The GOP, Third Parties, and The Prisoner's Dilemma

The Prisoner's Dilemma is one of the great exercises in game theory. The classic definition (pulled from Wikipedia) is this:

Two suspects are arrested by the police. The police have insufficient evidence for a conviction, and, having separated both prisoners, visit each of them to offer the same deal. If one testifies (defects from the other) for the prosecution against the other and the other remains silent (cooperates with the other), the betrayer goes free and the silent accomplice receives the full 10-year sentence. If both remain silent, both prisoners are sentenced to only six months in jail for a minor charge. If each betrays the other, each receives a five-year sentence. Each prisoner must choose to betray the other or to remain silent. Each one is assured that the other would not know about the betrayal before the end of the investigation. How should the prisoners act?

These choices can be summarized in the following table:

	Prisoner B Stays Silent	Prisoner B Betrays
Prisoner A Stays Silent	Each serves 6 months	Prisoner A: 10 years Prisoner B: goes free
Prisoner A Betrays	Prisoner A: goes free Prisoner B: 10 years	Each serves 5 years

The GOP presents its base with a similarly cruel choice. Only their most delusional Kool-Aid drinkers could call them the party of small government, minimal regulation, low taxes (deficits have to be paid for eventually), and personal freedom. They certainly have had their (brief) moments in certain areas - the Contract For America comes to mind (that lasted about two years) as did the Reagan presidency (which had several benefits at the cost of an increased national debt). One must keep in mind that Reagan was not in any way the choice of the GOP leaders - they wanted George H.W. Bush to be the 1980 nominee. So if one is a conservative or libertarian the GOP represents, at best, the lesser of two evils. There are other, smaller parties out there that would provide far better governance if brought to power, but the fear is that voting for them will split the vote and allow the Democrats to take control (and, ummm, how's that logic working for you right this minute?).

So our current State of the Union is thus:

Two prisoners voters are given a choice of parties. Each of these parties promises low taxes, small government, and personal liberties, but the large, dominant party is known to lie like a rug. If one voter votes according to their principles and the other cowers in fear and votes for the party they know will betray them, then the evil progressives win and they get 10% closer to socialism or fascism (take your pick). If both voters chicken out and vote for the Party of Betrayal, then they'll only get 5% closer to socialism / fascism. If both voters stick to their guns (in the most literal sense) and vote for a Party with Principles, then they are rewarded with 10% less government. Each one is assured that the other would not know about the betrayal before the end of the investigation election. How should the prisoners voters act?

	Voter A votes GOP	Voter A votes 3rd Party
Voter B votes GOP	GOP wins - 5% more gub'mint	Dems win - 10% more butter / 10% less guns
Voter B votes 3rd Party	Dems win - 10% more socialism / fascism	3rd Party wins - 10% more freedom

One would think this is a no-brainer - Electing the GOP versus electing the Democrats gets you the same results, just not as quickly. To pretend otherwise is to engage in a spectacular display of willful ignorance of very recent history (take Bush - either one - please!). The only thing that keeps the GOP relevant is fear, and that fear is mostly irrational... but that's a topic for another post.

Update: If it makes you feel any better, the progressives feel the same way about the Democratic Party. It seems that nobody outside of DC is terribly well-represented.

Update 2: I've never gotten what exactly it is that causes a group of people who ostensibly fear and loathe the corruption that occurs when power is concentrated and centralized in Washington DC to be so willing to ignore and even go so far as to embrace the exact same phenomenon when it occurs in a political party.

A million thanks to the Nobel Committee!

There's a bit of incredulous moaning all over the libertarian / conservative blogosphere this morning over Barack Obama winning the Nobel Peace Prize. Never mind the dubious honor of joining this largely blood-soaked brotherhood. Really, for most of these awards I think they choose the winner by counting the bodies - Carter, Arafat, Gore, etc. They even nominated Adolph Hitler once (yes, it's true).

But back to Barry. He's incredibly gifted in many ways as a politician, but his number-one weakness is his ego - he actually believes his own hype and can't seem to exist outside of the spotlight. Just as he was coming back down to Earth and perhaps facing the realization that his magnificence alone can't do everything he wants, the Nobel Committee comes around and cranks his ego back up to eleven. Nothing anyone else could do could possibly make Obama act more foolishly over the next year or so.

