Folding a Playable Hand

Last week I argued that Obama and the Democrats would benefit from some lessons at the poker table.  And I'm not the only one making awkward poker analogies recently. Ezra Klein wrote a full piece last week with a similar theme:

On page 116 of “The Promise,” Jonathan Alter describes President Obama's approach to the stimulus as "bad poker." "Instead of holding his cards close, and then sweetening the pot for Republicans with tax cuts in the final negotiations, [Obama] offered nearly $300 billion in tax cuts at the front-end of the process. ... It was a big bargaining chip left off the table."

While I'm not sure I completely understand the poker metaphor that he borrows from Jonathan Alter, the rest of the piece is a sound critique of Obama's compromise-based strategy in the face of determined, unprincipled GOP opposition. And the critique does fit well with a more well-developed poker concept: if you too frequently fold playable medium-strength hands, your opponents will eat you alive.

If Obama does not soon learn this lesson--and bring moderate Democrats from red states along with him--then America is in real trouble. No honest analysis of the current fiscal situation suggests that we can continue to run deficits at the current scale. All honest solutions to long-term deficits include taxation at a higher percentage of GDP than current rates provide.

But the Obama Administration and Senate Democrats have once again folded a playable hand. You can be sure the GOP strategists will be even more aggressive next time they sense weakness.