Endowment Effects, Confirmation Bias, and the Politics of Health Care Post-Passage

Gavel of Justice, or Hammer of Doom. Your Call. (Chip Somodevilla / Getty Images / March 21, 2010)

Sen. Tom Harkin articulates the new conventional wisdom:

“I can’t wait for this debate [about Health Care reconciliation and repeal] to happen. I look forward to it. I will relish it,” Harkin said, on his way into a weekly Democratic caucus lunch. “Now the bill is passed, its signed into law. Now the American people have something. They own it. It’s theirs. And the Republicans are saying they want to take it away from them.”

This sounds like an argument based on the endowment effect. But it’s actually not all that clear that this “bias” operates in the way that Sen. Harkin posits, i.e., that individuals will value the benefits of a law more after it passes, because they exhibit loss aversion.  This optimism risks ignoring an important limitation on endowment, which (simplifying radically) suggests that how you obtain property seriously affects whether you exhibit an endowment superpreference.  That is: when people think that property is allocated randomly or by grace, they value it less than when they feel they’ve earned it.  It strikes me that Republicans will have every incentive to try to convince the public that health care goods have been allocated randomly or by influence peddling, rather than because the Congress deliberated fairly and divided by desert.  That’s why fighting about reconciliation and in the courts make strategic sense: not because such battles are likely to succeed (they aren’t) but because they reduce general belief in the procedural legitimacy of reform and attachment to its substantive products.

In other news, Prof. Ann Althouse is very defensive about saying “so what if some idiot said a bad word,” referring to the worst word there is.  Of course, what was objectionable was that she first asserted – with no evidence at all – that Representative Lewis had made up the charge  (“It’s one of the oldest dirty tricks.)  Then, she argued that it was actually white politicians who were upset by the protesters who were racist because they were “so quick to think of powerful black politicians as vulnerable and besieged.”  All this while refusing to permit her commentators to actually use the word, presumably because she recognizes that it is uniquely stigmatizing, evil, and, well, racist.

Look: it isn’t racist to deny that racism exists despite evidence of racial animus directed at a black Congressman, nor is patent favoritism to permit your views of that event to be informed by a correspondent who happens to be your newlywed husband.  Instead, this feels to me like confirmation bias at work.  You credit the evidence you find congenial to your worldview.  For Prof. Althouse, it’s hard to imagine that tea party protesters are violent and scary because she knows & loves them, but easy to imagine that black Congressmen are “leveraging patronization” because, well, she doesn’t.

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10 Responses

  1. AYY says:

    Actually the Republicans are likely to argue that this is a bad plan that hardly anyone wanted, and that it’s going to lead to rationing, death panels, higher taxes and fewer jobs. Those are pretty good arguments.

    Not sure what your complaint is about Althouse, but I don’t think you’re being fair. Tea Pary violent and scary? No, no, no. You must be confusing them with the Obamacare supporters who attended the Town Hall meetings. Tea Party protesters are usually nice and soft spoken.

    The evidence supporting Althouse’s statement is that someone who was in the area when the comment was allegedly made said he didn’t hear anything like that. Besides the Left has been known to create these types of incidents. It’s an Alinsky tactic.

    Anyway she’s probably right that the incident is overblown. The media relishes anything that portrays the Tea Party unfavorably. And it’s easier for them to focus on an alleged incident of this type than to do any serious analysis of what we’ve just had foisted upon us.

  2. Matt Bodie says:

    I think the Republicans are also using the endowment effect to say (a) you are going to lose money that’s yours (through higher premiums) and (b) you are going to lose your freedom to decide whether you want health care or not.

  3. “Of course, what was objectionable was that she first asserted – with no evidence at all – that Representative Lewis had made up the charge (“It’s one of the oldest dirty tricks.)”

    I’ve read and re-read the Althouse post. Where does she “assert” that Rep. Lewis made up the charge? She writes:

    “I have no idea who was the source of any saliva and nasty words…” and then posits that just because there were words doesn’t mean they came from those there to protest the bill. In fact, I don’t even read Rep. Lewis’s name in her posting, much less any accusation of him making up a charge.

    I agree – someone’s confirmation bias may be at work here.

  4. dave hoffman says:

    Rep. Lewis was the one who said that he had been called epithets. So of what relevance is it that she didn’t name him? And the “charge” is that he was called an epithet by the tea party protesters – to which she said that it is likely that the democrats were the ones saying that as a “dirty trick.” I don’t know how you can read that – and her later posts (“self-victimization” or “real violence”) and conclude otherwise. She just doesn’t believe that her friends and husband could be associated with such ugly violence.

