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The Return of Barack Obama and the Art of Negotiation

Paul Krugman quotes Elizabeth Drew who says that Obama is “a weak negotiator—a ‘pushover.'” But it’s not the whole story. I wrote about his negotiating style and the impact it could have on the looming debt ceiling fight in December of last year, shortly after the extension of the Bush tax cuts. And I figure if Tbogg can rerun the lawnmower post….

The President is “moving quickly” to reassure liberals that he has “not abandoned them” in the wake of the tax cut deal, according to the Washington Post.

But liberals shouldn’t be concerned that Obama has “abandoned them.”  They should be far more worried if he’s actually on their side, and simply losing one fight after another.

The White House has been working to smooth the ruffled feathers of liberals that Obama dismissed as “sanctimonious” in his spur-of-the-moment press conference two weeks ago. But having watched the event, I have to say that I was personally far less concerned about Obama’s attack on his liberal critics than I was about the signals he sent to anyone who ever negotiates against him.

Can you imagine Netanyahu or Medvedev or Wen Jiabao watching this and scratching their heads, and wondering what the heck he’s talking about? And someone has to scramble to explain that there are a couple of bloggers nobody has ever heard of who have apparently gotten under the President’s skin, and this is about the fourth or fifth time he has publicly lashed out at them?

The need for credit, the desire to be seen as a “winner” and the anger at lack of perceived support from those he thinks should be on his side are things that are consistently being exploited by everyone who negotiates with Obama. Moveover, his willingness to call anything a “win” — no matter how badly he gets cleaned out — sends a signal that stagecraft rather than substance will always be his focus.

The same petulance Obama devoted to bloggers was on display during his Korean press conference at the G20 in November.  Unfortunately, this time it was the Chinese who were on the receiving end.  In response to Jake Tapper’s question on Chinese currency manipulation, Obama referred it as an “irritant,” and then patronizingly told the Chinese they needed to be “a responsible partner.”

Such language in the blogosphere would be considered remarkably tame and wholly unworthy of note. But by State Department standards, it was practically fisticuffs. The LA Times headline read:

Obama slaps China after G-20 summit, indicates little room for compromise on Bush tax cuts

Okay, so he wants to get tough with the Chinese. No doubt they are watching his actions closely.  So what does he do?  After “getting tough” and making bold public statements at the G20 insisting he would not budge on the Bush tax cuts, in front of every major world power, he returns home — and does just that.

The President didn’t get anything he wanted at the G20, either.  Simon Johnson said the trip was a “profound and complete disappointment for the US Treasury”:

It is hard to imagine how the summit could have gone any worse for the US Treasury and the president. The spin machine is now working overtime – and you’ll see big efforts to get more positive stories over the coming week – but on all fronts the outcome is very bad.

People who watch domestic politics closely may not have been paying that much attention to what happened in Korea, but in short:

  • Obama announced on election day (Nov 2) that the Korean Free Trade deal was complete.  When he got to Korea, it fell through.
  • During the summit, Obama couldn’t put it back together again.  The Koreans refused to budge on cows and cars.
  • Despite Obama’s public chiding, the Chinese dug in hard on their exchange rate.
  • The G20 refused Obama’s entreaties to include stronger language about the currency situation in a joint statement
  • The Europeans refused to give up control of the IMF managing director job, which means no country outside of Europe will  want to rely on IMF help in an emergency.  Simon Johnson warned that they will thus want to “manage” their exchange rates along Chinese lines, and called it “a major step backwards.”

The WSJ was likewise unimpressed:

Has there ever been a major economic summit where a U.S. President and his Treasury Secretary were as thoroughly rebuffed as they were at this week’s G-20 meeting in Seoul? We can’t think of one. President Obama failed to achieve any of his main goals while getting pounded by other world leaders for failing U.S. policies and lagging growth.

The root of this embarrassment is political and intellectual: Rather than leading the world from a position of strength, Mr. Obama and Treasury Secretary Timothy Geithner came to Seoul blaming the rest of the world for U.S. economic weakness. America’s problem, in their view, is the export and exchange rate policies of the Germans, Chinese or Brazilians.

It’s a pattern:  Big promises. Failure. Blame-shifting. Victim card.

Two weeks ago, in the dead of night, the White House announced they’d finally reached a trade agreement with the Koreans.  Not only did Obama cave once again on every promise he made on the campaign trail about opposing NAFTA-style deals, he didn’t even get as good a deal as the Europeans got when they finalized their Korea Free Trade deal earlier this year.

But Obama now considers that a “win,” right?

I asked an ex-U.S. Ambassador how the President’s performance at the press conference played on the world stage:

We seem phenomenally weak and whiny — and look at how the North Koreans and Chinese and Iranians are all taking advantage.

You can’t be president and a victim at the same time.

That certainly echoes what I’ve heard from other corners: Obama’s seven-minute tirade against critics in his own party did not inspire confidence in his leadership skills.

