Why Any President Will Be Plagued By the Proverbial 'Black Swans'

Short version: if something doesn't happen for thirty years, people start thinking it's exceedingly unlikely.  But (a) there are a lot of very problematic 'somethings' out there, and (b) thirty years isn't a particularly big multiple of a two-term Presidency.  So if you're an incoming Democratic President that hopes to be re-elected, you'd better watch out for the misnamed 'black swans' - they'll kill you.

Today's text is from the book of McClatchy, chapter Obama, verse SAO:

"It's really important to understand you have decades of nothing going wrong," said one senior administration official, who spoke only on the condition of anonymity as a matter of White House policy.

"The last time you saw a spill of this magnitude in the Gulf, it was off the coast of Mexico in 1979," a second senior administration official said. "If something doesn't happen since 1979, you begin to take your eye off of that thing."

Oops.

I'm not questioning the SAO's basic assumption: that if something doesn't happen in a good long while, that's probably an indicator that it isn't particularly likely to happen next year.  The problem is the jump to "you begin to take your eye off of that thing."

A probability lesson: suppose the fact that something hasn't happened in N years means that its likelihood of happening next year is 1/N.  So an oil spill that hasn't happened in 30 years had 1/30 chance of happening this year.

The problem, or one of them anyway, is that a two-term President is in office for eight years, and an eight-year timeframe is a considerably larger target for an unlikely event than a one-year period.  And we reflect that in the numerator of our formula by replacing the 1 with an 8.  (Technically, that's not exactly true, but close enough.)  So the oil spill that hasn't happened in 30 years has an 8/30 chance of happening on Obama's watch, which is a nearly 27% chance, which is far from trivial right there.

The other problem is that there are all sorts of bad things that haven't happened in a good while.  We haven't had a hostage crisis in 30 years either.  Or energy shortages and gas lines.  And we haven't had a Great Depression in 80 years.  So these things have probabilities of 27%, 27%, and 10% (=8/80). 

And we're just getting started, but even with that set of 'black swans,' their individual probabilities of afflicting a particular Presidency are hardly trivial, and the probability that at least one will happen in a given 8-year period is around 65%.

So this business of taking your eye off the ball because it hasn't happened in 30 years or so is dangerously misguided.  Hell, even if it hasn't happened in 80 years, you should still keep half an eye out for it, if its occurrence would be consequential enough to ruin your Presidency.  Really the only reasons to take your eye off these things is if there are causal, structural reasons why these things won't happen anymore, or if their potential ramifications have dwindled to triviality.

In the case of the oil spill, better regulation kept the worst blowouts from happening (maybe), but better regulation was conspicuously undermined during the Bush years.  And the ramifications were same as they ever were.

I think the Obama crew had better keep an eye on the possibility of peak oil, because it could really ruin the Presidency of a Democrat that gets caught not only unprepared for it, but having failed to really try to warn the public about the possibility.  If I were in his place, I'd be doing it low-key, but I'd still be mentioning in my speeches the real possibility that there may soon be less oil than there used to be, and that when it does, the price will go up radically.  And I'd be suggesting that we make major investments in subways, buses, and SUPERTRAINS so that $10/gallon gasoline doesn't catch everyone without any alternatives to driving long distances daily.

Comments

[Crissa]

Hasn't peak oil already happened? The only reason we're not suffering from it is 'cause of that massive recession (which, by the way, were alot more common before 1930 than after).

[low-tech cyclist]

I think it's more that, because of the recession, we don't know whether the peak's ahead of or behind us. If the latter, we'll find out pretty quickly once the world economy starts to recover.

I hope and pray that it hasn't happened yet, and that Obama has some brilliant reason for waiting until after the midterms to start talking about getting ready for the peak. Because when it hits, it's really going to hurt if we haven't prepared for it.

[Sir Charles]

Well with respect to peak oil we have had almost forty years with which to deal with the possibility and our track record is not very impressive.

I think Obama is certainly cognizant of both the short and long term energy issues -- whether that will get him anywhere remains to be seen.

Jimmy Carter had a fair amount of bad luck while in office. However, he was luckier than Obama in one sense -- there was not an entire political-media apparatus trying to destroy him 24/7. The magnitude of the hostile forces arrayed against Obama are pretty much unprecedented -- well other than that pesky armed insurrection that Lincoln had to deal with.

[litbrit]

So the oil spill that hasn't happened in 30 years has an 8/30 chance of happening on Obama's watch, which is a nearly 27% chance, which is far from trivial right there.

There you go with that logicy-numbery thing, ltc. Surely you don't expect our leaders to cotton to that with any degree of enthusiam! /snark.

You make excellent, fact-based points here. Thank you.

I would add, if anyone wants to go further still with the logicy-numbery stuff, check out the horrible safety record--the global one--of BP itself, bearing in mind that it's the third largest energy company and the fourth largest company, period, in the world.

Here, even Wiki has a good basic rundown of BP's "incidents".

When you factor in said global record of spills, explosions, and other disasters--along with the unprecedented depths at which they were drilling in the Gulf of Mexico and all the unknowns related thereto, and the company's history of cutting corners in the name of profits--the chances of a disaster of this magnitude occurring, and occurring on Obama's watch, increase even further.

And I'm not even a math person. *sigh*

[low-tech cyclist]

I think the SAO's point was, "if a major drilling-related catastrophe hasn't happened in 30 years, you can't expect us to be looking at details like that in the first place."

That was really the point I was trying to address: that they can't afford not to consider the possibility of certain genuinely catastrophic events happening on their watch just because they haven't happened in awhile.

And I was trying to make that point in terms of the very information the SAO was willing to use to rule out, or rather cop out, on a more detailed look.

Because if you can get them to look similar information to BP's actual track record for each of the potential 'black swans' out there, then you've already gotten them to not ignore the 'black swans' simply on the basis of their supposed rarity.

[minstrel hussain boy]

a "black swan" is an event which is not only unanticipated, it goes against what is accepted truth. it comes from the early days of british imperial exploration.

the accepted fact was that there was no such thing as a black swan. then, cook in australia saw them.

all of a sudden, with that sighting, all they thought that they knew about the subject had changed.

a spill by bp is no black swan. they painted their stations green and spent shitloads on advertising to promote their environmental record, while that environmental record was one of the most dismal.

on the bright side, there have been discoveries of extensive mineral deposits in afghanistan. we can send massey and peabody there. if we can get folks in the taliban working for massey and peabody, we won't have to worry about them no more.

[oddjob]

Meanwhile Sen. McConnell attempts to yet further undermine what faith Americans have in their ability to govern themselves.

[kathy a.]

that senator is a jerk-ass. talk about trying to profit from a disaster....

what is the POTUS supposed to do, exactly, when this happens on his watch? and he also inherited numerous disasters already in progress, and decades of bad policy?