0:37
Intro. [Recording date: December 18, 2024.]
Russ Roberts: Today is December 18th, 2024, and my guest is economist Mike Munger of Duke University. This is Mike’s 49th appearance on the program. He was last year in September talking about Bruno Leoni.
Our topic for today is the [U.S.] Constitution, the so-called Department of Government Efficiency [DOGE]–with the expectation it will be led by Elon Musk and Vivek Ramaswamy–and I’m sure we’re going to get into many other things along the way.
I want to remind listeners to go to EconTalk.org and vote for your favorite episodes of 2024.
1:11
Russ Roberts: Mike, I want to start with an observation about the current moment in America and see if you agree. You and I, historically at least, are what might be called classical liberals. At times we have called ourselves libertarians. I moved in various ways, I think, to what is closer to a conservative. And I’ll confess that while much of my life has been tilting at the windmills of government intervention in the economy, I find myself less passionate about those issues.
And careful listeners will have noticed this trend over the years on EconTalk. You and I have discussed this some in our conversation about crony capitalism and in other episodes. And I’ve also confessed that despite the rising size of government over our lifetime, things are pretty good in America, at least in terms of material well-being and so on for a large portion of the population.
But, you know, somewhere deep down, I still have a deep skepticism of centralized power, a belief that economic freedom is essential to human flourishing.
Looking back at the Presidential election we just went through in 2024, fans of economic freedom–what might be called free market economics–had no home in 2024, or for quite a while before that–not in the Democratic Party, not in the Republican Party. Both sides are unhappy with immigration, eager to shore up the border. Both sides are happy to impose tariffs. The so-called Libertarian wing of the Republican Party has been completely amputated by Trump. In the old days, most Republicans paid lip service to market principles. They didn’t always–or often ever–do anything that would be called free market, but at least they would defend the ideal. Those days seem long gone. Candidates who talk about the power of markets, economic freedom, have very little traction with the electorate these days. And yet–and yet–weirdly, inexplicably, it feels to me like the most libertarian moment of my lifetime.
First, we have Milei in Argentina–not an American, but he’s doing great. Seems to be doing great, anyway. He’s the most libertarian national candidate who has succeeded anywhere in my lifetime, at least so far. We’ll see what he ends up being; but he seems to have taken a chainsaw to government agencies and to spending. He’s an incredibly articulate defender of economic principles related to free markets.
And, even though I said that Trump doesn’t seem to have much of a libertarian streak, since the election, there are elements of this moment that are, dare I say it, libertarian.
First, there’s a full-throated defense of free speech from many, many players and a deep suspicion of the deep state. That is a fundamentally libertarian urge, a suspicion of government power.
Then, there is the Department of Government Efficiency [DOGE], which I hope we’ll be talking about. There is serious talk–just talk for now–but there is serious talk of eliminating government agencies.
There is serious talk of slashing spending. On my X account just now, five minutes before we recorded this [recorded 2024/12/18–Econlib Ed.], Elon Musk tweeted a photograph of the government’s spending bill–I think it’s about to pass–to keep the government going. And, he said something like, ‘Well, here’s a picture of pork.’ This is unusual.
There’s a focus on the deficit [the Federal budget deficit–Econlib Ed.]: suddenly that it’s an urgent issue–something that no one in either side of the aisle in the election had any interest in discussing.
What is going on?
Now, you and I, being men of the world, being economists, are always going to be skeptical of what people say versus what they end up doing. But I’m kind of surprised–well, I’m very surprised–at the current rhetoric coming out of Elon Musk, Vivek Ramaswamy, Trump, and others. Am I imagining this? What are your thoughts?
Michael Munger: A bunch of shocking things have happened. In the Middle East, the collapse of Syria. In Argentina, the rise and continued popularity of Javier Milei, and then in the United States, for many people, unexpected, not just victory, but dominance of what you might call the Trump coalition have put them in a position to be able to try to do things.
Now, I’ve been a Libertarian since 2004. And by being Libertarian, I mean big-L Libertarian: I have been active in the Libertarian Party since then. We probably would want to distinguish between big-L Libertarian Party people; small-L libertarians who kind of identify; and then classical liberals, which are a much larger group.
But, all of those people are skeptical of government.
Now, it seems to me that a big problem that libertarianism has had is that it’s torn between two impulses. One is to celebrate the, if not perfection, at least magnificence of markets.
And the other is to point out the difficulty, and in fact danger, of relying on the state to accomplish things that people want to accomplish.
I’m much more in the second group. And, coming up as I have, in the Public Choice approach to Political Science and Economics, I’ve always been much more comfortable with what–and we’ve talked about this on previous podcasts–the ‘pretty pig’ approach. That is: we look at one set of processes–market processes–and we’d talk about their imperfections. There’s market failures, there’s these problems, there’s inequality. We should rely on the state.
Well, wait: We would want to say something about the ability of the state to carry out those functions.
And, there’s an original libertarian impulse in the American Constitution, or at least the original version of the American Constitution–what the Constitution started out as saying–which seemed to be just a model of limited government.
And, by limited government, what they meant was there will be specifically enumerated powers that the Federal government will be able to exercise. That’s it. Only the powers that we are listing. And, there were a bunch of restrictions on what the state could do.
So, my concern–and I say this all the time, but people won’t heed it–is, to me, the most important political principle is never make a sword so powerful and sharp that you don’t want to see it wielded by your worst enemy right after the next election.
