What could this mean? Was the old management unbearably stupid? No, they were just throwing money around because it was there and never stopped flowing. It was boom times. Advertisers lined up and spent lavishly. The money was there, and they just kept hiring. Then, the new employees filled their time doing evil things, such as censoring the best contributors and steering the company toward “woke” political goals.
One criticism of my thesis might be that the now-fired employees built things that are now in use. So in a sense, the company is living off the work that others did. Now that the company has the machinery, it doesn’t need the labor anymore.
Maybe that’s true, but so what? Think of them as temporary contractors. Companies do that all the time. There’s no moral obligation to keep paying people forever for what they’ve done in the past. You don’t pay your mortgage to those who built your home. You pay the mortgage holder. The builders moved on long ago.
So it should be and will be in corporate life going forward following the end of the boom times. It only makes rational sense to pay wages and salaries to those who are adding value in real time. When they stop adding value, so too should the labor costs decline. We use just-in-time inventory; why not just-in-time payrolls too?
There are extenuating circumstances of course. Every company needs institutional knowledge, and that accumulates through personnel. Fine. But this proviso certainly didn’t apply to all 7,500 people who worked at Twitter. It might not apply to all of the 1,800 people who remain.
How slim can a staff be? Musk seems determined to find out. But consider how the incentives line up here too. He needs to economize to survive. This is how it works in the private sector. It especially works when monetary policy is sound and not distorting the production structure by mucking around with interest rates. This is precisely how the staffing here and in most of the Big Tech sector got overblown. But now that this policy is ending, we’re reestablishing economic reality.
This is how the private sector works. It must balance its books. It has income from customers, whether users, advertisers, or stockholders, and has expenditure on ongoing costs plus research and development. Double-entry bookkeeping minimizes waste and maximizes efficiency and excellence.
And how does government work? It takes money from the public and spends it. That’s the whole story. It can take money via taxation or inflation. It can also get revenue through other sources such as fees from pharmaceutical companies plus royalties on patents held. This leads to terrible conflicts of interest. And in general, there’s always and everywhere in government a penchant for unchecked abuse of power.
Will they? There’s no real reason for politicians to act unless they’re pushed to do so by voters. Too many voters are clueless about the power and reach of the administrative state. They don’t know that the power of this fourth branch of government far outstrips that of the elected branches. Just consider the COVID-19 response. Not one thing about those coercive measures was voted on by any elected body. The entire system deferred to the administrators to run the entire response.
Courts have cut some of these powers back but too few and too late. What’s more, the courts have done nothing at all to cut back the size and scale of these agencies. If we apply the Elon rule, 3 out of every 4 could be instantly fired and perhaps we have a better government that minds its own business. How can we know for sure? It would be nice to try it.
It would be great if the president of the United States could act like a CEO and just fire people. Just like Musk. Sadly, he can’t. Union rules and other laws that date back to the 1940s prevent it. That’s completely crazy if you think about it. Who’s in charge around here? It seems like the administrative state is the only institution truly managing the administrative state.
After all, what was once charmingly called the “civil service” has become the bane of American life, a permanent oppressor class as debilitating as it is illegal by the Constitution. It has been well described in the Declaration of Independence as a swarm that’s eating out the substance of freedom itself.
One of Biden’s first actions as president was to reverse this executive order. He wanted to save the administrative state from even the most minor threat. What does that tell you? It reveals the true agenda of a whole political party in this country. They aren’t serving the people. They’re serving the administrative state. That’s treason as far as I’m concerned.
The point is that if Musk became president, he could in no way do to the government what he has done to Twitter: plug the disastrous leak of inefficiency, save resources, and increase the functionality of the system. He simply wouldn’t be allowed.
That isn’t the American way. The Republicans absolutely must take this on. They need to change the system so that someone in Washington can gut the administrative state, the same as anyone would manage a bloated company that’s losing money.
Do you want smaller government? There’s only one way: crush the administrative bureaucracy. Devastate it. Send its employees to the hospitality sector.
Cutting 3 out of every 4 federal employees would at least be a good start. I might further suggest that every lawmaker take a tour of Washington. Make a list of every building labeled agency, department, or bureau. Put a red line through every item on that list. That’s a good beginning to get back to Constitutional government.
