9 ms·

DOGE's government cuts may hurt business, companies warn investors

82 points by howard941 2y ago

howard941 2y ago
https://archive.ph/okSlz https://archive.ph/okSlz
downrightmike 2y ago
Nothing they are doing is good for business. All will suffer. Think the Military Industrial Complex can't run when agencies, the military and our allies won't be able to buy our munitions/platforms? Nope, and private business won't need it unless they can offload on to local governments at less than cost, and cities will be broke without federal funds backing them up.
- ty6853 2y ago
  Most of the bombs/munitions the US drops is from the perspective of the American worker the equivalent of digging holes in the desert. The way to have more goods and services is to make more goods and services. Releasing people from digging holes allows us to create more wealth.
- voidfunc 2y ago
  It's pretty clear the obvious objective is to cripple the economy and buy up the losers for pennies on the dollar then also use government money as the carrot to compel surviving companies and local governments to adopt policies that are favorable to administration insiders. The new game is how much dick can you suck so someone in power smiles upon you.
  - no_wizard 2y ago
    This is my assessment as well. Yes, all companies feel pain, but some can survivor years of pain compared to competitors, and couple that with price increases due to tariffs. Then in 18-24 months when everyone has resigned themselves to the price increases and the politically connected buy up struggling businesses the tariffs come off. At which point, the cost to the business is lowered but the price increases will more or less stay, and those that have consolidated power will be in prime position to remain dominate for some time, likely decades. It’s a giant market manipulation experiment disguised as many other actions but will ultimately culminate in consolidations of power Step II is going to be regulatory capture. I expect to start seeing this by summer or fall
- xpe 2y ago
  It depends on "good for who" and over what time scale. My dominant model is this: the core of the Trump administration is most interested in remaining in power and building connections. So they do whatever works to garner favor. They are relatively unaware or unafraid of the gathering storm of legal pushback. I think they figure they can get away with a lot before it catches up to them, politically or legally. This includes taking actions that they know are illegal. Bluntly, with their own admission, they are bringing a chainsaw to the status quo. Why? Probably because this builds power: others are beholden to them to build it back. I don't think there is much of a shared sense of "doing what is best" for the country. I view them as opportunists, hoping to ride Trump's popularity. Around them is a coalition with a range of interests. Some are genuine believers that DOGE will bring greater long-term economic growth (i.e. GDP). Some are so ideological that no real-world scenario would prompt them to change their policy prescriptions. Some of the coalition actively wants to reduce separation of church and state. Some are willing to curtail freedom of the press. It is a dangerous coalition because each part seems willing to let the other parts get what they want. They seem to fail to understand the importance of the rule of law and economic stability. I wonder how many know that Silicon Valley wouldn't exist without government research. Have they studied history? I can't claim to peer into their brains. I am curious as to what various people on the inside think they are accomplishing. It sure seems like a risky bet to ally with Trump; any allies better be ready to contort themselves to his various mercurial whims. Which parts of the coalition can get what they want and come out the other side in good shape? It seems to me they are burning the candle at both ends. Up until now, I've been reluctantly tolerant (far from happy) with a manageable level of government inefficiency, military-industrial backscratching, political pork sharing, and insufferably