Thoughts on the Debt Limit Showdown: Short-sightedness and Brinkmanship

First thoughts are from Megan McArdle, who is deeply worried about the prospect of default, on the political irrationality of the Republicans’ “spending cuts only” approach:

The political logic is infantile. The American public does not want you to cut Medicare, Medicaid, or Social Security… Imagine that the GOP forces through an all-cuts deal–or forces the country into default? What’s the next logical step?

Why, probably that an angry nation sends more Democrats to Congress (and Obama back to the White House), where they happily “restore” the programs that “brutal” Republicans tried to “gut” with “draconian” cuts…

I can admire someone who’s willing to be a one-term congressman in order to do something big and important. But what’s the point if your big, important legislation doesn’t live much longer than your political career?

Good point, except she might be wrong on the time scale. Presidents rarely gain many seats in Congress when they run for re-election, and I’m not sure the middle of the country would so clearly identify the Republicans as the culprit that they would vote en-masse for Democrats. Keep in mind that each election is local, and for each Democratic challenger blaming the Republicans for the budget, their will be a Republican incumbent with better name recognition claiming that it would all be ok if the Democrats hadn’t bungled things–and anyway, Obama’s to blame! (It doesn’t have to make sense; it just has to confuse voters.)

And now for my thoughts, on brinkmanship and rationality. This is a classic study in brinkmanship, as developed by Thomas Schelling. I think the Republicans’ logic in pushing the issue to the brink of default is to effectively limit the time for meaningful debate, in hopes of forcing Obama to blink. The essence of brinkmanship is purposely pushing an issue to the point of crisis and creating risks so extreme the other side can’t accept them. And since Obama has blinked at least once before on a critical budget issue–extension of tax cuts–there’s every reason for the Republicans to think he’ll blink now. Legendary presidential scholar Richard Neustadt emphasized the critical role of a president’s professional reputation in aiding or hindering his success. Presidents who have a reputation for getting what they want tend to get what they want because the opposition feels intimidated from the start, while presidents who have a reputation for not getting what they want embolden their opposition and make achievement of future goals that much harder.

But it gets even more interesting in light of McArdle’s question of whether the Republicans might really be irrational in their political calculus, because Schelling also argued that in brinkmanship a reputation for irrationality is beneficial. Because a rational person would not accept such serious risks, the (apparently) irrational person has the advantage, in being willing to push the crisis farther. Of course that means the rational person may find it rational to give the appearance of irrationality, so that a rational person may in fact accept greater risks than normal. But the key is whether the opponent actually knows whether they’re facing a rational person pretending irrationality or someone who really is irrational.

That knowledge makes all the difference in the world, but I don’t think anyone in the Democratic camp–or even thoughtful non-Democrats like McArdle–have any confidence that the Republicans are secretly rational. Oregon Democrat Peter DeFazio (my former Rep) is actually yearning for a return to the relative sanity of the ’94 Republican Freshmen class.* And Grover Norquist is willing to send the country into default in order to prevent the elimination of tax expenditures that are nothing more than business subsidies, and he’s threatening every Republican who doesn’t go along.

If there actually is rational calculation behind these appearances of irrationality, I’d have to give it my grudging respect. But such cleverness is so exceptionally rare (outside of Tom Clancy novels) that the more parsimonious interpretation is that they really are loony-tunes, off the deep end, screw-loose nutters. And I pity the Democrats trying to fight them. It’s not easy battling against someone who’s willing to blow up the whole system in order to get what they want. They see any compromise as a total loss and are unwilling to accept anything except unconditional surrender.** The only way to beat them–unless cooler heads within their camp prevail–is to find the cost they find unacceptable and force them to it.

But that’s assuming they’re not answerable to anyone else. In this case they are, but they’ve managed to fool a considerable number of people into thinking that their way is the “common sense” approach. And it’s devilishly tricky to replace people’s simplistic and emotionally satisfying beliefs with truths that are both more complex and provide less emotional gratification. While the Democrats could conceivably, if implausibly, win this particular battle, they won’t have defeated their enemy. It may be that the only long-term solution is to let the nutters win, so everyone can see just how bad their ideas work in practice, which would be an incredibly costly victory.

* Thanks for the tip, Scott.

** Yes, these fanatical conservatives follow the same thought-processes as terrorists.

About J@m3z Aitch

J@m3z Aitch is a two-bit college professor who'd rather be canoeing.
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5 Responses to Thoughts on the Debt Limit Showdown: Short-sightedness and Brinkmanship

  1. Yagotta B. Kidding says:

    Tag closure, Professor.

    Another handy reference for you: the classic James Dean scene of playing “chicken” with someone who is suicidal.

    Finally: this is a no-lose situation for the Republicans. If they block the debt limit extension, they get credit with the 60+% of the population who oppose it — followed by the economic disaster that follows, which gets blamed on the Administration. To make them an even better offer, the Administration is going to have to do something that’s at least as bad for the economy, which will also get blamed on the Administration, PLUS putting Democratic leadership fingerprints all over the demolition of the most popular Government programs out there.

    In sum: the Republicans get credit for opposing the debt limit extension (a popular position), score a policy win they’ve been pursuing for seventy years while getting the Democrats to take the blame for it, and get the Democrats to take the heat for the short-term economic damage to boot.

  2. James Hanley says:

    Tag closed; thanks.

    Re: Chicken. Schelling also said that the best way to win in Chicken was to throw the steering wheel out the window. Is it plausible to argue, at this point, that the Republican have done that?

    Re: No-lose situation for Republicans. You may be too pessimistic. While the Democrats certainly never seem to miss an opportunity to miss an opportunity, it’s not impossible for them to spin the consequences as the results of Republican policy and say, “we told you so.” Not at all impossible, if they weren’t so damned scared of the Republicans that they often quit the battle field before they even have a chance to lose.

  3. ppnl says:

    This is just the authoritarian nature of the republican party. When it works well it is a strong and cohesive leadership. When it works poorly it is like an abusive alcoholic bipolar authority figure. And the democratic party is like an enabling codependent spouse.

    Republicans need to join idiots anonymous and stop depending on their cultivated idiot base. Democrats need to grow a set.

  4. Matty says:

    I’ve been wondering why so many European countries have managed to pass debt reduction measures while America seems unable to do so.

    The first answer that comes to mind is a variation on ‘too big to fail’. That is America is still so rich that no one really believes that the US government will default on its debts or shut down to the point where doing business in the States is impossible so the politicians can play games with the issue without risking a Greek situation.

    I’d be interested to know if you have any better ideas.

  5. James Hanley says:

    Matty, I think that may be part of it. I don’t really have any better ideas except that parliamentary systems might find it easier. That’s certainly true for majoritarian parliamentary systems, but less certain for coalitional parliamentary systems.

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