Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

New Cost Function Has New Variable - Political Basis Points


This article is about the 31-yr. old recent Yale graduate that is controlling the fate of GM.


In no uncertain terms, he states that the decisions being made are done with BOTH economics and politics in the calculus.  This is the poster child for the administration.  This is someone who doesn't have the stones to make a good economic decision because it will affect future politics.

So, we can now assume that the administration has a new cost function:

C = E + P,

NPV = FR - C

Where E is the cost of a project, measured in dollars, and P is the POLITICAL CAPITAL that is spent to make an unsavory political decision, measured in electoral basis points multiplied by some factor to convert it into dollars.  NPV is the net present value, and FR is future revenue.


Well, friend, I have a new Cost calculus of my own that you should use:

C = E + P - HE,


Where HE is the HIDDEN EXPENSE and OPPORTUNITY COST of NOT making the most COST-EFFECTIVE decision early (the net present value of the cost of P, measured in electoral basis points).


In short, the arithmetic of this inexperienced administration is costing the country billions or trillions of dollars and a lower standard of living, and can be used to calculate the outcome of the 2010 and 2012 elections.