The entire academic industry is in turmoil, the uncertainty on how bad things could get is probably the worst of it as Universities are having to plan for some pretty extreme outcomes even if unlikely.
For those who are questioning the validity of a 59% (or higher for some other institutions) overhead rate, your concerns are worth hearing and a review could be necessary, but oh my please not like this. This was an overnight (likely illegal!) change made with no warning and no consultation.
If the government decided that a cap was necessary it should be phased in to allow for insitutions to adjust the operational budgets gradually rather than this shock therapy that destroys lives and WASTES research money (as labs are potentially unable to staff their ongoing projects). A phased in approach would have nearly the same long-term budget implications.
Are there too many admin staff? Likely? Is this the right way to address that? Absolutely not.
For those who are unfamiliar with how career progress works in Academia, it is so competitive that even a year or two "break" in your career likely means you are forever unable to get a job. If you're on year 12 of an academic career, attempting to get your first job after your second (probably underpaid) postdoc and suddenly there are no jobs, you can't just wait it out. You are probably just done, and out of the market forever as you will lose your connections and have a gap in your CV which in this market is enough to disqualify you.
> For those who are questioning the validity of a 59% (or higher for some other institutions) overhead rate, your concerns are worth hearing and a review could be necessary, but oh my please not like this. This was an overnight (likely illegal!) change made with no warning and no consultation.
Why should the public believe that procedures that produced 59% overhead rates in the first place can be trusted to fix those overhead rates now? Sounds like a demand for an opportunity to derail needed reform by drowning it in red tape.
Also, what would be illegal about the change? Are the overhead rates in a statute somewhere? The grants certainly aren’t individually appropriated by Congress.
You seem to be unfamiliar with how indirect rates work.
First some basic math: if a project is budgeted at a direct cost of $500,000, the indirect rate of 60% applies to the $500,000, i.e. $300,000.
The total grant is thus $500K + $300K = $800K. The $300K indirect costs are thus 37.5% of the total. This is an upper limit, as many direct costs such as equipment do not get indirect rates applied to them.
Second, these rates are painstakingly negotiated with the NSF and NIH. Yearly audits to ensure compliance must be passed if funding is to continue.
Third, these indirect cost go towards to items such as electricity, heat, building maintenance, safety training and compliance, chemical disposal, and last by not least laboratory support services such as histology labs, proteomics core, compute infrastructure, and some full time staff scientific staff. Only a relatively small portion goes to administration.
Finally, scientists generally would welcome review and reform of indirect costs to ensure they get the maximize benefit from the indirect rates. However, DOGE is not interested in reform. They are interested in raze and burn destruction.
If DOGE gets its way, it will knock the Unites States off its perch as the world’s technological leader.
You can tell people the truth all day long. They don’t want to hear it. They’re convinced that academia is rotten to the core and none of your facts and figures will dissuade them.
For example I know at my institution every dollar, every piece of effort, is painstakingly tracked and attributed to funding sources. We have extensive internal checks to make sure we aren’t misusing funds. Audits happen at every major milestone. All of that effort is reported. It’s exhausting but the government requires it because we have to be good stewards of the funds we have been granted. No one believes it.
I’m not part of academia but was heavily involved in funding because of my position in student government while still in college.
While I won’t argue there isn’t waste (what endeavor doesn’t have waste?) it’s an incredibly tiny percentage (except in cases where there was actual fraud, which we also discovered and the Feds prosecuted and convicted people for).
The irony is that academia is so afraid of “waste” that I wouldn’t be surprised if colleges spend more money on the auditing and the compliances, etc than the actual waste they prevent.
I’ve had to deal with NIH audits up close. The amount of work devoted to compliance can make one question if the grant money is even worth it in the first place.
A big part of the reason indirect rates evolved is because the administrative burden to track direct costs is immense. How do you split up direct costs on an electric bill? Do you place a meter on each wall outlet and try to assign each amp to a specific job? Or safety training? Divide the safety meeting minutes by ….. ? It’s impossible. Which is why Vannevar Bush pioneered indirect costs. See the history section here:
> knock the Unites States off its perch as the world’s technological leader.
It's a funny thing. there is a distinct chauvinism to any citizen's nation. Every American is confident and absolutely positive that we are the best in so many categories. By what metrics? And who measures these? What about other nations who claim the top spot as well?
Before I travelled to Europe in 2008 I had some mental image of backwards, technologically inept populace that had old electronics and lagging standards and rickety brittle infrastructure. I mean you watch films and look at pictures and you see the roads and the old buildings and the funky cars and there's just a mix of things that are 500 years old or 1500 years back and thoroughly modern.
when I finally showed up in Spain I was completely disabused because all the electronics and the homes were totally modern and there were big box superstores that looked exactly like Target or safeway.
We went to shopping malls, watched normal first-run films in luxurious theaters that sold beer, and we rode around in cars/trains/boats, and I visited veterinarian and physician and hospital, and the medical treatment was indistinguishable from the American type.
