Beyond Binomialism

The practical political-economic model we use now is binomial. It is responsible for the frustration we experience with the republican form of government our founders very deliberately devised to secure the general welfare and promote domestic tranquility.

Our constitutional form of government is deliberately anti-monarchist and more pluralistic. Consolidation of power is, by the wisdom of our founders, based on the historical evidence and their own experience, to be very deliberately avoided.

While a binomial, two-party system looks pluralistic, however, it functions to consolidate power and reduce the ever-present fundamental risk of sovereign power possessed by The People to command and control their fate.

Our founders recognized that sovereignty, even for monarchs, is the baseline risk.

Claiming sovereignty for yourself is a risky business. It is the fundament of power, and its accumulation is contrary to the natural order of things, disturbing to the domestic tranquility, inimical to the general welfare.

The People are constitutionally endowed by nature to rule--to self determine. Our founders correctly recognized this to be a consistently confirmable hypothesis foolishly subjected to self-indulgent legitimacy theories.

Nature does not give a hang about the king's divine right to rule, or the more secular binomial partisan technique used now to secure a popular sentiment with religious fervor.

Where the king once needed a large, loyal bureacratic elite to manage the gamma-risk accumulation, a two-party system has emerged to suggest a legitimate pluralism characterized by the consent of the governed.

Binomialism (a pseudo-competition between Democrats and Republicans, and more broadly the public and private sectors) is needed to reduce the liability of an illegitimate, and detrimental, accumulation of the risk in an environment in which sovereignty is legally deconsolidated and devolved. A bifurcated, partisan loyalty substitutes for the antecedent monolithic allegiance of royalty.

Emerging as the republican form of government, partisan diffusion of the risk innovated its cumulative management. An iron-law, bipartisan, organizational technology evolved along with the strong democratic tendency of the risk to be managed at the fundament by the sovereign power (the natural right) of The People.

In order to avoid the pitfalls of democracy, our founders thought it best to achieve a peaceful and prosperous pluralism through a republican form of government. Although the term "democracy" does not even appear in the Constitution, its operational design is intended to maximize sovereign power at the fundament for a legitimacy of power exercised with the "consent of the governed."

Binomialism reduces the liability of the risk by simulating the consent of the governed and a process of continuous improvement that is the mark, the verifiable proof, of an operant pluralistic process.

Since the management of risk in an accumulated, gamma proportion is political risk subject to electoral sanction, the result of its management is not considered to be a criminal liability. It is absolutely critical for maintaining the Hamiltonian model to keep the management of the risk politically accumulated because of the strong democratic tendency of the republican form of government. This is where Jefferson and Hamilton parted ways.

Hamilton was more concerned with supporting the virtue of a dominant power elite endowed by nature to be the ruling class despite the utopian sentiments of language in the Constitution that suggests a more fundamental power. That language, according to Hamiltonians, is there to empower elite rule with legitimacy. The language is "loosely constructed" to allow the power elite the means to apply power with limited liability, to which Jefferson maintained the Hamiltonians should be held strictly liable.

If they seek to become "the king," which is illegal, Hamiltonians should be held liable by the strictest interpretation of the law, according to Jefferson.

Hamiltonians considered Jefferson's strict constructionism to be impractical if not dangerous. A strict legal interpretation of devolved sovereignty, for example, could lead to a Reign of Terror. To the elite, especially at the time, it was a very real possibility. Anybody could be accused of being a royalist and subjected to all manner of criminal treatment just by trying to accumulate wealth and power (by pursuing life, liberty and happiness).

Of course, the natural right to pursue happiness includes the accumulation of riches, like a king. Resolution of this paradox is at the center of the ideological debate that enslaves electoral politics to a constant accumulation of the risk. The debate (the empirical critique inherent to an operant, pluralistic process of continuous improvement) is constructed to keep the risk in a gamma proportion, motivated by the inalienable, constitutional right to pursue happiness by the strictest construction.

Since the motivational quality of the debate is essentially philosophical, and philosophy is not something most people have a practical command of, the debate lingers in a perpetual limbo of specious reasoning and logical fallacy. How many people know what a post-hoc fallacy is, or care? Their ideology is a psychological condition--literally an object of both classical and operant conditioning. When the bell rings, we salivate; and when that fails, the critical philosopher will be starved into submission, learning his lesson, operantly conditioned, having learned what his happiness really means. Is that not what we are facing as the unemployed face the prospect of no relief until either Democrats extend unemployment or Republicans get their tax cuts for pro-growth investment?

