Today’s Washington Post column by Allan Sloan includes the following:
— “Cash for Clunkers.” It was a well-intentioned plan that was supposed to increase consumer confidence, spur fuel efficiency, jump-start the auto industry and help create American jobs. Instead, it disproportionately benefited foreign automakers, which create fewer North American jobs per car dollar than the Detroit Three do. And sales came mostly from inventory, doing little to increase production and jobs. What’s more, by junking clunkers, the program removed many low-end vehicles from the used-car market, running up prices for the lower-income people who’d normally buy them. So we hurt the people most in need of help, while throwing taxpayer dollars down the drain. As the saying goes, the road to hell is paved with good intentions.
It’s easy to throw up your hands when talking about “unintended consequences,’ but none of these can really be said to be “unforeseeable consequences.” In hindsight they look pretty obvious to me! And I believe that a little foresight would have revealed them as well.
We already have Environmental Impact Statements; they’re either famous or infamous, depending on your viewpoint. There are also financial impact statements: how much will this bill cost, or this revenue measure raise?
Maybe we need to have the Congress publish “Legislative Impact Statements” that list what the legislators think will happen, both good and bad, so that we can judge afterwards how much they thought about what they were doing?
Legislative Impact Statement is a brilliant idea. It invites variety into the conversation, so that a range of viewpoints can be incorporated into the problem statement as well as problem definition. There would also be an evaluative mechanism, to show afterwards what viewpoints were valuable and why, affording a meta-view on how to design subsequent legislation and “get it right, sooner”. How can we make this happen?
My mother used to say “look before you leap.” She didn’t have a Ph.D. in public policy; she had common sense. She’s also the kind of everyday voter the politicians try to persuade, so why don’t the politician routinely follow my mother’s advice? Why don’t policymakers think long and hard before making big decisions? I think it’s because they’re just like the rest of us.
I would suggest that members of Congress are no more fickle than Americans in general. The best evidence I’ve got to offer is the string of bad private-sector decisions that led Congress to even consider the cash for clunkers program. The reason the economy tanked is that private investors didn’t think through the implications of their decisions. Home buyers didn’t think. Mortgage bankers didn’t think. Financial advisors didn’t think. The list goes on and on. Congress is no more unthinking than the rest of us. And old saws aside, Congress behaves pretty much the way the rest of us do. As often as not, we Americans, including our representatives in Congress, make decisions from the gut, not the head.
Mark Twain used to kid that anything is possible in America so long as you are ignorant and confidence. But, the truth is that our national character has been carved from a history of risk taking by what the Irish call “chancers” who crossed oceans for the opportunity to try something new. Americans may actually be genetically engineered to be optimistically experimental. Seriously, somebody ought to a rigorous study of the immigration patterns and genetic selection mechanisms that created the current U.S. population – we were bred from generations of hope-inspired risk takers.
We are proud of the fact that we take decisive action. We admire those who dare to innovate and we understand that innovation entails making mistakes. Even at the beginning, America was philosophically predisposed toward taking chances. While the great principles of American democratic thought weren’t haphazardly thrown together, they did, and do, embody a liaise faire concept of decision making. The whole idea of the marketplace of ideas is that there will be successes AND failures and we will learn faster and grow stronger because we have dared to make mistakes. Mahatma Gandhi, a student of government who held the American system in high regard, believed “freedom is not worth having if it does not include the freedom to make mistakes.”
Yes, our optimism gets the better of us sometimes. And yes, the rest of the world is generally more careful than we are (though the Chinese seem to have taken the American philosophy of quick production and rapid innovation to a new level). And no, we shouldn’t encourage our Congressmen or our children to make stupid mistakes. What we need, is to devise a means of allowing decisionmakers to make mistakes without being stupid about it.
Clear concise legislative impact statements could improve the public’s understanding of the issues and help improve the public discuss about what we ought to be doing. Of course how we, the people, choose to use such impact statements would make all the difference. If we were to continue to just push for quick decisive action (as is our predilection) the statements might not prove as useful as one would hope.
Taking this a little further . . . the Congressional Budget Office already does budget impact statements and most state legislatures also do some sort of fiscal impact statement, some (Ohio, for example) even go so far as to evaluate the overall impact on municipal governments. But as far as I can tell, you have to go down under to Australia and New Zealand to find legislative bodies that have formal structures for not only eliciting public input, but sytematically processing, analyzing and using that public input before passing legislation. Both Australia and New Zealand have regulatory impact offices that evaluate the total impact of both regulations and legislation as inputs into the regulatory and legislative processes. It seems that the process is similar to the Rulemaking/Regulatory proceedures for U.S. federal agencies. The government’s idea is published and public, industry, and NGO feedback is gathered. A report is done and a recommendation is made.
In the U.S., the public feedback loop is truncated. Every legislative idea is, of course, reviewed by interested parties (corporations, interest groups, academics) and often position papers are produced by those parties (although academics usually don’t more as quickly as the legislators so the opinions, data, and factoids offered by the interest groups are often more prominent than those of the nation’s scholars). The problem is the U.S. is that the process isn’t very transparent so many who might get excited about the conversation if they knew it was going on, never hear about the issue until all the important decisions have already been made.
Australia, New Zealand and our own Rulemaking procedures may offer a useful model for revising the legislative process to allow for meaningful pre-passage impact evaluations. Modern technology and a good model might get us all the way there.
Pingback: Dumb Design « Government Reform