Scott Lemiuex, Jonathan Chait, and Tim Noah Say: Over the Fiscal Cliff We Should Go
Scott Lemieux:
Tight-Weak Is No Way To Negotiate With Republicans: What Chait and Noah said about the deal that hopefully won’t happen. As always, it’s not that I’m opposed to any possible deal that makes concessions on tax rates, but I’m certainly opposed to concessions when the Republicans aren’t actually offering much of anything in return. And, since apparently it can never be pointed out enough, I cannot endorse more strongly what Reeve says about the idea that $250K isn’t an upper-class income bracket. Again, living in a desirable urban area is something you’re getting with your money — if you want to use your high income for more vacations or ivory backscratchers move to the suburbs and put the kids in public school.
Jonathan Chait:
Why Is Obama Caving on Taxes?: In the months before the election, and in the weeks after his victory, Obama had a clear position: The Bush tax cuts for income over $250,000 were ending. He would not sign any extension…. Now, by all accounts, Obama is prepared to extend the Bush tax cuts up to $400,000 a year. Or maybe more. As of Friday, Obama had told Republicans they could have the tax cuts extended on income up to $400,000 if they would accept the estate tax rising from its Bush-set rates. As of last night, Democrats were conceding the estate tax plus the higher exemption on tax rates, which had risen to $450,000. And Republicans still hadn't agreed to it! Why would they, when Democrats keep hurling money at them? By midnight, Republicans might be getting the Saturday Night Live version of Obama's offer ("a 1% raise on the top two Americans — just two people").
The erosion signals not only a major substantive problem in its own right, but it also raises disturbing questions about Obama’s ability to handle his entire second term agenda. To begin with, the $250,000 a year threshold was too high to begin with….
It’s surely true that the historical desire of many Senate Democrats to position themselves in the center of any debate, irrespective of substance, and associated desire not to upset their rich fundraising base posed a strategic problem for Obama. But if Obama fears trying to hold a line that Senate Democrats have abandoned, it’s just as likely they fear the same about him. Obama’s history of foolish negotiating with the Republican Congress gave Democrats every reason to fear he might fail to hold firm on his own line…. Now, the Obama offer to Boehner was not a full extension of tax cuts under $400,000. The plan was to get higher revenue on income below that level by reducing tax deductions rather than raising rates. But the news reporting cast the offer as simply moving up the threshold, and Obama did nothing to correct that impression…. Worse, exposing Obama’s willingness to move his seemingly unmovable demand emboldened Republicans to demand even more…. The negotiating style Obama has displayed in these instances is what poker players call “tight-weak.” A tight-strong player avoids throwing in his chips, saving them for a big hand, which he plays aggressively in hopes of a huge win. A loose-weak player plays lots of hands, bluffing frequently. Tight-weak is the worst of all worlds — when you have a weak hand, you lose, and when you have a strong hand, you fail to maximize your position….
[Obama] is allowing Republicans to whittle down the sum by essentially threatening to shoot themselves in the head. And this is the most ominous thing about it. The big meta question looming over Obama’s term is whether he has learned to grapple with Republican political hostage-taking. Hostage-taking is not simply aggressive or even irrational negotiating. It is the specific tactic of extracting concessions by threatening to withhold support for policies you yourself endorse, simply because your opponent cares more about the damage…. Obama claims, and seems to genuinely believe, that he won’t let Republicans jack him up over the debt ceiling again. But if Republicans could hold the middle class tax cuts hostage, they’ll try to hold the debt ceiling hostage. Indeed, they will probably discover other areas of traditionally routine policy agreement that can be turned into extortion opportunities. Obama may think his conciliatory approach has helped avoid economic chaos. Instead, he is courting it.
