Op-Ed: Get out of the way, and watch America work

by The Center Square

I have spent close to three decades studying markets and how they react to news and data. I lose sleep over actuarial assumptions, so my clients don’t have to. I have served as a designated expert witness on fiduciary duty since 2015, watching this drama from both the boardroom and the witness stand. For years, the story was grim. Funded ratios kept sliding, unfunded liabilities kept piling up, and politicians kept promising fixes that never showed up in the next actuarial valuation. Then, without a single new statute, the numbers turned around. Nobody in Sacramento or Albany passed the reform that did it. The market did.

That is not a bumper sticker. It is measurable, and the last 20 months measured it in three places at once: public pensions, merger enforcement, and the fight over how to regulate artificial intelligence. In every case, the years Washington tried hardest to manage outcomes produced the worst ones, and the years Washington backed off produced the best.

Start with the pensions, because the numbers are unambiguous. State and local retirement systems finished fiscal 2026 with an aggregate funded ratio of 85%, the best mark since 2009, up from 81.2% a year earlier. Unfunded liabilities fell to an estimated $1.13 trillion, down from $1.37 trillion. Nobody legislated that improvement into existence. Investment returns did, averaging roughly 9.4%, well above the 6.9% assumed rate plans have used for years, on the back of a stock market that outran nearly everyone’s forecast. Every firefighter and schoolteacher who retires solvent this decade owes more to the S&P 500 than to any statehouse.

Now look at what happens when regulators decide markets need closer supervision. Under the Biden FTC, chaired by Lina Khan, and a Justice Department that treated litigation as the default rather than the last resort, dealmaking became an ordeal. Companies that once negotiated a divestiture and moved on instead watched transactions collapse under the weight of delay: 20 mergers abandoned during the Biden years against just 6 in Trump’s first term, while negotiated settlements cratered from dozens to a handful. Those were not all bad deals. Much of that capital would have been redeployed into growth, jobs and lower costs. Instead, it died in a filing cabinet, killed by officials who measured success in deals blocked rather than value created.

The current administration reversed course, and it didn’t need a press conference to prove it. Merger settlements are back to being the normal outcome rather than the exception. An energy order fast-tracked permitting for domestic production and the data-center buildout AI now demands, and the Genesis Mission committed more than $5 billion in federal funding to computing and scientific research rather than new compliance offices. Most tellingly, the AI executive order the White House signed in June explicitly refused to create a licensing or preclearance regime for frontier model developers, choosing instead a voluntary framework for security review and a public-private clearinghouse to patch vulnerabilities. Compare that with the reflex on display in dozens of state legislatures right now, where AI gets the same treatment mergers got a few years back: license it, permit it, slow it down until someone who has never built anything signs off. Washington chose, for once, to trust the people building the technology to help secure it.

Markets rewarded that confidence with performance, not just sentiment. The S&P 500 returned more than 37% from Election Day 2024 through early August 2026, dividends included. That figure absorbs a stretch last year when the index gave back nearly 20% amid tariff uncertainty, so nobody should mistake this for a straight line up and to the right. What held the recovery together was not merely lower rates. It was corporate profit margins that stayed historically elevated because companies could plan around a predictable regulatory and tax environment instead of guessing which of their business lines an enforcement action would target next.

Understandably, deregulation carries real risk. I won’t pretend every merger Lina Khan’s FTC blocked deserved to close, or that every frontier AI lab should be trusted to grade its own homework unsupervised. Reasonable people worry that a lighter touch invites recklessness the next downturn will expose. Fair point, worth watching. But the alternative already ran its experiment, for four years, at scale. Aggressive intervention did not produce safer markets, cheaper goods, or better-funded pensions. It produced fewer deals, slower capital formation, and a funded ratio that kept sliding until investors, not regulators, turned it around.

And a caution of my own, since free markets are no substitute for fiscal discipline: the national debt crossed $40 trillion this month, doubling in under a decade, with interest payments now exceeding the defense budget. Deregulation frees capital to work. It does not repeal arithmetic. Markets can rebuild a pension fund faster than any legislature, but they cannot outrun a Congress that refuses to control spending.

Milton Friedman spent a career making this point more elegantly than I can manage here: the great advances of civilization never came from government. Ronald Reagan, whom I watched from a classroom in Connecticut as a teenager forming my own politics, put it more bluntly, that government is not the solution to our problem, it is the problem. Twenty months of data from pension funds, merger dockets, and an AI order that bet on builders instead of bureaucrats make the case all over again. Every retiree drawing a pension check funded by returns no state capitol produced, every job that survived a merger that would have died in a Biden-era filing cabinet, is the proof. The policy that keeps working is the one where Washington signs the order, then steps back and lets someone who actually builds things get on with it.