The smusher gem is a tool that allows users to optimize images in their website's directory by running a single command, achieving lossless compression that can result in significant savings in image file size, as evidenced by an example showing a 10% reduction. The effectiveness of the gem may be even greater for those who do not initially save images with optimal compression settings. This tool utilizes the smush.it service and has been praised for its performance and utility, with Tom Preston-Werner endorsing it as highly recommended and acknowledging grosser for the development effort.