Friday, November 18, 2011

The Nature of the Beast

I’ve long viewed public policy as philosophical kin to ecology. They’re both the science of tweaking complex systems, and both pose similar dilemmas for people who seek to alter the rules of the game.

I hate mosquitoes. It’s not enough that they leave me welted and itchy all summer; they carry diseases that contribute to the deaths of millions every year. It would be easy to say, “let’s kill the bastards,” throw some money at the problem, and drive them to whining, bloodsucking extinction. But what would the spiders, bats, and frogs eat? I may not like mosquitoes, but they matter to someone (or something). We need to look at the bigger picture. Will the other animals adapt to a mosquito-free world? Can we maybe just make mosquitoes leave us alone, or itch less? Can we go after the diseases they carry, and deal with the nuisance? My nuisance and pestilence is someone else’s bread-and-butter.

I also hate health insurance companies. Every year I find out that another $10-100 will be taken out of my paycheck to hand over to company whose profit model depends on not handing that money over to the doctors I see, who then must nickel-and-dime me so they can pay their own bills. It would be easy to hand the insurance companies’ responsibility over to the government and let them sort it out like they already do for old people on Medicare. It would be a lot cheaper. But what would the hundreds of thousands of people who work for the insurance companies do? What about all the people being paid to process claims at my doctor’s office? What about everyone who’s getting paid to keep the system just the way is? Couldn’t we make some more incremental changes? If cost is the real problem, aren’t there other solutions aside from a scorched earth policy on 16 percent of our economy? My expensive bureaucratic burden is lots of people’s livelihood.

The point is that personal, ideological, and political preferences don’t exist in a vacuum. Making changes to the supply of something (mosquitoes, health insurance) while ignoring the demand (frogs, workers), leads to massive imbalances and serious unintended consequences. In our system, a lot of the smaller, less interesting policy questions are handled with nuance and grace. But the bigger ones that people argue about over dinner, like taxation and the role of government, are not. The modern-day conservative notion of “starving the beast” of government has a clear goal in mind, but only looks at the supply side in achieving that goal. But you’re not starving the beast. You’re starving the taxpayer, and they vote. They say that if you take away the supply of funds (lower taxes), the demand for services will go away. But it doesn’t. Instead, people continue to demand the public goods they always have demanded, but finance it with the cheap debt that’s a byproduct of being the world’s currency. Instead, we end up in acrimonious debates about debt when all of us would rather be debating about what the government should and shouldn’t do.

If it is a conservative goal to limit government, one of the smartest things they can do is hand the public the tab. Instead, they hide it from the hungry public, but point out that their credit cards are maxing out. Only then can public demand for services match the supply of money to pay for it. If it’s a progressive goal to expand the role of government, the cost of doing so should be made clear. They hide the bill too, only they say that debt is cheap and limitless, so who cares?

Policy change must look at what sort of balance will be struck after the fact. Services do good, but they cost money. Cuts save money, but take away from the things people like. And debt helps us avoid making the real tradeoffs. In nature, cutting the food supply means that those who demand it will either look elsewhere or die.  In politics, cutting revenue means that we go into debt or default. In both cases, demand remains, at least until something cataclysmic disrupts it. It doesn’t take a treehugger to believe that.

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