With the probability that we will get a combination, a compromise measure, of both keeps the risk in a gamma proportion, dependant on the directives of a power elite that defies natural law, our Constitutional rights and privileges, by the strictest construction.

Loosely constructed, our natural rights are a philosophical eristic--a tool for gaming the system by psychological manipulation (popular sentiment) just as Jefferson, and Socrates for that matter, critically described and explained it.

Since drinking the hemlock is not the ideal redemption of pursuing "the good life" for most people, popular sentiment is largely limited to a phenomenological interpretation of a power elite, persuading us to run with the herd.

According to bankers, for example, the populist sentiment following The Great Recession is more a nuisance than a force to be reckoned with. The populace, however, is not so naive to think that the compensation of bank executives just appeared out of nowhere. It has to come from somewhere...like the net worth of their own customers.

Despite all the phenomenologizing of expert, Ivy-League economists and pop-media commentators, the value lost and gained that supports bank profits following The Great Recession did not just vanish and reappear out of thin air. It has been consolidated and is being largely distributed to the upper income class. Thus, as Bernanke recently reiterated, we will be in a recesionary trend for at least five more years.

The resulting austerity "derived" from deliberately inscrutible and circuitously indirect means is described and explained by the power elite as the administration of the public good. The People are then rounded up to binomially align, re-align, and run with the herd.

Hamiltonians argue their policies and practices avert the probability the herd will stampede. The herd (the legal sovereign) is a crude, unruly mass that must be ruled by a representative form of government, expressly endowed by the Constitution with the power of any and all means necessary, loosely constructed.

The bailout, for example, and bank profits described as "well in excess of expectations" (not admitting, of course, that the austerity is the source) was sold to The People as a necessary means for securing the general welfare.

We The People must now patiently wait for all that welfare to trickle down, allowing over-consolidated financials to accumulate profits from much-needed austerity.

The market is made for The People to sacrifice as liabilities are settled without risk of criminal liabiliy by too-big-to-fail firms like Goldman Sachs who, after The Great Recession, is only guilty of an omission of information, not commission of a crime.

Despite the glaring miscarriage of justice, The People will be assuaged by the sheer force and legitimacy of public authority described as any and all means necessary having been applied with all due diligence to derive the consent of the governed and secure the general welfare.

Goldman Sachs will publicly disclose its omission, but its admission presents no firm risk because it is too big, by confirmation of public authority, to fail.

Goldman Sachs will continue to be the largest investment bank entrusted with trickling down wealth it only seeks to accumulate (the problem, not the solution).

A concise critique can only describe the public administration of the Goldman case as a tragic farce, not to be tolerated, but it will be.

The outcome reflects badly on the Obama administration and the two-party system. It cannot be blamed on the Bush administration, and the organized alternative is the Republican party. It not only tends to confirm the one-party-system hypothesis, but also provides more evidence the free market is rigged for the consolidation of capital and markets.

At the same time of the Goldman Sachs settlement, Senator Dodd said, not ironically, with full disclosure, following the passage of financial reform, "crisis will happen."

The task now is to organize the consent of the governed, post hoc.

So our choice (falsely constructed) is binomially reduced to either Democrats dictating freedom for the general welfare, or Republicans dictating freedom in the name of the general welfare, to mind the potentially unruly herd. The effect is a net consolidation of the risk, and an aversive consolidation of its value by limiting the risk of liability (the retributive value of the risk--the populist sentiment considered to be more a nuisance than a threat) to political process, managed in gamma proportion.

The binomial processing transforms the alpha risk, accumulating it into a gamma proportion. Elite management of the risk arbitrages the gamma into beta risk that accrues in the form of the current value of the risk.

The TARP program, for example, arbitraged the value of the limited liability to the risk by political, non-market, means. Since the market could not, and still cannot, democratically sanction the bank recipients because of their size, the value of the risk was, and will be, representatively awarded to conserve the value of the risk in the gamma proportion (the value is re-presented and arbitraged as the current value of the risk).

The liability of the banks bailed out by the TARP was inextricably bonded to the current value of the risk, marked to the market. Their failure would have completely reduced the current value to a summary accounting of the risk, suffering the liability of being collapsed, transformed, into an alpha-risk, crisis dimension. While Senator Dodd accurately describes it as an unavoidable risk, the crisis associated with the accumulation of alpha risk can, however, be averted.

While the hypothesis that the elite operated to avert complete economic collapse (complete devaluation of the current risk) is a true statement, it fails to recognize that the means to avert it--gamma risk management of the risk--is what caused it.