And, everyone forgets that. What they want is a powerful state to accomplish what they envision that a powerful state at the–under the control of a good person they approve of, will accomplish all of these things: all of the Constitutional impediments, all of this argle-bargle, all of the red tape politics. The worst thing is politics.
So, they all hate politics.
One of the reasons libertarians like markets is they all hate politics. But when it comes down to it, almost all of us are susceptible to this Siren’s song of: ‘Well, we can control the sword. We can control the ring of power. And we will use it; and for just a day or two, we will make things right. And then, sure, we’ll revert to the state being weak. But for now, we need a powerful state.’
Everyone thinks that, is the problem. I always feel like a lone voice saying, ‘Wait, stop, don’t,’ which is what Willy Wonka said when the fat kid was going to jump in the chocolate: ‘Wait, stop, don’t.’ But, he didn’t say it very loud. The kid jumped in the chocolate anyway.
I say it loudly. People create the sword anyway. And so I’m worried that what we’re on the verge of now–it’s tempting to say what we’ll do is endow a powerful agency. The DOGE–the Department of Government Efficiency–we will suspend all of the usual rules. They will look through all of the different government activities. And with this enormously powerful sharp sword, they will cut out just those things that the government shouldn’t be doing. And then we’ll start over except with a much smaller, leaner, less powerful government and all will be well.
10:13
Russ Roberts: I have to reference one of my favorite episodes of EconTalk, which I think was back in 2012 with Robert Frank. We had an actual debate. It was not a conversation. We had been asked by National Public Radio [NPR] to talk about infrastructure. They ended up using about 10 minutes of our back-and-forth. But we recorded about an hour. And, NPR gave us permission to release the entire hour as an EconTalk episode. And although I prefer a conversation to debate, in this exceptional case–partly because of the relationship I have with Bob that we respect each other and it was in an educational vein–it was more of a debate than a conversation, much more combative and a little more entertaining maybe than the average episode. We’ll put a link up to that; you might want to go back and listen to it because it’s very relevant for this moment.
What Bob wanted, at that point, was to improve infrastructure in the United States, feeling that we had done a terrible job. I pointed out we’ve spent a huge amount of money on it. And he pointed out: Well, yeah, it doesn’t get spent very well because the government messes things up; and we wouldn’t let the government–
Michael Munger: Politics. Politics–
Russ Roberts: Yeah–and we wouldn’t let the government allocate this money in this better world. We’d have a committee of experts; and they would just actually make a list of the most important pieces of infrastructure–crucial bridges, highways, subways, you name it, high-speed rail. And, instead of it going to the places with the most political power, it would go to where it was most needed, or that was most good for the world or the economy or the American people.
And, I mocked that–politely more or less, and you can go back and listen to it–but we’re in the exact same moment. Here is this idea now coming from the Right–from the Republicans–that: Yeah, we can just avoid all these nasty political processes that gave us these bloated agencies; well, we could just actually do some good in the world.
And, my first thought–and I’m curious if it’s yours–and it seems very ironclad this first thought: Well, that’s all nice, but there are all these rules and you can’t cut.
I’ll take an example of my favorite. Social Security spends a huge amount of money–and so does Medicare–taking care of old people. Many of those old people have a lot of money, except they’re not means tested, exactly. So, obviously it would make sense to means-test Social Security and retirement and also healthcare; and the government would save an enormous amount of money. The deficit could come way down, and it would have important ramifications for the next 10 years.
Yet somehow the political process doesn’t think that’s a good idea. It doesn’t result–there’s no thinking–that result does not emerge from the political process. And so, if Mr. Musk or Mr. Ramaswamy with their giant shears cut through the Gordian Knot of politics–try to do so–well, they’re going to be stymied by filibuster and voting and it’s just not going to happen. Now what are your thoughts?
So, that’s my first thought, is that: Talk is cheap; they’ll never get this done. It’ll end up being a silly little thing where they kill off some NSF [National Science Foundation] study of snail darter reproductive habits and save $18 million and that’ll be it. There’ll be nothing grand or important that comes out of the Department of Government Efficiency [DOGE], because you can’t just add a department. You’ve got to go through the normal processes of budgets, and allocations, and spending, and this whole thing’s a fantasy. Well, you’re in a Political Science Department. Am I right or wrong?
Michael Munger: Are you saying that we know more about fantasies than most departments? You’re probably right. Yes. I’ve heard of the Fantasy Identification Department. It’s in Ecclesiastes–I don’t remember the Hebrew word–but it’s in Ecclesiastes that there’s nothing new under the sun.
So, this was a big debate in the ‘teens and early 1920s, and I actually have tried to make a point saying a lot of the observations of what we now think of as Public Choice actually come from the Cambridge School of Economics–and we did this on a previous podcast–where it’s really important to recognize that the concerns about insulation from politics were crucial to achieving good policy. So, it’s not true that people on the Left don’t understand the problem with democracy. They understood it 30 years before the Public Choice people on the Right started to work in that direction. And, Ludwig von Mises in his book on Bureaucracy and on socialism, made the really important observation that bureaucracy is the sine qua non–it is the essential form of organization for the territorial extensive state.
And the idea that we’re going to reform bureaucracy, we’re going to make it more efficient, we’re going to go through the budget and cut wasteful spending, is just nonsense. You either want the state to do this, or you don’t. If you want the state to do it, then you want bureaucracy to carry it out.
So, the question is not: Can we go through their budgets? The question is: What are the things that the government should be doing? If it’s doing–and this is Tyler Cowen’s claim, really, about state capacity libertarianism–there are some things the state should be doing. We’re going to have to argue and decide what those things are. If the state should be doing that thing, it should be carrying it out in a way that is well-funded, that has experts, that has employees that are dedicated to that purpose. [?If?] the state should not be doing it, we need to get rid of the entire agency.
