America First

Thu, 2017/10/19 - 1:01pm | Your editor
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Reader FBN of Long Island sent a note about why America is first which may not convince the White House to stop trying to block environmental protection laws. A new study by Mark Wall and his macro team at Deutsche Bank looked at how easy or hard it is to do business in different countries. The US remains number one in 2017 despite the near doubling of regulations in the period since 2010.

US reforms under the Obama Administration increased red tape particularly for financial firms in the wake of the global financial crisis but the obstacle level was vastly lower than that for any other country surveyed.

Among developed nations, red tape was cut by Greece, Italy, Spain, France, Portugal, and Germany. However they all at least twice as many business hurdles as the USA and often the reductions were modest (for example in France which is ranked 31st). In the over-regulated Club Med countries and Portugal, reforms were not sufficient to really reduce the obstacles. Greece was No. 60 in the ranking for ease of doing business today: Italy No. 52, Spain No. 62, and Portugal No. 30.. Note that a history of protectionism by governments of the right remains an obstacle to ease of doing business in southern Europe. Ireland and Britain are the only countries close to as open as the US.

While FBN and Mark Wall may not agree, I think opening a Pandora's box of measures to restrict trade will eventually hurt the competitiveness of US business. While Trump talks a good line over deregulation in fact his policies on borders—fence and tariffs—is going to hurt US business competitiveness in the end. Immigration obstacles ditto.

I find Steve Mnuchin's theory that tax cuts have been “baked into” the price of US stocks to be simplistic. The Treasury Secy has to sooth the ego of his boss, but the rise in stocks has been because of the Trumpian governmnet disarray but in spite of it. And Mnuchkin at some point has to warn his boss that tearing up trade agreements will not be good for US business.


*After IBM bounced high yesterday it bounced some more today. And another Dow monster, GE, is also up. And (hip hip hooray) The New York Times has cleaned up its Business Day stock tables after I sent its PR a copy of yesterday's blog.


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