  5. Well, the WaPo article she links to doesn’t quote him saying that and she doesn’t say he said that so…

    (For the record, from the article: “[Rep.]Carson told reporters that protesters yelled “kill the bill,” then used a racial epithet to describe Carson and Lewis…”)

    Yet, remarkably, in this day and age, no audio/video exists to substantiate the charges that it was an actual protester.

    But maybe it is just my confirmation bias that I won’t discount the chance that acts of racial animus would be staged by leftists to make their opponents look bad.

  6. ..and why is it objectionable that she believes her husband over a member of Congress? If a Republican member of Congress said something that contradicted the recollection of a member of your family…

  7. dave hoffman says:

    It isn’t objectionable! Rather, it is natural, as my post explained, to behave this way. The point is that we should all be aware of this kind of bias, lest we come to believe that people who disagree with us about risks and judgments are merely partisan hacks, or conniving, scheming ideologues.

  8. AYY says:

    Prof H, Here are some reasons Althouse might be skeptical of the charge
    (This is from today’s Michelle Malkin’s site):

    “Upon decimating the deliberative process to hand President Obama a health care “reform” victory, unpopular Beltway Democrats and their media water-carriers now claim there’s a Tea Party epidemic of racism, harassment, and violence against them. On Thursday, House Speaker Nancy Pelosi issued a tepid, obligatory statement against smearing all conservatives as national security threats. But her lieutenants had already emptied their tar buckets. Democratic Congressional Campaign Committee chairman Chris Van Hollen blamed Republican leaders of “stoking the flames.” Democrat House Whip James Clyburn accused the GOP of “aiding and abetting” what he called “terrorism.”

    Yet, the claims that Tea Party activists shouted “nigger” at black House Democrats remain uncorroborated. The coffin reportedly left outside Missouri Democrat Rep. Russ Carnahan’s home was used in a prayer vigil by pro-life activists in St. Louis protesting the phony Demcare abortion funding ban in President Obama’s deal-cutting executive order. Videotape of a supposed intentional spitting incident targeting Missouri Democrat Rep. Emanuel Cleaver at the Capitol shows no such thing. Cleaver himself backed off the claim a few days later. He described his heckler to the Washington Post in more passive terms as “the man who allowed his saliva to hit my face.” Slovenliness = terrorism!

    The FBI is now investigating the most serious allegation – that Tea Party activists in Virginia are somehow responsible for a cut gas line at the home of Democrat Rep. Tom Perriello’s brother. But instead of waiting for the outcome of that probe, liberal pundits have enshrined the claim as conclusive evidence of the Tea Party reign of terror.

    Need more reasons to treat the latest Democrat hysteria with a grain of salt the size of their gargantuan health care bill? emember:

    *In November 2009, Kentucky Census worker Bill Sparkman was found dead in a secluded rural cemetery with the word “Fed” scrawled on his chest with a rope around his neck. The Atlantic Monthly, the Huffington Post, and liberal media hosts stampeded over themselves to blame Fox News, conservative blogs, Republicans, and right-wing radio. Federal, state, and local authorities discovered that Sparkman had killed himself and deliberately concocted a hate crime hoax as part of an insurance scam to benefit his surviving son.

    *In mid-October 2008, news outlets from Scranton, Pa., to ABC News, to the Associated Press and MSNBC reported that someone at a Sarah Palin rally shouted “Kill him” when Barack Obama’s name was mentioned. In fact, the Secret Service (which was at the event in full force) couldn’t find a single person to corroborate the story – other than the local reporter for the Scranton Times-Tribune who made an international incident out of the claim. Agent Bill Slavoski “said he was in the audience, along with an undisclosed number of additional secret service agents and other law enforcement officers and not one heard the comment,” the paper reported in a red-faced follow-up. Maybe the shouter is hiding with Nicole Simpson and Ron Goldman’s real killer.

    *In late October 2008, a gaggle of liberal blogs spread the rumor that a Republican supporter of vice presidential candidate Sarah Palin’s had shouted that Barack Obama was “a nigger” during a campaign rally in Iowa. Video and first-hand accounts showed that the protester did not shout “he’s a nigger,” but “he’s a redistributor.” A lefty activist at the “progressive” Daily Kos blog confirmed the truth – but to this day, the crisis-manufacturing smear lies uncorrected and unretracted across the Internet.

    *In September 2009, supporters of Colorado Democrat Rep. John Salazar falsely accused a town hall protester of hurling a death threat at the congressman. Liberal blogs again disseminated the angry Tea Party mob narrative. A week later, the local press quietly reported that Grand Junction police had investigated the incident – and determined the claim was “unfounded.” A police spokeswoman revealed that “[p]eople who witnessed the interaction between the man who made the complaint and the suspect confirmed they never heard any direct threats made regarding Congressman Salazar; the witnesses included a Grand Junction cop “in close proximity when the interaction took place.”

