How Not to Negotiate

I found this experimental confirmation of what any good bargainer already knows interesting, reported here by the University of Technology, Sydney:

Previously there has been two conflicting views on first offers in negotiations, said Professor Page.

One view is that a low opening offer works as an “anchor” that moves the final offer in the direction of the first offer.

The second is that a more reasonable initial offer achieves a better outcome because it doesn’t sour the atmosphere and endanger the agreement.

Professor Page said their study showed support for both these ideas.

“We found that there is a small window where an offer is lower than an equal split, but not so low that it triggers negative emotions. It was viewed as ‘fair game’ to start the negotiation at this point.”

So in summary to strike a good bargain your opening offer needs to be not too hard, or you risk a spiteful counter-offer, but not too soft either, or you might be taken for a ride.

If your opening offer is too high, you’re throwing your money away but if it’s too low you risk hitting the “insult price”—the offer that is so low that negotiation ends.

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Status Report on Biden Foreign Policy

Experienced diplomat Daniel Baer has an informative post at Foreign Policy on what the Biden Administration has accomplished in European foreign policy since taking office:

In fact, the trans-Atlantic partners have been busier than they look. Biden halted the precipitous removal of more than 10,000 U.S. soldiers from Germany that former U.S. President Donald Trump ordered in an apparent fit of anger after Merkel rejected his invitation to Camp David for an in-person G-7 meeting in the early months of the COVID-19 pandemic. In June, an agreement was reached to suspend the 17-year-long Boeing-Airbus dispute that had metastasized into a vicious trade conflict and led to new tariffs during the Trump administration. To better align U.S. and European security strategy, NATO launched the process of developing a new strategic framework to modernize the alliance’s approach to 21st century threats, including those from outside the trans-Atlantic area. At the United Nations General Assembly, the United States and European Union announced new COVID-19 vaccine donations to poorer countries on top of the commitments already made through the U.N.-led COVAX facility, with a goal of reaching 70 percent global vaccination by next September.

More is on the way: Biden and his EU counterparts agreed earlier this year to launch a U.S.-EU Trade and Technology Council. It’s a new mechanism that reflects both sides’ recognition that the digital economy and emerging technologies increasingly define the trans-Atlantic economic relationship, affect an ever-broader set of issues (including security), and require special effort from policymakers because the issues involved are often technical and complex, which means policies can lag far behind the pace of innovation. The council kicked off with a high-level meeting in Pittsburgh last month, includes working groups staffed by technical experts, and has adopted an agenda that includes coordinated efforts on investment screening and export controls, artificial intelligence, semiconductors, trade barriers, and workers’ rights.

The summits, photo ops, and joint statements that made up Biden’s first trip last summer were symbolically important: They set the tone and strategic orientation. But the follow-up work is harder. The policy issues the United States and Europe need to work on together—within NATO, at European Union-level, in bilateral partnerships—are complex, technical, and time-consuming. The fact that it takes time to produce high-profile outcomes is less a sign of a troubled relationship than a reflection of a robust agenda.

That’s certainly an optimistic view which I found rather refreshing under the circumstances. I wish Mr. Baer dealt with the subject a bit more critically. Should we have those 10,000 soldiers in Germany? What is the nature of the Boeing-Airbus dispute and which is more in the U. S. interest: continuing it or ending it? Most of the rest of his list are more process-y than that. We’ll know more about them when they actually produce results. Alternatively, it’s a bit too much inside baseball. Launching a “U. S.-EU Trade and Technology Council” is an accomplishment if you’re a diplomat. For the rest of us what such a council produces would be the accomplishment.

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The Europeans Have Never Understood Us

I have a number of points of disagreement with the observations of Walter Russell Mead in his most recent Wall Street Journal column. For example:

After almost two years of Covid-induced absence from Paris and Berlin, I returned to the old world to make a surprising discovery: Europe no longer understands the United States. Between Washington’s shift to the Indo-Pacific, the lingering effects of the Trump presidency (along with fears of a return in 2024), and confusing signals emanating from the Biden administration, neither the Germans nor French know what to expect anymore. That uncertainty further complicates the difficult task of recasting the Atlantic alliance for a turbulent new era.

