DOGEY accounting

Feb 14, 2025

The US Government gets the Mumps

What put Trump in office and Musk in power – henceforth the Mumps – is the popular belief that business is efficient, and government is inefficient, ineffective, wasteful, and crooked –irredeemably so but for the Mumps. Thus, Musk sayeth, “let there be DOGE and he saw it was good.”

Well, I have a few questions.

1. What qualifies Musk to review the government of the United States?

2. What’s the justification for this review?

3. What’s the process?

4. How’s it going?

But first, I have a confession.

MAGA culpa

Elon Musk said some weird and worrisome things in the oval office on Tuesday February 11^th, and it’s my fault. Let me back up a bit. If an English solicitor committed suicide because he left a coma out of a will (read the backstory of Re Gestetner) then what am I to do? I left out an entire word in the title of Elon, Run Your Business Like a Government. The word was “Democratic”. I stupidly assumed he’d know that’s what I meant.

This post is an attempt to atone and a chance to recycle a bit of the Elon post I published almost exactly two years ago when I only had four lucky subscribers.

Even at the time I should have realized Musk would just read the title and assume he’d mastered the subject. I was trying to show him the big picture. I was naive. He’s no longer a big picture guy. Now he prefers his binoculars the wrong way ‘round so everyone looks small.

In my defence, his idea of democratic government is such that he probably would have turned Twitter into the propaganda machine other tyrants only dream of regardless of anything I wrote.

The Musk qualified candidate

The title Elon, Run Your Business Like a Government was my attempt to be clever by flipping the cliché that government should be run like a business on its head. Trump’s whole appeal is founded on the belief that what government needs is not politicians but businessmen. That and the fairy tale that he’s an exceptionally successful businessman.

He’s a terrible businessman and, unfathomably, a supremely successful politician. He’s also a gargoyle. I called him that figuratively years ago but, when I was checking the spelling, I found this.

Source: Art History News “This photo (of a 700 year old Gargoyle on Southwell Minster) surfaced on Twitter this morning. It seems the fates have been trying to warn us about Trump for centuries.” https://www.arthistorynews.com/articles/4090_Trump__the_gargoyle

Musk, on the other hand, is the world’s greatest living businessman - he must be because he’s the richest – so who better to whip a government into shape?

Just how great is he?

X spots the mark

I wrote the Elon post not long after he bought Twitter for $45B (US). It is now estimated to be worth $9.4B. It lost 80% of its value and he can’t say I didn’t warn him.

Tesla stock is down 25% in the last year at least in part because of his posts and handling of X.

This decal is for sale on Etsey but there are lots of others.

Fortunately for him, he was able to pick up the US government for the bargain price of $250m thanks to Donald Trump, the 78 million Americans who voted for him, and the 90 million who didn’t vote.

Since Donald J. Trump was elected the U.S. president on Nov. 5, Musk’s net worth skyrocketed 84% from $264 billion to a high of $486 billion on Tuesday before falling to $458 billion amid Wednesday’s market rout, according to the Bloomberg Billionaire’s Index. Tesla stock dropped 8.3% on Wednesday, closing at $440.13.. – Barrons Dec 20, 20241

Musk hit the jackpot. But, if you’re super rich, how much business acumen does it take to fool Trump?

Right offs

Speaking of skyrocketing, there’s Space X which blew up a heck of a lot of rockets along the way. Every SpaceX Starship explosion and what Elon Musk and his team learned from them

Winning in business is a net sum game. If you’ve made more money than you’ve lost, you are a winner. The bad decisions and explosions, no matter how really, really bad, are literally and figuratively, written off.

In government bad results accumulate and good results are quickly taken for granted or claimed by others. As Count Galeazzo Ciano, an Italian fascist politician famously said, “Victory has a hundred fathers, but defeat is an orphan.”

Okay, you say, where money is concerned, who better than a businesser (my woke term to replace businessman/businesswoman/businessperson) to root out waste and inefficiency? Businessers are masters of metrics, especially financial metrics. They really know their stuff when it comes to money!

Musk said that he would be able to cut $2trillion from the US federal budget. He later said he was off by a trillion. This is what a trillion looks like, $1,000,000,000,000.00 so it’s easy to see how you can overlook it. But then he explained,

"I think if we try for 2 trillion, we've got a good shot at getting 1," … He described the $2 trillion target as a "best-case outcome." – Reuters January 9, 2025

So, you see, 2 trillion is a stretch target, the product of his ambition for government not his ignorance of government.

Making America Grate

If it were merely a matter of cheese paring2 as he did at X, $1 or 2t would be an arithmetic exercise. But that’s not DOGE’s remit. It is a wholesale remake of the government. DOGE is,

"… to dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies… Essential to the 'Save America' Movement."3

Trump wrote. "I look forward to Elon and Vivek making changes to the Federal Bureaucracy with an eye on efficiency and, at the same time, making life better for all Americans." Donald J Trump (emphasis mine.)

