Tuesday, November 24, 2009

Yet Another Reason Why Small Government Works Better

In previous posts, I've often asserted that, while social engineering (aka big government programs designed to change society in some form or another) seems like a rational undertaking, which a clever engineer ought to be able to effect, the non-linearity of the system to be engineered guarantees unintended and probably negative consequences. I still think that's right, but the recent health care kabuki in Congress has driven home another problem:

Forget about rationality. Big government programs chum the water so badly that the lobbyist sharks guarantee that any program that emerges is irrational and fatally flawed.

Let's take a look at the health care bill as it currently stands. We've got the labor unions ensuring that any reform of the employer-mediated insurance system is impossible. We've got AARP ensuring that any rational flavor of medicare reform is impossible. Hell, we've even got about fifty women's interest groups ensuring that evidence-based medicine can't be advocated, much less adopted, when it comes to breast and cervical cancer screening. Meanwhile, we have the health care providers and the insurance companies salivating over the prospect of hundreds of billions of dollars pumped into the system with absolutely no mechanism to contain cost.

Lobbying is essential. Lobbying is the only mechanism by which our representatives get even the tiniest amount of feedback on their cockamamie schemes. Without lobbyists, Congress would happily legislate pi equal to 3.0 and then be surprised when all the wheels stopped turning.

But lobbyists, by definition, want something from the government. They either want something stopped to satisfy their own interests, or they want something enacted, again, to satisfy their own interests. Successful politics results when the issue is sufficiently circumscribed that representatives can balance the interests and come up with a close-to-optimal solution.

That can't happen when the issue is so large that the lobbyists can play whack-a-mole with various parts of it and escape the scrutiny of the legislators considering the issue. That's what's going on with health care. We're no longer even attempting to engineer a single system; we're busy enacting yet another Christmas tree.

This is the fundamental reason why government programs need to be, if not small, at least circumscribed. This could of course be done with health care. The basic goal of providing guaranteed issue and the strategy of paying for it via mandates and subsidies is a completely separate issue from specifying how payments get transferred so that there's downward pressure on cost. But there is absolutely no incentive to do this. If the bill shrinks to the point where it's comprehensible by an ordinary mortal, the lobbyists lose their leverage.

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