Appeals to “Government Efficiency” Are A Smokescreen For Political Decisions

The Appeal to Government Efficiency Is a Smokescreen

 Pres. Trump likes to present his political program as one of promoting efficiency in government. He and Mr. Musk say that government agencies are inefficient and that we can save money by eliminating waste. This idea seems to be appealing. After all, who can be against efficiency? Who does not support eliminating waste? However, the idea of eliminating waste as it is used by Trump and Musk is always a smokescreen for eliminating programs that they don’t like. In order to see why this is so, we need to delve deeper into the idea of economic efficiency.

What Is Economic Efficiency?

Economic efficiency is the ratio of benefits to costs, or 

efficiency = benefits/costs. 

If the benefits of a program are big and the costs are small, the efficiency will be high, but if the costs are high and the benefits are low, the efficiency will be low.  Suppose for example, that we invest $500 in the stock market and the value of our investment increases to $1000, the efficiency of the investment will be $1000/$500, which will give us an efficiency of 2. We can multiply that by 100 to get an efficiency of 200%.

Measuring Economic Efficiency Requires a Point of View

Measuring efficiency always requires a certain point of view that determines what is considered to be a benefit and what is seen as a cost. For example, the efficiency of a business is usually easy to measure because in a business, the owners define the point of view. The benefit is the profit earned by the business, and the wages earned by the workers are a cost. The owners have an interest in lowering their workers' wages because doing so increases the efficiency of the business, but the owners must allow the workers to earn a certain wage because otherwise, the business would fail, and the owners would lose their profit.  

From the workers’ point of view, however, the wages they earn are the benefit, while the owners’ profit is a cost. The workers' wages are always limited by the owners' need to make a profit. The workers must allow the owners to make a profit because otherwise, the business would fail, and the workers would lose their wages. Thus, even in a business, the idea of efficiency is tied to a point of view.

Efficiency in Government Programs

When we are speaking of the efficiency of a government program, we must always take a point of view that determines what will be considered a benefit and what is seen as a cost. Is better police protection a cost or a benefit? Is affordable childcare a cost or a benefit? Is affordable healthcare a cost or a benefit? There are no simple answers to these questions because in each case, the answer depends on one’s point of view. 

In questions of public policy, the various points of view are political. In fact, elections are often about the choice of the point of view that will frame the discussions of particular policies. The question of what is considered a cost and what is a benefit is always political when we are speaking of government programs. It follows that we cannot begin to measure the efficiency of a government program independently of a political point of view. If efficiency = benefit/cost, we cannot calculate its value until we have decided what is a benefit and what is a cost.

Two Practical Examples: Consumer Protection And Clean Air

To most of us, protecting consumers from fraud is a benefit, but businesses can make a profit by defrauding consumers, and from their point of view protecting consumers is a cost. The Trump administration shares that view. Trump sees protecting consumers as a cost, and therefore, reducing protection for consumers increases the efficiency of our government. That is why the administration has ordered the Consumer Financial Protection Bureau to stop all of its work. Trump and Musk believe that our government should not protect consumers from financial fraud because to do so is wasteful, and elimination of waste increases efficiency. To the Trump administration, protecting us from financial fraud is not a benefit. It is a cost.

Here is another example. To most of us, clean air is a benefit provided by government regulations. From that point of view, eliminating the regulations would reduce the benefit of clean air, and reducing a benefit does not increase efficiency. However, from the point of view of businesses that produce pollutants, the regulations that force the companies to emit fewer pollutants are a cost, not a benefit. The Trump administration shares that view. To Trump, clean air is not a benefit; it is a cost because complying with the regulations costs money. From that point of view, eliminating the regulations will reduce costs and will thereby increase efficiency. 

Don't Be Fooled

In the cases of clean air and consumer protection, the idea of increasing efficiency cannot be separated from the political question of whether clean air or protection from fraud are benefits or costs, and that is true of every government program. Is the medical care provided by Medicaid a benefit or a cost? Is DEI a benefit or a cost? Are agricultural price supports benefits or costs?

The answers to these questions are inherently political. Trump and Musk like to pretend otherwise. They try to persuade us that increasing efficiency is politically neutral. They claim that increasing efficiency can be separated from politics, but that is a lie, and it is a screen for their real goal, which is to eliminate programs that do not increase corporate profits. Anything that does increase profits is seen as a benefit while anything that does not increase corporate profits is described as a cost. Social Security? It's a cost. Cut it! Medicare? It's a cost. Cut it? Air quality regulations? They're a cost. Cut them! Public education? It's a cost. Cut it!  Don’t be fooled. Resist!