Economists have models and explanations for anything and everything. Relevant to today’s top issues is the value of waiting. I am sure that many women wish they didn’t have to wait nine months to deliver but they know that trying to have a baby at the end of the third month would not have acceptable results. An economist would say something stupid like – the marginal costs of waiting one less month is greater than the marginal benefit and therefore waiting has value. In the case of pregnancy, most of us wait about nine months. Of course we wouldn’t want to wait 18 months because we know the marginal costs of waiting more would outweigh the benefits.
Maybe you don’t love my example, but we face the costs/benefits of waiting all the time. Should I wait at this red traffic signal for another minute? The young guy with slicked back hair wonders how many more songs to sit through before he asks the babe in the pink hot pants to dance. If our wait is too short, we may experience the costs of a hasty decision. Wait too long and the opportunity escapes.
This issue of waiting came to mind as I was playing with my new Nespresso machine and thinking about climate change and national defense. ( I can't drink JD all the time!) With respect to climate change we have one group of people who deem it urgent. These people advocate full speed ahead when it comes to ending reliance on coal and investing in new non-renewable sources of energy. To the climate change advocates, waiting is not a luxury we can afford. With respect to very recent changes in global terrorism and American security there are some people who also think that waiting is not a viable option. To them terrorism is on our global doorstep and needs to be addressed firmly and immediately.
The value of waiting is being evaluated seriously by climatologists and defense planners. Sadly much of the resolution to these waiting issues is ideological. Many of those who would put climate change in a speedboat are the same folks who would see no rush to deal aggressively with terrorism. And, of course, vice versa many who favor a rapid response by the US military are those who would drag their feet on climate change. This ideological approach needs to be replaced by something more sensible.
The value of waiting is affected by the expected costs and benefits of waiting. I say “expected” because these impacts are not known and will play themselves out in the future. That means several things. First, except for your spouse, no one knows the future with certainty. Second, that means we have to use models or somehow guess about the future. Third, it means we will have plenty to argue about since no one knows the future. Fourth, the less ideology and emotions play into this valuable exercise, the better off we will be.
But we are a long way from that situation. My bearded long-hair friends say that America has suffered enough. We have no stomach left for a fight. As in the recently cited report by former Treasury Secretary Hank Paulson, these groovy dudes are sure that the costs of global warming are ever-present, immediate, and catastrophic. That’s it. Story over. For every person with those beliefs there is one who thinks that if we wait too long to weaken a growing terrorist threat, we will surely be overrun by vicious enemies who will show us no mercy. These khacki-wearing, button-downed, crew-cuts see the immediate employment and growth impacts of vigorous environmental policies as swamping any possible future benefits.
Okay my depictions of extreme lefties and righties are pretty stupid but the point is not. We are getting nowhere and perhaps risking our future because we are letting extreme views prevent us from hard-headed analysis about our most important policies. Consider that we have four possible SOLUTIONS, two of which hardly ever get considered:
· Conservative Defense Fast; Environment Slow
· Liberal Defense Slow; Environment Fast
· Expensive Defense Fast; Environment Fast
· Cataclysmic Defense Slow; Environment Slow
To decide on one of these or perhaps some combination of these solutions means we have to do the work. We might not know the future but perhaps we can throw away the knives and swords and make use of our best experts. What do we need to know?
· If we wait on defense, what can we expect from terrorism? What is the most likely outcome? What is the very worst that can happen? How likely is that?
· If we wait on climate change policy, what can we expect in the way of negative impacts? What is the most likely outcome? How likely is that?
· If we move quickly on defense, how much will that cost? What benefits will be gained? Can these policies really accomplish their goals? If the US acts alone, can these policies really accomplish their goals?
· If we move quickly on climate change, how much will that cost? What benefits will be gained? Can these policies really accomplish their goals? If the US acts alone, can these policies really accomplish their goals?
I know that I am unrealistic to think that our present government representatives can shed their blue and red uniforms to do something sensible for the good of the country. But without a real assessment of these questions I don’t trust either party to do the right things. As in my last post about poverty, I come off sounding naïve in the real world for suggesting that real problems have real solutions. Isn’t everything simply political and ideological? Maybe that’s true. But if people don’t demand better processes and outcomes, then it seems to me there is no way to ever get them. So I continue to spout off even if it amounts to urinating into the wind.