Rope-a-dope Dep’t

Romney endorsed default. How’s that going to play in November?

When the chips were down and the alternative to the debt-ceiling deal was default, Mitt Romney, the one Republican running who might actually get the nomination (unlike Huntsman) and might seem like a plausible President (unlike Bachmann or Perry), came out against it. That should play well in Iowa. But in November? Not so much. The voters didn’t like the deal, but demanding a vote for default was a classically un-serious thing to do.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com

19 thoughts on “Rope-a-dope Dep’t”

  1. By Oct 2012 the vast majority won’t have a clue what happened in Aug 2011. Certainly the MSM will do what they can to keep folks distracted.

  2. It’s going to be fairly easy for Romney to convince “independents” we need more austerity if they’re all jobless 15 months from now. Mitt is going to Very Seriously argue the deal was a “classically un-serious” attempt to fix this economy and people won’t be able to make sense of the fatuity. These “independents” in the Midwest move away from the guy in power when things are bad. They aren’t economists. Take a trip out to Ohio or Pennsylvania, Mark and tell me Pres. Obama can win out here with a listless base and crap conditions on the ground. He’s in jeopardy of getting rolled if Romney wins the nomination. I can’t believe I just typed that after what happened in ’08.

    Lastly, as a fan of the sweet science, I have to say most using this Rope-a-Dope analogy are forgetting a couple things about Ali’s strategy:

    1. He had to make sure he left enough in the tank to knock Foreman out in the later rounds. Sitting on the ropes as the other guy out works you usually gets ya KO’d or causes you to lose a decision when it goes to the cards.

    2. Unlike Ali, Pres. Obama is taking some pretty big shots, and he’s not leaning on ropes, but rather a base of folks who are getting pretty tired of holding him up. If Ali would have taken those same punches in the middle of the ring that night in the jungle, he wouldn’t have lasted more than a couple rounds.

    I hope you accept the POTUS is not sacrosanct, Mr.K because it’s that type of acceptance and the intransigence which usually shrinks because of it that separates us most from the other side in so many ways.

  3. I’ll say it one more time: I know it’s your party line. I know you’ve got the media in tank to repeat it at every opportunity. But they weren’t voting on whether to default, which is to say, whether to not pay our debts. They were voting on whether to borrow more. Debt service is a small enough percentage of revenue that not borrowing money does NOT equal default.

    Just because you find a balanced budget, (Which is the actual consequence of not raising the debt ceiling.) so cosmically unimaginable that you’d stiff our creditors in an instant to maintain every cent of spending, doesn’t mean everybody has a similar obsession with continuing current spending levels come hell or high water.

    It wasn’t a vote about default. It was a vote about going deeper into debt.

  4. Brett:

    Unless we ignored the debt ceiling, or just printed more money, the only other options would have involved defaulting on commitments to somebody. The US government has made commitments to pay bondholders. You say we wouldn’t have had to default on those commitments, and that’s true. But the US government also has made commitments to pay its employees, its defense contractors, its senior citizens, its highway maintenance contractors, etc. etc. etc. through the normal budget process. Cutting spending would involve defaulting on one or more of those commitments.

    Maybe you think we should renege on the commitments Congress and the President made during the budget process. That’s your right. But you can’t force others to share your pretense that those commitments were never made.

  5. Cutting spending would involve defaulting on one or more of those commitments.

    It should be obvious, but just to clarify, the above ought to be understood as “abruptly cutting spending mid-year, outside the normal budget process”.

    Had Congress passed a clean debt-ceiling increase, waited until the start of the next budget cycle, and then gutted spending through the regular budget process, that would not involve defaulting on any commitments. It would be unwise, of course, but that’s a separate issue.

  6. Mr. B, they were voting to borrow more to pay for things both sides had agreed to pay for. You do acknowledge this, correct? (I beg you to answer a question directly just this once!)

    However, you’re right. We could have serviced our debt, avoided default, and left our seniors and disabled veterans with the table scraps. Alternatively, we don’t pay our creditors, default, and payout the obligations due. So, it seems like we were voting for one or the other regardless of what we “say” the vote is for, no? Remember, it’s the consequences of the vote that matter- not what we call it.

  7. I left this post open 20 minutes ago to get a cup of coffee. I got distracted, came back to the computer,finished it, hit send, and found out two folks had already done a better job articulating the same message. Damn the intelligent RBC posters!

  8. For once I’m going to agree with Brett. We could have EASILY slashed enough military spending to avoid raising the debt ceiling.
    Do the math, Brett. The things you want to cut won’t even come close to balancing the budget.

    J: You’re wasting your time. These arguments have been made to Brett many times. He’s being intentionally obtuse.

  9. I’m trying to figure out the point of Mark’s title: is this more of the “long game”, “n dimensional chess” kind of thing? Yes, Obama is extremely smart. No, this debt ceiling debacle wasn’t part of a grand strategy that included forcing his currently most plausible and electable potential opponent into embracing an irresponsible position that might later reduce his electability.

    Let me also second the responses to Brett Bellmore above. The Congress passed laws directing the to government to take certain actions. Doing so involved contracting in a wide variety of ways with a wide variety of individuals, companies, and other governments. The Congress then further authorized the government to go forward with these contracts by appropriating the funds. The government then entered into these contracts. To then not actually pay would certainly constitute welching. Witness the current debacle at FAA where employees may have to work for nothing for some extended period of time in order to ensure public safety due to Congressional fecklessness.

