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Wednesday, March 24, 2010

Opaque by Design

“The House and Senate plan to put together the final health care reform bill behind closed doors, according to an agreement by top Democrats.”

That less-than-startling piece of news was delivered by House Speaker Nancy Pelosi back in January. She was at the White House when she said it, so it looks like it’s okay with President Obama.

Thus, as the CBS News headline had it, “Obama Reneges on Health Care Transparency.”

Anyone who is really shocked (shocked!) that this is happening should avoid talking to strangers on the street. You’ll wind up believing you own a bridge.

In other words, no one really thought Obama and his cronies were going to make government transparent by conducting business on C-SPAN. As the head of the Council on Foreign Relations said admiringly about Obama in another context, “He’s learned the difference between campaigning and governing.” Indeed. Even if he wanted to, there was no way Obama was going to get our misrepresentatives in Congress to do it.

The phrase “transparent government” is just this side of a logical contradiction. A really transparent government would barely qualify as a government at all. Imagine if you could witness all the backroom dealing, logrolling, outright bribery, and the rest of the shenanigans that go on under the laughable rubric of “governing.” It wouldn’t last a week.

Once in a while we get a glimpse of what goes on. When Sen. Ben Nelson’s vote on the health-insurance takeover was cynically bought with the promise that everyone but Nebraskans would pay Nebraska’s new Medicaid bill, there was genuine disgust—even in Nebraska. The payoff to Louisiana Sen. Mary Landrieu got a similar reception. But that was just the tip of the iceberg. Did you hear that under the Senate bill (now dead) companies with fewer than 50 employees would have been exempt from the health-insurance mandate—except for construction companies? There the threshold would have been five. It was a little favor to the construction trade unions. According to the New York Times:

Labor unions that have negotiated health benefits for construction workers lobbied for the provision. Without it, they said, small nonunion employers would have an unfair competitive advantage over companies that they say do ‘the right thing’ by providing health benefits to plumbers, electricians, carpenters, roofers and other workers in the building trades.

This sort of thing happens every day. As Michael Kinsley once said, the real scandal in Washington is the legal stuff, not the illegal stuff, that goes on.

We can’t say we weren’t warned. A few years ago a great scholar named Charlotte Twight explained it all in her book Dependent on D.C.: The Rise of Federal Control over Ordinary Americans. I’m a huge fan of this book, and everyone concerned with liberty should read it closely. What I said about it in 2003 still holds:

If I may be blunt, this is a subversive book—in the sense that if average Americans were to read and grasp it, they would turn into libertarian revolutionaries. Why? Because Twight documents the ways that officials systematically mislead us about what government does. In many cases, she uses their own words to convict them of mass deception aforethought.

The key to her thesis is the concept of political transaction costs. In economics, transactions costs are the expenses one accepts to engage in exchanges. To use Twight’s example, if you hire someone to plant a tree in your yard, the transactions costs include any expenses you would not have incurred had you planted the tree yourself.

There are transactions costs associated with politics too. These, Twight says, are “the costs to individuals of reaching and enforcing political agreements regarding the role and scope of government . . . [t]he costs to each of us of perceiving, and acting upon our assessment of, the net costs of particular governmental actions and authority . . . of learning the likely consequences of proposed government programs and taking political action in response to such programs. . . .”

We could sum up the idea with the phrase “eternal vigilance,” which takes time, effort, and money. Or as others have put it, “freedom isn’t free.”

Of course the higher the political transactions costs, other things equal, the less monitoring people will engage in. Keep in mind that any one person’s clout is small, so the payoff from absorbing the costs and engaging in the monitoring is also small. That results in a government watched closely by those who stand to gain a lot (the special interests) and not so closely by those who stand to pay, in the aggregate, a lot (the mass of taxpayers).

Contrived Costs

Twight points out that there are “natural” transactions costs, as with any economic activity, but also “contrived” transactions costs—the ones “deliberately created by government officials to increase our costs of assessing and responding to government policies” (emphasis added).

You’re not apt to read about these in textbooks or the establishment apologies on most newspaper editorial and op-ed pages. For some unfathomable reason, most pundits don’t want us to worry our little heads knowing that politicians may intentionally make it more difficult for us to see what’s really going on or to do anything about it.

But it’s hard to conclude the politicians would want it any other way. How else to explain 2,000-page bills laden with impenetrable legislatese—which no member of Congress will read in their entirety—and 800-page amendments? Have you tried reading the federal budget? Such output mocks the ideal of an “informed citizenry.” That’s the last thing the misleaders in Washington would want.

As Oscar Wilde said, “Nowadays to be intelligible is to be found out.”

  • 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.