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Friday, August 24, 2007

Bad Policy Drives Out Good

All public policies are related. Okay, that may be a slight overstatement, but there's a point here. A politician's credibility on one public issue — and thus the disposition of that issue — will often be determined by his or her position on other issues. People will look at a politician's full program as a way of judging good faith.

Case in point: the Bush administration's announcement that it will limit the states' ability to extend medical coverage through the State Children's Health Insurance Program (SCHIP) to families that do not qualify for poverty programs because they make too much money. (The states are unhappy.) President Bush opposes expansion of SCHIP because when you expand eligibility . . . you're really beginning to open up an avenue for people to switch from private insurance to the government. (This in fact has happened.) Moving from private insurance to the government dole would undermine self-responsibility.

He really said that — the same public official as the one who added universal drug coverage to Medicare. Back then he was undeterred by predictions that retired people would drop their private coverage in favor of the government program.

There's another level of hypocrisy, though. Given the existence of a federally financed state medical program for low-income families, it is surely wise not to enlarge the coverage to include middle-income people, who have or can obtain private insurance. So in itself, the new rules are unobjectionable, even laudable. But the administration's new rules won't be judged on their own merits. That may be regrettable, but it's a fact. In politics public opinion matters, and perceived intentions shape public opinion. Ignoring this is self-defeating. To put it bluntly: how can the Bush administration hope to persuade people that the government should not subsidize middle-class children's medical care when it is famously on record supporting billions of dollars in subsidies and other privileges for big corporations, including agribusinesses.

It can't. It has no credibility whatever in the matter. Non-ideological, middle-of-the-road voters, who elect people to office, are likely to suspect the worst when they see a politician push energy, defense, and farm bills that transfer huge amounts of taxpayer money to wealthy individuals and companies while opposing health coverage for children in nonwealthy families.

And why shouldn't they suspect the worst? When the president lectures working people about self-responsibility, might they not wonder why self-responsibility isn't also expected of energy companies that find privileges included in energy bills, defense contractors that make things of dubious value to the average person, and agribusiness and food-processing companies that get ethanol subsidies and other guarantees?


Corporate Welfare

Don't get me wrong. SCHIP shouldn't have been created ten years ago (mind you, by a Republican Congress and President Clinton). And now that it exists, it shouldn't be expanded to cover more and more children. That will indeed undermine parental self-responsibility. And the government has wreaked enough havoc with this country's medical system.

But no politician who embraces corporate welfare in all its varieties can credibly oppose the SCHIP expansion. All he accomplishes is to make opposition to government health coverage look callous and cynical. With friends like that, the free market hardly needs enemies.

There's a lesson here. When a prominent figure holds a mixture of good and bad positions, the bad ones damage the good. It's a form of Gresham's Law. Inconsistent and seemingly insincere defenders of freedom harm the cause.

Keep this in mind when picking political allies.

  • Sheldon Richman is the former editor of The Freeman and a contributor to The Concise Encyclopedia of Economics. He is the author of Separating School and State: How to Liberate America's Families and thousands of articles.