Leviathan
After the holiday, we'll talk about the Bear Case. The euphoria about DOGE will abate, if not soon, then perhaps in the first quarter. It's going to be a fight.
In This House, We’re Angry When Government Fails
This is glorious. Jennifer Pahlka talks about how civil service hiring is not about merit. Applicants game the system easily.
This process suggests a fundamental contempt for the mission of government.
‘You have a system that is supposed to hire people on the basis of merit. But when you interpret that very, very, very rigidly, what you do is say: OK, we don’t want to have people involved in selecting candidates who aren’t familiar with all the ways in which we try to reduce or eliminate, really, bias in the process. And so what we’ll do to hire civil servants is we will have human resources people screen their resumes and look for — and I’m not kidding you — exact matches in the language between the job description and what’s on their résumé.
‘Because that’s — if you’re taking things very literally — an indicator that they have the exact, right skills for the job. And then once you’ve found all the people who were great at cutting and pasting, then you send them all a self-assessment questionnaire. Because it’s safer to have them self-assess than it is to have, say, if it’s a programming job, have programmers interview them — where they might bring their own biases to the table.
‘And then you’ve down-selected twice on the basis of their ability to copy and paste, and then essentially lie about their skills. Because if you don’t put “master” on every single level of the self-assessment, you don’t make it to the next cut. And then we apply veterans preference, and that’s the certification that gets handed to the hiring managers.
‘And that is not consistent with merit. You really are then hiring people just who know how to work the system. That process that I just described, where we rely entirely on self-assessments, is how 90 percent of competitive jobs are done in federal government. Ninety percent we do not assess independently.’
Can Elon Musk teach an old DOGE new tricks?
Bureaucratic reform failed in Trump 1.0 because he was blocked through the Cabinet level.
Let’s see if a loyalist cabinet and Schedule F can clear the path.
‘It looks like Elon Musk really is going to try to fix the federal bureaucracy. I hope he succeeds. But as he and Vivek Ramaswamy settle in at the still somewhat undefined Department of Government Efficiency (humorously referred to as “DOGE”), there is something they need to fully grasp from the outset: the federal government really, really doesn’t want to be reformed. ‘
How Trump could disrupt the federal bureaucracy, from Elon Musk to Schedule F
Putting aside the assumptions that loyalists are not competent or that experts do not act to advance their own agendas, not those of the elected President, is it really correct to think that tons of really good civil servants will leave the government?
Where will they go?
‘If the Trump Administration implements Schedule F, what we’ll have is a mass exodus of extremely competent and professionalized civil servants that are truly the envy of the rest of the world. Our administrative apparatus is second to none in terms of the expertise that we have within our federal government.
‘Schedule F will do nothing but enable Trump to put loyalists into place, but those loyalists are chosen on the basis of loyalty, not on the basis of competence within specific policy domains. Given that the position of the Trump Administration towards much of the administrative state is in dismantling it, this also means that, in many respects, you’re going to have people put into place whose objectives fundamentally fly in the face of the mission orientation of those agencies.’
Biden, bureaucrats scramble to set roadblocks to Trump-proof federal government
The article makes it sound like the scene from a movie of a US embassy about to be overrun with frantic officials burning what they can.
Trump-proofing is an open secret in DC.
‘Democrats are racing against time to set bureaucratic “land mines” to blunt the impact of President-elect Donald Trump, scrambling to rush billions of dollars out the door, confirm judges and entrench climate and health policies before the incoming administration can dismantle all of it.
‘With less than two months until the president-elect takes over, Democrats are doing what they can to “Trump-proof” the government.
‘The White House is doling out billions in infrastructure and manufacturing spending, along with aid to Ukraine. Agencies are furiously issuing rules, and Senate Democrats are trying to expedite confirming Biden-appointed judges, gearing up for upcoming legal fights with the Trump administration.’
Not All Trump 2.0 Regulatory Initiatives Will Survive—Here’s Why
Will the DC Court of Appeals be the schoolboy with their finger in the dyke?
‘Trump’s record could weaken even further in the second term if his administration follows through on plans to downsize the federal workforce that are being spearheaded by Elon Musk and Vivek Ramaswamy, says Glenn Schwartz, director of energy policy at Rapidan Energy Group. Federal employees, after all, are the ones with the expertise to do the required analysis and procedure to make sure rules can be upheld in court, according to Schwartz.
‘Another potential limit: Most rules that are nationwide in scope—such as those under the Clean Air Act or the Clean Water Act—are under the jurisdiction of the District of Columbia Court of Appeals, according to Schwartz. Seven out of the 11 judges on the court are Democratic presidents’ appointees. While rulings can be appealed to the conservative Supreme Court, its docket space is limited.’
How Trump can cut the regulatory red tape to launch rockets — and companies
To get things in done in the bureaucracy, you need to know how to get around the bureaucracy.
Recondite, indeed.
‘Garver cut red tape, fast-tracked projects, cultivated relationships with private space companies, sourced funding and, most importantly, prevented regulatory retrenchment and agency domain capture in launch. To a rough approximation, Garver cleared private launch by working hard to, in some ways, ground NASA.
‘I am a Trump-appointed Republican regulator, but I have no compunctions about stealing good ideas wherever I find them. Our approach to the next chapter of space innovation should be Garveresque.
