There’s a new president in town, and he looks awfully familiar. Trump’s inauguration this week turned heads for all sorts of reasons, but as ever, the policies that followed were most interesting to us here at the Institute of Economic Affairs. And there were a lot.
Upon being sworn in, Trump signed over two-hundred executive orders on a range of topics – from shutting down diversity and inclusion programmes to releasing information about the murder of JFK, and everything in between. I won’t bother listing or analysing them all here (other lists are available) but it is worth picking up on a few.
One of the most promising from the pack is an executive order ordering government departments and agencies to cut unnecessary regulatory burdens and embark on a supply-side reform agenda. Not only is this the best way to boost growth but it is also couched in consumer-first terms. The title of the order refers to ‘defeating the cost-of-living crisis’. Politicians here could learn a lot from this approach.
On the other hand, while concrete action on tariffs hasn’t emerged yet – as our Economics Fellow Julian Jessop pointed out – President Trump still announced an overhaul of the trade system that laid the groundwork for more taxes on imports in future. This is bad news for American consumers and the international economy.
There are significant differences to the ways things are going this side of the pond, particularly on energy. Trump wants to ‘drill baby drill’ and is deregulating to do it, not to mention withdrawing from the Paris Climate Agreement. Meanwhile, the British government is moving full steam ahead towards Net Zero.
But on supply-side reform to cut costs for consumers and boost growth there may yet be some common ground. This week the Prime Minister and Chancellor have been talking up their appetite for growth and their taste for supply-side liberalisation. This is music to my ears.
But while President Trump has signed swathes of executive orders within hours of being handed the levers of power, Rachel Reeves has gone to the regulators for ideas on how to achieve their ‘number one priority’ of growth, after six months of not doing much at all – except, perhaps, making matters worse with a misjudged Budget that wrecked business confidence.
In our podcast this week, Tom Clougherty and Kristian Niemietz discuss whether the Government has landed on this theory of growth out of desperation rather than belief. With no cash to splash, the entrepreneurial state is out and supply-side liberalisation is in.
That undoubtedly bodes well, but reality is yet to catch up with rhetoric. Environmental policy, employment regulation, and tax remain major drags on our economic dynamism – and are only getting worse. Reforms to the planning system and capital markets may not be radical enough to move the needle in the other direction. Still, the recent shift in emphasis is a start. We will watch carefully to see where it leads.
Callum Price
Director of Communications
P.S. The best way to never miss out on IEA work, get access to exclusive content, and support our research and educational programmes is to become a paid IEA Insider.
Executive Director Tom Clougherty, Editorial Director Kristian Niemietz, and Director of Communications Callum Price discuss Labour’s theory of growth, the future of Net Zero, and what airport regulation tells us about the British economy on the IEA Podcast.
Tom Clougherty on GB News
In this new GB News interview, IEA Executive Director Tom Clougherty discusses Britain's economic challenges and potential solutions.
Addressing years of high taxes and low growth, Tom explains how many young Brits in their twenties and thirties have never experienced real economic growth, with incomes remaining stagnant since 2007. Rather than pointing to a single solution, Tom argues that Britain needs hundreds of small changes across the economy. He discusses the need to reform energy policy, housing, and what he calls a ‘bureaucratic state’ that's suffocating growth.
The interview also touches on the IEA's role as an educational charity and its mission to develop alternative economic ideas. As Britain continues to face economic challenges, Tom emphasises the need for radical change to avoid a bleak future.
News, Views & Upcoming Events
IEA Editorial Director Kristian Niemietz was interviewed by Novara media’s Aaron Bastani, YouTube
Professor Alexander Klein and IEA Managing Editor Daniel Freeman discuss the history and economic impact of American protectionism, IEA YouTube
IEA International Programmes Manager Harrison Griffiths worries about the ‘naturalistic fallacy’ and conspiratorial thinking in the second Trump administration, CapX
IEA Head of Lifestyle Economics Christopher Snowdon has a letter in The Economist:
‘The review notes that randomised controlled trials have shown that “moderate drinking favourably affects HDL cholesterol, low density lipoprotein (LDL) cholesterol, and apolipoprotein A-1”. It would be remarkable if this did not lead to lower heart disease and stroke risk, and it is this that explains most of the longevity gains enjoyed by moderate drinkers.’
IEA Communications Manager Reem Ibrahim discusses the benefits system on TalkTV (from 1:36:55)