Leading in a Prisoner's Dilemma: Obama and the Debt Limit Debate - Leadership Week on BTR


President Barack Obama and Speaker of the House John Boehner discussing the debt ceiling in early July.

An Editorial

Yesterday, after no more than a week since Congress passed the terribly procrastinated deal to ultimately raise the national debt ceiling, Americans began seeing the fallout. The blunted shockwaves of an economic apocalypse that might have been, had Washington not found a compromise on the issue, came in the form of America’s credit rating being downgraded from AAA to AA+ by the S&P 500. Shortly thereafter, the Dow fell more than 600 points.

As President Obama so astutely observed after the legislation passed, Americans may have voted for divided government, but they definitely did not vote for a dysfunctional one. If the last few weeks of political charade and the oncoming market turmoil teach us nothing else, it’s that there’s no difference between them but for reasons you might not have first expected.

As has been made evident by the presence of the Tea Party, division in Washington is no longer determined by party lines or simple ideological differences. Instead, it has become about which is more important: getting something done, or getting everything you want. It is a question answered best not by Washington politics-as-usual, as many passionate Tea Partiers in Congress learned the hard way last week, but by basic game theory.

Game theory, for those who have neither heard of it nor seen the movie A Beautiful Mind, is an area of mathematics that deals specifically in strategic situations in which individual success relies on the silent interactions between players.

What we saw two weeks ago in Washington is what they call a basic ‘prisoner’s dilemma’ in game theory. Prisoner’s dilemma occurs when several players in a game don’t cooperate even if it’s in their best interests to do so. The classic example of a prisoner’s dilemma is usually explained in general economics courses as when two suspects are arrested by the police who don’t have enough evidence to charge either with a crime. Both suspects are placed in separate jail cells and offered the same deal: testify against the other and if their accomplice remains silent, the tattletale goes free while the accomplice serves a one-year sentence.

However, if they both remain silent (or to use complex mathematical terms, if they “cooperate”) both receive a month in jail for a minor charge. Lastly, if they both betray each other, each receives a three-month sentence—still significantly less than the penalty for taking a chance on staying quiet.

In the classic version of the ‘game’ where neither player is able to communicate with the other, it was determined that the most logical course of action for each player was to betray each other and take the three-month sentence. With some variation, this is precisely what we saw in Washington throughout the month of July. The principal difference being, our politicians decided collectively to betray each other and in full view of the American public. It is a more uncommon occurrence than the average American so frustrated with their government might think.

The goals set forth by both sides of debate saw a wider area for compromise than any fiscal issue since the budget was last balanced in 1996. First off, no one wanted to see the country default or have its credit rating downgraded (the latter of which ended up happening anyway). Generally speaking, no one was in favor of raising the debt limit, save as a last resort. Lastly, both parties demonstrated an uncharacteristic commitment to actually reducing government spending if not the overall size of government.

Under normal circumstances, the average two-party Congress that we’ve known for most of the last century could have made some movement towards these ends, given at least that much common ground. In terms of game theory, the American public is used to having only two players in the game who know that at the end of the day, the best way to play is to not screw each other (too much) and to cooperate whenever possible. The trouble is, we no longer have two players in the game.

To the credit of the Tea Party, there’s nothing wrong with digging your heels into the ground to solve a problem for good, say like our ballooning national debt. In fact, if there is any rhetorical victory to claim from the debt ceiling drama, it stands on Tea Party talking points: the government continues to grow disproportionally and the economy declines in the wake of a decision they ultimately resisted.

Yet aside from wining privileges, what the hell did they accomplish towards their actual goals? Almost nothing, besides evading tax increases. I could go on forever writing about how the steadfast ideologues on the far-right wing refused to compromise on generous offers by the Administration and Republican colleagues thus blowing any chance for making the largest reduction in government in decades. This, however, would be beating a dead horse. The Tea Party is not a political movement that measures its success based on how much it has delivered on its promise, rather, it is a movement built on the promise of demanding everything it wants and not taking ‘No’ for an answer.

Which makes the prisoner’s dilemma that much more difficult. The Tea Party has become that player naïve enough to think it can rat everyone out and then walk casually out of jail as the unencumbered winner. Doing so would not only be acting idiotically on a mathematical improbability, but it’s also a surefire way to ensure nobody wins, especially not the American people.

President Obama’s timidity as a leader could hardly be less suited for such a political climate, and the Tea Party’s success has all but baffled a man who touted bipartisanship as his claim to fame. In seeking his place as the post-partisan president, he continues to pitch rough outlines for legislation allowing for illusionary compromises that end up being the feast for those who only want to see him fail. You’d think after the exhausting odyssey of passing Obamacare, he would be a bit more hard-fisted at the bargaining table, since what but his unsteadiness has allowed them to even exist?

For such a young political movement teeming with political novices, it’s difficult to tell whether or not the Tea Party will catch on to the merits of compromise. On the other hand, will the President ever learn to stop feeding the hands that bite him? The Tea Party isn’t going anywhere anytime soon. As for President Obama, time is running out.