What If?

What will it mean if Musk and Ramaswamy cannot overcome the wall of opposition?

Bringing Elon to a knife fight

Diagnosis of the problem that DOGE targets is not an issue. Much of the issues are known. We’ve known for a long time.

The remarkable thing is that this is the first time there has been the political will to fix it.

Everyone in DC focuses on the sexy bits like policy. Implementation is an assumption. Everyone wants to be McKinsey. Nobody wants to be Joe the Plumber.

DOGE may be insufficient considering the forces arrayed in opposition, not least of which are the incumbent vendors and third-parties in the broader ecosystem.

What if Elon and Vivek cannot make any progress? What does that mean?

This is an interesting article from Jennifer Pahlka, someone who has been at the heart of trying to reform the bureaucracy from within.

‘I am guessing that those most worried that DOGE will succeed have never tried their hand at reforming government. It’s hard. But easier, you say, with no respect for the law, and the DOGE team will be unencumbered by such details. But that’s not true. The lawsuits will come. A lot of the government tech community is skipping the hand wringing; they've basically just grabbed a bag of popcorn and are watching in real time as Elon and Vivek learn all the things they’ve known, lived, and absolutely hated for their entire time in public service. They don’t see DOGE as their savior, but they are feeling vindicated after years of shouting into the void. I am struck by how different the tone of the DOGE conversation is between political leaders on the left and the people who’ve been fighting in the implementation trenches. One group is terrified they’ll succeed. The other is starting to ask a surprising question (or at least I am): What if even billionaires can’t disrupt the system we have built?’

EU Forced Labour Regulation Is Now Adopted: What Does It Mean?

Nobody wants to buy products made with forced labor. Nobody decent, anyway.

This new rule from the EU banning such things suggests a couple of questions, though.

Was it legal to sell products made with forced labor before this rule?

How feasible is this to enforce given the low visibility buyers have into their supply chains? Often, there is a prime contractor. They have a subcontractor. Who has subcontractors. And so on.

The prime is lucky if they can see one or two levels below, most of the time.

Consider the Hezbollah pager setup. They thought they were buying from Taiwan when the Taiwanese had subcontracted to Israelis pretending to be Hungarian. That was one level.

Isn’t this rule just the kind of well-intentioned, unnecessary juvenile exercise in forced compliance that will accomplish nothing on the margin other than to declare our good intentions?

‘The Regulation follows a trend in EU regulations emphasizing accountability across the supply chain of economic operators. It also follows legislation in other jurisdictions that target allegations of forced labour practices, like the UFLPA.’

The EU Enacts New ESG Ratings Regulation to Boost Transparency and Promote Sustainable Finance

The EU acknowledges that prior ESG efforts were vulnerable to greenwashing. Water is wet, after all.

Apparently, regulating the regulators is the way to go.

Why doesn’t the EU just determine ESG ratings themselves?

‘Previously, ESG rating activities lacked EU-wide regulation, leading to discrepancies and greenwashing risks. The new regulation establishes harmonised standards for quality, reliability, and transparency, tackles conflicts of interest, and improves methodology disclosures.’

Argentine trade union bureaucracy deepens partnership with fascist President Javier Milei

Argentina has many unions, but the largest one just capitulated to the reality of Milei’s juggernaut of reform.

Will we see similar movement in developed markets?

‘Notable in their absence were unions represented by the General Workers Confederation (Confederación Gerneral de los Trabajadores-CGT), Argentina’s oldest and largest labor organization.

‘The absence of the CGT unions was in keeping with a decision made 16 days prior to the December 5 protests. On November 19, the top CGT bureaucrats declared a “truce” with the Milei administration, postponing all strikes or protests at least until 2025, and canceling all talk of a “strategy of struggle” (plan de lucha). ‘

Wisconsin's Collectivist Bureaucracy: Part I

We don’t talk about the integration of state and federal bureaucracies often enough.

Money is the seal.

This means Musk and Ramaswamy can actually have a cascading reform impact on the states when they cut the funding for these fiscal transfers.

‘It’s almost as bad on the state level. These days state bureaucracies are more integrated with their federal counterparts than with the elected state polities to which they belong. Throughout the country, to shine a light on just one sector, the federal Department of Transportation (DOT) issues directives for state departments of transportation to use in construction projects, and state bureaucrats happily oblige. They funnel dividends and rewards to various private interests who sustain them and partner with them. That’s where unions come in, but it’s also where crony capitalists come in. And thus is formed a united front of federal and state agencies aligned with unions and sidekick crony businesses looking to line their pockets, and in so doing they force local communities to accept construction projects designed to kill them.