I mean, this is one consumer's anecdata, but you've got to consider that we're ready to believe vague propaganda about #1 America First Outclassing The Solar System, and the fervent patriotism is perhaps not a 100% accurate lens.
Universities are designed to collect and disseminate knowledge worldwide. The top institutions and even the worst ones thrive on international collaboration. Think about how difficult it is to achieve and hold military superiority even. Schools are an effective equalizer, and globalist mindsets are the default.
the US is def not the best in many categories - though I suspect certain pockets of the US (overrepresented on HN) are like SV re: tech/quality of life and academia
many people I know - mostly [science/math/etc. denying] republicans think the US is the best at everything including healthcare (!!!) despite reams of data conclusively proving otherwise
my fingers are crossed that DOGE/Dump does something stupid enough to irritate the populace (and by extension a handful of senators/representatives to grow a mini-spine) enough to stop this destruction
Below the Ivy League and Premier type universities, many systems are based in/through a particular State, and so we could be more granular with a huge territory/populace and evaluate which States are ranked where for what types of research.
Further, it may be the case that Europe doesn't need/want a lot of high-tech, high-cost intellectual workers and opportunities that would drain brains from pools that do something more relevant, like soldiers, transport/shipping, or retail workers or HCPs.
in terms of scientific research though, America is ahead of much of Europe. It's historically been easier to get a good job in research in the US. Some research is also harder to carry out in Europe due to regulations. Now, whether the European lifestyle compares to the US is a different story. But when it comes to university-level research, it has been the case that there is just more money to throw toward it in the US, leading to more highly-cited papers. That might be changing, though.
> Also, what would be illegal about the change? Are the overhead rates in a statute somewhere? The grants certainly aren’t individually appropriated by Congress.
2024 appropriations (and it showed in many years before then-- Public Law 118-47. Statutes at Large 138 (2024): 677.
SEC. 224. In making Federal financial assistance, the provisions
relating to indirect costs in part 75 of title 45, Code of Federal
Regulations, including with respect to the approval of deviations
from negotiated rates, shall continue to apply to the National
Institutes of Health to the same extent and in the same manner
as such provisions were applied in the third quarter of fiscal year
2017. None of the funds appropriated in this or prior Acts or
otherwise made available to the Department of Health and Human
Services or to any department or agency may be used to develop
or implement a modified approach to such provisions, or to intentionally or substantially expand the fiscal effect of the approval
of such deviations from negotiated rates beyond the proportional
effect of such approvals in such quarter.
That says the indirects must be based on the existing regulations. The memo purports to rely on the existing regulations. It relies on 45 CFR §75.414(c)(1), which states:
> The negotiated rates must be accepted by all Federal awarding agencies. An HHS awarding agency may use a rate different from the negotiated rate for a class of Federal awards or a single Federal award only when required by Federal statute or regulation, or when approved by a Federal awarding agency head or delegate based on documented justification as described in paragraph (c)(3) of this section.
Subsection (c)(3), in turn, says:
> (3) The HHS awarding agency must implement, and make publicly available, the policies, procedures and general decision making criteria that their programs will follow to seek and justify deviations from negotiated rates.
Just based on a quick perusal it seems like the administration has a decent argument that the agency head can approve the 15% indirect by fiat as long as he or she comes up with a documented justification.
> So, an HHS division like NIH can use a different rate only for a “class” of grants or a “single” grant, and only with “documented justification.”
> There is nothing that says NIH could, in one fell swoop, overturn literally every negotiated rate agreement for 100% of all grants with all medical and academic institutions in the world, with the only justification being “foundations do it” rather than any costing principle whatsoever from the rest of Part 75 of 45 C.F.R.
Further, this doesn't allow a blanket adjustment to existing awards.
That is an argument in the opposite direction, but it overlooks two things.
1) The “documented justification” must reflect the requirements of subsection (c)(3), but that provision imposes no real substantive requirements. It’s a litigable, but the linked article concludes there must be more justification than the statute seems to require.
Note also that, amusingly, Kisor is still the law of the land and under that decision agencies still get deference in interpreting their own regulations.
2) The article frames the Congressional rider as prohibiting changes to the indirects. But the statute only prohibits changing the regulation, which HHS hasn’t done.
The statute just says the agency must use the existing regulations. The regulations were promulgated by the agency to govern its own discretion. The executive reads the regulation to constrain the civil service to a particular process, but allow the negotiated indirects to be overridden by the head of the agency with a documented reason.
You’re assuming that the regulation would constrain the head of the agency but why would that be the case?
Whether or not the head of agency is allowed to a drastic change like this doesn't change the fact that it is stupid. It's going to cost money in the long run.
At the *very* least you should be following the administrative rules act (requiring you to solicit 45 days for comments by effected parties) before making such a dramatic change in policy.
Courts absolutely love striking down EOs (of both Dems and Reps Admins) when they should have been following the administrative rules act.
You can file an APA lawsuit about anything. Nobody really calls APA violations “illegal.” It’s a “show your work” and “don’t be drunk or crazy” procedural law.
