DRI-275 for week of 9-28-14: Touchdown-Celebration Prayer: Time for Separation of Church and Red Zone?

An Access Advertising EconBrief:

Touchdown-Celebration Prayer: Time for Separation of Church and Red Zone?

Fans of the National Football League (NFL) have become inured to the spectacle of celebrations conducted by players who score a touchdown. These actions have assumed a variety of forms, ranging from ordinary excesses of joy and enthusiasm like jumping up and down to esoteric rituals like spiking or dunking the football over the goalpost. Perhaps the most common form is some sort of gyration or celebratory dance. The practice originated among certain players whose fame depended at least as much on their self-promotional zeal as upon their athletic prowess – Deion Sanders, formerly of the Dallas Cowboys, comes particularly to mind.

Older readers will appreciate the striking contrast between this modern attitude and that exhibited by legendary stars of yesteryear like Jim Brown of the Cleveland Browns and Johnny Unitas of the Baltimore Colts. Brown, who may have been the greatest running back of all time, was slow to assume his stance prior to the center snap of the football and even slower to rise after being tackled when running the ball. His demeanor was impassive. He conserved his energy and saved his exertions for the time between the snap and the referee’s whistle signaling the end of a play. Did this account for the fact that his average-yards-gained per carry was the highest of any Hall of Fame runner?

Unitas was similarly deadpan on the field. As quarterback for the Colts, he terrified opponents and awed teammates with the knack for leading his team from behind in the closing seconds of a game. But fans could never have guessed by looking at him whether he had just been sacked for a loss or thrown the winning touchdown pass as time expired. If any of his teammates had ever done anything as gauche as celebrating a long run or spectacular catch, they would have been frozen solid by the icy stare known throughout the NFL as the “Unitas look.”

In the so-called “greatest football game ever played” – the 1958 NFL championship game between the Baltimore Colts and the New York Giants – Unitas provided the prelude to victory by completing a daring sideline pass to tight end Jim Mutcheller in the Giants’ one-yard line in sudden-death overtime. At the post-game press conference, a reporter ventured to question Unitas’s play-calling decision: “That was a pretty dangerous pass, wasn’t it? What if it had been intercepted?” The reporter was the first televised victim of “the look.” “When you know what you’re doing,” Unitas replied without needing to raise his voice, “they’re not intercepted.”

Nowadays many players feel obligated to supplement the audio and visual record of play supplied by television by advertising what has just happened. The newest wrinkle on this style of irrepressible self-expression is praying in the end zone after scoring a touchdown.

The Abdullah Case and Ensuing Fallout

In the fourth quarter of a game between the Kansas City Chief and New England Patriots at Arrowhead Stadium on September 29, 2014, New England quarterback Tom Brady completed a pass to Kansas City safety Husein Abdullah. Abdullah traversed the 39 yards to the New England end zone, where he dropped to his knees in prayer.

End-zone touchdown celebrations are now so commonplace that rules have been drafted to cover them. One of those rules forbids celebrating while “on the ground.” The referees invoked this rule, penalizing the Chiefs 15 yards on the ensuing kickoff for “unsportsmanlike conduct.”

That did not end the matter, though. Two days later, the NFL’s league office announced that the official decision had been in error. Why? It seems that “there are exceptions made for religious expressions,” according to NFL vice-president for football communications Michael Signora. But the referees may have been confused by Abdullah’s body language; he slid on his knees rather than simply kneeling down. Probably sensing an opportune moment, the well-known organization CAIR (Council on American-Islamic Relations) lodged an objection to the original ruling. According to an article in the Kansas City Star (“NFL Admitting Error on Abdullah Flag,” October 1, 2014, by Tod Palmer), “Abdullah is a devout Muslim.” The CAIR spokesman urged the league office to “clarify the policy” so as to “avoid the appearance of a double standard” for Muslims and non-Muslims.

The sensitivities of Americans have been abraded by over a half-century of controversy over the separation of church and state. Now the debate over public religious observance has invaded the football field or, more specifically, the end zone. Will theologians have to be on call for replay decisions by officials? Should the NFL nail a thesis on the separation of church and red zone to the main gate of its stadiums? Is all this really necessary?

