Interview with Paul Krugman on DOGE from 2 weeks ago (8:39)

That boogey man of old that MAGAs love to pull out and shake around to scare people – the Deep State – is finally revealing itself to the public. You all remember the “Deep State” don’t you? That hidden entity that works in the shadowy mists who has all sorts of information on you and is causing you not to be able to do what you want.

Before the current administration, the Deep State was a figment of someone’s over active imagination. However, since January 20th Trump has unleashed Elon Musk along with a pack of teenage and twenty something hackers to rummage through the computer systems of our various government departments, What exactly their mission is, what exactly their goals are and what their processes are are unknown except to them.

In their hacking they are very likely to damage machinery, and very possibly could leave gaping back door access where it was once secure. In short they could be doing billions of dollars of damage while leaving open accesses that could come back to haunt Americans for years. 

At least part of their story was revealed last week by Nobel prize winning economist Paul Krugman. Krugman left the New York Times last fall and is now posting on substack. It appears that the NYT had some constraints on him. Now he is a bit less constrained. For this piece Krugman interviews an independent expert on US government payment and computer systems, named Nathan Tankus. I warn you it is long   

The story that Nathan Tankus weaves of Musk and company’s attack on our (yes OUR!) computer system is like a novel but is very real. It also shows that there is little guidance as to what these hackers are doing. There is a video (48 minutes) and a transcript at the website that I recommend you listen to. It is almost unbelievable. Her are a couple of paragraphs to et you warmed up:

Like most people paying attention, I was and remain terrified by the predictable power grab by the Musk/Trump administration. But it never occurred to me that Musk’s people would try to seize control of the computer systems that, in effect, cut all the checks the federal government sends out. In fact, very few people realized it was happening.

One person who did realize it, however, was Nathan Tankus — an independent expert on the financial “plumbing” at the Federal Reserve and the Treasury Department. So Nathan suddenly became the man of the moment. His blog Notes on the Crises has become crucial reading — and he may have helped steer us, temporarily at least, away from the edge of the abyss.

From there we go into a lengthy discussion of Nathan Tankus’s background and what makes him an expert on what they term the ‘financial plumbing’ of the government. Then we go into a deep dive into how that financial plumbing works. It was fascinating to me especially in how it relates to what Musk and his hackers did.

Here is the crux of what deeply scared Tankus and should scare every one. It is a bit long but he must be detailed:

Tankus: Friday, January 31st, I had just put out a big piece about how we already were in a constitutional crisis. I described a five alarm fire constitutional crisis. There had just been this implementation memo from the Office of Management and Budget directing a sweeping freezing of spending across the federal government until the Trump administration could review it. This caused immediate chaos. The Medicaid portals to send payments out through Medicaid went down. This had caused such an immediate disruption that they had to rescind the memo, but they hadn’t rescinded the executive orders that were driving this memo. And so I wrote a long piece about why this is a big deal. Why, what’s called impoundment, which is not spending what Congress directs or appropriates to be spent, is a big deal, why it’s a constitutional crisis, why it is like a fundamental demotion of Congress’s role in our constitutional system. So I was already focused on this issue and I was already pretty concerned.

You know, my newsletter is called Notes on the Crises. So, I’m paying attention to crisis. Crisis is, you know, when people are really reading my articles and when you’re really getting a lot of them, that’s when you know something’s really, really wrong, you know? So I was already focused on this. And in an article in the Washington Post I had seen a headline about how a high level person in the Treasury had resigned in protest or is on leave or something, but related to the treasury’s payment system. And as a payments expert, that headline was incredibly alarming. So alarming, in fact, that I put it aside and I couldn’t get myself to read it for a few hours. I had gotten caught up with promoting my piece that day, so I hadn’t eaten that day. So I was like, ‘I’m gonna go get something to eat.’

And my friend, colleague, the economist Stephanie Kelton at Stony Brook, when I told her that, she had already read the article and was already alarmed. She said, ‘I don’t think that’s the right order.’ But nevertheless, I hadn’t eaten that day. So I went to go eat, and then I went to go read it. I mean, literally, four paragraphs into this article, I had a panic attack. It was possibly the scariest or one of the scariest moments of my life when I read that article. And it was so scary to me because what the article said was that the fiscal assistant secretary, who’s the highest civil servant in the treasury, where everyone above him are political appointees. You know, there’s that top layer of every agency which are political appointees that, you might fire the old people, you fire the Biden administration or the Trump people, and you bring in your people. That’s a normal expected part of government. But everyone below them are supposed to be professional civil servants who were doing the job regardless of the partisan status of the executive branch, regardless of who is president. And the fact that this person had been pushed out because DOGE and Elon Musk in the Department of Government Efficiency were asking to have access to the Treasury and this guy, a long time official, someone who’d been in the government since 1989, had been in this highest status position since 10 years ago had been widely credited as the person who has expertly managed the treasury and payments throughout the various debt ceiling crises where you’re trying to squeeze every dollar and make sure payments go out without breaching the debt ceiling. I immediately understood how desperately serious and what the worst case scenarios could be and was overwhelmed by it. And I was also overwhelmed and alarmed as an expert in this area that so few people understood how serious this was that it was, and that it was going to be, that it’s not just that this was so dangerous, but that there was very few people who were in a position to really say anything about this. And to be frank, my newsletter is called Notes on the Crises. I have 50,000 people on my email list, some already very high-powered, powerful people who—I’m not going to name names—but I know that they’re there. And it might seem a little strange, absent concept, but I knew immediately that this was basically up to me.

Tankus: (ed. Note continuing his thoughts)

So, you know, more or less, to get the word out there and to race against the clock of whatever DOGE was gonna do and before they actually could get in there, you know? And so taking the opportunity of what I hoped gave me the weekend, like literally just the time of the weekend, hopefully the DOGE kids were going out, you know, doing drugs somewhere else and not actually at the Treasury, and take that opportunity to write as fast as I could, research as fast as I could to have a piece out Monday morning. I successfully accomplished that. I also managed to concurrently have a simpler version of my piece run in Rolling Stone at the same time and, you know, then hit the ground running, made sure to get a haircut Sunday night, had the, you know, brain space to do that because I knew I was going to be doing video interviews the next day.

Krugman: Just to be clear, impoundment is like the director of the Office of Small Animals gets a memo saying no money for rabbits, even though Congress has allocated it. But this is some guy, some 19-year-old or whatever from DOGE gets into the computers and possibly, and we need to talk about this, possibly alters the code so that no money goes out for rabbits or possibly just doesn’t know what the hell he’s doing and just crashes the system. Is that a fair characterization?

The article continues into Tankus spreading information on what he knew plus some speculation of what damage the hackers have done.

Scared me to think not only that folks like Musk and his hackers are in OUR computer systems hacking at OUR information, but that they are doing so with the blessing of a president who I must remind you is a 34 time convicted felon.

Also remember that the current president has already shown allegiance to those who only a couple of months ago were our enemies on the world stage. Plus we have no idea what Musk or his henchmen will do with the data they have captured or the accesses they have compromised or may have left open.