The Specifics Matter
Plus: DOGE watch, pivot to Reason, and more...
Agency shakeups: In the first Cabinet meeting of the new administration, President Donald Trump announced that Environmental Protection Agency (EPA) head Lee Zeldin will be cutting 65 percent of his agency's workforce, or almost 10,000 jobs. "Hours later, an E.P.A. official said Mr. Trump was referring to overall agency budget cuts and not a 65 percent reduction in personnel," reports The New York Times. Trump and co. should get their stories straight and be consistent, but a massive headcount reduction at the agency will probably be necessary regardless.
"After recently identifying $20 billion fraudulent in spending, Administrator Zeldin is committed to eliminating 65% of the EPA's wasteful spending," says White House spokesman Taylor Rogers. "The $20 billion Rogers referred to is the Greenhouse Gas Reduction Fund, for which the Biden administration placed $20 billion in grants to be administered by nonprofit groups in Citibank," adds Politico. "EPA has not identified any fraud under the program but is trying to get the money back from Citibank."
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The Greenhouse Gas Reduction Fund has become something of a controversy (though calling it "fraudulent" is probably not accurate). The massive grant, doled out as former President Joe Biden was winding down his time in office, was supposed to fund clean energy and transportation projects in poorer communities. That $20 billion cited is a chunk of the slightly larger $27 billion Greenhouse Gas Reduction Fund, which was created in the 2022 Inflation Reduction Act (IRA). (You might be wondering, "What does this have to do with reducing inflation?" Absolutely nothing, of course. Thanks, Biden. In that sense, all unrelated things authorized by the IRA are fraudulent, I suppose, deliberately branded as something they're not.)
Anyway, the grant was basically given to financial institutions, which doled it out to nonprofits who would give home retrofitting grants to individual homeowners (among other things). Certain amounts were earmarked for rural areas and tribal nations. It all seems like something that shouldn't be in the government's purview. Now, Zeldin has vowed to get this money back, to end the contracts and rescind the grants. But the administration has done this in a maximally aggressive way, and senators are chafing at the methods, saying that this money was legally appropriated by Congress and that circumventing that process is wrong. For example, "Trump administration officials had instructed Denise Cheung, a prosecutor with the U.S. Attorney's office, to start a criminal probe of the funding in an effort to claw back the money that is currently held by Citibank, which holds a financial agency agreement with the Treasury," reports Reuters. But Cheung resigned from the U.S. Attorney's office last week over this very issue, saying the administration made an improper demand.
This whole saga feels like the second-term Trump administration in a nutshell: Identifying a legitimately bad use of taxpayer dollars; publicizing how insane it is; wrongly flouting separation of powers as a means of attempting to get that money back; Democrats getting next-level apoplectic at them for the methods, seemingly unable to concede the foolishness of the spending in the first place; rinse and repeat.
DOGE and the software licenses: "Agencies often have more software licenses than employees, and the licenses are often idle (i.e. paid for, but not installed on any computer)," writes the Department of Government Efficiency (DOGE) on its X account, implying this is some sort of significant cost-savings. "For example, at GSA [General Services Administration], with 13,000 employees, there are: 37,000 WinZip licenses; 19,000 training software subscriptions (and multiple parallel training software platforms); 7,500 project management software seats for a division with 5,500 employees; 3 different ticketing systems running in parallel. Fixes are actively in work."
But this misunderstands a few things about how software licensing works: Customers buying software licenses, across all sectors, frequently get volume discounts, so 5,000 seats can be gotten more cheaply in many cases than, say, 4,578 seats; you can use a higher employee count to get into a different (and better) pricing tier. For federal employees in particular, duplicate licenses are frequently required due to using classified networks vs. unclassified ones. There's also flux in headcount (seasonal workers, interns, etc.), so agencies see fit to overbuy. In other words, Elon Musk is fixating on something that probably isn't a real example of government waste. More importantly, the aggressive slashing of these licenses will probably provide a disincentive for private companies to secure government contracts, which means more government-built software vs. contracting it out to the private sector. (I can think of no scarier concept.)
Though the execution may be stupid, maybe DOGE is more symbolic than anything else:
On DOGE canceling unused software licenses, Bear Stearns' CEO used to send out memos admonishing bankers and traders for throwing away perfectly good paperclips instead of saving them for later use.
The point was not to save money on paperclips.
— Byrne Hobart (@ByrneHobart) February 26, 2025
"I have just informed the purchasing department that they should no longer purchase paper clips. All of us receive documents every day with paper clips on them. If we save these paper clips, not only will we have enough for our own use, but we will also, in a short time, be awash in the little critters," reads the original 1985 memo to employees from Bear Stearns CEO Alan "Ace" Greenberg. "This action may seem a little petty, but anything we can do to make our people conscious of expenses is worthwhile.…Bear Stearns is probably going to sell stock to the public, and there is one guarantee that I would like to give the potential buyers of our stock—they are going to get the fairest shake from us that management can give any public shareholder."
