Lune de Miel
If the economy rolls over, the honeymoon is over.
They’re in a race to make DOGE happen because the blowback from the job cuts and the economic correction are going to leave a hickey for the GOP at the midterms.
It’s not a coincidence that July 4, 2026 is the due date for DOGE completion.
‘Apollo Investments: DOGE-related layoffs could potentially be closer to 1 million including contractors. Will push jobless claims higher over the coming weeks, which has consequences for rates, equities and credit. Risk to unemployment in Virginia, Maryland and DC.
Trump gets middling grades on Americans' top issues, Reuters/Ipsos poll finds
DOGE needs to convince people that this will lead to lower inflation and more tangible progress.
Everyone loves a winner.
‘Americans do consider Trump's push to downsize government important, but are divided mostly along party lines on whether they support it. Sixty percent of respondents said the so-called Department of Government Efficiency task force for cutting federal spending, which is led by Elon Musk, would influence their vote in the next federal elections in 2026, when Democrats will seek to win back control of Congress. But only 42% of the country supports the endeavor and 53% oppose it.
‘"He's just rushing a little bit. I think the whole thing with the DOGE is being rushed a little bit," said Gerald Dunn, a Republican 66-year-old martial arts instructor from Staatsburg, in New York State's Hudson Valley. "I like what he is doing but I think a lot of what he says is just BS. When he starts talking about annexing Greenland and annexing Canada, you know that's just smoke."’
Warning signs for Trump in new polling
Also, it’s easy to hate Musk. He comes across as an angry, manic weirdo (to some). Personally, I like him.
DOGE needs a constant stream of common sense success otherwise Musk is sitting on top of a melting ice cube in the middle of the Amazon.
‘One reason for the erosion of support: a slight majority of respondents in both surveys said Trump has overstepped his presidential power in his attempts to reshape the federal government driven by tech billionaire Elon Musk. Many of Trump’s most controversial early initiatives, including a sweeping spending freeze, have been blocked in court thus far, but the new administration has still made waves with layoffs of federal workers, cuts to federal contracts and a flood of executive orders.
‘Those activities haven’t been popular, the new polling found. In the Post survey, for example, 58 percent of respondents opposed laying off large numbers of federal workers. And Musk, Trump’s most high-profile adviser, is not getting good marks either: Just 34 percent of respondents in the Post poll approved of Musk’s role in the federal government, while 54 percent of respondents in the CNN poll said it was bad for Trump to have given the SpaceX CEO a prominent role in his administration.’
Don’t underestimate the partisanship of DOGE politics.
‘DOGE is kind of a Rorschach blot for a lot of people. The right thinks it’s being effective, the left thinks it’s not. The interesting thing is that Trump is putting the left into a position where it’s arguing against something that is common sense—cutting red tape—which is never a good position to be in politics. Let me tell you something that I think Elon Musk has already told you—you could cut government headcount by 70% and it would not affect operations at all. I firmly believe that. You’ve probably noticed that rush hour in D.C. starts at 2:30pm. Elon Musk has demonstrated that he is pretty good at cutting useless people and getting the remaining people to work harder. I am completely in support of this. There might be some cases where cutting government headcount by 70% would severely impact operations. Well, I hope that happens to the IRS. The IRS, for its part, needs to be modernized. The IRS Service Center in Charlotte has piles and piles of paper returns stacked up all over the place.
‘I think DOGE sunsets in 2026. This is not something that can be accomplished in two years. You could cut for a decade and never get down to tag ends. But you can do a lot. And we haven’t even talked about the fact that a sizable portion of the federal workforce went home during the pandemic and never came back. I know some people in Canadian politics, and I know that Trudeau has massively expanded the bureaucracy. There are people in Ottawa who make $100,000 a year for the government, don’t work, and have a second job. The same thing is going on here.’
DOGE Claims It Has Saved Billions. See Where.
The Wall Street Journal is tracking DOGE cost cutting.
Are we cutting fat or muscle or bone or all of the above?
‘Research-focused agencies were among the top targets for cuts, including the Education Department and the Department of Health and Human Services, where DOGE terminated contracts costing the government more than $900 million last year.
‘DOGE terminated more than 60 Health and Human Services contracts including a clinical evaluation of an Alzheimer’s and traumatic brain injury drug and a study of smokers with chronic lung disease. DOGE described these as “administrative expenses.”’
Amundi CIO says Donald Trump’s move to rein in regulators is a ‘big mistake’
Trust in the US economy will be a consequence of performance, not regulation. The US has enjoyed (endured?) plenty of regulation in place for decades but we still suffered through the corporate governance scandals of the early 2000s (Tyco, anyone?), the Global Financial Crisis, and the mini-regional crisis around Silicon Valley Bank.
