Hysteria & Misunderstanding.  Lanhee Chen Talks to A&G

Summary

Podcast Summary: Armstrong & Getty On Demand - "Hysteria & Misunderstanding. Lanhee Chen Talks to A&G"

Release Date: February 24, 2025

In this engaging episode of Armstrong & Getty On Demand, hosted by iHeartPodcasts, hosts Armstrong and Joe Getty delve deep into the complexities of domestic policy, government bureaucracy, and the current administration's initiatives under President Trump. They are joined by Lon He Chen, Diane Steffi, and Joe Getty to unpack the myths and realities surrounding government cuts and reforms.

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1. Introduction to Government Cuts and Bureaucratic Restructuring

The episode opens with a discussion on the Trump administration's ambitious plans to cut federal programs and streamline bureaucracy. Armstrong introduces the topic by highlighting the "chainsaw for bureaucracy" approach that aims to reduce government size and expenditure.

Notable Quote:

Diane Steffi (00:09): "Cut jobs, save the government money, send Americans a check for the difference. That's the Trump plan being floated at least. But is it realistic, is it feasible, and might it hurt your wallet more than it would help?"

2. Debunking Hysteria Over Government Cuts

Lon He Chen addresses the perceived hysteria surrounding government cuts, emphasizing that many fears are exaggerated by the media.

Notable Quote:

Lon He Chen (01:38): "There is a fair amount of hysteria over some of the activity that we're seeing, and the effort, I think, that's underway by some of the media is to try and define some of these cuts as existential or deeply problematic."

He uses the example of the IRS, explaining that despite media portrayal, the agency had been expanding its workforce prior to the proposed cuts. The intended reduction of approximately 6,800 positions represents a modest 6-7% decrease, not the crippling blow often depicted.

Notable Quote:

Lon He Chen (02:15): "The service at the IRS wasn't all that great before. So the notion that we have this challenge that's being created because of the things that government is doing and things that Doge is doing in particular, it's just not true."

3. The Dynamics of Independent Agencies and Executive Oversight

The conversation shifts to the role of independent agencies within the executive branch and the Trump administration's efforts to increase oversight.

Notable Quote:

Lon He Chen (03:44): "We've got some of these institutions that are supposed to create some separation from the rest of the executive branch. It just doesn't make a whole lot of sense, though, at some level."

He explains that the administration is seeking to have independent commissions' regulations vetted by the White House, arguing that this ensures greater political oversight without entirely stripping agencies of their intended independence.

4. The Erosion of Congressional Oversight and its Implications

Armstrong and Lon He Chen discuss the diminishing role of Congress in checking executive power, attributing it to changes in incentive structures and increased political polarization.

Notable Quote:

Lon He Chen (08:10): "The incentives for members of Congress are really different now than they were before. You know, now it's all about how many likes can I get on social media, how can I generate a following on social media."

He criticizes Congress for ceding power to the executive branch, noting that the lack of functional oversight exacerbates executive dominance.

5. Impact of Administrative Growth on Main Street Americans

The dialogue turns to how the expansion of the administrative state affects ordinary Americans, particularly through increased taxes and regulatory burdens.

Notable Quote:

Lon He Chen (13:22): "If government gets bigger, taxes go up and people pay more because we have to pay more to support the mechanism of government that's been created."

Armstrong shares a personal anecdote about high taxes impacting his ability to invest and support private enterprises, underscoring the tangible effects of government growth on economic freedom.

6. The Necessity of Government Reform for Efficiency and Transparency

Lon He Chen emphasizes the need for an effective and transparent government, arguing that without competition, there's little incentive for governmental improvement.

Notable Quote:

Lon He Chen (10:15): "The only way government gets better is if you apply some pressure on it to be more efficient and more effective."

He advocates for increased transparency to ensure accountability, highlighting the lack of visibility into governmental spending as a significant issue.