Reforming the hypothesis would mean destroying the current valuation of the risk arbitraged into a gamma dimension and returned to be arbitraged in the form of beta-risk volatility, avoiding the alpha risk (the risk of liability).

The Hamiltonian model cycles and recycles the risk, re-presenting its value in a current, useable form, driving the ideological sentiment of the binomial political system into a structured critique of validation rather than the verifiable hypotheses (the successes and failures) of an unfettered, free-and-open market ruled by the herd.

The best way to not be trampled by the herd is to be so big you can't be trampled. It works both politically and economically.

Goldman Sachs and Bank of America are so big they cannot fail; and following The Great Recession, with the market having been even more consolidated and financial reform that assures bigger is better, they only get bigger.

Neither Democrats or Republicans are willing to fix this problem of scale. We have to go beyond binomialism to operationalize the value of the risk with the risk of liability at the fundament.

There is not a political duopoly of power, there is a monopoly of power. Busting this trust requires going beyond the binomial management of sentiment to encourage an alternative independent of bipartisanship.

More powerful than the organizational technology itself is the psychological element operationalized with it. A perpetual lust for dominance is the motive that drives the organizational machinery.

When Democrats and Republicans compete for public sentiment, popular consent is secured in name only (bi-nomially), limiting the liability of the powerful while deriving current value from the aversion of that risk. Deriving that value without true accountability is a psychological trick--it is the risk that is averted.

A true accountability reverts, rather than averts, the value of the risk. President Obama was an ingenius psychological ruse. His rhetoric suggested the subversive reckoning of the risk. The party, post hoc, considers its policies and programs to therefore be the empirical consent of the governed, and the negative vote that disconfirms that hypothesis will be, in the same way, considered by Republicans to be positive verification of its policies and programs.

Breaking the cycle of false induction--to truly test hypotheses--requires a pluralistic mechanism. A binomial party structure is not that mechanism.

The beauty of a free-market mechanism is that it subjects ideology to the rigors, the ethic, the virtue of emirical verification. Its recognition is a transformative process interrupted by eristics concerned with the false efficiencies of consolidated power and the natural predisposition for its pursuit, shaping the sentiment that literally rules the value of our existence.

The transformation is a philosophical one, initiated by recognizing the virtue of an inductive, cognitive process toward realizing the good life of our "natural" existence. It is an ethic to which our founders had been so enlightened, intending a free-market mechanism to be the object of political process (limited government) rather than being subjected to it.

It is time to re-declare independence and re-present the natural rights of sovereign power.

Beyond binomialism is the democratic-republic. It is not one or the other. They are not mutually exclusive practical models, but work together to yield a syncretistic practical effect. Weakness of one is compensated by the strength of the other.

We tend to use an either/or application of the model, however, diminishing the syncretism that would reduce the amount of error toward applying the popular consent of the governed. Instead, there is a deliberate trade off that produces an unstable value of current risk.

The elements for stability are present but ideologically bifurcated to produce a current value of the risk that requires cyclical correction without improvement.

Financial reform, for example, having become law after members of the Republican faction, staging a strong partisan resistance, finally signed to it following a highly technical debate, is a cycle of regulation and deregulation that measurably destabilizes the value of the risk, providing the motive to change it without any real improvement.

Bipartisan compromise is not syncretic, it is discretely binomial, appearing to be an inductive, pluralistic process of improvement. It is idiosyncratic, validating the status quo ante through a deductive process that only looks like confirmation of a popular sentiment ideologically derived.

Popular sentiment beyond the binomial is considered idiopathic and functionally deficient; a psychological disorder that undergoes intensive media therapy to exorcise the radical demons of change from the absolute and uncompromiseable morality of the body politic.

The democratic component of our democratic-republic largely exists in economic form--the private sector: the free-market domain.
From our founding, governance is largely a function of private practice, ensured by governmet in that limited capacity.

Where government acts to ensure consolidation of the marketplace is where we see it beyond its limited capacity (e.g., a multi-billion dollar bailout and a financial reform that accomodates crises its authors assure will subsequently occur).

Free-market economics works, but it requires income to vote in the marketplace. If the income is not present for democratic governance (liquidity crisis), it is well within the limited capacity of government to deconsolidate the capital and provide the liquidity necessary for a democratic form of governance.

The binomial expression of that capacity is bailouts for consolidated banks and compensation for being unemployed.

Beyond the binomial expression is the assurance of a free and unconsolidated marketplace in priority so "We The People" can get down to the business of governing ourselves with the naturally endowed freedom protected by The Constitution of the United States.