The Corner

Liberals Admit That They Understand Public-Choice Economics After All!

As it turns out, many influential liberals understand one of most fundamental principles of public-choice economics: Politicians are not necessarily benevolent. Like others, they are self-interested and seek to get the stuff they want, which can sometimes lead to deceiving the public and other members of Congress.​

Case in point: The progressive punditry’s response to Grubergate, i.e., the confession by MIT professor and health-care expert Jonathan Gruber that the health-care law was written in a “tortured way to make sure CBO did not score the mandate as taxes.” The whole point, of course, was to mislead people about the law so it could be pushed down their throats whether they wanted it or not.

That caused quite a stir since people aren’t too happy to be called “stupid” and as it is not common to hear someone actually admitting to having deceived others.

But here is the interesting thing: In the last two days, many liberals have come out in defense of Gruber on the grounds that the outrage coming from the right makes no sense since everyone knows that this is how laws are written and passed. For instance, Neil Irwin, over at the New York Timeswrote :

Here’s the dirty little secret, Mr. Gruber was exposing something sordid yet completely commonplace about how Congress makes policy of all types: Legislators frequently game policy to fit the sometimes arbitrary conventions by which the Congressional Budget Office evaluates laws and the public debates them. 

And Josh Barro isn’t surprised either. He recently said during an interview on MSNBC:

The Democrats lied about health care, Republicans lie about health care, Jonathan Gruber and the people who put together Obamacare lie about what the true cost of it is.

Over at Vox, Sarah Kliff not only wasn’t surprised, she even provided other examples of such deceptions: 

The Affordable Care Act is replete with policies drafted to avoid political controversy. It’s true of the decision to call the mandate a fine, and the commitment to keeping the price tag of the law under $1 trillion. This led to weird policy decisions, like waiting three years until after the law passed to start the coverage expansion.

Irwin has other examples, too, from other programs and from Republican administrations.

He is right that politicians of all stripes are deceiving the public to get their way. But let me say, what a relief to see that so many on the left actually understand public-choice economics! How nice to see that they understand that as Donald Boudreaux writes at Cafe Hayek: ”The very process that people on the left romanticize and celebrate — democratic politics — isn’t what it’s cracked up to be.” 

This is a good thing. Given our shared understanding the government isn’t always benevolent, we can all stop pretending that the debates that take place in Washington are always honest and based on objective scoring of laws and policies. We can all admit that Washington is a place where ideologues on both sides met and try to advance their preferences because they think it is better or simply because they know it will benefit them. Acknowledging the existence of deception doesn’t make it okay, but it will hopefully help people be more skeptical about government expansions than they have been in the past.​

And to my liberal friends, I will say, now that you clearly understand the first lesson of public-choice economics, you can move to Phase Two of the lesson. Here it comes: The institutions of government are inherently incapable of performing certain tasks well, even if our most visible elected officials were smart, compassionate and well-intentioned (unlike the architects of Obamacare). An unseen army of self-interested bureaucrats and administrative agencies are just as self-interested as the worst of the politicians that we elect; but considerably less accountable. An honorable politician who wanted to truly do the right thing would find him or herself battling with the bureaucratic structure that supposedly serves the public but in reality serves themselves. This means that most government expansions are bound to fail from the start independently of who is in charge.

One last word of advice. Those out there who are defending Gruber’s deceptions should stop telling us that politicians have no choice but to deceive people because people are “too stupid” to know what is good for them or because they don’t know what they want, and hence, they should let the elites of the world decide for them. In his Nobel Prize lecture in 1974, economist F.A. Hayek warned his profession against the dangers of what he called “the pretense of knowledge.” He might as well have been addressing Gruber and his ilk directly. He urged economists and social scientists to maintain humility about the limits of their own knowledge and to reject the impulse to blind themselves with the heady authority of “expertise” by experimenting with and controlling the populations that they believed needed their guidance. He said:

The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson of humility which should guard him against becoming an accomplice in men’s fatal striving to control society – a striving which makes him not only a tyrant over his fellows, but which may well make him the destroyer of a civilization which no brain has designed but which has grown from the free efforts of millions of individuals.

Besides, if it is the case that the public often wants things that are inconsistent with one another (like wanting loads of government services and low taxes, or in the case of the Affordable Care Act, free health care but also Cadillac coverage), the deception isn’t going to help them form better judgment about what they want in the future.

Finally, a friend of mine just pointed out that to the extent that “the objectives of Obamacare are incoherent and self-contradictory,” and they are, they are an indictment of the Grubers and Obamas of the world who advocated for and spent a considerable amount of energy defending “these self-contradictory and incoherent policy objectives.” Shame on them for having fed the American people with these lies.

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