Wow! The number of people doing essentially the same job is astounding. Do 2500 scientists studying the weather do any better than 250 scientists studying the weather? I don't know but it sure seems that the benefit is likely to be minimal and the cost is multiples higher. In the Federal agency in which I spent my career (35 years) we went from 60 in my office down to about 20 but our job description and duties changed very little. We still got the job done. In my opinion, nothing was lost although employee complaints increased about how much more work we were doing. When the head count was cut to 12 we still got the job done. The one thing that I noticed during all of this is that the quality of staff increased substantially. Essentially, we got rid of a lot of dead weight. The dead weight is not something I want to pay for and I believe most of the country would agree with me.
Please accept a comment from an Australian experienced in interactions between industry and government "agencies" (to use a short word to summarise), interactions plausibly similar in your country and mine.
I read with consternation the dollar amounts and the scale of corruption revealed in DOGE reports over the last month or so. Time will tell if they are accurate. For now, they cast an imperative over all agencies to demonstrate that they do not deserve remediation. Consider the FBI in the period starting with the Hunter laptop, the Russian collusion papers, the role of the FBI in the January 6 2021 gathering, the Jeffrey Epstein alleged suicide in an anti-suicide cell and the FBI slow release of Epstein papers demanded by DOGE, and possibly more. There is enough prima facie information to lead to a plausible conclusion of significant wikedness.
You have shown a short case for NOAA to be treated lightly, but you have not provided much evidence of absence of wikedness FBI style. Is this not a little unbalanced? Geoff Sherrington
Wow, I have not yet viewed a comment that references the most basic fact about government spending. To this discussion whether or not any government spending is valuable or not is completely irrelevant. The one relevant fact is that by definition government spending subtracts from the economy. Why? Because the government has no money. It is funded by taxes paid for with money generated from private sector economic activity. Counting salaries paid to government workers as economic activity would be double counting, because all of that money was already paid to someone else prior to it being paid in taxes.
The USAF gives as the reason for retiring the F22 is that they are too expensive to maintain, and the the NGAD is supposed to have all sorts of new stuff. The question is whether or not that is the best use of our defense dollars. AF brass will always say yes. In fact, all three branches of service are pushing for new toys. The Defense Industry is right behind them, and they probably have more influence than the Pentagon Brass. Stopping weapons production would cause massive unemployment, and the Defence industry put plants in every state to make sure the politicians understood that. It is exactly what President Eisenhower warned us about many years ago. It worked in the past, but the gigantic budget deficit has created a new situation.
What is missing is that government is a political entity and much of what it does is because a high ranking Senator/House member said they would support a bill if they got a piece of the pie. So while the blunt may be working now, it will stop working when voters are losing jobs. Military contractors have offices in 50 states to ensure that their projects continue to grow and get legislative support. The cuts so far - pretty easy going after agencies that are not well know n outside of Washington. But when the impact hits the broader community the cuts will slow down. It is why Congress cant pass a budget. No one wants to give up their pork.
If the people thinking about tanks and planes and ships give the public competent product, there will be very little complaint. However, when those thinking people deliver abominations like the Littoral Combat Ships and the $324 million movable pier that collapsed in Gaza because the waves were too big for it to handle, with no accountability, it is unrealistic not to expect howls of rage from the plebs extorted of their wealth to pay for such folly. Especially with income tax due in coming weeks.
Interesting article. But you are misrepresenting what Lutnick said. He indicated he was going to pull out the government portion out of the GDP estimate (based on what he said in an interview yesterday). This gives a clearer estimate of the growth (or not) of the private sector. Yes, the administration’s changes will impact the governments input and output. But I think it will be more accurate to represent them separately.
In the article you attribute the decrease of GDP to the Atlanta Fed forecast is not quite correct. It was based on an unadjusted model, GDPNow. “GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available economic data for the current measured quarter. There are no subjective adjustments made to GDPNow—the estimate is based solely on the mathematical results of the model”. The actual forecast will come later.
Your argument on the comment regarding thinking about tanks extrapolates far beyond what the comment said. You talk about the War College, DARPA and the Defense Intelligence Agency, technological innovations, etc.. It was interesting information, but not really relevant. By mentioning these, you imply all these things might happen, when all he said was a comment about thinking about tanks.
