Operational Risk Management (ORM) 101
Political class wealth redistribution (Conclusion)
For the past nine weeks OCGJ has focused on various sectors of the political economy that benefit most by citizen wealth redistribution. Politicians, lobbyists, political consultants, earmark recipients, the military-industrial complex, academia, not-for-profit organizations, attorneys and financial service companies characterize those sectors that sit atop the food chain that receives redistributed wealth enabled by the political class. You don’t have to dig deep to explain why the middle class is fading fast. The abuses by the political class are so wide and so deep you have to wonder how they do it without more push-back from the citizens, let alone law enforcement. A fair question is, “With all the hard evidence, does the political class believe there is risk in doing what they do.” There’s a compelling argument that may lead to the conclusion that the political class believes they can act with impunity and suffer no negative consequences regardless of the degree to which they violate due process and the rule of law. Basically, they do it because they can.
The Department of Defense (DoD) advocates an operational risk management (ORM) metric that helps determine whether a risk is worth taking. The process identifies potential risks and then assigns two characteristics to each risk; likelihood of occurrence and impact on the mission. By the way, the DoD encourages everyone to apply ORM to their personal lives as well as on the job. In any case, once a risk is identified, subjective values are assigned to likelihood and potential impact. The worst case scenario results when a risk is likely to occur and carries catastrophic consequences. If a risk is unlikely to occur and has a negligible impact, it probably isn’t a risk worthy of further consideration except to reevaluate periodically.
We have to believe that both good and bad actors, subconsciously or otherwise, go through a similar decision process before they make a decision to act, but especially when the action has a high impact on health, safety, financial security or ability to live one’s life in peace with freedom to exercise one’s free will. In the latter case, thankfully some of our forefathers thought it was worth risking everything to preserve those unalienable rights guaranteed by the Constitution.
So why does the political class break the law as they did in 2003 when Greene County Commissioners and the Dayton Development Coalition misappropriated $1.9 million from Ohio taxpayers? The simple answer is, first, they don’t believe they will be caught, and second, if they are caught, they believe they are immune from prosecution because the “good-old-boy” network will protect them. The only problem with that logic is a Black Swan event as characterized by Nicolas Taleb and others. Basically, a Black Swan event is one so removed from likelihood that no one could see it coming, so it is dismissed as an “outlier” that could never have an impact on any course of action. For centuries no one could conceive of a world that had swans other than white ones until 1697 when Dutch explorer Willem de Vlamingh discovered black swans in Western Australia (Black Swan Unique to Western Australia, Parliament, AU: Curriculum, archived 2011-03-01)…..hence the Black Swan event was born.
Taleb characterizes Black Swan events as:
- Outliers, as they (notionally and statistically) lie outside the boundaries of reasonable expectations;
- Carrying a significant impact;
- Rationalized by human nature after the fact that the Black Swan event was predictable after all. (Source: The Black Swan: The impact of the Highly Improbable. New York Times, April 22, 2007)
It will take a Black Swan event to defeat the political class. It will take a movement or individual willing to risk everything to stand up to the political class. It will take someone who has safeguarded detailed records that document ubiquitous abuses of due process and the rule of law by the political class. But most of all, it will take a legion of freedom-loving citizens to defeat the political class and perhaps even a few courageous ex-patriots from the dark side who believe freedom for future generations of Americans is worth fighting for.