inane politics -- because, put together, this seems to a relatively stable way of maintaining some semblance of a representative democracy, healthy economy, a strong entrepreneurial sector, strong national defense, and math/science research. But the current direction is far worse. I don't think economic chaos, massive privatization, blatant corruption, likely Constitutional crises, meddling with the free press, using government for political retribution of (institutions, universities, individuals), loss of confidence in SCOTUS, etc... is doing to lead the US in promising directions. A significant number of people and business are going to leave. We're losing national prestige. It is a net loss to America and the world. But a net gain to Trump and his circle, at least in the short-run.
xpe 2y ago
I'm looking for predictive economic models out in the open. I want to see the underlying assumptions and experiment. I'm not even picky about the kind of model: it could be a relatively simple linear regression model, a systems dynamics model, a complex simulation, or anything in-between. I just want models to a focal point of discussion rather than some poorly-explained textual interpretation. I know... I'm asking for too much... this is usually proprietary stuff, so people are reluctant to share. But I want to live in a world where sensible people can compare models of what might happen. We don't have to necessarily agree on the assumptions or results. But we could at least be open about why we predict various outcomes. That would be better foundation that how we do things now, which is really embarrassing for a world with our capabilities. Eventually, I want to live in a world where we have sensible discussions about our predictions and about which outcomes are more and less favorable. P.S. If you are building a product or startup doing this, let me know. Or let everyone know. I built a product in this general area many years ago, but I didn't find product-market fit. Anyhow, I just want modeling tools like this to exist; I don't care who makes them. P.P.S. I'm very intentionally not bringing in my political philosophy nor level of personal concern here. To be open, I am personally affected, as are many of my friends, but I want to find some kind of common ground that doesn't make this about my particular take on the overall situation.
- trescenzi 2y ago
  I mean there’s some fed ones. Two are - GDPNow if you want shorter term: https://www.atlantafed.org/cqer/research/gdpnow https://www.atlantafed.org/cqer/research/gdpnow - DSGE if you want longer term: https://www.newyorkfed.org/research/policy/dsge#/overview https://www.newyorkfed.org/research/policy/dsge#/overview
  - whatever1 2y ago
    Eia also publishes their models.
  - xyst 2y ago
    GDP is such a deeply flawed metric of measuring human welfare. It’s an aggregate measure and doesn’t tell the distribution of wealth amongst nation. Also, it’s a metric that was sort of useful in the 1950s and during wartime when this country manufactured goods. Now it’s all unclear in this modern economy. It doesn’t take into proper account of services, quality of care, quality of life. It doesn’t even take into account _losses_ that may occur. Such as a natural disaster. Sure, in a post disaster GDP goes up because region is rebuilding. But the losses due to disaster are not figured into GDP. It’s a broken metric. Stop using this as an indicator of economic health and human welfare. edit; never heard of DSGE but yet again looks like yet another flawed “model” that assumes a level of “equilibrium” and seems to have been birthed out of the pseudoscience known as neoclassical (and orthodox) economics.
ohgr 2y ago
[flagged]
jongjong 2y ago
Well of course they're going to hurt zombie companies, that's the whole point. That's literally why everyone voted for Elon Musk's DOGE. Every company is another company's competitor and it's not fair that some companies have to compete against other companies whose profit margins are padded by taxpayer dollars... To some degree it's like being forced to subsidize one's own competitor.
