Meet the Person Who Wants to Run Your Life -- And Obama Wants to Help Her

I am a bit late on this, but like most libertarians I was horrified by this article in the Mail Online about Obama Administration efforts to nudge us all into "good" behavior.  This is the person, Maya Shankar, who wants to substitute her decision-making priorities for your own

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If the notion -- that a 20-something person who has apparently never held a job in the productive economy is  telling you she knows better what is good for you -- is not absurd on its face, here are a few other reasons to distrust this plan.

  • Proponents first, second, and third argument for doing this kind of thing is that it is all based on "science".  But a lot of the so-called science is total crap.  Medical literature is filled with false panics that are eventually retracted.  And most social science findings are frankly garbage.  If you have some behavior you want to nudge, and you give a university a nice grant, I can guarantee you that you can get a study supporting whatever behavior you want to foster or curtail.  Just look at the number of public universities in corn-growing states that manage to find justifications for ethanol subsidies.  Recycling is a great example, mentioned several times in the article.  Research supports the sensibility of recycling aluminum and steel, but says that recycling glass and plastic and paper are either worthless or cost more in resources than they save.  But nudgers never-the-less push for recycling of all this stuff.  Nudging quickly starts looking more like religion than science.
  • The 300 million people in this country have 300 million different sets of priorities and personal circumstances.  It is the worst hubris to think that one can make one decision that is correct for everyone.  Name any supposedly short-sighted behavior -- say, not getting health insurance when one is young -- and I can name numerous circumstances where this is a perfectly valid choice and risk to take.
  • The justification for this effort is social science research about how people manage decisions that involve short-term and long-term consequences

Some behavioral scientists believe they can improve people's self-control by understanding the relationship between short term memory, intelligence and delay discounting.

This has mostly been used to counter compulsive gambling and substance abuse, but Shankar's entry into government science circles may indicate that health insurance objectors and lapsed recyclers could soon fall into a similar category

I am sure there is a grain of truth in this -- all of us likely have examples of where we made a decision to avoid short term pain that we regretted.  But it is hilarious to think that government officials will somehow do better.  As I have written before, the discount rate on pain applied by most legislators is infinite.  They will do any crazy ridiculous thing that has horrible implications five or ten years from now if they can just get through today.  Why else do government bodies run massive sustained deficits and give away unsustainable pension and retirement packages except that they take no consideration of future consequences.  And it is these people Maya wants to put in charge of teaching me about delay discounting?

  • It probably goes without saying, but nudging quickly becomes politicized.  Is nudging 20-something health men to buy health insurance really in their best interests, or does it help keep an important Obama program from failing?

Postscript:  Here is a great example of just how poorly the government manages delay discounting.  In these cases, municipalities are saddling taxpayers with almost certainly bankrupting future debt to avoid paying any short-term costs.

Texas school districts have made use of another controversial financing technique: capital appreciation bonds. Used to finance construction, these bonds defer interest payments, often for decades. The extension saves the borrower from spending on repayment right now, but it burdens a future generation with significantly higher costs. Some capital appreciation bonds wind up costing a municipality ten times what it originally borrowed. From 2007 through 2011 alone, research by the Texas legislature shows, the state’s municipalities and school districts issued 700 of these bonds, raising $2.3 billion—but with a price tag of $23 billion in future interest payments. To build new schools, one fast-growing school district, Leander, has accumulated $773 million in outstanding debt through capital appreciation bonds.

Capital appreciation bonds have also ignited controversy in California, where school districts facing stagnant tax revenues and higher costs have used them to borrow money without any immediate budget impact. One school district in San Diego County, Poway Unified, won voter approval to borrow $100 million by promising that the move wouldn’t raise local taxes. To live up to that promise, Poway used bonds that postponed interest payments for 20 years. But future Poway residents will be paying off the debt—nearly $1 billion, all told—until 2051. After revelations that a handful of other districts were also using capital appreciation bonds, the California legislature outlawed them earlier this year. Other states, including Texas, are considering similar bans.

Or here is another example, of New York (the state that is home to the mayor who tries to nudge his residents on everything from soft drinks to salt)  using trickery to consume 25 years of revenue in one year.

