Government regulation disproportionately handicaps small businesses and saddles the economy with deadweight. President Trump has a once-in-a-lifetime opportunity to end this drag with a small business liberation day. Regulatory costs are ordinarily fixed and bear more heavily on small rather than large enterprises.
Small businesses fuel our economy. According to the U.S. Chamber of Commerce, 33.2 million small entrepreneurs account for 99.9% of all American businesses. They account for about 63% of all new jobs created between 1995 and 2021. As small business goes, so goes the economy.
Government policies should promote innovation, growth and competitiveness for small businesses.
Any new regulation should be tied to repeal of an obsolete rule. A task force comprised of small business leaders should advise the process and guide a policy that makes sense to those who know best. A sunset policy should target consent decrees, regulation by another name, of more than five years’ duration or ten years at a maximum. With business models changing at warp speed, such decrees risk metamorphizing into fetters on free and fair competition.
The Small Business Administration should lead this regulatory reform endeavor, beginning with so called “penalty-based” instruments that operate as regulation by another name. Exemplary are final consent orders, consent decrees, settlement agreements, administrative consent orders and other similar actions that saddle small businesses with prohibitive deadweight regulatory expenses.
The Federal Trade Commission (FTC) is notorious in this regard. John Villafranco and Adrea de Lorimier wrote for the Washington Legal Foundation in May, “a company might sign a consent order to avoid the potentially negative publicity associated with litigating against the FTC, to evade a costly and prolonged lawsuit, or to combat internal disruptions to its operations, among other reasons.” The burden on the capitulating company includes “requiring monetary payment, injunctive relief barring the allegedly unlawful conduct, supplemental relief prohibiting conduct different from (but related to) the unlawful conduct (i.e., fencing-in relief), and other affirmative obligations, including customer notice, recordkeeping, and compliance reporting provisions.” Many companies cannot afford the cost of defending against FTC enforcement misadventures.
The Trump Administration’s new Chair of the FTC, Andrew Ferguson, has a golden opportunity to end the agency’s missteps. The FTC should advise businesses about allegedly anti-competitive behavior. Administrative cease-and-desist orders should be the preferred remedy. Private enterprise is the friend, not the enemy of consumers because it prospers only by optimizing consumer welfare.
Consent decrees are currently a favored but ill-conceived enforcement tool of the FTC. As my friend Bruce DelValle wrote at Real Clear Policy on June 13, 2025, “each consent order becomes its own judicially approved private law imposed on industry by the administrative agency that creates it.” He observed that the consent orders have become “inflexible administrative and judicial rules, fixed in time and incapable of adaptation to changing circumstances” at a time when “the business landscape is breathtakingly dynamic, with rapid technological advancements and evolving market conditions.”
Chairman Ferguson, go for it and remove the regulatory burden that hit small businesses harder than the large ones who can handle the increased cost of compliance.