Paul Krugman’s quit his NY Times column and although he hasn’t said it in so many words, it’s most likely because he felt constrained from saying what he wants to say the way he wants to say it. He does have a newsletter and he’s already bringing the fire:
Once upon a time a Republican president, sure that large parts of federal spending were worthless, appointed a commission led by a wealthy businessman to bring a business sensibility to the budget, going through it line by line to identify inefficiency and waste. The commission initially made a big splash, and there were desperate attempts to spin its work as a success. But in the end few people were fooled. Ronald Reagan’s venture, the President’s Private Sector Survey on Cost Control — the so-called “Grace commission,” headed by J. Peter Grace — was a flop, making no visible dent in spending.
Why was it a flop? There is, of course, inefficiency and waste in the federal government, as there is in any large organization. But most government spending happens because it delivers something people want, and you can’t make significant cuts without hard choices.
Furthermore, the notion that businessmen have skills that readily translate into managing the government is all wrong. Business and government serve different purposes and require different mindsets.
In any case, the Grace commission’s failure taught everyone serious about the budget, liberal or conservative, an important lesson: Anyone who proposes saving lots of taxpayer money by eliminating “waste, fraud and abuse” should be ignored, because the very use of the phrase shows that they have no idea what they’re talking about.
OK, you know where this is going. There’s an obvious parallel between the Grace commission and Donald Trump’s Department of Government Efficiency, DOGE, led by Elon Musk and Vivek Ramaswamy. (The picture above is Leonardo Loredan, doge of Venice from 1501 to 1521, painted by Bellini.) But there are differences too: Muskaswamy bring a level of arrogant ignorance and clownish amateurishness that Grace never came close to emulating.
Grace, after all, assembled a staff of nearly 2,000 business executives divided into 36 task forces, who spent 18 months on the job, although they mostly came up empty. So far, at least, Muskaswamy don’t seem to be doing anything besides credulously scooping up random posts from social media.
Oh, and putting supervision in the hands of Marjorie Taylor Greene won’t help.
That said, there’s a pattern in their pronouncements so far, which I’d describe as Willie Sutton (the man who robbed banks because “that’s where the money is”) in reverse: going where the money isn’t.
He goes on to list some of the half-baked blather we’ve heard from Musk and Ramaswamy and it’s even dumber when you see it all together. Here’s just one of their bright ideas:
Moving on: In what I guess we should consider their opening manifesto, published in the Wall Street Journal, Muskaswamy call for “mass head-count reductions across the federal bureaucracy.” This suggests that they believe that bloated payrolls are a major budget issue. But how big a factor is employee compensation in federal spending? This big:
Again, going where the money isn’t.
But wait: aren’t there tens of millions of Americans employed by the government? Yes, there are — but they overwhelmingly work for state and especially local governments, not the federal government DOGE is supposed to be tackling. In fact, federal employment is about the same now as it was in the 1950s:
What are all those state and local workers doing? The Census offers a very useful chart:
The lion’s share of state and local employment is in education. Much of the rest is either in hospitals and other health care or in law enforcement. So when someone says “government worker” you shouldn’t imagine a paper-pusher in a cubicle — I mean, the government, like the private sector, does have lots of guys in cubicles, but they aren’t the typical employee. You should instead picture a schoolteacher, or maybe a nurse or a police officer.
He goes on to explain that the US is basically an insurance company with an army. In other words, the military and the safety net. As he points out there are inefficiencies in some things but certainly not in Social Security which is an extremely efficient program.
Health care is a more complicated story; there are some real inefficiencies in our system. But Musk seems to have the nature of these inefficiencies completely backwards:
Yes, American health care has uniquely high administrative costs. But Musk pretty clearly imagines that these costs reflect government inefficiency, when the real reason health care in America involves so much bureaucracy is the exceptional degree to which we rely on private insurance companies. Comparing administrative expenses for public and private insurance is tricky, but there’s no question that they’re much higher in the private sector.
This comes back to the point that running the government isn’t at all the same as running a business. The purpose of Medicare and Medicaid is to pay for peoples’ health care. The purpose of health insurance companies is to collect premiums; paying for care is a cost — the industry actually calls the share of premiums that end up paying medical bills the “medical loss ratio” — and they devote considerable resources to finding ways to avoid covering medical expenses.
Obligatory disclaimer given recent events: No, I’m not offering a justification for killing health-industry executives. Murder is evil, and in this case it’s also stupid. The problem with the U.S. health insurance industry isn’t that it’s run by bad people, it’s the antisocial incentives created by the system.
Read on for much more accessible wonkery, which is his specialty and why I’m glad he’s still going to be writing about this stuff. The NY Times is poorer for the loss.
His conclusion:
Now, in the end none of this may matter. The real purpose of DOGE is, arguably, to give Elon Musk an opportunity to strut around, feeling important. And while it’s a clown show, these clowns — unlike some of the other people Trump may put in office — won’t be in a position to inflict major damage on national security, public health and more.
But it is a clown show, and everyone should treat it as such.
I suspect that’s true but I will admit that I’ve lost faith in my ability to see beyond the next week when it comes to politics. This weird billionaire populism has me off-balance and I honestly can’t predict what they are going to do. Perhaps it will become more clear as time goes on.