So, the cuts and changes will come from efficiencies and Elon (Vivek quit in a move “essential to the Save Vivek Movement”), not the President, not the Congress, will make the cuts and restructuring. The February 11^th presidential order inserts a DOGE agent in every agency and puts them in charge of hiring.

My point is that having Musk assess public services entirely on business characteristics is like have a whale assess birds. Whales are smart, their views will be interesting but, in the final analysis, they’ll judge the birds based on how long each can hold its breath underwater.

Musk is smart, but he is too egotistical to recognize when he is out of his element.

There’s a jackass in a government

If you are pressed for time and must choose between reading the rest of this post and watching John Mulvaney’s “There’s a horse in a hospital” go with Mulvaney.

What’s the justification for the review?

Assuming the worst

Trump said on February 11^th that they’ve already found, “billions and billions in waste, fraud, and abuse.” He didn’t provide any details and neither did Musk. This surprised no one. For MAGA types and many others it validates their view that governments are inefficient, ineffective, wasteful, and crooked. For the rest of us it validates our view that Trump makes stuff up that confirms people’s worst prejudices. Lying convincingly to the cruel and or credulous is his superpower.

DOGE started at USAID because most Republicans think a third of the US budget is spent on foreign aid. The actual figure is 0.6%4

Another article of faith is that most of the budget is taken up by the fat cat salaries of a bloated public service. Here’s an excerpt from the White House fact sheet issued with the February 11^th order,

There are too many federal employees.
- Excluding active-duty military and Postal Service employees, the federal workforce exceeds 2.4 million.

Musk plans to cut 25% of the workforce. According to the Washington Post this would shave about 1% off the budget.

All large organizations have fat, but I doubt even the US government can shrug off 25% of its workforce. Even if it could, indiscriminate, across the board cuts dispose of institutional memory and expertise built up over many years. But this will be popular because salaries are quantifiable while opportunity costs and harm avoidance are invisible. In fact, public sector failures caused by Elon’s cuts will confirm the Mumps’ rationale of government incompetence.

My guess is that many of the public servants will end up working for more money at consulting firms that will be hired to perform the services. But the Mumps will be able to claim, truthfully for once, that salaries are down.

DOGE will struggle to save more than a few percent. Undoubtedly $2 trillion sounded doable at first- after all it’s less than a third of a $7 trillion budget but most of the budget consists of transfers to people – two thirds on social security and Medicare and Medicaid – and 10% on interest. Only about 25% is internal and half that is defence. Trump has promised not to touch the big transfers and defence. My guess is Musk didn’t know he’d have a paltry 10 to 12% of the budget to play with.

Thwarting the will of the people

Musk offered his political science justification for his work, “if the bureaucracy is in charge, then what meaning does democracy actually have? It does not match the will of the people, so it’s just something we’ve got to fix.”

Arthur Balfour put it less oafishly, “Officials should be on tap, not on top.” No one disagrees with this principle but there is another principle at play, the public interest.

Certainly, Trump was frustrated in his first term by officials who stopped him doing illegal and unethical things. The proof is what he is doing in his second term once he’d fired the watch dogs and senior officials.

The duty of public servants in a democracy is to act in the public interest, which requires them to give their best advice and carry out lawful instructions to a professional standard. In my experience in the government of Nova Scotia and from what I observed in other governments over thirty years, public servants do this whether they like the instructions or not. As a senior manager I was less concerned with the contrary minded types than the too eager to please. The former eventually give way or go away. The later give away too much.

The public interest standard is the fundamental difference between business and government. I explained all this to Elon:

Competition and the financial bottom line provide firms an objective performance standard. The bottom line for democratic governments is public confidence they are acting in a construct called “the public interest”. Unlike the financial bottom line, which is cruelly objective, the democratic bottom line is cruelly subjective. Opinions about the public interest are controversial, fuzzy, capricious, kaleidoscopic and idiosyncratic. The only thing that can be said with certainty about (individual views on) “the public interest” is that it is most often coincident with self-interest.
“A government that robs Peter to pay Paul can always depend on the support of Paul” - G. B. Shaw.
It can also depend on the enmity of Peter. – D.J. Keefe.

So what is the public interest?

The laws are surest statement of the public interest because they are debated and legislated in public by elected representatives. A country’s constitution is its supreme law. So, the public interest is, in descending order: the constitution, the law, and the lawful instructions of publicly accountable officials.

The Mumps’ idea of democracy is that the government is the property of the winners and acting in the public interest as insubordination.

Infuriating bureaucrats

The very word bureaucracy conjures up bloated Kafkaesque labyrinths. We’ve all been frustrated in our dealings with large organizations, and not just governments. (Think phone companies). But that ties back to the subjectivity of the public interest. I think it was Tom Peters who said that when he goes to city hall for a permit to build an extension on his house, he wants service but when his neighbour wants an extension on his house, he (Tom) wants process.

Musk is a bit of a special case. He hates government bureaucracies because they aim to treat everyone the same in accordance with the law.