But there was another part of the now-infamous press conference that concerned me far more than the President’s weird rant.  He could have offered up many excuses for cutting this tax deal with Republicans, but this was the one he chose:

I’ve said before that I felt that the middle-class tax cuts were being held hostage to the high-end tax cuts. I think it’s tempting not to negotiate with hostage-takers, unless the hostage gets harmed. Then people will question the wisdom of that strategy. In this case, the hostage was the American people and I was not willing to see them get harmed.

Since that time, the White House has reiterated the point about giving the Republicans everything they wanted because they were holding “hostages” several times.

Think about that for a minute. The President of the United States entered into negotiations with the opposition party, who are still currently in the minority in both the House and the Senate. What he wanted (unemployment benefit extension) was tremendously popular with the public, and without it, the Republican plan would’ve been extremely unpopular. And after announcing at the G20 that he absolutely would not compromise, he proceeds to give the Republicans everything they wanted, and more, because they were willing to “take hostages.”

He acknowledged he had popular support for a fight, that the public was on his side and didn’t WANT this capitulation.

And then he referred to those who had forced him into this terrible position due to their unconscionable willingness to “take hostages” as “my friends.” And claimed victory.

It’s like sending an engraved invitation to everyone who ever negotiates against you to engage in brinksmanship.

Now, I happen to think Obama wants this tax cut deal, has wanted it all along. He just didn’t want to take the political heat for it. He put off dealing with an extension of middle class tax cuts until the end of the year while trying to kill a compromise behind closed doors.

But it really doesn’t matter, because even if that’s true, the Republicans still walked away with the estate tax and Social Security tax cut in addition to the Bush tax cut extensions. The Social Security tax cut was unpopular even among Republicans. The President let his “win” — unemployment insurance extensions, which had 78% public support — be used by the GOP as a sugar pill to make what they wanted palatable to the public.

The Republicans knew they would have to extend unemployment insurance benefits  anyway. They just didn’t want to take responsibility for it. So Obama’s “win” lifted that burden from their shoulders, and freed them from any potential problems with their own base for doing so.

Not only does the President consider this a triumph, he paints himself as the victim of “sanctimonious” liberals who just don’t appreciate his remarkable achievements (apparently the ones who represent what he just acknowledged to be the position held by the vast majority of the country).

We are headed into some really rough times ahead as the global economy shakes out, and we continue to absorb the impact of the shenanigans in the financial world.  Our major financial institutions are insolvent, and have been for quite some time. Our economy is still dependent on a housing bubble and we’re in the midst of a foreclosure crisis. We have massive unemployment, and no jobs plan. We’re engaged in two wars, and the Chinese are eating our lunch.

But because the President didn’t include the debt ceiling in the tax cut deal, we’re also facing a potential shut down of the government in the next few months, which the Republicans have already said they will use to force dramatic cuts in much-needed social programs at a time of economic hardship.

Bob Corker is already assembling a “shock doctrine” team. Who do you think is going to get the best out of that fight?

The President has set up a situation where the GOP will once again have all the hostages they need to force his hand. So what’s his plan?  According to Robert Kuttner, he will announce at the State of the Union that he supports the Simpson-Bowles deficit reduction plan, which includes cuts to Social Security. He has to do this, he will say, because what Paul Ryan and the Republicans want to do is much worse.

I mean, what Republicans? The ones who don’t control the Senate, who don’t control the White House and who don’t have veto power?  The ones who have a slim majority in the House, a body whose power has been eroded into complete and utter irrelevance over the past two years, thank you very much Nancy Pelosi?

Today it’s Mitch McConnell and other Senate oligarchs who are chomping on cigars and slapping each other on the back for having successfully loaded the tax cut bill down with pork for themselves in exchange for voting for something they wanted anyway, things like billions in ethanol subsidies for the oil companies.

But tomorrow it could be the Chinese. Or the Iranians. Or Goldman Sachs.

The President is supposedly working behind the scenes with Pete Rouse to clean house after the first of the year.  It’s rumored that Gibbs will be gone (hard to see how he can stay, after the President treated him like a garden gnome in front of Bill Clinton and the New York Times). Likewise Patrick Gaspards and the rest of the political team.

I hope the President focuses on replacing these staffers with people he trusts, because he clearly no longer trusts this bunch, and probably with good reason.

But if, as Robert Kuttner says, Obama is negotiating a “grand bargain” with the Republicans that includes cuts to Social Security benefits, the GOP is running a successful trap for him once again. White House strategists apparently believe that this will “give Obama ‘credit’ for getting serious about deficit reduction.'”

This is not how you negotiate successfully for anything. This is how you send the signal that you want a “win” at all costs, you’ll give away the farm to get one, and once someone has announced their willingness to take “hostages,” there is no demand so extreme that it will drive you away from the table.

There are much bigger bogeymen lurking on the horizon than Paul Ryan.

I have a feeling the ranks of the “sanctimonious” are going to be swelling in the near future.

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Jane Hamsher

Jane Hamsher

Jane is the founder of Her work has also appeared on the Huffington Post, Alternet and The American Prospect. She’s the author of the best selling book Killer Instinct and has produced such films Natural Born Killers and Permanent Midnight. She lives in Washington DC.
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