This sets an interesting precedent. If Lutnick justifies exclusion of government spending on grounds of "x is not GDP. That is wasted inefficiency, wasted money” then could we also begin to see other things cut from GDP, such as many things that would come under the classification of rentseeking activity, excess interest, a lot of other phony economic activity (finance, insurance real estate -FIRE- excesses)? Also, do you know if the Bureau of Economic Analysis already parses out FIRE activity vs. industrial production? What lines in the report would that be on or is it all hopelessly bundled?
I'm told by those who make a distinction between industrial capitalism & fiscal capitalism that US has a greater portion of FIRE GDP to industry than, for example, China, and so the GDP numbers are misleading indicators of economic robustness. It would be nice to have some simple line items to show the proportion of industrial productivity vs. rentseeking. Why just cut the fat from Government, why not from the whole economy? If only we all understood it better and were in a better position to negotiate.
Also, would be interesting to see how the "tax" from all that rentseeking activity compares to government tax as a portion of GDP. I don't think people keep track of how much they spend away on rents & interest embedded all along the supply chain of our lives.
I'm afraid we're past the holding on to the baby point of discarding the bathwater.
I keep hearing this argument and I strenuously disagree.
We've tried many times to reduce the size of government. Almost every time, it's been a miserable failure. No doubt much time was spent on study and planning.
Now the government is facing an existential financial crisis coming down the pike -- a real one, not like the climate one -- and it's too late for all the measured responses that have failed in teh past.
I mean we could try one of those again, but why would we expect them to succeed now?
We had our chances to clean up the budget, now we're like the guy who is selling the TV for 1/4 of what it will cost to replace to pay the rent. We're out of time and options.
I am ever more surprised at the apparent ignorance of the people Trump has put in high positions. In Lutnick's case, I doubt that it's ignorance. I graduated with a degree in Economics the same year he did from Haverford. Haverford's (current) introductory Economics course, Econ 105, includes measurement of GDP as one of its topics. By definition, GDP (Y) = Consumer spending (C) + Physical Investment (I) + Government Spending (G).
Even if Lutnick doesn't remember this from his first Econ class, he should have been exposed to it more or less every day in his working career. He should be embarrassed to make statements like this in public.
I am trying to maintain perspective on the DOGE activities and not succumb to the handwaving hysteria that Democrats and leftist news sources present about DOGE's mistakes on an hourly basis. I am generally sympathetic with the effort to vigorously root out waste, as I think there must be a lot of it in an organization of 3 million (plus contractors) who basically cannot be fired. I also get that time is short for Trump, that he went easy the first time around and was attacked constantly with leaks and resistance from the deep state, which is a fair term to use for a permanent 95% Democratic workforce that sees Republican administrations come and go. And that this time he wants to get something done before time runs out on "doing things the right way". And that eggs have to be broken to make an omelet before the honeymoon is over.
In fact I have no way of knowing whether the massive firings and spending cuts that seem to include many babies with the bathwater could have been done better and whether there is simply too much haste and chaos in what is happening, or whether when the dust settles, and the lawsuits and legislative voting proceed, and the mistakes are rectified, more good will have been done than bad, and the haste was in fact necessary, or perhaps something in between. I do know that no one has tried to shake up the government like this administration in modern times, and that if this doesn't work, it is unlikely to be attempted again, and the Democrats and the deep state will rule forever.
I do not doubt that if the Democrats take control, they will take actions to make their rule permanent (and if they had won this time they would have), including ending the filibuster, making DC and Puerto Rico states, and packing the court. I doubt there will be another Republican administration or Senate after that. They will institutionalize the censorship they put in place in recent years, and because they control so many levers of power in our society, from the schools to the academy, to the MSM, to the establishment businesses that have to go along with ESG and DEI if that's the dominant tune, and with the corrupting grants, loans, and incentives to NGOs, academics and business (carbon capture anyone? battery plants in Kentucky, and the like), the culture of government dependence will co-opt everyone, and that is a greater "threat to democracy" than Trump's likely futile attempt to stop it in its tracks. I say likely futile because as Reagan said, the closest thing to immortality is a government program. That's because when you start spending you can't stop; those who are hurt will scream louder than those who only have a general interest in fiscal prudence. The more success he has in cutting, the stronger will be the pushback. Add in the pain of tariffs, the noses out of joint about the Russian pivot, and, as Carville says, they are trying to do too much too fast and "it just can't be done". I'm afraid that's the smart money.
