Yeah I guess that line is a bit out-dated by now, but indeed one of those funniest moments in the Simpson’s movie is to see President Schwarzenegger making “decisions”. Perhaps a bit unfair to stereotype him like that, so today I am going to share a story that I heard over the radio about him and how he makes political decisions in real life.

Despite the negativity over all the investment banks with sub-prime loan crisis or credit crunch in the recent months, Goldman Sachs and Lehman Brothers have both expressed their interests in operating the lottery in the state of California for a cheque of $18 billions and $36 billions respectively. While people working in the state government is indifferent about this, Governor Schwarzenegger believes it is a good idea.

Arnold: Well what are we waiting for? Let’s do this.

Associate: But the public may see that as a support in gambling from the state government for more money.

Arnold: We can pour all the money we collect from this into health care then, people will accept it.

Associate: What about the state senators? They will demand us to impose more regulations to the investment bank in how they can run the lottery. That would increase a lot of our workload, and the senators would keep a close eye on us all the time. Also that may affect the negotiation with the investment bank….

Arnold: That’s easy. We just sit back let the senators to come up with their desire list of regulations. They know it very well that if there are too many regulations then the lottery would become a less attractive investment, and so the money we get from the investment bank would be lower, hence affect the health care system that we intend to use the money for. Now the senators or the public can decide what is more important – regulating the lottery or improving the health care, and the answer will determine the price of the deal.

Associate: Brilliant! Let me go and draft this, I’ll be back!

Personally I think the governor is pretty smart to use the price system from economics 101 on top of something that is traditionally difficult to associate a price with – desire to regulate the lottery for example. After that link is created, then discussion around that can be easily understood by everybody who has an opinion about how much they would want their social health care to be improved, balance with how much they want the lottery to be regulated. I almost feel that I should try to put a price tag to every topic or assessment I have in my course, so that I can easily communicate with my students why they are doing them in the first place