DOGE, and the the Pareto Rule

According to president-elect Trump’s transition team co-chairman Howard Lutnick, he was the first to propose the Department of Government Efficiency(DOGE) a planned United States presidential advisory commission subsequently announced by president Donald Trump to be led by Elon Musk and Vivek Ramaswamy

The Government Accountability Office has identified 37 federal programs that are highly vulnerable to fraud, waste, abuse, and mismanagement.Of the 37 programs included on the list, 26 have been designated as high-risk for at least 10 years. Five programs have been on the list since its first iteration in 1990.
The 2023 list included three new areas of spending: the federal prison system, the Department of Health and Human Services’ management of public health emergencies, the unemployment insurance system.

The GAO called out five specific areas in particular need of attention: National cybersecurity
Efforts to respond to drug abuse, Federal oversight of food safety, Government liability for environmental cleanup, Managing fiscal risks associated with climate change

The Department of Defense (DoD) is the agency most likely to be called out as inefficient. Five of the 37 programs include DoD in their name; four of those have been on the list since 1995.

We've Met The Enemy:  The Swamp 

Congressional and agency action is required to fix the problems identified by GAO, with many government agencies partially or entirely  responsible to fix the problems.  Yet, organizations like FinCEN continue to rely on new regulations like the Corporate Transparency Act (CTA) to go after the little fish - as predicted here the CTA has been stalled due to litigation.  

Congress may be DOGE's Fort Knox.  Yet, if anyone can break though the vault is the Trump-Musk duo.

The dynamic duo is a huuuge target for the  New York Times; "Elon Musk remains perhaps the most consequential figure in President-elect Donald Trump’s orbit, with a commission for cutting government spending headed by him and Vivek Ramaswamy — widely known by its acronym, DOGE — promising huge reductions."

But the federal bureaucracy is not standing still. Federal regulators have become prominent targets for Musk and his allies. But those agencies are continuing to scrutinize the tech billionaire’s interests, raising questions about conflicts, or manufacturing them for that matter.


“The SEC is just another weaponized institution doing political dirty work,” Musk posted on X prompted by an appeals court ruling that Nasdaq can’t require diversity on the boards of companies that list on the exchange. Whereas

Ramaswamy wrote on X of the commission: “When an agency like the SEC is so repeatedly & thoroughly embarrassed in federal court for flouting the law, it loses its legitimacy as a law enforcement body.”

DOGE Tools - Pareto Rule

The Pareto principle specifies that 80% of consequences come from 20% of the causes, asserting an unequal relationship between inputs and outputs. 

Named after economist Vilfredo Pareto, the Pareto Principle serves as a general reminder that the relationship between inputs and outputs is not balanced. The Pareto Principle is also known as the Pareto Rule, the 80/20 Rule, the Law of the vital few and trivial many and the Principle of factor sparsity

Pareto observed that 80% of the land in Italy was owned by only 20% of the population. He also witnessed this happening with plants in his garden: 20% of his plants were bearing 80% of the fruit.

While the Pareto Rule is not a formal mathematical equation, it is a generalized phenomenon, that can be observed in economics, business, time management, analytics sports, social media, the auto industry, government and so on. In 2009, General Motors painfully discovered the Pareto: The more brands a carmaker has, the more it must spread money around to develop vehicles and market them. As a result, “every brand suffers,” said A. Andrew Shapiro, a managing partner with the Casesa Shapiro Group. “No particular brand or brands can achieve the share of voice that they need.

Ditto for women's handbag vendor Coach in 2016. The leather-goods maker will no longer sell its handbags and purses at some "lower volume" department stores, the company announced. The move comes in response to the brand's perceived diluted appeal to wealthier shoppers amid mass market access.

Other examples of the Pareto principle:

20% of a plant contains 80% of the fruit


80% of a company’s profits come from 20% of customers


20% of players result in 80% of points scored

20% of employees do 80% of the work.  The Pareto Principle applies to Elon Musk’s firing 80% of Twitter’s staff, for example.

According to 2020 Pew Research Study, the Pareto Rule can be applied to social media.  X users follow the Pareto Principle.  20% of X users, mostly Democrat, are responsible for 80% of the content, mostly misinformation-based.

Other examples.

A small percentage of customers (20%) might account for a significant portion (80%) of a company's sales. 

In a hospital setting, a minority of patients (20%) often require the majority (80%) of healthcare resources. 

In portfolio management: 20% of the brands account for 80% of the revenue.

Software Development: A few lines of code (20%) can cause most bugs (80%). 

Personal Productivity: A small number of tasks (20%) might contribute to the majority (80%) of your productivity.

In government the Pareto Rule is known as the Pareto Rule Of Government, or 90-10 ( varies between 90-10 and 95-5) Rule, because the normal distribution is artificially affected by political activity: 10% of government employees do 90% of the work. The rest are parasites and or are saboteurs.

DOGE and the Pareto Rule, a perfect match

While efficiency is something Elon Musk and Vivek Ramaswam are extremely familiar with, it's a foreign concept for politicians and demagogues. They talk about transparency.  Talk. For example:

The White House:

 We’re unable to track $6.2 billion dollars sent to Ukraine. 

California: 

We’re unable to track $24 billion dollars spent to combat homelessness. 

Governor Gavin Newsom of California referenced the state's long-standing work on civil service reform. Despite these comments, audits have shown that the state's significant investments in addressing homelessness have not been tracked effectively for outcomes. This comes at a time when California is dealing with a growing budget deficit and high unemployment rates, as reported by various state agencies.

The Pentagon:

 We’re unable to track $2.3 trillion dollars of military spending. 

The U.S. Treasury: 

We’re unable to track $5 trillion dollars of pandemic spending. 

FinCEN; 

We can't catch the Big Fish, so wel go after the little fish:  Corporate Transparency Act.

The IRS: 

We know you sent $601.57 to your friend, you better report it or you’re going to jail. 

DOGE managers can use the Pareto Rule as generic benchmarking to demonstrate to taxpayers abd skeptics that government efficiency is a low-hanging fruit;

Benchmarking

Benchmarking can be used by leaders to convince skeptics that new performance levels can be achieved.

ASQC defines Benchmarking as the process of measuring products, services, and processes against those of organizations known to be leaders in one or more aspects of their operations to gain insights om how your organization compares with similar organizations, even if they are in a different business or have a different group of customers.

Benchmarking can also help organizations identify areas, systems, or processes for improvements—either incremental (continuous) improvements or dramatic (business process re-engineering) improvements. 

Generic benchmarking broadly compares how core processes or functions are practiced in a similar way without regard to the industry to gain a new perspective and way of thinking. The advantage of generic benchmarking is the ability to compare your business to almost any other organization in the worl
Just DOGE It!

Recently Chuck Schumer called for congressional action because federal agencies were depleted, instead of calling for congressional action to stop government waste.  While not rocket science, political science might be Elon Musk's Achilles heel. I would not bet against him.