DOGE’s approach to deregulation demonstrates the need for economists and lawyers to learn from each other.
The Department of Government Efficiency (DOGE), under the leadership of Elon Musk, has sought to restructure and downsize the federal bureaucracy to eliminate what it deems wasteful government spending and burdensome regulations to, as a recent executive order states, “commence the deconstruction of the overbearing and burdensome administrative state.”
The economics profession should reflect on the fact that DOGE is proceeding without the input of economists because economists have downplayed the persistence and extent of government policy failures. Minimizing governmental shortcomings weakens the profession’s policymaking relevance. The legal profession should reflect on the fact that lawyers lack the requisite economic training to grasp the potentially adverse implications and social desirability of DOGE policies and actions that lawyers are facilitating and defending.
The economics and legal professions should cross-fertilize their intellectual strengths to enable future economists to formulate actionable policies and to inform future government lawyers about the implications of representing policymakers who may seek to adopt harmful policies. Cross-fertilization should begin in graduate economics and law school programs. New courses in economic policy analysis and practice for economists and lawyers interested in helping their professions contribute more effectively to the nation’s economic policies can help address the problems posed by DOGE.
I have defined a government failure as a public policy that “significantly wastes resources.” Government failure is the leading cause of resource misallocation in the United States because it encompasses the vast array of economic policy interventions that adversely affect the economy. Evidence abounds that federal government regulatory and spending policy failures result in hundreds of billions of dollars of persistent inefficiencies. When economists recommend efficient government policy reforms to correct government failures, they are effectively hoping for the best and have little justification for their recommendations because they are ignoring the extent and persistence of policymakers’ failures to adopt efficient policies. Importantly, economists are unable to revise their recommendations to take these persistent government failures into account because they do not have causal evidence that explains why policymakers institute inefficient policies and do not reform them.
Economists would be more useful if they focused on advocating policies under which government would withdraw regulatory interventions and allow the private sector to address problems that the government has difficulty addressing. For example, economists could provide useful advice to DOGE by identifying regulations of private sector firms that should be eliminated because they produce more costs than benefits. Economists also could identify services provided by the public sector that should be transferred to the private sector because the private sector can provide them more efficiently in a competitive environment. It is not naive to believe that DOGE could welcome such suggestions. In addition, this approach is likely to be useful long after President Donald J. Trump’s departure. For example, Presidents from both parties have sought to deregulate industry.
Without economists’ guidance, DOGE has begun widescale deregulatory initiatives, cuts to the federal workforce, and the elimination of government agencies. DOGE believes erroneously that what should be reduced is the size of government generally instead of targeting specific regulatory and spending inefficiencies. By operating on this belief, DOGE is foreclosing substantial benefits by failing to make the most effective use of the private sector and creating costs by not providing services that the public values. For example, lost in DOGE’s activities is any effort to revitalize the transportation system by deregulating international airline and ocean shipping services and by privatizing airports and ports to increase competition in providing those services. DOGE could jeopardize the safety of air travel if it reduces air traffic controllers and facilities indiscriminately.
Lawyers are playing several key roles in DOGE. They are navigating legal challenges and defending multiple lawsuits. In addition, lawyers are likely advising DOGE on how to restructure federal agencies, cut regulations, reduce spending, communicate with the public about sensitive areas of data privacy and governmental transparency, and terminate government employees.
At the same time, DOGE lawyers are ignoring the fact that they are facilitating a fundamental and probably irreversible change in government regulatory and spending policy without a grasp of its resulting economic effects and whether those effects would be socially desirable. Lawyers may claim that their role is to provide the best representation for DOGE that complies with the law and to neglect the economic effects of DOGE’s recommendations. But a defense of benign neglect is hardly convincing when the neglect is not benign but rather potentially quite harmful. Specialized expertise—in nuclear weapons, for example—lost through wholesale firings and mass resignations may be very hard to recover or retain.
Lawyers may believe that it is in their interest to help advance DOGE’s goals without question because President Trump has made it clear that he will punish law firms that he views as opposing him. His recent attempts to intimidate law firms include signing an executive order to punish the law firm Perkins Coie by stripping its lawyers of security clearances and access to government buildings and officials. He issued a similar memo attacking the law firm Covington & Burling. President Trump also has ordered investigations of at least 15 law firms over their diversity programs. Finally, President Trump’s attacks on the American Bar Association have threatened its funding and membership.
President Trump also appears to be willing to threaten law schools. Ed Martin, the interim U.S. attorney for the District of Columbia and a Trump appointee, reportedly told the dean of Georgetown University Law Center that his office will not hire students or other affiliates associated with a university that uses diversity, equity, and inclusion measures.
President Trump’s intimidation of the legal profession with various attacks seeks to weaken the profession’s potential resistance to his efforts to expand and exercise his presidential power beyond conventional legal limits. The legal profession must not be cowed by President Trump’s actions. Instead, it must collectively resist President Trump’s autocratic behavior for the good of the nation and itself.
Ultimately, the economics and legal professions must increase the constructive influence of economists and lawyers in future government initiatives. To accomplish this goal, it is necessary that new generations of economists and lawyers be better trained than previous generations in how to play a more useful role in public policy. Faculty in economics graduate programs and law schools should begin the process by working together to offer new courses for economists and lawyers.
The economists’ course should present the realities of the government’s regulatory and spending policy performance and explain that policymakers are often lawyers and rarely economists. This course should address the inefficiencies of government policies and acknowledge that no evidence explains why policymakers institute inefficient policies and do not reform them. Because economists have no guidance on how policymakers could be persuaded to support efficient policies, the course should then identify the many cases in which market corrections could address the government’s persistent failures. To close, the course should explain that policymakers—that is, non-economists—would be more receptive to market corrections if they were provided with evidence based on market experiments of the positive effects of greater competition in a deregulated environment.
The lawyers’ course should expose lawyers to the basic tools of policy analysis—such as cost-benefit analysis, empirical methods, and welfare economics—and explain how those tools should be applied to assess regulatory and spending policies. Although many law students likely went to law school to avoid math, all law students can understand the usefulness of these tools if they are explained intelligently. The substantial costs of policymakers’ failure to use these tools should be illustrated with actual regulatory and spending policies. Lawyers should therefore understand that, as policymakers or advisors to policymakers, the policies they are facilitating and defending could harm the economy. Importantly, they should recommend, when appropriate, that economists participate in the policy process to shed greater light on the effects of those policies.
The importance of scholarly analytical arguments is currently minimized in economics policymaking. The economics and legal professions should be alarmed by this problem and should take steps to ameliorate it by educating members of their professions about the costs of anti-intellectualism to the nation’s economy and by encouraging economists and lawyers to work together constructively, whenever possible, to improve the nation’s economic policies.
