The Trouble with DOGE

Department of Government Efficiency…sounds good, right?

Who doesn’t want to either pay less on taxes or at least get more for the taxes you do pay?

But..is DOGE really doing what it claims to be doing?

This is how they operate….

1. A team of 20-something year olds go into a government agency and look for inefficiencies.
2. This team appears to be made up of programming people.
3. After a couple of days, this team declares that by eliminating X% of the workforce, they can save billions of dollars.
4. Since they only want to eliminate waste or unproductive people, they carve out the newest employees and send them on their way.
5. Final step…publicize a great success

Let’s stop and think about this for a minute.  Let’s just slow it down.

Recall the last time you got a new job or a new position at an existing workplace.  How long did it take you to fully understand what your job was?

If your job is to pick lettuce, you may have caught on pretty quickly.  Here is how deep I dig to get the roots.   Remember to lift with my legs and not my back.  If I stack 3 before loading them into a bag I can go faster.  Every job has things to learn.

If your job is to manage a team of salespeople for a product you have never heard of before, it may take longer.  In fact, it could take weeks, months or even years before you are able to say, “I know my job inside and our.”

That is just for one job.

Now imagine a bunch of DOGE kids bursting into a giant, decades old social service organization with tens of thousands of employees.  How many centuries would it take for them to fully understand the value of each and every job?  The idea that in a couple of days, they have it all figured out is simply nonsensical.

What I think they are doing is grabbing a payroll spreadsheet and sorting the names by date of hire.  Next to each name is an annual salary.  They start and the bottom and add up the salaries as they go up the spreadsheet.  They stop when they have highlighted enough salaries to justify a savings.  For example, if we fire the most junior10,000 employees, we will reduce payroll by $850 million per year.  That’s almost 10 billion over10 years. 

Let’s do that and claim $10 billion in savings and then move on to the next building.

I have spent the last 35 years of my career working with companies to help them become more efficient.  These are large companies that make pharmaceuticals, or semiconductors or cars.  They might be in mining or transportation or manufacturing.  They might have as few as 100 employees or as many as 100,000.

In all of that time, I have not once found that the best way to lower costs was to reduce payroll.

Not one single time.

The reason for this is that companies, profit and non-profit, do not have a high tolerance for paying people to stand around.

People at a company to do one thing…add value.  If they weren’t adding value, they wouldn’t be there.

Yes, you can have lazy people and hard workers but on the whole…people add value in their job position or they would be let go.

If you understand this, then you understand why reducing payroll is almost never the best way to become more efficient.

Let’s take an example…

Suppose I went to a company that makes Electric Vehicles.  I could go into that plant and say, “Let’s fire 25% of your workforce and save $10 million a year.”  Sounds great, right!

However, now we don’t have the maintenance people we need to keep the machines running.  There are not enough people to paint the cars or install batteries.  There is not enough programs to keep all of the automation in sync.  The air conditioner breaks down and people start to get sick and equipment overhears.  Trucks are lined up to deliver parts but no one is there to check them in or unload them. 

The company saved $10 million a year by cutting productivity down to nothing.

And, did I really save $10 million a year?  Those people I fired will get some severance.  They will files lawsuits.  This will become a public affair nightmare.  These fired employees will start to collect unemployment and stop paying taxes.  They will stop paying rent, and buying TV’s and new clothes. 

In short, my random firings cut valuable services needed for production without saving all that much money and even adding to the social welfare burden caused by the newly unemployed. 

This is what DOGE is doing.

Yes…the idea is grand.  The execution is going to disrupt our economy for generations.