David R. Henderson  

Jonathan Gruber's Economics

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"Why, Sir, if the fellow does not think as he speaks, he is lying; and I see not what honour he can propose to himself from having the character of a lyar. But if he does really think that there is no distinction between virtue and vice, why, Sir, when he leaves our houses let us count our spoons."
--Dr. Sam Johnson

Tyler Cowen, co-bloggers Scott Sumner and Bryan Caplan, and David Friedman have all weighed in on Jonathan Gruber's morality or lack of same. I have little to add to that discussion beyond the fact that I agree with Bryan and David.

Here's Gruber, although I'm guessing that the vast majority of you have already watched it.

But I do want to take up Tyler Cowen's challenge that we focus on Jonathan Gruber's economics. That is what I have always done in discussing Gruber in "Jonathan Gruber and Me," "Jonathan Gruber's Analysis of 'Obamacare'", and "Last Night's Debate on Health Care."

His recent admission, though, confirms a suspicion I've had about his honesty. How could someone whom the government paid almost $400,000 to estimate the effects of Obamacare not take account of the fact that the ban on charging for pre-existing conditions would affect insurance rates? It seems clear now. He did understand that that ban would drive insurance rates up, as he admitted later. He just didn't want to admit it before the bill passed.

How could an economist, who's on the faculty of MIT, no less, change his mind about whether Obamacare would "bend the cost curve?" One obvious answer is that he got new information. That would be the charitable interpretation that one would give if one trusted him. But a far more likely answer is that he didn't change his mind and that when he first claimed cost savings, he, put simply, lied.


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COMMENTS (6 to date)
Cassander writes:

Gruber lends credence to the notion that economists are little more than court astrologers. Sure, they can predict eclipses now and then, but when it comes to more subtle phenomena, they can gun up results to please the customer. Should those results fail they can always fall back on obscure theory.

David R. Henderson writes:

@Cassander,
My view is that Gruber WAS the customer.

Bob Murphy writes:

When the Avik Roy story first came out about Gruber switching his views, I had the same problem that I'll raise now: Yes, it is obviously crazy for an economist to model the impact of ACA without incorporating the fact that it forces insurers to accept customers with pre-existing conditions.

However, if I'm reading the Roy piece correctly, even when Gruber was advising individual states and telling them to expect premium hikes, his model still excluded that complication.

So I've never felt comfortable saying definitively, "Gruber before the ACA passed modeled it without pre-existing conditions, then after it passed gave better guidance to individual states with a more realistic assumption." I'm not sure that's what happened. Does anybody else know?

Glen Whitman writes:

"But a far more likely answer is that he didn't change his mind and that when he first claimed cost savings, he, put simply, lied."

Gruber pretty much admits exactly that in the video linked below. He says that the public doesn't care about covering the uninsured, only about reducing costs -- so they had to claim the law was about cost control even if it really wasn't intended to do that at all. Go to the 3:50 mark.

http://www.washingtonexaminer.com/three-strikes-another-video-shows-obamacare-architect-talking-about-the-exploitation-of-american-voters/article/2556079

Tim Kane writes:

Well said, David. Our friends are confusing academic honesty with scholars being publicly dishonest then confessing it later. Gruber's deception was intentional, and is so different from Larry Summers that I am astounded by the comparison. Kudos.

Hazel Meade writes:

Gruber lends credence to the notion that economists are little more than court astrologers. Sure, they can predict eclipses now and then, but when it comes to more subtle phenomena, they can gun up results to please the customer. Should those results fail they can always fall back on obscure theory.

Well put. And this is hardly the only example in recent history of economists playing court astrologer to the Obama administration.
Think stimulus package.

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