Organizational Size and Pluralistic Tendencies

As the drama unfolds over preventing an improbable default of our sovereign debt, we can plainly see binomialism at work.

The drama is just that--political theater. Since the probable, binomially determined alternatives are obviously limited to the "dummy" variables, observing the determination of our fate is but a form of entertainment--an art form to make consolidation of power appear pluralistically legitimate in the republican form.

As we discussed in previous articles, binomialism is a large, consolidated, organized means of conserving the stakes over time by toggling between two variables. It is an organized tautology--a large, pre-determined, bureaucratic organization that delivers stable, routine results.

The result of consolidation--crises--is fully expected, and since the risk of loss is fully assumed, the risk is modeled in the republican form to safely vary within the limits of the routine (pre-determined) probability. The risk, you see, does not reduce, it is managed (consolidated) to yield a stable distribution of power (and wealth) over time at a highly predictable frequency, which is what we can clearly see happening now.

Although the risk is politically organized to be reduced by keeping it consolidated, it is actually being accumulated. Eventually, the value is so accumulated that a distribution occurs beyond the normally expected value. We have then, for example, the Tea-Party movement moving the realpolitique toward a more pluralistic distribution.

Our founders intended for power to never get so big and powerful that "We the People" have no authority to self-determine. We are assured a system of checks and balances (pluralism) by Constitutional authority. The natural tendency for power to collapse into crisis when it becomes so-called "too big to fail" is modeled as a fully assumed risk of loss in priority.

Since the pluralistic tendency is 100 percent, it is foolish to think you can be so powerful you cannot fail. It is practical, then, to systematically model the risk for cyclical consolidation and deconsolidation over time without loss of principal. Risk is proportioned to never be so diffused that the principal amount of power can be permanently lost. The proportion is effectively structured to conserve over time, conceived to ensure the general welfare (i.e., to legally, Constitutionally, ensure Pareto Optimality without instability). Federalists have been doing this for 235 years. It is the two-party system, and the Pareto-Optimal jurisprudence, we see in operation today.

Interjection of a third-party element destabilizes the binomial system of governance, and it is important not to characterize it as a duopoly. It is not a duopoly, it is a monopoly. The two variables operate together to monopolize power. The duality aspect is a psychological trick--it is a false pluralism that the Tea Party, for example, is Constitutionally empowered to check and balance.

To avoid more accountability, the third element must be co-opted--it must be organized, absorbed, into what is otherwise too-big to fail. As the organization gets bigger, more consolidated and more unaccountable, it is more likely to fail, collapse, under the weight of an accumulated, retributive value.

Yes, the bigger it is, the harder it falls. It is important to keep the system as deconsolidated as possible, but doing that is antithetical to the working model we have now. Conventional wisdom dictates: the bigger the better to control the risk.

Organizations that are are so big they can control the risk are largely unaccountable. They are intended to be unaccountable, by virtue of size, because accountability, or the lack of it, measures power--it measures who is in control and who is not.

The bigger, the more unaccountable, and the more unaccountable, the more risk accumulates unaccounted for. It gains a gamma-risk proportion with the benefit (and detriment) of being too big to fail. However, it really isn't too big to fail because the legitimate risk (pluralistic accountability) is falsely valued.

Legitimate value is missing and largely unaccounted for in the gamma, too-big-to-fail dimension. Legitimate risk is avoided (structured to accumulate, or transfer, to the future both politically and economically), which systemically, as we come to find out over and over again, is highly detrimental. It is detrimental even for a power elite who mistakenly assume they can completely self-determine without accountability (without risk) through ever-larger economies of scale.

An organization like the Tea Party is to prevent the risk from transferring to the future. It is demanding an immediate accounting of the risk, bringing us to the point of possible sovereign-debt default, improbable as that really is because the system is politically modeled (it is designed) for continuous debt accumulation, not default. The risk is always transferred to the future, by default, with the "full faith and credit" of the sovereign state (with the force and legitimacy of public authority).

Government is the ultimate entity of a truly too-big-to-fail proportion. It is the repository for all the accumulated risk, expressed as public debt. It is a place in which to dump our toxic assets and refinance the debt without fear of deconsolidation (default and political reorganization of the risk proportion). Risk can safely accumulate and reside there indefinitely...until, of course, its retributive value is demanded for redemption, which requires deconsolidation (a full, legitimate accounting) of the risk proportion, and is essentially what the Tea Party is doing.

Default on the national debt is exactly what we are politically organized to prevent on an ever-larger scale of too-big-to-fail. Deregulation, for example, demands a more deconsolidated marketplace by removing barriers, which means it will not happen; and sovereign default will demand a full accounting of the risk buried in that huge, infinitesimally larger number we call the national debt, which means it will not happen. It is political theater designed to make it look like government is the problem, and if you remove that appearance (that false valuation), a real, empirically verifiable accountability appears. If government is not the problem, then what is?

Neither party really wants to deregulate, and both parties want to raise the debt limit because that is where all the risk is stored to be managed without real, easily verifiable accountability (without deconsolidation). In the same way, we don't have a balanced budget amendment because it increases accountability. A clear accounting of the risk would gain current, present, empirical value. If government spending does not cause slow growth and recessionary trending, then what does?

Requiring a balanced budget is much more likely to require a more progressive tax code to balance it. The hypothesis that budget deficits cause inflation and unemployment rather than being the effect will be empirically tested (which is what "The Revolution," and The Enlightenment, was, and still is, all about...this is what the foundation of our political heritage really is).

To conserve the consolidation of power, an empirical test is a political risk to be avoided like the plague, and so we have a third-party element emerging to interpolate the missing value of risk unaccounted for because it is always being avoided and accumulated into an oversized, too-big-to-fail (gamma-risk) proportion. That proportion of unaccountability, hidden within the oversized dimensions of power to command and control the distribution of risk and the accumulation of reward without liability, is being tested by the natural emergence of a pluralistic, third-party element. It is a nascent occurrence of deconsolidated risk, currently being expressed as an otherwise improbable default on our sovereign debt.

The Tea Party is a precursor. It begins a larger movement--a natural tendency--toward a more empirically verifiable accountability. While risk is deliberately structured to accumulate, or transfer, to the future, both politically and economically, in a too-big-to-fail proportion, it is, at the same time, accouchering its antithetical form.

All is not lost. There is still a natural tendency to a more pluralistic proportion in which our problems will more easily resolve in the future.