So, on the question about DOGE, the problem is: Well, there’s two dimensions of problems that are kind of separate. One is that the budgets and the enabling statutes of these agencies were passed by Congress. They cannot be cut by some–forgive me–bureaucrat, even if that bureaucrat’s name is Elon Musk. He’s still just a damn bureaucrat who works for a new department called the Department of Government Efficiency.
So, one bureaucrat can’t look and say, ‘You know, we should get rid of this department,’ and everybody will say, ‘Yes, thank you for revealing that, and we’ll get rid of the department.’ It’s there because of a statute. It would have to be passed by Congress.
And, it is the nature of these departments that they create quite a few winners that have very concentrated benefits. They will rise up–immediate pop-up lobbyists–against getting rid of the agency.
The other thing is, there’s a bunch of statutes. There’s a bunch of things–you may not like them, but there’s a bunch of things that these agencies do. And so, the rule is that if you have one lawyer, they’re not very busy. If you have two lawyers, they have more business than they can handle. The usual rule about bureaucracy is that the larger they get, the busier they are because they have more rules and regulations to enforce. And so, there’s a bunch of statutes.
People say we should get rid of the Department of Education. The Department of Education administers just an enormous number of regulations that we have to do in order to spend the money that the Department of Education spends. We can’t cut that back. We either have to get rid of it entirely–in which case we also would have to get rid of the statutes that they enforce, and the regulations that they use–or we’re going to recognize that we’re not going to accomplish very much.
So, the two dimensions–I said a bunch of things there–the two dimensions are: First, you can’t get rid of the agency.
Second, there’s a whole forest of regulations that they enforce that unless those statutes–also in addition, hundreds of things–are withdrawn, you can’t get rid of the agency.
And so, my favorite of these is the IRS [Internal Revenue Service]: We’ll get rid of the Internal Revenue Service. The reason the Internal Revenue Service is there is that we have this gigantically complicated tax code. Getting rid of the IRS will not change anything about the gigantically complicated tax code.
Now, if what you want to do is have a flat tax with two rates and no deductions, then we can get rid of the IRS. But, the IRS would, like Marx said, it would wither away. We wouldn’t need it. It would disappear.
And so, the idea that we can just go through the budget and cut it, suffers from those two problems. First, we’d have to get rid of the entire agency because that’s how bureaucracies work. That’s what governments do. And, von Mises noticed this in the 1920s and argued it very clearly. The second thing is this forest of statutes and regulations we would also have to get rid of.
I just think it’s a non-starter. I think it’s a complete waste of time and it’s just a public relations stop.
19:19
Russ Roberts: Okay, I want to come back to that in a second, but I want to say something first about the Department of Education. Some Americans understand–many do not–but some Americans understand that the Department of Education at the Federal level, is a relatively small dispenser of funds. It is an important dispenser of some regulations, but in general, the organization of education in the United States at the K-12 level, the public education system is a local system.
So, Trump, at some point, tweeted a bunch of goals he wanted for the Department of Education. ‘Stop doing this DEI [Diversity, Equity, and Inclusion] thing, do more of this,’–I don’t know what it was; it doesn’t matter. He wanted education in America to have certain characteristics it doesn’t have now. And, among the other things he wanted to do was to eliminate the Department of Education.
And, I suggested that it’s going to be difficult to get the 50-state, 3 million municipality-level public education system to do x, whatever x is, if you don’t have a Federal organization to impose it. It’s just not going to happen.
So, there is a inconsistency there. We may disagree–reasonable people can disagree about what trade-offs are worth enduring or things worth giving up if you keep it or don’t keep it. But, you can’t do all that. It’s not realistic.
I think the only challenge I would have to your claim–that it’s just PR [Public Relations]–is the following. You and I did a really wonderful conversation–mostly you, not me–on enforcing the obedience to the unenforceable. And, it was a conversation about norms. And, I’ve become increasingly interested in the fact, it seems to me, that norms decay over time in the face of temptation.
So, the U.S. political system has a bunch of rules[?roles?]–checks and balances, the role of Congress, the role of the Federal court, the power of the Constitution. They have changed dramatically over time.
And, much of what has changed is not the letter of the law, but how the law is enforced, how people feel about it. And, the most obvious example of this, to me, is the increase in the executive power of the executive of the President of the United States. And, there are a lot of things presidents do now that would have been considered unacceptable 50 years ago, 25 years ago, certainly 100 years ago.
One of my favorite presidents, Grover Cleveland, at one point was asked to give money to farmers to help them after a drought[?]. He said something like, ‘I’d love to. Where does say I can do that in the Constitution?’ It doesn’t. So, raise the money through charity or do something else. That attitude is not acceptable anymore. And, the norm of a stay-in-your-lane, no matter what institution you’re part of, has degraded and eroded over time.
So, even though I am skeptical of the true desire and especially the ability of what we’re talking about–the people we’re talking about–to achieve what they claim they want to achieve, I wonder if I’m underestimating them. I wonder if it might be possible to elude and evade some of those restrictions in place that keep change from happening.
You know, the United States is famously a country where radical change is difficult. The checks and balances have this cost. Change is hard. They have this advantage. Change is hard. It leads to a certain level of stability. You don’t have large swings in policy.
