Part 2. A Decision Tree for the Democrats' Impossible Choice
Part 1 explained why Democrats should have used a decision tree on the Continuing Resolution. This article builds that decision tree as an example of what is possible.
This article takes up where Part 1. Chuck Schumer and the Democrats' Impossible Choice, left off.
There are three steps to building a decision tree: first build the shape of the tree, then set the probabilities, and finally set the values. Then you evaluate calculation results and make your decision. It won’t be perfect, but it will be a lot better than no tree.
Most people won’t build a decision tree. Instead they will read one and use it to make better plans and decisions. But to read a tree, it helps to know how they are built.
Step 1. The shape of the tree
Below is the result of first step, build the general shape of the tree. A tree’s shape is built by starting on the left with your decision, the red box. Democrats must make a decision on the Continuing Resolution (CR) bill. There are two choices: No Shutdown (vote for the CR) or Shutdown (vote against the CR).
If No Shutdown is chosen, two events will occur: Increased Damage from the new provisions in the bill or Current Damage, which is what’s occurring now.
Here damage refers to reductions in national GDP and quality of life components like health and level of crime. We could have more events, such as High Increased Damage, Medium Increased Damage, Low Increased Damage, and Current Damage, but are keeping the tree in this article as simple as possible. A real tree would be more complex than the one shown here.
If Shutdown is chosen, two events occur: Democrats Blamed or Republicans Blamed. Each of these leads to further events with the same shape. Let’s discuss the first one.
If Democrats Blamed occurs, then two further events occur: a Long Shutdown or a Short Shutdown. If it’s a Long Shutdown then either High Damage or Low Damage occurs. If it’s a Short Shutdown there’s not much time for high damage to occur, so we assume just low damage will occur. The Republicans Blamed branch works in the identical manner.
Already this is a powerful diagram of the difficult decision the Democrats confronted. It simplifies and clarifies the agonizing debate of “What Should We Do?” into a well-structured framework. Now debate centers on the elements of the tree rather than who’s wrong or right. We have identified what matters most and can ignore the rest.
Step 2. Set the event probabilities in the tree
A probability is the chance something will happen and ranges from zero to 100%. Unless something has already occurred, we must estimate its probability. Here we use 100% to be absolute certainty, 80% to be high, 50% to be medium, 20% to be low, and 0% to be no chance something will happen. Estimates don’t have to be exact to adequately quantify a decision tree. They only have to be strategically correct, such as high rather than low.
Starting on the left, we first set the probabilities of the first two events, No Shutdown or Shutdown. Once we make the decision, their probability is known. Suppose we choose No Shutdown. Then its probability is 100% and the probability of a Shutdown is 0%.
Next, for No Shutdown we estimate the probability of Increased Damage to be 80% and that of Current Damage to be 20%. The 80% is based on evidence that not only will the present damage rate continue. It will increase once the bill is passed, as the Republicans take advantage of the new provisions in the bill. For example, a March 20 article on Trump’s Self-Inflicted Economic Wounds says:
The reversal in economic data since the Trump Administration took over has been historically rapid—and bad. The stock market is in near free fall. … While the precise impact of DOGE’s cuts to the federal workforce is hard to predict, the plan to destroy the capacity of the federal government by any means possible was stated plain as day during Trump’s campaign. … the second Trump Administration has ended a strong inherited trend of economic growth in just two months with a string of policy decisions so bad that they might match the destructiveness of a once-in-a-century pandemic in the minds of consumers and business owners.
Stock market prices are based on investor consensus of what future corporate earnings will be. A stock market “in near free fall” is a strong indication that damage is considerable and will get even worse as markets fall further.
Trump and the Republicans have a “plan to destroy the capacity of the federal government by any means possible.” Passing the bill increases those means. The Republicans will jump on the new opportunity.
Next, let’s examine the Shutdown branch. Examining the evidence, it’s hard to estimate the probability Democrats or Republicans will be blamed for a shutdown. Some say the Democrats will be blamed. Some say it will be the Republicans. So we will run later three scenarios: Democrats Blamed is 80%, 50%, and 20%, and Republican Blamed is 20%, 50%, and 80%. The parameter of 50% is shown. 50% is what analysts use when the probability of a binary event is unknown. Democrats or Republicans getting the blame are equally likely.
The Democrats Blamed and Republicans Blamed branches are almost identical because both model what will happen in a shutdown. Once one party is blamed, one of two events happens: a Long Shutdown or a Short Shutdown. If Democrats are blamed, there is no incentive for Republicans to stop the shutdown, so there is an 80% chance of a Long Shutdown and a 20% chance of a Short Shutdown. But if Republicans are blamed, the chances are just the opposite. There is a 20% chance of a Long Shutdown and an 80% chance of a Short Shutdown.
The events to the right of the two Long Shutdown nodes are identical. There’s an 80% chance of High Damage and a 20% chance of Low Damage. This is what Chuck Schumer alluded to when he said on March 13, one day before the vote:
“The Republican bill is a terrible option,” Mr. Schumer said in his evening speech. “It is deeply partisan. It doesn’t address far too many of this country’s needs. But I believe allowing Donald Trump to take even much more power via a government shutdown is a far worse option.”
In a shutdown, Mr. Schumer said, “the Trump administration would have full authority to deem whole agencies, programs and personnel nonessential, furloughing staff with no promise that they would ever be rehired.”
He also warned that if the government closed, Mr. Trump and Republicans would have no incentive to reopen it, since they could selectively fund “their favorite departments and agencies, while leaving other vital services that they don’t like to languish.”
This article is continued in Part 3. A Decision Tree for the Democrats’ Impossible Choice. That article continues with Step 3. Set the event values in the tree.