7. Conclusion: Balancing Executive Action with Oversight

The episode concludes with a reflection on the current administration's proactive approach to governance. Lon He Chen appreciates the action-oriented nature of the Trump administration, despite disagreements on specific policies, and expresses optimism about ongoing debates and reforms.

Notable Quote:

Lon He Chen (15:58): "We can have a real debate over these things and this level of activity in action that is truly exciting to me."

Armstrong wraps up by acknowledging the challenges and the importance of constitutional principles in reshaping the administrative state, expressing confidence in the judicial system's role in preserving foundational governance structures.

Notable Quote:

Armstrong (16:06): "We're looking at the foundations of the giant obese Washington colossus and drag to the Supreme Court questions like these commissions and boards and departments."

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Key Takeaways

• Government Cuts: The Trump administration's efforts to reduce federal workforce are presented as measured and necessary, countering media-driven hysteria.

• Independent Agencies: There's a push for increased executive oversight over independent agencies to ensure political accountability without entirely dismantling their functions.

• Congressional Oversight: The decline in Congress's effectiveness is attributed to changing incentives and polarization, weakening checks on executive power.

• Economic Impact: Expansion of the administrative state leads to higher taxes and regulatory burdens, adversely affecting private enterprise and Main Street Americans.

• Transparency and Efficiency: Enhanced transparency and accountability are crucial for a more effective and responsive government.

• Balanced Governance: While supporting executive action, there's an emphasis on maintaining constitutional checks and fostering constructive debates to improve governance.

This comprehensive discussion offers listeners a nuanced perspective on the Trump administration's domestic policies, the challenges of bureaucratic reform, and the vital role of congressional oversight in maintaining balanced governance.

Transcript

[Lon He Chen]

Because four hours simply isn't enough.

[Armstrong]

This is Armstrong and Getty.

[Lon He Chen]

Extra large.

[Diane Steffi]

Cut jobs, save the government money, send Americans a check for the difference. That's the Trump plan being floated at least. But is it realistic, is it feasible, and might it hurt your wallet more than it would help?

[Joe Getty]

Where he's gone too far. A slim majority using presidential power, 52% say he's gone too far. They're cutting federal programs. 51% of Americans say gone too far.

[Armstrong]

This is the chainsaw for bureaucracy. Chainsaw, chainsaw. A variety of opinions and thoughts there having to do with domestic policy, budget cutting, bureaucracy taming, et cetera, which is one of the major initiatives going on in the Trump administration right now. Who better to discuss this with than Lon He Chen David and Diane Steffi, Fellow in American Public Policy Studies at the Hoover Institution and the Director of Domestic Policy Studies at Stanford University. Lon he, how are you?

[Lon He Chen]

Great to be with you. How are you?

[Armstrong]

Just terrific. Thank you. Earlier in the show, we were comparing and contrasting the Democratic reaction to a lot of the cutting and restructuring and examining the giant bureaucracy which has been essentially any, any cuts or a horror in a constitutional crisis, with Lincoln's statement that we absolutely have the right to amend, reconstruct, and, you know, he didn't say this explicitly, but cut or grow government in the way we the people see fit. It's quite a contrast.

[Lon He Chen]

It is. And I would just say this. I mean, I think there is a fair amount of hysteria over some of the activity that we're seeing, and the effort, I think, that's underway by some of the media is to try and define some of these cuts as existential or deeply problematic. So let's just step back and take a look at one of them that they talk about. For example, the irs. This is one of my favorite ones. The IRS has reached record levels of staffing in the last couple years, and they have significantly expanded their workforce. So they went from about 70,000 employees to 100,000 employees over the course of a couple of years. Now, the cuts that Doge is talking about, 6,800 employees, we're talking about 6,800 probationary recent hires that they're looking to essentially trim from the IRS bureaucracy. We're Talking about between 6 to 7% of the workforce, and it doesn't even account for the significant, as I said, increase in the workforce we've seen recently. So people just need to look at the facts and try to figure out exactly what's going on here, because fundamentally, there is this notion that, well, no, we can't cut anything. This is going to cause a degradation of service. Look, the service at the IRS wasn't all that great before. So the notion that we have this challenge that's being created because of the things that government is doing and things that Doge is doing in particular, it's just not true.