If the heavy hand of regulation was, in fact, dead, and markets still endured, then perhaps a lighter touch has the potential to be more effective (in making regulators nimbler in both anticipation and response).
There are those who feel that US capital markets are attractive because of their regulation. By that logic, Paris and Frankfurt should be dominant financial centers.
‘Donald Trump’s move to tighten his grip on independent US watchdogs is “a big, big mistake” that risks eroding trust in the world’s biggest economy, Europe’s largest asset manager has warned.
‘The Trump administration has pushed for greater control of regulators, signing an executive order late on Tuesday that “reins in independent agencies” and requires them to submit draft regulations for review.’
A DOGE-Driven Overhaul Could Improve the Education Bureaucracy
What’s the Return on Government?
‘Contractors across the nation view DOGE’s actions as catastrophic, and they are mobilizing to overturn the cancellations. That’s natural and reflects how they’ve done business for decades. But recipients of taxpayer dollars must embrace the new reality: Citizens want to see good returns — indeed, any returns — on their taxes; politicians now seem to agree.’
Federal Agencies Push Back on Elon Musk’s ‘What Did You Do Last Week?’ Email
Bureaucracies are about turf. Now that the Cabinet is in place, we’ll see more internecine conflict in the sense that they will neuter each other’s efforts, taking up time and space and energy that should be devoted toreform.
‘Musk over the weekend, in a post on X, said that “all federal employees will shortly receive an email requesting to understand what they got done last week. Failure to respond will be taken as a resignation.”
‘The email, which asked “What did you do last week?” in the subject line, told federal workers to respond by 11:59 p.m. Monday with a list of “5 bullets of what you accomplished last week.” The note didn’t say that nonresponses would be considered resignations.
‘Musk’s moves have rattled career government employees for weeks, but the Saturday email appeared to prompt the most push back so far by other top administration officials. Perhaps most prominently, Federal Bureau of Investigation Director Kash Patel told employees to “pause any response” to Musk’s note.’
The bureaucracy should want the public to know what they’re doing because of all the public good it creates.
It tells us much when they block their politically elected overlords.
‘Still, one ought not to let the perfect be the enemy of the good. The unresponsiveness of the bureaucracy is one of the biggest threats to our constitutional order. As a result of congressional abdication, presidential ambition, and the progressive movement’s long march through the institutions, conservative presidents are routinely saddled with a civil service that, with the encouragement of the press and much of the legal academy, has come to regard itself as an independent check on the White House. DOGE cannot solve this problem alone, but, providing that it works within the limits of its legitimate power, it can make itself extremely useful to those who desire reform. By ensuring that federal agencies are staying within their legal bounds, by shining a light on spending and policymaking that would never have got through Congress or been consented to by the voters, and by removing rogue staff whose intention is to make trouble for their elected boss, DOGE can strike a blow against the extra-constitutional “fourth branch” that President Trump has so often promised to curtail. Godspeed.’
Why Trump Is So Threatening to Permanent Bureaucracy
If Musk can succeed where everyone else has failed, the game will be entirely different going forward. This is why the political opposition to DOGE must be relentless and intense.
‘And yes, the president and DOGE should be careful and systematic. But they need to be tough and persistent, too. The permanent bureaucracy has made itself hard to penetrate and change because it really, really doesn’t want to be penetrated and changed. Recently, a group of former Obama aides who appeared on the podcast Pod Save America discussed how hard change can be. “We all know that government is slow,” said former Obama speechwriter Jon Favreau. “We all know government can be inefficient. We all know that the bureaucracy can be bloated. We all worked in the White House. We tried to reorganize the government. We tried to find efficiency. It’s hard to do.”
‘Another former Obama speechwriter, Jon Lovett, addressed what Trump and Musk are doing and said, “Honestly, some of this is pretty annoying because it’s some of the stuff we should have done. We didn’t know you could do some of this.”’
Biden’s Mortgage ‘Relief’ Fuels Higher Housing Prices
It turns out that socializing consumer risk makes everything more expensive.
Go figure.
‘The problems began when the Obama administration eased underwriting standards by enabling more home buyers whose debt payments exceed 43% of income to qualify for government-backed loans. Such borrowers are risky because they might not be able to make payments if their income drops or expenses rise.
‘As home prices climbed, the Federal Housing Administration insured more loans to financially stretched borrowers with as little 3.5% down. No skin off lenders’ backs if borrowers later defaulted, since the mortgages were backed by the government.
‘…
‘Under the guise of Covid relief, the Biden administration masked the growing troubles in the housing market by paying off borrowers and mortgage servicers to prevent foreclosures. Of the 52,531 FHA loans last year that went seriously delinquent within their first year, only nine resulted in foreclosure.’