The Rationalist Papers (11): The art of the deal

We are a divided nation. It’s clear to me that the job of the next president is to lead — to bring people together, and to create policies that reach across the aisle. I’ll explain why, and which of the two major candidates would be best at creating the deals that will heal the nation.

How deals work

I was trained in negotiation by the leaders of the Harvard Negotiation Project, the team that created the massive bestseller Getting to Yes. One principle from that training has stood out to me for decades of negotiation. It is that a negotiation is not an endpoint, it is the beginning of a relationship and a shared set of responsibilities.

If you negotiate a salary and job perks, you’re going to have to actually do the job. That means you and your employer need a shared understanding of what you’re trying to get done and a basis for working together, such as metrics for measuring and rewarding your performance.

Even a simple purchase, like buying a house, includes this quality. If you agree to buy a house for $100,000, you have an expectation that when you move in, you will not find that the floorboards are rotted and a family of squirrels is living in the walls. The seller has an expectation that you can actually deliver the cash on the appointed day. If the buyer and seller don’t trust each other — and have not put legal mechanisms in place to codify that trust — then the transaction may not come off, regardless of how well you negotiated the price.

I used to carry a card in my wallet that listen the elements of the Harvard Negotiation Project method. Here’s what they are:

• Interests. Each side has a core set of interests they hope to accomplish (say, preserving American jobs or making voting more fair). A good deal should satisfy interests for both sides, because if it doesn’t, the side that “loses” will have no interest in contributing after the deal. Note that interests are not the same as positions — you may have to move off your initial negotiating position, but what matters is that you still satisfy your core interests.
• Options. A good negotiation explores creative ways to satisfy each party’s interests. If you see everything on a bilateral scale (we win = you lose), you won’t find the best solution. If you can create an option where all parties win, you’re more likely to reach a deal.
• Standards. How can you be sure that the deal makes sense? You need a common set of standards. For example, one standard might be: which economic recovery package will save the most jobs? Another might be, how can we keep the deficit lower than 10% of the size of the economy? You use standards — and their historical justification — to strengthen your negotiating position; they’re how you prove you’re not just “making things up.”
• BATNA (best alternative to a negotiated agreement). What will you do if you can’t get a deal? The stronger you make your “walk-away” position, the better a deal you can make. This is why deals negotiated at gunpoint tend to be poor — the BATNA is you get shot.
• Commitments. How will you make sure both sides follow through on the deal? In “trust but verify,” this is the verify.
• Communication. You need to use language both sides understand the same way. This is challenging in politics, because everyone uses language to twist meaning: one side’s “estate tax” is the other side’s “death tax.”

Who makes the best deals?

Donald Trump wrote The Art of the Deal. Based on that, you’d think he’s a hell of a dealmaker.

But we’re not talking real estate now. We’re talking government, where dealmaking is its own art form. What’s the record on Donald Trump’s dealmaking in government?

The only international deal he has made that has satisfied all parties to the deal was the USMCA, the successor to the North American Free Trade Agreement. His actions have alienated our allies and failed to create any other international deals or treaties.

Three Democratic Senators voted for his first Supreme Court Justice, Neil Gorsuch. Only one voted for Brett Kavanaugh. Trump’s tax bill did not attract a single Democratic vote. He was unable to even hold all the Republicans together on his health care bill.

Some of his funding for the border wall came from diverting funds from the Defense Budget; he could not get Congress to fully fund it.

His administration has failed for months to pass another COVID economic stimulus bill, despite active negotiation by the Democrats in Congress.

What’s the problem? Well, look at the negotiation checklist. It doesn’t make negotiation with Democrats any easier when you retweet people saying “The only good Democrat is a dead Democrat.” Trump ridicules Democrats’ interests, takes a tough “my way or the highway” attitude, and fails to set a common set of standards. Most importantly, on most of the deals, the BATNA — the alternative to a negotiated agreement — is to let the country keep suffering. That’s not the best agreement for anything.

I’ve previously characterized this a “mean” rather than “tough” negotiation style. It doesn’t work because even if you can get a deal, beating down your opponent doesn’t tend to lead to a good outcome. It makes your own backers cheer and your opponents hate you, and it fails to actually accomplish much.

What about Biden? Sure, he says “here’s the deal” all the time, but can he actually make a deal?

When he was in Congress, and as vice-president, he made many deals across the aisle.

He won over Republicans for the Obama economic stimulus in 2009 and the tax bill in 2012. He worked in a bipartisan way on the Violence Against Women Act and had a solid partnership with John McCain. According to Mike Sozan, senior fellow at the Center for American Progress and a former senior congressional aide:

“Biden seems comfortable talking to any member of Congress of either party; in fact, he thrives on it. . . . I saw it countless times, how much he thrives on those personal relationships, on always trying to find ways to talk to his colleagues, to try to broker deals, and ultimately to try to keep Congress functioning. . . .

He seems to pride himself on his relationships and his ability to have those conversations with Republicans, especially [Senate Majority Leader] Mitch McConnell.

Many progressives find Biden’s willingness to work with Republicans to be a flaw. They want retribution for the intransigence of Republicans during the Obama administration and their support of Trump during his presidency.

But if Joe Biden wins, he’ll have to deal with Republicans to get things done — even if he has a majority of both houses of Congress.

We’ve seen what four years of bluster and threats has accomplished — lots of anger, very few actual deals that reached beyond Trump’s base. As a campaign strategy, this is dubious. As a governing strategy, it is bankrupt and totally ineffective.

It’s pretty clear to me that when it comes to the art of the deal in government, Biden is the experienced candidate. If we actually want to get anything done and hold the country together, Biden’s a better choice.