Friday, February 21, 2020

Good Ideas By Acclimation Or Sausage Being Made?

In the game theory of multi-stage games, the "right" solution, referred to as subgame perfect equilibrium, is to envision the equilibrium outcome in each subgame first, then roll that back into the decision making in the first stage of the game. In this case, we get a forward looking, but realistic, outcome.

I could only stomach watching about a half hour of the last debate.  In that time, healthcare came up and the candidates were passionate about the need for all Americans to have health insurance.  This was especially true about Sanders and Warren, but also Biden and Buttigieg. (As an aside, the brief time that any candidate was allowed to speak lent itself to soundbites and slogans rather than well thought through argument.  My preference is for the latter.) Yet in what I saw, only Klobuchar made reference to getting some bill through Congress and how Purple State Legislators would vote in the process.  That too was a soundbite, but she got a nod from me for at least recognizing the issue in thinking this through as a subgame perfect equilibrium.  Warren dinged Klobuchar because her plan wasn't detailed enough.  And Warren insisted that she gets things done.  I'm still undecided now, but I do wonder whether the candidates playing non perfect equilibrium strategies realize they will get derailed along the way and if they have thought through (but not articulated publicly) what they will do when that happens.  I'm now going to walk through a simple three-stage game to illustrate the issues.

Stage one is the game for the nomination.  We can call that the Primaries season.  Stage two is the general election.  This matters not just for the Presidency, but for Congress as well.  Stage three is governing after the election.  One should note that while in the third (last) stage you simply analyze each possible subgame for its equilibrium outcome, in the second stage you must consider the likelihoods that particular subgames will occur, and ditto for the first stage.  Conversely, by looking at the strategies employed by candidates, you can make some inference about the likelihoods they perceive in the next stage of the game.

The Democrat candidates articulated first priority is beating Trump in the general election.  But one might hypothesize that their real first priority is getting the nomination for themselves.  At present, there is too much uncertainty to change that, but I want to ask this question, which might have eventual impact, when the uncertainty is reduced and it is evident that the likelihood they'll get the nomination is low, will they then care about selecting who does get the nomination from among the candidates who still have a chance?  I'm going to use this recent poll about the Nevada Caucuses to work through a hypothetical scenario.  (I must admit some confusion about Bloomberg.  He is not mentioned explicitly in this poll, but he was allowed to be in the debate while Steyer was not.  Something isn't adding up here.)

Sanders is the leader but he and Warren taken together have under 43% of the vote.  So if you cluster the candidates this way, the rest have the majority.  In my hypothetical, Buttigieg, eventually realizing he can't be king, then casts himself in the role of kingmaker.  He makes a behind the scene approach to Steyer to say we need a centrist candidate getting the nomination.  You and I should both drop out, throw our support behind one of the others, and commit our high roller funders to supporting that candidate as well.  The choices left are Biden and Klobuchar, because Bloomberg just has too many negatives.  Indeed, after they have made their choice publicly, they will have a similar conversation with Bloomberg to ask him to withdraw soon and endorse this candidate.  They understand that Bloomberg has been under attack by the media and by the other candidates, so as a matter of pride it might be difficult for him to do that, at least not immediately.  They agree to let Bloomberg choose the time of his own exit, so that can be as graceful as possible, but once it does happen Bloomberg has agreed to throw his support behind the centrist candidate who is now the leader for getting the nomination.

Between Biden and Klobuchar, I can't predict whom they will choose.  My own preference there is Klobuchar, partly for the age factor and partly because as subgame perfect equilibrium goes, I think the Obama administration got that wrong.  The Tea Party may have been inevitable no matter what.  But losing the majority in the House after only one term was not inevitable, or so it seems to me. I wrote about this in my previous post, Lamentations about our Politics.   Regardless of this, the centrist leader is better positioned to attract Republican suburban and gentrified urban voters in the general election who will make a crossover vote this time around.  These voters will understand that their taxes will go up some as the next Congress does push through healthcare reform.  But these voters aren't prepared for that tax increase to be too large.  They are the proverbial median voters in the general election.   If the centrist candidate really can get many of them, then this is the way to maximize the likelihood of beating Trump.

Let me now speculate about how a Sanders or Warren candidacy impacts the Congressional races.  Turnout among young voters will be higher.  But candidates in Purple districts probably will have to distance themselves somewhat from the Presidential candidate.  This will be evident and assist the Republican candidate they are running against.   So, it seems reasonable to consider the possibility, even the likelihood, that if either Sanders or Warren do become the Presidential candidate and do win in the general election, they will be faced either with the Republicans still holding onto the Senate or with having very slim majorities in the Senate and the House.

My inference about Sanders supporters is that they either ignore this sort of thinking or nonetheless expect overwhelming majorities in Congress.  In that scenario, of course, having a detailed plan for the legislation to be put forward is then useful, and the then President will have delivered on the various campaign promises that were made.  The supporters will be grateful for that.

But what of the slim majority scenario or Republicans maintaining control in the Senate?  Can any legislation get through this way that the President will sign?  If legislation does get through, will it have any resemblance to the policy positions that the Presidential candidate put forward during the campaign?  If not, how will supporters during the campaign feel about the outcome?

My heart is to be quite liberal on the issues.  But my head tells me that for this to actually happen, upscale voters, whether generally voting Democrat or Republican, need to embrace large tax increases for themselves into the indefinite future.  We are not there yet.  Most voters, these included, have learned to vote their pocketbook.  Voting more selflessly, for the good of the order, requires moving away from pocketbook issues among this constituency.  If this is indeed how the politics will play out, then a majority that assembles to beat Trump will dissipate thereafter.

And if we are in a sausage-being-made world when it comes to additional healthcare legislation, it is no longer obvious that it should be the top priority for what a new Congress handles. An infrastructure package might more readily garner bipartisan support.  But the new President who has written a detailed plan for healthcare during the campaign, might then feel obligated to make it the top priority.

It would truly be wonderful if social need was the driver in how our politics plays out.  Yet it would also be good if voters could think it through in this subgame perfect equilibrium kind of way.  Then candidates might be less prone toward slogans and more prone to connect the nomination to the general election and to connect that to the likely legislation that will emerge in the next Congress.

If only wishing would make it so.

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