Monthly Archives: November 2013

Be a Policy Hero!

A friend remarked, while we were watching one of the Gotham street scenes in a Batman film: “You don’t need a superhero. You just need better macroeconomic stabilizers!” Unemployment insurance and food stamps could have kept that marginal Gotham resident from turning to crime in desperation. Robust fiscal and monetary stimulus might have kept him employed. Give people a way to earn a living legally, and they’ll desert their criminal overlords. That’s how you vanquish the forces of evil.

This way of thinking about Gotham isn’t entirely alien to the story. In Batman Begins, Ra’s al Ghul explains how the League of Shadows has destroyed every city that once was great. Against Gotham, he tells Bruce, they are using a new weapon: the economy. The best strategy, then, would have been to employ the League’s own weapon against it. True, the industrial economy is prone to a kind of instability that did not exist previously. It could be turned into a tool of destruction by a sufficiently nefarious villain, especially one with a drug that induces panic. At the same time, industrial economies offer new superpowers to the strong and the good: a fluid supply of money, budget deficits, and (of course) immense productive capacity. Batman Begins arrived in theaters in 2005. In its portrayal of a ubiquitous economic crisis with remote, obscure, and somewhat sinister origins, the film was eerily prescient. That’s exactly how the global economy seems to many people today.

The Batman story is a kind of Randian fantasy, in which a society at the point of collapse finds its savior in a wealthy vigilante. Which is not surprising. As Americans, we find this kind of fantasy irresistible. Deference to authority is not a common trait among our popular heroes. The Avengers had the sophistication to explore some of the dangers of this kind of fantasy in the character of Tony Stark, but for the most part, Hollywood indulges our make-believe rebellion.

But for many of us, the rebellion isn’t just pretend. Many Americans seem to think that politics is just an action movie lacking a protagonist — that is, they believe that all our problems could be fixed by someone with the physical and moral courage to do what a man’s got to do, get in there, get ‘er done, and so forth. That’s the fantasy that explains the electoral success of obvious greenhorns such as Sarah Palin, Michele Bachmann, or Ted Cruz. Maybe if Palin had had a cape…

But what about the opposite fantasy? I mean the collective delusion toward which Washington’s policy apparatus is sometimes tempted: that an elite few could save society from itself using a set of extraordinary superpowers never before employed against the ancient hosts of darkness. (These superpowers would include charts, graphs, econometrics, a sophisticated understanding of certain recondite constitutional and legal debates, and, for some, an ability to type very very fast for days on end.) And, furthermore, that these champions chosen by destiny could actually achieve a kind of ultimate victory over evil, that timeless ills such as hunger, alcoholism, and disease could be forever conquered with just the right mix of incentives.

Many of our problems are now nearly solvable in principle. Eradicating malaria might be unrealistic, and it’s likely there will always be junkies. Still, with more intelligent policy, we could greatly reduce the rate of malaria and addiction, not to mention predatory lending, climate change, and countless other sources of human suffering. Sometimes, the fantasy that these problems could be addressed in practice is necessary just to keep a person from incapacitating frustration and despair.

Yet such problems are not practically amenable to policy, because politics — ideology and entrenched interests — always intervenes. This isn’t a reason not to present the case for good policy whenever possible, but it is important to be aware of policy’s political limitations when you are actually writing or implementing it. Too often, analysts want to solve political problems in the same way that they solve problems of policy, through sheer force of intellect. Steven Teles explains the risks of this tendency:

Because the current political environment nurtures suspicion of government action, liberal politicians have developed the sneaky habit of finding back doors through which to advance their goals. This habit has had a corrosive effect on liberalism. In searching for ways to promote public activism in spite of institutional and cultural resistance, liberals have developed a pattern of dishonesty and evasiveness instead of openly making the argument for a muscular role for government. This is why, despite liberalism’s legislative victories, very few recent liberal policies have successfully provided platforms from which to launch new rounds of policy innovation.

The danger lies in trying to find cleverer solutions to political problems than simply changing people’s minds. And, as Teles argues, policies that are intricately designed not only to solve some problem in society, but also to circumvent this kind of political opposition, are less likely to succeed. That’s not at all because government lacks the competence to administer complex programs. Instead, policies fail because political opposition usually proves more tenacious than the policy analyst anticipates.

