Thursday, August 13, 2009

Undermining the Public's Trust in Public Institutions

My new FindLaw column became so lengthy that it is being published in two parts, the first having been posted this morning and the second to follow tomorrow. In that column, "Can the Public Option in Health Care Reform Be Saved? Should It Be?" I revisit the "public option" in health care reform and explain in some detail why the best aspect of such a health care plan -- the pressure that a non-profit insurance plan would put on private insurers to lower costs and improve service -- is ultimately (spoiler alert!) unlikely to save the public option from the fate that I predicted here on DoL recently (here and here, building on an earlier FindLaw column here).

The analysis in the column develops the ideas that I first articulated here last week, essentially examining why public misperceptions of government-financed programs will result in relentless pressure on a public insurer to try to meet goals of efficiency and low cost that will be unachievable. This is likely to be true even if the public insurer is formally designated as an independent agency and thus "off budget."

This conclusion, however, raises a disturbing possibility. If my analysis is correct, is this somehow a form of the Heckler's Veto, capitulating to those who oppose a public plan simply because we know that they are willing to attack and thus destroy it? (Note to First Amendment types: I'm sure this analogy is highly imperfect. Please indulge me.)

Readers of this blog know that one of my primary concerns is the bipartisan foolishness about budget deficits that permeates political discussions. It is perpetually necessary to try to set the record straight, explaining over and over that budget deficits are not the worst thing in the world, that they provide opportunities to improve economic outcomes in both the short term and the long term that would not be possible for any entity except the federal government. One of the Clinton administration's greatest betrayals, after all, was its embrace of the budget balancing mantra, cynically attempting to gain short-term political advantage by undermining those who were speaking the truth. Once Clinton had followed Dick Morris's advice to co-opt budget orthodoxy, important options disappeared.

Would the abandonment of the public option for the reasons that I have offered be different? Essentially, I am arguing that cynical politicians will be so quick to malign and mischaracterize the performance of a public health insurance company that we should not even try to create one. Needless to say, this apparent similarity makes me uncomfortable.

There is, however, a difference. Even if we know that politicians will ridicule, say, a fiscal stimulus bill, their playground taunts will not stop the stimulus spending from resulting in the creation of new jobs. It is true that public confidence is important in creating and sustaining momentum in the economy, and those who misunderstand budget deficits may be reducing the positive impact that would otherwise have been possible. This will, however, only reduce the level of success of such a program, not prevent success entirely.

By contrast, the standard talking points about the inefficiencies of government bureaucracies (even setting aside the new standards of craziness about euthanasia, etc.) seem certain to undermine the public option from the start, causing it to be under-funded and over-burdened. When its performance under those constraints disappoints, it will be blamed for its own failures. "Government can't work!"

Can this ever change? What battles should we fight, and what must we avoid in the name of political reality? While public education is always important, it seems that the best approach might be to avoid those public initiatives that are the most likely to fail (once enacted), even if the failure would be due to continuing political opposition even from a minority of public voices.

It is true that even clear successes are the targets of demagoguery -- the most recent, outstanding example being the "cash for clunkers" program -- but when there is success, we can point to that success and hope to carry the day in the court of public opinion. In other cases, however, people of ill will can prevent success from ever being achieved. Until we can find a way around their destructive behavior, enacting such programs is unfortunately likely to make matters worse.

-- Posted by Neil H. Buchanan