Let’s stop with that first paragraph. In the earliest part of my career I had the opportunity of living and working in Germany and being immersed in what Germans thought of the U. S. Since then I have worked in the UK and in Italy. Believe me when I say that Europeans have never understood the U. S. There are all sorts of reasons for it including that European elites are actually elite and craft their countries’ foreign policies accordingly with a facility about which American diplomats can only dream. Dr. Mead provides a good explanation:

American interests are global, and American presidents, like it or not, can’t confine their attention to a single world theater. During the Cold War, Western Europe was the primary focus of American foreign policy, but the U.S. also fought two major wars in Asia. The energy crisis has already forced President Biden to pay more attention to the Middle East. China’s efforts to gain influence in the Middle East and Europe will draw Washington’s attention toward its old NATO partners, as will Moscow’s continued alignment with Beijing.

but I fear that may reflect another misunderstanding on his part. For Europeans Europe is the center of the world and they can’t imagine how anyone could think anything else. Germany is focused on Germany to a degree I presume would horrify most Americans.

He continues:

Europeans also have a hard time grasping what the U.S. wants from its old allies in this new struggle. Britain, France and even Germany have sent token military forces to the Pacific this year. Americans appreciate the spirit behind these gestures, but European assistance in the Pacific means less to the U.S. than many Europeans, accustomed to American eagerness for allied participation in places like Afghanistan, expect.

I don’t believe that. I think the German leaders, French leaders, etc. understand quite well what we want from them. However, as Joschka Fischer put it, what they don’t know is how they can keep their jobs if they do what we want.

My advice to Americans is somewhat different than Dr. Mead’s:

To some degree these misunderstandings are due both to the isolation and emotional stress of the pandemic, and with the resumption of travel they will begin to fade. But to the degree that distorted perceptions inform European policy, Americans should think harder about communicating effectively with old allies even as we prepare for new challenges ahead.

I think we should be more concerned about American interests and far less interested in Europe’s interests than are the Europeans. If we pursue our own actual interests (which I think are quite limited) rather than pursuing European, German, British, Israeli, etc. interests, that will be more than enough.

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The Erosion of Support

If, as William Galston declaims in his most recent Wall Street Journal column, independents are disappointed that Joe Biden has chosen to pursue a progressive agenda over uniting the country:

The erosion of support for Mr. Biden has been especially steep among independents, for reasons that cut to the heart of his presidency. During his campaign, he sent two basic messages, one to his party, the other to his country. He promised to bring Democrats together around an agenda carefully negotiated before the 2020 election began, as the leader of a party in which all Democrats from the center to the left would have a voice. At the same time, he would bring Americans back together by treating Republicans with respect and by doing his best to craft policies that appealed to both parties.

In practice, these two promises have proved incompatible. There have been some discrete bipartisan successes, such as the infrastructure bill and a measure to boost investment in technologies to counter China. But there is no Republican support for Democratic approaches to social programs, voting rights, immigration, criminal justice and public education.

Faced with a choice between party unity and national unity, Mr. Biden has chosen the former more consistently than independents had expected, and their disappointment is showing up in the polls. He will have a hard time regaining their support without trying harder to reach across party lines. But in today’s polarized climate, such a démarche might well fail.

it’s clear that they don’t read The Glittering Eye since that’s what I said he would do while he was campaigning for president. But Mr. Galston has it wrong, too. President Biden is not trying to unify the Democratic Party but to remain in its center. As it moves left, dragged by the energetic progressive activists, so does he. The only limiting factor would be political defeat. Even then it would be blamed on undemocratic, intransigent Republicans.

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Answering the Rhetorical Question

I presume that the question the editors of the Wall Street Journal ask about Tesla is rhetorical:

No one should begrudge Mr. Musk his commercial success, but one question comes to mind: Why does Tesla still need subsidies to make and consumers to buy electric cars? The House reconciliation bill would extend the existing $7,500 EV tax credit through 2031 and remove the 200,000 car per-manufacturer cap, which both GM and Tesla have hit.

