President Donald Trump may not have been immediately impressed with his choice to be the new head of the Consumer Financial Protection Bureau, but it should not take a Green Book to know that the consumer side of life is struggling right now. The digital economy, with its happy accidents of commerce and commerce’s inevitable mixing with power, is confronting the worst societal issue that modern America has ever seen. Americans have lost trust in government and their businesses and the vicious competition of capitalism is filling the gap. But rather than meet the challenge on his own, President Trump can take some of his best ideas and apply them to the business world. And so he should.
Let’s begin with the student debt crisis, which all industries from Netflix to education institutions have helpfully exacerbated. Accentuating the problem are the generation failures that are the Millennial generation. The good news is that these young people can learn from their mistakes and become good taxpayers if they take the time to learn how the market works. You don’t have to meet the students’ needs at their adult life stages, nor do you have to sit in their classrooms or companies and teach the responsibility for their good or bad judgment. One of the most important tasks for the new federal office that’s supposed to help the sector provide better choices to those who want to borrow money will be to find ways to assist them in purchasing more responsibly. They’re buying five houses rather than four, buying dozens of cars rather than one, investing in speculative asset-backed securities rather than savings accounts. It’s something that President Trump should find productive ways to encourage. He understands the economy through the glass ceiling, the rewards for “low-wage workers,” and he cares that the elderly and disabled are treated with respect. He should continue his idea of making insurance deductible deductions more inclusive, strengthen social security benefits to make them a whole lot more able to survive harsh financial times. Finally, Mr. President, you’ve got the budget right, about how business should be run more smoothly. Put to shame the business models that have a difficult time passing credit quality tests, replacing banks with gimmicks like fast-charging credit cards that don’t exist in the real world. Start a competition between the two lenders that offers the lowest interest rate for a product that just isn’t a real product, and let’s make it real so that the customer won’t be surprised. That can only be beneficial to the consumer and to lenders.
Another area that President Trump has been right on is reforming his far from perfect regulatory system. The high cost of regulatory compliance is one of the main reasons why businesses can’t hire or buy products and services they want. If less paperwork gets around to your offices or factories or oil and gas fields, that makes for a more productive, more responsive, and more profitable business. That sort of bottom-up reform is a rerun of the challenges that started out not just on the business side of governance but on the one where government people have felt like bureaucratic code and diagrams were against their grain. Better enforcement would be more effective and more humane and less of a burden to the market. A national well-regulated service or a plan backed by a rule on th e lower kill element would be less susceptible to all sorts of crises that we can mostly attribute to incompetence and corruption or to a little something called market fundamentalism. President Trump in his new state of the union address said that if the federal government does what we want and doesn’t pull the wool over our eyes, “we will succeed in transforming the lives of working Americans by making our communities safer, creating millions of new jobs, and expanding economic opportunity for all.” That’s what President Trump needs to focus on, again on how these changes can actually happen. Yes, lower taxes and reducing regulations will encourage employers to hire more workers. That won’t always be a case of the vicious yoke of regulations being lifted across the pond and then being passed through to Americans, but Americans know that bureaucracy is part of their ecosystem. If we can dial the bureaucracy back, we will do it without wrecking the entire system.
From his first speech to Congress in 2017, Trump has become clear about his ability to bring together business with government. Business leaders who know that when they’re the consumers of their products, they’re often getting ripped off too. That’s not necessarily a good thing. But they’re not the only ones having these problems. Now President Trump will have to bring that same strength and energy to bringing together government and business. Only then will we recover our faith in the system.