Every State Needs a DOGE

The Elon Musk-led Department of Government Efficiency (DOGE) has roots that predate the 2024 election. In May 2020, while much of the country was subject to COVID orders that closed schools, churches, businesses, even outdoor parks, Musk’s private space exploration company SpaceX launched its Crew Dragon capsule into orbit manned by two NASA astronauts. SpaceX’s “giant leap” marked the first manned launch from U.S. territory in over a decade and the space program’s first new ride since 1981.  

Musk initially chose California as SpaceX’s home-base, but began actively expanding the company’s Boca Chica, Texas presence. In 2021, Musk announced that SpaceX was recruiting “engineers, technicians, builders & essential support personnel of all kinds” to work at the South Texas launch site. He meant it. By 2024, SpaceX had created over 3,400 jobs and brought in nearly $100 million in tourism to Boca Chica. Musk recently confirmed that SpaceX’s HQ is now officially in Texas.  

Musk is not the only executive to flee California for the Lone Star State. As Civitas Institute senior research fellow Joel Kotkin and I have written, companies from banking to aerospace have decamped from the Golden State over the past decade. California has shed major companies including Charles Schwab, pharmaceuticals supplier McKesson, commercial-real-estate giant CBRE, energy major Chevron, and high-tech titans Hewlett Packard Enterprise, Oracle, Palantir, and Tesla.  

The multiple reasons these companies left California nonetheless point to a single policy prescription: California needs a DOGE. SpaceX’s departure is illustrative of the state’s benighted regulatory morass. Texas eagerly welcomed one of the world’s most valuable privately-held companies, even while California’s Coastal Commission clamped down on SpaceX’s plans to launch more rockets. It’s an unfortunately familiar story to anyone who has tried to run a business in California. The state’s regulators often see only the benefits of regulations without seriously considering the corresponding costs. Pumping the brakes on businesses that would otherwise be creating more jobs and tax revenue if they weren’t forced to spend countless hours and resources navigating the state’s notorious bureaucratic minefields forces them to leave the state. In the end, the regulatory environment leaves the Golden State with more mandates and fewer companies willing to stick around to follow them.  

But it’s not just California. Every state in the U.S. (and the entire E.U.) needs a DOGE. Since the November elections, tech titans and other corporate leaders have been eager to get facetime with President Trump, even writing checks for the President’s inauguration. If business leaders really want to supercharge U.S. productivity, they should ask themselves what they can do to shake their home states from bureaucratic sclerosis and reinvigorate broad-based economic growth.  

This brings us back to the Lone Star State, where Texas Governor Greg Abbott has shown other governors what a state-level DOGE looks like in practice. In crucial areas of regulatory policy, business investment, and education, Governor Abbott has driven a policy agenda designed to tear down barriers to economic opportunity and broad-based job creation.  

In the last legislative session, Governor Abbott supported legislation to create dedicated business courts to rival Delaware’s Chancery Courts. Team Abbott worked energetically after the session to recruit top-notch legal talent to fill the new judgeships. The results are promising. By October, 28 cases had been filed in the business courts and the newly appointed judges have exhibited a responsiveness and dedication to the law that has encouraged litigants.  

Texas is playing a long game to recruit companies—many of which are already based in the Lone Star State—to change their legal domicile to Texas and require corporate governance disputes to be resolved in Texas’s business courts. It’s a technical change with potentially enormous consequences. The headache that an activist judge has recently given Telsa over Elon Musk’s 2018 compensation package has played out in Delaware courts because Tesla (like most large cap U.S. companies) incorporated in the First State. Tesla investors are reduced to hoping that the court will assign a “more moderate” Delaware judge to the case at some point. But companies don’t have to wait for that day to come in Delaware: by reincorporating in Texas, they will have highly qualified judges on the state’s business courts to resolve their disputes.  

It’s not just Delaware’s dominance over corporate law that Texas is challenging. The state has opened its arms to the recently-launched Texas Stock Exchange (“TXSE”). The TXSE will operate from Dallas and offer companies “a better public-market experience through greater alignment and stability around listing standards and costs,” as James Lee, founder and C.E.O. of TXSE Group, explained in a September 30, 2024, launch event organized by Governor Abbott.  

Like the state’s new business courts, the TXSE plays a long game that could have seismic implications for corporate managers and investors. Since the 1990s, the list of publicly-traded companies has fallen by half as private markets have become the primary source of capital for the most innovative and fastest-growing U.S. companies, including OpenAI and SpaceX. A key culprit is the massive burden that regulators place on public companies. On top of that, the legacy stock exchanges have their own listing requirements. If TXSE successfully attracts listings, the exchange could have leverage to push securities regulators to listen to the previously unorganized executive teams and investors who have chafed at public company red tape that has the unintended effect of preventing retail investors from owning growth companies that choose to stay private. The result for Texas companies that list on the TXSE could be more efficient capital markets that are, to quote Lee, “laser-focused on the needs of market participants.”  

Governor Abbott’s efforts to expand opportunity goes beyond cutting red tape for businesses. Over the past two years, he has been on a mission to expand educational opportunities for Texas families, which is as critical for rising standards of living across all-income levels as Texas’ pro-growth regulatory policies. As Dan Lips, senior fellow at the Austin-based Foundation for Research on Equal Opportunity (FREOPP), reports: “for parents with children struggling to learn in public schools, [school choice] is a lifeline.”  A recent national survey found that expanding freedom in education is “significantly associated” with higher National Assessment of Education Progress (NAEP) test scores, “supporting the claim that choice and competition improve system-wide achievement.”  

Governor Abbott’s hard-fought campaign to expand educational choice has a crucial message: expanding opportunity requires taking entrenched interests head on. The teachers unions declared school choice “dead” after a 2023 legislative effort failed. Undeterred, Abbott doubled down on his commitment for educational freedom. Now Texas is on the brink to becoming one of the nearly 30 states that offer some form of parental choice. California, Illinois, and New York are among the minority of states with no meaningful support for parental choice. Add that to their DOGE list.  

Michael Toth is a resident fellow at the Foundation for Research on Equal Opportunity (FREOPP) and founding partner of PNT Law.