The Hard Part
It's one thing to say you're going to do something. It's another thing to execute well.
Elon and Vivek Can Make Government Work Again
Make American government nimble again.
Make American government accountable again.
‘The greatest gain of reform would come from scrapping the rusty machinery that grinds public choices through years of meetings and box-checking. What the machine generally spits out are weak compromises, and the inefficiency and waste are notorious. Procurement of defense and information-technology systems under Federal Acquisition Regulations, for example, is laughably ineffective and costly. RAND’s Michael Mazarr has documented how defense procurement is “plagued with dozens of program requirements that impose years of delay.” Current cost overruns are estimated at half a trillion dollars.’
How Elon Musk could disrupt Washington
The DC loop has opinions about what Musk and Ramaswamy should do.
‘Pahlka laid out a few straightforward principles for bureaucratic reform, saying “you need to be able to hire and retain the right people, which is going to require civil service reform, reduce their burdens and focus them on outcomes, which requires right-sizing procedures and cleaning up policy and regulatory crust, and to invest in digital and data infrastructure and close the loop between policy and implementation.”’
How quickly could the Trump administration shrink the federal workforce?
Hope springs eternal.
Having been stymied by the civil service during his first administration, the incoming President doesn’t intend to be bogged down again.
One interesting argument is that mere saber rattling from the likes of Musk and Ramaswamy will be sufficient to cow the civil service into acquiescing to Trump’s policy imperative.
This is wishful thinking.
‘Just putting the federal workforce on notice, he says, will go far in getting the administration where it wants to go.’
Trump's Plan to Cut Federal Bureaucracy? Force Bureaucrats Back to Office
It’s not clear how you can mandate a return-to-work policy for civil servants. They’re unionized. They have significant protections in place. They will fight it.
It might be easier to move federal agencies out of DC. Move the Department of Agriculture to Kansas. Move the Department of Commerce of Chicago. Move the Department of Transportation to Arkansas.
I wouldn’t want to be long DC real estate.
‘The former Fox News host said those working in the federal government had a stronger tenure than those at Ivy League schools, making it difficult to fire them.
‘At last estimates, about 2.2 million people worked across a variety of agencies, including the Department of Education, Homeland Security and the Federal Reserve.
‘"If you literally just mandated that they have to show up for work, Monday through Friday, a radical idea, a good number of them would quit that way," Ramaswamy said, claiming that about 25 percent of the workforce would be lost this way without needing to fire anyone.’
'Apprehensive and fearful': Federal workers await a dismantling under Trump
Without any apparent irony, bureaucrats complain about bureaucracy imposed on them in Trump’s first administration, ostensibly to stifle their good work.
‘She describes changes that hampered their work. For example, lawyers could no longer directly ask companies about the pollutants they were discharging. Such information requests had to go through headquarters instead of being issued by the regional offices.
‘"When you put an additional bureaucratic roadblock in, and you have to submit something like that to headquarters, they can sit on it for a really long time," she says. "And then you're not enforcing the law."’
Newsom Raises Gas Prices Again
The tapestry of economic distortions that is California continues apace.
Pity the poor who will have to pay higher gasoline prices.
‘Here’s how it works. Under the program, electric utilities, biofuel producers, and hydrogen and electric vehicle charging companies receive credits they can sell to refiners. Utilities steer the proceeds from the credit sales to EV subsidies. One of the program’s biggest beneficiaries has been dairy farms that capture methane from manure. Some make more money from selling credits than milk.
‘However, credit prices have recently fallen as more renewable producers and dairy farms chase subsidies. CARB frets that declining credit prices could make green investments uneconomic, so CARB is tightening its fuel standard to boost credit prices. The predictable result: Californians will pay more at the pump.
‘CARB last autumn predicted that its stricter standard would increase gas prices by 47 cents a gallon next year. Danny Cullenward of the University of Pennsylvania’s Kleinman Center for Energy Policy estimated prices could climb 65 cents a gallon in the near term and by 85 cents by 2030. Californians will soon miss the days when gas cost $4.50 a gallon.’
Gary Gensler’s Ambitious SEC Agenda Could Be Near Its End
The intersection between ESG and investment disclosure is on hold for now, if not permanently.
Do investors really need to know climate-related information about companies to invest intelligently?
How much did Gensler’s regulatory activities inhibit companies from issuing public securities? How many distributed ledger technology companies moved offshore because of him? What was the net benefit to the American investor from his period in office?
‘Gensler’s push for new climate disclosure rules, strong cryptocurrency enforcement and a focus on environmental, social and corporate-governance issues could be scaled back—or simply end—under a new SEC leader of Trump’s choosing.
‘Gensler’s Senate-approved term runs to 2026, but SEC leaders customarily resign when a new administration is elected, and he hasn’t indicated in public appearances that he would buck the norm.’
The Federal Workforce Boom Under Biden
It’s no wonder the regulatory burden has exploded over the past four years. The explosive growth in federal civil service employment is driving.
They didn’t get dressed up for nothing.
‘Since January 2021, the federal workforce has increased by about 120,800 employees. Washington has added as many workers in the last two years as during the prior 13. One reason is Veterans Affairs hospitals, which have staffed up to treat aging veterans. But employment has ballooned across nearly the entire government, as quarterly data from the Office of Personnel Management show.
‘Between December 2020 and March 2024 (the latest data), employment has increased sharply at the Environmental Protection Agency (9.4%), Agriculture Department (9.6%), Department of Housing and Urban Development (10.7%), Internal Revenue Service (14%), Energy Department (14.8%), State Department (18.4%) and Health and Human Services (18.7%).
‘Independent agencies have also mushroomed, including the Consumer Financial Protection Bureau (9.8%), Securities and Exchange Commission (11.1%) and Federal Trade Commission (11.6%). Even the White House Council of Economic Advisers has increased by a third during the Biden Presidency, not that economic policy has improved. A rare Biden-era exception is Defense and the armed forces (-1.2%), despite an increasingly dangerous world.’
State governments may increase focus on workplace regulation during second Trump administration
If the federal government succeeds in reducing its regulatory burden, don’t be surprised if the states step up to fill the void.
‘State governments may increase their focus on workforce regulation as a result.
‘“Employers will be surprised at how many states step up to enact their own statutes to provide what they perceive to be protections for the workplace that the federal government is stepping away from or has disavowed,” she said.’
Reserve Optimism For Financial Regulation Under Trump 2.0
For all the optimism about regulatory reform, all of it may be for naught if it isn’t entrenched in legislation.
‘To get lasting change, though, the administration and Congress will have to work together to do much more than they did during Trump 1.0. In 2017, for instance, Congress and the first Trump administration decided to focus on tax reform rather than financial regulatory reform. No major changes were implemented, and now the U.S. framework is even further from ideal.
‘Yes, legislative changes will be difficult to achieve, but they are sorely needed. Without them, future administrations can easily reverse course again.’