Modernization, Regulation and Costs

Speaker 3

29th, the day after Thanksgiving.

Speaker 2

Last...

Speaker 2

friday in november lots of tech news even though it's a quiet week traditionally thanksgiving week a lot of it focuses on musk and ramaswamy's doge plan to reform government and that was the week newsletter keith connects with a piece both from the wall street journal and the washington post they may not agree on politics but they agree that this is a lot of news and other Heavyweight, Silicon Valley people are throwing themselves into this. Mark Andreessen this week gave an interview to Joe Rogan in which he backed the Musk plan to reform government. And that's the focus of Keith's newsletter this week. Modernization, regulation and costs. Culture Wars, Silicon Valley and Washington, D.C. In the editorial, Keith is, and I have to admit, I was a little surprised on this, slightly ambivalent. I thought, Keith, you'd have rather liked the idea of Musk and Ramaswamy and Andreessen going into D.C. and cleaning all the inefficiencies up. What's the problem with it?

Speaker 1

Well, that first Wall Street Journal piece is written by them, so it's kind of like a manifesto. And what it does is it says three things. Firstly, that there are lots of bureaucrats who've been there for decades, unelected, effectively deciding policy through choosing what to implement and what not to implement. And many of them have got to go. I don't really disagree with that. There's probably a lot of truth and there's lots of scope for getting rid of a lot of the permanent civil service. The second thing they say is that procurement, government procurement is out of control and most of the money spent on behalf of the citizens is not coming directly from law that Congress passed and that a lot of it could go as well. And then the third thing they say is that there are too many regulations standing in the way of just getting stuff done. Now, I don't really object to any of the three, but I don't really think the problem of government is summed up by those three. What is super disappointing is, given that they're technologists, is there is no narrative about making government more modern. Saving money by doing it better using technology. So cheaper, better, faster isn't part of it. It's just cheaper. That's all they're focused on. So they're coming across as zealots for small government and not correlated at all except for the money spent with what the citizenry should be expecting of government. which leads me to think they don't really have an answer to the question, what is good government? They just don't have the answer to that. They don't understand that government is a service organization for citizens and that it should be good at delivering services, not just cheap, but good.

Speaker 2

I'm not defending them. In fact, I'm... I'm not sympathetic to what they're saying in any way, but I don't think they just miss this, Keith. They just don't like government. They think all government's bad. So your editorial is very interesting. You talk about government as a service to the people. It sounds like a term being used in a business plan to raise some money. What exactly in your mind is government as a service and how could technology be used?

Speaker 1

Well, For me, government is the end result of citizens deciding what needs to be provided to all of us by the people we elect and the taxes we pay. So good government is government that aligns with the customer need. And in the case of government, the customers are us. And the services they provide are everything from rules of the road, you know, education, which is a local matter in America, you know, criminal law, everything that, you know, to reduce it down to one word, it's society. Government produces society. And we live in that society and we expect it to deliver. So we want the DMV to be a good experience. We want the emergency room in the hospital to be a good experience. We want education to be a good experience. and so on and so forth. So you can deliver any service in millions of different ways, some of them super inefficient. And I don't disagree with Musk and Ramaswamy that that is the case. But your goal is to be a good service provider to your customer, which is us.

Speaker 2

Yeah, it's interesting. I wonder, thinking about this out loud, whether one of the ironies of this is the Republicans are leading on using technology to undermine government. But actually one of the consequences is that they open intellectually the Pandora's box of how technology can make government better and it will enable progressives like Tim O'Reilly and so many others who want to use government as a service in the way you're talking about. as so often it's the Republicans who are leading the way, but the Democrats should, and I think inevitably will have their own plans on this.

Speaker 1

Well, I think the Democrats focus a lot on policy and not very much on delivery. I think there's a huge separation between a policy wonk and an operational delivery mindset. And most politicians are not, and certainly bureaucrats, civil servants, they're not technical enough to be product managers. And what the government really needs is a product manager delivery mindset whose goal is good service at low cost.