So thanks again Nobel Prize Committee! Yes, you're a bunch of hapless reindeer-molesting morons, but the unintentional consequences of your stupidity will serve the rest of us just fine.

Whither the Massachusetts Kennedy Seat

Apparently people outside of Massachusetts are befuddled by the inability of the citizens of that state to consider a replacement for Ted Kennedy that's not related to him (the closer, the better).

It's simple. They're progressives. They don't want to be responsible for their jobs, their housing, their health care, their insurance, what they buy, what they eat, etc.

Why on Earth would they want to be responsible for picking a Senator?

What I can't understand is why conservatives and libertarians would have a problem with this. What could be better for us than another eternally scandalized, useless, brain-damaged drunk across the isle? It's all win-win from where I'm sitting.

The Ted Kennedy Health Care Bill?

h/t Ace

Apparently at least one prominent Democrat wants to name the Health Care legislation after the late and unlamented (at least around here) Senator Kennedy.

If you ask me, they couldn't pick a more appropriate name to drive this bill home.


(pic h/t Ghengis @ AoS).

Lions and Tigers and Death Panels, Oh My!

As much as I'm not convinced that Sarah Palin is made of Presidential timber, she did drop an extraordinarily adroit turn of phrase when she predicted that government-run health care would result in the creation of "death panels" that decide and control which people with expensive-to-treat medical conditions will be treated and which ones will not. It doesn't particularly matter whether or not it's specifically in the bills that are being debated; simple supply and demand dictate that such things will inevitably occur. It's short, it's snappy, and it resonates. I'm not sure it's entirely honest, though, because "death panels" exist right now in any situation where somebody else pays the way.

There are only five possible resolutions that can occur when a potentially huge medical bill looms:

1) You have private insurance and you can get your insurance to cover it.
2) You get the government to pay for it.
3) You get a charity to pay for it.
4) You or your family have sufficient financial resources to pay for it.
5) Nobody pays for it and the treatment doesn't happen.

Of the four resolutions under which the treatment occurs, the only one that offers full control is #4 - if you pay for it yourself. Unless you shell out the cash, you have to deal with some sort of "death panel." With private insurance, you usually have some control over which "death panel" you'll have to deal with. With the government, you'll have no control. With charity, you'll have no control. If it's really important to you that you or your family don't ever have to fight for the medical dollars to save a life, then what you really need to do is make the decisions that take you to a place where you have the financial wherewithal to control your own destiny.

The Democratic intention to move the entirety of health care under the iron umbrella of government mandates will eliminate your ability to even create a situation where you have empowerment. Ben Franklin's aphorism that those who will trade liberty for safety deserve neither could not possibly apply more than it does here. True freedom and true safety are the results of being able to rely on yourself and your family. Under any other circumstances, you'll probably find yourself staring down the barrel of a "death panel." It's bad enough dealing with them now; if the government is the only choice in town it will be much worse.

Education - Where does all the money go?

I've spent part of the summer watching our idiot legislature in California fail to balance the budget for the nth time, and I always wonder - with all of the resources they have, how on Earth can they fail at such a relatively simple task? I decided to tackle the largest state expenditure: K-12 education (just under 30% of the state budget). We spend a ton of money on this, and the results are abysmal.

Now, since I'm looking to solve problems rather than perpetuate the existing state of epic failure, I'm going to use a zero-based budget. Starting from scratch. We'll start off with the basic facts:

In 2007-8 (the last years I could find data for), there were 6,275,469 students enrolled in K-12 education in California. There were 295,222.7 "Full-Time Equivalent Teachers" teaching them, for an average of about 21.5 students per teacher. Since I like nice, round numbers and small class sizes I'm going to go for 20 students per teacher, which will give us 313,773 Full-Time Equivalent Teachers (hereinafter referred to as Teachers). I only want the best teachers, so we'll compensate them at $75,000 per year each - this works out to $60,000 in salary, $9,000 in health benefits, and $6,000 in retirement / pension contributions. All very generous numbers, which will hopefully keep the teachers on my side through the rest of this. We're also going to assume each student has 7 classes per year (yes, I know there are single semester classes; I'm assuming it all evens out), which works out to $3,750 in teacher compensation per student per year (PSPY).