    *In late August 2009, as lawmakers faced citizen revolts at health care town halls nationwide, the Colorado Democratic Party decried a vandalism attack at its Denver headquarters. A hammer-wielding thug smashed 11 windows and caused $11,000 in property damage. The perpetrator, Maurice Schwenkler, turned out to be a far Left nutball/transgender activist/single-payer anarchist who had worked for a SEIU-tied 527 group and canvassed for a Democrat candidate. Nevertheless, State Democrat Party chair Pat Waak continued to blame “people opposed to health care” for the attack.

    Then, as now, being a Democrat Party official means never having to say you’re sorry for smearing conservative dissent.”

  9. AYY says:

    Don’t want to keep beating a dead horse, but for the sake of accuracy I thought I’d add this, from today’s WSJ Best of the Web:

    “Yesterday the far-left pro-ObamaCare outfit MoveOn.org sent out an email that made the following claim: “Then this week, Democrats who voted for reform began receiving death threats–one had a coffin left on his lawn and another was told snipers would kill the children of lawmakers who voted yes.”

    The latter story, cited in this Politico piece, was a genuine threatening phone call, as far as we can tell. But the former claim is bunk. The coffin was not a death threat, and it was not left on the congressman’s lawn. Politico has the real story:

    Rep. Russ Carnahan (D-Mo.) had a coffin placed “near his home,” a spokesman said Wednesday evening.

    The coffin was from a prayer vigil, and protesters say that the coffin symbolized babies who would be aborted due to the health care law and was not a threat to Carnahan. . . .

    -Editor’s Note: This story has been updated to reflect that the coffin was placed in front of Carnahan’s house and not on his lawn.

    The Puffington Host reported Saturday that “a staffer for Rep. James Clyburn (D-S.C.) told reporters that Rep. Emanuel Cleaver (D-Mo.) had been spat on by a protestor.” As Cleaver is black, this claim had racial overtones. But Cleaver later gave an account to the Washington Post’s Courtland Milloy that was more “say it, don’t spray it” than gross assault:

    Cleaver told me: “I said to this one person, ‘You spat on me.’ I thought he was going to say, ‘Hey, I was yelling. Sorry.’ But he continuing yelling and, for a few seconds, I pointed at him and said, ‘You spat on me.’ ” . . .

    “I would prefer to believe that the man who allowed his saliva to hit my face was irrational for a moment,” Cleaver said.

    ABC News weighs in with a false claim against the woman liberals love to hate:

    [Sarah] Palin’s message to conservatives is not to retreat, but to “reload,” she said in a twitter message. Her Facebook page even puts 17 Democrats–literally–in the crosshairs.

    Not only does the Palin’s Facebook post not literally put anyone in the crosshairs–we’re not even sure this is possible–but it doesn’t even include a depiction of any Democrat in crosshairs. Rather, it features a map of the U.S. with stylized crosshairs indicating the districts represented by 20 Democrats (including three who are retiring)..

    Several news organizations, including Bloomberg, have reported that “a rock was thrown through the window of [Rep. Steve] Driehaus’s Cincinnati office on March 21.” The rock-thrower would have to have had quite an arm, because Glenn Reynolds points out that Driehaus’s Cincinnati office is on the 30th floor of a downtown skyscraper. (A 30-story building doesn’t seem like much of a skyscraper to us, but possibly the sky in Cincinnati is lower than in New York.)

    There does appear to have been a rock thrown through the window of the Hamilton County Democratic Party, which is at street level, so in this case the actual facts turn out to be consistent with the narrative. But the mixup also is consistent with the counternarrative of news organizations that are more interested in promoting the anti-anti-ObamaCare narrative than in getting the facts right.

    And as for threatening rhetoric, how about this:

    I know how the “tea party” people feel, the anger, venom and bile that many of them showed during the recent House vote on health-care reform. I know because I want to spit on them, take one of their “Obama Plan White Slavery” signs and knock every racist and homophobic tooth out of their Cro-Magnon heads.

    That’s not a crazed voice-mail message to a Republican member of Congress, or even the ranting of a comment-board crazy. It is the lead paragraph of the Courtland Milloy column from which we quoted the Cleaver story above. In the Washington Post.

    This is the kind of hate speech that could land you in the dock in Canada. Here in America, Milloy’s rageful reveries are fully protected by the First Amendment, and this column wouldn’t have it any other way–though their publication in the Washington Post speaks poorly of Milloy’s judgment and that of the Post’s editors.”