But excuses are not explanations. Pinning the defeat on "Harry and Louise" or any other tactic is an act of self-delusion. With initial public support well above 60%, nonstop campaigning by Hillary Clinton, control of both houses of Congress, as well as overwhelming support from the national media, the president should have been able to pass any reasonable health care bill. But what is reasonable inside Washington is no longer reasonable to the American people.
Oozing elitism, Beltway cognoscenti would have us believe that the American people were confused by campaign-style rhetoric and never understood the Clinton plan. But as the town meetings, newspaper analyses, talk shows and congressional debates wore on, the American people figured out this much: Though Mr. Clinton promised a "simple" plan that would guarantee choice along with security, he delivered a numbingly complicated 1342 page plan that put another 14% of the economy under the control of federal bureaucrats.
This approach to social reform -- widely accepted just 25 years ago -- no longer makes sense to an American public whose daily lives and expectations have been radically transformed by the first decades of the Information Age. Top-down social engineering by Washington's central planners is now intuitively rejected as an anachronism, a hopelessly inefficient throwback to the bygone era of the Machine Age.
Though camouflaged as state-of-the-art social policy for an America entering the hyper-competitive 21st-century global economy, Clinton's plan merely extended concepts first enacted under Franklin Roosevelt in the 1930s. Consider Mr. Clinton's remarks to die-hard supporters greeting the health care bus tour in Independence, Missouri just days before the plan's final demise. "Sixty years ago this fight started," he said. "Fifty years ago, Truman tried it three times and failed. Twenty-nine years ago President Johnson signed Medicare into law . . . We're halfway home and we can go all the way."
Need it be said that today's economy is unrecognizably different from Lyndon Johnson's '60s, not to mention the '40s or '30s? Back then, no one doubted that economic power would become ever more concentrated in massive, centralized hierarchies -- from IBM and Sears to Washington and Moscow. Advanced technology meant bigger mainframes and more power for the bureaucracies that controlled them. The most optimistic outcome of the Cold War anyone could predict was a concordat between big capitalism and big socialism. Command-and-control hierarchies ruled the earth and put men on the moon.
Then, in 1971, just two years after Apollo 11 reached Tranquillity Bay, three young engineers at an unknown California start-up named Intel invented the microprocessor and changed the world. By 1982, the computer-on-a-chip began showing up on desktops across America. From that moment on, real decision-making power began shifting from MIS directors to midnight hackers, from headquarters staffers to factory managers, from big time CEOs to nobody-ever-heard-of entrepreneurs. Apple Computer's famous "1984" TV ad captured the spirit of this historical watershed.
Over the past decade, relentless competitive pressure from Japan and Southeast Asia's Tigers compelled all but the most brain-dead U.S. companies to reinvent themselves. Using PCs, fax machines, voicemail, email, local area networks, cellphones and satellite uplinks, they slashed costs, cut cycle time, boosted quality and accelerated responsiveness.
To make it all work, centralized hierarchies were flattened into decentralized, horizontal networks where people stopped taking orders from bosses and started taking responsibility for results. And while the big firms downsized, an entrepreneurial army of Fortune 500 refugees -- several million strong -- launched their own small firms using the same microprocessor-based tools. Mikhail Gorbachev preached economic restructuring, while Americans practiced real perestroika.
Almost overnight, what had once been the world's premier Machine Age economy became the world's first Information Age economy. The significance of this metamorphosis is only now being appreciated. Just this month, the World Economic Forum made official what many in the business community intuitively knew -- America is once again the world's most competitive economy.
From a policy-making standpoint, this transformation created an American economy vastly more complex than it used to be. Indeed, an Information Age economy is more like a rapidly evolving ecosystem than a stable, predictable "economic engine." Like an ecosystem, an Information Age economy is far too complex to be designed. It must evolve spontaneously. Who planned the rainforest? Who planned the personal computer industry? In both market economies and natural ecosystems, "unmanaged" competition and continuous adaptation yield bewilderingly complex, yet enormously productive, living systems.
How did America's epochal transformation from a Machine Age to an Information Age economy affect the Clinton approach to health care reform? Apparently, not at all. The plan drafted by Hillary Clinton and Ira Magaziner, coordinator of Mrs. Clinton's Health Care Task Force, reflects classic Machine Age thinking: Centralize decisions through monopoly power, ensure stability through tight controls, insist on a "one size fits all" standard, and allow no room for local innovation. Plan everything out in advance -- to the last nit-picking detail.
Newly released secret task force documents show that Hillary and Ira only feigned interest in proposals offered by the public, Congress, and even administration officials. They had already made the crucial design decisions. This should come as no surprise. A complicated machine can't be designed by a democracy. To assure that its parts will mesh, you hire the best engineer you can find, give him plenty of resources, let him work in secret, and announce the product when it's ready.
I worked with Ira Magaziner years ago at the Boston Consulting Group. Like many others, I can attest to his intelligence, attention to detail, and maniacal work ethic. If you're looking for a social engineer, he's the best there is. But the era of the social engineer ended with the demise of the Machine Age. Ira's a mainframe in an age of networked PCs.
Years after IBM itself abandoned the mainframe ideology, Washington's policy wonks still don't get it. Think back to the opening line of President Clinton's health care speech. When he told the country, "This health care system is badly broken and we need to fix it," he revealed his own Machine Age mindset -- government as repairman, the engineer that can redesign a busted "market mechanism."
Instead of proposing an elegantly simple, market-based solution like Medical Savings Accounts supplemented with vouchers for the truly needy, Mr. Clinton's Machine Age technocrats believed that if enough really smart, really hard-working, really well-intentioned social engineers -- say, 500 health care experts -- worked under the right conditions, they'd come up with the ultimate policy contraption. Now, stunned by defeat, they're looking for scapegoats. Watch your back, Ira!
In the '60s, Bill, Hillary, Ira, & Company dreamed wonderful undergraduate dreams about saving America from the depredations of big capitalism. Their fatal strategic error -- the one destroying this presidency along with the health care plan -- has been their failure to realize that Machine Age America no longer exists. Liberated by the microprocessor, the rest of us created a new American society, while the Clinton crowd made the long climb to power.
Having learned from two decades of radical economic restructuring, the American people know what it takes to produce world-class results at globally competitive costs. Now they insist that their government perform as well as they do. From personal experience, they know that top-down, command-and-control bureaucracies are obsolete. The pundits may dismiss this hard-nosed realism as ornery cynicism, but the real story is a political/media elite utterly out of touch with the deeper forces remaking America's economy, society, and politics.