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Paul Sancya/AP

The Trump Rally has been on pause for two weeks, but its record since Election Day has nonetheless been close to historic. There's no doubt that investor euphoria is in part due to change in leadership in Washington and the promise in particular of less regulation.

Why it matters: Eliminating regulation is the most potent ways for government to boost economic growth, but the market may be overestimating what Trump can deliver without 60 votes in the Senate.

Expand chart
Data: S&P Global Market Intelligence; Chart: Andrew Witherspoon / Axios.com

The Trump rally has been dominated by the financial service sector, and independent banking analyst Chris Whalen says this is because banks have the most to gain from deregulation, in the form of a Dodd-Frank overhaul.

Expand chart
Data: Mercatus Center; Chart: Andrew Witherspoon / Axios.com

The cost of regulation: Wall Street has evidence to support its optimism. Research published by George Mason University's Mercatus Center over the summer estimated that the costs of regulation in terms of economic growth. It found:

  • National income in 2012 would have been $13,000 higher per person had the federal government added no regulations between 1980 and 2011.
  • It assumes that for every regulation added, one would be eliminated. Trump is promising to eliminate two regulations for every one added, a policy that could supercharge growth over the long term if faithfully implemented.

Not so fast: For one, the costs of not regulating business — like worse health and climate change — often don't show up in GDP figures.

  • The most significant EPA regulations claim to save thousands of lives — a priceless benefit for those helped by these rules.
  • To make large and swift contributions to American businesses and the economy, Congress would have to change the laws that support regulations. But with healthcare and tax reform higher priorities than financial regulations, it's not clear we'll get a Dodd-Frank overhaul anytime soon. As Whalen puts it, "Wall Street is way over its skis," when it comes to bidding up banks.

Go deeper

Biden to sign 15 executive actions on Day One

President-elect Joe Biden. Photo: SAUL LOEB/AFP via Getty Images

President-elect Joe Biden is expected to sign 15 executive actions upon taking office Wednesday, immediately reversing key Trump administration policies.

Why it matters: The 15 actions — aimed at issues like climate change and immigration — mark more drastic immediate steps compared with the two day-one actions from Biden's four predecessors combined, according to incoming White House press secretary Jen Psaki.

Off the Rails

Episode 7: Trump turns on Pence

Photo illustration: Eniola Odetunde/Axios. Photos: Elijah Nouvelage, Alex Wong/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. Axios takes you inside the collapse of a president with a special series.

Episode 7: Trump turns on Pence. Trump believes the vice president can solve all his problems by simply refusing to certify the Electoral College results. It's a simple test of loyalty: Trump or the U.S. Constitution.

"The end is coming, Donald."

The male voice in the TV ad boomed through the White House residence during "Fox & Friends" commercial breaks. Over and over and over. "The end is coming, Donald. ... On Jan. 6, Mike Pence will put the nail in your political coffin."

Big Tech's post-riot reckoning

Photo illustration: Sarah Grillo/Axios. Photo: Tasos Katopodis/Getty Images

The Capitol insurrection means the anti-tech talk in Washington is more likely to lead to action, since it's ever clearer that the attack was planned, at least in part, on social media.

Why it matters: The big platforms may have hoped they'd move to D.C.'s back burner, with the Hill focused on the Biden agenda and the pandemic out of control. But now, there'll be no escaping harsh scrutiny.