Elon's Government Efficiency Commission

Nobody spends somebody else’s money as carefully as he spends his own.

Author

Clint Betts
September 09, 2024

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“Nobody spends someone else’s money as carefully as he spends his own.”

― Milton Friedman

In today’s email:

  • Curated Reads: Is AI hype slowing down?

  • Elon Takes On Government: Not the worst idea in the world.

  • Latest Interview: Stack Overflow CEO Prashanth Chandrasekar

CURATED READS

What today’s leaders are reading

Bad faith or perfect freedom King-Ho Leung, Plough

The era of the do-nothing Congress Robert Tracinski, Discourse

ELON VS. GOVERNMENT

Giving Elon Musk power over government spending

At a recent speech at the Economic Club of New York, Donald Trump suggested creating a Government Efficiency Commission, potentially headed by Elon Musk, to audit the federal government and identify areas of inefficiency and waste.

If implemented, this idea, coupled with efforts to pass the Regulations from the Executive in Need of Scrutiny (REINS) Act, could represent a historical moment for reevaluating the size and scope of government.

Musk’s emphasis on government waste echoes one of Milton Friedman’s central critiques of the public sector: the inefficiency of government programs and the tendency for bureaucracies to grow without regard for effectiveness. Friedman’s “four ways to spend money” framework is especially relevant here.

Nobody spends somebody else’s money as carefully as he spends his own.

Milton Friedman

We must remember that the bureaucrats responsible for allocating government resources have little incentive to ensure these funds are spent effectively. Friedman argued that, over time, government programs accumulate inefficiencies and grow far beyond their original mandates.

Trump’s proposal for a Government Efficiency Commission recalls similar initiatives from past administrations. Ronald Reagan’s Grace Commission, launched in the 1980s, sought to identify and eliminate wasteful government spending. The commission produced thousands of recommendations that, if fully implemented, could have saved the government billions of dollars.

Bill Clinton’s attempt to “reinvent government” in the 1990s, led by Vice President Al Gore, also encountered obstacles, particularly from entrenched interests like labor unions.

Neither attempt by these two presidents from different parties produced much of consequence, illustrating the difficulty of achieving meaningful reform. Once established, government programs are notoriously difficult to dismantle or reform, even when their original purpose no longer exists.

“Nothing is so permanent as a temporary government program.”

Milton Friedman

Musk’s experience challenging the inefficiencies of traditional industries — whether space exploration, electric vehicles, or X — makes him an intriguing choice to lead such a commission. Could he bring the same private-sector efficiency that Friedman championed?

Trump’s proposal to cut government waste comes at a time when public trust in government is at a historic low. Only 22% of Americans express confidence in the federal government.

Should we hand Musk the reins?

CEO INTERVIEW

Stack Overflow CEO Prashanth Chandasekar

Prashanth Chandrasekar is Stack Overflow's chief executive officer responsible for driving its overall strategic direction and results.

Prashanth is a proven technology executive with extensive experience leading and scaling high-growth global organizations. Previously, he served as Senior Vice President and General Manager of Rackspace’s Cloud and Infrastructure Services portfolio, including the Managed Public Clouds, Private Clouds, Colocation, and Managed Security businesses.

Before that, Prashanth held a range of senior leadership roles at Rackspace, including Senior Vice President and General Manager of Rackspace’s high-growth, global business focused on the world’s leading Public Clouds, including Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform (GCP), and Alibaba Cloud, which became the fastest-growing business in Rackspace’s history.

Before joining Rackspace, Prashanth was a Vice President at Barclays Investment Bank, focused on providing Strategic and Mergers & Acquisitions (M&A) advice for clients in the Technology, Media, and Telecom (TMT) industries. Prashanth was also a Manager at Capgemini Consulting, managing Operations transformation engagements and consulting teams across the US. He holds an MBA from Harvard Business School, an M.Eng in Engineering Management from Cornell University, and a B.S. in Computer Engineering (summa cum laude) from the University of Maine.

Prashanth is married and has two children.

In his book "Awareness: The Perils and Opportunities of Reality," Anthony De Mello emphasizes the importance of self-awareness for effective leadership. De Mello points out that many people, including leaders, are often unaware of their biases, fears, and attachments, which influence their decisions and interactions.

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