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Madman Theory 2.0

July 28th, 2011 · 5 Comments

Is it ever an advantage to be crazy? Or at least, to be perceived as crazy? Richard Nixon thought so: During the cold war, he notoriously developed his “madman theory,” a stratagem of having senior aides circulate their “concerns” that Nixon had gone unhinged, and might just hit that big red button if provoked, even though the consequences of a nuclear conflict with the Soviet Union would clearly be catastrophic for the United States even in “victory” (if that term is even intelligible in the context of nuclear war). Nixon faced the  problem of “credible commitment,” as game theorists call it: It’s hard to use a threat as leverage when it would clearly be irrational for you to actually make good on that threat. An opponent who thinks you’re rational, therefore, will discount the threat as an empty bluff. But if your opponent thinks you’re crazy—crazy enough to make good on a threat even when it means mutual ruin—they may just be inclined to give you what you want.

It may be a bit inconvenient to keep up unhinged appearances over time, however, when you’re sharing closer quarters than Nixon and Khrushchev, especially if you sometimes need to collaborate on less hostile terms now and again. But of course, the folks involved in the detailed negotiations didn’t want their counterparts to think that they were crazy either: It was that other guy, Nixon, who they had no choice but to obey. Ideally, you want to be seen as rational yourself but accountable to a madman, at least on the specific point the threat is about.

Fast forward to 2011. Informed conservatives generally seem to agree that the debt ceiling has to get raised one way or another. They may all agree that large cuts in both discretionary spending and entitlements are desirable and, in the long run, necessary. But they also, however grudgingly,  allow that implementing all those cuts immediately and abruptly, in the middle of a recession, risks economic implosion and unnecessary suffering. Hitting the ceiling is not automatically the same as a default, but that doesn’t mean it’s a good idea either. That makes it hard to use the debt ceiling as leverage to extract concessions on those necessary spending cuts unless Democrats believe that Republicans are genuinely willing to court catastrophe. But under normal circumstances, it’s almost impossible to make any progress pushing back against the long-term economic problem created by promising ever more benefits financed with debt. So if you can’t lock in spending cuts in a situation like the current one, where the debt is politically salient, good luck getting them any other time.

But Republicans are in luck. Because the base doesn’t think a failure to raise the ceiling could have serious negative consequences as long as the right’s pundit ecosphere continue to insist it won’t (and those who get an attack of bad conscience can be written off as victims of leftist brainwashing). Assuming that messaging is sticky enough to be hard to reverse before the deadline, the threat suddenly gets a lot more credible. “Yes, we know it’s dangerous to walk away without reaching a deal—but the folks who determine whether we win our primaries and keep our seats don’t. So we’re going to have to walk away anyway unless we get everything on their wish list.” It’s a little risky, of course, because you can’t have them so out of touch that they don’t accept any deal you make, but if it works it suggests a method to the madness.

Tags: Economics · Horse Race Politics



5 responses so far ↓

  • 1 Dan // Jul 28, 2011 at 10:00 pm

    I think it’s less about policy and more about politics. If Obama unilaterally raises the debt ceiling he will have enacted an unpopular policy through a tactic of questionable legality it will therefore give the republicans and excellent weapon to use against him in his reelection campaign. It is for that reason that he has publicly insisted that he will not do it.

  • 2 Henry Baum // Jul 29, 2011 at 3:17 pm

    I don’t think this is just appearances. The Congressional Republican right is becoming its base – some who believe they’re on a mission from God to thwart a debt deal. Do you really think Michele Bachmann is faking it?

  • 3 Arnol // Jul 29, 2011 at 6:35 pm

    Sanchez’s description of Nixon’s use of the madman theory is a bit off — much of Nixon’s bombing of North Vietnam made little strategic sense, but it allowed Nixon and Kissinger to demonstrate to the Soviets that they were crazy enough to do anything. They were backing their message up with actions.

  • 4 Parliamentary Procedure and the Debt Ceiling Debate // Jul 29, 2011 at 7:45 pm

    […] cuts without much in the way of tax increases (unpopular with the Democratic base). For all the alleged craziness and irrationality going on in their caucus, it seems like a pretty good deal for […]

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