Obviously, neither Greenberg nor Bear Stearns are with us any longer; the whole sordid tale of the investment bank's collapse isn't worth getting into. Maybe it undermines the analogy. Or maybe there's an important message that federal employees ought to heed: The government is no longer immune from consequences when it wastes taxpayer dollars.
Still, the specifics really do matter. Maybe you could make the case that DOGE's primary value is gotten via slashing headcount, but firing is expensive; short-term costs will necessarily be incurred, possibly for long-term gain. But can that long-term gain be reaped if the next administration simply works to rehire and rebuild the gutted federal bureaucracy? If Musk and team were more deliberate about what's worth cutting and what's worth keeping, we might be in a better spot. But so far, they're directionally correct yet terribly sloppy.
Pivot to…Reason? Jeff Bezos, who founded Amazon and owns The Washington Post, appears to have finally read what his own paper has been publishing.
Anyway, he clearly didn't love what he saw. He issued a memo to the staff making clear that the opinion section will be repurposed to only publish pieces in favor of "personal liberties and free markets." Articles that fail to support those views will not be published.
"There was a time when a newspaper, especially one that was a local monopoly, might have seen it as a service to bring to the reader's doorstep every morning a broad-based opinion section that sought to cover all views," Bezos said. "Today, the internet does that job. I am of America and for America, and proud to be so. Our country did not get here by being typical. And a big part of America's success has been freedom in the economic realm and everywhere else. Freedom is ethical—it minimizes coercion—and practical—it drives creativity, invention, and prosperity." The existing opinion editor, when presented with this new mandate, hilariously stepped down; the spot's now vacant, but I must say, free markets don't appear to have a lot of supporters within the journalism industry. I wish him luck in his endeavor.
Scenes from New York: Columbia University and Barnard College students are still hot for Hamas.
BREAKING: Students and faculty at Columbia have taken over a building, while chanting "globalize the intifada," and shutting down classes.
Columbia needs to decide whether it's an academic institution or a bastion of extremism and violence. pic.twitter.com/dWmeISXHKH
— Eyal Yakoby (@EYakoby) February 26, 2025
QUICK HITS
- "President Donald Trump said Wednesday the United States will end the Biden administration's concessions aimed at promoting free elections in Venezuela, canceling a license that allowed U.S. oil company Chevron to produce and export oil in the country," reports Politico. "Trump said in a social media post the conditions the Biden administration reached with Venezuela in 2022 that allowed the country to export oil 'have not been met by the Maduro regime.'" This will go into effect March 1.
- "Nvidia Corp., the chipmaker at the center of an AI spending boom, delivered good-but-not-great quarterly numbers on Wednesday, drawing a muted response from investors accustomed to blowout results," reports Bloomberg.
- Trump, who may be pursuing a weakening of the U.S. dollar, has a lot of levers he could pull to get there. "He could drive up the value of a foreign currency by ordering the Treasury Department to buy more of it, for instance," writes Patricia Cohen for The New York Times. "Or he could pressure other nations to revalue their own currencies or buy more American goods by threatening to impose tariffs on their imports."
- Excellent answer:
Walter Williams in his EconTalk interview said: "Hayek's answer to 'If you could pass one law, what would it be' was 'I would enact a law that if Congress does anything for one American, it must do it for all Americans.' So if Congress paid one American to not raise pigs, it… https://t.co/mPKHYzm8YF
— Russ Roberts (@EconTalker) February 26, 2025
- Axios correspondent Alex Thompson has done a good job reporting on Biden's cognitive decline (and the mass cover-up from administration insiders and the complicit mainstream media). Journalist Jake Tapper was very much part of the problem, however:
ORIGINAL SIN, now available for pre-order at https://t.co/a9TcEIjAnV from @Penguinpress. Been working hard on this with @AlexThomp, from interviews with more than 200 WH insiders, Dem leaders, and more. #OriginalSinBook pic.twitter.com/e7hd4bqNHM
— Jake Tapper ???? (@jaketapper) February 26, 2025
- "U.S. Supreme Court Chief Justice John Roberts on Wednesday paused a federal judge's order requiring President Donald Trump's administration to pay foreign aid funds to contractors and grant recipients for past work," reports Reuters.
- RIP Gene Hackman, star of The French Connection, The Conversation, The Royal Tenenbaums, Bonnie and Clyde, and many others. The 95-year-old was found dead at home, oddly with both his 64-year-old wife and dog dead as well, though authorities don't suspect foul play (?). I think this line, from this piece, sums Hackman up well: "In his performances, as in life, the good guys aren't always nice guys, and the villains have charm." (Also, today I learned the famous car chase scene in The French Connection was filmed illegally, without all the proper permits from the New York Police Department. Incredible.)
