Nattering Nabobs
Nobody said it would be easy.
Can AI help DOGE slash government budgets? It’s complex.
There’s plenty of waste, fraud, and abuse to attack.
‘This is where AI comes in. The idea is to use predictive models to find providers that show the marks of questionable payment. “You want to look for providers who make a lot more money than everyone else, or providers who bill a specialty code that nobody else bills,” Leder-Luis says, naming just two of many anomalies the models might look for. In a 2024 study by Leder-Luis and colleagues, machine-learning models achieved an eightfold improvement over random selection in identifying suspicious hospitals.
‘The government does use some algorithms to do this already, but they’re vastly underutilized and miss clear-cut fraud cases, Leder-Luis says. Switching to a preventive model requires more than just a technological shift. Health-care fraud, like other fraud, is investigated by law enforcement under the current “pay and chase” paradigm. “A lot of the types of things that I’m suggesting require you to think more like a data scientist than like a cop,” Leder-Luis says.’
Show me the hack and I’ll show you the incentive. Show me the incentive and I’ll show you the outcomes.
Institute for Peace, indeed.
‘By Pounds’ estimation, what she calls an “Ouroboros of Interest,” an “infinite money hack,” is “the reason why our deficit spending is so out of control,” and it got a foothold under President Ronald Reagan with US-led initiatives to combat communism globally.
‘Instead of dissolving after the Soviet Union’s collapse, many of those organizations expanded their power and influence, acting as a revolving door for former congresspeople and Fortune 500 CEOs to siphon taxpayer money in the name of US foreign-policy interests while producing little of value in return, she says.
‘She points to one such NGO, the States United Democracy Center, with millions in the bank to lobby for foreign aid — but, she says, appears to have done nothing with the cash other than produce a Muppet video to “promote democracy.”
‘That’s part of an endemic pattern — “These groups almost always have the words ‘Security’ or ‘Democracy’ in their names,” Pounds says — of nonprofits sitting on taxpayer war chests and doing little but host the occasional conference or YouTube seminar that struggles to get 100 views online.‘
More than $220 million in contracts canceled by Musk and DOGE have been brought back
The New York Times decries the failure of DOGE to meet its cost savings targets overnight and for overreporting the cost savings it claims to have obtained so far. This article falls into the latter category. DOGE canceled contracts. Some of these cancellations needed to be reversed almost immediately because they were deemed critical.
The subtext here is that government cannot perform core functions without outside assistance.
How is that not the bigger story?
‘More than $220 million worth of contracts cancelled by Elon Musk’s Department of Government Efficiency (DOGE) have been brought back.
‘Forty-four of the government contracts ended by DOGE and Musk have been revived by federal agencies, according to a federal spending data review by The New York Times.’
Key data leadership roles are becoming vacant as DOGE pushes for access
Institutional knowledge is walking out the door at agencies characterized by what are likely to discover are poor documentation practices and diffusion of internal wisdom.
‘Leadership vacancies are creating upheaval within many agencies’ data ecosystems, according to a recent report from the nonprofit Data Foundation.
‘At least seventeen evaluation officers, chief data officers and statistical official positions across federal agencies were considered unoccupied — either without anyone in them or with another official "acting" to fill the role in a non-permanent basis — as of last week when the report was released. That number has gone up since then, said Nick Hart, the Data Foundation’s president and CEO.
‘“These vacancies, resulting from resignations, retirements, and reductions-in-force, create governance gaps that impact data quality and availability,” the report said.’
GSA expands review of ‘consulting’ contracts to 9 more companies
Moving to outcome-based pricing is going to put a significant dent in profitability at these “consulting” firms, one suspects.
‘A second group of nine companies has received letters from the General Services Administration asking them to participate in a review what the agency has identified as consulting contracts.
‘Those letters signed by Federal Acquisition Service Commissioner Josh Gruenbaum asks the companies to provide detailed input on their contracts, broken down by agency and category of services. The companies also need to provide pricing information.’
Has DOGE missed its opportunity?
Too late, we’re beginning to realize that Musk may not have been the best guy to do this.
Mistake #1: publicly state ambitious targets for cost cuts. This might work with Tesla stockholders who are willing to look through short-term and medium-term failures to accomplish as the aggression of a visionary. In DC, it’s a way to light your political capital on fire.
Mistake #2: a failure to plan is planning to fail. Move fast and break things may make sense when you’re experimenting with new ways of transforming the world. It turns out not to be the most effective way to perform brain surgery.
So, maybe, just maybe, we should be optimistic that Musk’s exit stage left is a great thing.
He has installed a great team. They’re wallflower nerds so the New York Times won’t even notice them. Now they can focus on deregulation, arguably the better target. We spend upwards of $3T annually to comply with onerous regulations. Cutting this down could be far more stimulative than any tax reform we’ve ever seen if they get this right.
It will happen in plain view, but it will be so boring that the Times and their fellow nattering nabobs will not pay attention.
‘But after the first 100 days it is clear that what should have been a carefully planned attack strategy has turned into a variety of scattershot “whack-a-mole” attempts at various agencies — exactly the approach that the federal bureaucracy was designed to fend off. For every “we found paper records stashed in a mine in Pennsylvania” story DOGE promulgated, the bureaucracy has come back with many more “you fired the wrong people,” or “you could expose every person’s social security data” to put DOGE back on their heels. What started with the promise that real change would happen has been beaten back by unnecessary mistakes that have eroded support for DOGE.
‘At this point, it seems that DOGE and the bureaucracy have reached a stalemate. And in a battle of attrition, smart money is on the bureaucracy. “Outwait, out play, and outlast” — to paraphrase the Survivor motto — is a major strength of the bureaucracy that has ended many attempts at transformation.’