The Economics of Player Celebration 

Does associating end-zone prayer with celebration seem odd? Abdullah himself referred to his action as “prostrat[ing] myself to God.” Still, the religious faithful at their devotions are often called “celebrants.” In any case, the attributes of prayer and those of celebration are virtually identical in this particular context, which allows us to apply economic principles to both types of action. Both interrupt the normal flow of play and divert attention away from the game and to the celebrant. A case exists that each kind of action might either please or annoy a football fan.

One interesting thing about this example is the diametric tacks taken by the economist and the non-economist. The non-economist feels compelled to ascertain whether prayer itself is “good” or “bad.” A particularly discriminating non-economist might put that to one side and focus on whether or not prayer is a good thing in this particular context; e.g., on a football field with hundreds of millions of spectators. The economist may or may not feel qualified to supply answers to those questions, but does not care about the answers because they needn’t be answered by any particular individual. Markets exist to answer questions that individuals cannot or should not answer. 

Professional football is an intangible product supplied by the National Football League and its member franchises (teams) to consumers (fans). That product consists primarily, but not solely, of competitive athletic performance. A rhetorical question posed previously in this space asked: If O. J. Simpson were still in full flower of his athletic skills, would he be working as a running back in the NFL, all other things equal? The obvious answer is no, because football fans do not want to watch murderers play professional football, no matter how talented they may be.

The advent of touchdown celebration allows us to add another qualifying example to our definition of the pro-football product. To the degree that some fans enjoy and even encourage end-zone celebrations, it is clear that they derive satisfaction (or utility, in economic jargon) from this practice. That means that the pro-football product is defined as “competitive athletic performance plus entertainment.”

This is not merely an ad hoc formulation cobbled together by an economist for a column. In the same edition of the same Sports section of the Kansas City Star as the story of the NFL’s recantation of the penalty on Abdullah, the adjacent story is a profile of Chiefs’ cornerback Sean Smith. Study Smith’s comments about his flamboyant style of play and the attitude of Chiefs’ coaches to the on-field exhibition of his personality.

“‘I think (the Miami game) gave the coaches a chance to see that when I’m able to go out there and just be myself and let my personality hang out there, not only do I play well, but people feed off my energy,’ Smith said.” [Quoting reporter Terez A. Paylor] “‘Smith, like his other more animated teammates, appreciates Coach Andy Reid’s philosophy. He encourages his players to play with passion and let their personalities shine through on the field, and Smith has embraced that approach this season.'”[Back to Smith again] “‘Coach emphasizes to let your personality show, go out there and cut loose, and be yourself and have fun…That’s something I definitely took personal. I’ve been a very enthusiastic guy. I like going out there and having fun and putting a smile on people’s faces.'”

This constitutes an implicit endorsement by a player and head coach, as cited by a beat reporter, of the economic model developed above.

Does this mean that end-zone celebrations are a good thing? Does it mean that players have a right to indulge them? Does it justify the NFL’s policy? Or condemn it? The answers to these questions are various forms of “no.” End-zone celebrations are one more input into the productive process, no better or worse a priori than any other. They may or may not be appropriate. Players have no “right” to indulge in them because players do not control the production process – the team does. The NFL is the franchisor; it has the right to control end-zone celebrations only if they affect its ability to provide the right competitive environment for the teams and not when only team profitability is at stake.

A last key question may be the one most frequently asked when this issue arises in public controversy. What about the player’s “right” of free religious observance?

Why Freedom of Religion Does Not Guarantee the Right to Celebrate in the End Zone 

Freedom is defined as the absence of external constraint. It does not guarantee the power to achieve one’s aims over opposition; in particular, it does not confer rights. A right can be enjoyed only when it does not abrogate the exercise of somebody else’s right. A contract is a voluntary agreement that imposes legal duties on both (all) parties to it.

These definitions lay the groundwork for our understanding of prayer in the end zone.

Husein Abdullah is an employee of the Kansas City Chiefs football team. He helps produce professional football entertainment but he does not control the mix of inputs into that product. The team decides who the other players will be, what style of football the team will play, what offensive plays the team will run, what defensive sets the team will employ, who the coaches, assistant coaches and trainers will be. If the team chooses all these inputs into the production of professional football entertainment, why should it not also control the nature of end-zone celebrations? Of course, the team may opt for spontaneity by giving free rein to players’ imaginations, just as conventional entertainers in show business may opt for improvisation over a scripted performance. Still, the team will almost certainly forbid players from celebrating by making obscene gestures to opposing players, revealing intimate body parts to fans and performing other acts virtually guaranteed to offend fans rather than entertaining them.