This is in addition to the many other government subsidies to produce batteries and the cars themselves. Tesla also benefits from the sale of regulatory credits to companies that don’t produce enough electric or hybrid cars to meet government mandates. Tesla’s 10-Q filing shows revenue of $1.15 billion from selling regulatory credits through Sept. 30 this year.

I will answer that question with a question: would Tesla be or remain a trillion dollar company without the subsidies? I think that Elon Musk is a very smart guy but his primary expertise is neither technical nor in business acumen but in seeking and receiving subsidies.

As additional evidence I submit the provisions in the “infrastructure bill” (the real infrastructure bill as opposed to the phony “social infrastructure” bill) regarding rural broadband could in effect be a subsidy to another of Mr. Musk’s companies: Starlink. My take differs from that of Congress. I think that Starlink’s network renders the need for special action or support for rural broadband obsolete.

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Points for Consistency

Despite my policy to refrain from commenting about the goings-on in states other than my own, I wanted to call attention to the editors’ of the Washington Post’s consistency:

If there’s one thing that former president Donald Trump has taught us, it’s how toxic to the system it is to question the legitimacy of election results. Mr. Trump continues to lie about his resounding loss in 2020 and insist that other Republicans accept the lie, too. In the Virginia gubernatorial race, Glenn Youngkin, the Republican nominee, has indulged Mr. Trump’s falsehoods while seeking not to embrace them so wholeheartedly as to alienate suburban voters who don’t buy them. Mr. Youngkin, a fresh face in politics, had the opportunity to tell voters frankly that the system worked in 2020. He chose not to.

That made it all the more disappointing to hear Mr. Youngkin’s Democratic opponent, Terry McAuliffe, fanning the flames of suspicion over the weekend among his supporters. Campaigning with Stacey Abrams, who lost a race for governor of Georgia in 2018, Mr. McAuliffe said Ms. Abrams “would be the governor of Georgia today” had not the state “disenfranchised 1.4 million Georgia voters before the election.”

“That’s what happened to Stacey Abrams,” Mr. McAuliffe said. “They took the votes away.”

If you’re going to complain about something when someone you despise does it, you should equally complain about it when someone you would ordinarily support does it. They engage in a bit of special pleading but good on them for being consistent.

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Is He Trying to Mislead Congress?

The editors of the Washington Post call for Congress to subpoena and question Peter Daszak:

Last week, it was disclosed that the EcoHealth Alliance in August filed a report on its research in 2018-2019 — the report was two years late. This just happens to be the two-year period of the pandemic and intense debate about the virus origins. No reason has been given. Mr. Daszak did not respond to our query. The tardy report describes experiments, approved in advance by the NIH, to test the infectivity of the genetically-manipulated viruses on mice with cells resembling those of the human respiratory system. The manipulations made the viruses more lethal to the mice. Although the NIH continues to insist this did not fit the definition of “gain of function” research, and could not have led to the pandemic strain, it certainly should have met the U.S. government’s own requirements for stricter oversight.

Still, much is unknown. There is no direct evidence of zoonotic spillover, nor of a laboratory leak.

But unanswered questions keep emerging about Mr. Daszak and the WIV. He was at the center of public debate over virus origins, the only American appointed to the joint World Health Organization-China mission. Why did he not disclose his 2018 proposal to the Defense Advanced Research Projects Agency (DARPA) for research on bat coronaviruses with the WIV and others, which called for engineering a modification onto spike proteins of chimeric viruses that would make them infect human cells in the way the pandemic strain did? What does he know about the databases of viruses that WIV took offline in 2019 and never brought back? Does he know what research the WIV may have done on its own, during or after their collaboration? What was being done at WIV in the months before the pandemic?

Mr. Daszak must answer these questions before Congress. His grants were federal funds, and it is entirely appropriate for Congress to insist on accountability and transparency. He might also help the world understand what really happened in Wuhan.