[Armstrong]

Well, in the idea that to even audit something is improper or threatening is just. It's. It's obscenely backward. One of the things Kim Strassel is writing about is how the Trump administration is taking a serious look at the agencies that Congress created to perform executive functions. Like. Well, they administer laws, but they're free from the executive branch's control. It's like Congress created its own executive branch. Any thoughts on where we are as a country with that, and what are the chances of doing something about it?

[Lon He Chen]

Yeah, that's another great question, because you've got a whole host of agencies that are. They're called independent agencies. Right. They're created. Usually they end a B or a C. So commissioner, board, and these are the organizations that essentially are part of the executive branch, but they have some independent authority. So they've got, for example, board members or commission members who are appointed by a president for a set amount of time, confirmed by the Senate, and they're supposed to sit for that set amount of time. And the idea was, well, you've got some of these institutions that are supposed to create some separation from the rest of the executive branch. It just doesn't make a whole lot of sense, though, at some level. And so what this administration, what the Trump administration is now trying to do is to say, for example, hey, if you, as a commission, a supposedly independent commission, issue a new regulation, something that you're saying people can or cannot do, you need to take that regulation and you've got to run it through the White House. We've got to know what it is that you're doing. Even as a, quote, independent agency, I don't think that's unreasonable. Right, because the independent agency has elements of independence. We understand that. Because they're regulating. Let's say, for example, whether a merger can go through or not. But at core, what the White House is saying is if you're going to regulate, we have to know about it. And again, this is one of those things where there's been a lot of writing in the media, a lot of misunderstanding, this notion of Trump's trying to take over the entire bureaucracy, when the reality is there's certain things here that independent agencies, for example been doing for a long time where we probably do need a little more political oversight. And so, you know, people, again, just got to understand what the real story is versus what the media is reporting.

[Armstrong]

Sure. And we've been plenty harsh about the unchecked growth of executive power and how the gigantic executive branch has come to be. In many ways, it mimics all three branches. It rights, rules and laws like Congress, then it enforces them, like the executive branch, I guess, and then decides on your fines, and here's the appeals and everything, like the judicial branch. And so obviously, it needs to be looked at. And the other aspect of this that is never talked about in the media is that the president, as, for instance, they're howling that Elon Musk is unelected. You know, like the president's virtually the only person in the executive branch who is elected. But the idea that a huge chunk of the executive branch wouldn't be answerable to the voters at all except, like, you know, three steps down the line. While I fear unchecked executive power, if the executive is in charge, they can do good things and be rewarded with reelection or their party reelection. But if they do bad things, they can be voted out. Right now, if the. The giant, sprawling executive branch does bad things, what the hell do I do about it?

[Lon He Chen]

Well, this is the most important thing that people don't realize, which is that there is actually a check on what the executive branch can do. And that's Congress. Right. If Congress actually did its job and was functional, as opposed to just being a bunch of people running around yelling all the time. If Congress actually. Yeah, if. If Congress actually functioned the way Congress is supposed to function. That's your check on the executive branch, Right? That's your check on what the executive is doing. They have the oversight power. They can have hearings, they can run legislation, they can do all sorts of stuff to constrain. If they're really worried about. If Chuck Schumer and Democrats in the House, Hakeem Jeffries and all the rest, if they're really worried about what the executive branch is doing, if they're worried about what Doge is doing, they have the ability in Congress to try and work together with Republicans there to figure out a way to conduct oversight, they can conduct oversight on their own, by the way. They don't need Republicans to do it necessarily. So the idea that there's no check on the executive. First of all, you're right. The voters can send a check, but more importantly, Congress needs to do its job, and Congress has completely Ceded the playing field. In a lot of ways, the executive. And this is not a Trump problem, but this happened during the Biden administration, this happened during Obama, that the Congress has just gotten less and less willing to do its job. And that's probably.