So we should hardly be astonished if the team should choose to regulate an action as potentially sensitive or embarrassing as an act of religious observance – should we? And, speaking as students of economic logic, we can make no objection to that – can we?

How about Husein Abdullah? Or, for that matter, any religious celebrant of any religious denomination? Is he being treated unfairly? Are his rights being violated?

No. As an employee of the team, Abdullah works at the direction of the team and for its benefit. The fact that Abdullah is engaging in a religious observance in this particular case is irrelevant. Abdullah certainly has freedom of religion. He has freedom of speech, too, but that doesn’t give him the right to say anything and everything under the sun in his capacity as an employee with no fear of repercussion.

Suppose Abdullah were an employee working in an office building. Does he have the “right” to pray at the top of his lungs while wandering around and between the desks of his fellow employees? No, he has no right to disrupt the workplace in this fashion even with the excuse that freedom of religion allows him the right of religious observance. Similarly, his “right” to pray in the end zone is circumscribed by team policy.

Does this mean that the Abdullahs of the world are inevitably booked for disappointment in their longing to prostrate themselves before God in the end zone? There is no reason to think so. We know, for instance, that celebrations were once frowned upon and suppressed yet are now practically de rigeur. There seems no way to predict what twists and turns this penchant for celebration will take because there is no way to predict how the tastes of the public will change.

Are we afraid that “discrimination” against unpopular minority groups (Muslims, for example) will proliferate? No, we are not, because in this context the term discrimination loses its familiar colloquial meaning. There is no arbitrary exercise of power against a group because no business has a duty to employ all inputs to an equal degree. Instead, businesses have a duty to their owners and consumers to employ inputs based on productivity precisely by discriminating in favor of the more productive and against the less productive. Whether the inputs are engaging in religious observance, speech or any other activity does not matter. If a player can produce a productive form of celebration, this will make money for his team and provide the player with a celebratory meal ticket. If not, the player will lose the privilege of celebrating in the end zone. Business is not about what the boss wants or what employees want – it is about what consumers want. Economists characterize this principle as consumer sovereignty.

If a player demands a right to pray in the end zone, what he is really demanding is not freedom, nor is an exercise of a valid right. Rather, it is the power to abrogate his duty to his employer at whim. As often emphasized in this space, this confusion of freedom and power suffered by the general public has been repeatedly exploited to political advantage by the left wing.

The Absurd Position in Which the NFL Finds Itself

The framework for analysis outlined above is simple and logical. It is an outgrowth of the system by which we divide labor to produce and exchange goods and services. The pellucid clarity of this system stands out in brilliant contrast to the existing framework under which the NFL currently operates.

The NFL currently has rules governing player celebrations. These rules are part of the code that governs play on the field. Violations are punished with penalties such as the one Abdullah earned for the Chiefs. Consequently, the rules must be mastered, interpreted and applied by the referees. Inevitably, as with all sports decisions made by referees or umpires, subjective perceptions and interpretations cause mistakes and controversy. (The distinction between kneeling and sliding to his knees probably reminded Abdullah of the judging on Dancing With the Stars.) Meanwhile, the entities whose interests are most directly affected – team ownership and management – must sit back and await the chance to appeal any wrongful decision later.

And the fans – the people for whose benefit the system operates – don’t get any direct say in this administrative process. Whereas in a competitive market, input from fans directly determines the nature and extent of player celebrations, the regulated market gives immediate control to the administrative mechanism of the NFL. This allows the entertainment part of the product to contaminate the competitive part when penalties are levied for unsportsmanlike conduct, whereas under a competitive system the team handles problems of unsuitable celebration outside of the context of the competitive contest.

That’s not all to object to about top-down regulation of end zone celebration by the NFL. In fact, it may not even be the worst. The Abdullah case illustrates the political hazards of the top-down approach. The NFL began by wanting to suppress inappropriate celebration, which is surely not objectionable in and of itself. By doing the regulating itself instead of leaving it to the market, the NFL left itself open to the pressures of every special interest with an ax to grind. Because the NFL has no special interest in the profits of any one team, it has no incentive to favor popular celebration. Because the NFL is a bureaucratic organization, it is open to influence by every special interest with an ax to grind, CAIR being the most recent to step up to the grinder.

