Many years ago I was in a debate with some other (then-young) economists over the concept of rational expectations. The discussion was about whether market participants would have enough information to make expectations about inflation, for example, that reflected all the relevant information available. The answer, I argued, was that it wasn't necessary for everyone to have the same information. James Tobin's disparagement of "yeoman farmer econometricians" (a model of firms used, for example, in Ball and Mankiw [1994]) was that the average person didn't have the information or analytical skill to enforce rational expectations over the price of corn. But what matters is not the average but the marginal farmer. As I had understood Hayek then and now, a world with dispersed knowledge requires only that the farmer with the relevant information has the capacity to act in the marketplace; her actions influence the price, which communicates that knowledge to the others in the market without that information.

I have always thought this applies much more broadly than the price of corn. Thus I think the argument we see today about plain language versus legislative language in the health care debate ignores the very real fact that what rules us is legislation and we only need the marginal analyst to tell us what really matters.

Sen. Thomas Carper (D.-Del.), a member of the Senate Finance Committee, told CNSNews.com that he does not �expect� to read the actual legislative language of the committee�s health care bill because it is �confusing� and that anyone who claims they are going to read it and understand it is fooling people.

�I don�t expect to actually read the legislative language because reading the legislative language is among the more confusing things I�ve ever read in my life,� Carper told CNSNews.com.

Carper described the type of language the actual text of the bill would finally be drafted in as "arcane," "confusing," "hard stuff to understand," and "incomprehensible." He likened it to the "gibberish" used in credit card disclosure forms.

If it's gibberish in the credit card disclosure, why does Congress insist on them? We know why, because the newspapers have consumer affairs reporters who find experts that help us understand that gibberish. This takes a little time. So too would the legislative language. When Congress says it cannot provide time to us because we wouldn't understand it anyway, this misses the point. I don't want to see it myself -- Carper and the other Democrats are probably right that I can't get through it in three days. But I want someone who is expert in reading health care legislation who is not a member of the majority to read it. Such people exist at think tanks up and down Washington, from a Keith Hennessey to a Bob Moffitt. Their input is vital to those of us who believe in checks and balances, and I believe it to be antithetical to good policy for either party to jam through legislation as consequential as this without time for review. At the margin, it's the analysis of the experts from the other side that provides the most information.

Labels: economics, health care, legislature