The State extracts, expends, and expands. I do not believe that either Elon Musk or Vivek Ramasawmy gets this concept. The wealth they created in this country is based on this concept; that as the State increases its borrowing costs to fund its expansion, that some of the raised revenues go to contracting with or subsidizing ventures such as Mr. Musk’s Telsa or Space X.
Having served on two regulatory staffs and as a member of a regulatory board, I can tell you that I never met a regulator that was anti-revenue or anti-profit. Pursuing a balance between a consumer’s need for fair and reasonable prices and a going concern should not be confused with being anti-commercial freedom or innovation. Regulators understand that firms need revenues and profits in order to sustain a firm’s operations, pay shares of profits to investors, and maintain wage and benefit obligations to labor. Regulators also understand that revenues and profits generated by a firm help to maintain and expand the State’s tax revenues.
Something else that Messrs. Musk and Ramaswamy overlook is the complicity of large private companies in the promulgation of the very rules they want to eliminate or severely reduce. Whether it was bankers in the 1900s that advocated for a central banking system that would mitigate bank runs or threats to liquidity or large telephone or cable companies during the early and mid 1990s that wanted to protect themselves from smaller emergent telecommunications players, businesses have always played a role in plowing the regulatory playing field and usually in their favor.
While expanding their local and national turfs, private companies may have in their best interests the erection of barriers to market entry and may only see innovation and freedom as a benefit if they can trade promises to improve technology and provide better customer service for a promise by government to harden and make taller the regulatory barrier to smaller players.
Closer to home, I do not see what positive impact the proposed advisory commission, the Department of Government Efficiency, would have on optimizing the currency for supporting a return of manufacturing to the United States. Reduce government spending and you reduce the supply of U.S. treasuries and the need to borrow. If the supply of bonds falls without a corresponding fall in demand for bonds, those willing to lend may either signal a desire to lend the United States more money at a reduced yield or go to another currency jurisdiction (nation-state) that is in search of capital.
Commenters have expressed reservation as to how impactful DOGE will be on increasing government efficiency and reducing spending. Unless Musk and Ramaswamy wish to enter the realm of the politically dangerous and gut non-discretionary spending on Medicare and Medicaid or social security, the two trillion dollars they would like to cut over the next four years is a pipedream.
Alton Drew
14 December 2024
The Show Notes:
https://www.usnews.com/news/national-news/articles/2024-11-13/what-is-doge-elon-musk-and-vivek-ramaswamys-new-trump-agency?form=MG0AV3#google_vignette US News and World Report.
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