Suddenly, the NFL finds it can’t simply ban a form of celebration it doesn’t approve of (by “any player on the ground”) because that would run afoul of “religious observance.” Imagine – religious observance interfering with the conduct of a football game, when previously the only thing the two had in common was Sunday. And the minute the NFL starts making an exception for “religious observance,” it then has to confront the issue of different – and conflicting – religions. Wonderful – the two things attendees at a dinner party are never supposed to mention are politics and religion, and both are now elbowing their way into the end zone. What next? Will Stars of David start popping up on player helmets as an expression of their “right of free speech?” If only the fans had the power to throw a flag against the NFL for interference!

The General Principle at Work Here 

Americans have forgotten the value of allowing markets to decide basic questions. A recent Wall Street Journal op-ed commented offhandedly that we have lost confidence in free markets as a result of the Great Recession. If so, this is a monumental irony, since that event was caused by the interference with and subordination of the market process. It is not clear how much of the current attitude originates with a loss of faith and how much with simple ignorance. Regardless of the source, we must reverse this attitude to have any hope of survival, let alone prosperity. We know markets work because the world in general and the U.S. in particular would never have reached their present state of prosperity unless markets were as effective as free-market economists claim they are. The pretense that regulated, administrative markets are a vehicle for perfect “social justice” is not merely a sham – it is a recipe for tyranny. Administrators possess neither the comprehensive information nor the omniscient sense of fairness necessary to decide whose celebrations to allow, which ones to ban and what standard to apply to all.

The best thing about the example of touchdown celebrations is that they provide a side-by-side illustration of free markets and regulated administrative markets. The free market is player celebrations as they evolved in recent years, encouraged by fan response and governed by individual teams. The Kansas City Star excerpts show in so many words that this market exists and the evidence of our senses shows that this market works just as economic logic predicts that it will. And our ever-more-dismal experience with top-down, bureaucratic NFL regulation shows that rule by fiat and by ventriloquists in the chattering classes is an escalating failure.

What about the older fans who are appalled by player celebrations and long for the good old days of strong, silent, heroic players like Brown and Unitas? Why, we’ll just have to find a team that suits our tastes – or found one.

DRI-291 for week of 6-8-14: The (Latest) V.A. Scandal: So What Else is New?

An Access Advertising EconBrief:

The (Latest) V.A. Scandal: So What Else is New?

The news media has covered the recent medical-care scandal involving the Veterans’ Administration with its usual breathless urgency. Veterans of political economy find this ironic, since no feature of the political landscape is more ritualistic than the administrative scandal. Its elements are by now as stylized as those of the Japanese kabuki dance.

It begins with the uncovering of shocking facts – perhaps by journalistic investigation, perhaps by revelation from an internal source such as a whistleblower, perhaps by random circumstance. The facts are greeted first by denials, starting at the administrative level and proceeding upward – typically to the cabinet level, sometimes ending in assurance by the President of the United States that reports are greatly exaggerated.

Observers generally realize that it is the administrators and politicians who are exaggerating, not the journalists and whistleblowers, since few scandals emerge full-blown without any previous hint of their existence. Eventually, the fundamental truth of the allegations cannot be denied any longer, and the administrators and cabinet secretary in charge of the erring agency must fess up. This is the confessional stage of the scandal. It is characterized by admission of grievous fault, abject apology and plea for forgiveness, or at least understanding. The confession flagrantly contradicts previous insistence that the whole thing was an overblown attempt by political opponents to smear the present administration.

The last phase is the Presidential phase. The President is shocked, shocked to discover that error and scandal have invaded the administration of government on his watch. His attitude toward his administrative subordinates in the executive department is that of the admonishing schoolmaster: fair but firm, reluctant to punish but determined to root out all evil, to banish forever this unaccountable blot on the escutcheon of his tenure. The administrators must go, of course, even though they are able, noble, kind, determined, brave, clean and reverent. There will be an investigation, and when all the details are known, we will proceed to wipe this disgraceful episode from our memories and move on, to greater and more glorious triumphs…

The ellipsis reflects the fact that the entire purpose of the ritual is to pass through the period of scandal with the least possible political damage inflicted on the administration. The collective attitude of that of a child caught in a misdeed. The child is fully conscious of guilt; every word and action is oriented toward escaping punishment and returning to the status quo ante. Neither truth nor justice has any bearing on the child’s behavior. Likewise, they have no effect on the administration’s actions, either.

