Decision Making as Output and Bounded Rationality

  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra

Is Trump 2020 Mirrors 1968?

The US violence over the death of George Floyd has assumed greater proportions. It is increasingly shaping up the divide that exists in the US. Its spill overs are threatening across Europe and other places too. Irrespective of the immediate cause, it is apparent that the Antifa among others have hijacked the protests towards their own narrow ends. The liberal game plan is unfolding to the extent even the articles or newspaper columns by the anti-protest commentators are not being allowed to publish. Given the state of the ecosystem, many commentators are drawing parallels to similar protests in1968. To many, it seems that 2020 elections might go the way of 1968.

 

Niall Fergusson, the noted conservative commentator however differs on this assessment. In his article, he assesses that while 1968 in many ways ended the Presidential campaign of incumbent Lyndon Johnson thus forcing him to withdraw, current incumbent Donald Trump might actually benefit from the same. The year 1968 was a different era and perhaps evokes nostalgia, emotions, perhaps something more from those who have lived through the era. The era was age of the rebellion. The anti-establishment was at its peak in the Western World. Hardly a country would have escaped the brunt of the anti-establishment campaigns that erupted all over the world.

 

Civil Rights movement had turned northward and morphed into Black Consciousness movement. It was the age of Black Power movement. The manifestation of the same came in 1968 Olympics at Mexico which itself was overshadowed by student protests all over the country. In a televised medal ceremony, US athletes raised the black fist salute symbolizing the Black Power movement. The rise of organizations like Black Panthers in the US which advocated violence added a new dimension. There were boycotts in schools and others on the grounds of black inequality. The killing of Martin Luther King Jr. aggravated the situation. If it was not enough, Democrat contender Robert Kennedy was shot dead by a Palestinian terrorist owing to his alleged support of Israel in Six-Day War.

 

The US was witness to large demonstrations against the Vietnam War. The Democrat Party convention became a site for large protests against the war. Americans could not simply stomach the fact why they had to die in a distant land which hardly had done any harm to them. Moreover, the ideological justification of Vietnam intervention was thought to be too weak to justify the body bags. The situation was made critical by the recession that struck US in that year. In contrast, inflationary pressures to begin to emerge. However, in contrast to the media coverage of the today’s events in US, the media according to Fergusson was largely unsympathetic to the protestors of 1968. Further Fergusson contends the electoral diversity is more pronounced in the current election though the demographics are skewed towards older age groups. The post war boom kids in 1968 were just emerging on the employment horizon and thus also influenced by the political outcomes. The interest in politics had been rekindled by this group which had not faced the war. Perhaps, the parents yet to recover from the consequences of the World War II and the Korean War that followed the same did not want their kids to die in a distant land for no worthwhile cause.

 

However. Fergusson contends, it would be a mistake to compare the events of 2020 to the ones in 1968. While there was Vietnam War then, today it is the war against COVID-19. The Wuhan flu has created havoc. Interestingly, in 1969, the Hong Kong flu apparently claimed more than a lakh lives in the US. Incidentally, the super-spreader event was the Woodstock festival of 1969. To Ferguson, the events following the shooting of George Floyd perhaps have come to the rescue of Trump. In 1968, President Johnson bowed out of the race arguing he could not run an election in a divided land. Yet, for Trump, it might be a time to divert the attention from the rising deaths through Wuhan flu. There have been multiple criticisms about his handling of the crisis. To be fair however, it is not just Trump, but many of the State Governors who too are responsible for the crisis. Many Democrat Governors including McCuomo of New York have escaped scrutiny though their performance is much left to be desired.

 

In the opinion of Ferguson, Trump thrives on disorder. His core selling point would be of a President surrounded by the disruptionists bent on destructing America. As he goes about making America great, he will be hindered by these barriers. Weaving conspiracy theories seem to be usual for Trump. Therefore, Trump will use the opportunity to whip up hysteria and his core voter base. Thus unlike Johnson, Trump might actually benefit from the riots.

 

To a few analyst including Niall, the elections are seemingly heading towards a possible repeat of 2000 Bush vs Gore. Yet this would be a mistaken proposition. Trump’s threat to use the military to crush the protests have drawn significant criticism from many quarters. Republican giants like President Bush, Gen. Powell have withdrawn their backing to President Trump. Yet, while woke considerations might make many whites express indignation at this proposal, within themselves, the Trump constituency would be more than delighted.  US is deeply divided racially. There is considerable Black anger against Whites and vice versa. Whites seem to be more looking inwards. They need an avenue for expression of their power which they feel has been eroded. Irrespective of the merits of the same, translation into electoral votes cannot be ruled out. There is good possibility, like 2016, the Trump voters might become secretive. For fear of backlash, they might point towards contradictory positions. So one might not be surprised to see polls showing dead heat or even edge to Biden as one heads to November 3. Yet, on the voting day, the whites might overwhelmingly vote for Trump. It is also possible that Blacks will vote in unison against Trump. The traditional black states might see Biden victory but the conservative Red states will stand behind Trump. It might be moot to compare the current with 1968 but what is certainly worrying is the increasing divide that is engulfing the United States that once stated itself to be melting pot of cultures.

 

 

 

 


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