I thought that Nate Silver’s take on President Trump’s war against Iran is worth bringing to your attention. Here are some key passages:
On the foreign policy front, Trump didn’t face any particularly adverse consequences for nabbing Nicolas Maduro under cover of night. On domestic policy, the Supreme Court sometimes bails him out.
Indeed, “you can just do things” is often a sound approach when you’re playing on a low difficulty level. In poker, we’d call this an exploitative strategy. Game theory will tell you that, if your opponent is playing optimally, you have to make some effort to balance and disguise your strategy. You can’t always bluff or the other guy will wise up. But some guys do always fold.
and
TACO (Trump Always Chickens Out) has become the slogan for the “Trump put” thesis that I described above. Trump does something that imperils the United States’ economic interests, whether tariffs or threatening to invade Greenland. The Dow sheds 1,000 points, and he reverses course. This doesn’t seem like a very stable equilibrium, however. If traders know that Trump is going to chicken out, they shouldn’t sell off in the first place; otherwise, you could always profit by “buying the dip”. But if markets don’t panic a little bit, how does Trump get the signal that he needs to TACO?
A game-theory equilibrium would almost certainly reveal that both sides are supposed to employ mixed strategies. In other words, sometimes they might be bluffing, but they can’t always be bluffing or there would be no deterrence. Some percentage of the time, they have to follow through with their threats: Trump to do the thing that markets don’t want, and the markets to actually get past the “freak out” stage into sustained, full-blown panic that might cause irreversible damage.
That’s a possible explanation for President Trump’s actions and a prediction for what may happen. Nate treats this as a signaling equilibrium problem; I think that underweights structural constraints. This isn’t poker.
I see it slightly differently. There is no shortage of reasons for the United States to go to war with Iran. Iran’s theocracy has been at war with the United States for almost fifty years. Seizing our embassy, near-daily demonstrations of “Death to America”, support for terrorism, the list is almost endless. But I also think that grievances have an expiration date and, as I’ve said before, there are no “do-overs” in foreign policy.
Israel’s situation is quite different yet. Iran’s theocracy poses an existential danger to Israel as long as it’s in power. But our interests are not identical to Israel’s and we didn’t place Israel in the same neighborhood as a mortal enemy. Those are the considerations that give credence to the hypothesis that Israel pushed President Trump into war. I don’t agree with that theory but those are among the reasons it’s credible. I simply don’t think that Netanyahu or anyone else has that kind of influence on Trump.
You only need look at the present situation to see a sufficient reason for the president’s attacks on Iran. Can we allow the Iranian theocracy to hold the world economy hostage at will by blocking the Straits of Hormuz? The issue is not that Iran can permanently close the Strait of Hormuz but that it can impose repeated, unpredictable disruptions on a passage that carries roughly a fifth of the world’s energy supply, creating intolerable economic risk. That would be the implication of “Trump chickening out”.







