Sounds Good Principle

Sort of a Part II of my previous post

Any policy or program, public or private, can be shown to be a success or failure. That’s because every program has benefits, direct costs, opportunity costs and 2nd, 3rd+ order costs and benefits.

 

Since there’s always some benefit, there’s always success stories to point to. Those stories typically receive get balcony seats at State of the Union addresses.

Want to focus on the failings of the program? That’s easy, too. Just focus on the costs.

That is what much political policy debate comes down to. Supporters of a policy focus on its benefits (“Fewer people are uninsured because of Obamacare!”) and critics focus on costs (“Medical care costs are rising faster and innovation is slowing!”).

I used to like the TV show Good Morning, Miami.

Its producers would not have succeeded in keeping it on the air by pointing me out to network execs: See, this guy likes our show, so you should keep it.

If they did, the network would lose ad revenue and shareholders would replace them.

So, network execs face strong incentives to cancel dogs, rather than be “pig-headedly insensitive” to the signs that show isn’t doing well.

In fact, they do what we all do with every purchase we make. We evaluate was it worth it?

Yet, politicians often succeed with the same tactic that wouldn’t work for Good Morning, Miami producers when they highlight a success story of their program in the State of the Union address or campaign speech.

Why? Because nobody owns the full cost-benefit of the program.

Taxpayers foot the costs, yet don’t have incentive to care whether a program is worth it because they operate on the “Sounds Good” principle.

Whether that program exists or not, they will pay about the same in taxes. So, their criteria for any government program is if it “Sounds Good” or not.

Politicians and their consultants have discovered that when you can put a face to the benefit of a program with an anecdote, that Sounds Real Good.

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