Even when you have a landslide, like when a president wins 49.7% of the vote-which I think is what the incoming president won; that landslide degraded over the course of the evening as votes came in from California. He did win. He does have something of a popular mandate, but I would say it’s quite thin. And yet it’s being treated as if this chainsaw is being put in his hands by the American people to do a bunch of things he did not campaign on. And, yet, I wonder if he might actually achieve some of these things because there is a willingness of different pieces of this puzzle to stand aside and not hold up their part of the bargain of what their obligations are.
Let me say one more thing. I apologize for rambling and going on so long. The Administrative State–the imposition of regulations by non-elected officials at their discretion–has grown over time. And again, the reason I feel like this is something of a libertarian moment is that all of a sudden people are talking–at least in the Republican Party–that the Administrative State is out of control.
Now you’re suggesting they won’t be able to do anything about it. I wonder: I’m a little more, dare I say it, optimistic. Your thoughts?
Michael Munger: Stafford Beer famously said that any system is designed to produce the outcomes that it actually produces. [This quote is often attributed online to W. Edwards Deming. Anyone know who said it first?–Econlib Ed.] And so, the concept of equilibrium is important here. The reason we have the system of government we have and not some other is there’s a set of political forces that have resulted in this. It’s not an accident.
And so, there’s a bunch of interests that are benefiting–probably, not net. That is, if we could get rid of it, the overall system would be better, but many individuals would be harmed and they’re not going to be compensated because the costs of getting rid of these agencies are going to be concentrated. The benefits are wide, but there’s going to be a big increase in growth.
In an article I recently wrote about changes in the Constitution, I said that if we were serious, there’s two things that we should be doing. And, we need to have a copy of maybe Milton Friedman’s book Free to Choose and the U.S. Constitution open to the page where the 10th Amendment is.
And, there’s two questions we should be asking of every government activity. The first is: Is this an activity the state should even be involved in? Not because markets are perfect, but because states are bad. States do things badly; they do them expensively. There’s a lot of red tape; it’s slow and it diverts resources from other parts of the society.
So, if this is not–and the case–the burden of proof would have to be on whoever wants to say, ‘Yes, we should do it.’ Not, ‘We should do it because we are doing it.’ Let’s assume we should not be doing it and you’d have to show it. So, is this something the State should even be doing?
Second, we look at the 10th Amendment. And the 10th Amendment, if I may quote it, is:
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
So, there’s a set of things that the Federal government gets to do. Everything else belongs to the state.
And so, this is Federalism–this is the issue of Federalism. It’s astonishing that there’s a Department of Education. You said that’s mostly in the states. According to the Constitution, it is entirely in the states. There is nothing in the U.S. Constitution about having a centralized system of education.
And so, education–maybe it’s a public good. Maybe this is something that government should be involved in. Department of Education fails the second test, which is the 10th Amendment. This is not a Federal activity. The Department of Education should be entirely eliminated. Not cut: not look at its budget. The way to get rid of it is just to excise it and get rid of it.
And, if we cannot do that, then we probably cannot do any of the more difficult ones where actually this is clearly a Federal government activity.
So, the other one that I have argued for is the Department of Commerce. And, I mentioned, again–it’s something that I wrote about cutting–the Department of Commerce.
If you look at their website, they say that we touch every American every day–
Russ Roberts: Yahhh–
Michael Munger: Well, this is non-consensual touching. I imagine I go to the doctor and I have a doll and the doctor says, ‘Well, show me on the doll, where did the Department of Commerce touch you?’ Because it’s too embarrassing to say, that I don’t want to be touched by the Department of Commerce.
They have 13 different bureaus. They have scientists who are doing research on all sorts of activity to improve the productivity of investment. That’s not a government activity.
So, the two that I would lead with–and so my test is how long is it before we at least ask–after January 20th, after the inauguration–how many months–or I would say years or decades, because I’m a skeptic–is it before we say we’ve got to get rid of the Department of Commerce and the Department of Education? That’s the low-hanging fruit.
My prediction is never: the over-under is never. And so, I don’t think they’re serious. Because that’s where you would start if you were serious. You have a copy of Free to Choose, a copy of the Constitution. And, it has to satisfy both of those two things: this should be something government should be involved in, and it should be involved in it at the Federal level. And there’s no way that’s going to happen.
Russ Roberts: Well, it’s going to be interesting to see. I don’t think we’re going to abolish the IRS. I don’t know.
Michael Munger: We have a complicated tax code. We should not–I’m waving my arms for those that are listening. You raise the important point, starting with the IRS, it is deeply unpopular. It is unpopular because the tax code that the Congress has passed is so complicated and in many cases, aggressively punishing people that work–that don’t rely on lawyers to create artificial structures that allow them to pay less. We have to have the IRS. We don’t have to have the Department of Commerce or the Department of Education.
30:19
Russ Roberts: Okay, so I want to give you a counterexample to your skepticism and see if this is the exception that proves the rule for you. To summarize your view–and to be honest, it’s my view too, but I’m caught up in the excitement of the moment.
I would summarize your view as saying the following. Political forces are very powerful. They impede change even when it’s for the best. And it would be foolish and unrealistic to expect those things to go away. And therefore very little is actually going to happen. Before we recorded this, I called this–the impulse we’re talking about here–the Thomas Friedman Impulse because Friedman once wrote–I found it deeply offensive–he said, ‘If only for a day we could be like China’–the United States–‘if the United States could be like China for a day where we didn’t have all these democracies’–
Michael Munger: With him in charge. Not with Xi in charge, but with Thomas Friedman in charge. So, not really like China, but otherwise like China and with Thomas Friedman in charge–
Russ Roberts: ‘And if we could just get rid of these checks and balances and these annoying institutions of a Constitutional Republic, we could get so much done. And, we would only needed for a day, though. We’d just do the big low-hanging fruit, the big important things.’ And as you say, of course he has himself or someone equally wise and good in mind. But every once in a while we do something like this.
