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Iowa Politics with Jeff Stein — Thu. Sep. 10, 2020

By Tim Martin Sep 10, 2020 | 7:59 AM

The Scam of Negotiation

You know how this goes. Two sides are trying to agree on a price for a product. The buyer wants to buy it for as low a price as possible, while the seller wants to sell it for as high a price as possible. So the seller inflates the price beyond what most folks would pay, figuring when they reduce the price they’ll still get what they really want…and the buyer then lowballs its offer, figuring when they come up a bit they’ll still only pay what they really want. The seller lists it for $3, the buyer offers $1, and they agree that the price is therefore $2. The theory is that both sides meet in the middle and are equally happy.

It’s always been a scam, and it’s something I hated when negotiating as a lawyer. Too much time wasted during the dance, when everyone knows how the game will end.

It’s somewhat different when politicians are negotiating budgets or spending plans, but the concept is similar. For example, the current negotiations on further COVID-related spending. House Democrats passed a $3 trillion bill some months ago. The White House is suggesting something far lower than that. Democrats now say they’ll go down to $2 trillion, but that’s it and it’s Republicans’ fault for not meeting them in the middle.

That’s fine unless the parameters were too inflated…that’s when the so-called middle becomes skewed. If the $3 trillion of spending passed by Democrats includes, for example, $1 trillion of pork or unrelated spending tacked on just to get the number high, then cutting that from the offer isn’t really negotiating in good faith if the topic is COVID relief. Sure, it sounds good for Democrats to say they cut a trillion dollars from their bill…but if they over-inflated things by that much, it’s a meaningless cut.

Same scam we see at budget time, where one party (typically Democrats) suggest a high number, and if the other party (Republicans) suggest something less, the first party calls it a cut…despite the fact that it’s still an increase from the past year’s number.

Always beware the negotiator who too quickly comes down, or up…because it tells you their original offer was too far off from reality to be taken seriously.News/Talk 1540 KXEL · Iowa Politics — Thu. Sep. 10, 2020