They’re right that questioning Dr. Daszak is within Congress’s oversight scope. I don’t know that anybody has actually done anything wrong but there appears to be a lot of plausible deniability excuse-making going on. Nonetheless I’m unconvinced we’ll know more after his testimony that we do now. I’m more critical of the vast number of NGOs that basically live from one government grant to the next.

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Ejecting from Congress?

Here’s Section 3 of the 14th Amendment:

No person shall be a Senator or Representative in Congress, or elector of President and Vice President, or hold any office, civil or military, under the United States, or under any state, who, having previously taken an oath, as a member of Congress, or as an officer of the United States, or as a member of any state legislature, or as an executive or judicial officer of any state, to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof. But Congress may by a vote of two-thirds of each House, remove such disability.

The notion of ejecting some members from the present Congress on the grounds that they violated Section 3 of the 14th Amendment in the events leading up to the breaching of the Capitol on January 6 of this year is being bandied about.

IMO a lot would hinge on whether they advocated violence. Isn’t that required for a charge of insurrection?

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FBI Hate Crimes Report, 2020


The FBI has produced its analysis of hate crimes committed in 2020. The graphic above which illustrates the breakdown of crimes by category is from the report. I found this observation interesting:

  • Of the 6,780 known offenders, 55.1% were white, and 21.2% were Black or African American. Other races accounted for the remaining known offenders: 1.1% were Asian, 1% were American Indian or Alaska Native, 0.5% were Native Hawaiian or Other Pacific Islander, and 5.4% were of a group of multiple races. The race was unknown for 15.7%.
  • Of the 6,169 known offenders for whom ethnicity was reported, 39.3% were Not Hispanic or Latino, 10.2% were Hispanic or Latino, and 2.4% were in a group of multiple ethnicities. Ethnicity was unknown for 48.1% of these offenders.
  • Of the 6,264 known offenders for whom ages were known, 89.1% were 18 years of age or older.

The point I’d like to call out is the very small number of anti-Asian hate crimes identified. As a percentage of the total it’s far beyond the percentage of Asians in the total population but the actual number is small enough that a few additional incidents can look like a larger change than it actually is.

They don’t seem to break down the biases by known offender category, either, which would be interesting.

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The Case for the Defense

After reading the Wall Street Journal’s editorial against confirming President Biden’s nominee to head the Office of the Comptroller of the Currency (OCC):

Ms. Omarova advocates central political control of capital, credit and wages, and she has praised the Soviet-era economic system. Are her own words off-limits to scrutiny?

Ms. Omarova wants to put an “‘end to banking’ as we know it”—again, her words—and transfer private banking functions to the Federal Reserve, where accounts would “fully replace” private bank deposits. The Fed would control “systemically important prices” for fuel, food, raw materials, metals, natural resources, home prices and wages.

She says the Fed should be remade into what she calls “The People’s Ledger.” By “the people” she means progressive elites like her. She calls for “reimagining” the role of central banks “as the ultimate public platform for generating, modulating, and allocating financial resources in a modern economy.”

A Washington Post columnist hails her as a “trenchant and informed critic of the current financial system” and praises her “innovative ideas about how to reform banking” and “tough approach to banking regulation.” Her ideas were innovative—circa Moscow, 1918.

I sought a case for the defense. Most of the defenses were either appeals to false authority or examples of the burden of proof fallacy. The best I found was this one at CoinDesk by Raúl Carrillo:

Now, Omarova has recognized the power of financial innovation to improve the quality of our lives. She acknowledges the U.S. lacks a unified strategy for fintech regulation and does not profess to have all the answers. She argues our payment and banking systems need to be more inclusive of low-income households and marginalized communities, goals the new industries say they respect. She has even emphasized the importance of data security and privacy, and deftly highlighted that opinions on these matters are not uniform among innovators.

Omarova takes a serious, long-term, big-picture attitude toward the entire financial system in favor of regulatory principles rather than any single industry’s agenda. She has long been a vocal critic of traditional finance and the largest, most entrenched players within it. And, she has argued the public interest is not served by allowing Facebook to issue its own money or Rakuten, the “Amazon of Japan,” to own a bank.

Should Dr. Omarova be confirmed? Why did President Biden nominate her?

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