The “overhead” isn’t even overhead as most people understand it.
But the real question is why does the general public think 59% is too high? Irs an arbitrary number. Maybe an appropriate level of “overhead” is 1000%.
In reality the people who actually know anything about how this is calculated, across the board and across the political spectrum, do not think this is a major concern at all.
The only people who are complaining about it are the ones who hear the word overhead, have no concept of what it means other than taking a lay persons understanding that all overhead is unnecessary and are coming with the idea that anything above 0% is bad.
It seems like the better comparison from your article would be 1992, but really, having RFK Junior sitting there with a chainsaw is in no way comparable to 2013
It’s different because RFK with a chain saw might achieve change where Obama failed.
We have had 3 populist elections in the last 5 cycles. Obama 2008 was co-opted and Trump 2016 was stymied by Russia investigations. So this time there’s RFK and Elon and Tulsi with chain saws. If the people don’t like the results they can vote for Harris in 2028. But at least sometime tried to do what the winning party voted for.
These are cuts to enrich the extremely wealthy, not for a lean-mean-fighting industry. Your whole conception is off. They don’t need or care if the entire country does better overall, they care about personal wealth. It’s Obama wasn’t trying anything of the sort.
This is really it. Generally they gesture vaguely toward a notion of "administrative and bureaucratic overhead", without really understanding how that overhead actually cuts waste and improves research output by removing redundancies. If we were to zero out this administrative overhead, it would mean every professor would end up doing less research and more not-research.
1. Why should the public believe that they can fix it. Perhaps they can't, that's not entirely my point. My point is that if the government firmly believes that a change is necessary there are _simple_ ways of acheiving such a change without causing such chaos, waste, and hardship. Perhaps a phased in approach, or other mechanisms. Overnight shock therapy offers very little economic benefits while having very harsh personal and insitutional cost.
2. What is illegal about the change. The NIH overhead rate is actually negotiated directly between the institution and the NIH, following a process put into law. This is why a federal judge has blocked this order [1]. I'm far from a lawyer, but my read of this is that this is a change that would need to come through congress or a re-negotiation of the rates through the mandated process.
If they can’t be trusted to fix the problem themselves with a 5 year phase in period they most definitely can’t be trusted to fix the problem immediately…so I don’t get your point.
Everyone involved in the current process has an incentive to not change anything. If you go through the existing process with some five year target, the universities and bureaucrats will bleed you to death with procedures and lawsuits and lobbying, as they did with prior efforts under Obama. It’s the same way NIMBYs kill development projects. The only way to change it is shock and awe.
What article are we taking about? The response to “shock and awe” was rescind offers to students, not cut down on administrators or address inefficiencies.
That’s a temporary measure. The universities know that in he long run they need students but can cut administrators. But at least the immediate reaction is controlling costs rather than geering up to lobby and litigate their way out of it.
The US has a peculiar culture where elite academic institutions are very much willing to limit their numbers of students, so it's not clear to me that they will in the long run control costs. Large, prestigious US universities have historically preferred funding more administrators over more students.
Those elite universities are less like schools and more like towns, so the focus is not just on teaching students but on maintaining a community. Sometimes that means protecting the people you have at the expense of people you haven't met yet. In many cases, "more administrators" translates to "better town services", so it's nor surprising to me the preference to cut enrollment.
I’m not convinced that the rate, per se, is actually a problem. What is a problem is the structure. If a contract said “you get $1M to do X and your university gets $590k, paid pro rata by time until completion”, fine, and one could quibble about the rates.
Instead, the grant is for $1.59M, and each individual charge to the grant pays an extra 59% to the university, conditionally, depending on the type of charge and the unbelievably messed up rules set by the university in concert with the government. Buying a $4000 laptop? Probably costs your grant balance $6360. Buying a $5000 laptop? Probably costs $5000 becuase it’s “capital equipment” or “major equipment” and is thus exempt. Guess who deliberately wastes their own and this also the university’s and government’s money by deliberately buying unnecessarily expensive stuff? It gets extra fun when the same research group has grants from different sources with different overhead rates: costs are allocated based on whether they are exempt from overhead!
And cost-plus disease is in full effect, too. If the research group doesn’t use all their awarded money because the finish the project early or below estimated cost, the university doesn’t get paid their share of the unspent money. This likely contributes to grantees never wanting to leave money unspent.
Of course, DOGE isn’t trying to fix any of the above.
I'm curious about where you would draw the line on government workforce/spending reductions. What specific cost-cutting measures would go too far and make you withdraw support from Trump/MAGA-related initiatives?
For example:
- Complete elimination of federal workforce (RAGE)
- Full military withdrawal from NATO/Europe
- Dramatic cuts to essential services (eg, Social Security)
What potential actions would make you feel the downsides outweigh any benefits? I'm curious what your threshold is for acceptable vs. unacceptable changes.
>For those who are unfamiliar with how career progress works in Academia, it is so competitive that even a year or two "break" in your career likely means you are forever unable to get a job.