Speaker 2

People like Tim O'Reilly understand that. There are a lot of people who, sort of move on the escalator between Northern California and Washington DC who, who, who, who get it. Um, I wonder whether what's his name that the transportation secretary would be on board for this, uh, Buttigieg, who of course, uh, is, is one of the smarter people in the Biden administration, a McKinsey person, whether he, he would certainly understand these issues.

Speaker 1

You would think so. I mean, he was in charge of transport, wasn't he? Was it energy or transport?

Speaker 2

He was in charge of transport. I mean, it does open up, I think, an interesting opportunity for a government as a service, to borrow your language, modernize it, to run. Because... As we think about 2028, most of the people we're still talking about as potential Democratic nominees are still very traditional politicians. And I'm not sure whether a traditional politician is able to even conceive of this language.

Speaker 1

Well, Musk is coming across as a kind of a greedy billionaire that doesn't want his taxes paid.

Speaker 2

Yeah, and he's not running. I mean, let's be clear, Musk is not president, so he's being appointed by the president. So it's a different thing.

Speaker 1

Yeah, yeah, exactly right. But you're right. I mean, Buttigieg does seem to have a brain that cares about things like this, but I don't think he has the ability to execute a plan or even know what the plan should be. Just take the difference between long-distance trucks and Uber. How good is Uber at knowing where a car is and whether it's going to get to you versus FedEx You know, you have no clue what time they're going to show up. Well, you do.

Speaker 2

I mean, in defense of FedEx, they certainly have a better clue than the post service, the post office, where not only do you not know when it's going to show up, you don't know if it's going to show up.

Speaker 1

Right.

Speaker 2

They're all terrible, Andrew. I'm not a big fan. I think FedEx is pretty good, actually. They give you a window and they always show up.

Speaker 1

I've had windows quite often where they don't. They don't show up and I, you know, but I don't, it's not a big point. So let's not go down a rat hole.

Speaker 2

The bigger point is, is an incredibly important one. And I think this is where innovation, I mean, you always claim to be a man of the left. As you know, I'm sometimes a little skeptical of this, but in progressive terms, this is where progressives have to go.

Speaker 1

Yeah. I think what you want is, um, and we'll get to this later in the show, you want government to focus on service delivery, not on regulation. Now, Musk is kind of right there. There's a lot to like about what him and Ramaswamy are saying, so I don't want to throw the baby out with the bathwater. But given who he is, you would think there was more of a vision than comes out of that manifesto for good government. It just doesn't exist.

Speaker 2

Right, and I think your editorial this week is a good one. I don't always like to agree with you, Keith, and we're supposed to disagree, but I think it's an important point. I wonder also, just thinking out loud, whether there'll be cracks within the Trump administration because Musk and Ramaswamy... I mean, they are in their own way libertarians, but they're not against government. They just don't want to do away with it. And some of Trump's appointments are so ludicrous. He's clearly appointing people who are by definition incompetent. So the government will just fall to pieces. And I'm guessing that neither Musk nor Ramaswamy would celebrate that, where entire government departments would just collapse.

Speaker 1

Yeah. Well, you know, there's this word in Silicon Valley which comes to the crux of this culture war comment, which is creative destruction. What I'm seeing so far is destructive destruction, not creative destruction, because the creative bit is missing. What do you want to replace it with is not even a question. But at least the conversation is starting.

Speaker 2

Now, I'm... I'm going to say impressed, but I'm struck by the fact that Andreessen is also throwing his metaphorical hat into this, aggressively supporting what Musk is doing at Doge. Is this the first time, Keith, and you're a longtime observer, is this the first time that serious Silicon Valley values, or what you might think of as culture, has come to Washington, D.C.?

Speaker

?