In Elon… I said that Musk’s mistake at Twitter was not running it like a government.

Among his first acts as dictator of his public square was cuts to the police and sanitation departments. Any mayor could have told him that businesses in and around the square would quickly shutter their shops…Twitter (is) a strange world for people like Elon Musk. Its financial bottom line is so inextricably tied to what I call its democratic bottom line, the usual signals like supply/demand and market pricing, and real competitors aren’t determinative of success. However social media is not unique in the business world. It may be the pointy end of the ship - with Musk at the bow shouting “I’m the king of the world” at least initially - but businesses have been moving in the direction of government for years either as passengers or crew…
None of this is to say that running a successful business in a competitive world is easy or that governments don’t do stupid things. It isn’t and they do. Sometimes the public demands stupid things and other times the government achieves them on its own.
Nor is it a whine that governments are maligned unfairly. It is that the democratic bottom line is susceptible to malign unfairness.

Governments do stupid things

Governments are large enough that it is possible to find examples of anything one cares to look for. Couple this with the human tendency to generalize and a juicy story becomes the whole story. But that’s not to say they don’t do stupid things. Sometimes it’s because voters demand it but other times they do it because they are big.

However, governments are not alone in this. Just as there are economies of scale, there are stupidities of scale, as no less a rugged entrepreneur than T. Boone Pickens, oil magnate and corporate raider, said in his 1987 autobiography:

It's unusual to find a large corporation that's efficient. I know about economies of scale and all the other advantages that are supposed to come with size. But when you get an inside look, it's easy to see how inefficient big business really is. Most corporate bureaucracies have more people than they have work.5

The public service needs a shakeup

Every organization needs a shakeup periodically. Even defenders of the public service concedes this. One commentator, while criticizing Musk for running DOGE like it was a corporate takeover said, “the public servants just aren’t used to that.” What they aren’t used to is forty pimply faced techies and a replicant barging into their workplace. But they are used to hostile takeovers. How many private companies submit their entire senior team to a popular vote every four or five years?

If you don’t think a new government isn’t a hostile takeover, then you haven’t been a senior government official. Nevertheless, you are familiar with the routine. Every new government expresses shock at the financial situation – “now that we’ve had a chance to look at the books, the financial situation is much worse than we were led to believe” despite the fact that the budget is debated and passed into law by the legislative body, and is then online in mind-numbing detail.

Captain Renault : I'm shocked! Shocked to find that gambling is going on in here. Croupier : Your winnings, sir. – Casablanca

The shock is fictional but it tees up a detailed program review that is real. All new governments hope to cut waste and some are naïve enough to expect to fund their promises by cutting it. It is a common assumption that the problem is wasteful spending, not demands for both more services and lower taxes.

So, the reviews are serious, and public servants may roll their eyes at the announcement, but they do take them seriously because they live and die with the results.

What’s the process?

Reviews are a regular event in democratic governments. Most are internal but some are external and highly visible. They are generally headed by respected people who have at least some familiarity with public administration– if for no other reason than the Government hopes to borrow their credibility. They are generally supported by a multi-disciplinary team. They publish a report which explains their findings, their recommendations, and their rationale.

DOGE is radically different and dangerous. It consists of one supremely self-interested and self-absorbed man supported by his minions.

But that’s not the crucial difference. Conventional reviews make recommendations leaving elected representatives to make the decisions and take the necessary steps, including legislation. DOGE is making the decisions, imposing radical cuts and thousands of layoffs, with neither reasons nor reflection.

But surely, given a beast as big and wasteful as the US government, the ends not only justify the means but necessitate them?

How’s it going?

According to The Economist, February 12, 2025 “Elon Musk is failing to cut American spending: DOGE has so far disrupted everything in government bar the deficit”

Since Donald Trump took office a little more than three weeks ago, outlays have averaged $30bn a day. Compare that with the same period last year under Joe Biden: federal spending back then came to about $26bn a day. Outflows from the Treasury have actually risen since January 28th, when Mr Musk first claimed his “Department of Government Efficiency”, or DOGE, was saving the federal government $1bn a day…
Armed with a new executive order from Mr Trump, it is now preparing to make mass lay-offs, though it may lack the legal authority to do so…
In any case, DOGE’s efforts appear to be pretty scattershot. Many of its spending reductions have targeted specific things that Mr Trump deems wasteful such as “diversity, equity, inclusion and accessibility” programmes. Yet these amount to a tiny sliver of the federal budget. The full value of the savings announced by DOGE (on its account on X, Mr Musk’s social network) adds up to about $7bn so far.6

Summing up

Dodge is a more accurate than DOGE as a descriptor. It is mostly sleight of hand, intentionally doing real damage on the pretext of fixing pretend problems. It won’t produce the efficiency and extravagant savings claimed; and any good results it might incidentally produce could have been achieved within existing laws and institutions. Musk is unqualified because he is out of his element and, worse, is dogmatic, not democratic.