[Armstrong]

Is it just that if they're not on the record having done anything, they can't be blamed for anything going wrong? Where does this cowardice, laziness, whatever it is, come from?

[Lon He Chen]

Well, part of it's that the incentives for members of Congress are really different now than they were before. You know, now it's all about how many likes can I get on social media, how can I generate a following on social media, how can I do all that? As opposed to, you know, where I think there. There were members of Congress that did the hard work of actually trying to get things done. You know, I think it's been a few decades since we've. We've really seen a lot of that activity. But I think part of it is the. The incentive structure has changed. And then part of it is, you know, unfortunately, I do think we're electing in a lot of places, more extreme members of Congress who are really more interested in advancing ideology than actually passing legislation and getting things done. Now, some of that's a reflection of us as the American people becoming more polarized and more ideological in some ways. But overall, I do think that the composition of Congress, the nature of Congress, who we're sending to Congress, all of these things have impacted, quite frankly, Congress's ability to do its job and Congress, members of Congress's willingness to do their job.

[Armstrong]

Wow, that's a big one. That's a big one. We don't really have time to talk about how to reform our entire primary process and the rest of it. And so for folks just tuning in, especially, we've been talking about, and a lot of this has gone on unnoticed or untalked about by many people in the media in the midst of Trump cutting, you know, transgender polo matches for Dubai or whatever the heck, a lot of the serious looking at and rejiggering the administrative state, all these commissions and boards and making everybody go through all the rules and see if any of the rules violate the Constitution, exceed legislative power, go beyond the clear words of the congressional statute, harm the national interest, a stripping down of the gigantic administrative state. And those of us who've been praying for that sort of thing are super excited. But as I said before the break, Lonhi, can we help understand. Help people understand rather, how that helps their lives? You know, in everywhere America.

[Lon He Chen]

Well, look, we. We want an effective and efficient government, right? And obviously everyone wants government to do the things it's supposed to do. But when you have. I think there's a couple of issues. One is when you have government that's grown so big and particularly has so many people that it becomes kind of a constituency in and of itself. Right. That it becomes about defending the institution, which really means making sure that nothing ever changes. What you end up with, unfortunately, is a situation where government doesn't have to improve. I mean, let's just compare that to a minute. Let's just think about a business, right? If you think about a business, the reason why businesses improve, really the only reason why they improve is because of competition. And you've got a marketplace where you've got different businesses competing for. For people's support and for people's business. And, and, and that ends up forcing them to improve and to change and to evolve. Think about government for a minute. What forces government to change and evolve and get better? The answer is nothing on a regular basis, unless you apply some sort of pressure, there is no competition. There's no other government out there that's going to do national security, that's going to do processing to make sure that we have clean air and clean water. You don't have that unless you apply some political pressure on government to do better. And that is fundamentally why we need to think about some of these changes that are going on. You know, are some of them unorthodox? Are some of them going to raise eyebrows? Sure. But fundamentally, the only way government gets better is if you apply some pressure on it to be more efficient and more effective. And by the way, here's another thing, Joe, that really drives me nuts, is transparency. If you look at, for example, in California, where I'm sitting, the lack of transparency we have into what government is doing and spending money on is remarkable. And at the federal level, we've got some similar issues. It's not as bad as it is in California. But why can't we, as the people who fund government, have a better idea of what government's spending our money on? This is something that's always drove me. That's why I ran for controller several years ago. It's why I continue to believe we've got to push this transparency message. Because if we don't know what government is doing, it can ever get better. We can't ever make it do the things it's supposed to do, and instead it ends up doing things that, you know after the fact we read about it, we're like, what? You know, our money's been going to what? Because no one was able to see along the way where all that money was going. So, anyway, I'll get off my soapbox now, but I really think transparency is hugely important.