Other New York deals engineered without voter say-so include a $2.7 billion bond offering in 2003, backed by 25 years’ worth of revenues from the state’s gigantic settlement with tobacco companies. To circumvent borrowing limits, the state created an independent corporation to issue the bonds and then used the money from the bond sale to close a budget deficit—instantly consuming most of the tobacco settlement, which now had to be used to pay off the debt.

By the way, I recommend the whole linked article.  It is a pretty broad survey of how state and local governments are building up so much debt, both on and off the books, and how politicians bend every law just to be able to spend a few more dollars today.

  • LTMG

    Except for my wife, anybody who tries to "nudge" me is going to get a "shove" in return. Speaking of the sequester, why is Shankar still drawing a Federal salary?

  • Another_Brian

    There is no science to nudging. All you're doing is giving people bad choices, knowing they will pick the one that hurts them the least. Will you hop into the cancer scanner, or will you be felt up by a TSA goon? Will you buy insurance you don't want, or will you pay to cover the cost of everyone else that couldn't afford their own insurance? Our government has already been nudging people for years: Do what we say or go to jail. The only thing new about this is the illusion of choice. The ultimate goal is making people do what you want them to do by limiting their options and hurting them less with the choice you want them to make. This isn't science.

  • http://devilish-details.blogspot.com/ mesaeconoguy

    This woman is frightening.

    Even more frightening are people who think she’s brilliant, and that her advice and ideas should be followed.

    She may have extreme musical talent, but that talent does not necessarily translate to other areas. Even beyond that, I guarantee she has no understanding of economics, indifference curves, and public choice theory.

    In short, she is ignorant. It would take me about 10 minutes with her to destroy her worldview.

    Using government – the worst economic actor and allocator – to improve efficiency is akin to using a sledgehammer for brain surgery.

    People like this woman need to ridiculed, not lionized.

  • chiliferealty

    I grew up in a very rural area, but for years have lived in very urban downtown locations (which I love) - so that's my experience. Despite my love of the urban, there seems to me to be something about urban society that encourages politicians and bureaucrats to view the rest of us like pawns or cogs

  • HenryBowman419

    One of those responsible for promoting government "nudging" is the execrable Cass Sunstein, who is married to the even-more-loathsome Samantha Power, who is nearly always advocating that the U.S. get into yet another war. These people are seriously dangerous to humanity.

  • aczarnowski

    A "late 20s senior advisor?" I'd say that's a hell of an oxymoron but, apparently, words have no meaning anymore.

    We're screwed.

  • Joshua Vanderberg

    So great, they are going to "nudge" us to save money for retirement, while the Federal Reserve pulls out all of the stops to try to get us to borrow money.

  • Minimum Wage

    How many hard earned taxpayer dollars are we paying this genius?

  • http://EasyOpinions.blogspot.com/ Andrew_M_Garland

    Legislators at all levels are sending a signal, just as if top management were selling their company stock short at deep discounts. They expect the company (the viability of government) to soon fall greatly in value.

    Legislators look around at their local and national colleagues. They know the books don't balance. They know that there is no tax rate which can pay off their past promises. They know that any individual politician's restraint will be laughed at by the vast majority of their fellows.

    They know the ship is going down, so they desperately apply any means to delay the sinking for a year. They trade 25 years of taxes that won't be collected, against a one year delay of bankruptcy. They have another year to build their own lifeboat and collect from crony business dealings.

    They will resign to a quiet, well supported, private life. People have been willing to lend the government money and pay now for contracts which will supposedly pay back in the future. These people will receive the usual reward for trusting politicians (crooks).

    EasyOpinions

  • MingoV

    The topic of "nudging" has been in the news often in the past few years. Nudging always takes the epidemiological approach: group outcomes will improve by using blanket recommendations that benefit average persons but may harm others. A good example of this problem is nationally recommended dietary salt levels. Some people have or are likely to get hypertension that is worsened by high salt intake. Therefore, the government recommended (nudged) low sodium diets, required food producers to show sodium content on labels (shove), and provided funds for further study (bribe). The problem is that a low sodium diet is bad for many people: those who sweat a lot (athletes, manual laborers, people in hot climes, etc), those taking lithium, those with certain kidney diseases, and those with calcium-sensitive hypertension. But, the government nudged and shoved everyone to low salt despite known bad outcomes for many people.