- exe34 2y ago
  so space x and Tesla are going to part with enough shares to pay back all the money they got from the public (and the growth that said money funded)?
  - jongjong 2y ago
    For SpaceX, we can deduct the amount they saved which would have gone to NASA. For Tesla, we can look at foreign gov subsidies which went to foreign car companies like BYD, Toyota, etc... because it wouldn't make sense to target just Tesla... Given that governments of all nations play a key role in propping up their national auto companies.
    - exe34 2y ago
      It's really great that they have somebody looking out for the national interest at the top!
throway456aef 2y ago
Crash the economy on the backs of a majority of workers (federal workers are large portion democrats) who didn't vote for you so interests rates / inflation goes down.
- deleted 2y ago
  [deleted]
- techpineapple 2y ago
  I’d be curious to see a breakdown, aren’t a lot of federal jobs in red states? Besides I’m more interested in the second order impacts, what happens when those people stop spending in their communities?
  - ty6853 2y ago
    Government employees draw their money from taxes, inflation, or debt that's paid by one of the two. Stop spending is a bit of a myth, it reverts the spending to whatever productive entity in the economy it was taken from.
    - throway456aef 2y ago
      Huh? If you or anyone loses a job and can not find another for a few months to many there's no doubt they won't be contributing to the economy.
      - ty6853 2y ago
        Government employees are funded by taxing or inflating away wealth from the productive economy. That wealth doesn't evaporate when the government employee is fired, it is instead reverts back for spending to the entities from which it came. It's in another person's pocket who themselves can fuel the local economy, not gone.
        throway456aef 2y ago
belorn 2y ago
I thought the old teaching said that during a recession when governments want to save money, the best strategy is to increase spending in order to increase the circulation of money and stimulate the economy, and when there is a economic boom and governments can afford to increase spending, they should do the opposite in order to save money for when a recession occur. This was the somewhat paradoxical strategy that I got taught in school during my teenage years. I don't know how true this actually is.
- tormeh 2y ago
  This is Keybesian counter-cyclic policy. It makes sense but is hard to do in practical politics.
  - ty6853 2y ago
    Which is why the federal reserve was ostensibly decoupled from politics and democratic election, and designed in secret on Jackyll island so the public would not poison it. Unfortunately as you say if you try to time the market, or centrally plan interest, you generally get it wrong and end up even worse than a floating market. It didn't take long before we saw the effects of the great depression.
  - throw678937 2y ago
    [dead]
deleted 2y ago
[deleted]
hereme888 2y ago
I think what they're doing is long overdue. The abuse and corruption already exposed proves it. The net savings to taxpayers far outweighs any business losses from what I've gathered.
- deleted 2y ago
  [deleted]
- JohnFen 2y ago
  > The abuse and corruption already exposed proves it. I have yet to see a significant amount of this exposed.
  - hereme888 2y ago
    Follow DOGE on x.com to see the $billions upon $billions redeemed for taxpayers: https://x.com/DOGE https://x.com/DOGE
Karellen 2y ago
> At a Morgan Stanley conference this month, Brian Robins, finance chief for San Francisco-based software maker GitLab, said GitLab is aligned with the goals of DOGE, because the company’s software tools aim to help people do more with less. > “What the Department of Government Efficiency is trying to do is what GitLab does,” Robins said. ...well, fuck
Ferret7446 2y ago
(Original) title tastes like clickbait. This is about companies that deal in government contracts, so of course DOGE's actions may stop the flow of federal money. This excludes companies outside of the public-private complex.

