Here's an idea: let's give investors less information and see if that helps markets distribute capital more efficiently.

US President Donald Trump wants to do just that. On Monday, he said companies should no longer be required to report quarterly earnings. Switching to half-yearly reports "will save money, and allow managers to focus on properly running their companies", he wrote on Truth Social.

Trump has railed against quarterly earnings for years -- he also put the idea forward in his first term -- and he is far from the only one. Supporters of less-frequent reporting argue it will give companies the breathing room they need to plan for the long term. They also contend looser rules will make public listings more attractive and spur more companies to float.

Short-term thinking and quarterly reporting have been blamed repeatedly for slowing productivity growth, massive share buybacks and plummeting rates of corporate capital expenditure between 1980 and 2020. CEOs, the thinking goes, are so consumed with meeting market expectations that they throw money at investors and engage in short-sighted cost-cutting to keep their share prices up.

Such arguments have avid adherents, particularly in the UK, where the Investment Association led a very successful campaign to cut back to half-yearly reports, on the grounds that shorter increments distracted management and created moneymaking opportunities for hedge funds and algorithmic traders.

At the same time, the number of US public companies has dropped by around half since 1996 to below 4,000, while the ranks of private equity-backed groups have quintupled to more than 11,000. Start-ups are staying private longer, and ordinary investors are being shut out of large parts of the economy. JPMorgan Chase chief executive Jamie Dimon was so concerned about the problem that he raised it in his 2023 shareholder letter, writing: "I fear we may be driving companies from the public markets."

But this feels like a weird time to be tinkering with US disclosure rules. The S&P 500 set a new all-time high on Monday, and companies within it are trading at 29 times earnings, well above the historic average of 18. Not only that, but the initial public offering market just had its busiest week since 2021.

Furthermore, there is no longer a drought in long-term investment, if there ever was. Humongous amounts of money are pouring into data centres and energy projects associated with the artificial intelligence boom. Meta, Microsoft, Amazon and Alphabet, all of them public companies, have announced plans to spend nearly $400bn on capex this year and their shares are all up by at least 38 per cent since April.

There is also a broader context to be considered. Trump is not just going after earnings reports. Last month he fired the head of the Bureau of Labor Statistics after weak jobs data. The administration has also stopped collecting greenhouse gas pollution data and cancelled plans to require companies to report cyber security breaches. Trump's Securities and Exchange Commission chair, Paul Atkins, has promised there will be more to come to "address disclosure burdens".

Some business groups are cheering the administration on. They see the anti-red tape drive as a needed counterbalance to the rulemaking blitz imposed under Joe Biden.

But regular financial reporting is no passing regulatory fad. The principle dates back to the 1929 Wall Street crash, which made clear that many public companies had promised investors the moon while revealing little of their decidedly earthbound financial workings. A 1934 law gave the SEC the power to require "periodic" earnings reports and define exactly what that meant.

Quarterly reporting itself has been a bedrock of US markets since 1970. Well-run companies use the requirement to update investors on their progress. More troubled groups are forced to disclose potential legal and regulatory problems, which is more important in the US than in places like the UK and Germany where companies have a duty to inform the market quickly of material changes. That is one reason investor groups opposed Trump's first tilt at quarterly reporting and are now raising concerns again.

The one thing that scrapping quarterly earnings would clearly do is widen the gap between ordinary investors on the one hand, and company insiders or those with private sources of information on the other. Trump's proposal will only advantage those on the right side of that divide.

Trump's quarterly reporting move is the wrong idea at the wrong time