Honest question. If the job market is that competitive, why are we guiding people down this path that requires investing their entire young adult life? To me, it seems you've inadvertently made a case for cutting funding.
The big question is how should the government allocate the funding for basic research between career stages to maximize the benefit to the society.
If you focus on training PhDs, which is the American way, you get a steady stream of new people with fresh ideas. But then most PhDs must leave the academia after graduating.
If you focus on postdocs, you get more value from the PhDs you have trained. Most will still have to leave the academia, but it happens in a later career stage.
If you focus on long-term jobs, you have more experienced researchers working on longer-term projects. But then you are stuck with the people you chose before you had a good idea of their ability to contribute.
We aren't really. We are guiding people to get college degrees. However, undergraduate education and professional research are both done by the same institution. Further, that institution likes to have those professional and apprentice professional researchers work as teachers. The result of this is that undergraduates get a lot of exposure to professional Academia, so they naturally have a tendency to develop an interest in that profession. Given how small the profession actually is, even a small tendency here saturates the job market.
At this point, what profession isn't "small"? It feels like jobs are declining across all industries except for the most exploitative ones they can't easily outsource.
The people in charge don't want good action, they just want action and now. They want to damage these institutions. They have published and spoken extensively on this. That we keep letting their defenders change the narrative to pretend anything else and continue to give good faith WHEN THEY HAVE TOLD US THEY ARE NOT ACTING IN GOOD FAITH in insane to me.
BTW, interesting thinking on the action for action's sake governing style:
"The cult of action for action’s sake. “Action being beautiful in itself, it must be taken before, or without, any previous reflection. Thinking is a form of emasculation."
I have a PhD from a reputed US university and I agree with the fixed overhead aspect of this.
There is no reason students get a third of the grant money and live in poverty (30k per year) while the university hires a football coach for ten million and builds a new building every year.
This is exactly the way this has to be handled, the universities are intentionally making this look worse than it is for public sympathy.
Again please read my post carefully. There is a valid critique of overhead rates, but simply doing it suddenly in this manner has little added economic benefit in the long run, while ruining lives and creating waste/chaos in the short run.
You can make a strong argument these institutions require reform, but such reform should be done not overnight, and not through such broad strokes.
There is a very basis here for invoking “rule of law” where:
1) we’re talking about discretionary grants being made out of taxpayer dollars;
2) congress has delegated authority to make the grants and to the executive, including determining indirects; and
3) the executive action is being used to save money.
It’s also “the rule of law” in some sense when NIMBYs sue to keep a Ronald Mcdonald House from being built in their posh neighborhood, but that doesn’t mean we need to lionize it on that basis, or preemptively surrender to efforts to invoke the law to block reform. The universities can afford expensive lawyers with their 59% indirects, let those lawyers worry about it.
Universities have freedom in how to use grant money. The government had so far not bothered with controlling what they do with the money coming from the government. The situation is a bit like you donating to a charity and they spending it on executive bonuses.
Are you proposing that the government has to sign everything into law before taking any action? Can you think of why that might be a terrible idea?
Since when is it required that all the money in a budget be spent? Amounts are budgeted for a division and then it’s up to that division to operate within that budget. It doesn’t mean they have to spend every single dollar in the budget. In fact, it should be a goal to spend less than the money that’s allocated in the budget so that it can be applied to the next year. The idea that all the money has to be spent, regardless is part of the problem.
> Since when is it required that all the money in a budget be spent
Since Congress passed The Constitution's Appropriations Clause and the Congressional Budget and Impoundment Control Act (ICA) in 1974.
Because otherwise, the executive could just unilaterally shut down any part of the government at any time. Or siphon money from one department to another.
Which it can't by design, since congress controls the purse.
There's a process outlined in that act, under which the executive can report to Congress that it is reducing spending, and Congress must approve that reduction in order for it to take effect. That is the law of the land. The law is being broken.
If you don't like the budget, there is one governing body that can do something about it in this country. The legislature. They control spending, just like putting people in prison is controlled by the judiciary.
Strangely, all the people grousing about executive overreaches are dead silent on all this.
The sin has never been executive overreach, the sin was always an executive they did not control.
No. The law is not being broken. That act does not require the president or the administrative agencies to spend all of the amount budgeted.
There’s a process to handle scenarios, where the administrative branch feels that more money is not needed to be spent for the purposes that the money was initially allocated for. At the very least, there is a 45 day process starting from the point that it is determined to be a “deferral of the budget process” (continuous days that Congress is in session) that is allowed for Congress to pass a rescission bill. I don’t believe Trump’s been in office long enough for that process to even have taken place.
I think we are talking about different things here.
I am not writing in support of funding cuts.
I am strongly supportive of stopping universities from skimming most of the funding, and the research getting a tiny bit. Student researchers doing the actual work get less than minimum wage.
If you are surprised by the 'less than minimum wage' part, it's a bit of creative accounting by universities counting a 'tuition waiver' as part of your wages.