  • doug katz

    "Meet the Person Who Wants to RUIN Your Life" is a far more accurate title for your piece.

  • kidmugsy

    Syria is about to be nudged too, apparently.

  • Joe_Da

    A few years ago, our local school district was doing a lot of construction adding on to the size of our four local high schools even though the student population was not increasing.
    I ran into the school board president at a social event and asked her why the school district was spending so much taxpayer money.
    The Response -

    "It was Not taxpayer money - it was bond money"

    That sums up the attitude.

  • Scott

    Excellent article.

  • Brandon Berg

    I've never really been able to get behind the idea that it doesn't make sense for young, healthy people to buy health insurance. Yes, obviously the risk of getting sick is low, but that should be priced into the premium, and anyone can develop an expensive disease at any age. When insurance is priced properly, there's no good financial reason for anyone not to buy it, unless money doesn't have diminishing marginal utility for that person.

    The government shouldn't be able to force people to buy insurance (though neither should it bail them out when they get sick). But that doesn't mean we have to ignore the fact that buying insurance is almost always the responsible thing to do.

  • Anonymous Mike

    All excellent comments on the post. I think this hiring of a twenty-something senior adviser for nudging has two unique points:

    1) Leave aside Cass Sunstein or the whole idea of nudging, what sort of political culture thinks that it's okay to place someone with so little life experience in a government position with the explicit purpose of nudging their private behavior. Keep in mind she just finished her post-doc so I have the strong suspicion she has spent her entire adult life as a student in higher education

    2) You can see a direct linkage between the description of public policy nudging and the rationale for bombing Syria, in fact listening to Washington insider David Brooks last night describing "incentives" you could probably substitute the nouns "high fructose corn syrup" for "Syria" get a verbatim statement.

    In other words we have 2 abnormalities shown here. The first is the notion that highly complex societies, let alone individuals endowed by their creator with life, liberty, and the pursuit of happiness, can be managed by people with the right type of training (let alone whether any such activity should be performed at all) Second you see have the toxin still in the strategic calculus from Viet Nam where the military can be used to nudge proper behavior from the most despicable people.

    Quite simply Ms. Shankar is the poster child of inner Beltway thinking

  • marque2

    The government nudged us on salt in the 1950's cutting our average use by 2/3rds. But that is not enough and they are hounding us still to get our salt use to truly unhealthfully low levels.

    Once it starts it never stops.

  • Canvasback

    Why does it never occur to them to practice on government behaviors
    first? To modify their own excesses and compulsions? If it works there,
    maybe we'll give it a shot.

  • irandom419

    Just because you are an expert at something, in this case plucking strings, doesn't make you any more knowledgeable in anything else. Much like people quoting Einstein on warfare, instead of physics. Here is another nanny from a city that is struggling to pay its bills.

    http://www.linkedin.com/pub/stephanie-scafa/18/15a/998

    http://klcc.org/Feature.asp?FeatureID=4476

  • Scott

    Student debt is largely identical to capital appreciation bonds. As interest accumulates, the borrower can defer the payments, while the interest is capitalized, the total amount of the loan increase, and the borrower winds up paying interest on the unpaid interest.
    Inflation, of course, can and most likely provide reprieve. Consider that when a central power manipulates the cost of capital, the temptation to employ such capital access strategies on behalf of municipalities is so irresitabile that it may be inevitable.

  • obloodyhell

    }}} To circumvent borrowing limits, the state created an independent corporation to issue the bonds and then used the money from the bond sale to close a budget deficit—instantly consuming most of the tobacco settlement, which now had to be used to pay off the debt.

    This is hardly the first time they've pulled this crap. They did the same thing back in the early 90s with Attica prison, "selling" it to th state bonding agency, then renting it back for its designed use. Last I heard, 20 years after, they still hadn't paid a dime on the principle.

