The New York Times reported this week that “a wave of optimism” has spread over the American business community since President Trump took office, which is spurring strong economic growth and job creation.
In a story titled, “The Trump Effect: Business, Anticipating Less Regulation, Loosens Purse Strings,” Times reporters Binyamin Applebaum and Jim Tankersley wrote, “A wave of optimism has swept over American business leaders, and it is beginning to translate into the sort of investment in new plants, equipment and factory upgrades that bolsters economic growth, spurs job creation — and may finally raise wages significantly.”
They added that “in the administration and across the business community, there is a perception that years of increased environmental, financial and other regulatory oversight by the Obama administration dampened investment and job creation — and that Mr. Trump’s more hands-off approach has unleashed the ‘animal spirits’ of companies that had hoarded cash after the recession of 2008.”
The Times noted that Trump declared rolling back regulations will be a defining theme of his administration, starting with signing an executive order 11 days after taking office on “Reducing Regulation and Controlling Regulatory Costs.”
The order required two regulations to be removed from the Federal Register for every new one added. Trump reported last month that his administration had exceeded that goal by a country mile taking away 22 regulations for every new one.
According to the Competitive Enterprise Institute, the Federal Register of rules and regulations is at its lowest page count in a quarter century.
The calendar year concluded with the Register numbering 61,950 pages, down 35 percent from the all-time record set under President Obama last year of 95,894 pages.
The last time the Register was at its current level was 1993.
“We have spent the past dozen years or longer operating in environments that have had an increasing regulatory burden,” said Michael Burke, the chairman and chief executive of Aecom, a Los Angeles-based multinational consulting firm that specializes in infrastructure projects. “That burden has slowed economic growth, it’s slowed down investment in infrastructure. And what we’ve seen over the last year is a big deregulatory environment.”
On Thursday, Trump tied the record rise in the stock market, which has gone up 36 percent since he took office, to creating a more favorable business climate. “Big cuts in unnecessary regulations continuing,” he promised.
“The National Association of Manufacturers’ fourth quarter member survey found that fewer than half of manufacturers cited an ‘unfavorable business climate’ — including regulations and taxes — as a challenge to their business, down from nearly three-quarters a year ago,” according to The Times.
In fact, nearly 95 percent of respondents said they are positive about their company’s future, which is the highest level on record for the survey’s 20-year history.
“And with tax cuts coming and a generally improving economic outlook, both domestically and internationally, economists are revising growth forecasts upward for last year and this year,” The Times reported.
Along with across-the-board rate cuts for individuals, the Republicans tax reform bill lowered the corporate rate from 35 percent — the highest in the industrialized world — to 21 percent, which is slightly below the average worldwide.
The legislation also allows companies to deduct 100 percent of their investments in new plant or equipment the year the expenses are made rather allowing partial write-offs over a multi-year period.
CNN Money reported last month, it is not only business leaders who are optimistic, but also American consumers.
Consumer confidence remained near a 17-year-high in December.
According to the news outlet, the optimism is being fueled by the strong jobs market, the stock rally, Trump and the Republicans’ tax reform bill.
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