82 points by howard941 2y ago

https://archive.ph/okSlz https://archive.ph/okSlz

Nothing they are doing is good for business. All will suffer. Think the Military Industrial Complex can't run when agencies, the military and our allies won't be able to buy our munitions/platforms? Nope, and private business won't need it unless they can offload on to local governments at less than cost, and cities will be broke without federal funds backing them up.

ty6853 2y ago
Most of the bombs/munitions the US drops is from the perspective of the American worker the equivalent of digging holes in the desert. The way to have more goods and services is to make more goods and services. Releasing people from digging holes allows us to create more wealth.
voidfunc 2y ago
It's pretty clear the obvious objective is to cripple the economy and buy up the losers for pennies on the dollar then also use government money as the carrot to compel surviving companies and local governments to adopt policies that are favorable to administration insiders. The new game is how much dick can you suck so someone in power smiles upon you.
- no_wizard 2y ago
  This is my assessment as well. Yes, all companies feel pain, but some can survivor years of pain compared to competitors, and couple that with price increases due to tariffs. Then in 18-24 months when everyone has resigned themselves to the price increases and the politically connected buy up struggling businesses the tariffs come off. At which point, the cost to the business is lowered but the price increases will more or less stay, and those that have consolidated power will be in prime position to remain dominate for some time, likely decades. It’s a giant market manipulation experiment disguised as many other actions but will ultimately culminate in consolidations of power Step II is going to be regulatory capture. I expect to start seeing this by summer or fall
xpe 2y ago
It depends on "good for who" and over what time scale. My dominant model is this: the core of the Trump administration is most interested in remaining in power and building connections. So they do whatever works to garner favor. They are relatively unaware or unafraid of the gathering storm of legal pushback. I think they figure they can get away with a lot before it catches up to them, politically or legally. This includes taking actions that they know are illegal. Bluntly, with their own admission, they are bringing a chainsaw to the status quo. Why? Probably because this builds power: others are beholden to them to build it back. I don't think there is much of a shared sense of "doing what is best" for the country. I view them as opportunists, hoping to ride Trump's popularity. Around them is a coalition with a range of interests. Some are genuine believers that DOGE will bring greater long-term economic growth (i.e. GDP). Some are so ideological that no real-world scenario would prompt them to change their policy prescriptions. Some of the coalition actively wants to reduce separation of church and state. Some are willing to curtail freedom of the press. It is a dangerous coalition because each part seems willing to let the other parts get what they want. They seem to fail to understand the importance of the rule of law and economic stability. I wonder how many know that Silicon Valley wouldn't exist without government research. Have they studied history? I can't claim to peer into their brains. I am curious as to what various people on the inside think they are accomplishing. It sure seems like a risky bet to ally with Trump; any allies better be ready to contort themselves to his various mercurial whims. Which parts of the coalition can get what they want and come out the other side in good shape? It seems to me they are burning the candle at both ends. Up until now, I've been reluctantly tolerant (far from happy) with a manageable level of government inefficiency, military-industrial backscratching, political pork sharing, and insufferably inane politics -- because, put together, this seems to a relatively stable way of maintaining some semblance of a representative democracy, healthy economy, a strong entrepreneurial sector, strong national defense, and math/science research. But the current direction is far worse. I don't think economic chaos, massive privatization, blatant corruption, likely Constitutional crises, meddling with the free press, using government for political retribution of (institutions, universities, individuals), loss of confidence in SCOTUS, etc... is doing to lead the US in promising directions. A significant number of people and business are going to leave. We're losing national prestige. It is a net loss to America and the world. But a net gain to Trump and his circle, at least in the short-run.

xpe 2y ago

I'm looking for predictive economic models out in the open. I want to see the underlying assumptions and experiment. I'm not even picky about the kind of model: it could be a relatively simple linear regression model, a systems dynamics model, a complex simulation, or anything in-between. I just want models to a focal point of discussion rather than some poorly-explained textual interpretation. I know... I'm asking for too much... this is usually proprietary stuff, so people are reluctant to share. But I want to live in a world where sensible people can compare models of what might happen. We don't have to necessarily agree on the assumptions or results. But we could at least be open about why we predict various outcomes. That would be better foundation that how we do things now, which is really embarrassing for a world with our capabilities. Eventually, I want to live in a world where we have sensible discussions about our predictions and about which outcomes are more and less favorable. P.S. If you are building a product or startup doing this, let me know. Or let everyone know. I built a product in this general area many years ago, but I didn't find product-market fit. Anyhow, I just want modeling tools like this to exist; I don't care who makes them. P.P.S. I'm very intentionally not bringing in my political philosophy nor level of personal concern here. To be open, I am personally affected, as are many of my friends, but I want to find some kind of common ground that doesn't make this about my particular take on the overall situation.

trescenzi 2y ago
I mean there’s some fed ones. Two are - GDPNow if you want shorter term: https://www.atlantafed.org/cqer/research/gdpnow https://www.atlantafed.org/cqer/research/gdpnow - DSGE if you want longer term: https://www.newyorkfed.org/research/policy/dsge#/overview https://www.newyorkfed.org/research/policy/dsge#/overview
- whatever1 2y ago
  Eia also publishes their models.
- xyst 2y ago
  GDP is such a deeply flawed metric of measuring human welfare. It’s an aggregate measure and doesn’t tell the distribution of wealth amongst nation. Also, it’s a metric that was sort of useful in the 1950s and during wartime when this country manufactured goods. Now it’s all unclear in this modern economy. It doesn’t take into proper account of services, quality of care, quality of life. It doesn’t even take into account _losses_ that may occur. Such as a natural disaster. Sure, in a post disaster GDP goes up because region is rebuilding. But the losses due to disaster are not figured into GDP. It’s a broken metric. Stop using this as an indicator of economic health and human welfare. edit; never heard of DSGE but yet again looks like yet another flawed “model” that assumes a level of “equilibrium” and seems to have been birthed out of the pseudoscience known as neoclassical (and orthodox) economics.