    I personally felt that the best way to approach this would have been to draw up a list of all government contractors working in or based in the districts represented by Members of Congress who thought it would be fine to welch on our bills; and then to call up the CFOs of all these companies and tell them that if the government was forced to prioritize its accounts payable due to lack of funds, payments to them would be cut first.

  10. I personally felt that the best way to approach this would have been to draw up a list of all government contractors working in or based in the districts represented by Members of Congress who thought it would be fine to welch on our bills; and then to call up the CFOs of all these companies and tell them that if the government was forced to prioritize its accounts payable due to lack of funds, payments to them would be cut first.

    That’s emotionally satisfying, perhaps, but it would represent a vast expansion of presidential power. I don’t think we want to go there.

    J: You’re wasting your time. These arguments have been made to Brett many times. He’s being intentionally obtuse.

    I wrote that primarily for anyone else who happens to wander into this thread. If it embarrasses Brett sufficiently to get him to drop that silly line of argument, that’s icing on the cake. But I’m not counting on it.

  11. J, I understand that Brett Bellmore is disingenuous. I actually have a test for intellectual honesty: if you are someone like Brett Bellmore (or, say, Steve Forbes) who clearly understands marginal utility, and you won’t straightforwardly acknowledge its implications regarding tax rates (namely, that a flat tax rate will inflict more pain on people with less money), then you are disingenuous. It turns out most smart right-wingers have no problem misleading people less smart or informed than them in this way.

    As for whether the President would have had the authority to do what I suggest, if the Congress demanded (by failing to raise the debt ceiling) that he welch on some of our contractual commitments, and it at the same time failed to provide any instructions as to how he should then prioritize which we should pay, and which we should welch on, then I think it would be up to him to decide as best could. And “best he could” would it seems to me include providing the appropriate political pressure to bring such a farce to its quickest end, since that would be in the best interests of the United States.

  12. Finally, we see the gazillion level chess in this: come November 2012, people will remember Romney’s non-role in this and not Obama’s complete screwing up of the economy. Also, too, Pivot to Jobs.

    I smell a job in the White House for Mark.

  13. A job in the White House for Mark…

    As what, a tour guide? Brett, please don’t give them an inch. Employees can be furloughed. That includes Congressional and White House staffers by the way. As for what Congress appropriated, they did so without a budget. I am unmoved by your concern for our “contractual commitments.”

    As I posted here any number of times, perhaps alone, my prediction that an eleventh hour deal would be made that largely kicked the can down the road came to pass. The market was glad the deal was done, but the more market participants look at it, the less they like it since there aren’t enough real cuts and now we have the uncertainty about what the commission will decide. But the more I read, the more I see the people that matter lining up behind the Bowles – Simpson framework. Maybe we are finally in the bottoming out process, policy-wise.

  14. I feel about Redwave72 the way I feel about people who are against nuclear power. I want it understood that if it comes to it, we’re going to cut off the electricity to their houses first. And I want it similarly understood that if it comes to it, we’re going to cut off his Mom’s Social Security and Medicare first. He’s obviously a Rugged Individualist; he can take care of his own.

  15. Larry,

    Not far off. Started with nothing but an education and parents that sacrificed to make sure I got a good one. I’m not much for the social safety net when it gets extended to the middle class. Or to everyone. That’s not what it’s for (or at least, not what we were told it was for). I do believe in, as the WSJ says on its masthead, “free markets, free people.” Socialists don’t. For most of the people on this blog, whether they accept the label or not, that’s what they are, and that’s why they are out of the mainstream (so far).

    The limited safety net, for those in need who are limited in their ability to improve their circumstances, is a necessity. But Democratic Party dogma is obviously to extend it to as many as possible, and co-opt a majority to the party through dependence. That has not been a bad strategy, but it does (hopefully) appear to be unraveling. It’s awfully cynical at best, don’t you agree? Folks are getting pretty concerned that a majority no longer pay income tax (though they do usually pay sales and payroll taxes).

    Anyway, we can agree to support nuclear power. I do.

  16. Redwave says, “Started with nothing but an education and parents that sacrificed to make sure I got a good one.”

    More succinctly, “I started with everything.”

  17. It’s hard to know where to begin. So I’ll just tell a story. During the doomed Clinton effort to enact national health insurance, I was talking with a friend and neighbor, very nice guy, we were watching our kids play on the block one evening after work. He was against it, I was for it. I said to him, but don’t you believe we have some responsibility towards our fellow citizens to make sure they have health insurance if they get sick? And he said, no, they’re responsible for themselves. And then I said, but what about kids, by definition don’t we have a responsibility to ensure them? And he thought for a while, and then said, no.

    At this moment I realized that he simply couldn’t imagine a world in which those might be HIS kids.

    Or, in this case, in which that might be your mother, or grandmother, who is sick and living in poverty, as so many were before Roosevelt and Johnson did something about it.

  18. It may surprise Redwave72 that many of these Socialists actually want free markets too. We just have different ideas about what “free market” means. For instance, if we decided end or curtail corn and transportation subsidies to agribusiness, he may find that many of his free market brethren don’t want the market to be quite that free. He may have no objection to this himself. Which tell us exactly one thing: He’s not making a living in the agribusiness sector.

  19. Folks are getting pretty concerned that a majority no longer pay income tax (though they do usually pay sales and payroll taxes)

    OK, I’ll bite: How do you pay payroll tax without paying income tax?

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