The recent V.A. scandal contains the classic elements. Not only is it predictable, it was predicted in this space in our previous discussions of the economics of medical care and Obamacare. Now the other shoe has dropped. The utter familiarity of the ritual means that the political aspects can be subordinated to our real object. It is the economic features that claim our interest.

The Details of the Scandal

The V.A. scandal concerns the provision of medical care for discharged members of the armed forces by the Veterans’ Health Administration in Department of Veterans Affairs. This is only one of the functions performed by the Veterans’ Administration, the others being administration of veterans’ benefits and supervision of burials and memorials for veterans. The cost of medical care to veterans depends on the ability to pay – it is either free or accompanied by a co-pay. When a vet is discharged from the service, he must enroll in the V.A. system in one of three ways: by calling a toll-free number, going online or visiting one of the hundreds of V.A. clinics across the country. In order to complete the enrollment process, the vet must possess his DD214 discharge form. At enrollment, the vet is given a means test to determine qualification for a co-pay.

Once enrollment is complete and the vet is accepted within the system, new patients must be seen by a physician within 14 days. Existing patients (who have already been treated and, thus, have already seen a physician for evaluation) must see a doctor within 14-30 days. The failure to meet the stipulated deadlines for these initial appointments is the gravamen of the current scandal.

The head of the V.A.’s health affairs office, Robert Petzer, testified that he knew as early as 2010 that V.A. health clinics were “using inappropriate scheduling procedures” to defer these initial appointments. The deferrals were done because of need; the clinics were simply unable to meet the demand for initial appointments. The excess demand for appointments grew over time and the situation worsened until it reached the epidemic proportions now forming the basis for periodic new revelations. Scandals within the armed forces (and the government at large) are investigated by inspectors general (known as “IGs”). An interim report on the V.A. scandal by the V.A.’s IG called the practice of inappropriate scheduling “systemic.” It involved the use of false or phony waiting lists that were tailored to give the impression that the V.A. was meeting its initial-appointment goals rather than falling further and further short of them.

The scandal erupted after a doctor at the Phoenix, AZ V.A. clinic complained to the IG about treatment delays. It should be noted that this doctor waited until after his retirement to lodge these complaints. The complaints were made in letters written in December, 2013 but did not rise to the level of a public scandal until May, 2014. It transpired that some 1,700 vets were kept on waiting lists and the average vet waited for 115 days for his initial appointment. Meanwhile, official records were falsified to hide these delays.

On June 9, 2014, the Department of Veterans’ Affairs released preliminary results of an audit of 731 V.A. clinics that showed about 57,000 vets who have currently waited for their initial appointment for an average time span exceeding 90 days. Some 13% of V.A. schedulers say they have been ordered to falsify appointment-request logs to make them compliant with the rules. The IG calls the current 14-day goal for initial appointment “unattainable” due to the logistical obstacles posed by insufficient money and personnel.

The news from Phoenix triggered a chain reaction of similar revelations from V.A. hospitals and clinics across America. In Fort Collins, CO, clerks were specifically taught how to falsify records to paint a misleadingly favorable picture of initial appointments kept. A police detective found that in Miami, cover-ups were “ingrained into the hospitals’ culture” and drugs were routinely dealt out of hospital premises. In Pittsburgh, PA, an outbreak of Legionnaire’s Disease in 2011-12 was revealed to be the product of “human error” rather than the “faulty equipment” that had been blamed in Congressional testimony last year.

The delays in initial appointments are important because they represent a delay in the potential diagnosis and/or treatment of one or more medical conditions. Much has been made of the statement by IG Richard Griffin that “we didn’t conclude…that the delay[s] caused… death. It’s one thing to be on a waiting list; it’s another for that to be the cause of death.” But in the case of 52 patients seen by the Columbia, SC gastroenterology unit of the V.A., it certainly was determined that those patients had “disease associated with” treatment delays. We are urged every day to visit our doctor, not to put off visits or hide conditions in hopes that symptoms will disappear, reminded that cancer and other diseases are curable with early detection. Now, suddenly, delays in seeing the doctor are downplayed as a factor in actual incidence or severity of disease.

