The Limits of Governing by "Easy Button"

And more from this week...

The thing about a chainsaw is that it’s really great for some tasks—say, chopping up a tree—and really bad for others—say, performing surgery. We don’t “support” or “oppose” chainsaws, we try to ensure that they are used appropriately. As Elon Musk and the “DOGE” wreak havoc across the federal government, polarizing everyone into “pro-” and “anti-” camps, we are mostly failing to draw these necessary distinctions between useful and harmful applications. So your one thing to read this week is the Wall Street Journal’s report, “DOGE Is Searching for Wasteful Spending. It Isn’t Hard to Find.”

The Journal dives deep alongside that great white whale of government “waste, fraud, and abuse” known as “improper payments.” People with no experience in public finance are often appalled to learn the federal government makes more than $100 billion in improper payments each year. Some believe they have come across some extraordinary, untapped opportunity. The payments are improper, after all! If we stopped making them, look how much we would save.

But improper payments do not persist because no one has thought to stop them. They persist, despite waves of legislation to document and reduce them, and concerted efforts to recover as much as possible after the fact, because a federal government that spends more than $6 trillion annually, often through programs that require self-reporting of eligibility or run through partnerships with state agencies and private providers, is sometimes going to make payments that it should not. Reducing them is hard and comes with costs—fewer improper payments, for instance, often means more inadvertent refusals of proper payment. You know who is really good at avoiding improper payments? Your health insurance company.

A Department of Government Efficiency dedicated to the hard work of making government more efficient could make headway on this problem. But it would take time and effort, the development of expertise, and collaboration with a whole host of parties with interests of their own. (It might also help if the Trump administration had not just fired the Inspectors General of most of the agencies where the payments occur.) Likewise, enormous opportunities do exist to reduce federal headcount. A Department of Government Efficiency focused on reducing headcount could do that. But doing it in a way that actually made the government more efficient would require knowing what work does need to be done in various agencies, who is doing what, and who is or is not doing it well.

Instead, DOGE is haphazardly cutting expenditures without even knowing what they are. My favorite example is cancelling the legal research tool used by the Securities and Exchange Commission, seemingly because it is labeled similarly to a newswire service. Suffice to say that will not make the SEC more efficient. As for actual savings, those are not materializing. DOGE attempted to post a rundown of $16 billion in savings achieved, but the largest item on the list, an $8 billion contract, turned out to be an $8 million contract that cost roughly $1 million per year.

To reduce headcount, DOGE is firing just about anyone with a “provisional” status—typically newer hires who are thus easiest to fire—which is the opposite of an efficient approach. This will reportedly include most staff hired with expertise in artificial intelligence and those working to rebuild domestic semiconductor manufacturing capacity. The White House just announced it is cancelling the Presidential Management Fellows Program, which is specifically designed as a pipeline for the kind of high-quality talent that a more efficient federal government should want to attract.

One peculiar line of argument holds that all this should be celebrated for its disruptive effect, perhaps because it helps to reassert control of the bureaucracy, shoves opponents off balance, puts bad actors on notice, and so on. But none of that is in evidence. If anything, the frequent missteps have weakened political support, armed opponents with ammunition, and reduced the likelihood of durable progress. That so many actions have been reversed, employees rehired, and estimates restated further suggests sloppiness rather than a plan. And the closer the process gets to more sensitive and popular functions of the government, the greater the risk of a more catastrophic backfire.

I think something much simpler is probably going on, which is a fundamental failure to distinguish between easy problems and hard ones. Some challenges are the straightforward result of policy choices. If you want a different result, just make a different choice. Let’s say the federal government is spending enormous amounts on foreign aid and in fact channeling much of it to progressive NGOs, and you want to cancel all that. You can in fact do it. There will be disruption and controversy, but if you’re willing to stomach all that, there’s an “easy button” that you can press. Let’s say agencies are putting employees through DEI trainings and you want them to stop. Press the button.

Let’s even say millions of illegal immigrants are pouring over the border because the prior administration has made it national policy to welcome them in. Yes, the media and the experts will insist this is an intractable and multifaceted problem driven by forces like climate change. But you really can just change the policy. And if it was the policy creating the problem, changing it will indeed deliver border security overnight. Many people will look extremely foolish. You will have a major victory to savor.

Identifying such situations, and pushing the button with gusto, has been one of the keys to President Trump’s broad appeal. Where most political figures worry about the downsides and the blowback and lean toward half measures and gradual phasedowns and compromises, Trump relishes tuning that all out. You don’t have to agree with his objectives. You don’t have to agree with the cost-benefit analysis that leads him to choose the unflinching approach. But you do have to concede the internal coherence—there is a plan, and it is accomplishing what he wants it to accomplish. Some parts of what DOGE is doing fall clearly within this framework, and Trump’s supporters are understandably delighted.

But other parts don’t. Many of the most intractable problems in government are hard problems. They are not just a matter of choosing policy, but rather depend upon reforming process or grappling with painful tradeoffs. We don’t have improper payments because some president issued an executive order encouraging them, and now we need a new executive order to reverse it. We have them despite everyone’s desire to end them. We have an enormous budget deficit because we have committed to providing generous health and retirement benefits to hundreds of millions of Americans but not to raising the tax revenue necessary to cover the cost, and changing either side of that equation is politically unpopular.

The mistake that some in the administration seem to be making, with DOGE a prime example, is to assume that all problems are easy problems, solvable by edict, or by just doing the opposite of what has been done before. Insofar as the constraints are technical, the strategy is likely to make things worse. Insofar as there are tradeoffs, disregarding them is going to waste enormous amounts of political capital.

