Business
DOGE Theory
One of the most intriguing developments following Donald Trump’s election victory has been the announcement of Elon Musk and Vivek Ramaswamy’s Department of Government Efficiency, or DOGE. The initiative, which hopes to cut up to $2 trillion from the federal budget, has generated notable excitement, momentum, and memes. The world’s richest man and a successful biotech entrepreneur, Ramaswamy, have revitalized what seemed to be a mostly dormant libertarianism, drawing on the inspiration of Milton Friedman and promising to slash the bureaucracy to the bone. But what are its prospects for real-world success?
Elon Musk is our era’s most gifted entrepreneur, having revolutionized several industries and run multiple major companies. But the private sector operates on radically different principles than the public sector, which has a way of stalling or disarming even the most determined efforts. I foresee three potential impediments to DOGE’s success.
First is the problem of authority. While President-elect Trump has dubbed the effort the “Department of Government Efficiency,” it is not a government department at all. Rather, Musk and Ramaswamy will remain in the private sector and preside over what is, in effect, a blue-ribbon committee providing recommendations to the president and to Congress about potential cuts. In practice, though, blue-ribbon committees are often where ideas go to die. Politicians who feel the need to “do something” about a given problem often establish such committees to create the perception of action, which masks their true desire or, at least, the eventual result: inaction.
DOGE’s challenge will be to translate its recommendations into policy. It is almost certain that an entrepreneur of Musk’s ambition will not be content with writing a report. His and Ramaswamy’s task, then, is to persuade the president and the director of the Office of Management and Budget to enact real (and politically risky) cuts, and, if possible, to persuade Congress to abolish entire departments, such as the Department of Education, in the face of left-wing backlash.
The second problem for Musk and Ramaswamy is public opinion. Libertarians and small-government conservatives have long promised to reduce the size of government; one reason that they have never done so is that federal programs and agencies are generally popular. All of the major federal departments, with the exception of the IRS, the Department of Education, and the Department of Justice, have net-positive favorability numbers. Congressional members, even conservative Republicans, fear that slashing these departments would expose them to savage criticism from the Left and backlash from voters. They know that Americans complain about the size of government in theory but oppose almost all spending cuts in practice—the key paradox that libertarians have been unable to resolve.
Musk and Ramaswamy have repeatedly appealed to the work of Argentinian president Javier Milei, who has dramatically reduced the number of departments and created flashy video clips of himself stripping down organizational charts and yelling, “Afuera!” But what is possible in Argentina, which has been mired in a decades-long economic crisis, may not be achievable in the United States, which is much more stable, and, consequently, may not have the appetite for such dramatic action.
Which brings us to the problem of politics. Sending a rocket into space requires mastery over physics, but cutting government departments requires mastery over a more formidable enemy: bureaucracy. As Musk and Ramaswamy will see, the relationship between would-be reformers and Congress is vastly different from that between a CEO and a board of directors. To succeed, Musk and Ramaswamy must persuade a group of politicians, each with their own interests, to assume a high level of risk.
DOGE’s first task—identifying the budget items to cut—is the easy part. The hard part will be actually cutting them. They will have to convince Congress, which, for nearly 100 years, has refused to reduce the size of government, even when that notion had bipartisan support, as it did during the presidency of Bill Clinton, who promised that “the era of big government is over.”
This does not mean that DOGE cannot succeed. Though there may not be an appetite for a $2 trillion reduction in government spending, there is a hunger for targeted cuts that would strip the federal government of hostile ideologies that have made our institutions dysfunctional and our national life worse. For example, slashing grant funding for critical race theory would likely win support from voters; cutting the budget for USDA meat inspectors would not, and, given opportunity costs, would probably prove unproductive as well.
Perhaps the name of this committee—the Department of Government Efficiency—is also slightly off the mark. The problem is not only about efficiency, which suggests quantity, but about orientation, which implies quality. The federal government has long been captured by ideologies that misdirect its efforts. Simply making the bureaucracy more efficient will not solve that problem. DOGE must first determine what federal spending is worthwhile; from there, it can focus on creating “efficiencies.”
I hope that Musk and Ramaswamy can dispel my pessimism. Political realities have stifled countless reform efforts before now, and DOGE is an enterprise that would be difficult, if not impossible, under normal circumstances. But these are two remarkably talented men; if anyone is capable of shattering the mold, they can.
Please share your ideas, dissents, and thoughts in the comments. In the next newsletter, we will feature the best material in a“comment of the week” section. In the meantime, have a wonderful Thanksgiving.
From the Fraser Institute
By: Ben Eisen and Milagros Palacios
The number of government jobs in British Columbia grew by 22 per cent (the highest percentage in the country) compared to just 0.5 per cent in the private sector. In Ontario, the number of government jobs grew by 14.6 per cent compared to 4.8 per cent in the private sector.
Across Canada, government employment has exploded, dwarfing job-growth numbers in the private sector and raising serious questions about the affordability of this government hiring spree.
Specifically, according to our new study, from 2019 to 2023 employment in the government sector (which includes federal, provincial and local governments nationwide) increased by 13.3 per cent compared to just 3.6 per cent in the private sector (including self-employment).