So, here’s the exception that proves the rule. Maybe. I suspect you know more about this than I do. When the Cold War ended, the United States found itself with all kinds of bells and whistles that were no longer necessary. One of them was we had a lot of military bases that were no longer necessary. And, a military base is very much like the kind of political example we’re talking about. The benefits are very concentrated; the costs are dispersed. So, it’s really hard to close a base. The people who live there, work there, benefit from it, yell a lot. The people who would benefit from the closing don’t even know it’s happening. They tend to stay quiet. And the political process keeps the base open.
So, at some point–and I don’t know how this happened; maybe you do–most people say, ‘Well, this is silly. We’ve got to close some of them. And, we can’t just close this one over here because Senator So-and-So will scream on behalf of his or her constituents. So, we’ll have a commission. The commission will look across all of them.’ This is akin to the infrastructure example of Bob Frank. ‘And, they’ll close the least needed ones. And, it’ll be painful for those locations, but we’ll spread them around geographically.’ And, I think that actually happened.
And, I’m asking–the version of this that is maybe somewhat interesting, or maybe not, is that: The United States all of a sudden spends a lot of money and has a really big national debt and a really big deficit.
And, it’s true that nothing bad has happened so far, which is why that issue gets almost no political traction. But, even most people recognize that that’s not a good strategy over time, to say that there are no budget constraints for the Federal Government. And so, maybe there would come a moment where we’d have to do a commission-on-base-closings kind of thing to get the deficit or the debt under control. And, I feel like, is it possible that the Department of Government Efficiency–which is a really Orwellian name by the way: you really couldn’t name it any better because it’s only going to get rid of inefficient things–the efficient things we might even spend more on, by definition, it’s the Department of Government Efficiency. Really we probably should have called it the Department of Government Inefficiency, DOGI. But, anyway, what do you think about this question of a commission to override the things you’re talking about and that maybe the deficit and the national debt could create that kind of serious moment?
Michael Munger: The Base Closing Commission [Base Realignment and Closure (BRAC) Commission] was created because of the problem of time inconsistency. Time inconsistency for economists is that we recognize that we might have different incentives at different points in time. So, we would say, ‘We should get rid of some bases.’ And then, when it’s proposed that the base in my district is one of the ones to be closed, I’m going to say, ‘Wait, not that district. You can’t have meant that.’
And so, on the cover of the Constitutional Political Economy Journal is Odysseus bound to the mast. Because Odysseus recognized that he had the problem of time inconsistency. So, at one point he says, ‘I would like to hear the Sirens and not die.’ But, he is not–
Russ Roberts: Explain who the Sirens are.
Michael Munger: Well, the Sirens in this case are deficits. But, the Sirens, they lived on an island surrounded by big rocks. Waves are constantly pounding against it. But their song was so seductive that people wanted to draw near to hear it. They would either have their ships broken on the rocks, or they would swim and then die because they would sit there and listen until they starved to death.
So, the goddess Circe in The Odyssey tells Odysseus, ‘If you want to listen, you can, but make sure that you do two things. First, have your men stop up their ears with cotton and wax. And, second, command your men to do two things: First to tie you to the mast; and second, when you order them to untie you, have them bind you all the more tightly.’
And so, the question is: Could Odysseus give his men an order to disobey his future orders?
Because that’s what the Base Commission was. The U.S. Congress said, ‘We’re going to create a commission, and that commission is going to be beyond the power of politics, because later we’re going to thrash around and try to untie ourselves and go to where the seductive song of the Sirens we can hear.’ But, when we say, ‘Wait, no; you can’t close those,’ they are impervious. The Base Closing Commission will close them even if we don’t want them to close it then, because we recognize in advance that we need to close some bases. We’re going to accept the outcome even though we know that we’re going to dislike the outcome when it actually comes down: what I want is to close all the bases except the one in my district. And so we’ll have a collective solution to this.
I think the difference was–there also was the 1986 tax change where there was a compromise where a bunch of different deductions were gotten rid of and tax rates were lowered all in the same omnibus bill.
So, if you can put a bunch of things together, then you can probably solve this problem.
To my knowledge, the Department of Government Efficiency has not worked on that line. That is: We’ll create a commission beyond politics that will be able to say, ‘Close this department, cut this part of the budget,’ because members of Congress are not going to be willing to give that kind of blank check to things that are likely to be unpopular among their constituents. Base closing, yes: we all recognize we need to do it. It’s fairly limited and it’s kind of a one-time thing. Getting rid of the entire agencies and giving a agency-closing commission the power to do that, I think is something that Congress is not willing to do.
The other thing is that there was a spirit of compromise and shared purpose in the 1980s that Congress really has not had since about 1994.
So, somewhere in 1994, Newt Gingrich turned out to be a genius for political organization–but probably was damaging to the norms of the organization–where you had to at least pretend that what you were doing was for the good of the country. Now it’s okay if you’re just doing it for the harm of the other party.
And so, in terms of getting rid of the unenforceable law, the Congress no longer–you don’t have to say, ‘I’m doing this because it’s good for the country.’ You can just say, ‘I want to smite that evil other party,’ and it’ll be, ‘Yeah, that’s right. That’s what you’re going to do.’
