Related to: Politics is the Mind-Killer

Both sides seem to have a stake in the current budget supercommittee failing. Why?

The NYTimes reports:

Intrade, the political futures market, currently puts the odds at just under three to one in favor of both a Republican takeover of the Senate and retention of the House — 74.4 to 21.5 for the Senate, 72.2 to 28 for the House.

According to an ABC poll, a majority of Americans, by a margin of 55 to 37, believe that the Republican nominee will be victorious. Republican voters are overwhelmingly optimistic about their chances for the White House, 83-13. Democrats, by the far smaller margin of 58-33 percent, think President Obama will win re-election. Independents, by a 54-36 margin, believe that the Republicans will take the presidency.

The chance of all three contests going the Republicans’ way is less than 50-50, but if they do, the payoff would be huge.*

As a top Republican Congressional aide put it in a interview about the supercommittee’s deliberations, “Winning the trifecta — House, Senate and White House — in 2012 is a game changer. We would be in the driver’s seat.”

In this scenario, Republicans in the 113th Congress would swiftly enact a version of the budget proposal put forward by Paul Ryan....

Capitalizing on collapse is not the exclusive terrain of the right. There are some on the left who believe that simply taking no action whatsoever before this year’s November 23 and December 23 deadlines will force the expiration of the Bush tax cuts at the end of 2012. The expiration of these cuts will produce an estimated $3.8 trillion in new revenue between 2013 and 2022 – enough to maintain many of the key safety net programs with relatively minor tinkering.

Of course, this strategy depends either on a Democratic chief executive to veto Republican legislation extending the Bush cuts or on the less likely event of Democratic retention of the Senate or a takeover of the House.

In other words, the Republicans believe they can achieve complete victory so that they can enact their whole agenda, while Democrats believe they can block this victory.

On a key component — Obama's re-election — Republicans believe they will defeat Obama with 1:6 odds, while Democrats believe this event has only 3:2 odds.**

With a 9-fold difference in this key perception, it seems highly unlikely the two will reach a compromise.

 


* Not necessarily true — you can't just multiply 74%*72%*83% as these events have high positive correlations.

** Yes, perhaps the people in power have different perceptions than the rank-and-file electorate — but they still must win their base's support to gain re-election.

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I agree with the game-theoretic principle here, which I assume is the part of relevance to LessWrong, but in the interest of mandatory token disagreement: the stated expectations of voters are probably an extremely bad guide to the actual expectations of policymakers, and when either party does achieve a trifecta they very swiftly moderate what has been portrayed as their "full agenda." Barring extreme external events Ryan-style budget cuts aren't going to happen.

when either party does achieve a trifecta they very swiftly moderate what has been portrayed as their "full agenda."

In US national politics, I suspect that the least secure incumbents in Congress are also those that are closest to the "center" between the two parties, and that when they're replaced, they're often replaced by similar "centrists", so the median ideological position of the parties doesn't change much.

I also imagine that under parliamentary systems in which people vote for parties rather than individuals, this isn't the case.

Not to mention the fact that they'd need to be able to override cloture in order to achieve the sort of "swift enactments" being discussed.

calcsam, congratulations on writing a non-mind-killing post concerning politics.

[-][anonymous]20

If it did succeed, it was seven sentences; if it didn't succeed, it was only seven sentences.

Either way, it is better than the par for the course around these parts.

Thanks. My model is this, though that is more about election than governance.

[-]knb10

I doubt the professional politicians who are making big decisions actually have such wildly disparate predictions. Rather it seems that political amateurs have lousy predictions about who is likely to win--not surprising since the stakes for amateurs are pretty low. Intrade has Obama's chances at 51% for reelection. I would be surprised if the GOP leaders in Washington are banking on winning the trifecta.

*Edited to fix a typo (of should have been if -- in the last sentence).

What makes you think the professional politicians are any better than say, Nate Silver or the pollsters, all of whom go into the Intrade stew? Politicians routinely make epic mistakes ranging from their personal life to grand strategy (in fact, one such example - Newt Gingrich and the government shutdown - has multiple parallels in modern American politics, from Gingrich himself being back to the recent near government shutdown).

[-]knb20

You misunderstood what I was saying. I was referring to this:

In other words, the Republicans believe they can achieve complete victory so that they can enact their whole agenda, while Democrats believe they can block this victory. On a key component — Obama's re-election — Republicans believe they will defeat Obama with 1:6 odds, while Democrats believe this event has only 3:2 odds.** With a 9-fold difference in this key perception, it seems highly unlikely the two will reach a compromise.

The post conflates the outcome of an opinion poll of the general population with the beliefs of the Democrats and Republicans who will actually make big budget decisions. There is good reason to expect the professionals have more accurate expectations than a bunch of poll-taking amateurs. I wasn't saying that the politicians are more accurate than Intrade, I was saying they're more accurate than poll-takers. Actually, I wouldn't be surprised if a lot of politics professionals use Intrade to estimate probabilities.

[-][anonymous]00

I doubt the professional politicians who are making big decisions actually have such wildly disparate predictions. Rather it seems that political amateurs have lousy predictions about who is likely to win--not surprising since the stakes for amateurs are pretty low. Intrade has Obama's chances at 51% for reelection. I would be surprised of the GOP leaders in Washington are banking on winning the trifecta.

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