When You Don’t Need To Worry About Facts

By James Kwak

Masquerading behind an invocation to “wisdom” in the title, David Brooks today finds his false equivalence (see here for another example) by comparing the the two parties’ approaches to Medicare: the Democrats, he says, favor “top-down centralized planning” while the Republicans favor the “decentralized discovery process of the market.”

David Brooks swallowing Republican talking points whole is not worthy of note, so I’ll just point out one: he calls the Ryan Plan a “premium support plan,” despite the categorial denial by Henry Aaron, the creator of the premium support idea.* But it’s marginally more interesting to point out Brooks’s finely-honed rhetorical dishonesty.

The first example is characterizing this difference as a “basic philosophical choice” between centralized planning and the market, when it’s really the difference between having a government health insurance system and not having one. Brooks echoes the Republican characterization of the Independent Payment Advisory Board (Paul Ryan’s “fifteen-panel board“) as a centralized planning bureaucracy and expresses skepticism that it can work. But IPAB is supposed to do the same thing that every private insurance company is trying to do: figure out how to provide incentives that will improve care at lower cost. All large companies have centralized planning; that’s how they get things done. One problem with Medicare is that its centralized planning committee is called Congress, and hence Medicare payment rates are highly politicized. The alternative to IPAB is running Medicare poorly. Criticizing government experts as central planning is just a more reasonable-sounding way of saying that government programs shouldn’t have planning at all, which is transparently crazy.

The other alternative, Brooks would say, is not having Medicare at all. But the Obama administration didn’t choose IPAB because they wanted Soviet-style centralized planning; they chose it because it was the only pragmatic, responsible choice. Based on everything we know about Obama’s economic and domestic policy teams, it’s much more likely that, if they had a clean slate to draw on, they would have preferred managed competition — the exchanges, regulation, and subsidies that the ACA creates for the under-65 individual market — for the entire population. They stuck with Medicare because (a) it’s politically popular and (b) it’s already the lowest-cost part of our health care system. Dismantling Medicare would be like pouring gasoline on a fire: it would only exacerbate the problem of health care cost inflation, since Medicare pays lower reimbursement rates than the private sector.

The real choice is whether or not to have a government health insurance plan for the elderly. And in evaluating that choice, Brooks invents a whole new category of rhetorical subterfuge.

“The fact is, there is no dispositive empirical proof about which method is best — the centralized technocratic one or the decentralized market-based one. Politicians wave studies, but they’re really just reflecting their overall worldviews. Democrats have much greater faith in centralized expertise. Republicans (at least the most honest among them) believe that the world is too complicated, knowledge is too imperfect. They have much greater faith in the decentralized discovery process of the market.”

Why is this brilliant? Most ordinary pundits (those without space on the Times op-ed page) use the more common device of citing studies on both sides to show that there is support for both sides. But this is rookie league stuff. Brooks shows how it’s really done: just dismiss the entire attempt at empirical support with a wave of the hand, which lets you get back to “philosophy.” It’s much easier to know nothing than to know something.

But for this question, we don’t even need to go to the academic studies. We already have a health care system where people “select from a menu of insurance plans. Their consumer choices would drive a continual, bottom-up process of innovation. Providers could use local knowledge to meet specific circumstances.” It’s called the individual market, there are tens of millions of people in it, and it’s a complete failure. It leaves tens of millions of people uninsured, and to those who are insured, it delivers mediocre care at high costs. The only way you can ignore this fact is by pretending that facts don’t matter.

Then there’s this gem: “if 15 Washington-based experts really can save a system as vast as Medicare through a process of top-down control, then this will be the only realm of human endeavor where that sort of engineering actually works.” Um, David, there’s this country to north of us. It’s called Canada. They have a national health insurance system that covers everybody. And that system . . . Whom am I kidding? When you don’t have respect for facts, a few more aren’t going to change your mind.**

I’m not expecting the Times to fire David Brooks anytime soon, but after his enormous, embarrassing gaffe with the Ryan Plan, can’t his editor at least get him to stop writing about Medicare?

