Jeff Bezos Is ‘Optimistic’ About Trump’s Win — Here’s Why and What It Means for Your Wallet
Written by
Andrew Lisa
Edited by
Cory Dudak
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While Elon Musk is the billionaire most closely associated with incoming President Donald Trump’s second term, Amazon founder Jeff Bezos seems to have softened his once-adversarial attitude toward Trump.
In a recent appearance at the New York Times’ DealBook Summit, Bezos gushed over America’s vast, but underutilized resources, and announced he is “very optimistic” about Trump’s return to the White House. But just because the ultra-wealthy class expect good things for their wallets starting on Inauguration Day, should you?
Change of Heart — or at Least Tune
Since his rise in 2016, Trump has had an antagonistic relationship with Bezos that touched on gripes ranging from Amazon’s tax obligation to Bezos’s stewardship of The Washington Post. At the DealBook summit, however, Bezos extended an olive branch by saying he believed Trump had “grown,” was “calmer,” “more confident” and “more settled.”
Beyond vague descriptions of a perceived personality shift, Bezos stuck to the one topic most responsible for his rosy outlook — the potential to cut the red tape that he has long loathed.
“I’m very hopeful,” Bezos told an interviewer. “He seems to have a lot of energy around reducing regulation, and my point of view is, if I can help him do that, I’m going to help him, because we do have too much regulation in this country.”
Shared Passion for Deregulation
Forbes estimates Bezos’s net worth at $236 billion (as of Jan. 8). Unless you’re Musk — who has $416 billion and is rapidly approaching a half-trillion-dollar fortune — you’re probably working with considerably less. However, the incoming administration has its sights set on policies ranging from taxes to tariffs that could impact the billionaire class, the average earner and everyone in between.
For Bezos, however, the real prize would be to reduce what he sees as government overreach in the business world. “We do have too much regulation in this country,” he said at the conference. “We are burdened by excessive permitting and regulation.”
Bezos said that excessive regulation has hampered the improvement and development of everything from traditional infrastructure like bridges to emerging projects like solar fields.
It’s unclear whether Trump has softened his own hostile views toward Bezos, but personal grudges aside, Trump has been a consistent and long-standing advocate for cutting red tape.
It makes sense for deregulation to be a passion project for people like Bezos, whose operation has 1.52 million employees scattered across the world, but what would such initiatives mean for you and your wallet?
Well, it’s complicated.
No Concrete Answer or Simple Solution
The Kenan Institute of Private Enterprise, a nonpartisan business think tank, chronicled the challenges of navigating the perennial controversy of regulation vs. deregulation, describing the issue as “extraordinarily complex and ingrained with challenging trade-offs,” and that “the U.S. regulatory system’s aggregate costs and benefits are difficult to measure.” The institute’s data showed the impact on consumers can vary widely depending on the market, the industry and the company’s size and location.
Small businesses tend to have lighter compliance burdens than larger companies and, therefore, pass on fewer costs to consumers. However, regulatory requirements vary dramatically from industry to industry. The insurance and airline industries, for example, navigate vastly different compliance environments.
A universal solution that applies economy-wide is impossible to achieve and unproductive to attempt, especially considering that some firms and industries get relief in the form of exemptions and others do not. On top of that, many businesses grapple with multijurisdictional regulations at the federal, state and local levels, which often overlap and force redundant compliance efforts and costs.
Too Much Regulation Can Burden Businesses and Consumers — But So Can Too Little
There are some fairly cut-and-dry cases where the impact of deregulation is clear, but they’re exceedingly rare. For example, The New York Times reported the 35 states that deregulated their retail electricity markets have consistently experienced higher energy prices than those that didn’t since at least 1998, with the average consumer in deregulated states paying $40 more per month for electricity.
But energy is an outlier. Most industries exist in a gray area that requires complex, delicate and constantly evolving regulatory initiatives that must balance social and environmental goals with finite resources and the realities of the labor market.
The Kenan Institute concurred with most credible experts in one fact that is difficult to dispute. The gargantuan size and scope of America’s regulatory landscape place enormous costs — direct and indirect — on both the businesses that must stay in compliance and the government entities charged with monitoring and enforcement. Overall, the Kenan Institute estimated that companies spend an average of 3.2% of total working hours and 3% of total wages on regulatory compliance, which they then pass on to consumers. Others, like the Competitive Enterprise Institute, cited data estimating the final tally at nearly $2 trillion, with the average household spending more than $14,000 per year in hidden regulatory costs.
Trump, Bezos and many others believe that deregulation is the solution. If realized, their aspirations have the potential to lower costs for businesses and consumers, at least in some industries and sectors — as long as they manage to strike the ever-elusive balance between too much regulation and too little.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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