The medical facilities were not the only loci of dereliction. The War on Terror launched by the Bush Administration has produced an avalanche of disability claims filed by veterans of the Iraq and Afghanistan campaigns. In order to claim a compensable disability, a veteran must show not only the existence of a disability but also a likelihood exceeding 50% that it is due to military service. He is not allowed to hire a lawyer (unless the lawyer works pro bono) before the disability determination is made, so as to preclude the lust for private profit from luring private-sector contingency lawyers into the Klondike of military disability determination. But this process of disability determination has been stalled by (you guessed it) a massive backlog of claims waiting to be heard. This backlog reached a high of 611,000 in 2013 before the resulting publicity triggered a mini-scandal that forced action by Eric Shinseki, Secretary of the Department of Veterans’ Affairs. It now stands at about 300,000 cases that so far have taken over 125 days to process.

One of the most highly publicized features of the scandal has been the bonuses received by upper-level V.A. administrators, tied to complying with V.A. rules for initial-appointment timeliness. These bonuses provided a clear-cut incentive for the falsification of records by lower-level employees operating under orders by their superiors.

The Economics of the V.A. System of Medical Care

Previous discussion of health care in this space touched on the V.A. system. Why should a separate system of medical care exist for military veterans?  Why should that separate system be administered by the federal government? If this separate system exists because it is superior to the one available to the rest of us, why not make it available to all? If it is not superior, why does it exist at all?

Some people have actually followed this logic to its ultimate conclusion. In 2011, the left-wing economist and political columnist Paul Krugman made the case that the V.A. does indeed constitute a superior system of medical care which should be broadened to the entire country. Part of his case rested on the V.A.’s success in meeting its initial-appointment guidelines. By doing so, he contended, it avoided the need for any rationing of care.

“Rationing” is the operative word applying to government provision of medical services. The whole purpose of designating government as the “single payer” for medical care is to sell the concept as “free medical care for all regardless of ability to pay.” Private producers cannot distribute goods for free but this is a specialty of government. As always, the big problem government faces is bridging the gap between its expansive claims and its inability to deliver what it claims. A free good is one for which there is no opportunity cost of provision, hence no scarcity. Saying that a good is free doesn’t make it free; it merely causes people to try to maximize their efforts to acquire it. Maximizing the demand for something is the worst possible way to deliver it free to everybody because it places the biggest possible burden on the supply apparatus.

The V.A. headlines its medical services to veterans as free, but upon reading the fine print veterans discover that they will be subjected to a means test and requested to pony up a co-pay. Of course, this is not the same thing as a unit price to an economist, but it does involve a sacrifice of alternative consumption. But this is small potatoes compared to the real shock in store for any veteran who thinks that his military status entitles him to health care in perpetuity.

Reading current newspaper accounts of the scandal would leave the impression that discharged vets enroll for medical benefits on a first-come, first-served basis. This is not so. Upon applying for benefits, vets are assigned to one (or more) of 8 “eligible priority groups.” The word “priority” hints at the purpose of these groups; they decide whose applications get processed first and in what order. In other words, medical care for veterans is rationed by the Veterans Health Administration from the instant of application for enrollment.

To erase any doubts about the veracity of this statement, we have the word of the V.A. itself. “Unfortunately, the Veterans Health Administration does not have enough resources to provide care to all veterans who need it. To address this issue, the VA has created eight priority groups for enrollment.” There we have it – the dirty little secret of VA medical benefits. Veterans are lured into the system with the promise of free benefits. Before they are even accepted, they find out that the benefits aren’t free and they may not even get them – or, if they do, the effective price may include a hefty upcharge for waiting time. At worst, that upcharge may be the loss of their life.

Each of the 8 eligible priority groups contains multiple subcategories of prioritization. Any connection to medical need or severity is tenuous at best. Group 1, the highest priority for enrollment, includes vets who are 50% or more disabled due to service-connected disability, then picks up those who are unemployed due to service-connected disability. Of course, it could be true that a 50% disability carries with it an immediate need to see a physician. It could also be utterly untrue; it depends on the specific medical circumstances.

Right away, we see that the criteria governing rationing are political and bureaucratic. Political because a disabled vet is a highly visible and ongoing political liability, much more so than a vet who dies awaiting treatment. In a free-market system, decisions about medical treatment are made by you and your doctor in consultation. You know your economic capabilities and your doctor knows you and your medical needs; together you can compare the value you would receive from each incremental bit of medical treatment with its cost. But in the VA, your medical decisions will ultimately be made by bureaucrats who know little or nothing about medicine. That is why criteria like “50% disabled” are necessary; they provide a pseudo-objective basis upon which medically untutored bureaucrats can affirm or deny treatment.

