Michael Lewis’ 2002 best-selling book Moneyball: The Art of Winning an Unfair Game documents the efforts of Oakland A’s general manager Billy Beane to reimagine the Major League Baseball front office. Rather than relying on outdated statistics, institutional biases and misleading perceptions about players, Beane’s hyper-focus on pure performance data allowed him to snap up undervalued players, and ultimately, compete successfully against richer teams in Major League Baseball.
Or so the story goes.
Since the book’s release, everyone and their second cousin has proposed their own industries take a Moneyball approach. None, however, have been less realistic than the pairing being peddled by Peter Orszag and John Bridgeland – formerly of the Obama and Bush administrations, respectively.
After being “flabbergasted by how blindly the federal government spends,” the bipartisan duo, with the backing Mike Bloomberg, is hyping a project called “Moneyball for Government.” By applying the Moneyball approach to government funding, Washington can, according to the group, not only constrain spending levels but allow politicians to come to bipartisan agreement more easily.
The Moneyball for Government folks offer a three-pronged strategy:
- Building evidence about the practices, policies, and programs that will achieve the most effective and efficient results, so that policymakers can make better decisions;
- Investing limited taxpayer dollars in programs that use evidence and data to demonstrate they work;
- Directing funds away from practices, policies, and programs that consistently fail to achieve measurable outcomes.
None of those aims are uniquely Moneyball, per se, they’re just some common sense budgeting ideas. But let’s go with it anyway and argue that it would never work.
1. Federal government doesn’t operate with “limited resources,” it operates with unlimited aims that its resources can never keep up with.
The government’s problem is that its debt-driven funding can fuel bad decisions. Its generational commitments remind me more of the 1980s New York Yankees than the 2002 Oakland A’s. (Actually, these days, the idea that spending itself, even spending on bogus alien invasions, will drive economic growth is a rather common belief on the Left. Right or wrong, it’s not exactly a Beane-ian notion.)
Beane’s innovations were necessitated by the pressures of surviving in a highly competitive environment under a hard cap. Federal government will never feel a similar pressure.
There’s a reason the Obama campaign had the ability to collect the names of millions of potential voters in every hamlet across the entire nation, unleash a vast-but-nimble, pioneering-but-practical, high-tech operation that puts all others to shame; but then, even after spending over $300 million on outside contractors over three years, it can’t imitate a project that dozens of companies have already produced and come up with a functional website.
It’s passé, I realize, to assert that the competitive nature of an operation may push people towards better outcomes. But, let’s put it this way: there’s a reason someone hires Harper Reed to run their tech operations rather than Kathleen Sebelius. And vice versa.
3. We can guess, but most often there’s not enough data to predict if a law will be effective …
Moneyball for Government “encourages governments at all levels to increase their use of evidence and data when investing limited taxpayer dollars.” We have no real statistical equivalent of the on-base percentage – Beane’s most sacred statistic – for government. We rarely pass policy based on evidence or hard data because we simply can’t. We rely heavily on the clairvoyant powers of the economists we happen to agree with, and the Congressional Budget Office, which, through no fault of its own, is compelled to offer forecasts that most everyone knows – through empirical data –will be complete rubbish.
4. … or to quantify if it is a “success” afterwards
And based on ‘Moneyball for Government’ calculations, less than $1 out of every $100 of government spending is backed by “even the most basic evidence that the money is being spent wisely.” This sounds about right. Success in government and in politics is predicated on the ability to avoid risk not stretch a dollar.
Then again, there are probably enormously varying interpretations of what “wise spending” means. The duo argue that government should dedicate at least one percent of its funding for program evaluation, so that Washington can start to identify what works and what doesn’t. Guess what? We already know what’s not working. Ethanol subsidies aren’t working. Education policy isn’t working. Medicaid isn’t working. Medicare isn’t working. Yet, somehow I’m guessing not everyone agrees.
5. Ideology and politics have nothing to do with efficiency
Isn’t it often argued that government has a moral obligation to pick up the slack when an unscrupulous profit-driven marketplace leaves people behind? As hard as Democrats make their (increasingly weak) case for the cost savings and affordability of the new health-care law, it’s the ethical case for insuring those who can’t afford it that’s the most compelling to their base. It is almost certain that a consumer of an affordable health-care plan that’s subsidized by others is not going to care one whit about the cost of the program. And those who want to appeal to those voters probably care even less.
For the Left, efficiency is not exactly a political winner. To them reform typically implies ”cuts.” And that is political unfeasible.
More libertarian-minded Americans have a different sort problem with efficiency, on occasion. Orszag and Bridgeland, for instance, argue that there are numerous data-driven studies that show out-of-control health-care costs can be contained. They tell us that according to the Institute of Medicine, more than half of treatments patients use today lack any evidence that they’re effective. To achieve better outcomes, the duo says, we should end imprudent and costly choices for consumers. “If we could stop ineffective treatments,” they wrote in the Atlantic recently, “and swap out expensive treatments for ones that are less expensive but just as effective, we would achieve better outcomes for patients and save money.”
Now, even if I believed that government could offer me more prudent choices than an open market (I don’t), if I want my Electro Physiological Feedback Xrroid or Cucumber Heel therapy isn’t that my business? Certainly, government’s mission might be to keep people safe, but is it also charged with forcing people to make more cost effective choices?
We can always use more economical and effective programs, of course, but generally speaking, all the incentives that makes politics politics also make the Moneyball approach antithetical to running government. “Moneyball for Government” is a vaguely enticing campaign that allows technocrats to pretend that inefficiency isn’t inherent in government itself. By doing so, it proposes to expand the power of the very institutions driving the inefficiency they’re complaining about.