Gently, softly, calmly, let’s talk about what’s happening in DC right now.
Friends, have you ever been through a ZBB process? If not, let me give you my take. So, in a corporation where expenses are out of control, you have to put the entire company through a zero based budgeting process. It is one of the most painful things that people in a company experience.
You basically have to justify every. single. expense. And you also cut a bunch, and then only add back after you’ve gone through a proper ZBB cycle.
The US government is going through a ZBB right now. And that is necessary because spending is out of control. The complexity is so vast that I expect it will take AI to decipher.
You cannot tell me that a government that accidentally wires hundreds of millions of dollars to the Taliban has its finances in order. That signals an underlying disaster. That signals bad stewardship of resources.
In fact, it is a disaster. Over the last 20 fiscal years, the US government has made ~$2.7 trillion in "improper payments," according to the US Government Accountability Office. Trillion! With a T!
That financial management disaster was not caused by . And there is no painless way to clean it up.
Elon is doing what any executive would do walking into a giant mess. You ZBB and then build back.
So, I don’t believe that America is going to be on the wrong side of global right and wrong, as some are saying. I don’t believe that America is going to be permanently isolationist. I do believe that unwatched finances will get out of control in any human system, and that the GAO has been trying to ring this bell for years, and that scaled complexity requires scaled financial management.
Because the US has the largest budget in the world, it will now go through the single most complex ZBB ever undertaken in the history of the world.
Some states do ZBB, but it's never been done at the federal level. President Jimmy Carter tried, but the bureaucratic systems were too complex, and President Ronald Reagan abandoned the attempt.
So, if there is one person in the world chosen to lead this Grand Canyon of projects, we would hope for the president to choose one of the best capital allocators on the planet. Better if that human is also one who can leverage AI and technical talent to manage the massive complexity.
Anyone who has lived through a ZBB at the corporate level will tell you that it’s hell and everyone hates it. This is why I feel really bad for federal workers -- I have a lot of empathy for civil servants and people doing a great job every day for the United States. No doubt, the uncertainty is trying and stressful for many. It's an unfortunate situation.
So, that's my take. I don't want to speak beyond what I know and can observe from the other side of the country. I've worked both in the private sector and the public sector -- the cultures are different. And an Elon-Musk-style culture is going to be the most hard core of them all. No doubt, it's jarring. It's gonna be a lot.
But what I also know is that every time I have ever doubted Elon, I ended up being the one who was wrong.
Nicole Shanahan: "On the topic of of DOGE, I don't think people are hearing exactly what DOGE is. It's yes. It's an efficiency agency, but what really is it? I've heard from, an incoming agency head that what DOGE is, it's a data mining research arm that can answer any budgetary question by department. And, I've seen it, you know, executed now a few times where an individual will ask, you know, tell me, everything about where department dollars are going overseas."
"And they can deliver that and tell you every individual who is hired to execute specific programs. Now before DOGE, in order for you to answer some of these questions, you would have to either hire consulting team or build a team internally to do that work. It was very slow. You oftentimes wouldn't get clean answers. So acting on efficiency goals with, like, inter agency was almost impossible."
"So having this, like, external almost consulting team that has some of the best data miners and organizers we have in this country because each department has its own team, I've been told, about five or six people dedicated. And, and they're really smart, very thoughtful, tech savvy. So they're they're actively mining information and turning it into, solutions in in just a matter I mean, USAID, you said he did over the weekend. I mean, they're moving so rapidly. It's fascinating."
"And and people don't understand how they're doing it. I feel like if they understood how they were accomplishing these things, they would have greater respect for it as a, as really something we need in this country."
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