Saturday, February 15, 2014

Obama's All-in Compromise Strategy: Does it work?

We all thought we knew how to compromise. You make an offer. Your opponent makes an offer. Your first offer never reveals everything you are prepared to yield. You save that for your final offer.

This style of compromise is based on the idea that there is a middle ground somewhere that will satisfy both parties. This style works well when both sides are evenly matched and the compromise will not harm either party too much. This is the piecemeal style of compromise.

The piecemeal style does not work well at all when one side is much stronger than the other, as when a prosecutor is negotiating with a defendant in a criminal trial. The prosecutor has little to lose in this negotiation. True, a series of lost judgments can harm a prosecutor's career, but he or she must be willing to take that risk because a series of non-decisions can be just as harmful. Besides, a single case ordinarily will not make or break a career.

A defendant in a criminal case frequently has his whole life on the line. Criminal sentences are cruelly harsh these days. Even a first offense can lead to years spent in prison. A second or third conviction can lead to a life behind bars. In one recent case, a defendant was involved in a robbery with two accomplices. The two accomplices pleaded guilty but the defendant, a young man who believed that his two older friends had influenced him to commit a crime, decided to plead not guilty and go to trial. This defendant lost his gamble and the judge sentence him to spend much of his life in prison. Admittedly the judge was extreme in his sentencing, but what's the point of being a judge if you can't throw the book at scofflaws? 

So a criminal defendant is likely to seize at any offer of compromise to avoid a dire outcome. Any offer is likely to be better than what he can expect from a skeptical jury and a mean judge. So our prisons fill up with petty criminals. 
The piecemeal style of negotiation is not the only style, however. As an American, I became annoyed with the Turkish bazaar in Istanbul, where the salesman typically starts out with a price three or four times the value of a piece. Once when a tradesman used this approach on me, I simply turned and walked away. He followed me, cutting his price in half several times in succession. But I didn't want to deal with someone like that and I kept on walking.

It turned out that someone else was watching the incident, one of the seller's competitors, or even--who knows?--his boss. This man came an offered to show me better merchandise at his factory, located outside the bazaar. I went with him and bought two items. No bargaining involved, I simply accepted the price offered. I later discovered from my Turkish friend that the price I had gotten was a good one. Maybe not the best possible price, but still a good one.

I would call this the "all-in" style of negotiation. The name comes from tournament poker, where a player cannot wait for a good hand while his pile of chips dwindles. At some point, he will not have enough money to compete with the other bettors. He therefore pushes all his chips into the pot and calls "all in".

Until Barack Obama became president, all negotiations between presidents and the congress were piecemeal negotiations. One party made an offer to compromise, then the other made one, and so on. The result of this style of negotiation was not satisfactory for Obama, however. Frequently, one party may delay a bill by offering one compromise after another in a piecemeal fashion. In the end, the party withdraws its support and the session ends with no action on the bill that seemed so popular at the outset.

Obama saw that the piecemeal style had one big flaw--bills could not be continued on to the next session of Congress. So he tried the all-in strategy. In the health care bill, he offered the same bill that the Republicans had offered the last time the issue had been brought before the congress. He may have believed that the Republicans would simply cave in and accept their own proposal. But he probably realized that the Republicans never intended to pass that proposal and merely used it as a delaying tactic in their piecemeal strategy.

Obama's all-in strategy worked. The Republicans tried to make counteroffers, but they really had nothing else to give. Obama and his congressional allies passed the bill by buying off the few votes he needed to get the bill through the Senate. The all-in strategy essentially stops the clock ticking, preventing delaying tactics, especially if, as on the debt-limit bill, the all-in player refuses to offer any further compromise.

After the 2010 elections, Obama faced an obdurate congress that refused to be intimidated by the all-in strategy. Obama continued this tactic, however, and gained a political advantage by making his Republican opponents appear petty, self-interested, and even stupid. The Republicans countered by passing one meaningless bill after another, hoping the electorate would blame the president for the failure of these bills. After numerous meaningless bills failed to pass the Senate, however, even disinterested voters began to get the idea that the Republicans were not serious about solving problems and governing. 

It remains to be seen whether the all-in style wins in the long run.

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