Monday, November 25, 2013

Why the Failure of Matters

Causation is hard. Especially in the realm of public policy, where multiple factors affect any one outcome, such that there is almost always another explanation for any given outcome. That's not to say that some explanations aren't better than others. Just that, in the face of evidence that contradicts a person's philosophical belief, there's always enough wiggle room for the belief to survive the confrontation.

An illustration or two. The stimulus bill was designed to get the economy going and lower unemployment. Now, the unemployment forecasts were much rosier than the actual path of the unemployment rate. One explanation is that the stimulus failed to jump start the economy as promised. But another explanation is that the economy was just in much rougher shape than the forecasters could know. (Don't let it trouble you that the forecasters did not understand the condition of the current economy, while attempting to predict the future economy.)  And a third explanation is that the stimulus just wasn't big enough to have the rosy impact that was predicted. We failed to spend enough money to get the job done.

So here we have three explanations of what the stimulus accomplished or didn't accomplish, each consistent with the history, and each ascribed to by smart people. Take your pick of what you want to believe based on your theory of economics or government.

Same thing is going to happen with insurance prices post-Obamacare. Your insurance premiums went up? Or your Deductible went up? Or you have fewer doctor options? It's probably due to the excessive regulation in Obamacare. Unless you're a Democrat. Then it's probably due to a spike in insurance companies' levels of greed. Or, you're actually better off than you would be, because premiums would have been even higher, but for Obamacare.

That's why the failure of is instructive. Because the counter factual is so easy. It's hard to know how the world would have looked without the stimulus, or without Obamacare. But I can imagine a world with a functional website for buying insurance. I have seen functional websites. In fact I have purchased things from them.

Having spent millions of dollars and three years, the administration's failure to get the website working right speaks volumes about it competency to do much harder things, like forecast the effect of 800 billion dollars of stimulus spending, or predict the intended and unintended consequences of 20,000 pages of Obamacare regulation.

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