We are living the operational weakness of modern American liberalism (neoliberalism) – it’s bored by the details of erecting the dream.
Neoliberals have a utopian view of neoliberalism realized, and that view is based upon a collection of social-, economic-, gender- and racial-justice principles taken to be axiomatic. In foreign policy, for example, neoliberals favor an arms-length relationship with foreign capitals, friend or foe. They are by nature Liberal Internationalists, eschewing the harshness of Realism. Domestically, neoliberals tend to be Euro-style Social Democrats, believing that the prime function of central government is to provide for the people. Neoliberals are, in other words, broad-brush visionaries – theoreticians on the macro-level. They favor large, sweeping programs that establish new norms.
It’s actually carrying out those visions that bore neoliberals.
A textbook example, if somewhat Gilbert & Sullivan in its execution, is the whole Patient Protection and Affordable Care Act saga. Neoliberals were flush with winning the White House and legislative majorities in both Houses of Congress. They had total control of the government of the United States of America. They could pass anything they wanted. And what they wanted was a grand gesture, of course, to usher-in the Age of NeoLiberalism – healthcare as a right.
From those four words on a page, had to be fashioned the next level of detail: “we’re going to put 30 million needy new patients into a shrinking doctor-pool, and give everyone improved care at lowered cost without increasing taxes or indebtedness.” The writing of the bill would delineate how to manipulate the existing national economy into compliance with those four words on a page. For this task, they hunkered down in political isolation (“We won [the election] and we’ll write the bill”) with the century-old liberal dream of universal healthcare. So much had been written about this, so many think tank studies, so many speeches, that the architecture of the proposal was well understood. They had the conceptual and political freedom to craft the bill in as pure as they wanted.
The process quickly broke-down into an orgasm of “2+2=Grapefruit” thinking, and colloquial political assaults and exemptions dominated the synthesis of the bill. They emerged with a 1,726-page tome that explained the bill in what they call “plain language,” as to distinguish it from the “legislative language” version (2,300+ pages) which is what appears in the US Code. The “simple” version ran over 1,700 pages! No one bothered to read the thing (with the possible exception of Paul Ryan, who took exception with it) – “You’ll have to pass the bill to find out what’s in it.”
It’s a kaleidoscopic salad of double-accounting (e.g., using $500 billion of Social Security money twice), self-defeating trajectories (e.g., low penalties on the prime players for not participating), and does nothing to realize the promise (e.g., “putting 30 million needy new patients into a shrinking doctor-pool, and giving everyone improved care at lowered cost without increasing taxes or indebtedness”).
They had a chance to craft from the heights of a hundred years of theory – the best and the brightest of neoliberalism – and they chose to go small-ball. They blew it.
The very complexity of the thing precludes it from working. Nobody can write that much code – computer or legal – into a workable whole because of the myriad of unintended consequences unwinding simultaneously. Frank Lloyd Wright would admonish his students that “a thing will do precisely what its design permits it to do, regardless of what the designer had in mind.” You can’t wish a flawed premise workable. And “30 million needy new patients into a shrinking doctor-pool, giving everyone improved care at lowered cost without increasing taxes or indebtedness” is a flawed premise.
The economic model is inter-demographical wealth transfer – the young and healthy pay for the old, the infirm, and the uninsurable. And then they stipulate that offspring can remain on their parents’ policy until 26 years of age. These are the prime financiers of the program, and they are exempted! The rest of the young and healthy are to choose between $400 to $500 a month premiums with $6,000 deductables, or an annual fine ranging from $95 or 1% of income (the first year) to $325 or 2% of income (the second year) to $695 or 2.5% of income (thereafter). Only in the third year does the penalty exceed one month’s premium, and those premiums are needed from year-one for the business model to work. The combination of these two features almost assures that the economics are going to be upside down from day-one.
Doctors and hospitals are refusing to participate (they lose money), and doctors are retiring early (seeing rough seas ahead). There aren’t enough residency slots in the country to replace the exiting doctors in near enough time to counterbalance the trend, and even if there were, you are replacing seasoned skills with raw, new ones. Quality of care would necessarily diminish. When demand badly outstrips supply, the economy spawns black markets and rationing. The rich will be able to go offshore for quality care and everyone else will get their care rationed.
The natural tendency of ObamaCare is to fly apart from contradictions in the premise.
