Sunday, November 23, 2008

Doesn't just wanting "change" mean something was seriously wrong?

Much of the rhetoric around Obama's successful election campaign, as well as the economic problems that are facing the country and world, can be summarized in one word: change. To take a representative quote:

Nobody knows exactly what they should, but anything is better than nothing.
This from New York City mayor Bloomberg, discussing government bailout of companies in the wake of the stock market crash, on the September 21 edition of Meet the Press.

Something really bothers me about this line of "thinking", and I think I can explain it with a little mental exercise.

Imagine a game in which the object is to get the highest score on a scale of 1-100. The game allows you to make "moves" when it is your turn; for simplicity, let's just say it's some set of moves numbered from 1 to n. What the moves actually *are* isn't important for this thought exercise. In fact, the moves are completely meaningless to the players: the game does not tell you ahead of time what the relationship between the moves and scores is. The game also does not tell you ahead of time how many moves you will get to make. All you know ahead of time is that each move gives you some score between 1-100, and to simplify the thought process a little, let's assume that the game also tells you that if you just randomly pick rules, your average score will be 50, that is, the distribution of scores is some symmetric curve around 50 (it's probably best to just think of a constant distribution, that is, every score from 1-100 is equally likely).

So, basically, it's a guessing game: you make a random move, you get a score. The game might end at that point; you don't know. Your score in the game is the score of your last move.

Note, however, that you don't *have* to make a different move. If you're happy with the score you have, you can keep choosing the same move and getting the same score.

So, let's consider playing this game. You must start by making some random guess, and you get back a score. When and why would you choose to make *another* guess? Clearly, if your score is less than 50, it is *always* a good idea to make another guess, because the expected value of your new move is higher than your old one, and you'd rather end up on a better score. If your score is already over 50, it only makes sense to guess again if you have some way of predicting how many moves the game might go on; otherwise, if you guess again and get a lower score, you run the risk of the game ending and thus ending up with a worse score. Since the rules of the game dictate that you *don't* have any way to predict how many moves the game will last, guessing when you are over 50 is at best risky, and perhaps suboptimal.

In either case, it's important to note the following conclusion: the *only* time when it makes sense to randomly guess a new move is when you are already below the halfway mark.

Now let's pull this back to "change": according to Bloomberg and the apparent social, government, and MSM consensus, *any* change right now is better than none at all. Any *random* change; IOW, they are advocating that in our game, we definitely should take another move and randomly get a new score. In the context of our game, this implies that the current "score" must be less than 50, must be less than "halfway".

Do you see the dilemma? Assuming of course that our game is a decent analogy for the "economy" and generally for "society" - and it's clear enough from centuries of failures, mistakes, tragedies, rise and fall of ideologies, etc, that the relationship between the "moves" that government can make and their "economic score" is nearly random (this follows mathematically from the highly nonlinear and thus chaotic nature of economic and social systems) - this means that either A) after 232 years of being "in charge", our government is still scoring less than halfway in this game, or B) random change is *not* the optimal move.

In either case, our government is failing us: either they have failed to achieve the halfway score that a monkey throwing darts at a dartboard to run the economy would achieve (the median of our distribution), or they are now embarking on a venture that is going to make things worse on average.

The point really is: change for change's sake is never a good idea unless you are in the total crapper.

I realize that Democrats will be happy to conclude that the economy *is* in the crapper and that it's the republican's fault, and thus random change *does* make sense. Sorry, you don't get a pass: economic momentum spans far more than the term of one president or congress, and includes the consequences (usually unintended: politicians don't have much incentive to think longer-term than the duration of their terms, unlike private parties who have incentives to think in terms of spans of time that are at least their lifetime long and oftentimes the lifetime of their children and children's children) of decisions made many decades ago. The current economy cannot be laid at the feet of Republicans or the Bush administration; it's a bipartisan failure, tracing some of its origins to events such as the imposition of the individual income tax and the creation of the fraudulent Federal Reserve system that go back almost a decade and which had the complicity of every congress and president since, Republocrat and Demopublican.

If I had hired "government" to run my economy and the solution they gave me after 232 years was "random change", well, they'd be fired.

And isn't that what the government is? People that work for us? Doesn't the preamble say "for the people"?

I say we fire 'em, and look for a group of people who has something better to sell us then "change". How about, you know, an actual *plan*?

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