And yet everyone was arguing recently about how amazing Deepseek was because they operated on such a smaller budget and how the restriction of chips into China forced them to find an efficient solution to training an LLM model. Sudden and drastic changes don’t always result in bad outcomes; in fact, they can many times produce outcomes that were never possible without the shock to the system.
Most of the critics of the doge are arguing that the changes are too fast and that the system needs to gradually and systematically through a series of conferences and meetings come to a proposal that might be implemented sometime in the future.
Spurious. Football coaches are not paid by overhead dollars. but mainly by alumni that like football wins.
No, when a major for-profit company outsources research they pay way more than a 50% “markup”. Unless they go to a research university: then they pay much less, and just like the federal government they are getting a fine deal.
Yes, some rich foundations (Gates, Ellison etc) exploit the situation and do not pay full overhead costs: They are essentially mooching on the research institutions and the federal government.
So you don’t think that some of the money that gets sent to athletic directors to build fancy stadiums and pay for multimillion dollar coaches would’ve gone possibly to research facilities if those athletic departments didn’t exist?
No, I do not. Most health science centers do not have football teams ;-). I am at UTHSC in Memphis and I can assure you we do not send money to support the Vols in Knoxville. Worlds apart.
Really? Then why do they charge students athletic fees? Why do stadiums and athletic centers receive government grants and subsidies?
Here is a huge list of donations from various groups to an athletic endowment at the University of Alabama. Much of this money could have and would have been donated to schools directly for research and academic purposes instead the athletic foundations.
Alabama is one of the most successful Division 1 football programs in the nation. If these programs are so profitable, why do they need so much money for these endowments? And why all the money from governments and grants? Doesn’t add up.
> Here is a huge list of donations from various groups to an athletic endowment at the University of Alabama. Much of this money could have and would have been donated to schools directly for research and academic purposes instead the athletic foundations.
Because donations are made for tax purposes and virtue signaling … someone is going to get this money. Many of the donors are alumni and will donate money to the school. It was already targeted to the university athletic departments. It’s not a big stretch for it to be donated to another university department that has a direct academic role.
One of the options is “the donors kids” here. Donating money never leads to more savings than it costs, people donate because they support what they’re donating too. Sports boosters care about sports, not academics.
Doesn’t the football stuff fund itself through tickets, licensing, etc? It seems hard to believe research overhead grants are going to the football coach.
Only if the organization with the money wants to do that. Flip it around. Do you think the sports program at any major university pays for physics research facilities (or any topic outside of sports medicine)?
> For those who are questioning the validity of a 59% (or higher for some other institutions) overhead rate, your concerns are worth hearing and a review could be necessary, but oh my please not like this
This comment encapsulates a big part of why people like Trump. They are sick of inaction in the name of careful consideration and nuance.
And I kinda understand it. By analogy, I've see this many times at different companies I've worked at. Whether it's a 20-year scripting engine or a hastily put together build system that barely works but the entire project depends on, whenever someone suggests to replace it you just get reason after reason for why you have to move slowly and consider all the fine details. Months and years pass and the core system never improves because an "old guard" shuts down every attempt to change it. Finally, someone new comes in and calls bullshit and says enough's enough, and rallies a team to rebuild it. After a difficult process, you finally have something that works better than the old system ever could.
Yeah, I understand the story doesn't always end well, but the analogy above helps me understand Trump's appeal.
Let’s ask ourselves what happens when the story doesn’t end well and it’s a service that government has been providing. The answer may be lives are lost, the economy breaks, enemies win victories, etc.
Move fast and break things is fine in a competitive marketplace. It’s asinine for the government to do.
The answer is to elect better politicians who can nominate better heads and those department heads can drive the necessary change without succumbing to the old guard.
The federal workforce, as a percentage of all jobs in the U.S. was 4% in the 50's, decreased steadily to 2% in 2000 and has held roughly steady since then. (The source is https://usafacts.org/articles/how-many-people-work-for-the-f... second figure, and I'm taking total jobs as a proxy for the population that the workforce serves.)
The end of that period of reduction was Clinton's Presidency. Clinton's National Performance Review (NPR) started at the beginning his term in '93. It had goals very similar to the stated goals of this efficiency effort, but it was organized completely differently. He said, "I'll ask every member of our Cabinet to assign their best people to this project, managers, auditors, and frontline workers as well."
GPT4o: The NPR's initial report, released in September 1993, contained 384 recommendations focused on cutting red tape, empowering employees, and enhancing customer service. Implementation of these recommendations involved presidential directives, congressional actions, and agency-specific initiatives. Notably, the NPR led to the passage of the Government Performance and Results Act (GPRA) of 1993, which required federal agencies to develop strategic plans and measure performance outcomes. Additionally, the NPR contributed to a reduction of over 377,000 federal jobs during the 1990s, primarily through buyouts, early retirements, natural attrition and some layoffs (reductions-in-force or RIFs).
