“[Economist] Mark [Pauly] made a couple of comments that I do want to take issue with, one about transparency in financing and the other is about moving from community rating to risk-rated subsidies. You can’t do it politically. You just literally cannot do it, okay, transparent financing…and also transparent spending.” Gruber said. “In terms of risk-rated subsidies, if you had a law which said that healthy people are going to pay in—you made explicit that healthy people pay in and sick people get money, it would not have passed, okay. Lack of transparency is a huge political advantage. And basically, call it the stupidity of the American voter or whatever, but basically that was really, really critical for the thing to pass…Look, I wish Mark was right that we could make it all transparent, but I’d rather have this law than not.”
What Gruber called “stupidity” is better described as ignorance. Even highly intelligent voters have strong incentives to be rationally ignorant about complex political issues.
This is far from the only deception that played a major role in the passage of Obamacare. Perhaps even more important was President Obama’s now-notorious lie to the effect that “if you like your health care plan, you can keep it.”
In both cases, people who studied the plan carefully could readily tell that the administration’s statements were deceptive. Forcing millions of people to buy more comprehensive and more expensive health insurance plans than they had previously was an important element of the ACA – a feature, not a bug. This was well understood by health care experts on both of sides of the debate over the law, and seized on by opponents early on. But a majority of the public is often ignorant about even simple aspects of the political system, such as which party controls which house of Congress. The problem of political ignorance is exacerbated by the enormous size and complexity of modern government, which makes it difficult for even relatively attentive voters to keep track of more than a small fraction of what the state is doing. Therefore, it isn’t surprising that the administration’s deceptions about Obamacare fooled enough people to ensure its passage.
It would be a mistake to assume that such exploitation of political ignorance is unique to the Obama administration or to Democrats generally. Conservative Republican politicians and interest groups also often exploit ignorance. Indeed, neither party can afford to abjure this vital political tool. A candidate or party unwilling to manipulate voter ignorance labors at a systematic disadvantage relative to more unscrupulous opponents. Things would be different if voters carefully kept track of political leaders’ claims and punished those who use deception to exploit “the stupidity of the American voter.” But if the public were that well informed about the exploitation of ignorance, there would not be so much ignorance to exploit in the first place.
The underlying problem is not that one party is uniquely unscrupulous, but that both must operate under a structure of incentives created by an electorate that itself has a strong incentive to be ignorant. If we want to change that sad state of affairs, we should consider making more of our decisions in a framework where the incentives are better.
UPDATE: Gruber now says that his 2013 statement was “inappropriate.” Perhaps so. But notice that he does not say it was inaccurate.
UPDATE #2: This post attempts to use my statement that both parties exploit political ignorance as a kind of excuse for the Obama administration’s actions. But the fact that both parties do it does not actually justify either. It merely means that we cannot address the problem by replacing the Democrats with the Republicans or vice versa. The problem is structural and requires a structural fix, such as reducing the size, scope, and complexity of government.