The Utility Of Hostage-Taking Depends On The Value Of The Hostage

A sour Christmas in Washington, D.C.:

After a miserable year being thwarted by his foes on Capitol Hill, Obama turned the tables when the Republican-led House blocked a bipartisan Senate compromise to extend a middle class payroll tax holiday for two months.

“Let’s not play brinksmanship, the American people are weary of it, they are tired of it… I am calling on the speaker and the House Republican leadership to bring the Senate bill up for a vote,” Obama said.

...House Republicans appeared stuck in a corner, partly of their own making, facing criticism from fellow party members in the Senate as polls suggest the showdown may be boosting Obama’s political fortunes.

If the tax holiday is not extended by January 1, payroll deductions will go up from 4.2 percent to 6.2 percent and Americans stand to lose an average of $1,000 from their paychecks over the year.

In the summer debt-limit standoff, the Tea Partiers in the GOP seized a high-value hostage: the full faith and credit of the United States. They had to be appeased, and they were.

The Tea Partiers likely learned the wrong lesson: hostage-taking against Obama always works.

This time around, however, they seized a lower-value hostage: the amount of taxes paid by the American middle class. By driving up taxes at this time, there was a major side-benefit: the deleterious effects of higher taxes - crippled consumption - would occur during a Presidential Election year. Angry voters would blame the Obama Administration policies. So, bombs away!

The trouble, of course, is that Obama doesn't really care if payroll taxes go up. It's certainly a small price to pay for his people. Ensuing voter anger is the perfect cudgel to use against the GOP. The GOP becomes the scapegoat and attempts to blame Obama can easily be deflected by pointing to the record. As far as Obama is concerned, he's fine if the hostage gets shot.