The recommendations that involved changes to law, the GPRA, were passed in both houses of Congress by unanimous voice vote.
I don't think the stated goals of the current efficiency drive are controversial. The problem is the method. I want to understand the basis for people supporting those methods, the "we've got to break some eggs" crowd, when the example of the NPR exists. In my opinion, it didn't cause conflicts between branches of government, didn't disrupt markets, and was wildly successful. It also caused much less disruption in people's lives, because the changes were implemented over several years with much more warning.
I, personally, don't think the real goals of this effort are the stated goals, but that's a different issue.
Elon proved with Twitter that large corporations can survive drastic, chaotic and insane levels of cuts/layoffs (80%+) and still survive. If DOGE waited to do things less drastically, nothing would ever get done. The cuts that are going through are nothing as drastic as what Twitter endured (except USAID) so I guess he is willing to risk short term disruption for long-term spending cuts and that the organization will reorganize and restabilize pretty quickly.
> can survive drastic, chaotic and insane levels of cuts
I get ads on X that are just videos of animals being slowly shot multiple times to death. There's also some for tools to slim jim car locks. None of the mainstream/normal accounts I used to follow (shout out SwiftOnSecurity) are there, and instead it's a hotbed of crypto scams and deranged vitriol. The site is still running, but is a shell of its former self, making so little money that Elon is trying to sue people (and now, abusing US govt payment systems) to force them to pay him for advertising.
I can see how if you think that's a success, that you would think similar actions with regard to the US government are successful. The necessary cuts he's making are not necessary, and I'm guessing you aren't impacted, so, given the general lack of theory of mind towards others, I'm not surprised you think they're ok. The rest of us out there who understand the idea of human suffering are concerned for our fellow citizens facing arbitrary and unnecessary pain as the result of a capricious court eunach's drug influenced decisions before the "restabilization" that will never happen.
This is false. Twitter is not the US government. And Twitter is certainly not the US scientific establishment which is dispersed broadly across the nation and which has taken decades to build up. Many research universities will shutter their research departments permanently if these overnight changes are implemented. This is especially true in smaller states like Alabama, which is why Republican Katie Britt is sounding the alarm. Moreover, many people will leave the field permanently.
Moreover, scientific R&D is a strange place to slash if cost savings are the goal. Medicare and Medicaid comprise over 50 times the NIH and NSF combined budget of approximately $50B. If we want to save costs, research into diseases like Alzheimer’s Disease is the way to go. Alzheimer’s currently costs the nation $412B per year [1], eight times the NIH annual budget. Therapies which delayed the onset of Alzheimer’s Disease by 20 years would nearly eliminate this cost.
Let’s be clear: DOGE is led by a self described autist who has little idea how government and broader society functions. The damage he will do if left unchecked is vast.
Twitter’s valuation has plummeted since Elon’s purchase.
And to the extent Twitter is still limping along it’s because Twitter due to its very nature benefits immensely from the stickiness of social networks.
For example, Facebook is almost completely junk. It hasn’t improved or been relevant in a long time. And yet it survives and makes tons of money simply because people don’t want to rebuild their networks.
There are many other examples where even minor cuts have been devastating. The classic example is of course GE, the ultimate example of cutting a company to the bone, which worked for a decade or so, but set the company up to essentially cease to exist after.
Then you have Boeing, a company in an industry with less competition than probably any other in the world and it’s struggling to make money because of this thinking.
Boeing and GE are inappropriate comparisons. Their cost-cutting maneuvers were primarily driven by moving existing, quality work to overseas contractors. It was simply about saving money without worrying about efficiency or long-term benefit. The overhead of managing contractors spread throughout the entire world is much more difficult than overseeing groups say within the Seattle Washington area. I really don’t see how this compares to reduction of work forces in government divisions. These government positions are not being moved overseas along with the complicated overhead of managing the groups all around the world.
The functions will end up being outsourced to contractors and bureaucracy will have to deal with managing them and their failures. This is exactly what has already happened to many departments and direct cuts to workforce will only worsen it.
Sorry, but I just don’t feel like you have the authority or knowledge to make that statement. How could you possibly know whether direct cuts will only worsen things? This is the type of issue that is argued between people inside of an organization that are fully aware of all of the factors at play.
It's not really a prediction I'm making, this already happened in the 70s with Nixon, the 80s with Reagan and the late 90s with Clinton. Direct cuts to employment in valuable functions have historically always ended up with core employees being replaced by armies of contractors which then need armies of bureaucrats to manage instead of doing things in house. It's why the US Digital Service started, for example. The issue has been argued for about 50 years now and the outcome has been pretty clear. It's the inevitable conclusion of firing federal employees but still wanting the program function to live on, you will inevitably end up with contractors and that has meant armies of bureaucrats to manage them.
This equivalence between a company that provides one app that, if it were to disappear, would hurt no one, and a government that has thousands of functions, many of which are life-and-death in both the short and long run, is just ridiculous.
