Firing people only to immediately rehire them is wasteful and inefficient. Elon Musk’s Department of Government Efficiency’s (DOGE) push to shrink the federal workforce has resulted in this occurring repeatedly. This firing-rehiring routine is also a sign of bad management. But this is arguably the smallest of the problems with DOGE. Overall, while this department has been ineffective at saving money and being efficient, it is a very profitable venture for Elon Musk’s companies.

For the people of the United States, one of the biggest problems with DOGE is its abuse of people’s privacy rights. DOGE has accessed the entire country’s personal records in multiple federal government databases and has not told the public why and for what purpose. There is no need to access the private records of the American public to determine whether to restructure a federal government agency.

Elon Musk leads DOGE and is simultaneously the head of private companies doing business with the federal government. He is looking to move into financial services as well. Individuals’ government financial records are extremely valuable to a financial firm. While our privacy is priceless from our perspective, for Musk’s finance business, it is worth several billion dollars.¹

Musk’s companies currently have 50 federal government contracts. Given that Musk’s businesses are directly or indirectly dependent on funding from the federal government, it is unethical for him to de facto be put in charge of the federal government. This is the proverbial fox guarding the henhouse. There are concrete concerns. A Biden administration plan to purchase $483,000 in electric vehicles for the State Department was transformed in the Trump administration into a plan to purchase $400 million in armored Teslas — vehicles made by Musk’s company. While this would be profitable for Musk, security experts do not deem the Tesla Cybertrucks suitable for hostile environments. If these vehicles were used by State Department officials, it could put the officials’ lives at risk. Once reports about this deal surfaced, the State Department removed Tesla’s name from the relevant documents, and then declared it would not be moving forward on the plan.

It appears that Musk’s Starlink company has taken over a $2 billion Federal Aviation Administration (FAA) contract previously awarded to Verizon. The Associated Press reports that Verizon “is unaware that the contract is being amended or terminated” although the FAA has begun testing Starlink technology. Former FAA officials state that Musk’s Starlink should not be used “without adequate testing, review and debate about its benefits and drawbacks.”

In addition to creating new business opportunities for himself, Musk is also benefiting from crippling the agencies that regulate his companies. New York Times reporter Kirsten Grind finds that 32 federal investigations of Musk’s companies are now stalled because of the actions of DOGE and the rest of the Trump administration. DOGE’s actions may not be helping the American people, but they are very beneficial to Musk’s companies.

DOGE’s Bad Management Practices

As a practical matter, the Musk-led group has demonstrated remarkably poor leadership. As DOGE is accessing multiple federal databases, they do not appear to be following security protocols. No one should assume that tech moguls can’t be hacked –  a cryptocurrency exchange was hacked by North Korea in February, losing $1.5 billion in the process. The data in the federal databases that the DOGE team is playing with is worth much more than $1.5 billion.

DOGE’s main objective thus far has been to go after the federal workforce to purportedly save money. This is bad management since that’s not where the bulk of the federal spending occurs. The labor cost of the civilian federal workforce is only about 4 percent of federal spending. There is not much savings to be had here.

Conservative politicians have been working — and succeeding — to constrain the growth of discretionary non-defense spending from at least as early as the 1980s. This politics has led to the understaffing of many agencies. A recent analysis by the Brennan Center found that 10 of 15 cabinet level agencies had a reduction in staff from 2010 to 2022.

In fact, if one wishes to have good government that properly serves the American people, the federal workforce needs to be increased. Here are just some of the federal agencies that are understaffed:

• the nation’s air traffic control centers are understaffed causing many controllers to work six days a week, 10 hours a day
• the Veterans Health Administration does not have enough medical officers and nurses to properly care for veterans
• the Federal Deposit Insurance Corporation does not have enough examiners to insure against bank failures
• the immigration court system does not have enough staffing to process cases in a timely fashion

Musk’s approach to reducing staffing in the federal government is also wasting taxpayer dollars. The many lawsuits that have been filed in response to DOGE are costly. Beyond that, federal workers spend their days serving the American people. When they are stressed and confused by Musk’s directives – regarding whether they are going to be fired or not, whether a severance offer is legal or not, or whether reporting to Musk what they did last week will violate national security – their productivity is significantly diminished. By distracting them from doing the work of serving the American people, Musk is likely costing us hundreds of millions of dollars in lost productivity from the federal workforce.

A related management issue is more straightforward: Who is in charge of DOGE? Although everyone knows that Elon Musk runs DOGE, the Trump administration refuses to officially acknowledge this fact. It claims that Amy Gleason is the acting administrator of DOGE. Gleason was on vacation in Mexico in February, soon after the start of DOGE, when the White House first made this proclamation.

Gleason’s title gives Musk a way to avoid responsibility for his actions – but it’s not likely to fool anyone.