..that President Obama has made Tim Geithner the point person for budget negotiations. I very much hope he doesn't negotiate away the President's strong position.
Saturday, November 10, 2012
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Richard Green is a professor in the Sol Price School of Public Policy and the Marshall School of Business at the University of Southern California. This blog will feature commentary on the current state of housing, commercial real estate, mortgage finance, and urban development around the world. It may also at times have ruminations about graduate business education.
How strong is the President's position? You might be right, but Republicans have demonstrated that they are willing to risk economic damage to get their way (debt ceiling, 2011), that doing so does not cost them their House majority, and that they are capable of serious miscalculation (2012 election expectations). It is like Nixon's madman strategy (http://bit.ly/UglNgt) - being credibly irrational and stupid is a great negotiating tactic.
The House can keep passing bills extending the Bush tax rates, and refuse to raise the debt ceiling. Republicans can claim that they expect Obama to be blamed for the resulting recession.
Obama is cautious, and has caved to pressure in the past. The result is very difficult to predict.
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