This opposition may not be directed against a particular program, but could be simply skepticism of government in general. In either case, it thrives like a parasite in the blood of a bureaucracy. The product of legislative compromise over the last century and a half has been a series of institutions that allow maximal representation to those aggrieved by government. The separation of powers and the freedom of the media increase their chances for redress. As a result, bureaucracies can be a forum for competing interests just as Congress is. The episodic paralyses of both are a symptom of the same disease.

To give a concrete example, the fact that medical insurance markets are prone to dysfunction as a result of moral hazard and adverse selection is a problem of public policy. The fact that the incumbents in those markets will exploit Americans’ suspicion of the state to forestall any kind of sane or sensible reform is not a problem of public policy. It is a political problem. The writers of the Affordable Care Act tried to solve both at once.

They might object that they had no reason to think the administration’s Web site would be malfunctioning so spectacularly right now. They might note that some of the exchanges run by the states, which have significantly fewer resources than the federal government, are running smoothly. Yet that the federal site is performing badly and the states are doing better is not really a surprise. State governments are more ideologically unified, so it’s understandable if they don’t share Washington’s schizophrenic tendencies.

It is easy to see the political reasons for the various problems with the site’s construction:

  • Procurement. As Tim Murphy writes, bureaucrats may not have been able to work with the best contractors because of federal procurement rules. These rules are designed to prevent cronyism, ensuring a democratic bidding process. “The procurement process tends to select for firms that are good at navigating the procurement process, not providing good IT services for the dollar,” said one researcher. Procurement rules are a general limitation on officials’ power, not connected with medical insurance at all except that the reason they exist is the same reason a single-payer system would not have passed Congress. Americans do not trust their government.
  • Integration. The Centers for Medicare and Medicaid Services, rather than hiring a general contractor, directly coordinated the several dozen companies it hired to work on the site. Yuval Levin, who spoke to several bureaucrats and insurance representatives, could not get an explanation for why a general contractor was not hired. The most plausible explanation seems to be that the funds were not forthcoming from Congress, and the agency was trying to build the system on the cheap.
  • Partisanship. The administration’s partisan opposition limited their ability to respond to the problems in development. They felt they could not postpone the launch, and they apparently insisted late in the process that developers make it impossible for users to see prices for available insurance policies without seeing individually calculated subsidies as well. According to The New York Times, the administration delayed issuing important rules until after the election, and the number of states that refused to build their own exchanges made the federal task harder. The Post describes in detail how the political sensitivity of the project forced bureaucrats to hide and fragment its implementation.

Liberal advocates of health reform realized that because of Americans’ government allergy, Congress would not enact a public option or a single-payer system. They adopted a different policy, one also supported by some conservative experts. They were trying to avoid an allergic reaction, but instead of swelling or indigestion, the body politic broke out in hives. I hope that Tyler Cowen is wrong, but it does seem as though no matter how ingenious the Affordable Care Act was as a solution to the medical sector’s problems, the law was always just as much of an impossibility in practical terms as more liberal solutions would have been in legislative terms.

Last month, I was excoriated by my commenters who felt that a critique of the Affordable Care Act as insufficiently liberal ignored the political reality of 2010 and denigrated the hard work of the people who got the law enacted. These commenters felt that I betrayed the irresponsible attitude of favoring ideas that are good in principle over ideas that are practically achievable. It now seems that it was the advocates of the law whose view wasn’t practical enough. They had devised a brilliant, resourceful solution that appeared to transcend the twentieth-century opposition of liberalism and conservatism. It was a policy that could pass Congress, but its supporters neglected to consider its political viability over the next several years. As a result, all their hard work and savvy might have gone to waste.

Does that mean they were wrong to try?

I don’t think so. A climate bill, or an immigration bill, or even a second stimulus would have been preferable — but any of those would have met intense opposition in Congress as well. There was a chance that the law that was passed would have succeeded. In fact, it might still succeed. More importantly, though, it is never wrong to believe in the possibility of a better society and to work to make that possibility a reality, as long as you make the effort in good faith.

As nearly every superhero film insists, a world needs to believe in something. The real world can believe in policy. We’ve got so little else.