Among the provinces, during the same four-year period, the number of government jobs in British Columbia grew by 22 per cent (the highest percentage in the country) compared to just 0.5 per cent in the private sector. In Ontario, the number of government jobs grew by 14.6 per cent compared to 4.8 per cent in the private sector. Eight out of the 10 provinces experienced a faster rate of job growth in the government sector than in the private sector over the four-year period. Alberta was the only large province where the private sector had a faster rate of job growth (7.2 per cent) than the government sector (4.4 per cent).
Moreover, during the four-year period, almost half of the total job growth in the Canadian economy took place in the government sector. As a result, the number of government jobs (as a share of total employment) increased by 21.1 per cent. In case you’re wondering, you can reasonably attribute this growth in government to the pandemic as most of the growth occurred post-COVID. As a result, government employment (again, as a share of total employment) in 2022 and 2023 was higher than at any point since the start of the fiscal reforms of the early 1990s.
So, why is this a problem?
Because the private sector pays for the public sector including the wages and salaries of government employees. And when you increase the size of the government-sector workforce, you increase the strain on government finances. If the share of workers employed by government continues to grow, the government must extract more money from the private sector to pay for a growing government wage bill—either in the form of higher taxes today or new debt that must be either repaid or financed indefinitely by future taxpayers. That’s the last thing taxpayers need, considering the state of government finances across the country. The federal government, for example, expects to run budget deficits of at least $20 billion for the next five years.
Taken together, these job growth numbers tell us an important story about the state of Canada’s labour market and economy. While there was substantial variation between provinces, almost all of them experienced a faster rate of job growth in the government sector than in the private sector over four years. This raises serious questions about the health of the private sector in Canada and the effect of an increasingly expensive government wage bill on taxpayers who must ultimately foot the bill. Policymakers should consider these questions before making any future decisions about budgets and government-sector job growth.
S
Business
Trump Sanctions Flag A Harsh Reality—PRC and Canadian Elite Ties Underwrite Fentanyl Vulnerability
By Garry Clement
Former Senior Mountie Argues Geopolitics of Ottawa’s Relations with Beijing Loom Behind Trump Threats
The threat of a 25% tariff on goods from Mexico and Canada, announced by President-elect Donald Trump, highlights a harsh reality: Canada’s vulnerability to fentanyl is deeply intertwined with its close ties to China.
Chris George, a government relations advisor and writer, has highlighted the Liberal Party’s connections with Chinese leadership. He notes that the party’s relationship with the Chinese Communist Party is significantly influenced by Power Corporation, the Desmarais clan’s flagship enterprise.
“The Liberal Party of Canada is inseparably tied to the Chinese Communist Party today,” George alleges, “and much of the Canadian-Chinese business relationship is driven by Power Corporation, the crown jewel of the Desmarais family fortune.”
The ties between the Liberal Party and Power Corp have allegedly become so entrenched they are virtually indistinguishable:
- André Desmarais, son-in-law of former Prime Minister Jean Chrétien, serving as President and co-CEO of Power Corp.
- Former Prime Ministers Paul Martin, Jean Chrétien, and Pierre Trudeau holding positions within Power Corp.
- Jean Chrétien acting as a Power Corp. lobbyist in China.
- John Rae, brother of former Liberal leader Bob Rae, being a long-serving senior manager.
- Senator Peter Harder, a key advisor to Prime Minister Justin Trudeau on China, previously serving on the board of Power Financial Corporation, a subsidiary of Power Corp.
Peter Harder also served as President of the Canada-China Business Council, a business advocacy group founded in 1978 with significant support from Paul Desmarais and Power Corporation. He left the council upon his Senate appointment by Prime Minister Trudeau. The Council is now chaired by Olivier Desmarais, grandson of Paul Desmarais and Jean Chrétien. These connections are also explored in my book, Undercover: In the Shady World of Organized Crime and the RCMP.
Recent reports reveal strong ties between Chinese leaders, the People’s Republic of China, and the Premier of British Columbia. Chinese companies have been acquiring Canadian logging operations and vast tracts of farmland. In Prince Edward Island, properties are being purchased under the guise of a monastic group called Bliss and Wisdom.
Evidence suggests that China’s leadership is complicit in producing fentanyl precursors, fully aware of their shipment to Mexico—and now Canada. It is widely suspected that fentanyl money laundering is facilitated through the “black market peso exchange,” a method funneling illicit proceeds into North America. Wealthy Chinese buyers then use fentanyl profits to purchase property, while the manufacturers of precursors are paid in Chinese renminbi.
Traditional media outlets, across the political spectrum, seem to have fallen under the same spell as the Liberal Party, failing to report on these pressing issues with any legitimate objectivity.
The tariffs proposed by President-elect Trump will undoubtedly impact us all. But perhaps, by remaining silent for so long, Canada is now facing the consequences it deserves. It is time for the silent majority to hold this failing government accountable. Canada needs greater transparency, accountability, and a complete re-evaluation of its foreign and domestic policies—especially those concerning China.
Garry Clement consults with corporations on anti-money laundering, contributed to the Canadian academic text Dirty Money, and wrote Undercover, In the Shady World of Organized Crime and the RCMP
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