‘The DOT delivers federal money in return for federally prescribed transportation standards and formats: more bike paths and walking routes, whether they are needed or not, less vehicular ingress and egress. They eliminate access points to restrict highway entrances and to choke small businesses, to cite a common practice, and they channel traffic through small towns quickly, making it difficult to slow down, much less stop for a visit.

‘That’s just the tip of the iceberg. Amazingly, federal and state agencies form a co-functional but unelected government, from top to bottom, completely separate from elected state and local governments. As a result, the administrative state is virtually structured and closed off to competition or substantive public participation. It all adds up to a vertically integrated and parallel but unelected government that increasingly rules with an iron fist.’

Washington bureaucrats race for exit as Trump vows to drain ‘swamp’

Fool me once, shame on you. Fool me twice, shame on me.

Civil servants know that the jig is up, this time. The priestly caste has been exposed.

Now, they’re running for the hills. You can’t fire me. I quit.

‘James Sherk, a special assistant to the president for domestic policy throughout Trump’s first term, said senior officials revealed numerous examples of policies being hampered by middle-ranking employees.

‘“Most career federal employees honourably serve the American people, diligently following orders and implementing policies of elected officials. However, a significant minority does not,” he wrote in a paper, Tales from the Swamp: How federal bureaucrats resisted President Trump.

‘He claimed that staff at the Department of Education, which Trump has pledged to close down, “would either produce legally unusable draft regulations that would never withstand judicial review, or drafts that significantly diverged from the department’s policy goals”.’

Hold On, Elon and Vivek: Firing Federal Bureaucrats Isn’t the Solution

Francis “End of History” Fukuyama has thoughts.

The core problem here that he dances around in a politically correct fashion is that government hasn’t attracted the right kind of talent in years. They aren’t smart enough. They aren’t ambitious enough. They aren’t sophisticated enough.

The government has an adverse selection problem in which middling, mediocre, otherwise less employable people join for the benefits and the work conditions and the status. Of course, there are brilliant ones, too. But they get chewed up or embittered. They’re overwhelmed. They leave to become contractors. At least they get paid.

Musk and Ramaswamy need to figure out how to attract the right people, even as they seek to cut the dead wood.

‘Federal agencies need more discretion, not less. Many of the rules they follow are not statutory, and one useful function that DOGE could perform is to identify and eliminate the most outdated and inefficient of them. As Philip Howard, the author of many books on simplifying government and founder of the nonpartisan group Common Good, has pointed out over the years, bureaucrats need more freedom to use their own good judgment regarding the implementation of policy, rather than being forced to follow rules.

‘Today a bureaucrat’s career can end if he or she violates a rule. By contrast, few are punished for failing to achieve real-world results. As in the private sector, we need to reward government officials who take initiative to solve problems.

‘Second, give the bureaucracy more capacity.

The leaders of DOGE seem to believe that the federal bureaucracy is massively overstaffed, with lazy bureaucrats sitting at home in front of their computer screens doing nothing.

The truth of the matter is the opposite: There are the same number of full-time civil servants today—about 2.3 million—as there were back in 1969, despite the fact that the federal government distributes nearly five times as much money as it did more than 50 years ago.

‘The federal government doesn’t need fewer bureaucrats; it needs more talented and ambitious ones. Only 7% of the federal workforce is under the age of 30, while 14% are over 60. This is not the right age balance for a government that needs to keep up with the latest changes in technology like artificial intelligence. You are not going to attract smart, creative young people to the civil service if you aim to rule them by fear and arbitrary firings.

‘Third, drastically cut back on contracting.

‘To make up for its personnel shortfall, the federal government now relies heavily on contractors, and the work of many bureaucrats is simply to manage the contractors they hire. Much of the implementation of federal policies is thus handed off to private actors who don’t have the same degree of accountability as federal employees.

‘Outsourcing was at the root of the initial fiasco of the healthcare.gov website that was supposed to be the centerpiece of the Obama administration’s Affordable Care Act. Outsourcing too often means that the feedback loop among policymakers, those who implement policy and ordinary citizens is broken. Musk and Ramaswamy praise the efficiency of the private sector, but outsourcing frequently makes government less accountable.’