Economist Milton Friedman said the promotion of bad policy requires two types of advocates. "Do-gooders," he said, act in good faith but out of ignorance in promoting counterproductive policies. The second type are the "special interest" rent-seekers, those who stand to personally profit from the scheme.
For economist Jonathan Gruber, the primary architect and intellectual godfather of both Romneycare and Obamacare, we need a new category. Gruber is a two-fer -- both a do-gooder and a rent-seeker. Gruber, so far, has pocketed $6 million advising the federal and state governments on the very law he helped design.
Massachusetts retained MIT economist Gruber to help design its signature health care measure. President Obama later employed Gruber to do the same thing for Obamacare, which Gruber called a deficit-reducing measure that bends the cost curve down. But it turns out when Gruber lets his hair down, he speaks very differently about the nature and goals of Obamacare. Recently, some rather embarrassing videotapes of Gruber comments have surfaced.
Gruber on cost controls: "Cost control turns out to be very, very hard to do. Probably the single biggest frustration I have with critics of this law are people who say it didn't go far enough. ... We do not solve our cost problem in health care in the U.S. with this legislation. We simply do not, OK? But you know what? That's because it was impossible to do so."
Gruber, in 2012, explaining how Massachusetts pulled off Romneycare: "The dirty secret in Massachusetts is the feds paid for our bill, OK? In Massachusetts we had a very powerful senator you may know named Ted Kennedy. ... Ted Kennedy and smart people in Massachusetts had basically figured out a way to sort of rip off the feds for about 400 million dollars a year."
Gruber, in 2012, admitting that Obamacare was intentionally designed so that only enrollees in state-run exchanges -- not the one run by the feds -- receive subsides and tax credits (a matter the Supreme Court will soon decide): "I think what's important to remember politically about this, is if you're a state and you don't set up an exchange, that means your citizens don't get their tax credits."
Gruber, in 2013, on voter stupidity: "Lack of transparency is a huge political advantage. And basically, you know, call it the stupidity of the American voter or whatever. ... Look, I wish ... that we could make it all transparent, but I'd rather have this law than not. ... Yeah, there are things I wish I could change, but I'd rather have this law than not."
Gruber, in 2012, on Americans' lack of understanding economics: "We just tax the insurance companies. They pass on higher prices that offsets the tax break we get -- it ends up being the same thing. It's a very clever, you know, basic exploitation of the lack of economic understanding of the American voter."
Gruber, in 2013, on Democrats' efforts to disguise a direct tax on people who purchase so-called Cadillac plans: "Then another Massachusetts hero, John Kerry ... came up with a great substitute idea. They said ... 'What if we instead just levied a 40 percent tax on the insurance companies that sell these terrible expensive Cadillac plans?' We said, 'Well, that's pretty much the same thing. But why does it matter?' 'You'll see.' And we proposed it, and that passed because the American voters are too stupid to understand the difference."
Former House Speaker Nancy Pelosi, D-Calif., in 2009, extolled his credentials: "I don't know if you have seen Jonathan Gruber of MIT's analysis of what the comparison is to the status quo versus what will happen in our bill for those who seek insurance within the exchange."
Then-Sen. Obama, in 2006, bragged about how he stole ideas from Jon Gruber: "You have already drawn some of the brightest minds from academia and policy circles, many of them I've stolen ideas from liberally. People ranging from Robert Gordon to ... Jon Gruber." In 2009, Senate Majority Leader Harry Reid, D-Nev., called Gruber "one of the most respected economists in the world."
Today neither Pelosi nor Obama knows the economist from a fence post. Asked recently about Gruber, Pelosi said, "I don't know who he is." When asked about him, Obama shrugged and reduced Gruber to some guy who "was never on our staff": "The fact that an adviser who was never on our staff expressed an opinion that I completely disagree with in terms of the voters is not a reflection on the actual process that was run." According to Fox News, Gruber visited the Obama White House at least 19 times.
In deciding this key issue about state exchanges, the Supreme Court may throw the Gruber's own words right back at him -- and rule Obama's unilateral reinterpretation unlawful. Then even Pelosi will know Gruber's name.