Eye of the Tiger
Regulatory competition heats up.
Texas Is the Low-Cost, High-Reward Darling of Big Tech
One of my friends worked on the GM line as a student one summer. He worked hard, sweeping up and doing whatever they told him. He had the right attitude.
At the end of the week, the crew to which he was assigned took him out for a beer. They told him he had to lay off. All he had to do was hang out and he’d get paid.
The problem? My friend was making them look bad.
Texas is making California look bad.
‘“In the end, it’s all about the cost of doing business, and the cost of doing business is just lower in Texas,” said John Diamond, an economist at Rice University in Houston.’
Competitive deregulation in financial services is a thing, too. And it doesn’t have to mean imposing risk on the system.
‘Several global financial centres, including London, Hong Kong and Singapore, are overseen by financial regulators with an objective on competitiveness and growth. In a recent staff working paper, we develop a theoretical model to show that some competitive deregulation can arise when several regulators are focused on growth, though not a ‘race-to-the-bottom’: regulators will not lower regulations to levels favoured by banks if the costs of financial instability are large. To maintain competitiveness and stability of the UK as a global financial centre, there is a need for a comprehensive strategy which takes into account both regulatory and non-regulatory measures. This may require coordination across multiple institutions.’
Less bureaucracy or less accountability?
Competitive deregulation comes to Europe.
‘Child labour, land grabbing, pollution — the EU’s supply chain law is intended to oblige companies to protect people and the environment. But despite years of democratic negotiations at European level, Commission President Ursula von der Leyen now wants to hollow it out in no time at all. The trigger is an unprecedented procedure to supposedly reduce bureaucracy. However, critics see this as a pretext for caving in to economic interests and lobby groups.’
How Elon Musk Executed His Takeover of the Federal Bureaucracy
The people who challenged Musk to follow-through on his takeover of Twitter may be the ultimate ones to blame (or thank) for DOGE.
‘Mr. Musk made clear that he saw the gutting of that bureaucracy as primarily a technology challenge. He told the party of around 20 that when he overhauled Twitter, the social media company that he bought in 2022 and later renamed X, the key was gaining access to the company’s servers.
‘Wouldn’t it be great, Mr. Musk offered, if he could have access to the computers of the federal government?
‘Just give him the passwords, he said jocularly, and he would make the government fit and trim.’
Elon Musk Comes Back Down to Earth
The DOGE correction of the past week makes the effort more sustainable.
‘The DOGE drama of the past week indicates he may be starting his descent.
‘This doesn’t mean that the billionaire entrepreneur’s work in Washington is anywhere near finished or that he doesn’t still exercise enormous influence over federal government personnel and President Trump. But — and this could partly redound to Musk’s benefit, in ways Andy McCarthy will explain below — the image of Elon Musk as a demigod Bob Slydell, a roving entity with plenary power to “fix the glitch” of anybody’s continued federal employment, has been cracked.’
Congressional Republicans Feeling the Heat on DOGE, Call for ‘Scalpel Not a Sledgehammer’
Republicans buy shoes, too.
‘“I just want to make sure our messaging is clear that we’re trying to be compassionate,” says Representative Rich McCormick (R., Ga.), a self-described “Calvin Coolidge fan” who supports DOGE’s mission and represents a deep-red district. “If you make this about the chainsaw and taking pictures and you think you’re only punishing Democrats, there’s going to be some Republicans that lose some benefits too. There’s going to be Republicans that lose their job too.”
‘This Georgia Republican is being extra cautious, having been in the DOGE hot seat lately. Over the weekend, video snippets of a McCormick town hall went viral when a series of protesters lambasted the congressman in his home district over their alleged concerns with DOGE’s overreach. Excluded from many mainstream news reports were the details surrounding the protest organizer’s background: a self-described Democratic political activist and donor who later bragged about making headlines, as the Washington Free Beacon revealed.’
Bureaucracy of, by, and for the Smug
Regulatory power is legislative power, not executive power. Congress cannot delegate legislative power.
Why not reassign bureaucrats from the agencies to Congressional committees?
‘If anything saves our constitutional republic at this stage it will be Americans’ sheer unruliness, our unwillingness to sit still and be told what to do by people convinced that their scores on entrance exams (or, perhaps, on the squash court) entitle them to organize our lives for us.’