Sunday Pearlstein: Starve the beast. End the stalemate.

at 11:35 AM ET, 12/18/2011

There is a branch of economics known as game theory, which tries to figure out how various “players” in a market maximize their welfare based on the expected behavior of other “players,” all of whom are doing the very same thing.
Starbucks CEO Howard Schultz has got 23,000 to sign his pledge to withhold political contributions until a “fair, bipartisan deal is reached that sets our nation on stronger long-term fiscal footing.” (Mary Altaffer/ASSOCIATED PRESS)

One of the earliest game theorists was the mathematician John Forbes Nash, who was the subject of the book and subsequent movie, “A Beautiful Mind.” In game theory, a Nash equilibrium is that point where no player has anything to gain by unilaterally making a change in his own strategy. The game, in effect, has been played out to a draw.

These days, Washington is stuck in a nasty Nash equilibrium. The two dominant parties -- the anti-tax, anti-regulation, anti-government wing of the Republican Party, and the raise-taxes-on-the-rich-but-don’t-touch-my-entitlement wing of the Democratic Party -- have fought each other to stalemate. Every few weeks or so, some event or deadline comes along that appears to hold out the prospect that one side or the other might prevail and thereby break the deadlock. But, in the end, nothing really gets resolved, nobody wins and the stalemate continues.

There was, as you recall, the threatened government shutdown last December, followed by the debt ceiling fight in the spring, which led to the supercommittee failure this fall, which gave rise to another threat of government shutdown last week, while postponing until March 1 the battle royale over a further extension of a temporary payroll tax cut. Anyone who believes that these dramatic showdowns will actually resolve anything of significance might also want to rush right out to the mall and let Santa know which color mink you would like for Christmas.

The conventional wisdom is that all of this will get sorted out by the election next year, when the voters will supposedly deliver their definitive verdict after being presented with starkly contrasting visions for the role and size and cost of government. When the votes are all counted, however, the more likely outcome is that we’ll be left with a slightly reconfigured version of the same divided government that we have now: a wounded Democrat in the White House, a smaller Republican majority in the House and a Senate so paralyzed by its own rules that it won’t matter which party has the slim majority.

There are lots of different institutional strands that come together to create this political Gordian knot. Fragmentation of the media. A highly partisan redistricting process. The proliferation of narrow special interest groups. The disappearance of any sense of stewardship on the part of the business and political elite.

No factor, however, has been more important than the tidal wave of political money that has overwhelmed the political system.

This money has now corrupted and polarized the legislative process, warped the judgment of elected officials and regulators, transformed elections into destructive media wars and provided the whip that enforces party discipline.

Who’s money is it? Actually, a lot of it is yours. Some of it is in the form of direct political contributions to campaigns, political parties and political action committees. But an increasing share of it comes indirectly - every time you pay dues to join a labor union or a professional association, when you buy shares of stock in a company, when join a church, an environmental organization, a gun club or the local chamber of commerce. It is in your name, with your money, that this unproductive game is played. One way or another, we are all enablers.

At this point, it’s almost impossible to change this game through the electoral process -- all the candidates are products of the same system. Come November, your choice is between a Republican who won’t compromise or a Democrat who won’t compromise, with both beholden to special interests and party leaders for the money necessary to win reelection. Any vote winds up being a vote for continued stalemate. Nash equilibrium.

The only way to change their behavior is to stop the flow of political cash to both parties. It’s the only currency that seems to matter to these guys, the only thing that will get their attention, the only message they are likely to understand. No Grand Bargain = No Political Money.

Howard Schultz, the founder and chief executive of Starbucks, took up this cause back in August, focusing his attentions on the business community. So far, he’s got 23,000 Americans to take the “no contributions” pledge, among them chief executives Tim Armstrong of AOL, Mickey Drexler of J. Crew, Dan DiMicco of Nucor, Barry Sternlicht of Starwood Capital, Myron Ullman of J.C. Penney and Ted Leonsis, the lead owner of the Caps and Wizards.

Now, with prospects for a deal even dimmer, it’s time to take this campaign to the next level, with a full national boycott on campaign contributions just as the election year begins. You can add your own name at www.upwardspiral2011.org.

The next time anyone calls you for a campaign contribution or tries to bill you for next year’s association dues or solicits your vote on a corporate proxy statement, do yourself and all the rest of us a favor: Just say no. Tell them you’re not interested in participating unless they become part of the solution rather than part of the problem and put their weight behind a fair, sensible and credible grand bargain in Washington.

Over the past year, people across the world have decided they’ve had enough with the political establishment in their countries.

Dictators have been overturned in Egypt and Libya. Syrians have mounted a revolt. Russians have taken to the street. And governments have fallen in Ireland, Italy, Greece and Portugal. In this country, the tea party movement and Occupy Wall Street have both channeled the frustration that Americans feel about the inability of their government to address serious and long-standing problems, but their activities have only served to further polarize and paralyze the political process. This has left the Moderate Majority either turned off or toying with romantic fantasies of a third-party presidential candidacy.

It’s gotten to the point now that only a significant shock could upset this Nash equilibrium in the political marketplace.

Another financial crisis might do it, but that seems like a strategy we might want to avoid. A much better strategy would be to starve the political establishment of the money that is used to keep itself, along with the rest of the country, locked in stalemate.

 
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