Zell Says Trump's Proposals to Cut Regulations Will Spur Economy

(Bloomberg) -- President Donald Trump's pledge to roll back regulations is “creating a lot of hope” among businesses and will provide stimulus for the U.S. economy by spurring investment, billionaire investor Sam Zell said on Sunday.

The regulatory burden under former President Barack Obama drained business confidence and sharply increased compliance costs, Zell, founder of Equity Group Investments Inc., said on Fox News Channel's “Sunday Morning Futures.” As a result, many companies opted not to make commitments and take risks, Zell said.

“It's not accidental that corporate America has more cash on its balance sheets today than any time in history,” Zell said. “That's not productive allocation of capital.”

Confidence among businesses and consumers has surged since the presidential election, based on optimism that Trump's administration will cut taxes, reduce regulations and increase investment in U.S. infrastructure to spur economic growth and create more jobs.

Gross domestic product rose at a 2.1 annualized pace in the fourth quarter, in line with the average pace during the current expansion. Household spending has been the main driver, as corporate investment has lagged.

“The biggest opportunity that Trump has is to create stimulus by loosening up the regulatory environment,” Zell said. That means “creating stimulus without creating the debt to pay for it,” he said.

Commerce Secretary Wilbur Ross, also speaking on “Sunday Morning Futures,” said the administration has already started rolling back regulations. The Commerce Department is studying all of the permitting rules that are impeding manufacturing and will be releasing a list of other regulations that should be eliminated “pretty soon,” Ross said.

GE Chief Executive Officer Jeffrey Immelt, in an interview broadcast Sunday on CNN, said the U.S. is in “a steady economic growth pattern,” and was optimistic about its prospects given Trump's push for regulatory and tax relief.

“A 40-year-old tax code, we're not getting the reinvestment back in the economy we should,” Immelt said on “Fareed Zakaria GPS.” “The regulatory pendulum has swung too far and the country needs infrastructure. You do those three things, I think the economy is going to do better.”

To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net.

To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Mark Niquette, Ros Krasny