Un-Repealing Obamacare: The Un-Romantic Side Of Politics

Negotiation is at the heart of practically everything that goes down in Congress. That said, negotiation is a messy task, in general, and explains why there are a bunch of failed attempts at getting things done in government.

Politics without “romance”

Many folks have this romantic view that government is filled with people that selflessly take on the problems of the world and can magically solve them through powerful speeches and hand waving. This is far from the truth.

When policies, budgets and laws are being drafted and negotiated in Congress, they are being put forward by regular people like you and me. Regular people in the sense that we make our decisions based on what will make us, as individuals, better off. We all value things differently. We react to incentives differently. Government officials don’t turn into all-knowing do-gooders who care more about the public than themselves. In the end, they want to get re-elected and keep their job. After all, we’re only human.

Outside of the government, this inherent feature of being human, with our ideas of what is or isn’t valuable, works pretty well. We use prices to help dictate our decisions and the cheddar in our wallets to go through on those decisions. Buyers and sellers come together in the “market” and agree upon prices to make the trade. To illustrate: I give the Uber driver $20, and in return he gives me a ride home after a rowdy Saturday night downtown.

Instead of selling goods and services, policymakers are selling policies to other government officials. What’s more is that money is not used as the medium of exchange. Back-door deals, favors and, ultimately, votes are used in the place of money. This makes passing bills and other government transactions difficult and, often, inefficient.

Not so romantic after all, eh?

Compromises, sacrifices and negotiations, oh my!

In the economy, individuals make deals with other individuals to trade goods and services. If the price of a good or service is too expensive, we can negotiate for a lower price, choose to buy it from someone else or forgo purchasing the item altogether. The key is that the decisions are made by the individual.

In the government arena, there are groups of people trying to settle on one good or service. Recall how difficult it is for a group of friends to settle on at which restaurant they’d like to dine. Now, imagine that those friends have stark differences in their diets. One is on a paleo diet, the other is on a seafood diet and another only eats beef, medium-rare. Compromises, sacrifices and some negotiating need to happen.

The same idea applies to government policymaking. Decisions are made collectively, but that requires the individual politician making a deal with another politician, who in turn, makes a deal with another, and so on, all to get the bill passed in Congress. On top of that, all these politicians are subject to special interests, lobbyists and their voter base, all of whom need to be kept happy in order to help get them re-elected in the next election cycle.

house_of_cards_trailer

This was at the root of why Speaker Paul Ryan and the GOP’s effort to repeal and replace Obamacare with their version ended in failure. In their attempt to make deals with different people, with different needs and desires of what should be in the bill, we got this disheveled and costly replacement that ended up being pulled before letting Congress vote on it.

This problem isn’t special to just health care. It is a pervasive element in policymaking as a whole. Whether policymakers are trying to decide how to address the student-loan dilemma, improve the tax system or deal with climate change, this process of difficult and inefficient negotiating will always rear its ugly head.

Takeaway

If we want policymakers to solve problems that markets on their own can’t seem to solve, we also have to understand that their “solutions” might not make things any better. In order to satisfy the wants and desires of a bunch of people, the bills proposed result in being jumbled with backward amendments and complex loopholes so not even the politicians themselves know what to make of them.

To be sure, governments can be very useful in alleviating the pitfalls of markets in the economy. But, in general, we should be skeptical of how successful they will actually be because it may end up being more costly had we left the issue alone.

Previously posted at GenFKD.

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