* The difference is who bears the overall risk of health care cost inflation. In a premium support system, you have a market mechanism to promote competition, but you keep beneficiaries whole by making sure that the subsidies, in the aggregate, continue to pay the same proportion of health care costs. In a voucher system, like Ryan’s, you decouple the value of the subsidies from the cost of health care, shifting risk from the government to the individual.
** For those of you weirdos who do like facts, Krugman has charts on costs and quality. In the latter, Canada doesn’t do so well (although still better than the U.S.) — but check out the U.K., where not only health insurance but health care delivery is public?

22 responses to “When You Don’t Need To Worry About Facts

  1. David Brooks is an embarrassment to the Times, to National Public Radio, and to the country. Thank you, Mr. Kwak, for calling him out. I hope you will continue to do so.

  2. Apparently in Bobo’s world, “central planning” is inherently evil unless it’s done solely to maximize profits. In other words, if the government denies payment for a treatment because it’s ineffective that’s bad, but if your insurer decides to deny payment for a treatment so the CEO can buy a new Gulfstream it’s TOTALLY OK!

  3. We shouldn’t run away from “centralized planning” any more than “socialism” or “liberalism”. This allows them to manipulate these words into ugly propaganda (well, they already have, but it continues to allow them).

    “centralized planning” isn’t a dirty word unless your name is Stalin, who was not evil because he was a socialist or communist, but because he was a paranoid totalitarian.

    That’s not to say that “central planning” is *the* answer, not even close. But “free market capitalism” also isn’t *the* answer either. The answer is a melange of ideas where you use the appropriate one for the issue at hand.

    Clearly “free market capitalism” has failed when it comes to health insurance, and it’s easy to see why (health is not a purvey of profit). Thus “central planning” of a sort makes sense here.

    In any case, using terms like “centralized planning” to tar your opponents is not a lot different than using the n-word and should be called as such. It’s dogmatic rhetoric intended to paint the opposition as something icky and evil – distasteful by association. It is a hallmark of weak arguments and we shouldn’t give it power by running away from it.

  4. One of the most centralized technocratic parts of Medicare is the top-down way it sets fees paid to physicians.

    Very briefly, Medicare pays physicians on a piece-work basis. Each office visit, each procedure is a piece. It sets what it pays per piece using a complex system, the Resource Based Relative Value System, RBRVS. In turn, to keep this system, which started around 1992, up to date, it relies entirely on the RBRVS Update Committee (RUC).

    The problem is that the RUC is a private committee run by the AMA. Most of the RUC members are doctors who do procedures. So the RUC, meeting in secret, and whose membership has been secret until recently, ends up setting Medicare payments for procedures high, and for everything else low.

    For details, see:
    http://hcrenewal.blogspot.com/search/label/RUC
    http://replacetheruc.org/

    Medicare could have set up a much more open system, perhaps involving public hearings and some negotiations with a more representative group of doctors.

    But it has settled for an autocratic, top-down system which in turn is a terrific example of regulatory capture.

    Yet few on the right wing, which supposedly hates government price fixing, have seen fit to complain.

    Of course, few on the left wing, which supposedly favors big government has seen fit to complain about this embarrassment to the integrity of big government.

  5. “The fact is, there is no dispositive empirical proof about which method is best – the centralized technocratic one of decentralization market-based one. Politicians wave studies but they’re really just reflecting their overall world views. Democrats have much greater faith in centralized expertise. Republicans (at least the most honest among them) believe that the world is to complicated, knowledge is to imperfect. They have much greater faith in the decentralized discovery process of the market”

    #1) Dualism is how a Republic works by the very facts of our constitution. Monism by nature is the enigma of this symbiotic evolution of a Democracy – where one’s generality is best defined to serve the host a longer survival.
    #2) “Oakham’s Razor” (Law* [?]) – Politics and Philosophy should be kept as…”Simple-as-Possible” (all for one and one for all?). **Do not multiply entities beyond necessity. (KISS?)
    #3) “The Philosopher’s Stone” – the stone (tongue) or material (propaganda) that practitioners (politicians) of Alchemy (the ability of rationale to turn reason into nonsense) believed capable of changing other materials into gold”.
    This is a metaphor I’d like to sarcastically postulate upon David Brooks as his once, “Golden Tongue”, being tarnished by the draconian Ryan of “Fantasy-Land”, with druid embezzled blood for today’s serfdom on his hand’s!

