The Gruberization of Policy: Unintended Consequences
Voters allowed the Affordable Care Act (ACA) to become the law because voters are ‘stupid,’ according to one of the law’s architects.
Vaughn Cordle, CFA
First published November 19, 2014
Revised April 10, 2022
“It is always important in matters of high politics to know what you do not know. Those who think that they know, but are mistaken, and act upon their mistakes, are the most dangerous people to have in charge.”—Margaret Thatcher.
Even more dangerous is the politician who will say or promise anything to win an election or spin reality for “stupid” voters because it’s the only way to ram through policies that the majority would never accept if they knew the truth. The objective of a corrupt politician is to leave out important information that is required to understand the issues. This is why voters and Democrats became stupid enough to allow the Affordable Care Act (ACA) to become law. They were, in short, Gruberized by a cynical administration that is more than willing to deceive and mislead to achieve its goals.
Where was the press when it became known that Jon Gruber was on the Administration’s payroll when his “objective analysis” was used as proof that Obamacare helped businesses and lowered premiums for families? This type of misrepresentation and conflict of interest would amount to fraud in the private sector. Before the Senate vote on the bill, the White House touted another Gruber study that “confirms” that the new healthcare bill reduces costs and improves coverage. The exact opposite has occurred. Gruber was the go-to guy for the press and the only source used to [falsely] validate the benefits of Obamacare. What has become clear is that much of the media has done a lousy job of covering this scandal.
Obama acts on his mistakes and does not know what he doesn’t know, especially concerning the unintended consequences that ultimately result in more damage than benefits from poorly thought-out policies that were not properly vetted in cost-benefit terms. This is a perfect example of the third law of stupidity coined by Italian economist Carlo Cipolla in his “The Basic Laws of Human Stupidity:” A stupid person is a person who causes losses to another person or a group of persons while himself deriving no gain and even possibly incurring losses. The political damage from the mid-term elections should be a wake-up call for Obama and his liberal base but likely will not help them with the competence problem, which gets to the heart of why they are unfit to govern or manage the public purse.
The incompetence of the administration is that it did not, and still does not, understand the unintended consequences of passing the new healthcare act. The consequences include a shellacking of Democrats that voted for ACA and the resultant Republican control of Congress. Another big [unintended consequence] shoe to drop is the 40% excise tax on “Cadillac” healthcare plans, which kicks in in 2018 after Obama is out of office. Under Obamacare, private-sector unions and employees get hit hard with higher taxes, higher out-of-pocket healthcare, and lower quality healthcare; public sector unions benefit.
Most big union plans, including public-sector unions, will be hit hard by this new tax. Companies are already cutting benefits and shifting costs to employees to get ahead of the new tax. It’s a tax that was sold (i.e., Gruberized) as shifting costs to greedy insurance companies, but they will receive a $175 billion windfall from the government (i.e., taxpayers) that allows them to profit from Obamacare. This is the worst type of corporate cronyism and the payments are made without the consent and approval of Congress via presidential executive order.
According to Gruberomics, union workers are like voters—too stupid to understand economics. Of course, the insurance companies will simply shift the costs to employers that provide the benefits, which, in turn, shifts the costs to employees. Stupid employees will, of course, blame the insurance companies and their employers. Abracadabra! The administration’s real goal of wealth redistribution will have been achieved, and the blame for higher healthcare costs will shift to greedy corporations and insurance companies. The government and its public-sector union constituents will simply pass along the higher cost of the Cadillac plan to the middle class via higher taxes.
Most employees and voters, however, are not stupid. Given the necessary information, most will form the right conclusions. The Gruber videos provide valuable insights into how this administration fraudulently sold Obamacare by camouflaging its contempt for the average working American. The contempt is reflected in its attempt at central planning where liberal elites like Gruber devise the master plan.
It should be noted that every promise made (many were based on Jon Gruber’s model) to sell Obamacare has been proven false … by a wide margin. For example, Obama and Senate Democrats promised the new healthcare law would lower average premiums by $2,500 and deficits would be reduced. However, average premiums have increased by $4,000, deductibles are higher by 46%, and federal deficits have increased significantly. Hence, the proof of the deception and incompetence in [healthcare] central planning enacted into law by Obama and his far-left base that controlled both chambers of Congress when it was passed. This is what makes liberals dangerous when they are in charge of fiscal policy.
Thatcher and Reagan understood this danger; most liberals do not because they do not know what they don’t know, and they act on their mistakes. This is why their preferred policies—tax, spend and redistribute wealth—are, inevitably, self-defeating. The policies are stupid because they result in lower economic growth, higher unemployment, and falling standards of living for the middle class. Hence, such politicians are unfit for policy-making, and the American voters were smart enough to put the Republicans back in charge. As Cipollo says in his fifth law of stupidity, Stupid people are the most dangerous type of people. We’d be smart not to forget that.
I agree, Gruber abetted Obama's socialist plans which from my perspective made him complicit in the lie. His actions should be considered a serious ethical violation for an educator. It's one thing to advocate for a point of view, it's another thing entirely for an educator to deliberately conceal or distort information. But the goal, which leveraged 'stupidity' was to deliberately omit essential information from the public to achieve a socialist end.
Gruber's disdain for voters, people who on average do not have a college degree, is an example of the very elitism that has been dividing society for years; Obama is another example of this elitist perspective. Such elitism is back-firing on the educated elites (I'm well educated but still respect folks without a college degree).
Consider Walmart's recent ads for truck drivers. $110,000 per year (plus benefits) for a job where no college degree is required. Does Walmart pay new college graduates that kind of money? A young person could take the job, save a big slug of money, and either retire early or get a college degree, debt-free, and move up further. But such a person would be considered inferior by the elitists. The pay for a truck driver is a sign of value-add. Gruber did not provide value-add.
What kind of future do we want for this nation? I'm in favor of initiative not government edicts or handouts where every worker provides value-add (government workers excluded because few are value-add).