Alignment and Disconnection

Political economists spend a lot of time identifying alignment of incentives and the disconnection of risk from the reward. Analysts spend a lot of time in these dimensions because they are highly predictive.

If we can identify probable incentives to act and the probable techniques used to derive value, analysts are more likely to predict the direction of trends both long and short, political and economic.

As "the direction of trends" descriptively suggests, analysts identify how trends are being directed and why. The incentive to act "directs" a trend, purposefully manipulated toward a predetermined goal. Thus, the "direction" (the manipulation) of the trend.

The current deficit-and-debt-reduction debate provides a good example of trending analysis. In this debate we see policy options to control risk philosophically motivated. Keep in mind that the Tea Party membership adheres to a philosophy of risk that has been thoroughly tested and disconfirmed, yet it insists on it being applied in its pure, unadapted form, fundamentally misattributing its failure to its adaption. Combined with technical means, the risk is predictably directed to a probable outcome that is not necessarily in the self-interest of the actors, their constituents, in the desired direction, or for that matter, philosophically consistent.

The trend can change simply because the outcome does not reconcile philosophically, as in the case of Tea Party activists aligned against both Republicans and Democrats (which was an easily predictable trend modeled in the gamma-risk dimension). Binomially structured, a left-of-center realignment was reasonably expected to firmly follow a strong, recessionary trend. Instead, a strong, populist sentiment quickly realigned with conservative philosophy after so-called liberals demonstrated how illiberal they could be.

Identifying all the risk factors--like the empirical value of your working philosophy--is a function of predicting the future value of the risk (like an otherwise unlikely sovereign-debt crisis). It predicts where winning players should be positioned at any particular time. Ignorance is bliss until it is too late to change your position.

Changing positions determine (indicate) likely trend reversals and, with added complexity, subsequent valuations that appear disconnected. While outcomes may in many respects be unexpected, they are not necessarily unintended, which makes a normative valuation of the risk cognitively tense and complex. Culpability becomes an ambivalent tension between ontology (probable outcome despite purpose) and teleology (probable purpose despite the outcome). It is important to remember here that once outcomes are deemed to have ontological legitimacy, the incentive (the telos, the determination) to act in such a way increases and the trend is highly probable until the legitimacy comes into question (until a de-ontology becomes apparent, like needing government to control accumulated risk that, philosophically, is supposed to be ontologically legitimate--laissez-faire--if it does not accumulate).

Where the deontology occurs is where all the risk has accumulated--where it has been disconnected from the risk takers and assigned as pure detriment to be publicly consumed in the form of public debt which is now, predictably, in crisis.

The risk to be now consumed is in the form of the need to tax. Since the risk takers (the risk makers being falsely described as job creators) largely control the apparatus of power, the risk (the tax, the detriment) will be assigned to those (the risk consumers) who do not have the means (the power) to control it despite having that power (self-determination) being the legitimate philosophy of the risk. Consumers being culpable for assuming risk they cannot control is clearly a false assumption--it is illegitimate. There is, then, a disconnection between risk producers and consumers and the incentives that govern the direction of the risk perversely align to surplus detriment into a cataclysmic, crisis proportion.

Philosophically, the risk is out of proportion. It is a critical, crisis indicator, and despite all the value poured into ignoring it--having accumulated $14 trillion, and counting--the discrepancy cannot be empirically ignored. The disconnection cannot be consensually maintained so it will be validated--reorganized and aligned--in the republican form with the Tea Party providing a semblance of verifiable, Constitutionally consensual, accountability.

Since the risk ontology cannot be avoided, there is an attempt by conservatives to constitutionally endow the detriment through a balanced budget amendment to the U.S. Constitution. The incentives will no longer be perversely aligned--they will be constitutional. The disconnect between political-economic philosophy and practice will no longer determine the probable direction of the risk. Binomially structured or otherwise, risk will be legitimately aligned with (determined by) the Constitution to which every executive of the administrative state swears an oath to protect and defend.

Theoretically, with probability out of the way, what remains is deontological certainty of the risk. Instead of being managed into an ever-larger proportion of debt-to-GDP, the risk is "balanced" (directed) into an ever-larger proportion of consumed detriment. Risk no longer accumulates disconnected from the reward but is balanced (fully accounted for) with the force and legitimacy of constitutional authority. Ontologically, however, with the risk/reward fully accounted for, the probability an amendment will occur that reverses the trend is nearly perfect, which means a balanced budget amendment will not occur and a rising debt limit will.

It is important, critical, to keep the risk disconnected from the reward to maintain continuous consolidation of wealth and power. Accounting for the risk becomes so complicated, so mired in political-economic conspiracy, that culpability always has the shadow of doubt, which is why, for example, no criminal referrals have occurred despite all the inquiry into what caused the Great Recession.

The current means of converting value and consolidating it is reliably routine and effective. Risk-value is effectively derived, hidden and narrated into a complex, technically exclusive knowledge of it, which determines the power to direct it. There is no reason to change it except, being moral beings concerned with the legitimacy of the outcome, there is the incentive to align the philosophy of risk disconnected with the distribution of reward.