    Thanks James and Simon

  6. Barney Dodd

    You must be tired of having to explain why David Brooks’ column is wrong each week. His continued employment astounds me given he has proven beyond a reasonable doubt that he has no idea what he is talking about. I enjoyed the Upper Class Twit of the Year as a Monty Python sketch, but this running show at the Times is wearisome.

  7. CBS from the West

    “…they chose [the IPAB] because it was the only pragmatic, responsible choice.”

    Well, if they really wanted to make a pragmatic, responsible choice, they would have given the IPAB some teeth. But as with the other components of the ACA that purport to actually reform health care, the statute has sabotage built-in. Face it, James, the ACA was written by and for the health care and insurance industries. The stuff that looks like real reform is just cosmetics, and easily seen to be such just by reading the statutory language, not just the headlines.

    .

  8. I can’t be bothered reading or listening to these right wing blowhards, to a person, wrong-headed.

  9. You may be surprised, but D Brooks has JKGalbraith on his side; somewhere G wrote advice to a young beauracrat, and in that great piece of prose, JKG notes that you should never trust experts – no matter how strongly they assert something, they can be wrong.
    From our commonplace knowledge that experts are often wrong, brooks draws the wrong conclusions, but your condescending arrogance is hardly better.
    I certainly don’t trust a gov’t with T Geithner , friend and protoge of Rubin, the NY Fed guy who help the vampire squids cook their books, to run the economy, and I don’t see why I should trust his boss, Obama, to appoint good people to the control boards.
    and I’m a liberal

    Also, I’m gonna stop reading this blog
    like all the other liberal bloviators, you spend all your time on easy targets – the wingnuts.
    How about doing something useful – every day, either a practical suggestion on what to do, or a nice, detailed,data rich wiki page on some topic, like say, share of income paid by the wealthy going back to 1920 – why on earth can’t all you economists get together, start a wiki, and have some well written, fact rich, data heavy pages that we can all use for ammo, sort of like brad delongs virtual green room, but with facts instead of opinions

  10. @earle of Florida,

    You sound like George Bush with a Thesaurus filled with malapropisms. PS, nitwit, it’s Occam’s Razor.

  11. I used to love David Brooks. He was intelligent, funny, and self-deprecating. I have been watching his slide into political ideology with growing dismay. He seemed to WANT to be reasonable and did a fair job. Then he took a strange turn into social science that made little sense. Now it seems his thinking processes have become warped by his trying to make Republican dishonesty and nonsense into an intelligent argument. GIGO — Garbage In, Garbage Out.

  12. I don’t see the problem with private health care that fails to deliver decent health care. After all, we have private armies in Iraq and Afghanistan which are failing to deliver victory. We have a private financial system which is failing to deliver prosperity. We have a private Congress which is failing to deliver democracy.

    The problem in the US is not just lies. It’s that most people are either ignorant or want to believe the lies. I grew up hearing about Soviet propaganda and how Soviet children were told lies about America. As I look back on America from abroad, I can see that perhaps Americans were fed the greater propaganda after all.

    We get the system we deserve. America deserves overpriced crappy health care.

  13. I question my support for NPR every time i hear that idiot Brooks giving his self-satisfied commentary. Don’t get me wrong, I’d love to hear a well reasoned conservative opinion, one that relied on ideas and facts rather than fantasy and lies, but Brooks is a disgrace. I think NYT must keep him on just so readers can mercilessly whip him in the comments section. That said, i have pledged to myself not to pay for the Times untilo they get rid of Brooks.

  14. Woop2012@aol.com

    @ Temptation, Earle is a poet-sage, your critique of spelling misses so much brilliance…..just my gut.

  15. Thanks Woop2012

    Looks like someone woke-up on the wrong side of the bed this morning.

    “Tis a shame, to waste the, “Music of the Spheres”, on such a tempting “Noble Savage”, but such is how ergo would have it?”

  16. FACTS!?!?! Who is misrepresenting facts about Canadian health care here?

    Claude Castonguay

    Forty years after being one of the pioneers of socialized medicine, Castonguay’s commission advocates both an increased role for private enterprise in medicine and increased public investment in the socialized system both through taxes and through user fees. Castonguay was quoted as saying “We are proposing to give a greater role to the private sector so that people can exercise freedom of choice.”[3] While concerned about the financial stresses the system places on the government, Castonguay does not advocate dismantling publicly financed health insurance altogether.

