DOGE: Market Forces Meet Government Reform

The Department of Government Efficiency (DOGE) marks a decisive break from traditional attempts at government reform. In this excerpt from my recent conversation with top institutional strategist Jason Trennert of Strategas Research, he highlighted how this initiative differs from past efforts like Simpson-Bowles by bringing private sector discipline to public spending.

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The evidence of government inefficiency surrounds us. Trennert points to a striking statistic: only 20% of federal workers show up to their offices daily, yet agencies maintain expensive real estate portfolios in prime locations. More telling still, 11 of America's 20 wealthiest counties now cluster around Washington, D.C. - a region that produces little beyond influence.

Unlike previous reform attempts, DOGE brings two crucial advantages: private sector leadership and crowdsourced accountability. With Vivek Ramaswamy and Elon Musk at the helm, the initiative carries the credibility of proven business innovators. Their active presence on social media platforms enables real-time gathering of waste-cutting suggestions from citizens and stakeholders across the country.

This market-oriented approach matters because, as Trennert notes, "Politicians are put on earth to give stuff away, not take stuff away." Without the discipline of higher interest rates or genuine market pressures, government agencies tend toward eternal life rather than efficiency. Each finds new things to regulate, new programs to administer, becoming an industry unto itself rather than serving its original purpose.

The timing proves crucial. While the upper half of income earners may not feel immediate pressure for reform, those without significant financial assets increasingly bear the burden of government inefficiency. Previous reforms failed partly because quantitative easing (QE) masked the true cost of deficit spending. With the Fed's balance sheet now at $7 trillion - up from $800 billion before Bear Stearns failed - this fig leaf grows thin.

DOGE's success could trigger a virtuous cycle. By exposing wasteful contracts and excessive margins, it may prompt voluntary withdrawals by contractors seeking to avoid scrutiny. The initiative might achieve significant savings without the political challenge of federal workforce reductions, as the larger opportunity lies in examining the $6 trillion of non-payroll federal spending.

The core message resonates internationally. Trennert observed how quickly investors from Seoul to Zurich embraced the concept, suggesting global recognition that government efficiency represents the next frontier in economic reform. While the path forward isn't guaranteed, DOGE offers the first serious prospect in decades for bringing market discipline to government spending.