    This is why there's no point in a national Balanced Budget Amendment, unless and until you also pass an amendment which requires the government to use Generally Accepted Accounting Practices -- GAAP -- instead of the funny-money accounting schemes they use which would get ANY OTHER ORGANIZATION's operating officers thrown in jail.

  • obloodyhell

    No, it just means we're going to likely have to resort to violence to fix things. The question is mostly "when?"

  • marque2

    She does look cite though - there is something healthy she could suggest I would be willing to try :P

  • Not Suure

    Nothing more than the predictable result of throwing out the "limited and defined" role of government for one where Really Smart People* decide how the rest of us should live. How else would you expect things to play out?
    Move along- nothing to see here.
    *They really think they are.

  • Harry

    What is disturbing, Coyote, is that BHO gets her advice (astrological) before deciding what to do before lobbing a dozen cruise missiles somewhere.

    BHO, the half-assed president.

  • obloodyhell

    The Obama admin is continuing in its process of hiring the blatantly corrupt, the flagrantly inept, and/or the relentlessly incompetent to every position it can possibly apply its executive power to.

    She looks to me like the same genius who was assigned to the selection of presidential gifts to the PM and Queen of England some years ago. She's certainly in the same mold. Probably the same mildew, too.

  • MNHawk

    I'm sure a Doctor of Philosophy is fully qualified to lead us peons into a lower standard of living, while the Mooch's (pun slightly intended) continue to fully exploit the 5 star lifestyle.

  • marque2

    Teachers in general don't understand bonds. In 8th grade my history teacher told us - the school board was lying, they could pay us higher salaries by issuing bonds.

    They are oblivious to economics.

  • Borchardt

    Sadly, we just don't have the balls. Political correctness, pussification and perfunctoriness.

  • obloodyhell

    Oh, we have the balls, it's just not bad enough yet that people will cross that line.
    It's like how you boil a frog, except at some point, the issue does lead to leaping.

  • obloodyhell

    I think this more than amply defines her ilk...

    http://img59.imageshack.us/img59/7451/sl9z.png

  • obloodyhell

    Speak for yourself. I think he's a complete ass.

  • markm

    Brandon: If the insurance was actually insurance (for catastrophically expensive illnesses, rather than paying a third party to pay your bills for routine treatments), and if it was truly going to be priced for the risk, it wouldn't be an issue. But the actuality is that healthy young adults are going to pay many times the cost of properly priced insurance for their risk level, in order to subsidize treatment for the elderly and the chronically ill. The greater part of the beneficiaries of this wealth transfer are older people with greater income and wealth than young adults at the start of their career.

  • Phelony Jones

    No one can compete for self-righteousness more so than the "Progressive". Obama's sole qualification to run other people's lives is that he won an election. Other than that, the man has done nothing worthy of note. The Nobel Commission should be ashamed of their political stupidity. I think the poor old Preezy Prez might actually believe he deserved it as he prepares to kill even more brown people, more brown kids form Pakistan to Yemen. Is that how he wishes to run the lives of those who might not listen? Drones over America, the NDAA say it might be so.

  • Torn between

    Relentlessly incompetent. Nice turn of phrase! I'm sure she thinks she is brilliant, as do her cheerleaders who will profit handsomely if anyone puts her nonsense into action. I'm always surprised (well, I'd like to be surprised) that politicians cannot find better qualified, in our opinion, people to work in high profile positions. I figure the eminently qualified are much like myself; would never, ever work for a politician, or want to be beholden to one for my livelihood.

  • sux2bme

    Disheartening, but not surprising. I have predicted that the government would, in time, use the hapless indebted slaves as conscripts to do their bidding in staffing positions that would not otherwise be filled due to the nastiness inflicted on their fellow Americans in performing their "duties." A refusal to perform means that your non-dis-chargeable through bankruptcy loan is back due in full with penalties. This "nudging" mindset along with the following are indications it is coming to pass:

    http://www.breitbart.com/Big-Government/2013/08/31/Public-Service-Workers-Exempt-From-Paying-Off-Student-Loans

    I weep for our progeny ...

  • Jesse

    She's cute----too bad her chosen path means she'll likely grow up into a tax-fattened, irritable beauracrat