I was thinking that much of NOAA’s progress is with improvements in their prediction software. If the blunt instrument causes that capability to weaken or stop surely the outcome is not worse predictions capability? Eventually the lack of progress will reveal itself but wont go backwards imho.
Increasingly, I turn to Roger for the quiet, still voice of reason. As always, this is just the beginning of a very complex discussion, but at least it is a coherent beginning. He has come a long way from his climate science days, but his innate capacity for rational thought is much needed. However, I think we are watching a much needed major reset, so there will be eggs broken along the way.
I once heard a discussion that went something like like this.;
Man #1 Remember it was the deficit spending in WW2 that brought us out of the great Depression.
Man #2 Then all we need to do to get out of this recession is build a great fleet, take it out to sea and sink it.
The take away I got from this is that deficit spending only works if it provides goods or services that are needed at the time. So needed, that it justifies spending our children's money before they can choose to do so. Instead, we have incorporated it into our annual expenditures as a way to balance a budget that contains dubious spending.
As far as DoD is concerned, consider the F22. Recognized as the best fighter in the world. It has never gone to war, never been in combat, and has no equal. Yet we are now working on the Next Generation Air Defense fighter (NGAD, a program that will consume almost a trillion dollars. Then there are our aircraft carriers, the pride of the navy. Yet there are many that believe we are building a navy to fight the last war rather than a navy to fight the next war. It may be like building battleships in WW2 to sail off to fight aircraft carriers.
During my time in service, I learned that even the most capable and best intentioned people can be wrong and not know it. DoD is just as in need of house cleaning as the IRS. Both are vital agencies but in need of serious review.
An FYI about the F22. We can't build any more of them because Lockheed lost or destroyed critical tooling for the F22. They were required by law or contract to keep it, but somehow it got lost or was destroyed. It would cost a significant amount to recreate the tooling that could be better spent on a newer design.
I'm recalling that from memory so may not be totally correct.
If one would try to follow the Secretary of Commerce's bizarre assumption, spending money on R&D and on Marketing would add no value to a company.
In particular, risking failure in R&D (does he know what means this acronym?) should be avoided.
This time, I'm not the one kidding.
Wow! The number of people doing essentially the same job is astounding. Do 2500 scientists studying the weather do any better than 250 scientists studying the weather? I don't know but it sure seems that the benefit is likely to be minimal and the cost is multiples higher. In the Federal agency in which I spent my career (35 years) we went from 60 in my office down to about 20 but our job description and duties changed very little. We still got the job done. In my opinion, nothing was lost although employee complaints increased about how much more work we were doing. When the head count was cut to 12 we still got the job done. The one thing that I noticed during all of this is that the quality of staff increased substantially. Essentially, we got rid of a lot of dead weight. The dead weight is not something I want to pay for and I believe most of the country would agree with me.
Roger,
Please accept a comment from an Australian experienced in interactions between industry and government "agencies" (to use a short word to summarise), interactions plausibly similar in your country and mine.
I read with consternation the dollar amounts and the scale of corruption revealed in DOGE reports over the last month or so. Time will tell if they are accurate. For now, they cast an imperative over all agencies to demonstrate that they do not deserve remediation. Consider the FBI in the period starting with the Hunter laptop, the Russian collusion papers, the role of the FBI in the January 6 2021 gathering, the Jeffrey Epstein alleged suicide in an anti-suicide cell and the FBI slow release of Epstein papers demanded by DOGE, and possibly more. There is enough prima facie information to lead to a plausible conclusion of significant wikedness.
You have shown a short case for NOAA to be treated lightly, but you have not provided much evidence of absence of wikedness FBI style. Is this not a little unbalanced? Geoff Sherrington
Wow, I have not yet viewed a comment that references the most basic fact about government spending. To this discussion whether or not any government spending is valuable or not is completely irrelevant. The one relevant fact is that by definition government spending subtracts from the economy. Why? Because the government has no money. It is funded by taxes paid for with money generated from private sector economic activity. Counting salaries paid to government workers as economic activity would be double counting, because all of that money was already paid to someone else prior to it being paid in taxes.
