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OPINION

How will the shutdown end? Time for some game theory

By TYLER COWEN | Bloomberg News | Published: January 21, 2019

So when and how will the shutdown end? A bit of game theory is in order. Game theory doesn’t usually serve up exact predictions, but it can help us see around corners and find unexplored angles. In this case, the key actors may be the employees of the U.S. government.

Right now most Americans disapprove of the government shutdown, and most voters are not obsessed about building a wall on the Mexican border. That said, the shutdown doesn’t yet seem like a pressing issue for Middle America. Uber and Lyft drivers in Washington may be hurting, but for most of the country life is going on pretty normally.

The key question is when the shutdown will start to bite. Social Security and Medicare checks are going out, and the planes are continuing to fly, even though employees of the Transportation Security Administration are not being paid. The Food and Drug Administration has resumed inspection of high-risk foods, also with unpaid employees. If problems pop up, it seems they can be patched over, at least temporarily.

The real power here is held by government employees, especially those in critical jobs. Let’s say that more TSA screeners decided to walk off the job. It’s already the case that the TSA absentee rate has gone up to 10 percent, from 3.1 percent a year ago. It is possible to imagine screeners staying home in much greater numbers, thus crippling the entire nation. That could either force President Donald Trump’s hand or lead to a congressional override of a potential presidential veto.

(You might think the nation can do without TSA workers, but I doubt that is true. Even if they don’t make air travel safer, it is hard to imagine airports and airlines going about their business, in a litigious society, without TSA assistance.)

You might wonder why the inspectors, and other essential government employees, are showing up for work at all. Here is where game theory comes in. During past shutdowns, government employees received back pay for their efforts, and furthermore it is illegal for them to strike. So why not show up? Unless you are cash-strapped and need your regular paycheck, it seems like a tolerable if frustrating situation. A few federal workers may even be better off; maybe the shutdown will allow them to steal a few extra days off for that trip to Disney World.

In contrast, if TSA workers walked off the job in greater numbers, they would run the risk of public disapproval and perhaps legal sanctions. The public might blame them rather than Trump, and Trump of course would get on Twitter to try to make sure this is the case. Remember that the public supported President Ronald Reagan when he fired the striking air traffic control workers in 1981 and banned them from federal employment for life.

A few days ago Congress passed a bill guaranteeing back pay for federal workers, so as to forestall immediate catastrophe. As the tension rises, Republican elements in government might drop hints that workers will be offered bonuses for good behavior during the shutdown. Those strategies could forestall a workers’ revolt for a while. In the longer run, however, I expect an increasing number of defections — and there are already real signs of strain.

As a rationale for showing up to work, “I’m helping both the TSA and my colleagues” can work for a while, because of both cooperative norms and peer pressure. But I don’t think it can hold things together for more than a few months. They may not have the right to strike, but federal employees can still gum up the works with high absenteeism and poor performance.

In other words, the break point is likely to come when some critical group of federal employees, perhaps the TSA, gets tired of playing along with the charade. Then the whole game will blow up in the faces of both Trump and most congressional Republicans, who will find it hard to escape blame for their complicity in this suboptimal — some would say incredibly stupid — path we are on.

So what does the final equilibrium look like? Some number of extra weeks (months?) of talking about Trump and the wall. Trump over time becoming less popular. Congressional Republicans folding, and Trump lying about both the outcome and the process. Democrats looking better, at least relatively. Federal workers emerging with bruised morale, but mostly intact.

If you think those are implausible outcomes, you haven’t been paying close enough attention to the last two years.

Bloomberg Opinion columnist Tyler Cowen is a professor of economics at George Mason University. His books include “The Complacent Class: The Self-Defeating Quest for the American Dream.”

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