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Gruber and Barro Are Wrong to Assume the Public is Stupid

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Gruber and Barro Are Wrong to Assume the Public is Stupid

November 19, 2014

A ton of virtual ink has been spilled over Obama Administration advisor Jonathan Gruber’s admission that he and others intentionally misportrayed the effects of the Affordable Care Act to facilitate its passage. I share the frustration over belated acknowledgments that the law’s effects were inaccurately described when it was first debated. Here I want instead to explain how Gruber’s characterizations of the “stupidity of the American voter,” as well as subsequent comments by Josh Barro, are incorrect on the substance.

It is a sad situation that whether deceiving the public is wrong appears to be in dispute, so let me offer a couple of quick comments on that before turning to the substantive points:

First, it is indeed unethical to mislead the public in this context. This was not a matter of telling a “little white lie” to protect a friend’s feelings, nor did it involve hiding a national security operation from the public so as not to jeopardize lives. Dr. Gruber’s statements instead admitted misleading the public about the effects of a sweeping domestic policy change, specifically because the public would oppose the law if they accurately understood it. 

Deception is particularly inexcusable for someone in Dr. Gruber’s position. He owes his station in part to the fact that modern life is so complex that it is impossible for all individuals to fully analyze every important policy issue that comes before the public. Dr. Gruber is paid handsomely for his analyses because others are not in a position to perform them, conferring upon him a powerful obligation to be truthful. 300 million Americans may have opinions on an issue that entitle them to no especial compensation or deference; Gruber’s platform derives not from his own subjective opinions but from the assumption that he has unique, useful knowledge to share. 

There is an important distinction between the ACA’s advocates using Gruber’s expertise to help craft a better law, and using his reputation to sell a flawed one. When the ACA was debated, supporters repeatedly cited Gruber’s authority despite the lack of substantiation for his claims. For him to engage in “mislabeling” of policies because he would “rather have this law than not” is to obliterate the basis for that perceived authority.

More concerning still were the televised comments of Josh Barro later last week in which he, though cognizant of the offense Gruber’s remarks had caused, earnestly defended “lies” on the premise that they are necessary because the views of the electorate are “incoherent.” 

Ethical considerations aside, Barro’s analysis is flat wrong on the substance for these reasons:

Despite their claims about its virtues, advocates did not generate public support for the ACA. During the 2009-10 debate a number of inconsistent claims were made on the ACA’s behalf. The public was told that (in Charles Krauthammer’s words) “it would help the needy, but if you were not in need, if you liked what you had, you would be left alone.” They were told that millions of Americans would be assisted in buying more health services but that somehow this would bring costs down. They were told that Medicaid would be dramatically expanded, the solvency of Medicare extended, that millions would receive new subsidies, and that all of this would reduce the deficit. These claims were irreconcilable and Americans perceived this. Public opposition to the law remained strong. In a desperate attempt to stop the ACA, even deep-blue Massachusetts elected a Republican Senator in a special election. Lawmakers enacted it anyway. It is not true that deception about the effects of healthcare reform was necessary to create public favor for the law. Instead the contradictions engendered public skepticism and opposition. 

The public opinions described as “incoherent” to justify deceit are not in fact incoherent at all. Barro argued, “Jonathan Gruber was right. Public opinion on health care policy is just completely incoherent. People think we ought to have health care plans that are cheap, that provide high quality coverage to everyone, that everyone should see whatever doctor they want, they don't want their premiums to go up, they don’t want to pay for anything through taxes.” He then concluded: “The public puts politicians in a position where the only thing they can do to make the public happy is lie and so, people lied.”

Barro is wrong here. There is nothing incoherent about the views he lists. Imagine a healthcare market in which most of our routine health expenditures were not purchased through insurance, and that insurance instead primarily protected people against catastrophic health events threatening their financial security. In such a market people would be able to choose their own doctors, plans would offer cheaper premiums, and there would be no inherent reason it must be financed through taxes. 

Contradictions only arise when we combine Barro’s public wish list with certain existing policy phenomena, including:

  • Requiring everyone to carry comprehensive health insurance covering various routine services, irrespective of whether this makes sense for them;
  • Substantial and opaque income redistribution through the healthcare system;
  • Financing seniors’ health services through federal taxes;
  • Maintaining the tax preference for compensation in the form of health benefits over wages;
  • Securing the political support of health insurance companies.

There are indeed contradictions between Barro’s list and these various characteristics of existing healthcare policy. But these are conflicts between current policy and public opinion, not self-contradictions on the part of the public. Disagreement is not incoherence.

Public policy puts Americans in an environment where they must endure a vexing rigmarole to buy the simplest of health services; no one tells us what things cost, prices are invisibly negotiated between provider and insurer, and we must waste time we do not have trying to figure out what exactly is covered and fixing bureaucratic mistakes after the fact. Perhaps Barro is correct that the public has somehow demanded all this, but nothing in his list of allegedly incoherent public opinions suggests it.

Varied preferences are not inconsistency. A friend of mine drew my attention to Barro’s mistake on this point, prompting me to develop the following illustration. 

Let us assume for the sake of argument that A and B represent two possible public policies that are in conflict, and that 60 percent of the public is found to favor each. Does this suggest that the public is being inconsistent in wanting both A and B, and that deception is necessary to gain public support?

It does not. Suppose for example that 100 voters had been asked and that:

Voters 1 through 60 want A.

Voters 41 through 100 want B.

In that instance, 80 percent of voters have been perfectly rational (voters 1 through 40 and 61 through 100), understanding that they cannot have both. Even the remaining 20 percent, voters 41 through 60, might understand the trade-off between A and B if it were explained to them.

Barro’s approach would conclude from the survey data that the public is irrational, so they must be told a pending law will successfully achieve both A and B. Not only is this unethical, it groundlessly denigrates the public; further, it will likely backfire—because 80 percent of the public understands the trade-off and will not be fooled.

An ethically defensible solution would be for public policy makers to choose either A or B, explain the trade-off, and make the case for their preferred choice. This would likely draw the support of at least 40 percent of voters, plus some fraction of the 20 percent that could understand and accept a persuasive explanation of the trade-off.

But even this is not the optimal solution. The optimal solution would be to allow those voters who want A to choose A and those voters who want B to choose B, and have the government not attempt to steer either choice. Then at least 80 percent of voters will be happy.

The diverse public attitudes that Barro/Gruber assert require the government to lie in fact argue instead for greater freedom of consumer choice. The progressive agenda of having the government determine answers for everyone introduces the supposed contradictions and incoherence into national health policy.

Jonathan Gruber, Josh Barro and others are trying to persuade you that others’ failures of integrity, analysis, and policy design are your fault, simply for wanting a better healthcare market. Do not believe them. They are wrong on the ethics and wrong on the substance.

 

 

Charles Blahous is a senior research fellow for the Mercatus Center, a research fellow for the Hoover Institution, a public trustee for Social Security and Medicare, and a contributor to e21.

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