The USAF gives as the reason for retiring the F22 is that they are too expensive to maintain, and the the NGAD is supposed to have all sorts of new stuff. The question is whether or not that is the best use of our defense dollars. AF brass will always say yes. In fact, all three branches of service are pushing for new toys. The Defense Industry is right behind them, and they probably have more influence than the Pentagon Brass. Stopping weapons production would cause massive unemployment, and the Defence industry put plants in every state to make sure the politicians understood that. It is exactly what President Eisenhower warned us about many years ago. It worked in the past, but the gigantic budget deficit has created a new situation.
What is missing is that government is a political entity and much of what it does is because a high ranking Senator/House member said they would support a bill if they got a piece of the pie. So while the blunt may be working now, it will stop working when voters are losing jobs. Military contractors have offices in 50 states to ensure that their projects continue to grow and get legislative support. The cuts so far - pretty easy going after agencies that are not well know n outside of Washington. But when the impact hits the broader community the cuts will slow down. It is why Congress cant pass a budget. No one wants to give up their pork.
If the people thinking about tanks and planes and ships give the public competent product, there will be very little complaint. However, when those thinking people deliver abominations like the Littoral Combat Ships and the $324 million movable pier that collapsed in Gaza because the waves were too big for it to handle, with no accountability, it is unrealistic not to expect howls of rage from the plebs extorted of their wealth to pay for such folly. Especially with income tax due in coming weeks.
Interesting article. But you are misrepresenting what Lutnick said. He indicated he was going to pull out the government portion out of the GDP estimate (based on what he said in an interview yesterday). This gives a clearer estimate of the growth (or not) of the private sector. Yes, the administration’s changes will impact the governments input and output. But I think it will be more accurate to represent them separately.
In the article you attribute the decrease of GDP to the Atlanta Fed forecast is not quite correct. It was based on an unadjusted model, GDPNow. “GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available economic data for the current measured quarter. There are no subjective adjustments made to GDPNow—the estimate is based solely on the mathematical results of the model”. The actual forecast will come later.
Your argument on the comment regarding thinking about tanks extrapolates far beyond what the comment said. You talk about the War College, DARPA and the Defense Intelligence Agency, technological innovations, etc.. It was interesting information, but not really relevant. By mentioning these, you imply all these things might happen, when all he said was a comment about thinking about tanks.
This sets an interesting precedent. If Lutnick justifies exclusion of government spending on grounds of "x is not GDP. That is wasted inefficiency, wasted money” then could we also begin to see other things cut from GDP, such as many things that would come under the classification of rentseeking activity, excess interest, a lot of other phony economic activity (finance, insurance real estate -FIRE- excesses)? Also, do you know if the Bureau of Economic Analysis already parses out FIRE activity vs. industrial production? What lines in the report would that be on or is it all hopelessly bundled?
I'm told by those who make a distinction between industrial capitalism & fiscal capitalism that US has a greater portion of FIRE GDP to industry than, for example, China, and so the GDP numbers are misleading indicators of economic robustness. It would be nice to have some simple line items to show the proportion of industrial productivity vs. rentseeking. Why just cut the fat from Government, why not from the whole economy? If only we all understood it better and were in a better position to negotiate.
Also, would be interesting to see how the "tax" from all that rentseeking activity compares to government tax as a portion of GDP. I don't think people keep track of how much they spend away on rents & interest embedded all along the supply chain of our lives.
I'm afraid we're past the holding on to the baby point of discarding the bathwater.
I keep hearing this argument and I strenuously disagree.
We've tried many times to reduce the size of government. Almost every time, it's been a miserable failure. No doubt much time was spent on study and planning.
Now the government is facing an existential financial crisis coming down the pike -- a real one, not like the climate one -- and it's too late for all the measured responses that have failed in teh past.
I mean we could try one of those again, but why would we expect them to succeed now?
We had our chances to clean up the budget, now we're like the guy who is selling the TV for 1/4 of what it will cost to replace to pay the rent. We're out of time and options.
I am ever more surprised at the apparent ignorance of the people Trump has put in high positions. In Lutnick's case, I doubt that it's ignorance. I graduated with a degree in Economics the same year he did from Haverford. Haverford's (current) introductory Economics course, Econ 105, includes measurement of GDP as one of its topics. By definition, GDP (Y) = Consumer spending (C) + Physical Investment (I) + Government Spending (G).
Even if Lutnick doesn't remember this from his first Econ class, he should have been exposed to it more or less every day in his working career. He should be embarrassed to make statements like this in public.
