Gail Collins, who's fast becoming the deepest Times columnist -- despite her intentionally fluffy style -- wrote a nifty op-ed explaining why consumer choice doesn't help when it comes to student loans (and moisturizer). For one, the government regulates loan terms (the meat of the product), meaning the only choice relates to customer service, which nobody cares about, and anyway most schools have exclusivity deals with a few lenders. Her broader point, however -- that consumer choice doesn't always help -- warrants further exploration. 

There are two ways we tend to suffer from having choice: we act on bad information, and we act selfishly (put another way, we're not presented with the social cost of our actions).  As for the first, the most common reason for this is marketing. Marketing is designed to create a demand and image for a product, which may or may not reflect our actual needs or the actual quality of the product. This can be simple omission of information (say, with early cigarette commercials or fast food commercials). Marketing also creates demands for products where there was none -- we see this all the time with young children and toy makers. Of course, marketing can also gloss over the social cost of a product as well -- no commercial for hybrid cars mention the huge carbon footprint of building the car in the first place, or the astronomical number of people killed by cares each year; no fast food commercial mentions how many acres of rainforest are destroyed to raise cattle. 

The most violent example of suffering from consumer choice is with health insurance. In this case, the bad information arises from the fact that the differences between products are incomprehensible. "We accept most Medicare Part D plans." Now, granted, I don't have a Medicare Part D plan, so it's no surprise I have no idea what that is, but even if I did have one, I imagine I might not know -- and I certainly wouldn't know why my local Walgreens did or did not accept my particular Medicare Part D plan. And we're just talking about picking up some medicine. When it comes to determining if a health plan, say, will provide long-term end-of-life care, forget about it -- you couldn't pay a lawyer enough to figure that one out for you. Clearly, the negatives of consumer choice when it comes to health care outweighs the positives, as most people simply want affordable and timely basic and emergency care, and aren't overly concerned about which chiropractor they can see. 

Perhaps the most egregious example of consumers not considering social costs is our car-buying habits. Literally the second gas prices went down, people began to buy fuel-inefficient cars again. Several columnists have complained that, "Nobody wants fuel efficient cars now, so the government is shooting the auto industry in the foot by mandating their production." Excuse me? We still have a dire oil shortage, and the globe is still warming. 

There are, fortunately, simple ways the government can resolve the dilemmas of choice. Organizations like the FDA and FTC already help consumers with the dilemma of bad information by fining companies who make false claims, and by requiring certain information to appear on packaging. There's no need to reinvent the wheel, but the regulation needs to be tightened. Why are pharmaceuticals advertised on television? The notion that consumers should advocate a drug to their doctors is insane.

As for enforcing socially conscious decisions, the government merely needs to appropriately tax socially harmful products. Thomas Friedman has repeatedly advocated for a tax that keeps gasoline above $4/gallon. Such a tax is commonsense. That said, the government has never truly addressed the social cost of cars. The injury and a death stastics are astounding (think several wars), not to mention the carbon footprint of the car itself. Cars are considered a necessary evil -- that is, their necessity outweighs their harm to society -- but anyone with half a brain would conclude that they're mostly a luxury that could easily be replaced by public transportation in almost all areas (remember, a bus carying only ten people or a truck delivering the groceries of several families will always be more efficient than a hybrid auto). I don't think anyone who currently owns a car can truly afford the thing, but their ownership has been heavily subsidized. Only by revealing the true cost of cars, through taxation, could consumers make a socially acceptable choice regarding car ownership. 

Recently, California held a special budget election. Never has the problem of "public governance" been so clearly illuminated. For those who don't know, the California constitution is such that budget measures can be passed by the people with a 50% + 1 vote, but only by a 2/3 vote in cogress. Essentially, this means that the public is presented with a series of hairy budget measures that even the expert tasked with the write-up in the voter information pamphlet comes out undecided about the fiscal effects of any given policy. And yet, here we were, being asked to determine the budget of a state with an economy larger than most countries. Out of principle, every voter I know voted no on each measure -- we simply had no idea what their effects would be. 

I'm all about individual freedoms, but with some decisions, I'm not to be trusted.