African Swallows
The players are staging for the big battle in DC even as the ground is shifting underneath them.
Bridgekeeper: “What is the airspeed velocity of an unladen swallow?”
King Arthur: “What do you mean? An African or European swallow?”
The key to the CEQ decision in which an agency issued significant regulations on the basis of an executive order for decades, only for these cumulative regulations to be ruled invalid, is the distinction between an advisory agency and a regulatory agency.
‘Nevertheless, the court concluded that CEQ’s NEPA regulations were invalid and had no binding effect because Congress did not confer rulemaking authority on CEQ. The court explained that constitutional separation-of-powers principles did not allow for executive orders to grant CEQ authority to issue binding regulations in the absence of a clear congressional authorization to do so. In other words, CEQ is merely an advisory agency, not a regulatory agency. This portion of the opinion was written by Judge Randolph and joined by Judge Henderson. (Judge Randolph had previously raised questions about CEQ’s authority to issue binding regulations. (See Food & Water Watch v. U.S. Department of Agriculture, 1 F.4th 1112, 1118–19 (D.C. Cir. 2021) (Randolph, J., concurring).))
‘In the remainder of its opinion, the court agreed with the petitioners’ argument that the agencies’ analytical baseline was unreasonable and, therefore, held that the agencies’ approval of the air tour management plan was arbitrary and capricious under the Administrative Procedure Act. The court ordered the air tour management plan vacated.
‘Judge Srinivasan joined the portion of the opinion holding that the agencies violated NEPA. Judge Srinivasan wrote a dissenting opinion disagreeing with the court’s conclusion that CEQ lacks rulemaking authority as well as the court’s remedy of vacating the plan.’
How Musk’s DOGE Can Actually Do Some Good
Musk and Ramaswamy will need to concentrate their forces and push through the bureaucratic line at its most sensitive points.
First principle? Do no harm. People in DC and the states are itching to control AI. They can sense how important it will be. All the more reason to get their fingerprints on the machine. Take credit if it goes well. Avoid responsibility if it fails. That’s the standard playbook. Instead, carve out AI as a space for experimentation and innovation, all while claiming priority and squeezing out the states.
Do these people have the ability to set priorities or will they try to do everything at once?
Musk and Ramaswamy need quick wins that will inspire the public mind as to the feasibility and the impact of the DOGE project.
‘The first thing to realize is that it is not possible to eliminate every law, regulation, committee or agency that deserves to be. The system was set up such that getting rid of anything is a tough legal slog. It is not easy to fire large numbers of bureaucrats, and in any case their pay is a small part of the federal budget. When it comes to reducing red tape, there are bound to be more losses than victories.
‘So it’s important to set priorities. One is that it is easier to keep new sectors of the economy free from regulation than it is to deregulate existing sectors. The US should not impose onerous restrictions on the development of artificial intelligence, for example. With so many state-level bills pending, the federal government should aim for preemption and a light regulatory hand, at least initially.’
Elon’s Real Trump Mission: Protect Growth
The US has been given a gift: the sclerosis and the bureaucratic drags of its global competitors is even worse than what it faces domestically.
We have too little economic growth and too much growth in administration. This has been true for a long time.
DOGE is about restoring balance.
Because growth is the only thing that will get us out of the colossal hole in which we now stew.
‘The real fight is to protect entrepreneurialism and its unappreciated concomitant, free speech, in those parts of the economy where they still survive.
‘After all, the offsetting factor to bureaucratic accretion in our time and hopefully generations to come is economic growth. Even the consequences of endless deficit spending can be outrun indefinitely if the economy is growing fast enough. The old joke about two hunters and a bear also applies: The U.S. only needs to stay ahead of global rivals, with their own compounding structural rigidities.’
What Does HUD Have to Show for the Trillions It’s Spent?
The motivation for the Department of Housing and Urban Development. After close to sixty years, it has failed to make any progress, whatsoever.
Home ownership rates are less than European rates. Home prices are volatile and have grown more than the rate of inflation. All of this drives personal financial leverage. The system needs bailing out from time to time.
Why is it still around?
‘What are the results? In 1967 the U.S. homeownership rate was 64%. Nearly six decades and $3 trillion of spending (in 2024 dollars) later, according to the U.S. Census Bureau, the home ownership rate is nearly . . . 64%.’
The Musk-Ramaswamy Project Could Be Trump’s Best Idea
The upcoming dog fight will be epic. Everyone and everything in DC is aligned against DOGE.