I am trying to maintain perspective on the DOGE activities and not succumb to the handwaving hysteria that Democrats and leftist news sources present about DOGE's mistakes on an hourly basis. I am generally sympathetic with the effort to vigorously root out waste, as I think there must be a lot of it in an organization of 3 million (plus contractors) who basically cannot be fired. I also get that time is short for Trump, that he went easy the first time around and was attacked constantly with leaks and resistance from the deep state, which is a fair term to use for a permanent 95% Democratic workforce that sees Republican administrations come and go. And that this time he wants to get something done before time runs out on "doing things the right way". And that eggs have to be broken to make an omelet before the honeymoon is over.
In fact I have no way of knowing whether the massive firings and spending cuts that seem to include many babies with the bathwater could have been done better and whether there is simply too much haste and chaos in what is happening, or whether when the dust settles, and the lawsuits and legislative voting proceed, and the mistakes are rectified, more good will have been done than bad, and the haste was in fact necessary, or perhaps something in between. I do know that no one has tried to shake up the government like this administration in modern times, and that if this doesn't work, it is unlikely to be attempted again, and the Democrats and the deep state will rule forever.
I do not doubt that if the Democrats take control, they will take actions to make their rule permanent (and if they had won this time they would have), including ending the filibuster, making DC and Puerto Rico states, and packing the court. I doubt there will be another Republican administration or Senate after that. They will institutionalize the censorship they put in place in recent years, and because they control so many levers of power in our society, from the schools to the academy, to the MSM, to the establishment businesses that have to go along with ESG and DEI if that's the dominant tune, and with the corrupting grants, loans, and incentives to NGOs, academics and business (carbon capture anyone? battery plants in Kentucky, and the like), the culture of government dependence will co-opt everyone, and that is a greater "threat to democracy" than Trump's likely futile attempt to stop it in its tracks. I say likely futile because as Reagan said, the closest thing to immortality is a government program. That's because when you start spending you can't stop; those who are hurt will scream louder than those who only have a general interest in fiscal prudence. The more success he has in cutting, the stronger will be the pushback. Add in the pain of tariffs, the noses out of joint about the Russian pivot, and, as Carville says, they are trying to do too much too fast and "it just can't be done". I'm afraid that's the smart money.
I was thinking that much of NOAA’s progress is with improvements in their prediction software. If the blunt instrument causes that capability to weaken or stop surely the outcome is not worse predictions capability? Eventually the lack of progress will reveal itself but wont go backwards imho.
Think Bastiat. Tanks and LCS's are the ultimate window breakers. Drones and ships that work will do nicely.
Increasingly, I turn to Roger for the quiet, still voice of reason. As always, this is just the beginning of a very complex discussion, but at least it is a coherent beginning. He has come a long way from his climate science days, but his innate capacity for rational thought is much needed. However, I think we are watching a much needed major reset, so there will be eggs broken along the way.
I once heard a discussion that went something like like this.;
Man #1 Remember it was the deficit spending in WW2 that brought us out of the great Depression.
Man #2 Then all we need to do to get out of this recession is build a great fleet, take it out to sea and sink it.
The take away I got from this is that deficit spending only works if it provides goods or services that are needed at the time. So needed, that it justifies spending our children's money before they can choose to do so. Instead, we have incorporated it into our annual expenditures as a way to balance a budget that contains dubious spending.
As far as DoD is concerned, consider the F22. Recognized as the best fighter in the world. It has never gone to war, never been in combat, and has no equal. Yet we are now working on the Next Generation Air Defense fighter (NGAD, a program that will consume almost a trillion dollars. Then there are our aircraft carriers, the pride of the navy. Yet there are many that believe we are building a navy to fight the last war rather than a navy to fight the next war. It may be like building battleships in WW2 to sail off to fight aircraft carriers.
During my time in service, I learned that even the most capable and best intentioned people can be wrong and not know it. DoD is just as in need of house cleaning as the IRS. Both are vital agencies but in need of serious review.
An FYI about the F22. We can't build any more of them because Lockheed lost or destroyed critical tooling for the F22. They were required by law or contract to keep it, but somehow it got lost or was destroyed. It would cost a significant amount to recreate the tooling that could be better spent on a newer design.
I'm recalling that from memory so may not be totally correct.