Business
DOGE Theory
One of the most intriguing developments following Donald Trump’s election victory has been the announcement of Elon Musk and Vivek Ramaswamy’s Department of Government Efficiency, or DOGE. The initiative, which hopes to cut up to $2 trillion from the federal budget, has generated notable excitement, momentum, and memes. The world’s richest man and a successful biotech entrepreneur, Ramaswamy, have revitalized what seemed to be a mostly dormant libertarianism, drawing on the inspiration of Milton Friedman and promising to slash the bureaucracy to the bone. But what are its prospects for real-world success?
Elon Musk is our era’s most gifted entrepreneur, having revolutionized several industries and run multiple major companies. But the private sector operates on radically different principles than the public sector, which has a way of stalling or disarming even the most determined efforts. I foresee three potential impediments to DOGE’s success.
First is the problem of authority. While President-elect Trump has dubbed the effort the “Department of Government Efficiency,” it is not a government department at all. Rather, Musk and Ramaswamy will remain in the private sector and preside over what is, in effect, a blue-ribbon committee providing recommendations to the president and to Congress about potential cuts. In practice, though, blue-ribbon committees are often where ideas go to die. Politicians who feel the need to “do something” about a given problem often establish such committees to create the perception of action, which masks their true desire or, at least, the eventual result: inaction.
DOGE’s challenge will be to translate its recommendations into policy. It is almost certain that an entrepreneur of Musk’s ambition will not be content with writing a report. His and Ramaswamy’s task, then, is to persuade the president and the director of the Office of Management and Budget to enact real (and politically risky) cuts, and, if possible, to persuade Congress to abolish entire departments, such as the Department of Education, in the face of left-wing backlash.
The second problem for Musk and Ramaswamy is public opinion. Libertarians and small-government conservatives have long promised to reduce the size of government; one reason that they have never done so is that federal programs and agencies are generally popular. All of the major federal departments, with the exception of the IRS, the Department of Education, and the Department of Justice, have net-positive favorability numbers. Congressional members, even conservative Republicans, fear that slashing these departments would expose them to savage criticism from the Left and backlash from voters. They know that Americans complain about the size of government in theory but oppose almost all spending cuts in practice—the key paradox that libertarians have been unable to resolve.
Musk and Ramaswamy have repeatedly appealed to the work of Argentinian president Javier Milei, who has dramatically reduced the number of departments and created flashy video clips of himself stripping down organizational charts and yelling, “Afuera!” But what is possible in Argentina, which has been mired in a decades-long economic crisis, may not be achievable in the United States, which is much more stable, and, consequently, may not have the appetite for such dramatic action.
Which brings us to the problem of politics. Sending a rocket into space requires mastery over physics, but cutting government departments requires mastery over a more formidable enemy: bureaucracy. As Musk and Ramaswamy will see, the relationship between would-be reformers and Congress is vastly different from that between a CEO and a board of directors. To succeed, Musk and Ramaswamy must persuade a group of politicians, each with their own interests, to assume a high level of risk.
DOGE’s first task—identifying the budget items to cut—is the easy part. The hard part will be actually cutting them. They will have to convince Congress, which, for nearly 100 years, has refused to reduce the size of government, even when that notion had bipartisan support, as it did during the presidency of Bill Clinton, who promised that “the era of big government is over.”
This does not mean that DOGE cannot succeed. Though there may not be an appetite for a $2 trillion reduction in government spending, there is a hunger for targeted cuts that would strip the federal government of hostile ideologies that have made our institutions dysfunctional and our national life worse. For example, slashing grant funding for critical race theory would likely win support from voters; cutting the budget for USDA meat inspectors would not, and, given opportunity costs, would probably prove unproductive as well.
Perhaps the name of this committee—the Department of Government Efficiency—is also slightly off the mark. The problem is not only about efficiency, which suggests quantity, but about orientation, which implies quality. The federal government has long been captured by ideologies that misdirect its efforts. Simply making the bureaucracy more efficient will not solve that problem. DOGE must first determine what federal spending is worthwhile; from there, it can focus on creating “efficiencies.”
I hope that Musk and Ramaswamy can dispel my pessimism. Political realities have stifled countless reform efforts before now, and DOGE is an enterprise that would be difficult, if not impossible, under normal circumstances. But these are two remarkably talented men; if anyone is capable of shattering the mold, they can.
Please share your ideas, dissents, and thoughts in the comments. In the next newsletter, we will feature the best material in a“comment of the week” section. In the meantime, have a wonderful Thanksgiving.
Business
Our energy policies have made us more vulnerable to Trump’s tariffs
From the Fraser Institute
By Elmira Aliakbari and Jason Clemens
As Donald Trump, who will be sworn in as president on Monday, threatens to impose tariffs on Canadian exports including oil and natural gas, the calls from some Canadian politicians and analysts for greater energy trade diversification grow louder. However, these calls highlight a hard truth—Canada has repeatedly foregone opportunities to reduce our dependence on the United States by cancelling already approved pipelines and failing to approve new pipeline and LNG projects that could have increased our access to global markets.
The U.S. is not just Canada’s largest energy customer—it’s nearly our only customer. In 2023, 97 per cent of crude oil exports and virtually all natural gas exports were sent south of the border. This dependence on the U.S. for exports leaves Canadian producers and the Canadian economy exposed to policy shifts in Washington and even state capitals.