While all of this was going on, we experienced a politically corrupt IRS, serial Justice Department failings, a complete collapse of State Department’s responsibilities to its own, and two election cycles. The unseemly way in which the bill was passed – without a single Republican vote, and over the omnipresent polled objections of a majority of the American people – cost Democrats their legislative majorities in both Houses. They retained a simple majority in the Senate, and retained the White House in the second election cycle.
Then came the rollout. A website with an embedded Data Hub – a “server” of information between customer and federal agencies, for the verification of customer-supplied information, and access to the policies for which they qualify. They had three years to design the thing, and let contracts totaling more than $400 million dollars (on a cost-plus basis). It was, and is, a disaster. The picture that’s emerging is that virtually all the people actually working on it knew it wasn’t ready, and virtually all the political types were committed to going live on October 1st. The political types won the day, and the coders were proven right. Forty-five days later, we are up to being able to handle 11,000 visitors a day (Drudge Report fields over two million unique visitors daily), and three twentysomethings in San Francisco took a week and developed an enrollment screen that works. It does so by bypassing all the “exchanges,” state and federal, asking you only to fill-in your zip code, age, number of people covered and salary (if you want to see if you qualify for subsidies), and listing the policies for which you qualify. If you see one you like, click on it, and the screen directs you to the insurer offering that plan. It doesn’t care about your name, address or Social Security number, etc (only the insurer needs personal data). Simplicity itself.
The general contractors, and their sub-contractors (and their suppliers), produced a hodge-podge of code that doesn’t work, has copyright problems, wasn’t end-to-end tested (the consumers were alpha-testers), exhibits data-security as an afterthought (the backup transaction file isn’t even encrypted), and was running on too few servers. It would be amateurish if not for the hundreds of millions of dollars we paid them to produce it. The only conclusion is that there was no oversight. I have dealt with government contracts in the defense sector, and they always contain benchmarks – “phases” of the contract that must be demonstrated to be attained by the prime contractor before proceeding (and collecting another increment of funding). It doesn’t sound as though the programmers for the enrollment screen had such provisions in their contracts. They showed up on October 1 with a broken, non-functional product. And “no one knew it.” If true, that’s a condemnation of malfeasance by CMS, and by extension, HHS. If not true (if somebody knew), that’s a condemnation of leadership character or ability.
Coincident to the rollout was the ever-growing number of people losing their existing policies, obviating President Obama’s principle selling point during the 2012 campaign – “If you like your insurance, you can keep your insurance. Period. If you like your doctor, you can keep your doctor. Period.” It can now be documented that he made that promise some 36 times between 2009 (when the bill was being written) and 2012 (after he signed the bill). The perception is that he lied. Now he says “What we said was ‘if you like your insurance, and it hasn’t changed since the bill was signed into law, you can keep it.’ ” He’s trying to reconcile what he said with what the law says, and they are irreconcilable. Gaffe or lie, it’s just more incompetence being heaped on the Act.
Modern American Liberalism had its best shot at demonstrating their ability to live up to their rhetoric, and they didn’t. We didn’t get a gleaming edifice of social justice, we got a garish finger-painting of special interests, cronyism, magical thinking and surreal economics. People losing their insurance outnumber those getting new policies by a hundred to one. Fewer than 50,000 have enrolled as of this writing, and most of those are takers – the infirm and uninsurable who will consume services far in excess of their premiums. And it’s going to get worse. Next year, when the business mandate kicks-in, millions more will dumped onto the exchanges (from policies they liked, and severed from doctors they liked). It was a lost opportunity that all liberals should mourn. Politically, liberals have lost a high-stakes poker hand – their signature achievement, totally attributable to Democrats, is failing before their eyes.
And it is this that is the lesson here: neoliberals are too ethereal to efficiently run complex processes. They seem to lack the discipline to keep a process running within sustainable bounds. Neoliberals aren’t good with bounds. When they get something enacted, they’re off to the next big dream. The pedestrian task of making the last idea work is alien to them.
They have, over the last five years, shown their utter contempt for day-to-day management. All of the crises during this period are attributable to a lack of, or wholly incompetent, oversight – the day-to-day management of process. Neoliberals aren’t good at it, they don’t like it, and all failures are somebody else’s fault. There is no visible institutional inquisitiveness – they don’t appear to want to be good at it, don’t want to like it, and failure is irrelevant.
This is not a partisan attack, rather an observation of operational ineptitude. Regardless of their political agenda, they are proving incapable of governing, and that is a dangerous attribute from those who are supposed to be governing.
 See John Blackstone, SF programmers build alternative to HealthCare.gov, CBS News, November 8 2013, 1926EST.