Musings on the VA Scandal

The Veteran’s Administration debacle is such a scandal because it involves breaking a promise to those who risked their lives, health, bodily integrity, and sanity for the country, and it also underscores the many problems that come with government-run businesses. One such problem is that the government cannot act as an umpire when it is also a player in the game: while it can regulate other businesses in the marketplace and bring prosecutions or civil charges as needed, it is fundamentally incapable of policing itself.  Rather than have the government as a neutral third party to ensure that people and companies do not commit rampant fraud, we have a government that is structurally accountable to no one, and victims of its malfeasance lack any redress. While the IRS and Benghazi scandals are dismissed as ginned-up ideological issues, it is hard to do the same for the V.A. when the underlying issues (i.e. total lack of accountability for a government agency or actors) are involved.

Just as the government holds corporations accountable, so do markets. An inefficient corporation that does not provide quality goods or services will find that its customers go elsewhere. While it may struggle to pinpoint the source of the problem (e.g. bad customer service, faulty reporting by employees, or a poor product), it will either find and redress the problem or go out of business.

While I agree with Megan McArdle that the scandal is bigger than any one President, I disagree with her that such an idea exempts Obama from criticism.  In 2008, Obama was more than happy to play the Wonderball game: the one holding the ball when the timer runs out (in 2008, it was on the housing and stock markets) is the loser. If that was his standard in 2008, it should be the standard to which he is held in 2014.

In a larger sense, Obama has done things that promote the evils of the V.A. scandal: on a structural level, he has presided over a massive growth in the federal government, and his signature accomplishment is to bring the V.A. system to all Americans. It’s not that his actions are neutral on this and momentum carried the malfeasance through his term; his entire Presidency has been aimed at making these scandals happen to all of us.  Without government or market oversight, this is our future under ObamaCare – a future that we warned the nation about, but for which we were viciously derided by the current occupant of the White House.

The prescriptions for avoiding such scandals in government agencies are simple: reduce the size of government, eliminate sovereign immunity, outsource as much as possible to the private sector and let competition clear things up, and ensure that at least some reporting is done by the people, not the bureaucrats.



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Filed under Economics, Medicare/Medicaid, ObamaCare

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