Latest Obama Fiscal Cliff Gambit: Bad Negotiating, Bad Economics, Both, or Neither?

obama-laugh

We’ve got an odd one on our hands here folks:

President Barack Obama said Tuesday that while tax rates must go up for a “fiscal cliff” deal, it may be possible to lower rates at the top end of the scale late next year as part of tax reforms that would close loopholes and limit deductions.

“Let’s let those go up,” Obama told Bloomberg Television in an interview, referring to tax rates for the wealthiest Americans.

“And then let’s set up a process with a time certain, at the end of 2013 or the fall of 2013, where we work on tax reform, we look at what loopholes and deduction both Democrats and Republicans are willing to close, and it’s possible that we may be able to lower rates by broadening the base at that point.”

There are a couple things wrong here both from a negotiations theory standpoint and from an economic perspective.  First, this looks too overtly like a bait and switch.  Obama is not the most trustworthy of negotiating partners, so this “pay you Tuesday for a hamburger today” gambit looks and smells alot like the Tip O’Neill phony baloney that Republicans need to be, justifiably, on guard against.  Why is he still asking for trust from the Republicans when he knows that he doesn’t have their trust and hasn’t presented anything to earn it?  Second, this undermines his insistence so far on higher taxes for the rich.  Isn’t Obama equating his push for higher rates with a revenue stream over 10 years?  Wouldn’t raising rates now only to lower them in a year or so mean only a year or so of revenue?  The 10 year figure barely put a dent in our looming fiscal catastrophe, one or two years won’t even register.  Unless there is more to this, Obama just neutered an already pretty lame argument for higher taxes.  Furthermore he is confusing his base; he is stating, even more nakedly, that he wants to raise taxes for purely emotional reasons – “fairness” – but then saying that he ultimately wants to lower taxes on the rich and raise them on the non-rich (that’s what “broadening the base” means).  He’s all over the board here, seemingly trying to appeal to everyone and no one.

Now to the economics.  The tax landscape is already highly uncertain and the economy is plagued by this uncertainty.  So what does Obama do?  Go ahead and inject more uncertainty.  Tax rates are to go up, but then only to come back down in a short, but still indeterminate, time frame and in an indeterminate manner?  Huh?  That means more planning, more fretting and more sitting on the sidelines.  If the prospect of a new tax regime is a year or two away, investors and high-earners will duck, dodge and game the system for that time period.  Witness the rash of dividends flowing out of companies to beat the end of year deadline.  Lastly, in economics, as in most of life, if something is the right thing to, it is the right thing to do now.  So if Obama is admitting that the right thing do is to reform, which includes lower rates for high earners and a broadened tax base, why isn’t that the right thing to do now?  Why the interim step, which is by definition not the optimal policy?

Very strange.  Is this Obama walking back his position?  Normally, I’d say yes, it’s a clear opening for a broader reform process to begin.  However, given that this is Obama we’re talking about, it could just be horrible negotiating and/or economic incoherence.  We’ve seen plenty of that to know he is thoroughly capable of such.  Head-scratchin’ time.

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  • mickey_moussaoui

    I don’t think he gives a rats ass about economics. He has always taken the position that business will take care of itself. His single objective is bigger government. With that comes more control of the purse. All this talk about class warfare is a smokescreen to keep the usefull idiots occupied while he grows government powers. If the little people get hurt, BFD. They bring nothing to the game for him anyway except a vote and he got what he needed, so adious suckers.

  • mikemc1970

    He wants to drive America off the fiscal cliff. He has the dreams from his father to fulfill.

  • SigFan

    Beware of communists bearing gifts. Obama has no intention of cutting taxes for anyone but those who he can gull into voting for him. Bet on it. This is just another lie and patently obvious con.

    • matthew_bosch

      With a political philosophy that touts, “by any means necessary,” your phrase “Beware of Communists bearing gifts” is very poignant.

    • zdavid53

      Putting a higher tax rate on the rich is punitive. The actual amount of mony raised is not enough to be considered an actual policy. However, some jobs may be lost as a result. That is a fact. The rich will still be rich. It will be middle class people losing the jobs. So what wehave here is an ideological position versis the actual loss of jobs. One could make the arguement that ideology is more important to Obama than is the loss of jobs to the middle class. That should be the conclusion any reasonable thinking individual should come to.