Group 2 includes 30-40% disabled vets. Group 3 is headlined by former prisoners of war, Purple-Heart holders, holders of the Medal of Honor, vets with lower disability status and those who disability was actually caused by treatment or rehabilitation. Again, politics is evident in this ranking with the inclusion of POWs and medal-winners. Why should medical care be turned into a popularity contest? Then again, once we have excluded the free market from consideration, any other system of allocating benefits would be arbitrary.

The lower-ranking Groups introduce other arbitrary criteria like service in Vietnam and exposure to atomic radiation at Hiroshima, Nagasaki or test sites. Low-income vets receive precedence over high-income vets; willingness to fork over a co-pay buys the vet a higher place in line.

When we combine the economics of the V.A. system with the known facts of the current V.A. scandal, the latter becomes easier to understand but harder to stomach.

The Economics of the Scandal

Note the fundamental difference between scarcity as it exists in a free-market context and in the command-and-control context of a politically motivated bureaucracy. Economists define scarcity as the condition in which we cannot have all that we wish to consume and must choose the things we value most. Nobody is automatically or inherently excluded from consumption; price tells us the value that people place on a good and its cost in alternative (or foregone) output. People choose how much to buy based on their incomes and tastes; they can buy small, medium or large quantities and vary their consumption as their incomes change and prices vary. At the V.A., the government chooses what to give you and how much to give you based on (mostly) arbitrary criteria that ignore price and cost. It frankly admits that some people will be excluded – once more based on arbitrary criteria.

Economic logic tells us that the government system is wildly inefficient. Moreover, its inefficiencies will get worse and worse over time because it encourages customers to demand more medical care than can be supplied.

There is nothing remotely surprising or shocking about the current scandal. And as the Washington Post points out, “President Obama has been talking for years about fixing the system.” According to Press Secretary Jay Carney, “This is not a new issue to the President.” Here is one sure sign that Krugman, et al, have missed the boat analytically; you don’t fix a system that is working brilliantly.

Everybody is acting as if the scandal is the result of something going terribly wrong with the system. But this is merely the system working as we expect a system of rationing to work – by excluding some people from service altogether. The V.A. itself says it is designed to do this and explains how it does it – just how surprised should we be when that is exactly what happens? The scandal is not that something has gone wrong with the system; the scandal is the system.

Economic logic tells us that the system is designed to ration care by excluding vets from medical benefits, thereby reducing the amount of medical care provided. This exclusion by rationing takes several forms. First, the vet may be excluded by not qualifying at all. Second, he may fall in the last (8th) eligible priority group, get tired of waiting to be processed and accepted and simply seek out paid care in the private sector. This relieves the V.A. of the burden of serving him. Third, he may die while waiting to be seen, as vets have done and continue to do. The larger the number of vets who face delays in acceptance and processing, the greater the likelihood that this will happen. And the longer the delays, the greater the likelihood that this will happen. Once more, this relieves the V.A. of the necessity of serving him. Fourth, the longer the delay faced by the vet, the worse (on net balance) will be his condition when he is finally accepted, seen and treated. This will shorten his life span and reduce the total amount of medical care the V.A. will be required to give him. (In this shorter time span, however, it will increase the need for greater spending on him, which will give the V.A. leverage to demand larger budget allocations in Congress. This is politically valuable to bureaucrats and their political sponsors.)

Of course, the V.A. can haul out testimonials from some vets who crow about the outstanding medical treatment they have received. In any bureaucracy – police, fire, public education, even the federal government itself – some individuals will stand out by ignoring the lack of incentives for performance and adhering to their own personal standards. And the fact that the V.A. picks and chooses who it treats, when it treats them – “we will treat no veteran before his time” – and how it treats them will allow the agency to provide good service to some vets. But claims of competitive superiority for the V.A. are a mockery considering that it is able to rig the game through rationing and, we now belatedly realize, rig its own statistics internally.