Let's take one example. The Epidemic Intelligence Service (EIS) is a two-year post-residency program that trains health professionals in applied epidemiology. These officers are crucial for on-the-ground investigations of disease outbreaks. It's a 2-year program, with 50-60 doctors in each year. All of the first-year doctors in this year's program were fired by DOGE, so far, for a capacity reduction of 50%. Both years are in the 'probationary' civil servant category, so the jobs of the rest of them are still at risk.
I asked ChatGPT 4o for other examples, and it generated a list of 40. You can do that for yourself, if you're interested.
Twitter hardly ever made money before and after is in the same state now. Its contribution (anything?) to this country is far different than a government institution.
The comparison here isn’t encouraging and makes no sense.
Amazon made almost no profits for many many years others too. They follow a reinvest or expansion strategy and if investors believe it the stock goes up. It is not encouraging that Twitter lost 80% of its value under Musk's leadership and not something pne wants for the US Government which also does not work on a for profit basis. Ofcourse Musk fakes that he doesn't know that and promotes his unsubstantiated wins stories daily.
Amazon offered very obviously valuable and profitable services. I think we're starting to realize ad-based monetization is not how to maintain a billion dollar corporation anymore. I wouldn't have much aspects for Twitter even if Musk never took over. But he sure did accelerate things.
>ad-based monetization is not how to maintain a billion dollar corporation anymore.
Online ad revenue has been growing, 15% per year recently. Huge growth. That includes legacy networks like (decrepit) Facebook, which is seeing double digit growth, and the short form video frontier is growing considerably faster and constantly pushing out new ad/partnership models and is very much a strong growth industry in an of itself.
Ad revenue is more than sufficient to sustain a billion dollar corporation. It can and does sustain trillion dollar corporations, and the industry is currently in a strong growth phase with a lot of obvious green fields for innovation.
Twitter was an imperfect yet functional website before Elon. Elon fired most of the staff. Twitter then continued to be an imperfect yet functional website.
Hell, I remember ten years of HN saying "WTF does Twitter need so many people for??", and then those same people said "OMG Elon is insane to fire so many people!!".
Many people are more concerned about the messenger than the message. They’ll flip-flop their opinions solely based on who is doing the bidding.
A glaring recent example. If Biden had taken action like Trump has to negotiate with Russia to stop the Ukraine war, would the Democrats be screaming that Biden is a “Putin apologist”?
If Barrack Obama made statements about deporting undocumented immigrants (which he did), Democrats fall largely silent. If Trump makes similar statements, same Democrats scream fascism, racism, and Nazi/white supremacy.
Sure, rhetoric matters for style points, but the act supersedes stylish rhetoric. I’ll take proper action with clumsy rhetoric over inaction or improper action backed up with eloquent rhetoric, which is what most politicians provide.
This is an incorrect statement. Twitter’s revenue halved but its expenses were cut as well meaning its EBITDA doubled. The most likely conclusion on cash flow is that it went down actually, probably by a half in line with revenue (since revenue is a sign of flow in).
This is not the stunning retort to criticisms of Elon’s “fire them all” approach that some imagine it to be. It basically says “we cut expenses by 75% and only lost half our business.” Which half of the US government are you willing to lose, and are you sure you’re cutting the right 75% to lose the targeted half? Which half of the subjects that we fund R&D for are you willing to lose?
https://www.bankrate.com/investing/ebitda/ (“Some investors and analysts use EBITDA to assess the operating performance of a business or as a broad measure of its cash flow.”)
Increasing EBITDA by downscaling the business and severely cutting expenses is a common approach when turning around an unprofitable company.
https://altline.sobanco.com/ebitda-vs-cash-flow/ ("EBITDA and cash flow are both important financial metrics, but they serve different purposes and provide different insights into a company’s financial health.")
We can quote secondary sources back at each other all day, but it's somewhat pointless because the truth is what I said already: EBITDA and revenue are merely indicators for cash flow, not synonyms. You used the wrong words dude.
I also noticed you only replied on a pedantic point while leaving the substantive questions on which half of the government and research funding you'd like to see gone (and how these cuts target that half) as an exercise for the reader.
I think it’s common for people to refer to “cash flow” (without referring to OCF or FCF or whatever specifically ) when they mean EBITDA, but I’m happy to be wrong about that. I’m not a financial analyst. But as you acknowledge, EBITDA is an indicator of cash flow. Is there a difference between the two measures that you think is relevant to X? X is increasing how much money they’re making right?
I'm glad we agree that cash flow is not the same as EBITDA.
The question we are talking about is whether Twitter makes more money now versus before Musk's take over. If "makes more money" means revenue, then the answer is a definitive no, it does not make more money now. If "makes more money" means profit, then the answer is that we don't know but probably not because profit is found after ITDA (hence the B in EBITDA) and we know the ITDA is substantial for Twitter given how it was acquired.
So yes there is a difference between cash flow and EBITDA that is germane here, and the difference is that cash flow doesn't help us answer the question that we are asking while the one piece of information that we do have (revenue) tells us the opposite of the answer you're trying to imply.