‘The current regulatory environment in which space startups seek to operate is, at this point, so full of regulatory requirements and permissioning that it is at least as recondite as some of the engineering needed to accomplish the actual work of satellite and launch operations. And it operates as a dragsail on the companies themselves. ‘
As Musk Assumes Deregulation Role, Tesla Racks Up Pollution Violations
Attacks on Musk are to be expected.
The troubling aspect of this report is that it suggests his plans lack sustainability.
‘Elon Musk made big promises to Wall Street about Tesla’s TSLA -1.33%decrease; red down pointing triangle new Model Y SUV in 2022, and the company was ramping up its production in Austin, Texas, when environmental problems threatened to derail his plans.
‘The door to the plant’s giant casting furnace, which melts metal to be molded into the Model Y’s parts, wouldn’t shut, spewing toxins into the air and raising temperatures for workers on the floor to as high as 100 degrees. Hazardous wastewater from production—containing paint, oil and other chemicals—was also flowing untreated into the city’s sewer, in violation of state guidelines.’
Musk, Ramaswamy Want Federal Workers in the Office Full Time. There’s a Hitch.
It’s going to be a dogfight.
‘Unions are gearing up to counter such efforts. The National Federation of Federal Employees, which represents 110,000 federal workers, has been consulting with its legal team, said the union’s national president, Randy Erwin. It also plans to lobby members of Congress and is holding town halls with members concerned about full-time office mandates and job cuts. ‘
Tenure is something for academics to protect their freedom of speech. Ironically, so many academics seem hell-bent on limiting freedom of speech.
Tenure can have perverse consequences.
Congress may be the one to cut the Gordian Knot here. The Stop Resistance Activities by Federal Employees Act would punish civil servants for obstructing lawful orders from administration officials.
‘The civil service was once a good idea, protecting everyday workers from politics and ensuring the continued day-to-day business of the government, like sorting mail and collecting tariffs. But today all sorts of bureaucrats, including many in policy organs like the National Security Council and the State Department, are now civil servants. Yet their protections against political interference have grown stronger, so that it is near impossible to fire them even for cause. Hence the “lifetime jobs” of legend most civil servants enjoy.
‘The problem: Some, even many, of those civil servants are able to stymie the president’s initiatives under cover of their employment protections. This time, Trump wants that to change. He wants to be able to fire some of these bureaucrats at will. They will not go easily, and the terms are tough; Vivek has vowed to cut 75 percent of the federal workforce. “This will send shockwaves through the system, and anyone involved in government waste, which is a lot of people,” Elon said.’
Can Trump Bust Up the Beltway?
Imagine what happens if the reformers start publishing documents showing Americans what the bureaucracy is like.
Shock and awe.
‘A reason these bureaucracies get away with so much is that so little sunlight reaches them. Notwithstanding recent concerns about “our democracy,” few reporters volunteer to build a career covering unglamorous federal agencies. It’s no surprise that, untended, Washington degraded into a swamp. Mr. Trump seems serious about pulling the plug. Like everything else about his presidency, we’ll see.’
McHenry to Prudential Regulators: The Era of Post-Financial Crisis Regulation is Over
It really was absurd to see banks fail for interest rate risk management reasons.
‘“The era of post-financial crisis regulation is over.
‘“For the past decade, your agencies have worked to push credit risk out of the banking system.
‘“At the same time, you completely missed the interest rate risks on bank balance sheets. This led to three of the largest bank failures in American history last year.
‘“Time and again, your agencies have also worked to stifle the beneficial role that innovation and technology play in our financial system.
‘“It’s clear our banking regulators, under Democrat leadership, have been busy fighting the last war.
‘“Your backward-looking approach to regulation has harmed our financial system, innovation, and consumers.’
Delta CEO says Trump administration’s approach to regulation could be ‘breath of fresh air’
Transportation has been disastrous for the last four years, not to mention the structural frailty of the air traffic control system. Bridge accidents, rail accidents, you name it. It’s hard to see how things don’t improve.
‘Other U.S. airline CEOs have expressed enthusiasm for the new Trump administration and urged incoming officials to make sure the industry has enough resources to improve air traffic control, which falls under the Federal Aviation Administration, and other key pieces of infrastructure.
‘“We have to invest in this industry,” American Airlines CEO Robert Isom said at the Skift Aviation Forum in Dallas last week. He said there is more work ahead to approve more visas so people can visit the U.S.’
Prescriptive regulation locks-in current techniques and stifles innovation.
‘Sausage making, once an artisan’s craft, has become a compliance exercise that perhaps only corporations can realistically manage. One can certainly see that regulations of this extensiveness lock-in production methods. Woe be to the person who wants to produce a thinner, fatter or less salty sausage let alone who tries to pioneer a new method of sausage making even if it tastes better or is safer. Is such prescriptive regulation the only way to maintain the safety of our sausages? Could not tort law, insurance, and a few simple rules substitute at lower cost and without stifling innovation?’
Managing Regulatory Review in the Biden Administration
Theoretically, centralized review of regulation should gum up the works and make regulation more difficult. That’s not necessarily true, in practice at least.
The argument here is that a centralized judge is an umpire, adjudicating conflicts between agencies and around interpretation.
‘In sum—contrary to the fears of some on the left and the hopes of some on the right—centralized review of regulation is not a force for delay or weakening of agency regulatory action. Instead, OIRA’s role in increasingly active management of the regulatory process saves time and makes an administration more effective by resolving disputes and ensuring that agencies do not act at cross-purposes.’