A federal takeover?
President Trump proposes a federal takeover of Washington DC. Ironically this has renewed calls for DC statehood.
It’s not clear how having the federal government taking over Washington DC would work. On one level, it’s like a snake eating its own tail … Washington DC already is the federal government.
Statehood advocates have long complained that DC voters are not represented in Congress. The existence of other remedies for that short of making it a state makes it look more like a simple grasp for power.
Other remedies? Sure. Restore the District of Columbia to its original ten-mile-square diamond straddling the Potomac. On the Maryland side you have Washington, DC; on the Virginia side you have Arlington, DC. Washington voters vote with Maryland, Arlington voters with Virginia. Everybody has their senators.
Meanwhile Elon Musk’s DOGE is taking a shredder to much of the federal government, slashing federal jobs. While his heart’s in the right place, he’s starting at the wrong end. The jobs are there because the workers are needed to implement mountains of regulations. The regulations need to go first. Cutting workers without cutting work is a recipe for disaster.
In many cases, entire agencies can go; illustrated by the now infamous case of USAID. In others, regulations are just unnecessarily complex … tax, Social Security, Medicare rule streamlining would not only reduce the need for workers to administrate them but make them more comprehensible to average citizens, lightening their burden as well. The costs of government extend well beyond the borders of the District of Columbia.
The second Trump presidency, only weeks old, is shaping up to be a historic watershed. It’s difficult to even catalog, let alone analyze, the changes both realized and proposed, both foreign and domestic.
Financology is about finance and economics. But the world doesn’t neatly divide into disciplines, and its not possible to fully treat economics and markets as if the political earthquake that’s occurring is happening in another universe. The behavior of stocks, bonds and commodities is intimately linked with these developments. Economics and finance continues to be Financology’s beat, but it will have to acknowledge the world in which it plays out.
Regardless, it’s a welcome change to have something in officialdom to cover besides the Federal Reserve.