Great euphemism for “In one month, we’re going to kill tens of millions by withholding food/medical care and permanently destroy institutions that took a century to build”.
This is the most infuriating part of this. Musk acted like a moron and overpaid for twitter. Then cash constrained, he rapidly cut things to save money. Now twitter is completely diminished in its reach, at an all time brand low, and at real risk from competitors.
Meanwhile, the companies Musk built that actually have dominated their space are big idea innovators like Tesla and SpaceX. Musk wasn’t successful because he’s a good penny pincher, he was successful by burning cash on big ideas and talented people.
But somehow we decided its case 1 that we’ll apply to the government.
Case 2 had a lot of safeguards around Musk to keep him isolated from the talented people. But Case 1 made Musk feel better. So we know which one he prefers. Not like he's going to suffer the losses the most.
It seems Twitter is in a death spiral. That is the model to apply to scientific research and academia that has powered Americas dominance for the past 100 years?
Sure, if we detonate all nukes, I imagine 20% of humanity will survive. "We" won't die out that easily. Me and you are probably dead, though. Statistically speaking.
Elon proved with Twitter that he doesn't know what he is doing. Huge loss, zero lessons. If US ends up being downsized financially and ethically the way Twitter has, that will also provide zero lessons for Musk.
Having spoken with people who worked there, Twitter built a system for which the technical its mostly ran without much help. So it’s not surprising that you can still tweet with most of the staff gone.
> Twitter that large corporations can survive drastic, chaotic and insane levels of cuts/layoffs (80%+) and still survive.
US Government is not Twitter, but yeah, I can see some element of it. Now I suddenly remember, the various comments here convinced me that X/Twitter will be dead in just two months. Yet, it's still around. Not that I care to make account there or bother looking at it, but I figure if it kept crashing, it would show up in the news. Maybe everyone moved to bluesky and it just doesn't have any customers?
So you're still just going to attack the most extreme interpretations and dismiss the truth because it's not literally dead?
Digg is still alive. Myspace is still alive. These big brands don't literally die often; someone will want to try and play around with it.
>but I figure if it kept crashing, it would show up in the news. Maybe everyone moved to bluesky and it just doesn't have any customers?
Twitter is technically stable in terms of servers. They did a good job doubling up by 1) minimizing the load needed by making users sign in to see more than a literal permalink (you can't even see comments anymore) while 2) being a bait to get more new accounts to report on engagement. Not that that matters now since Twitter is no longer publicly traded.
It's the everything else around it that caused it to plummet.
> So you're still just going to attack the most extreme interpretations and dismiss the truth because it's not literally dead?
I can attack my own interpretation, that seems fair, doesn't it? You can have your own interpretation, and then attack it, (or not attack it) later.
> Digg is still alive. Myspace is still alive. These big brands don't literally die often
I had no idea! That's cool. I never really used either one that much. I do know yahoo is still around. One difference is I periodically I see links to X/Twitter. I never see people link to digg or myspace. But sounds like you have a different perspective, which is also cool.
> dismiss the truth because it's not literally dead?
Just to be clear, the truth for me is my impression from reading HN about 2022 or so. Namely from comments like these:
> (Nov 18, 2022) I very much doubt that. Twitter must have had some bloat, but there's no way that 80% of the workforce was bloat. I'd be extremely surprised if Twitter(as in, the website/app, not the registered legal entity) still exists and works by the end of this year.
I agreed to them at the time. So not sure how "truth" and "dismissing" applies; it's really just an impression. Am I allowed to dismiss my own impression? Seems odd to object to that...
>I can attack my own interpretation, that seems fair, doesn't it? You can have your own interpretation, and then attack it, (or not attack it) later.
Your comment just gave some vibes that because Twitter didn't literally die 2 years ago (as you and others predicted) that it seems that introspection was completely proven wrong, "Yet, it's still around". I just simply wanted to assert that being nearly dead doesn't exactly inspire confidence, even though the doctor was technically disproven by his statement of "you'll be dead in 6 months".
For those who are questioning the validity of a 59% (or higher for some other institutions) overhead rate, your concerns are worth hearing and a review could be necessary, but oh my please not like this. This was an overnight (likely illegal!) change made with no warning and no consultation.
If the government decided that a cap was necessary it should be phased in to allow for insitutions to adjust the operational budgets gradually rather than this shock therapy that destroys lives and WASTES research money (as labs are potentially unable to staff their ongoing projects). A phased in approach would have nearly the same long-term budget implications.
Are there too many admin staff? Likely? Is this the right way to address that? Absolutely not.
For those who are unfamiliar with how career progress works in Academia, it is so competitive that even a year or two "break" in your career likely means you are forever unable to get a job. If you're on year 12 of an academic career, attempting to get your first job after your second (probably underpaid) postdoc and suddenly there are no jobs, you can't just wait it out. You are probably just done, and out of the market forever as you will lose your connections and have a gap in your CV which in this market is enough to disqualify you.