      • SigFan

        Exactly – this always was and always will be about Obama’s ideology, his disdain for capitalism and his deep seated desire to reduce American exceptionalism. And since he doesn’t need to win another election he doesn’t need the middle-class anymore.

  • Guest

    Yes, who would’ve thought Obama would be naive enough to negotiate starting with what he campaigned on? Clearly Boehner is the better negotiator. He wisely modified his offer from 950 billion in new revenue before the election to 800 billion now, as the Republican’s position has been considerably strengthened since the election. Derp.

    • mickey_moussaoui

      Boehner will sell out. Bottom line: these pols love their salaries more than they love country

      • Guest

        Exactly. Every time a politician does something that doesn’t fit with strict, uncompromising conservative ideology, it’s clearly because they love their salaries more than they love their country. Derp.

        • Onslaught1066

          Right, and that is why Snowe quit, because her love of salary out weighed her “love of country”. Derp.

          • Guest

            Right, because the logic that she didn’t run because she wouldn’t win because she didn’t run is unassailable. Derp.

          • Onslaught1066

            If she loved her country so much why didn’t she run?

          • Guest

            It’s because she wouldn’t win, there’s absolutely no other reason a politician would retire. Derp.

          • Onslaught1066

            Exactly, glad you could pull your head out long enough to breath fresh air.

          • Guest

            Exactly, glad you agree about the unassailability of she didn’t run because she wouldn’t win because she didn’t run. Circular logic has the word logic right in it’s name, so it must be a valid way of reasoning. Derp.

          • Onslaught1066

            So we’ll have no more of your opinion = “fact” nonsense, yes?

          • Guest

            No, the logic that she didn’t run because she couldn’t win because she didn’t run is unassailable. Derp.

          • Onslaught1066

            Excellent.

          • yy4u2

            Looks like Hanni learned a new word. And only because his latest sexual tryst spray painted ass over his tricycle. That’s one talented blow up doll for sure.

          • Guest

            Look like sh*thead hasn’t learned to take blind guesses as who he’s talking to. And only because his latest sexual tryst has left him a sh*thead as his mouth is so full of cum drenched fecal matter as a result his irresistible desire to suck on c*cks pulled straight from an ass. That’s one talented sh*thead for sure.

          • yy4u2

            Poor little Hanni. Busted and flat broke on intellect again. Hope you didn’t spill your milk, stain your blanky, get sent home from kindergarten, or ruin your nap time. Every time you post, your ideas are childish and when left with nothing, you go into a tirade. As Prood would say, comedy gold.

          • Guest

            Poor little yy4u2 made a stab in the dark in about who he was talking to. But unlike the stabs in the dark bath house he frequents which could reasonably be attributed to the hard thrusts of his anonymous partners’s c*ck, this stab attribution was wide of the mark.

          • yy4u2

            Hey, child Hanni. When are you gonna break out the good stuff like “my dad is bigger than yours?” Apparently that nap didn’t work so well for you. Careful they don’t see you froth at the mouth, you might find yourself going to the clinic where they will find out what we all have known forever, you are off your meds and out of your league.

          • Guest

            You’re right, I’m out of my league when it comes to being childish sh*theads wasting their life by sitting online making insults online all day.

          • yy4u2

            Look at Hanni boo boo being wrong again. You are the king of what you just described. Run along, the short bus is honking its horn for you.

          • Guest

            Yes, excellent. The logic that she didn’t run because she couldn’t win because she didn’t run is unassailable. It doesn’t matter if polls showed her ahead, experts aid she would win, the reasoning that she didn’t run because she couldn’t win because she didn’t run is ironclad. We’re so smart. Derp.

          • Onslaught1066

            No it does not matter, polls only reflect opinion, opinions do not constitute fact, there are no facts that prove that Snowe would have won re-election, Snowe knew better than your polls that she would not have won re-election otherwise she would have run and won.

            She did not care one little bit for “her country” she only cared whether she could win and steal more of OPM.

