Obama's Pre-Christmas Pivot To The Lesser Bargain  

A blog about business and economics.
Dec. 22 2012 10:56 AM

Obama's Pre-Christmas Pivot To The Lesser Bargain Is Great News For America

The general impression in the media is that there was "no news" in the statement President Obama made in the late afternoon yesterday. In one sense that's true. But on another level, the statement reflected a substantial change in White House strategy for the better.

That's because as I outlined on December 10 there have always been two different ways of averting the economic problems associated with the fiscal cliff. One—which I'll call the "lesser bargain"—is an effort to reach a de minimis agreement that avoids middle class tax increases and minimizes short-term spending cuts while reducing the long-term budget deficit relative to the current policy baseline. The other is the quest for a true "grand bargain." A deal that attempts to "fix the debt" by doing more tax hikes and more long-term spending cuts and then perhaps tries to reduce the perverse economic impact by adding on short-term stimulus.

The quest for the lesser bargain is important because achieving it will improve the short-term economic picture. The grand bargain, by contrast, is impossible and pointless and its relentless pursuit is positively harmful since it generates these damaging crises.


Yesterday afternoon Obama hardly came around to my big-picture objections to grand bargaineering. But he seemed to have reached the conclusion that he wasn't interested in offering any more concessions than have already been offered, so it's time to pivot from the grand bargain in the short-term and work on a lesser bargain instead. Officially Obama's idea is that we try to do the lesser bargain now, and then that gives us plenty of time to keep working toward the grand bargain. That'd be a mistake. What Obama ought to do is try to reach a lesser bargain as soon as possible and then shift to addressing almost any other problem under the sun. But however it ends up, it was a step in the right direction.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.



The Democrats’ War at Home

How can the president’s party defend itself from the president’s foreign policy blunders?

Congress’ Public Shaming of the Secret Service Was Political Grandstanding at Its Best

Michigan’s Tradition of Football “Toughness” Needs to Go—Starting With Coach Hoke

A Plentiful, Renewable Resource That America Keeps Overlooking

Animal manure.

Windows 8 Was So Bad That Microsoft Will Skip Straight to Windows 10


Cringing. Ducking. Mumbling.

How GOP candidates react whenever someone brings up reproductive rights or gay marriage.

Building a Better Workplace

You Deserve a Pre-cation

The smartest job perk you’ve never heard of.

Hasbro Is Cracking Down on Scrabble Players Who Turn Its Official Word List Into Popular Apps

Florida State’s New President Is Underqualified and Mistrusted. He Just Might Save the University.

  News & Politics
Sept. 30 2014 9:33 PM Political Theater With a Purpose Darrell Issa’s public shaming of the head of the Secret Service was congressional grandstanding at its best.
Sept. 30 2014 7:02 PM At Long Last, eBay Sets PayPal Free
Sept. 30 2014 7:35 PM Who Owns Scrabble’s Word List? Hasbro says the list of playable words belongs to the company. Players beg to differ.
  Double X
The XX Factor
Sept. 30 2014 12:34 PM Parents, Get Your Teenage Daughters the IUD
  Slate Plus
Behind the Scenes
Sept. 30 2014 3:21 PM Meet Jordan Weissmann Five questions with Slate’s senior business and economics correspondent.
Brow Beat
Sept. 30 2014 8:54 PM Bette Davis Talks Gender Roles in a Delightful, Animated Interview From 1963
Future Tense
Sept. 30 2014 7:00 PM There’s Going to Be a Live-Action Tetris Movie for Some Reason
  Health & Science
Bad Astronomy
Oct. 1 2014 7:30 AM Say Hello to Our Quasi-Moon, 2014 OL339
Sports Nut
Sept. 30 2014 5:54 PM Goodbye, Tough Guy It’s time for Michigan to fire its toughness-obsessed coach, Brady Hoke.