Along with tax cuts, deregulation is one of the signature policies of the Trump administration. Surprisingly, some free-market economists, myself included, are less than enthusiastic about these policy changes. The skepticism reflects two factors: the offsetting increase in regulation in some areas and the type of deregulation that is occurring.

While the Trump administration likes to say it is cutting regulations, the truth is that the number of regulations has continued to increase. A Mercatus Center study found that the number of federal regulations increased 0.65% during 2017, the administration’s first year. On the positive side, that is well below the 2.1% average rate since 1970. But it still would be wrong to characterize the policy as simply “deregulation.”

Moreover, we need to consider areas where regulations are shrinking and areas where they are increasing. In many cases, the regulations being removed are much more defensible than those being added, even from a free-market perspective.

In early October, the Treasury Department put into effect regulations that will restrict foreign investment in a wide range of fields, such as biotechnology and nuclear power generation. This could make it harder for startups to find financing, given how the biotech sector is increasingly dependent on inflows of money; Asian investors contributed nearly 50% of venture-capital investments in U.S. biotech companies during the first eight months of 2018.

The federal government has also increased the hurdles that companies must overcome to hire foreign workers, ranging from high-tech professionals to summer workers in hotels and restaurants. There is now much more paperwork, and work visas are being denied much more frequently.

A recent bill aimed at dealing with the opioid epidemic will also increase regulation. The New York Times reports new rules will require the U.S. Postal Service to collect the name and address of the sender as well as the sender’s description of the contents of the package by the end of this year for all shipments from China and at least 70% of all international packages. It will have to do so for all international packages by the end of 2020.

All of these regulations, as well as the recent tariff rate increases, reflect a deep distrust of interactions with the rest of the world. Some of this involves suspicions about Chinese government spying, but the concerns go far beyond foreign policy, to broader issues of trade and immigration.

The specific areas of deregulation also raise some concerns. The Trump administration has trimmed regulations in areas such as energy production, labor rules and financial markets. Yet even free-market economists often favor regulation when there are negative effects from an activity, called “externalities”, such as the environmental effects of burning coal.

The financial industry is especially problematic, as we saw during the 2008 financial crisis. In many cases, an economy is most efficient when operating under free-market principles, free of regulation. However, the financial sector is already heavily distorted by government backstops such as deposit insurance (through the FDIC), government-protected enterprises that purchase mortgages such as Fannie Mae and Freddie Mac, as well as an implicit policy of “too big to fail” — the federal government’s tendency to bail out big banks during a crisis. The Trump administration has not reduced these serious market distortions.

As an analogy, imagine removing all regulations on building homes right on fragile oceanfront sand dunes, while continuing to provide federal flood insurance to those homes. A truly free-market solution might involve private flood insurance priced to reflect actual risks. The high insurance rates would discourage home building in flood-prone areas. Another approach would provide subsidized federal insurance, but strictly regulate the building of homes in flood-prone areas.

In America, we tend to provide subsidized government insurance without always considering the need for accompanying regulation. That’s not a “free market.”

Read:Congress dodged hard decisions about flood insurance again

When the government deregulates banking without addressing the public policies that protect the financial sector, it tends to encourage an excessive amount of risk taking, as we saw during the housing boom more than a decade ago, and also during the 1970s and 1980s. Thus it’s not clear that freeing banks to take greater risks with taxpayer-insured funds is actually moving the financial sector closer to its free-market ideal. The Trump administration seems intent on freeing up banks to take greater risks, without first removing the federal policies that already encourage excessive risk taking.

Sometimes it’s unclear what public policy principles are motivating the Trump administration’s moves toward deregulation. Consider two seemingly unrelated areas: pot smoking and the fiduciary rule for investment advisers. Attorney General Jeff Sessions reversed Obama administration policy and began adopting a stricter stance against marijuana legalization in the states. The motivation seems to be paternalism — the idea that left on their own, many people will make poor choices and consume drugs that are bad for them. Although I’m skeptical of the war on drugs, I do understand the logic.

But then why did the Trump administration block the fiduciary rule, which requires investment advisers to act in the interest of their clients? After all, there is overwhelming evidence that average people are often taken advantage of by investment advisers. It almost never makes sense for an investment adviser to recommend a portfolio of actively traded stocks and bonds with a high expense ratio, rather than a low-cost index fund alternative. But this often happens, and many suspect it’s because investment advisers earn much higher fees from this sort of advice at the expense of their client.

To be fair, there are good arguments against regulating investment advisers, as the side effects of regulations can often distort markets with unintended consequences, and add lots of unnecessary paperwork. So it’s not obvious the fiduciary rule was appropriate. But of course the same applies to restrictions on drug use, which have enormous distortionary effects.

If one looks at the areas the Trump administration is choosing to deregulate and those where there is increased regulation, it seems clear that the motive is not primarily any sort of free-market principles. Rather, it’s a desire to aid certain politically important special interest groups. Bankers and coal-mining firms clearly have a higher priority than low-income people selling pot and facing the risk of imprisonment or American consumers who want access to cheap imports.

Free markets for me, but not for thee?

Scott Sumner is the Ralph G. Hawtrey Chair of Monetary Policy at the Mercatus Center at George Mason University. This is adapted from a blog post entitled “Regulation Watch” published on The Library of Economics and Liberty website.