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Why commissions can't solve the economy's problems

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Kostas Tsironis/AP

(Read caption) European Central Bank official Klaus Masuch, left, and European Commission official Matthias Mors, members of a debt inspection team, arrive for a meeting with Greek Finance Minister Evangelos Venizelos in Athens on Thursday, Sept 29 2011. The author argues that commissions can be problematic because they indicate that the government is unable to solve a problem on ts own.

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I had a quick negative reaction to Peter Orszag’s piece about ways to get around government dysfuntionality. But that was mostly from the misleading title—most of the piece argues for better automatic stabilizers—programs that kick in to help people when the economy hits a recession; fiscal triggers—rules that enforce deficit reduction (kind of the opposite of the stabilizers); and independent commissions.

I’m a huge stabilizer fan but it’s that last part about which I’m not nearly so sure. In fact, I’ll admit it: I don’t like commissions.

OK, I should dial that back a bit: Peter endorses procedures like the base-closing commissions of the 1980s and the Independent Payment Advisory Board created under health care reform. In both cases, they’re structured to wring inefficiencies out of the economy (to close underutilized military bases and reduced ineffective health care spending) that Congress would tend not to touch for political reasons.

But it’s an awfully slippery slope, no? I’m with the NYTs Catherine Rampell on this one:

“…expert panels can be useful. But…delegating policy authority to technocratic panels is more problematic when dealing with larger economic matters that involve social value judgments, like austerity measures and tax reform.

These policy areas may sound like dry academic subjects. But they are thoroughly infused with, and ultimately shaped by, moral beliefs.

There are, after all, infinite combinations of spending cuts and tax increases that can add up to the same bottom line. Deciding what should get trimmed and what taxes should be increased or decreased involves questions of favoritism, welfare, compassion, fairness and all sorts of other subjective judgments not answerable by the “laws” of economics.”

That’s one problem. The other is that when you constantly kick tough calls to commissions, you amplify cynicism about government. Too often in this town, when you want to show you care about something that you don’t really want to do anything about (or, less snarkily, you’re not ready to do anything about), you kick it to a commission.

I haven’t seen polls on this, but I’ll bet most people’s reaction to “so, we created a commission to study the issue and make binding recommendations, etc.” is “those guys just can’t do their jobs.”

The Bowles/Simpson deficit reduction commission is an interesting example. They came up with a lot of good ideas (and some bad ones too, like a revenue cap of 21%) that were ultimately adopted as part of the President’s new plan. But I’m really not sure what was gained by kicking this to the commission last year—on the one hand, you could make a case that this was a good way to get the ideas into the debate. On the other, it just muddled and clouded things up.

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Not sure which way I fall on that, but I think that latter.


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