Caving on taxes?

Of course he will! Jonathan Chait:

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 surely going to have to accept a lot of bad policies in his negotiations with Republicans (a fact I’ve argued to some of my harder-line liberals friends in several columns). But the tax cuts are the one area where he enjoys overwhelming leverage over the Republicans. Their only threat is to block extension of tax cuts on income under $250,000, a wildly unpopular stance countless Republicans have acknowledged they could not sustain for long without courting an enormous public backlash. This is the hand where Obama needed to collect all the chips.

Instead he 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. Republicans agree that the debt ceiling must be lifted, but forced Obama to offer them policies he opposed because they believed he cared more about damage to the country than they did.

Their refusal to extend the middle class tax cuts is the same thing – they support the tax cuts on income under $250,000, but demand that Obama give them other tax cuts he opposes in order to pass them.

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.

Matt Yglesias does not agree with Chait. However, it’s important to remember that any revenue Obama doesn’t get in taxes will be made up in cuts to social programs.

6 Responses to Caving on taxes?

  1. imhotep December 31, 2012 at 11:09 am #

    “It’s a failure of leadership on both sides,” say Republicans and Democrats alike concerning the fiscal cliff negotiations. Which begs the question “Who needs leaders?” Look at the past 15 thousand years of history. With very few exceptions our ‘leaders’ have brought us to wrack and ruin. Does anyone actually believe that the 535 clowns dressed in business attire up in Washington who are bought for us by the 1% really care about “promoting the general welfare” of “we the people?” Wouldn’t we all be better off if we governed (lead) ourselves?

  2. quixote December 31, 2012 at 11:30 am #

    “but [Republicans] forced Obama to offer them policies he opposed”

    How does Chait know Obama opposes those policies? The only evidence of it is that Obama says so. But everything he does goes to help those Bush once called “mah base.”.

    He starts negotiations from the corporate position because everything else is “unrealistic.” Remember when Simpson-Bowles seemed like a radical attack on social programs? Now it’s the best we’re supposed to hope for. Medicare for All fell off the table like that back in the day.

    Every chance he gets, he sends decision-making to Congress where he and everyone else knows it will die. Climate change legislation, for instance. Immigration reform, for another instance, until he needed Hispanic votes before his last election.

    And then, when something absolutely has to get done and his earlier steps have “made” him start (start) from a corporate position, the Republicans have to be more pro-rich just to differentiate themselves. Then he immediately meets them “half way.”

    None of that shows any signs of force. Force would be Obama proposing one thing and Congress voting against it with a veto-proof majority.

  3. lless December 31, 2012 at 6:17 pm #

    Aaack! Four more years of this crap. So now we’re up to 450,000 with the difference ultimately to be funded by cuts to social services and infrastucture programs. Just wait until you see the cave in on the estate tax, dividends and capital gains. Most obscene of all the hedge fund bracket, the proof certain that all of politics is about money and bribery, is off the table on all sides.

  4. Carolyn Kay December 31, 2012 at 6:24 pm #

    >>The negotiating style Obama has displayed in these instances is what poker players call “tight-weak.”

    Yes, but Obama’s poker experience was playing with lobbyists in Springfield, whose job was to make sure they lost and the lawmaker won. It was legal bribery.

    His negotiating style was honed in the Illinois political culture where Democrats and Republicans work together to give lobbyists everything they want. He apparently thought he could work similar deals in Washington, not having the faintest idea how radical the national Republicans had become. His naivete has damaged us all.

    I tried to warn the internet crowd in 2008, and for my trouble I was hounded, banned, and called a dry-pussy vagina-voting racist.

    You’re welcome.

    Carolyn Kay

  5. tsisageya December 31, 2012 at 7:15 pm #

    Oh, I feel so faint!!! Where are my pearls??? I must clutch them.

  6. Adams January 1, 2013 at 10:47 am #

    Barry and the Dems welcome the new year in their traditional fashion: they cave. It has not been entirely clear whether they are fools or liars. Now it is crystal clear that they are both.

    Barry says he absolutely will not negotiate on extension of the debt limit. That, of course, means precisely that he will. With this cave he already has seized defeat from the jaws of victory again.

    Schadenfreude is all I’ve got; gladder and gladder I didn’t vote for this loser-twit-wimp. Even craven WH mouthpiece Ezra says Obama should stay far away from any poker table.

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