The assault on the Congressional Budget Office by the White House has begun in earnest. Tired of the dismal numbers the CBO has scored when looking at the completely fictitious claims of “savings” and the real damage the ObamaCare bills will do, the White House is releasing Clintonistas to smear the CBO.
These mistakes arise neither from a hidden partisan agenda nor a shortage of competence or commitment. The CBO’s reputation for scrupulousness, thoroughness, and nonpartisanship is well-deserved. But the very processes in which it is asked to engage, and the ways in which its results are used, make serious misjudgments almost inevitable.
To start, health care is very complicated, and even with all the economists, investors and policy wonks who study it, its financial dynamics are never fully defined. Government policies certainly influence health care costs, but, as the CBO acknowledges, so do technological and labor-market changes, fallout effects from the larger economy, and mass psychology among health care providers and insurers, all of which defy predictive models.
Further, the economists who dominate the CBO assume that health care providers will respond to changing economic incentives as though they were rational, profit-maximizing firms, but hospitals, managed care plans and large group practices are complex organizations with multiple, competing objectives. In the short run, they often do exactly the opposite of what microeconomic theory might predict. Perhaps most importantly, the CBO is now routinely expected to project the impacts of policy changes over 10 years, an absurdly long time to predict what will happen in so large and complex a sector as health care.
Catch that tone? It’s not that they are stupid or anything, it is just that they are not wise enough. Unlike the former Clinton appointee, who understands all of the complexities of the new ObamaCare. The CBO hacks are really, really good people who lack his superior judgment and super-duper wisdom. Because he is really, really wise and stuff. So trust him.
Saddest thing, the media rolls out this obvious political hit job slander as straight commentary.