by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Gene Epstein of Barron’s explains in his latest “Economic Beat” column why economists who touted the potential benefits of the Affordable Care Act ought to have recanted their support once further evidence came to light.
In January 2011, more than 300 economists signed a letter to Congress endorsing the Affordable Care Act and specifically affirming that ACA would have the net effect of creating jobs. The letter may have emboldened President Obama to declare last September that no “serious economist” could doubt Obamacare’s positive effect on “growth and jobs.”
Economists have since pointed out ACA’s huge disincentive effect on job creation, based on data and insight the letter overlooked. The nonpartisan Congressional Budget Office estimated early this year that the equivalent of more than two million full-time jobs could be lost to Obamacare. University of Chicago economics professor Casey Mulligan believes the CBO projections would be more accurate if doubled, as he explains in his recent e-book Side Effects: The Economic Consequences of the Health Reform. …
In this annual Yom Kippur column on economic sins of commission and omission that need atoning for, the 300-plus economists who signed that letter to Congress rate high among this year’s sinners. Theirs is the sin of omission: failing to send a follow-up letter to Congress that substantially modifies the “strong conclusion” they claim to have reached in the January 2011 letter, given subsequent findings by the CBO and economist Mulligan, which directly contradict that strong conclusion.
Perhaps some of these economists have since studied this issue and reached different conclusions from those of Mulligan and the CBO. But then, with the exception of Harvard economist David Cutler, who tells me that he still stands by the letter he signed after reviewing Mulligan’s work, none of have published such findings. While Mulligan has not done a systematic survey, he did learn from a few that when they signed the letter, they were unaware of many of Obamacare’s disincentive effects on work. One signatory Mulligan spoke with admitted realizing that the ACA would have damaging effects on the economy, but signed anyway, since the health-care law was viewed as worthy on other grounds.
All these economic sinners may be failing to write a follow-up letter because they believe in sacrificing truthful economics to the higher good of supporting Obamacare. But they are still guilty of an economic sin. And in Mulligan’s view, “Any economist engaged in bad economics for a good cause is practicing amateur political science.”