Adverse bundling

I thought it was a common term in economics, but there is no wikipedia article. And a google search on “adverse bundling” brought up a bunch of papers on energy efficiency (my day job). So you may not be familiar with the term. Adverse bundling means packaging unrelated things together under a single decision in a “take it or leave it,” “all or nothing” configuration.

Cable TV packages are an example. It used to be that you could buy the small, medium or mega package. Of course the business theory is really simple – if somebody wants Home&Garden OR ESPN OR Disney, then they will upgrade to the package that includes that channel. Even if they don’t want any of the additional channels. By bundling the channels together into packages, the cable company makes people buy a lot of things that they don’t want, making more money and straining customer relationships at the same time.

The same thing has happened with two-party politics in America, though perhaps for a different reason. When I go to the polls, I must choose between a republican and a democrat. These people are supported by the national party and likely to vote “along party lines” on most if not every issue. As I am writing this, I realize that there may be people reading who dispute the claim that elected legislators vote with their party, so I did some research. Using this great database from the Washington Post, I found out that the median value for votes along party lines in the 112th Congress is 91% in the Senate and 93% in the House. (If you are curious, the numbers ten years ago were 85% and 88%.)

So do you agree that when you vote for a candidate, you are really voting for one of two political parties? The highly partisan, “good-vs-evil” believers among us might be OK with that, but most people are not.

Especially when you think about it a little more. A political party constructs a platform of policy ideas and philosophies, and then markets the package based on the strengths that resonate in the populace at a given time. That is fine if I agree with all of the policy ideas in the bundle. But if I happen to disagree with one of the policy ideas, then I am in a difficult spot. What if I am a democrat who opposes abortion? Or a republican who wants to reduce the size of the military? The list could go on, with as many possible permutations as their are voters.

Today we bite the bullet, choose the party we feel most closely aligned with, and don’t think about the inefficiency caused by the official I just elected representing the exact opposite of my view on a specific issue. After all, what can we do?

Special interests in politics

So you may not have been following the news during the 2012 campaign season, or for the last decade. If that is the case, there is something important you should understand about politics: It’s all about money. I have asked a lot of people, and no one has given me a very good explanation of why money matters so much (most people mention television ads, but do people really watch commercials anymore?), but it is nevertheless an empirical fact that money wins elections

Here are some numbers on the big donors from 2012. Note the preponderance of donating organizations that give to one party and not the other. Are these entities convinced of the relative righteousness of the donkey or the elephant? Are they following their collective hearts? No – they are making investments in hopes of getting their way when the candidates they supported become elected officials.

I mostly included this infographic so you could get a kick out of the creepy computer graphics candidates.

This finding should be at the same time very obvious and also deeply unsettling for American voters. In summary, rich people and powerful organizations give money to the political party they think will best serve their interests when in power. This money is used on a propaganda machine to spin, twist, slant, angle, demonize and vilify until the correct number of swing voters from the right demographic are convinced that they should mark one box on a ballot card. Then, after inauguration, the favor is returned as the elected official repays the groups and individuals that got him elected.

This is true for both parties and validated over decades. After all, the same unions and corporations keep giving to the same Democrats and Republicans, respectively. Would you continue to hand over millions election after election if it didn’t get you what you wanted?

So we have a special interest problem. This is maddening for many of us, but there has been nothing we can do about it.

The customer of government

There is a lot of variation in mindsets and paradigms around government and its relationship with society and the people. Some see government as the “master of society,” assuming that the authority of the state is the driving force behind everything that happens. Others reverence government and invoke a religious lexicon to talk about it.

Without getting into any of the underlying philosophy, I am going to apply a different way of thinking about government, one that is gaining traction among Hayekian economists, crazy libertarians, and even a small set of dreamers promoting concepts like “customer service” in federal agencies.

Here’s the crux of it: government provides a set of products and services that we – the people – buy.  We pay taxes, which pays for programs and agencies and bureaus and departments, and those things in turn do something that we value. We are customers of government.

It won’t take you much thought to realize that there are fundamental differences between the way we buy hamburgers and the way we buy national defense. And we definitely do not get the amount of choice for property rights providers that we have for cold medications.

But I would ask that you don’t throw out the idea because it is a less-than-perfect way of looking at the world. After all, every idea has limitations. By being honest about the shortcomings and open to the connections and ramifications, a different mindset can shed new light on things that didn’t make sense before.

In the coming posts, I will step through elements of modern American politics using the framework as citizens as customers.

Election blues

Like everyone else in America, I got swept up in the election last night, after resisting it over the preceding weeks and months. I used cynicism as my defense mechanism – the candidates are basically the same, pandering for votes, not trustworthy, controlled by evil geniuses behind the scenes, etc. I have long held the view that the system is broken, so I try to convince myself to enjoy the drama the same way I would relish a Yankees-Red Sox baseball game of maybe a reality TV show.

But the self-delusion never really works. I guess at the heart of it I really do believe there is something under all the propaganda, wheeling, dealing, and positioning that matters. The rules of society matter. Personal liberty matters. It’s just that this stuff gets lost in the jumbled mess that is two-party politics.

So the big election of 2012 is over and I am depressed about the status quo. Not depressed about the individual winners and losers, mind you, but about the system as a whole. It seems like we should be able to do better.

With that, I will share my crazy thought of the day: I want to use technology and the internet to disrupt American politics.