Claims by Krugman and others that the V.A. is a model for health care in general are false on their face. What little success the V.A. has enjoyed depends on the failures highlighted here. The V.A. cannot exist in its present form without the concurrent existence of a private-sector (or public-sector) alternative where its rejects can be dumped and where consumers can seek out consistently higher-quality treatment at a price. An attempt to impose the V.A. model on the country at large simply produces the kind of socialist, “national health service” health care found in countries such as Great Britain and Canada. These are characterized by long waits for care, lower-quality care, poorer medical technology and almost no new drug development. According to Krugman, we should be clamoring for access to the superior medical care provided by the V.A. Americans should be “health tourists,” traveling to Great Britain, France and Canada for their health care. Instead, though, the flow of health tourists runs the other way – into the U.S.

Democrats insist that the Bush Administration caused the V.A. scandal by overloading the system with applicants through its foreign wars. They cannot have it both ways. How can their system be superior if it falls apart when the demand for its product increases, which is the average business’s idea of paradise? Free-markets use flexibility of prices and quantities to handle variations in demand; they use higher prices to attract more resources into the system to handle the larger demand. It is command-and-control rationing systems, deprived of vital pricing tools, which crumble under the pressure of demand increases.

Public shock over the incentive bonuses paid to V.A. administrators for initial-appointment compliance not actually attained is likewise naïve. After all, critics of free markets and corporations scream bloody murder when CEOs are not paid for performance. The V.A. was simply trying to curry favor with the public by mimicking the private sector’s performance incentives. The problem is, of course, that the V.A. is not the private sector. In a free market, a firm couldn’t get away with faking its performance because you can’t fake the bottom line; failure to perform will reduce profits. But there is no bottom line at the V.A. and no way (short of audit) to detect the kind of fakery that went on at the V.A. for years and years. Sure, veterans complained, but nothing happened because vets did not control the bureaucracy and had no political clout. The only reason the scandal was uncovered was that the doctor who blew the whistle had recently retired and no longer had to fear bureaucratic retaliation for his actions.

Speaking of political clout…

Cui Bono?

Why has a federal agency so inimical to the interests of a beloved constituency persisted – nay, thrived – since its inception in 1930? The great myth of big government is that it serves the interests of its constituents. But as we have seen, this is hardly true.

The real beneficiaries of big government are government employees, bureaucrats and politicians. The V.A. has metastasized into a cabinet-level bureaucracy with over 330,000 employees, including thousands of mid-level bureaucrats. Most of its employees belong to a powerful public-sector union. Employees and bureaucrats vote for the politicians who vote the appropriations that pay their salaries and lucrative benefits.

These people are invisible in the current scandal, except for the passive role they play as order-takers and functionaries. But they are the reason why the system is not “reformed.” There is no reforming this kind of system, only tinkering around the margins. Genuine reform would disband the V.A. altogether since its rationale is utterly misguided.

That will not happen. The falsity of the V.A.’s guiding premise is irrelevant. It is not really intended to serve veterans, so its failure to do so does not really matter to politicians. Its real purpose is to win votes by conferring benefits on employees and bureaucrats and it is fulfilling that purpose just as well, if not better, by failing veterans as it would by serving them.

That is why the stern promises to “fix the problem” are so much hypocritical cant. There will be no fix and no reform – only the next scandal.

Cant Rules in Public Discussions of the V.A.

Why do we watch numbly as the V.A. scandal unfolds – the latest in a never-ending series? By now, we know the ritual by heart. What is that has us hypnotized?

Human beings mix reason with emotion, and we apparently remain enthralled by the cant that surrounds the V.A. “We love and revere our veterans – so much that we cannot entrust their physical well-being to the mundane ministrations of marketplace medicine. Veterans deserve only the very best. So, naturally, we put their welfare in the hands of the federal government, because it handles all our most important jobs and never fails to satisfy us. We will never rest until veterans are well-cared for, because their happiness and security is our first priority.”

In one part of our mind, this rationale reigns supreme. In the other part, we store all that we know about how the V.A. – and the federal government – actually operates. If those two parts ever commingled, they would probably short-circuit our mental processes indefinitely. We have not yet outgrown our fantasy of government as benevolent, omniscient, omnipotent parent.

In reality, the failures of government are all too painfully obvious. It is not that government has anything special against veterans, other than the fact that they keep showing up at the door expecting to be medically treated. No, government double-crosses and fails veterans just as it does the rest of us. When its failures become manifest, it lies about them. And the people who have placed their ideological and occupational bets on government lie, too.