This is why most administrations proceed down parallel tracks: a “day one” agenda of policy changes that can be achieved by executive order, and a “first hundred days” agenda that anticipates time for appointees to be confirmed, plans to be created and vetted, and balls to start rolling. Compounding excess faith in the easy button, the many false starts and stalled initiatives of the first Trump term have further heightened the pressure to make everything a “day one” or at least “month one” project, and the result has been both rapid positive progress in the areas amenable to it and a widening morass elsewhere. (One notable exception is the Department of Defense, where Secretary Pete Hegseth has directed the Pentagon to identify 8% in achievable savings over each of the next five years that could be reallocated toward new defense priorities. That’s how strategic budgeting and improved efficiency is supposed to look.)

The good news is that Trump has historically shown himself highly attuned to what is politically achievable and what is politically unwise, and he seems unlikely to allow DOGE to run wild beyond the point of diminishing returns. Musk has shown no such judgment. Which likely puts an expiration date on his time in the president’s favor.

WHAT ELSE SHOULD YOU BE READING?

Further from the spotlight, on a number of fronts, the administration has been embracing constructive policies that confirm sharp breaks from the Old Right orthodoxy.

One good example:

Trump Administration Keeps Biden’s Tough Rules for Merger Reviews | Eamon Javers, CNBC

New FTC chair Andrew Ferguson announced that he will retain the Biden administration’s strict guidelines for merger review. “The decision is a victory for the populist, anticorporate wing of the Trump administration, embodied by Vice President JD Vance. Vance frequently found common ground with Biden’s FTC chair Lina Khan, who made antitrust enforcement a centerpiece of the agency’s mission. The announcement is also a blow to Wall Street, which had been eagerly anticipating an uptick in corporate consolidation under a loosened framework for evaluating proposed mergers.”

Sad Trombone for venture capitalist Jason Calacanis, known for thoughtful insights like, “Until we balance the budget, I’m literally for randomly cutting everything by 10-35% and seeing what happens.” Jason asked Vice President Vance to “please consider what American exceptionalism would look like if we let all the companies with a market cap under $500B merge and acquire each other,” which is a strange conception of American exceptionalism to say the least. He also warned Lina Khan, “you’re costing Americans jobs and stunting the returns to people’s retirement accounts and the returns to important endowments that get their best returns from VC investments,” which perhaps gets closer to his true interest in the matter.

But, as Dan Gray noted in Was Lina Khan to Blame for the Tech M&A Slowdown?, “there’s very little reason to think Lina Khan’s tenure at the FTC had much to do with the M&A slowdown… (e.g. 2023 was the second most active M&A year for SaaS since 2014). … Khan is a convenient scapegoat for the lack of liquidity in VC, but venture capital's own greed and short-sightedness is clearly the main culprit.”

Microsoft’s AGI Plan & Quantum Breakthrough | Dwarkesh Patel, Dwarkesh Podcast

This was a fantastic interview of Microsoft CEO Satya Nadella. I particularly appreciated this point: “Us self-claiming some AGI milestone, that’s just nonsensical benchmark hacking. The real benchmark is, is the world growing at 10%?” This is a great point. If AI is actually replicating human capabilities, it will show up quickly and dramatically in the economic data. When someone tells you AGI is right around the corner, just ask them what’s their prediction for GDP growth over the next five years. If they stick to their guns, you can make a lot of money betting them on it!

Xi Is Making the World Pay for China’s Mistakes | Brad Stetser, New York Times

Brad is second to none in data-driven analyses of trade trends, and here he tells a compelling story of just how wildly China has been messing with the global economy. “Over the past six years, China’s imports of such goods increased by an average of only $15 billion a year, essentially no change at all when inflation is taken into account. Its manufactured exports, on the other hand, have grown more than 10 times as fast, by over $150 billion a year.” I would quibble only with his conclusion, which draws the kind of false equivalence people too often resort to when worried they might otherwise seem to be acknowledging that Trump has a point: “Mr. Xi has a one-way vision of trade. Mr. Trump often sounds as if he doesn’t believe in any trade.” Trump never sounds like he doesn’t believe in any trade; he sounds like he believes in balanced trade, which is what the economists who originally built the case for trade believed in too.

Vice President J.D. Vance’s Speech at the Munich Security Conference

You’ve undoubtedly read a lot about the speech. You’re probably already expounding on it thoughtfully at cocktail parties. But it really is worth reading the whole thing.

Reindustrialise: Building Capacity, Security, and Prosperity in a De-globalising World | Austin Bishop & Blake Seitz, ARC

An interesting paper from good friends of American Compass, made more interesting by its publisher: the Alliance for Responsible Citizenship. ARC tends toward a more orthodox, Old Right, dare-I-say market fundamentalist approach to economic issues, so there’s a lot to be learned from how the authors build a case within that orientation for the industrial policy, trade intervention, and so on necessary to in fact rebuild manufacturing in countries like the United States and the United Kingdom.

AND THIS WEEK @COMMONPLC

Meet the Post-Trump, Working-Class GOP | Ethan Dodd

Pennsylvania’s blue-collar voters went for Trump, but whether they stick with the GOP will depend on what the party does next.

The German Question Returns | Mike Lind

As Germans head to the polls, taking stock of an economic system coming apart, and its consequences.

A Time for Choosing | Henry Olsen

Confronting America’s security, fiscal, and aging crises will require making hard trade-offs.

The Promise of Lori Chavez-DeRemer | Daniel Kishi

The Republican Party needs to rethink its relationship with workers.

Karl Zinsmeister, the chief domestic policy advisor for President George W. Bush, joined me on the American Compass Podcast to discuss the 2000s-era Republican Party, the failures of the Reagan coalition, and what populism really means anyway.

As always, much more at commonplace.org, follow us us on X @commonplc, and subscribe for regular articles directly in your inbox.

And of course, enjoy the weekend!