39:32
Russ Roberts: I’m going to digress here for a minute using the power of the host, free of checks and balances, to remark, that this is the 50th anniversary of the release of what I think is the funniest movie of modern times, Young Frankenstein. We recently lost Teri Garr, one of the stars of that movie. And, your remark about time inconsistency reminds me of when Gene Wilder goes into the chamber where the monster is, and he tells Marty Feldman and Teri Garr, ‘No matter how much I beg, no matter how I plead, do not open this door.’ And he goes in, closes the door; I think he stumbles, wakes up the monster in an unplanned way. The monster gets up and roars and Gene Wilder races to the door and says, ‘Open this.’ And, Teri Garr and Marty Feldman look at their fingernails and whistle and do exactly as they were told: They ignore him. And mayhem ensues. It includes the great ‘sedagive’ moment shortly after that.
But, I want to try to come back to a question I asked a minute ago in a different way. The Department of Government Efficiency is a name. There’s no building. It has no power.
Michael Munger: Not yet, not yet.
Russ Roberts: Yeah, not yet.
Michael Munger: That’s coming. I’m sure it’ll be a big building with thousands of employees.
Russ Roberts: But, it has no building. It has no authority. There’s a certain comic, theatrical element to this moment that you are highlighting that this is theater.
The thing that pushes me in the opposite direction again is the President. President Trump does not, I would say, fully appreciate the complex system of checks and balances embodied in the American system. Kind of focused on power. He recently won a settlement from ABC News for $15 million for defamation, and he’s gone and he’s gone and launched a bunch of other threats and suits about other news organizations he doesn’t like. And, a number of media people have kowtowed to him. Some were very upset about the $15 million settlement: that ABC should have fought it.
And this comes back to my point about executive authority that has, I would say, somewhat run amok. And, your point about the sword: He’s got a big sword and he’s not ashamed to use it. He doesn’t care about norms and the dignity of his office, and he likes to win.
And by the way, he’s pulled into his orbit somebody else who likes to win: Elon Musk. Elon Musk is a very competitive–just as an aside, he’s like in the top 10 of the world in something called, what is it, Diablo? And, he’s running three companies and he’s internationally in the top 10 of some video game? He likes to win. And, he’s not going to be so eager to just slink off into the sunset the way you’re suspecting he will.
I just wonder if it’s possible that the normal constraints of government may be off the table. I find this very frightening by the way. I don’t find this exciting. Because as we both would agree, the elimination of the Department of Education, say–which I might, in many moments of my life, think was probably more or less a good thing–that probably won’t be the only thing the sword is used for. And it won’t just be used for cutting. It’s going to be used for all kinds of interventions in daily life.
I think there’s–I called this a libertarian moment. That’s probably the wrong word. We’re in a much more cesarean, much less constrained moment.
It does appear that certain libertarian impulses are prowling around. Silicon Valley in general has been empowered by this victory of President Trump and is excited clearly about cryptocurrency getting a better day in court, and other things. And, the price of Bitcoin reflects that. I know I’ve got many listeners who have invested in Bitcoin because of the episodes we’ve done in the past. I’m sure you’re feeling good about that right now, but there’s going to be some–I think we’re in for a rocky ride. That’s my thought. What do you think?
Michael Munger: You started out by saying I didn’t want to quarrel with you then, but I’ll quarrel with you now. Something about a full-throated defense of free speech. I am, maybe, on X: I’m not so sure that I see anything like that for Trump.
One of the problems that I think libertarians have to have with the present moment is that libertarians are principled in worrying about the power of the state, even if the power might be used in ways they happen to agree with. And, that’s a very difficult thing to force yourself to stick with, because that’s obedience to the unenforceable: There’s this rule, and if we could expand the power of the state, it would be used for good. No: Shouldn’t do that. Because if we do, it might be used for bad, even though right now it would be used for good.
And so, libertarians–it’s very tempting to think that the enemy of my enemy is my friend.
So, suppose there’s somebody who just doesn’t like some of the things that government is doing and wants to use this sword to smite their enemies. Well, it would make government smaller; and therefore I, as a libertarian, am going to be in favor of it–said no libertarian ever. No real libertarian, in the sense that: I want to give government the power to hurt other parts of the government that that person wielding the sword happens not to like. And, I’ll say, ‘Good, let’s do that,’ because I happen to agree with smaller government.
That’s not the same thing.
And so, I think that Elon Musk does like to win. He hates to wait around. He has the attention span of a gnat. And so, when it turns out that you can’t even make any progress against this Shmoo–this giant marshmallow that you’re punching at and it just rolls around–he’ll go do something else. So, yes, he likes to win. And, when it turns out that it takes more than 10 minutes just to say, ‘Okay, do this,’ he’s gone.
And, I don’t know that Trump is any different. Trump doesn’t like–Trumpe really doesn’t like people who disagree with him. And, yesterday he wrote–on his social media account that’s sometimes reproduced on Twitter–he had the largest mandate in 129 years.
I have actually–usually I can figure out what the heck he’s talking about. I have no idea what that means. It wasn’t the largest popular vote. It wasn’t the largest win in the Electoral College. What he might mean is it’s the largest total vote–but that can’t be right either given the increase in the population.
But, his claim is: I have the largest mandate in the last 129 years. Therefore, both the House and the Senate have to do what I say.
So, he’s just eliminating the fact that Article I creates a separate branch of government.
And, I admit you could get things done if you did that, just as if Thomas Friedman were in charge of the Chinese government. But, I think those are both terrible ideas. And in fact, compared to Donald Trump not having to worry about Congress, I almost would prefer Thomas Friedman being in charge of the Chinese government.