          • Guest

            Why are you arguing? It’s agreed that opinions are not facts, except your own opinion that Snowe knew better the polls. That’s a fact because of your unassailable reasoning that she didn’t run because she wouldn’t win because she didn’t run. Derp.

          • Onslaught1066

            You have no evidence that Snowe would have won re-election so you need to stop thinking that she did.

            She did not have a snow balls chance in hell, you know it, she knew it, and I know you both know it.

          • Guest

            Right, there’s no evidence Snowe would have not won re-election either, but your opinion that she didn’t run because she wouldn’t win because she didn’t run is unassailable. Derp.

          • Onslaught1066

            There is evidence, she did not win. that right there is evidence.

          • Guest

            Right that’s what I said. Your logic the she didn’t run because she wouldn’t win because she didn’t run is unassailable. Derp.

          • Onslaught1066

            Right that’s what I said. she didn’t run because she wouldn’t win because she cares only for stealing OPM.

          • Guest

            Right, screw not having any evidence. By dropping out of the race and removing herself from power, she is in a much better spot for stealing money. It’s common sense. Derp.

          • Onslaught1066

            Right, screw your so-called evidence. she’s not going to waste her “War Chest” on a certain failure, so she’ll just quit now, get her pension and come back as a lobbyist or consultant. Derp.

          • Anonymous

            LOL. Derp indicates what you just wrote is retarded. What you think and write can accurately be characterized that way, so thanks for your valid use of ‘derp’ in your post. LOL SH*THEAD!!

          • Onslaught1066

            LOL. Derp indicates you is retarded. What you think and
            write can accurately be characterized that way, so thanks for your valid
            use of ‘derp’ in your post.

          • Guest

            LOLOLOL. Of course it was retarded, the whole conversation he was mocking your stupidity by mimicking your specious reasoning. Every post that uses such stupid arguments deserves a ‘derp’ next to it and you did it too!! LOLOLOL SH*THEAD!!!

          • Onslaught1066

            LOLOLOL. Of course you is retarded,. Every post of yours
            that uses such stupid arguments deserves a ‘derp’ next to it and you did
            it too!!

          • Guest

            LOLOLOL. Of course you is retarded. Every post of yours
            that uses such stupid arguments deserves a ‘derp’ next to it and you did it too!! Derp.

          • Onslaught1066

            LOLOLOL. Of course you is retarded. Every post of yours
            that uses such stupid arguments deserves a ‘derp’ next to it and you did it too!! Derp.

          • Guest

            LOLOLOL. Of course you is retarded. Every post of yours
            that uses such stupid arguments deserves a ‘derp’ next to it and you did it too!! Derp.

          • Onslaught1066

            LOLOLOL. Of course you is retarded. Every post of yours
            that uses such stupid arguments deserves a ‘derp’ next to it and you did it too!! Derp.

          • Guest

            LOLOLOL. Of course you is retarded. Every post of yours
            that uses such stupid arguments deserves a ‘derp’ next to it and you did it too!! Derp.

          • Onslaught1066

            LOLOLOL. Of course you is retarded. Every post of yours
            that uses such stupid arguments deserves a ‘derp’ next to it and you did it too!! Derp.

          • Guest

            LOLOLOL. Of course you is retarded. Every post of yours
            that uses such stupid arguments deserves a ‘derp’ next to it and you did it too!! Derp.

        • mickey_moussaoui

          who said anything about “strict conservative ideology”? Oh yeah…only you did. Douche.
          My comment was about ALL politicians you dummy.
          thanks for playing anyway

          • Thresherman

            Normally, the GOP leadership when in the minority compromises by agreeing to virtually everything the Dems want and then the Dems offer them a fig leaf. The difference now is that Obama won’t even let then have the fig leaf.
            As far as the leftist with his claims of “strict conservative ideology”, that is not the problem we on the right have. It is the acceptence of 99% of a strict liberal ideology and labeling it a “compromise” that we object too.

  • WOOF

    The President is offering Republicans what they need.
    Cover from the crazies who think destabilizing the financial markets
    is a good thing.