ohgr 2y ago

[flagged]

jongjong 2y ago

Well of course they're going to hurt zombie companies, that's the whole point. That's literally why everyone voted for Elon Musk's DOGE. Every company is another company's competitor and it's not fair that some companies have to compete against other companies whose profit margins are padded by taxpayer dollars... To some degree it's like being forced to subsidize one's own competitor.

exe34 2y ago
so space x and Tesla are going to part with enough shares to pay back all the money they got from the public (and the growth that said money funded)?
- jongjong 2y ago
  For SpaceX, we can deduct the amount they saved which would have gone to NASA. For Tesla, we can look at foreign gov subsidies which went to foreign car companies like BYD, Toyota, etc... because it wouldn't make sense to target just Tesla... Given that governments of all nations play a key role in propping up their national auto companies.
  - exe34 2y ago
    It's really great that they have somebody looking out for the national interest at the top!

throway456aef 2y ago

Crash the economy on the backs of a majority of workers (federal workers are large portion democrats) who didn't vote for you so interests rates / inflation goes down.

deleted 2y ago
[deleted]
techpineapple 2y ago
I’d be curious to see a breakdown, aren’t a lot of federal jobs in red states? Besides I’m more interested in the second order impacts, what happens when those people stop spending in their communities?
- ty6853 2y ago
  Government employees draw their money from taxes, inflation, or debt that's paid by one of the two. Stop spending is a bit of a myth, it reverts the spending to whatever productive entity in the economy it was taken from.
  - throway456aef 2y ago
    Huh? If you or anyone loses a job and can not find another for a few months to many there's no doubt they won't be contributing to the economy.
    - ty6853 2y ago
      Government employees are funded by taxing or inflating away wealth from the productive economy. That wealth doesn't evaporate when the government employee is fired, it is instead reverts back for spending to the entities from which it came. It's in another person's pocket who themselves can fuel the local economy, not gone.
      - throway456aef 2y ago

belorn 2y ago

I thought the old teaching said that during a recession when governments want to save money, the best strategy is to increase spending in order to increase the circulation of money and stimulate the economy, and when there is a economic boom and governments can afford to increase spending, they should do the opposite in order to save money for when a recession occur. This was the somewhat paradoxical strategy that I got taught in school during my teenage years. I don't know how true this actually is.

tormeh 2y ago
This is Keybesian counter-cyclic policy. It makes sense but is hard to do in practical politics.
- ty6853 2y ago
  Which is why the federal reserve was ostensibly decoupled from politics and democratic election, and designed in secret on Jackyll island so the public would not poison it. Unfortunately as you say if you try to time the market, or centrally plan interest, you generally get it wrong and end up even worse than a floating market. It didn't take long before we saw the effects of the great depression.
- throw678937 2y ago
  [dead]

deleted 2y ago

[deleted]

hereme888 2y ago

I think what they're doing is long overdue. The abuse and corruption already exposed proves it. The net savings to taxpayers far outweighs any business losses from what I've gathered.

deleted 2y ago
[deleted]
JohnFen 2y ago
> The abuse and corruption already exposed proves it. I have yet to see a significant amount of this exposed.
- hereme888 2y ago
  Follow DOGE on x.com to see the $billions upon $billions redeemed for taxpayers: https://x.com/DOGE https://x.com/DOGE

Karellen 2y ago

> At a Morgan Stanley conference this month, Brian Robins, finance chief for San Francisco-based software maker GitLab, said GitLab is aligned with the goals of DOGE, because the company’s software tools aim to help people do more with less. > “What the Department of Government Efficiency is trying to do is what GitLab does,” Robins said. ...well, fuck

Ferret7446 2y ago

(Original) title tastes like clickbait. This is about companies that deal in government contracts, so of course DOGE's actions may stop the flow of federal money. This excludes companies outside of the public-private complex.