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Thursday, July 30th, 2009

[digg-reddit-me]Implicit in many of Obama’s policy proposals and programs is an assumption shared by many reformers (from here to here to here): that America’s political system is broken and that our traditional democratic institutions just aren’t up to the job of managing serious and difficult areas and making rational, long-term decisions when the payoff only comes after policy-makers are out of office. I’m not sure that they’re wrong – but I’m wary of the decision made by the Obama administration to focus on creating a technocracy to manage these areas.

In many of Obama’s programs and proposals, there is a bureaucratic independent or quasi-independent agency that is designed to manage whatever process is relevant to the program and that receives from the Congress authority to make decisions on its own. To the technocrats’ credit, in most cases, although the decision-making is outsourced to these agencies, Congress has some sort of limited veto over them. The appeal of outsourcing authority to these institutions comes from the fact that they are theoretically insulated from politics and are capable of making minor decisions over a long period of time which – if managed properly – can effect significant changes. The idea is that – rather than forcing through a controversial and wholesale change – you set up an independent agency that will gradually manage things in order to achieve the changes needed. This makes a great deal of sense politically – as the agency can be tasked with some anodyne goal that everyone can agree on – and as it makes controversial decisions,  politicians can distance themselves from each individual decision while still supporting the independence of the organization (as you often see with the Federal Reserve). They can say they didn’t vote for this or that specific proposal – and that they oppose it – but that given the authority of this independent agency, there’s little they can do. On a policy level, this also makes sense – as any attempt to push through wholesale reform is limited by one’s knowledge at the time the legislation is drafted. Better to experiment and try various small steps and set up different incentives to accomplish the same thing than to attempt to impose some pre-made solution. It’s also worth noting that these technocratic institutions are often supported on a bipartisan basis – while specific reforms are generally opposed by one side or the other. The appeal is obvious – yet the anti-democratic impulse is disturbing.

One example of these organizations is the IMAC (or Independent Medical Advisory Committee) which would be a technocratic institution that would set the pay rates for reimbursement of various Medicare programs and eventually perhaps for all government-sponsored insurance (as MedPAC does now) and also compare and evaluate what treatments work best to treat different conditions and make recommendations. Unlike MedPAC which simply advises Congress, IMAC would make annual recommendations which would take effect if accepted by the president and not vetoed by the Congress. The White House has been selling this plan as a way to take the politics out of Medicare reimbursements and restrain costs. A similar approach helps explain why Obama is pushing for the Federal Reserve (the organization to which the IMAC is most often compared) to be the regulator of those institutions that are “too big to fail” as well as tracking and regulating various other systematic risks – despite their role in the collapse that just occurred. What the Federal Reserve is known for is its independence from political pressure and its technocratic bent, thus making it the perfect vehicle for Obama’s efforts to reform the financial industry even though it clearly failed so recently. There is the proposal for a National Infrastructure Bank which would direct federal transportation money – again, independent of political concerns. The cap-and-trade program would likewise gradually institute dramatic reforms by giving authority over to a technocratic institution that would manage carbon emissions – distancing these actions from politically accountable leaders.

On each individual proposal, the solution seems compelling, but as an overall trend, it is disturbing. When Obama was elected, many claimed that there was a similar feeling of hope and progress to when John F. Kennedy was elected – and as then, when Kennedy gathered “the best and the brightest,” Obama has reinvigorated the idea of public service. But the downfall of these Kennedy men was their belief that they could “control events, in an intelligent, rational way.” Obama’s technocrats do not seem to have this same hubris. Their hubris is of a different variety: they believe that they can best manage complex areas and achieve needed reforms not through political action but by creating bureaucracies onto which they put the difficult political decisions.

But what kind of system do we end up with then? As rules and regulations are created by technocrats and then merely accepted or rejected by the elected officials. This system seems to resemble an oligarchy with democratic checks. With the Federal Reserve along with other less independent agencies already deputized to take care of most government responsibilities, we have already started down this road – but it doesn’t seem wise to double down on this approach. Unfortunately, I do not offer a solution – only a concern.

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