    • mickey_moussaoui

      Destabilizing the financial markets began $4 trillion dollars ago when the fed began printing money like it was toilet paper. It also started four years ago when the Democrats flooded the world market with worthless derivatives from their CRA scam. If you think there won’t be a reckoning for obama’s careless spending then you sir are the crazy one. The Republicans can justify walking away from this mess and it won’t change the direction we are headed anyway.

  • ellinas1

    Donny Baseball. Do you pay your bets?
    We did bet $100 dollars on Florida, and you lost.

    • two_amber_lamps

      Hello ellinas… how are you today?

    • donnyB

      Sure. Remind me of the exact bet…I recall it related to “slush fund” pre-campaign spending, but memory is vague. Remind me and let me know if PayPal is OK…

      • ellinas1

        Donny B. ellinas1 • 7 months ago
        OK.
        Here is my proposal. You mail $100 to Rob Port and I will do the
        same. If before the election, school districts in 2 or more out of the 3
        states I mentioned receive Race to the Top grants, I win and RP mails
        me the money. If grants fail to be awarded districts in 2 of those 3
        state, you win and RP mails you the $200. Say the word and I will bring
        RP on board.

        http://sayanythingblog.com/entry/obama-readies-swing-state-slush-fund/

      • ellinas1

        I do not have a paypal account.
        Money Order or American Express cheque will do just fine.

  • sbark

    Obama runs around the world appeasing and compromising with every Putin, Iran, Chaves and Morsi…………he offers them reset buttons, time to build nukes, bends over when a Morsi grabs power way beyond anything the previous Egyptian ruler did………

    …….but with his own citizens, branches of govt fully equal……..everything is with a iron fist, distorted, flat out lies and ultimatums………

    what he is trying to isnt negotiating……its blackmail, with the USA economy possibly at risk

  • http://ndgoon.blogspot.com Goon

    I am so sick and tired of this asshat and we have four more years…

  • Snarkie

    When are you all going to redub this blog the Dinosaur blog?
    And how does it feel to contribute in such a salient, public manner to the demise and alienation of your own political party?

    Inquiring minds want to know.

    • $8194357

      drunk Inquiring minds want to know?

      • Snarkie

        Oh hi Mr. Brontosaurus.

        • two_amber_lamps

          Oh 7, I’m sure he’s not drunk all the time… Hey snarkasaurus… were you drunk/high when you killed your wife? Do you still call her ugly racist epithets or do you even bother to try to honor her memory?

          • $8194357

            God created the devil so God made him do it?

          • two_amber_lamps

            Yup, just like it’s the spoon’s fault that Rosie O’Donell has a big fat ass from all that ice cream she stuffs in her big maw.

          • $8194357

            My car made me drunk and run over that guy?

          • two_amber_lamps

            It was a conspiracy between Ford and Jack Daniels…

          • $8194357

            Standard oil company as well.
            Or BP?

          • ellinas1

            Bloody dolly-mop.

          • two_amber_lamps

            That what you call your little gonorrhea infested tool after you’ve ruptured a blood vessel in some poor 10 year old boy’s rectum?

            You sick little greekling pederast monkey you!

          • ellinas1

            Bloody dolly-mop.

          • two_amber_lamps

            The Greekling NAMBLA High Priest of Stockton, CA knows how to cut and paste? Whodathunk?

          • ellinas1

            You didn’t until I showed you, you dollymop.

          • two_amber_lamps

            And you cut and paste just as you screw little boys in the poop hole… religiously that is….

        • $8194357

          Hey de-based self hater…

  • $8194357

    PT Barnum

    “There is a sucker born every minute”.

    http://atlasshrugs2000.typepad.com/atlas_shrugs/2012/12/they-know.html
    But ya can’t fool all of the people all of the time…
    Barry only needed 51% by hook or by crook…

  • Harold

    Just saw where Citi Group are laying off 11,000 employee’s, Apple has lost $30 and is still heading south. Detroit wants taxpayers of america to bail them out because they voted overwhelmingly for Obama, California and Illinois are looking to Obama for more of our money to bail them out, gosh 4 years of Obama’s administration sure seems to be working very well for America.

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