Speaker 1

can't remember a previous time so probably yeah in its own way even if

Speaker 2

This first draft will probably be a farce and a fader like so much else in the Trump administration. It is a big deal. It's significant in historical sense because I don't see them being able to go back now. I mean, even if this fails miserably, they're forcing the Democrats to respond. The Dems can't just come in and say, well, we're going back to the old 20th century bureaucracy, which everybody knows is inefficient and incompetent and sometimes even corrupt.

Speaker 1

Yeah, I think that's true. And Serge Salkat, who's watching us as Center Tech, saying, what about Lena Kahn? Your favorite girl, Keith. Well, I mean, in a way, it's a good question because she does sum up. the Democrats' view of innovation, which is to slow it down. Yeah, we'll split it up. I'll split it up. And there's been a flurry this week of new FTC lawsuits, one against Microsoft, one rumored against Uber, as well as the DOJ thing against Google. And it's going to be interesting to see how the Republicans think about regulating technology companies. I'm not convinced they'll be that much different to her, but we'll see.

Speaker 2

Well, I don't know. I mean, I can't see people like Andreessen and Musk and Ramaswamy. I mean, they may not like Google, but they're not going to be able to get away with breaking up companies and punishing companies they don't like and then promoting their own. It would be so obviously corrupt. I think the Democrats are doing themselves a profound disservice by... using these last few weeks to throw as much at the wall when it comes to regulation? Because firstly, it doesn't make any difference in the long term. And secondly, as you say, it reflects them as a reactionary party, a party of the previous century, a party who just doesn't get it, that they don't understand that something has profoundly changed. But that isn't something to be mourned. It's something to be celebrated and used creatively.

Speaker 1

Yeah, and I do think, despite my editorial, this is a moment to open up that conversation. That's why I didn't just say yes, because it's easy to say yes to the must-of, because a lot of it is common sense, but it isn't enough. The thinking hasn't gone far enough, and it needs to keep happening.

Speaker 2

Yeah, and I think it's going to be one of the more interesting aspects of the Trump administration. A lot of people expect Trump and Musk to have a big fight, which wouldn't surprise me. But in the first year, it'd be interesting to see what gets done, whether it would be like the wall in the first administration, a lot of talk, but nothing happens. Meanwhile, what about on the AI front? You link to something that Mark Benioff published in Time, which is, of course, a publication he owns. So in a way, it's his just as Musk tweets on X, so Benioff writes an editorial in Time about how the rise of new digital workers will lead to an unlimited age. Before we get to Benioff's point about AI, how central do you expect AI to be in this Doge initiative? You'd think that it's not coincidental that AI is changing everything and it will change governments.

Speaker 1

I'm a bit of a skeptic because I don't think there's anyone in government that can properly conceptualize how AI could improve government.

Speaker 2

But it's Musk and Ramoswami.

Speaker 1

Well, funnily enough, Musk compartmentalizes AI into, you know, Musk has been the cheerleader on how dangerous it might be. So he's building Grok or XAI. And there's a story about that this week. But I don't really get the sense of him being a cheerleader for his execution. The obvious place would be education, where you could revolutionize teaching and marking. That would be very obvious, probably diagnostics in health as well.

Speaker 2

It seems to me that AI as technology is the perfect antidote to bureaucratic excess, where it's transparent, where we're not relying on bureaucrats, incompetent bureaucrats, anonymous bureaucrats. The more AI is used in government, the more efficient it becomes. I mean, obviously there's the critique that AI promotes agendas, classes, genders, skin colors, all the rest of it. We've heard that and we will continue to hear it. But I would have thought that government is the perfect petri bowl, a laboratory to experiment with AI.

Speaker 1

Even more specifically in particular branches of government, But I think the price of medicines, for example, AI could play a huge role in policing pharmaceutical companies as sellers to governments, as buyers. There's so many different things, but for that to happen, there has to be an understanding of it, which I think we're a little bit early in the cycle of AI for there to be the right people in the right places. I can imagine a typical meeting at the Department of Transport where some young person, there's an article about this this week, some young person who does understand AI advocates for it and the kind of lifers who've been there for 40 years raise their eyebrows and frown.