Message Font: Serif | Sans-Serif
No. of Recommendations: 1
A conservative wish list would be analogous to the $0 bid for a car, because of several factors: the presidential election result, democratic shift in the house voting electorate, polls indicating GOP would receive more blame for a cliff dive, and a no-negotiation policy outcome that would be more antithetical to GOP desired outcomes than Democrat desired outcomes. The GOP, in other words, has incentives that make it probable that they are the party more rationally committed to there being an agreed outcome of negotiations rather than a stalemate. Those incentives are transparent to both sides of the negotiation. This is why Obama is wise to give his "wish list", while the GOP is wise to frame their opening offer more in terms of the best outcome that anyone in the GOP thought was plausible.

Interesting reasoning - and I don't disagree with your analysis, only the premises. I believe that it underestimates the degree to which the stalemate is more antithetical to Democratic desired outcomes, making a wishlist initial offer problematic for the Democrats as well. After all, half of the budget cuts in sequestration come from non-defense discretionary spending, and going over the fiscal cliff has a non-trivial chance of prompting a recession during the Administration's second term. Moreover, a stalemate over the fiscal cliff is likely to preclude the President from having any domestic legislative accomplishments in his second term - a time when the Democrats hold the Presidency and a sizable majority in the Senate (as these things go).

Moreover, I think your premises overestimate the GOP's concerns about going over the cliff - or at least, the GOP House. For most (if not nearly all) of them, their opposition to tax increases for the wealthy is well known to their constituents, and indeed was a campaign promise for many. Yet they won re-election against a heavily democratic electorate that is not likely to turnout that way in 2014 (Obama was unable to turn his GOTV into successful House turnout in 2010).

These incentives are transparent to both sides of the negotiation - which is probably why the GOP leadership was so dismissive of the President's first offer. Indeed, the Democratic wish list is also analogous to the $0 bid for the car, since the Democrats want a deal also.

Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.