Russ Roberts: Yeah, 129 years ago is roughly 1896. I don’t remember that being the heyday of mandates. Who won the 1896 election?
Michael Munger: William McKinley defeated William Jennings Bryan, got 73% of the Electoral College vote, and it was a pretty big victory. It wasn’t as big a victory as Reagan had in 1984.
So, again, I don’t know what the difference is. But Donald Trump posted this on Truth Social yesterday: ‘I won the biggest mandate in 129 years. I will make my appointment of Very Qualified People’–all in caps–‘in January when I am sworn in.’
And so, his claim is that the Congress–the Republican Senate–should just immediately accept all of his appointments without doing advise-and-consent. And so, his claim is that not even the Republicans should be scrutinizing his appointments.
And, this is presumably what people mean when they say we should concentrate more power in the Office of the Presidency.
I talk to a lot of young–they call themselves national conservatives–and they are interested in a doctrine of executive power. And their theory is that it’s a thousand-year Reich: they will never lose again, and this executive will always be a Republican. That would be really surprising if that were true.
So, I think I’ve said this before on the show also–
Russ Roberts: Yeah, go ahead.
Michael Munger: But, after both the 2016 election and the more recent one, I had lefty Duke faculty friends come into my office, close the door and say, ‘You know, I was looking in the Federalist Papers and there’s some good stuff in there.’ ‘Yeah. Yeah, there is. And, two weeks ago when your boy was President, there was good stuff.’ ‘Well, I’m not so worried about it when our guy is in charge.’ You’re completely missing the point. The point is the Federalist Papers are: You will not always be in charge. And you only have two choices. One is we’re going to have a really powerful president and just accept the fact that sometimes it will be held by the wrong person, or we’ll have a relatively weak president, which means that we will limit the thing–we have to actually have consensus. You’ve got to go through the Congress. You got to persuade people. You can’t use the giant flaming sword.
50:45
Russ Roberts: Yeah. The thing you’re forgetting, Mike, is that when you have the correct viewpoint, you can stay in office forever because everyone’s going to agree with you. And you see a lot of evidence for that. Nowhere. Nowhere: you see evidence for that nowhere.
Michael Munger: But, it is absolutely the core belief. Both of those things are true at the same time. That is the core belief of people on both sides; and there is no empirical evidence for it.
Russ Roberts: And, although I think they would–if you asked them–if you pointed that out to them, what they will often say is, ‘Well, sure in the past’ Because people were misinformed and miseducated and they didn’t understand that what I’m advocating for now is obviously really good and can’t be argued with. There’s no arguments on the other side that are legitimate, or viable, or credible. So, now that we’ve come to this enlightenment, everything’s going to be smooth sailing from here on in.’
Michael Munger: It is frustrating.
To me, the task of the libertarian–and we’ve talked about this also a bit–the difficulty with the conservative coalition, the fusionist coalition that probably was best embodied by Ronald Reagan, who was fiercely opposed to the Soviet Union, was at least in principle in favor of rhetorical shrinkage of government, reduction in taxes. So, government is not the solution: government is the problem. That’s some pretty libertarian rhetoric. And it’s not about the perfection of markets.
So, it’s the sort of libertarian rhetoric I actually admire: that there are problems with government. There should be a presumption against saying, ‘Let’s have the state do something about this,’ because the state is not going to be as good at this as you can imagine. You can see here in the background, there’s my unicorn, and the unicorn to me is the symbol of people’s imagination of how this time is going to be different. My argument is so persuasive that it will all work.
The difficulty that I think we have with the fusionist coalition of conservatives and libertarians is that libertarians without conservatives to say, ‘Wait, we need to worry about tradition and morality,’ libertarians become a free radical. They start to say, ‘Anything that you want to do, if it’s not illegal, it is moral. And, conservatives say, ‘No, we need to worry about morality.’
Now, conservatives without libertarians are a problem because conservatives fall prey to this desire to use power to achieve their means.
So, libertarians and conservatives actually need each other. They’re a much more effective, durable coalition. I think the split of fusionism in the United States has resulted in an enormous increase in pure conservatism. A lot of libertarians have kind of stepped back.
It is interesting that a lot of libertarian sentiment is now being expressed by the current Administration. And we haven’t really talked about Javier Milei. He is explicitly libertarian in the sense that he is advocating for market principles and is doing pretty well in Argentina.
I hope that you are right that this is a kind of libertarian moment in the sense that we’re going to see an emphasis on reduction of the size and scope of government. What I worry about is that instead we’re going to see as an increase in government power, so as to smite people that the Administration disagrees with.
54:35
Russ Roberts: Okay, I’m going to make my prediction now. We’re recording this in the middle of December. We expect it to be released in the middle of January, right before the inauguration of the new Administration. And, predictions aren’t interesting, really. I’m going to make one anyway. So, I am sympathetic–
Michael Munger: To listeners they will be–
Russ Roberts: Yeah, maybe–
Michael Munger: People are wanting you to make a prediction. They’re looking forward to it–
Russ Roberts: Oh, they can’t wait.
I’m going to suggest something a little different. I have to say, intellectually, I agree with you. Every bone in my body agrees with you. But those bones have been mispredicting things now for a while. So, I’m a little worried that my natural impulses, which are equilibrium-ish like yours, that say that what really matters isn’t who is in charge, but the incentives they face–that intuition has not been so reliable lately.