‘None of this will be easy. Lawsuits will proliferate. Mr. Trump’s own cabinet officers will resist cuts in their budget and regulatory sway. The iron triangle of the bureaucracy, interest groups and Congress will conspire to portray every decision as a threat to public health and safety. The press will pile on.’
Defense tech companies like Anduril hope Trump can streamline military contractsv
Bureaucracy is a key national security vulnerability.
‘Schrimpf said the most important steps to improving the defense contracting process are to slash government bureaucracy and pivot to building cheaper autonomous systems. He said it would be critical for the United States to "tap into all those commercial suppliers" within the country to compete in the global defense economy.’
Recognizing The Outstanding Work Of Bureaucrats
Just because many people in the bureaucracy do good doesn’t mean that everyone in the bureaucracy is good.
It certainly doesn’t mean that the structure itself lends itself to efficient execution of projects and initiatives that we believe to be good.
Look for more bureaucrat love in the press as the fight picks up.
‘Many of those in the federal government are often depicted as a distant and part of a deep state that seeks to uphold a bureaucracy over the needs of everyday Americans. But the work these people do improves our lives and often goes unnoticed.
‘The annual Arthur S. Flemming awards honor the work done by those behind the scenes in government and seeks to encourage workers to make a difference.’
The legal pathways for Biden-era rules facing a Trump takedown
There will be a decent amount of regulatory uncertainty over the coming eighteen months. Here’s a framework for thinking about it.
‘These regulations tend to fall into four categories, Cicconi said.
‘Rules under consideration, not yet finalized. These will probably be subject to a regulatory pause by the incoming administration on Jan. 20.
‘Rules that are passed before Biden’s term ends, and within the past 60 days will be subject to the Congressional Review Act, Cicconi said. The next Congress, under Republican control in January, is likely to enjoin Biden rules with a joint resolution Trump would sign.
‘Finalized agency rules that are still wending their way through litigation, including some that have been enjoined. The Trump administration is likely to stop defending many of the Biden rules, which would effectively end them. However, “in many of those challenges there are intervenors with authority to defend the rule going forward,” Cicconi noted.
‘That means rules that have survived court challenges and avoided being enjoined “will stay at least on the books” pending further administration action, she said.’
Donald Trump’s AI Regulation May Boost Open Source Much to Big Tech’s Dismay
JD Vance gets it. Regulation favors the large, stifles new entrants, and inhibits innovation.
‘Trump’s light-touch approach to emerging technology could potentially open the door to a wave of new ideas, including open-source AI.
‘Open-source AI refers to AI tools and models that are publicly available for anyone to view and modify.
‘By providing open access, any developer can change and innovate in ways that wouldn’t be possible in a closed environment.
‘The view on open-source AI in Trump’s close circle seems primarily positive.
‘JD Vance, the newly appointed Vice President, previously accused Big Tech of supporting regulation for their own gain.’
Killing the CAT: why a key regulatory tool is under attack from Wall Street
Imagine a system that knows every trade in the financial markets as they are taking place. That’s a big system. It’s expensive, so let’s make the users pay for it themselves. Then, let’s give access to the data to lots of people.
This is the Consolidated Audit Trail. It exists. It is the world’s second largest database, eclipsed only by the National Security Agency.
Here is an example of a regulator (the SEC) avoiding legislative approval for large-scale regulation. The SEC instructed the exchanges and FINRA, self-regulatory organizations for financial market participants, to fund the database.
Did the SEC have the authority to mandate this? Is the funding constitutional? Is the database vulnerable to abuse?
These are all good questions that should have been asked years ago. It’s interesting that they are coming up now.
‘To its detractors, CAT is an Orwellian nightmare — a huge invasion of privacy for which the SEC never sought congressional backing. And they are suing.
‘Billionaire Ken Griffin’s Citadel Securities filed one case in Florida last year in conjunction with the American Securities Association. The suit challenges CAT’s funding whereby the industry is on the hook for an estimated $200mn a year in running costs — on top of $1bn spent on the system. For good measure, the case warns darkly of 500bn trading records a day being stockpiled “for uses left entirely to the bureaucratic imagination”.
‘In April, a case in Texas took a different approach, with conservative activist groups including the National Civil Liberties Alliance calling for a halt to CAT because of its “dystopian surveillance” of individuals’ financial data. They have warned thousands of regulators could access this through what amounts to the world’s second largest database, behind that of the National Security Agency. “The Constitution expressly prohibits uncaging this CAT,” lawyers argued.’