Capital Markets: Observations & Insights

Less Regulation Is Good for Business Business Spending Boost

• Lower regulation is improving business confidence ‒ Regulation has gone from being the single most important problem in small businesses to being the third (behind taxes and quality of labor) ‒ In the past decade, new regulations have required 681 million hours of paperwork at a cost of $1.0 trillion, while year-to-date required paperwork has been reduced by more than 23 million hours

Business Confidence

Federal Rules

100 102 104 106 108 110

2,400

Final & Proposed Rules per Year

High Regulation

High Confidence

Recent decline in Federal rules strengthened business confidence

2,200

2,000

90 92 94 96 98

1,800

Low Confidence

Confidence Index

Low Regulation

1,600

1,400

Jun-16

Jun-17

Mar-16

Mar-17

Sep-16

Dec-16

Source: FactSet and George Washington University as of 9/30/17. Business confidence is NFIB Optimism Index and Federal Rules data is from Unified Agenda of Regulatory Actions. Small business concerns according to NFIB Economic Trends survey August 2017 vs. July 2016. Cost of regulations from American Action Forum.

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