Lies, Bribes and Hidden Costs

Eric Boehlert has a good piece in Salon analogizing the Bush administration’s selling of the Prescription Drug Bill to the selling of the Iraq Invasion: hype the benefits and willfully suppress the true costs.

In Iraq, the benefits were hyped primarily by promoting the WMD claims (thus creating the bogus benefit of removing WMD from Iraq) and, to some extent, by expressing too much faith in Iraq’s rapid transformation into a shining beacon of democracy.

The distortions on the cost side were equally egregious. Larry Lindsey, Bush’s then Economic Advisor was roundly chastised by the administration and the Right more generally for saying in September 2002 that the Iraq invasion might cost between $100 billion and $200 billion. White House OMB Director Mitch Daniels was similarly dressed down in January 2003 for proffering a $50-$60 billion cost estimate.(*) Of course, Daniels was too optimistic and Lindsey’s number was in the ballpark: costs to date are about $150 billion and the administration is still not including the future costs of the occupation in its budget forecasts. Clearly, officials at the time knews that the invasion would be very costly, but they were pushed to the side.

Similarly, Gen. Shinseki was widely criticized in February 2003 by the administration — most vocally, Paul Wolfowitz — for saying that “several hundred thousand” troops would be required to stabilize Iraq after the invasion (Shinseki retired last August.) Now, it is unfortunately becoming increasingly clear that the roughly 130,000 troops now deployed are not enough. Worse, I cannot recall a single pre-war mention that the cost in American lives would top 600. There was a clear and concerted effort to minimize the costs — whether measured by troops, dollars, or lives — of the invasion. Those who disagreed were disgregarded and marginalized.

Focusing on the actual costs and benefits of the invasion is important because of a sleight of hand tactic employed by war supporters. Often, in response to criticism of the invasion, supporters will ask questions such as

  • Don’t you think it’s good that Saddam is out of power? (e.g., here)
  • Don’t you want the Iraqi people to be free? (e.g., here)

Of course, there’s only one answer to both questions: yes. (However, if the Iraq situation devolves into civil war between the Shia and Sunni populatiosn, then the citizenry will likely be worse off than under Saddam, hence the need to do this right.) The chicanery is the willful conflation of these questions with the real-world question that should guide policy making:

Are the benefits of removing Saddam from power greater than the costs, in lives and dollars, of removing him?

By hyping the benefits and downplaying the costs, Bush and his supporters lead the public to believe that the answer to this last question was yes. Increasingly, the public’s answer appears to be no. Thus, the ex-post justification perforce devolves into a claim that the benefits are positive, not that the benefits exceed the costs.

It is in this context of comparing benefits and costs that the Medicare Drug Benefit and the Iraq War are properly juxtaposed. Could anyone answer no to this question?

Would it be a good thing for all the nation’s elderly to have access to life-saving and life-improving drugs?

Surely not. What about this question?

Is it worth $400 billion for the nation’s elderly to have access to life-saving and life-improving drugs?

As it turns out, the answer in the Congress was, narrowly, yes. But that answer was only achieved by hyping the benefits (upon reflection, seniors are not particularly pleased with the plan) and understating the costs by $140 billion, or 35%. While the answer to the previous two questions is apparently yes, had the question been honestly posed as

Is it worth $540 billion to give seniors a modest drug plan under which most will pay 60% or more of their total drug costs out of pocket?

then the answer would almost surely have been no. Only by concealing costs and exaggerating benefits is this administration able to get its major initiatives enacted.

Certainly, all politicians cast their proposals in the best possible light. But the Bush administration consistently pushes this to new heights. The old process of starting with analysis, selecting proposals based on that analysis, and then advocating for those proposals is now turned on its head. Policy is first and foremost derived from political exigencies; then the costs and benefits are transmogrified as needed to justify the policy. In 2002, John DiIulio made this painfully clear:

“There is no precedent in any modern White House for what is going on in this one: a complete lack of a policy apparatus … What you’ve got is everything — and I mean everything — being run by the political arm. It’s the reign of the Mayberry Machiavellis.”

Sadly, bad policy is the predictable result when decisions are made politically and justified by distorted cost and benefit projections. This is true in the context of Iraq, true in the context of Medicare, and true in the context of tax cuts (hyping the job-creating effects while understating the resulting revenue shortfalls). More simply, it’s true.


(*) I can’t recall which official, before the war, put the cost in the low single-digit billions; hopefully a commenter can help me out.