We know that many rich people are not too sharp, which is why they rely on help from the government to get rich and stay rich. Elon Musk is giving the whole country a prime-time lesson in how this works. He is looking to end the I.R.S.’s direct file program. This program was allowing hundreds of thousands of people to quickly file their tax returns for free. He also says he will shut down the Consumer Financial Protection Bureau (CFPB).
We’ll skip the fact that neither Musk nor Trump has the authority to shut down an agency created by Congress. The interesting item here is what Musk is trying to do.
In the case of the I.R.S. direct file, the agency was giving people the option to use a simple and free system to file their tax returns. Note that the I.R.S. was not forcing anyone to use direct file. It was giving people a choice. But Elon Musk labeled this choice as a far-left plot.
There is nothing obviously left-wing about making it cheaper and more efficient for people to do their taxes. But this option does pose one problem for people like Elon Musk, it will mean less money for H&R Block and other companies that charge people big bucks for filing their taxes.
The story here is straightforward, Musk is prepared to make the economy less efficient n order to put more money in the pockets of people who own companies that provide tax filing services. It’s a simple story; Musk is rigging the economy to take money out of the pockets of ordinary people and put it in the pockets of tax filing industry.
There is a similar story with Musk’s quest to shut down the CFPB. The basic purpose of the CFPB is to ensure that the financial industry is not ripping people off.
Think of it as similar to the Food and Drug Administration (FDA), which Musk probably also wants to shut down. The FDA reviews both food and drugs to ensure their safety. The logic is that most of us are not experts in determining whether meat or other items are carrying parasites or in other ways pose hazards to our health.
FDA inspections provide a guarantee that the food we buy won’t kill us and that the drugs we take actually do what the drug companies claim they do. There are serious grounds for complaint about how well the FDA does it job but I doubt many people would be anxious to go back to the days where infected meat frequently caused people to get sick or even die.
The story with the CFPB is about applying similar logic to the financial industry. People with advanced degrees, and endless time to devote to writing deceptive contracts, can likely find ways to get ordinary people with day jobs to make financial choices that hurt them. The point of the CFPB is to screen the dealings of the industry to ensure that financial products are as transparent as possible and not a sleazy way to rip people off.
Note that this is also a way of increasing efficiency, which is supposed to be the goal of the DOGE boys. It is a waste of resources to have highly trained people spend thousands of hours finding ways to scam customers. If we have serious fines for such scamming, then banks and other financial institutions will not do it.
It’s also more efficient from the customer’s standpoint. Just as we don’t want people with day jobs to have to become experts in detecting polluted meat, we also don’t want to make people get degrees in law or accounting to take out a mortgage. We want these contracts to be as simple and transparent as possible.
To be clear, there will always be mistakes in this effort. Just as some of Elon Musk’s rockets blow up, some of the regulations the CFPB, or any agency, put in place will not be optimally designed.
If Musk was actually interested in efficiency, he would be helping the CFPB to do its job better. But that clearly is not Musk’s concern. He is determined to find more ways to take money out of the pockets of ordinary people and give it to the billionaires. Eliminating direct file and the CFPB are part of that effort.