[Joe Getty]

Well, so.

[Armstrong]

And how that lands on Main street, though, is, number one, we're not being stolen from and our tax money merely distributed cronies. That is what I would like very much. But secondly, wouldn't we see less regulation, therefore more efficient economic growth and change and that sort of thing, and rising wages? I just think. I think scaling back the administrative state would have a specific material benefit to average Americans, wherever they are.

[Lon He Chen]

Well, yeah. I mean, look, aside from people getting better service and having a government that's more responsive.

[Armstrong]

You're right.

[Lon He Chen]

I mean, not to get too wonky about this, but there is always this worry about government crowding out the private sector. And what that means is that the government becomes so big that it starts to make it difficult for, you know, private entrepreneurs and small business owners to do what they're doing. And the more debt we take on, the more people are going to have to pay in taxes to pay off that debt. And why we. Why do we carry debt? We carry debt to have a bigger government. And so, yeah, there is a real impact for people on Main street, and that is that if government gets bigger, taxes go up and people pay more because we have to. We have to pay more to support the mechanism of government that's been created. So there is a direct effect on our pocketbooks and something that people need to be aware of.

[Armstrong]

And just, you know, a personal example, I've been very fortunate. Jack and I have done well in this business. I'm reasonably financially comfortable, but my taxes are breathtaking. And if I were not paying those taxes like that, it's not like I would go out and buy a yacht. I would love to invest in smart people with great ideas. That's what I would do if I was not spending X amount of money on taxes and help them grow their businesses and hire a bunch of people and get started an insurance plan and the rest of it. So, yeah, the idea that government crowds out free enterprise and private enterprises is absolutely true. So, Lana, we appreciate the time and thoughts. Anything else on what the Trump administration is doing domestically that's got you excited or you're feeling really good about?

[Lon He Chen]

Well, Joe, I mean, look, I think some of the stuff that the Doge is doing in terms of. Right. Sizing government, I think that's long overdue, quite frankly. But what I would also say is we've got a president. Whether you like what he's doing or not, he's doing something. Okay. And I think that that is fundamentally what in, in many ways in our, in our country, we feel like we've been lacking this, we've been lacking this kind of leadership and direction. And we can have a real debate about whether all of these things are right or wrong, whether we like everything that's happening, whether we think the direction that's, that the US Is taking around the world is the right one. But, but fundamentally we have an action oriented executive branch and an action oriented government, and maybe we can kind of wake everyone up and sort of say, listen, there's some things that have to get done here and there's some ways in which we need to push forward to improve our country. And I just think that we can have a real debate over these things and this level of activity in action that is truly exciting to me. And, you know, let's see where it goes.

[Armstrong]

Lan He Chen of the Hoover Institution, Stanford University. Lonhi, it's always a pleasure. Thanks so much for the time.

[Lon He Chen]

Yeah, great to be with you. Thank you.

[Armstrong]

Likewise. Thanks. And to Chuck Schumer and those who have been denigrating the Supreme Court and talking about how it's illegitimate and the rest of it, the plan is all the stuff we've been talking about to really look at the foundations of the giant obese Washington colossus and drag to the Supreme Court questions like these commissions and boards and departments of. Since they're no longer doing what Congress told them to do and they're not accountable to the executive agent, the executive branch, can we end them or how can we trim them and restructure them? And if it runs afoul of any constitutional principles we have, thank God and Trump, frankly, we have a lot of constitutionalist judges who are very, very protective of the bones of the Constitution, the original intent of the Constitution. So I think it's the perfect circumstance. We've got an agent of change and agents of stability that are going to work together to make the government better for all of us. Hey la, hey la, I love it.

[Lon He Chen]

Extra large.