capable and sought after professionals.  In this equation, they will leave to go to the private sector. We are then left with the “C” and “D” employees who either are unable to make the transition to the private sector or too apathetic to care about the lack of raises and promotions, and are just happy to collect their pay check and wait out their time until the pension kicks-in.

We will then have government agencies such as the SEC, EPA, and FDA suffering from the flight of the best and brightest and stuck with a staff that is demoralized and indifferent.  With all the anxiety, less budgets, and brain-drain, what do you think will happen?  You are right; nothing.  The agencies will be weak, toothless tigers.

The combination of doing away with regulations and starving the regulatory agencies will seed the growth of future scandals and the possible next financial crisis.

Most importantly, selfishly, it sucks for my Compliance recruiting business.

2 Comments
  1. January 31, 2017
  2. February 2, 2017

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