Why cutting federal spending isn't like cutting Twitter spending
Elon Musk hasn't overcome a fundamental problem with the difference in incentives between for-profit and government managers.
When Elon Musk overpaid for Twitter, he immediately set about retrieving some of his money by firing a large majority of Twitter employees. This was widely predicted by his enemies to bring about the immediate collapse of Twitter.
But that famously didn’t happen. It turned out that with the help of some expert Twitter insiders who turned coats and became Musk loyalists (Musk’s authorized biographer Walter Isaacson focuses, for example, on engineer Ben San Souci as a Twitter worker who could explain to Musk’s team what could be safely cut and what couldn’t be), Twitter could survive with only about one-quarter as many employees … as long as they were the right quarter of the original workforce.
Hence, Musk is trying to apply the same method to federal government agencies.
It's not hard for outside buyers to make big cuts in employment in private industry (e.g., Twitter). Michael Milken’s gang made a fortune in the 1980s by buying random companies with junk bonds and ordering severe cuts. Sometimes the cuts were too severe and the junk bond holders took a bath, but other times Milken’s minions could persuade insiders to tell them what could be safely cut. How? Because the newcomer takeover artists could find good workers within the organization who will make the smart cuts you are too unfamiliar with the organization to figure out for yourself because you offer them a big bonus, a promotion, stock options, etc.
But how does that work with the federal civil service?
After all, you aren't allowed to do much of that with federal employees — the highest allowable general schedule salary for a federal civil servant in the expensive D.C. metro area is $195,200 — so it's hard to find experienced old-timers who understand exactly what is going on within their organization and who can make smart cuts and want to make smart cuts for you.
I mean, what’s in it for them? If you are a GS15, much of your compensation is in having a lot of people working for you. Why would you want to betray your loyal underlings by telling Musk which ones you could actually do without if he’s not going to make you substantially richer for it?
So, instead, if DOGE tells you to fire 500 people, the obvious step is sabotage: make DOGE look bad by firing the 500 people who do the work that to the press and public seems the most obviously valuable. After all, what does DOGE know about how things actually work in countless agencies. Not much.
It's almost as if DOGE wasn't carefully planned ahead of time to focus first on the worst examples of waste and fraud, which allows bureaucrats to easily sabotage its efforts with bad PR.
Trump often cancels DOGE's worst mistakes, but not until after DOGEists dream up why, actually, that wasn't a mistake, that was 4D chess.
These mistakes are probably not insoluble, but thought and political capital needs to be expended in changing the incentive structure to make cuts smarter, instead of DOGE continuing to flail and step on every upside-down rake of a PR fiasco that bureaucrats have carefully laid in its path:
The Saw Doctors are an Irish musical group that were at their height thirty years ago. There’s a line in one of their songs in which a virtuous young lady is described as “collecting for Concern on Christmas Eve.”
Concern was, and is, an Irish Charity and NGO, much devoted to the usual left-wing, nation destroying causes.
Last week, Concern laid off over 400 staffers from their operations around the world, including many in the Dublin equivalent of K Street. The reason, cuts to USAid.
The American taxpayer has been paying the salaries of at least 400 people in one tiny little Irish “charity” for God knows how long.
Thank God Donald Trump won the last election.
I suspect there is a very high ratio of BS jobs in government. A business has to make a bottom line so there is a constraint on hiring. The last thing a bureaucrat wants is to solve whatever problem is his remit. The best thing is if the problem gets worse; then he needs more budget and employees and a promotion. No doubt there are some few dedicated people, but the incentives all run the other way. With such a high ratio of useless bloat, it should be easy to identify the few who actually do anything. In fact, DOGE is asking federal employees to list what they do. Many will have trouble pointing to anything useful. In private business, 10% reductions happen every few years; these are so common they are not even considered reportable events. When has the government ever had any similar reduction? Never, to my knowledge.