Private firms in capitalist nations can fire staff easily but govts can't do so; also, with Trump and Musk's massive egos, there was no way for a middle path
Writing for a leading Indian magazine in March on US President Donald Trump’s reliance on Elon Musk to reform the US federal government, I had concluded: “It remains to be seen if — and to what extent — the Trump-Musk team succeeds, for bureaucracies worldwide have a way of warding off such challenges.”
An American friend to whom I had sent my article wrote back: “It will be interesting to see how long these two massive egos can remain a team and not turn on each other.”
My American friend’s assessment that the Trump-Musk “team” would not last long has proved correct. Trump and Musk, the world’s richest man, who heads some of the planet’s most important technology companies, have fallen out.
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Trump-Musk fallout
The immediate cause of the Trump-Musk break-up was Musk’s strong criticism of Trump’s budget, which had passed through the US Congress. He publicly slammed the budget. He told a US TV channel, “I was disappointed to see the massive spending bill, frankly, which increases the budget deficit, not just decreases it, and undermines the work that Department of Government Efficiency (DOGE) team is doing.''
Naturally, such public criticism was unacceptable to Trump and his advisors. On his part, Musk obviously thought that Trump was no longer going along with his decisions on reducing government expenditure. This was unacceptable to Musk.
As my American friend had noted, with both Trump and Musk having massive egos, there was no way for them to find a middle path.
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Brewing discontent
While the budget issue became the reason for the final break-up, signs had been present for some time that Trump was becoming aware that Musk’s approach to doing things was making many of his senior advisors and principal cabinet members very unhappy.
These persons included Secretary of State, Marco Rubio. These senior political leaders were unwilling to accept Musk’s people in the newly created DOGE trampling over convention and slashing budgets and employees. An illustrative case was that relating to the United States Agency for International Development (USAID).
USAID is the main US government instrument to extend financial and project assistance to developing countries. DOGE practically ‘dismantled’ the Agency, leading to chaos and the stoppage of US assistance to poor countries. While publicly there were no protests from senior State Department officials or Secretary Rubio, they were all upset because it was adversely impacting US foreign policy.
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Governance vs corporate reforms
The real problem that Trump, who served as the President between January 2017 and January 2021, should have known is that reform in government cannot be like reform in business and industry.
Private firms in the US and other capitalist countries can hire and fire employees fairly easily but governments cannot do so.
Private companies can shut down what they perceive as loss-making units, but governments cannot suddenly shut down departments because there are linkages between one department and others; the shutdown of a department has a ripple effect throughout the government. Hence, closing departments must be done carefully.
Besides, there is a fundamental difference in the objective of business and industry and of governments. In the case of the former, it is profit, but the purpose of the latter is to serve the people. Hence, while there should be continuous reform to improve efficiency and also ensure savings in both businesses and governments, the methods employed in business and industry on the one side and governmental machinery on the other are entirely different.
Trump did not heed this difference when he allowed Musk to trample over bureaucratic traditions and use insensitive ways. His ways were, obviously, part of the US business tradition, but they were not in keeping with the conventions of the US government and political system.
Elitist groups
For some time Musk’s actions were popular with Trump’s base. This is because the vast social groups that support Trump are essentially suspicious of governments and bureaucracies. Hence, they were happy to see Musk’s people in DOGE moving into government departments, suspending programmes and throwing out people.
They applauded announcements stating that DOGE’s decisions were resulting in large savings that would reduce government expenditure without adversely impacting essential government services.
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Musk's inexperience
DOGE was implying that the US government was fat and bloated and under Musk’s direction — though he did not lead DOGE, he was its main guiding force — the 'fat' would be trimmed. Musk, who did not have any previous experience with the inner workings of government, thought that he would always have Trump’s support.
What he overlooked was that while Trump may have the instincts of a businessman, as President, he has to rely on the governmental apparatus to have his policies implemented.
He cannot, therefore, afford to alienate the bureaucracy and hope to succeed. Clearly, Trump's political advisors were informing him that Musk’s ways were causing an upheaval in the government machinery. That would cost him politically. Obviously, Trump did not want his political position to suffer on account of Musk’s ways of leading DOGE.
Non-transactional ties
On his part, Musk obviously felt that his position with Trump was secure because he was his main financial supporter during the Presidential campaign.
He had also rallied segments of US business behind Trump.
While Musk’s financial support was important for the Trump campaign, it was certainly not the reason for his great victory in the 2024 Presidential election. That was on account of the infirmities in the Democratic Party campaign and former President Joe Biden’s disastrous performance in his debate with Trump which led him to stand down. Finally, Kamala Harris who picked up the baton had hardly any time to convey her vision to the American people.
Besides, Trump’s faithful followers continued their support for him despite his defeat in the 2020 election. Thus, Musk overestimated his contribution to Trump’s victory. He was wrong if he thought that a grateful Trump would never allow a rift to develop between them. That is not how politics operates anyway in any country.
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Government is not business
As Musk returns to his businesses, the question to be asked is whether he achieved any of his objectives in Washington? News agency Reuters estimates “Trump and DOGE have managed to cut nearly 12%, or 260,000, of the 2.3 million-strong federal civilian workforce largely through threats of firings, buyouts and early retirement offers.''
It remains to be seen whether these cuts will remain or if the US bureaucracy will find ways to revert to the pre-Musk days.
The ultimate lesson from the Musk episode is that governmental and administrative reform exercises should continuously be undertaken but in traditional ways. Reform to right size the government apparatus and ensure prudent spending of public money in traditional ways is ultimately dependent on political will in all countries. And, finally, business is business and government is government.
(The Federal seeks to present views and opinions from all sides of the spectrum. The information, ideas or opinions in the articles are of the author and do not necessarily reflect the views of The Federal)
