The Right Coast

Editor: Thomas A. Smith
University of San Diego
School of Law

Friday, July 29, 2011

I may have to take the rattlesnake off my truck over this
Tom Smith

Yeah, I think Glenn and Prof. Jacobson are right about this.  It's time to pass the Boehner bill and move on to 2012.  Krauthammer is also right.  It now looks like with a balanced budget amendment condition to the second extension of the debt limit, the Boehner proposal will pass the House.  But then what?  The House and Senate seem too far apart to produce anything (via conference?  I don't know what the order would be on this one) that the House would sign off on.  Obama's pseudo-bluff (I don't think it's really a bluff if he refers to it as a bluff) is irrelevant at this point.  

A little game theory moment.  If it were a true game of chicken (recall, that's two cars rushing at each other, such that if they collide both drivers die) if both players refuse to swerve, both die.  In this game, it is actually to the advantage of the player to be known or believed to be irrational.  If you think the other fellow would rather die than lose (i.e. is crazy) then you will swerve, unless you are crazy too.  Thus the tea partiers may be rationally acting crazy in order to win the game.  The problem is, the Democrats in the Senate may not believe that a crash (default on the debt and/or credit downgrade) really is such a negative outcome for them, because they may (indeed correctly) believe this outcome would be blamed on those crazy tea party Republicans and their GOP enablers.  So on one side you may have actually crazy or rational-but-acting crazy tea partiers and on the other side Democrats who think default might be terrible for the country but good for them. This is not a true game of chicken but some sort of funky game unlikely to lead to anything good; call it the Stupid Selfish Politician Game, until a better name comes along.

Krauthammer has the most important insight.  The debt limit is the limited government vs. European style social welfare state debate and is really something for the people to decide in 2012, which is almost here already conveniently enough.  That's really the constitutional moment (thanks Bruce!) to decide whether we keep the party going until we hit the iceberg, or change course towards the sunny waters of liberty.  As the French used to say, conserver tout votre calme.

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European style social welfare, as opposed to US style free market fundamentalism? We gave Wall Street everything it asked for. Greenspan ruled the roost! Friedman was worshipped and Hayek was quoted as if a saint. We deregulated and cut capital gains. IOW we had AMERICAN style socialism for a few hundred folks like John Paulson on Wall Street. And how'd that work out for us? We doing OK? Full employment? The right is clearly delusional with its insistence that the middle class is financially irrelevant and only tax cuts for the 1% need to be considered.

Posted by: bob | Aug 2, 2011 9:46:16 AM