So much is going on that a lot of it, I don’t get a chance to share with you, or discuss with you. One pretty important thing has to do with the privacy of IRS records, your tax returns. DOGE operatives embedded at IRS last week were putting together a plan to allow IRS to share confidential tax records with agencies and civil servants across the government. As near as I can tell, and except for in very specific and limited circumstances, that’s illegal. The IRS lawyers said, wait, that’s illegal. You can’t do that. So that got shut down. But now they’re looking for creative ways to do it anyway. In other words, the illegality appears not to matter. They’re also creating an ‘agreement’ through which the Department of Homeland Security can request that certain businesses be audited. In theory, that’s because ICE suspects they’re employing undocumented immigrants. Again, against the law. But they seem to be on the way to doing it anyway. It’s that next step which is the big thing here and which we are seeing again and again. 1. That’s illegal. 2. Try harder. 3. Okay.

One of the great truisms about economics is that people assume CEOs have a deep understanding of economics when in fact most evidence suggests they don’t. This isn’t just the general and often true fact that people think captains of industry type CEOs are smarter than they really are. It’s more specific: what’s good for an economy isn’t just not identical to what is good for a company. Often they’re precisely opposite. You really don’t need to do anything more than actually read Adam Smith to know this. (You could actually argue it’s one of his central points.) And the point I’m making here is one that is almost a commonplace in policy circles if not on TV stock market news. I note it here because it’s possible, frighteningly possible, that we’re in the midst of a real world illustration of this reality, maybe one of the biggest or even the first.

It hasn’t gotten a lot of attention but Donald Trump’s February 11th “workforce optimization” executive order provides a very clear framework for the end stage goal of all the cutting. After a bunch of specific imperatives listed under Section 3-C of that executive order, it includes the following language: government department and agencies must plan to cut “all components and employees performing functions not mandated by statute or other law who are not typically designated as essential during a lapse in appropriations as provided in the Agency Contingency Plans on the Office of Management and Budget website.”

The Atlanta Fed has again lowered its projection for first quarter 2025 GDP. It had been predicting growth of 2.3%. At the end of last week that was revised to 1.5% contraction and this morning they were again down-revised 2.8% contraction, or in other words 2.8% negative growth. To be clear these aren’t final or official stats. We’re only two-thirds of the way through the quarter. They are a prediction based on current indicators. But if it’s not clear that would mean a steep move into recession. And the numbers which presage that outcome are largely tied to general economic uncertainty and various collective economic decisions based on the expectations of a dramatic ramp up in U.S. tariffs and tariff retaliation.

As you probably know a second version of the Elon/DOGE threat email went out this weekend, actually on Friday evening, and it’s due tonight at 11:59 PM. From what I can tell everyone in the leadership of the different agencies, with like one and a half exceptions, has gotten their ducks in a row and now everyone has to respond. I haven’t done a systematic survey. I’m not even sure that’s possible. But every agency or department I’ve heard about or from is telling their employees they have to reply. So that mix of kinks, bobbled communication and soft insubordination seems all ironed out now.

The only exception I’d heard about before mid-morning was the Commerce Department, which is odd since Secretary Lutnick appears to be as tight with Trump as almost anyone in the administration. A Commerce Department guidance email says that employees should reply with the requested information but send it to their supervisor. They are not required to send it as a reply to OPM/DOGE. Not sure what that’s about.

“My family is American, and has been for generations, in all its branches, direct and collateral.” – Ulysses S. Grant, first sentence, Memoirs.

Sen. Marshall went far into western Kansas looking for a rural town where there might be some support for DOGE and Russia. He still got smoked.

Here’s our full townhall list with three new entries from Kansas, Texas and Tennessee.

This deserves more discussion. My brain is a little fried from a long week. But I wanted to let you know that 18F, an in-house government tech consultancy focused on making key public-facing government websites and services more effective and user friendly was finally disbanded last night. It’s housed within TTS (Technology Transformativon Services) which is part of GSA. Just as an example, they’re the team who built the new free IRS tax preparation portal and many other similar things across government.

18F actually didn’t cost the government any money because it was funded by projects with individual government agencies. So they do a job for IRS and IRS “pays” them, which just means they take part of their budget and it goes to 18F for doing the work. The email from TTS Director Thomas Shed (an Elon guy installed in the position) said that the unit was being disbanded under the directive to cut all “non-essential consulting functions” within government. He additionally added that the abolition was “with explicit direction from the top levels of leadership within both the administration and the GSA,” which I take to mean, ‘Trump and Elon wanted all you guys fired.’

Here’s a small update on an on-going stream of reporting I’ve been at work on – the hows, whys, and miscellaneous mechanics of contract terminations across the federal government. I did that piece on the contracts killed at VA and how they seemed entirely or at least heavily focused on contract code NAICS-541611, which is for “Administrative Management and General Management Consulting Services.” I said earlier this week that from data in just a couple departments I had the strong impression that DOGE had made incursions into various agencies, pulled up the contracts under this heading and ordered them canceled. Usually they gave some set of either contract officers or stakeholders very brief periods to argue for a reprieve, often just a matter of a few hours. (Just how that was done seemed to vary and played a big role in what was eventually cut.) In every case I’d seen these cuts had been made with no real effort to discover what kind of contracts were being listed under that code and no effort to find out what the contracts were for.

Another example of a Republican member of Congress trying to open up some room between himself and Elon Musk, but lo-fi and only back in the district. Here it’s Rep. Jeff Hurd (R-CO), generally making out like there’s not much he can do about it, just a bystander.

This is a quick summary of the interview …

Hurd doesn’t know how many of his constituents have lost or left their jobs during these cuts, but says there are some he wishes hadn’t.

“I know there are hardworking land managers on the ground in the 3rd Congressional District who have lost their jobs that should be in those jobs and who should be working,” said Hurd. “Fortunately, we haven’t had any firefighters – public lands right away is where I go to, but certainly this is broader as well – we haven’t had any firefighters cut. But we have had some of the support services for those firefighters cut.”