So, while I am sympathetic to your view that nothing significant will get accomplished in terms of the Department of Government Efficiency and the size of government, I hold some probability that I’ll be wrong about that, and that you will be wrong about that.
Here’s what I’m more confident about, and I’ll let you react to this and bring us home.
In the last 10, 15 years, traditional economic issues have been subsumed by other kinds of issues. The rise of Trump within the Republican Party is a tribute to this phenomenon that cultural issues are dwarfing so-called pocketbook issues. I don’t think ‘It’s the economy, stupid,’ anymore. I think the worries, for example, about immigration are not about the fact that they might take away jobs from low-skilled workers. It’s more about whether immigrants will change the culture and fabric of American life. Some people think they’ll change it for the better. Some people think it’ll be for the worse. But, the fundamental issue here is not material: it’s cultural. It’s about a sense of identity; it’s about a sense of belonging.
And, what’s happening all over the world, not just in America, is that these cultural issues–for reasons I don’t fully understand; we’ll devote another episode or 10 to it in the future, Mike–these cultural and identity issues are at the forefront. And, I think that the pendulum is swinging very strongly in a different direction than it has been swinging for a while. I think Trump’s success–not his landslide, not his mandate of 129 years and counting–but his success is a tribute to his ability to be an effective politician, to recognize that that pendulum is swinging. He’s causing it, some of it; but he’s also as much an effect and the result of these changes. And so, the salience of certain cultural issues in this last election are what will endure. Not the size of the deficit. Not the tariffs–because I don’t think he’s going to pass large tariffs across the board. I don’t think he’s going to eliminate the income tax and replace it with a national tariff, which is what–he’s floated that idea.
But I do think he may–and it’s not just him–that this moment–four years from now in 2028 when I’m old and gray and fall asleep, and I hope perhaps still hosting EconTalk, and you still are willing to be my companion in this enterprise, I think we’ll look back on this moment, and it will seem to be more about cultural aspects of the moment and less about the economic policy aspects. That’s my guess. What do you think of that?
Michael Munger: I think big changes almost always seem impossible in prospect and inevitable in retrospect. And so, there’s no way any of this is going to change. I am reminded of, in The Sun Also Rises–I think you’ve quoted this before–Ernest Hemingway: Bill says, ‘How did you go bankrupt?’ And, Mike responds, ‘Two ways. Gradually, and then suddenly.’ So, you’re–
Russ Roberts: I’ve never quoted that, but that’s a great line.
Michael Munger: It is a great line, and that’s way bankruptcy works.
Russ Roberts: I haven’t read it in a long time.
Michael Munger: We have a big deficit. Gosh, well, it’s not so good. Maybe we should do something about that, but tomorrow. And then, all of a sudden, ‘Oh. Whoa, that was quick.’ And so, the change happens. The U.S. budget deficit is increasing in ways that would simply have been impossible. I have a graduate student who is now finished, named Cameron Tilley, who has a paper that he calls “The Old Time Religion.” And, the mystery is to explain why is it that enormous budget deficits didn’t happen long ago in the United States?
Russ Roberts: The puzzle–
Michael Munger: The question is not why they’re happening now. They had the capacity to do this. If I can use either money or tax cuts to buy votes, why wouldn’t I do that? That’s in the self-interest of politicians. For a long time, it was because people felt, well, it’s just wrong. We shouldn’t do that. And so, there was [inaudible 01:00:42]–
Russ Roberts: Obedience to the unenforceable–
Michael Munger: Obedience to the unenforceable.
But then, suddenly, it’s gone.
And so, the point that you raise about change, I think, as I said: In prospect, big changes always seem impossible. It can’t.
But then, sometimes it does. And afterwards: We’re trained economists. We can come up with reasons why it was inevitable: Here’s the reasons why it happened.
But in fact, it was something that may have been pretty hard to predict.
It will be interesting, four years from now, to look back and talk about the reasons why–by then, we will say, ‘Well, sure, the change was inevitable. We understand why it happened.’ Or, ‘Was there not any of the kind of change that we had hoped for?’
I think that your claim about the pendulum is–another way to say it is dialectic. By the time you think that all of the forces of cultural change are so deeply embedded in the society that we have moved in a wokest direction, the response is to say, ‘No, we don’t want that.’ And, it basically gets wiped out by a tsunami of response.
I think what we look at now–if we look at things that were just taken for granted in 2014 or 2022 about identitarian politics–now, could anybody really have believed that? Could they have said those things?
The Democrats, I think, are reassessing a fair number of their initiatives that had to do with culture. It seems to me that the economy is a big part of the explanation at the more fundamental sense that people–they feel precarious.
The employment rate is pretty high. Income is going up, inflation is going down; but they feel a sense of exposure. And, one of the things that always is going to appeal to people who are worried about being exposed to economic forces beyond their control is to control labor–which is immigration–and to control the imports of products that compete with things that I make: and that’s tariffs. And so, regardless of the fact that those things might be expensive, it’s going to appeal to me because I have more of a sense of control.
So, Trump, in happening upon those–maybe it was luck, maybe it was cunning, maybe it was strategy–but it happened slowly, and then suddenly. It happened gradually, and then suddenly. And now: Of course, that was the way that it worked. But, it’s not obvious that in the absence of Trump, the Republicans would have found someone else to do that. So, the figure of Donald Trump is someone who is going to be looked back on as an important figure in American history: Whether we attach a positive or negative valence, with any luck, we’ll know more about it by 2028.
Russ Roberts: My guest today has been Mike Munger. Mike, thanks for being part of EconTalk.
Michael Munger: A pleasure as always, Russ.
