Tuesday, December 7, 2010

Hindsight bias and Obama's "capitulation"

Paul Krugman and many other Democrats are saying that President Obama and the Democrats made a mistake by putting off until now the question of what to do about the Bush tax cuts. Clearly - as David Leohhardt, Nate Silver, and others have argued - the Democrats are not in a strong bargaining position now that the Republicans have threatened utter chaos (hold up all the other legislation, kill all extensions of all tax cuts, etc.) unless the Democrats extend the unproductive and unfair tax cuts for the rich.

But the wisdom of hindsight is wonderful. Where were the pundits saying "Now is the time to bring up the extension of the tax cuts"? And, looking back over the last two very difficult years, even now, can someone point to a specific time when the Democrats could have done this? My hunch is that there were always more important things.

So long as one of the two major parties is willing to sacrifice the well-being of the nation and the world for its misguided ideology, we have a problem that is not easy to solve. In this respect, the U.S. is much like Israel, where the equivalents of the Republicans are in control.

Added later: Seems I'm wrong. Here is what should have been done, in hindsight. But the congress had to do it, not the president.

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