    When will economists finally agree that when the gov’t subsidizes something it gets more expensive? It’s so clear. Food, oil, transport, housing, health care. C’mon now.

  17. Bayard Waterbury

    James, I appreciate what you are trying to do here, and sincerely appreciate the effort. What David says, and you criticize rightly, is just so… I don’t know… Brooksian. David is one of the few who actually adds rationale to his argument, while most simply rely on lies and distortions. Not that David’s rationale is worth the paper upon which it is written. And, if we look around the world, what passes for a health care system in the US is clearly broken. The health care reform was an absurdly ridiculous effort to make effective changes in a broken system. From my perspective, the changes only made is worse, and certainly no less expensive on a per capita basis (nor will it ever, if allowed to continue). If Medicare is the single most successful component of our health care system, which it is, then the obvious answer is to apply it to everyone, effectively Canadianizing our health care. There are lots of other workable programs in other countries, notably France, Germany, England, Scandanavia, etc. (perhaps the single most effective is actually in Cuba, strange, huh?) to use as models. Brooks is just so typically giving his own special spin to the absurd semi-free-market Republican core (Neoconservative to its heart), and that’s just what David does. He likes to be just a little critical, but only for purposes of separating him and thus creating a greater credibility.

  18. gasgangrene

    Glad to see yet another dig on David Brooks from JK. Seriously, this is exactly what I like to see in an economics blog–an obsessive, unrelating focus on a single middle-of-the-road writer. Kudos to JK.

  19. Seriously – people just don’t realize how important it is to have a front-row seat on an op-ed page as widely read by all – whom make decisions in the political arena, and on the average american’s life!
    It is the eyeballs that this prestigious paper reaches that can make or break a candidate, or a controversial issue coming to fruition, or being tabled…it’s just that simple. The “NY Times” has fallen in love with Brook’s, left-handed compliments, and seems very comfortable espousing his on-again/off-again rhetorical, “Procrustean Operation”!
    Have we heard or read anything of the contrary from this ignoble bipartisan literary “Knot” rag…that has slithered into the right-wing camp over the last few year? I think not. Krugman has lost his , Whatever, and the zeal for a dual-replacement is far overdue.
    Of course they would fear the likes of James Kwak, or a Simon Johnson taking a few lines-up on their “Op-Ed Page” for fear of the truth leaking out to their sponsor’s and the undaunted blind-sided public?
    So, indeed James, keep-on-keepin, til someone figures out your genius!

  20. Adam Washington

    I read Brooks’ piece before reading Kwak’s criticism of it, then I went back and re-read Brooks’ piece. Kwak’s criticism are not substantial; they simply reflect the basic philosophical differences pointed out by Brooks. Those of you jumping on Kwak’s bandwagon without bothering to read Brook’s op-ed should do so. I appreciate and enjoy reading Kwak’s blog and will continue to do so, but his criticisms of other writers are not always the epitome of even-handedness.

  21. Can someone please explain the “unfunded liabilities of Medicare” usually put at anywhere from 61 to 86 Trillion dollars that are thrown out by Republicans and Tea Partiers? No one ever specifies a time frame for this unfunded liability yet it is always talked about in terms of, this dark sky is falling tomorrow, and that this is a debt of some $330,000 for every man woman and child in the US, a terrifying amount of money. These are figures referred to by Richard W. Fisher, president and CEO of the Federal Reserve Bank of Dallas, in a speech back in May 2008.

    What do these figures mean? Why are they important? Are they important?

    If Medicare is this “unfunded” why would anyone think that it is working at all?? Is there any reality to this or is it a fantasy financial monster used to scare people that Medicare isn’t solvent.

    If this 86 Trillion is the unfunded liability of Medicare what would the unfunded liability of private health insurance be and how would one calculate it??

    I am lost and confused and drowning in this sea of absurdly large numbers.

    (At 67, without Medicare I would be living under a bridge or dead. I put off major surgery until 65 because I didn’t have any insurance until then. Fortunately it wasn’t too late to recover.)

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