The further to the left or the right you move, the more your lens on life distorts.

Tuesday, October 18, 2016

Sunk Cost Fallacy

On the one hand, Hillary Clinton would have us believe that she will carry on the "legacy" of Barack Obama's presidency—would, in fact, become Obama 3.0. On the other hand, when confronted with the many serious failures of his presidency, she states that "you can't just throw it [Obama's work] away, you have to fix it." She was referring to an imploding Obamacare system but in reality, it's what she has advocated for all of Obama's domestic and foreign policy disasters. After all, her supporters tell us repeatedly that she has both the "experience" and the "temperament" to do just that.

Richard Fernandez comments:
From Aleppo to Mosul, Yemen to Libya; from the Ukraine to Iran; from Japan to the Philippines the number of places that need fixing keeps growing. Domestically the situation is similar: the next four years must be devoted to repairing what last 8 years destroyed. At every step Hillary will cite her familiarity with the problems as reason for putting her in charge and inveigh against throwing away the gigantic investments of the past. The dictum "we can't just rip it up and throw it away" is psychologically convincing. It applies to a wide variety of situations, from the trillion dollar Obamacare debacle to the hundreds of billions spent trying to ingratiate the US with Iran.

However economists call this the sunk cost fallacy. It is "used by economists and behavioral scientists to describe the phenomenon where people justify increased investment of money, time, lives, etc. in a decision, based on the cumulative prior investment ("sunk costs"), despite new evidence suggesting that the cost, beginning immediately, of continuing the decision outweighs the expected benefit." The sunk cost fallacy explains why people continue to eat rancid food in a restaurant because they've already paid for it. It also explains why a Third Obama term is necessary. Somebody's got to fix the effects of the last two.
Stated more succinctly, it's a lot like the old saying, "You're throwing good money after bad."

A Democrat president made monumentally bad decisions (e.g., Libya and Syria), established monumentally bad policies (e.g., Obamacare), sucked up to monumentally bad people (e.g., the Mullahs of Iran) and now (to quote his long time mentor) the chickens have come home to roost. His bad decisions haunt both domestic and foreign policy. But no worries, another Democrat—Hillary Clinton—will fix all of this, not by rooting out the bad but simply by tweaking it just a little bit—the sunken cost fallacy.

Some of the damage done by the Obama presidency cannot be undone. Hillary can't do it and neither can the Donald. But much of Obama "legacy" (e.g., Obamacare and the Iran "deal") needs to be uprooted, not tweaked—uprooted. New ideas and new policies—simpler, less intrusive, more focused, more efficienct and effective, and less hyper-partisan—must be implemented to replace the failed policies and practices that currently exist. There's no chance of getting that done under Obama 3.0. None. At. All.