Momentum
The push for federal deregulation continues
US poised to dial back bank rules imposed in wake of 2008 crisis
This is not coincidental timing when we see the US debt downgrade at Moody’s.
The fiscal situation and the debt maturity schedule are perils.
‘US authorities are preparing to announce one of the biggest cuts in banks’ capital requirements for more than a decade, marking the latest sign of the deregulation agenda of the Trump administration. Regulators are in the next few months poised to reduce the supplementary leverage ratio, according to several people familiar with the matter. The rule requires big banks to have a preset amount of high-quality capital against their total leverage, which includes assets such as loans and off-balance sheet exposures such as derivatives. It was established in 2014 as part of sweeping reforms in the wake of the 2008-09 financial crisis.’
Good bloody riddance.
‘But one area where the GOP looks to have been a bit more aggressive was in rolling back Joe Biden’s Green New Deal. Biden threw hundreds of billions at the left’s climate hysteria—while imposing crushing new mandates—and then directed his administration to use its final days in office to shovel as much of of the money out the door as possible. But many programs and provisions remain fair game, and the GOP is going after some of the biggies.’
De Facto Eminent Domain in the Pacific Palisades?
This was obvious from the get-go. The state would take the land underneath the destroyed houses. The irony is that these homes were destroyed, in part, due to state bureaucratic incompetence.
The manner in which they will do it is connected to septic systems, according to this author.
Of course. It’s always the environment, isn’t it?
‘American realtor explains how the Los Angeles, California Coastal Commission is going to require $3-$5 million dollars in ground upgrades to EACH of these Malibu homes lost in the Pacific Palisades fire before rebuilding In simple terms. They’re going to take this land’
Welcome to the Post-Progressive Political Era
The existing order is progressive, full of expert opinions and boundary-pushing for its own sake. Only now, the establishment is progressive and the rebellion is coming for left-liberalism.
Deregulation that sets conditions of fair play as opposed to expert roadmaps to desirable outcomes is the principal manifestation of this phenomenon going forward, I think.
‘The success of the cultural left created a sense of progressive inevitability, captured by Ronald Inglehart’s important book, “Culture Shift in Advanced Industrial Society” (1990), which suggested that rising affluence and security propel young and educated people toward liberal-egalitarian cultural views. They in turn change society through generational turnover: one birth, one funeral and one college degree at a time. Left-liberalism was to usher in the end of history as society became more enlightened and empathetic. This confident historicist outlook could be discerned through phrases such as “the right side of history” or references to certain attitudes being out of date.
‘The cultural left envisioned a grand narrative of progress whose next phase would move from individual rights to group rights, citizen rights to rights across borders, and gay rights to trans rights. But what Daniel Bell termed the left’s “chiliastic hopes” appear to have ended in stalemate and polarization. The attempt to push for next-level DEI policies such as segregated graduation ceremonies, mandatory diversity statements, critical race and gender ideology in schools, or males in female sports has produced an enduring antiwoke reaction. Immigration attitudes have turned restrictionist after decades of liberalization.’
What has Elon Musk’s Doge actually achieved?
Musk failed (at least initially) with DOGE for two reasons. He failed to understand the politics of what he was doing and he focused on cost cuts when he should have focused on the more important deregulation. Deregulation would have been behind the scenes, but its impact could have been far greater in stimulating economic growth.
Perhaps that is the pivot no one recognizes. I hope so.
‘“The diagnosis of Doge was correct,” says Seb Wride, head of opinion research at Public First US, which has polled attitudes to the initiative over the past few months. “People still do believe that there is waste in government spending, but the approach Doge has taken felt reckless.”’
The modern world was built using energy. This is a complete sentence.
Deregulation of energy production will be positive for the economy.
‘HUGE NEWS for energy sector: DOE plans to streamline natural gas import/export procedures AND simplify electric transmission to other countries’
Interesting take on the EPA’s moves to undo the mandatory stop-start technology on cars.
Progressive impatience led them to regulate too far, too fast (because of the environment, natch), causing the frog to jump out of the pot of boiling water.
How much aggregate impact will these myriad small deregulations have on overall life?
‘The move is part of the administration’s broader deregulatory agenda. To hear the president’s Environmental Protection Agency administrator tell it, the aggregate macroeconomic effects of this administration’s efforts to get out of the way of business will be significant. But initiatives like these do not have to make measurable contributions to American prosperity to be politically valuable.
‘In the Biden era, Democrats did everything that was in their power (and not within their power) to make everyday life marginally more annoying, expensive, or both. Most of those initiatives were pitched to the public, insofar as the public was ever consulted, as desirable because of the environmental effects they would produce. Ultimately, the environmental benefits were usually marginal and always invisible to the consumer. The demands on their time, patience, and bank accounts were far more self-evident. One new but minor irritation can be absorbed. Dozens, however, and all coming online in the space of a few short years, proved far harder to ignore.’
All the jokes about insider trading in Congress notwithstanding, did IRS officials trade on inside information?
‘We investigate the information content of personal stock trades by IRS officials. We collect transaction-level data on over five thousand IRS officials' personal investments and document substantial trading activity in individual stocks by officials across IRS departments. We find that IRS officials' trades, predominantly their purchases, generate positive abnormal returns on average, consistent with officials' information being not yet fully impounded into stock price. Next, we examine whether stock trades by these officials are associated with the firm's future tax enforcement outcomes. For a given firm, we find IRS officials' purchases are associated with subsequent decreases in tax reserves and specifically lapses in the statute of limitations. We also find that IRS officials' sales are associated with subsequent unfavorable tax settlements. These findings suggest that IRS officials possess, and trade on, material tax-related information and that these trades are associated with future tax enforcement outcomes for firms.’
A "green bargain" on permitting reform
A serious thought piece on permitting reform.
‘To consider how to reform permitting, consider two dimensions: the power of the executive to decide and the capacity of the executive to plan. The U.S. permitting regime—federal, state, and local—features low executive branch power, partly because of powerful judicial review, and low planning capacity, partly because of relatively weak internal staffing and the split responsibilities in our federal system.’
FIGHTING OVERCRIMINALIZATION IN FEDERAL REGULATIONS
The Administration chips away at the power of the federal government.
Intent becomes a necessary condition for criminal enforcement of criminal regulatory offenses.
This is a significant weakening of enforcement administrators.
‘Section 1. Purpose. The United States is drastically overregulated. The Code of Federal Regulations contains over 48,000 sections, stretching over 175,000 pages — far more than any citizen can possibly read, let alone fully understand. Worse, many carry potential criminal penalties for violations. The situation has become so dire that no one -– likely including those charged with enforcing our criminal laws at the Department of Justice — knows how many separate criminal offenses are contained in the Code of Federal Regulations, with at least one source estimating hundreds of thousands of such crimes. Many of these regulatory crimes are “strict liability” offenses, meaning that citizens need not have a guilty mental state to be convicted of a crime.
‘This status quo is absurd and unjust. It allows the executive branch to write the law, in addition to executing it. That situation can lend itself to abuse and weaponization by providing Government officials tools to target unwitting individuals. It privileges large corporations, which can afford to hire expensive legal teams to navigate complex regulatory schemes and fence out new market entrants, over average Americans.
‘The purpose of this order is to ease the regulatory burden on everyday Americans and ensure no American is transformed into a criminal for violating a regulation they have no reason to know exists.’