Arnold Kling  

Questions about Jonathan Gruber

Crisis Commentary... Jonathan Gruber and Me...

Jonathan Gruber is under fire for failing to disclose to reporters the funds he received from the government to investigagte health care reform. This story reports,

That puts the total federal money Gruber received in the last two years at $958,910.

1. Doesn't that mean that some of Gruber's funding came from the Bush Administration? I wonder how much.

2. What is the maximum amount that Gruber could have received had he been a full-time government employee?

3. How much was Gruber paid for his work on the Massachusetts plan? Did he get some of that money during the same years he received Federal money?

I myself was paid just $5,000 to write a book on health care reform. I'll admit that I'm jealous of Gruber's gravy train. I dare say that I would bet that a decade from now my ideas on health care policy will stand in better repute than his.

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COMMENTS (10 to date)
Patrick R. Sullivan writes:
2. What is the maximum amount that Gruber could have received had he been a full-time government employee?

I suspect that is irrelevant, as Gruber probably has a consulting practice and the money is gross revenue to the practice, not personal income.

Zdeno writes:

If the gravy train entices, perhaps you should consider pushing ideas that are more amenable to justifying the expansion of government power. You might get a NYT column out of the deal too...

Ryan Vann writes:

Zdeno is definitely on to something. You could probably get some TV time out of the deal too.

Eric Falkenstein writes:

First rule of successful consulting: tell the people what they want to hear.

Second rule: make it appear objective and independent.

You aren't a very good consultant (telling individuals to pay more out-of-pocket?).

Gabe writes:

Isn't the larger story here that in many extremely important policy areas (climate change springs to mind) there appears to be (and if not, how come the no-bid nature was not challenged?) a very shallow pool of experts available to policy makers?

If the pool is not shallow, why is the administration not splitting the sum paid among a number of economists in order to canvas the widest number of views possible?

chipotle writes:

Is there a better phrase to describe Gruber than "a lethal tumor on the body politic"? (You know, he gets fat and rich and we slowly die in the fiscal sense)

I guess the neologistic "parasite/traitor" is more succinct...

Boonton writes:

Actually 'no bid' seems like a stretch of the truth here:

The purpose of this synopsis is to determine whether there may be other sources with the necessary expertise and qualifications to perform the work described above. All responsible sources may submit a capability statement, proposal, or quotation, which shall be considered by the agency Any interested source, in order to meet HHS requirements will need to demonstrate and address in their capability statement (1) A recognized expert in health policy and economics with special expertise on the effects of changes in health benefit design on the cost of enrollment in health insurance (2) a proven micro-simulation model with the flexibility to ascertain the distribution of changes in health care spending and public and private sector health care costs due to a large variety of changes in health insurance benefit design, public program eligibility criteria, and tax policy (3) the ability to seamlessly and immediately begin working with ASPE and the Office of Health Reform No solicitation document is available. Capability statements should be submitted by June 5, 2009 at 5 p.m. eastern time to the point of contact listed in this announcement.

Arnold writes:

I myself was paid just $5,000 to write a book on health care reform. I'll admit that I'm jealous of Gruber's gravy train. I dare say that I would bet that a decade from now my ideas on health care policy will stand in better repute than his.

Sounds like all you had to do was submit a capability statement 6 months ago and you would have been in the running. But then will your $5,000 book contain a 'proven micro-simulation model...'?

Daniel Kuehn writes:

I doubt all that money went to Gruber - that supports research staff and overhead too.

Blakeney writes:

I can answer the first question, at least: About $560,000 of his federal funding (from the NIH) was for a study of retirees' decision-making under the Medicare Part D program. That's $280k per year so far, and the project is scheduled to continue through 2012.

Boonton writes:

Seem to have lost a comment to the spam filter.

1. Saying the contract was 'no bid' is stretching the truth. The announcement specifically asks anyone who thinks they could produce the model could submit for consideration by June 2009.

2. As Blakeny notes, this is not "here's money, tell us what you think". These are requests for micro-economic models to make specific forecasts. If Kling's book has such a model then why didn't he submit for the project rather than accepting a $5K advance instead? It's because his book has no such model. Such models are built by people who specialize in very narrow niche's.

3. Missing from the carping is any objective look at the model produced. For example, did the model require buying proprietary market data? Did it require hiring people to enter data? I see nothing here to indicate that this was a 'sweatheart deal' or that Gruber got paid $300K for a dressed up Excel spreadsheet.

4. Kling shouldn't be surprised that Gruber was making money before Obama took office. If he checked his bio on wikipedia he would have learned that he was a consultant to Mitt Romney on his healthcare plan and serves(ed?) on Mass.'s 'linkage' board for their health reform.

Now I agree this should be disclosed and reported when Gruber's opinions are cited but I think far too much is being made of this. Gruber is an expert on a very specific type of health reform (Romney style public mandates-private insurance via exchanges). As a result he has the knowledge and skill to build very specific models that are relevant to that type of policy. No doubt if single payer had passed there would be people who make money selling models for that system.

The fact is when you are an expert in a niche field there is an inherent conflict of interest in that your primary market is going to be people either in that niche or considering entering that niche. Kling is a generalist. If, say, climate change was generating the buzz health care is he could probably have written a book on climate economics and scored the $5K advance. The advantage he has is that being a generalist gives him more customers to sell too and more opportunities to tailor himself to whatever is big in the market at the moment. His disadvantage is that he has more competition so he 'only' gets $5K for a book he writes on health reform.

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