Consider Energy East, a pipeline proposed by TransCanada (now TC Energy) to transport oil from Alberta and Saskatchewan to refineries and export terminals in Atlantic Canada. The pipeline would have reduced Atlantic Canada’s reliance on imported oil and opened export markets for Canadian oil to Europe.
However, in 2017 the Trudeau government introduced new criteria for evaluating and approving major pipeline projects, and for the first time assessments included not only the greenhouse gas (GHG) emissions from constructing the pipeline but also emissions from producing and using the oil it would transport. Later that year, TransCanada suspended its application for the project, effectively cancelling it. The CEO of TransCanada blamed “changed circumstances” but many observers recognized it was a combination of the new regulations and opposition from Quebec, particularly the City of Montreal. Consequently, the refineries in Atlantic Canada continue to rely on imported oil.
A year earlier in 2016, the Trudeau government cancelled the already-approved Northern Gateway pipeline, which would have connected Alberta oil production with the west coast and created significant export opportunities to Asian markets.
Canada is even more dependent on the U.S. for natural gas exports than oil exports. In 2023, Canada exported approximately 84 billion cubic metres of natural gas—all to the U.S.—via 39 pipelines, again leaving producers in Canada vulnerable to U.S. policy changes.
Meanwhile, Canada currently has no operational infrastructure for exporting liquified natural gas (LNG). While LNG Canada, the country’s first LNG export terminal, is expected to become operational this year in British Columbia, it’s long overdue.
Indeed, several energy companies have cancelled or delayed high-profile LNG projects in Canada due largely to onerous regulations that make approvals uncertain or even unlikely, including the $36 billion Pacific NorthWest LNG project in 2017, the $9 billion Énergie Saguenay LNG project in 2020, Kitimat LNG in 2021 and East Coast Canada LNG in 2023.
This all adds up to a missed opportunity, as global demand for LNG increases. If governments in Canada allowed or even facilitated more development of LNG facilities, Canadian companies could supply high-demand regions such as Asia and Europe. Indeed, during Europe’s 2022 energy crisis, Germany and several other countries turned to Canada for reliable LNG supply, but the Trudeau government rejected the requests.
The contrast with the U.S. is stark. Since 2011, 18 LNG export facilities have been proposed in Canada but only one—LNG Canada Phase 1—is nearing completion, more than 12 years after it was announced. Meanwhile, as of January 2025, the U.S. has built eight LNG export terminals and approved 20 more, securing its position as a global LNG leader.
Years of inaction and regulatory roadblocks have left Canadian energy producers overly dependent on a single trading partner and vulnerable to shifting U.S. policies. The looming threat of tariffs should be a wake-up call. To secure its energy future, Canada must address the regulatory barriers that have long hindered progress and prioritize the development of infrastructure to connect our energy resources to global markets.
Business
Trudeau leaves office with worst economic growth record in recent Canadian history
From the Fraser Institute
By Ben Eisen
In the days following Prime Minister Justin Trudeau’s resignation as leader of the Liberal Party, there has been much ink spilt about his legacy. One effusively positive review of Trudeau’s tenure claimed that his successors “will be hard-pressed to improve on his economic track record.”
But this claim is difficult to square with the historical record, which shows the economic story of the Trudeau years has been one of dismal growth. Indeed, when the growth performance of Canada’s economy is properly measured, Trudeau has the worst record of any prime minister in recent history.
There’s no single perfect measure of economic success. However, growth in inflation-adjusted per-person GDP—an indicator of living standards and incomes—remains an important and broad measure. In short, it measures how quickly the economy is growing while adjusting for inflation and population growth.
Back when he was first running for prime minister in 2015, Trudeau recognized the importance of long-term economic growth, often pointing to slow growth under his predecessor Stephen Harper. On the campaign trail, Trudeau blasted Harper for having the “worst record on economic growth since R.B. Bennett in the depths of the Great Depression.”
And growth during the Harper years was indeed slow. The Harper government endured the 2008/09 global financial crisis and subsequent weak recovery, particularly in Ontario. During Harper’s tenure as prime minister, per-person GDP growth was 0.5 per cent annually—which is lower than his predecessors Brian Mulroney (0.8 per cent) and Jean Chrétien (2.4 per cent).
So, growth was weak under Harper, but Trudeau misdiagnosed the causes. Shortly after taking office, Trudeau said looser fiscal policy—with more spending, borrowing and bigger deficits—would help spur growth in Canada (and indeed around the world).
Trudeau’s government acted on this premise, boosting spending and running deficits—but Trudeau’s approach did not move the needle on growth. In fact, things went from bad to worse. Annual per-person GDP growth under Trudeau (0.3 per cent) was even worse than under Harper.
The reasons for weak economic growth (under Harper and Trudeau) are complicated. But when it comes to performance, there’s no disputing that Trudeau’s record is worse than any long-serving prime minister in recent history. According to our recent study published by the Fraser Institute, which compared the growth performance of the five most recent long-serving prime ministers, annual per-person GDP growth was highest under Chrétien followed by Martin, Mulroney, Harper and Justin Trudeau.
Of course, some defenders will blame COVID for Trudeau’s poor economic growth record, but you can’t reasonably blame the steep but relatively short pandemic-related recession for nearly a decade of stagnation.
There’s no single perfect measure of economic performance, but per-person inflation-adjusted economic growth is an important and widely-used measure of economic success and prosperity. Despite any claims to the contrary, Justin Trudeau’s legacy on economic growth is—in historical terms—dismal. All Canadians should hope that his successor has more success and oversees faster growth in the years ahead.
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