Of course, students need textbooks. Since I'm generous, I want the best textbooks for my students and I want new ones every year. Let's call it $100 per book per student, times seven classes per year - $700 PSPY.

Students need more than just textbooks: chalk, lab equipment, computers, art supplies, athletic gear, sets for the school play, etc. Let's call it another $100 per student per class- $700 PSPY or $14,000 per classroom per year (at this point the teachers are probably giggling, crying, or some combination of the two).

Let's see. We need a place for students to learn. I want really nice buildings, so I'm going to budget $4 a foot (you can get some of the nicest possible "Class A" office space at this rate in most cities), and 100 sq. ft. per student - plenty of classroom space, plus bathrooms, lockers, cafeteria, gym, etc. This works out to $400 PSPY. We'll throw in another $50 PSPY ($7,000 per classroom) for new desks and other furniture.

Kids need food. Lots of it. Let's say a Whole Foods Pizza each, plus a drink and some fruit. Nice, healthy, nutritious lunch for $10/ head times 180 school days - this works out to a whopping $1,800 PSPY.

Schools don't just run themselves. They need administrators (principals, superintendents, and whatnot), clerical and other skilled workers (secretaries, school nurses, etc.), and service personnel (janitors, kitchen staff, maintenance workers, etc.). We'll figure one administrator at $100,000 and one clerical / skilled worker at $50,000 for every 300 students, and one service person at $35,000 for every 100 students (kids are messy). This works out to $850 PSPY for "support staff."

I'm probably forgetting tons of other stuff, so figure another $500 PSPY (or an average of $35,000 per classroom) for the always-important "Miscellaneous" (keep in mind that if you rent office space at $4 / ft, building maintenance would be included).

This is far from what our reality is. This is pretty much a budget for "dream schools" - schools that should exist in a perfect world. But add it up. My schools cost $8,050 per student per year, for a total of $50,517,525,450 - and most of my costs don't assume any sort of quantity discounts. California's budget for 2009-2010 for K-12 education in dilapidated buildings with ancient equipment, obsolete textbooks, food that's unsuitable for pigs, and supplies purchased by teachers who are paid an average of $45,000 per year - after horrendous, heartless, painful cuts by the evil Governor - is $59,637,256,000. $9,503.23 per kid, 15.3% more than what perfect schools should cost.

So what I want to know is - where does all the freaking money go?

Most Economists are just Cargo Cultists with PhDs.

Analysis like this is the main reason that I consider Economists to be even less useful than astrologers. Economists spend so much time staring at numbers and trying to find curves that describe them that they forget (or ignore) the fact that their data aren't the result of some mathematical equation waiting to be discovered, but are the sum of millions (or billions) of people each making dozens of decisions per day. This is the economy.

The problem begins when economists start loving their numbers too much and confuse correlation with causation. We wind up with PhD-level cargo cult analysis. In this case, the reason for increasing unemployment is simple: the government is scaring the crap out of business. The rule of law is even more subservient to the whims of politicians than it has been in the past (GM / Chrysler bankruptcy proceedings, anyone?). We're facing very significant tax increases in the near future, and the politicians are being even more disingenuous than usual when describing how it will pan out. With the "card check" legislation in the pipeline we're faced with uncertainty as to whether we'll be able to easily adjust our workforce to economic and other business conditions. Those of us who are strongly affected by the value of the dollar are deeply concerned about the government borrowing money with its printing press.

Any downturn creates opportunities for well-run companies to expand, but right now the uncertainty is exceptionally high. There are some opportunities that are irresistible under these circumstances (I just expanded one company this year), but for the most part we're looking at mountains of potential problems offset by a bunch of politicians and economists saying "don't worry - trust us - we know what we're doing." Umm... yeah. Right. You guys have just been batting 1.000 lately.

Businesses don't like uncertainty. More uncertainty = more conservative management. We're going to wait and see how things shake out before risking what capital we have left. There's no surprise here; we're just (mostly) rational people making (mostly) rational decisions.