A teachable moment.

Photographer: Drew Angerer/Getty Images

Let's See What Republicans Learn From Losing Boehner

Megan McArdle is a Bloomberg View columnist. She wrote for the Daily Beast, Newsweek, the Atlantic and the Economist and founded the blog Asymmetrical Information. She is the author of "“The Up Side of Down: Why Failing Well Is the Key to Success.”
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House Speaker John Boehner has announced that he’ll be stepping down from his post -- and his congressional seat -- come October. In the near future, this is going to reduce the chances of a government shutdown, as Boehner, no longer worried about keeping his caucus together, can simply pass a deal with the help of as many Democrats as he needs. In the long term, however, things get a little dicier.

Boehner has spent years and years trying to corral Republican hardliners into politically feasible deals on things like the budget and taxes. I gather he’s tired of it. And I don’t blame him; I’d have run for the hills after the debt ceiling debacle. Or after Ted Cruz managed to deflect attention from Obamacare’s failures with his pointless shutdown stunt. Or gosh, name a day in the past four years, really.

But for the rest of us, there’s the worrying question of what comes next. Does the caucus nominate a leader who will be itching for more such fights? This would be bad for America’s already dilapidated political institutions and civil society. It would also, I must point out, be bad for the Republican Party, which still shows lingering signs of infection by the dreaded “Ask for the Stars, You’ll Get the Moon” bargaining strategy. (Ever notice that's so beloved by Hollywood, and by almost no one who actually has to negotiate deals for a living?)

The idea behind this is that you will eventually settle for something about halfway between your initial demands, and what the other side is asking for. The winning strategy is therefore to ask for enormous concessions, include unrealistic demands as bargaining chips, and convince the other side that you’re just crazy enough to walk away if they won't make a deal.

As it happens, we have just had a demonstration of this technique -- a live drama, no Hollywood effects: Greek Prime Minister Alexis Tsipras tried it with the EU. This strategy worked so well that he ended up with a worse deal than the original offer, plus a banking crisis that is still unspooling. Somehow, this never happens in Hollywood movies.

It’s easy to see why Hollywood loves this strategy: It’s really easy to explain without chewing up screen time, and it’s dramatic. Why don't real-world negotiators more often do this?

All negotiations are defined by something called the ZOPA: the Zone of Possible Agreement. The boundaries of that zone are defined by another buzzword, the BATNA: the best alternative to negotiated agreement.

The ultimate deal has to be better for both sides than their BATNA. Anything that either side considers worse than no deal at all is outside of the ZOPA, and no amount of strategery is going to get you there. Getting rid of Social Security and Medicare: outside of the ZOPA. Raising tax rates to Danish levels: outside of the ZOPA. Single-payer health care: outside of the ZOPA. Defunding Planned Parenthood: outside of the current ZOPA.

Is the ZOPA fixed? Nope. If a Republican president were in the White House, and a few more Republicans were in the Senate, defunding Planned Parenthood might well be feasible. The massacre at Newtown moved the ZOPA on gun control leftward. The financial crisis made all sorts of previously unthinkable things -- like TARP and a nearly $900 billion stimulus bill -- eminently feasible. The ZOPA moves all the time, which is why we’re no longer debating the free and unlimited coinage of silver at a ratio of 16 to 1.

But note that these movements didn't come from some sort of deft negotiation strategy. They came from external events that changed the BATNA of one side or the other. Note too that even though the ZOPA had shifted in his favor, President Obama lost on gun control because he included an assault weapons ban in his list of demands as a bargaining chip, and the other side decided to walk away instead of negotiating a deal.

How did this happen? Because the bargaining chips you include send signals about your intent, and how serious you are about negotiating -- and they can therefore change the facts on the ground in ways that hurt you rather than help you.

Imagine that you tried negotiating for a car by announcing that you intended to pay no more than $2,400 for a fully-loaded new truck. Would this improve your bargaining position? Of course not; the salesman would decide that you were wasting his time, and go find another customer. Similarly, if the car salesman announced that he wanted $100,000 for a well-used Camry, that wouldn’t make you more willing to pay $30,000 for it; it would make you go seek a dealer who wasn’t obviously crazy.

In Greece’s negotiations with its creditors, Tsipras's party, Syriza, was sending the signal that it was willing to walk away from the euro rather than accede to what it considered to be excessively stringent creditor demands. This actually ended up worsening Greece's negotiating position in three ways. First, it eroded the already none-too-strong faith that the creditors had with Greece as a partner. Second, it made various non-Greek electorates mad, making it harder for their finance ministers to offer Greece concessions. And third, it triggered a banking crisis that meant the Greeks urgently required assistance from the same folks that they were trying to threaten. Angry creditors came back with a worse deal, and Greece had no choice but to accept. 

What lessons should Republicans in the House draw from this, as they look to choose their next leader? 

  1. The main obstacle to getting what they want is not the lack of leaders who are willing to fight; the main obstacle to getting what they want is that what they want is well outside the ZOPA. I’m not saying this to taunt my conservative friends; I agree with many of the things they want. But I recognize that there is a wide gap between what I (we) want, and what can be foisted upon the American public by its elected representatives. If I want outcomes closer to my preferences, then the primary problem is not the folks in office, but the preferences of the average American voter. Focusing your attention on politicians, instead of the hearts and minds of your fellow citizens, is like attempting to fix a faulty car engine by swapping out the dashboard gauges.
  2. Intransigence and bold demands do not necessarily get you closer to what you want; they often push you further away. Next year, Republicans will be trying to take back the presidency. A Congress that shuts down a few times or spends all its time passing strong, base-pleasing bills that can’t get past the Senate, much less the president’s veto pen, is not going to improve their chances. And for all the complaints about candidates who are Republican in name only, any of them would deliver more of what the party wants than Hillary Clinton would.
  3. This is really a return to the first: “more of what the party wants” is all you’re going to get. You’re not going to get it all. You live in a country with 300 million people, many of whom have very different desires than you, and, well, welcome to representative democracy. Republicans who currently enjoy their House majority thanks to the previous majority’s Obamacare suicide charge should know this better than anyone.

Now, perhaps such a suicide charge would be worth it, to lock in some policy preferences. But note that even getting to the point where the Light Brigade can ride bravely into the Valley of Death requires the presidency and large majorities in both House and Senate. Which are going to be hard to achieve if the hardliners start rattling their sabers a year before the 2016 election.

But maybe the only way Republicans will learn their limits is by crashing into them, as the Greeks did. Maybe they need to elect someone who will try what they’ve been longing for: a full throated, take-no-prisoners approach that doesn’t bother with compromise or concession. Like the Greeks, they’ll discover that this leaves them worse off, not better. If Republicans can't see that coming -- if they can't learn from Syriza's mistake -- then they will very likely learn their lesson from President Hillary Clinton.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Megan McArdle at mmcardle3@bloomberg.net

To contact the editor responsible for this story:
Philip Gray at philipgray@bloomberg.net