The inevitability effect: Part 1, who wants a piece?
The concept behind this post has been in my head for years, but it took the events of last weekend, when Treasury’s master plan to recapitalize the US banking system was forced through Congress, to crystallize it into a phrase: the inevitability effect.
No, that’s not the latest Robert Ludlum thriller.
Rather, it describes the change in behaviors after the point where an enterprise of great pith and moment, such as a real estate closing or a piece of major legislation, shifts from a possibility to an inevitability. When that happens, all sorts of people think, “Oh, okay, it’s inevitable, so they’ll give me what I want just to shut me up.“ Sometimes the addenda are reasonable. Sometimes they’re purely selfish. Sometimes they’re ridiculous.
I’ve dealt with inevitability effects my entire professional career. For a decade or so, they drove me crazy. Now I see them coming.
Inevitability, it’s a bitch, isn’t it?
Can’t tell the chaos without a program!
When a proposal becomes conceptually inevitable, all the stakeholders instinctively migrate into one of five roles, using as our principal text the New York Times:
“Don’t blame me: my source was the New York Times.”
1. The driver(s). The person or group compelling the activity forward. The driver, a visionary, sees riches and demons no one else sees. As such, he is single-minded: close. Everything else is evaluated on a simple friend-or-foe model. The driver usually has some friends, the Loyal Followers, but as they pursue the politically naive strategy of saying what they mean and doing what they say, we can consider them part of the driver’s party.
At the same time, a series of phone calls was taking place, including conversations between Ms.
Pelosi and President Bush; between Mr. Paulson and the two presidential candidates, Senator John McCain and Senator Barack Obama; and between the candidates and top lawmakers.
In the Treasury recapitalization, the driver was Secretary Hank Paulson, backed up by his president.
The driver will accept the addenda – especially if they’re cogently stated and can be quickly implemented – and may hold his nose and go along with the selfish, only because there is only so much political capital and the ridiculous must be shot down.
“Ah smell the obnoxious odor of mendacity in that request.”
2. The suddenly sober. They were joking around, playing the usual games, when suddenly the driver flung down the talisman of doom – and they realized, whoa, this is serious. And they did the right thing.
In the final hours of negotiations, Democratic lawmakers, including Representative Rahm Emanuel of Illinois and Senator Kent Conrad of North Dakota, carried pages of the bill by hand, back and forth, from Speaker Nancy Pelosi’s office, where the Democrats were encamped, to Mr. Paulson and other Republicans in the offices of Representative John A. Boehner of Ohio, the House minority leader.
Look grave … [NYT, 9/29/08]
In a brief speech on the Senate floor, Senator Kent Conrad, Democrat of North Dakota, said: “It’s not just going to be Wall Street. The chairman of the Federal Reserve has told us if the credit lockup continues, three million to four million Americans will lose their jobs in the next six months.”
Give credit to Senator Conrad for speaking plainly and without partisanship.
… not merry [NYT, 9/29/08]
3. The Laocoons who want to win the recriminations. Realizing they are going to lose, they intend to make very clear they had no part of it. They may be wrong-headed but they are honorable and direct.
Some lawmakers have made clear that they will not vote for the bailout plan under virtually any terms. “I didn’t want to be in the negotiations because I object to the basic principles of this,” said Senator Richard C. Shelby of
Pressed about his role, Mr. Shelby replied, “My position is ‘No.’ ”
Senator Shelby likewise deserves credit for his honesty. He may be completely wrong – I think he is – but he’s clear and upright about his view.
4. The reluctant bargainers. They didn’t want it, but now they realize that train has left the station. Having lost the war, therefore, they want to win the peace, or at least get a piece of the win.
5. The running-board scramblers. They weren’t necessarily going to push this car out of the muck, but once the wheels start rolling, they want to throw their piece of legislative luggage on board.
Congressional leaders who want the bailout to pass with solid bipartisan support had already begun to anxiously court votes, mindful of the difficulty they could face in a high-stakes election year.
Now that the deal has gone down, we can recall that it went from 205 votes in the House to 263. Most of the 58 who flipped did so, I suspect, because they got something tossed in to the legislation on their behalf – in fact, a total of $100 billion in various expenditures, most of them extensions of expiring tax provisions – a high price for 58 votes, but maybe the political necessity”
Public opinion polls show the bailout plan to be deeply unpopular. Conservative Republicans have denounced the plan as an affront to free market capitalism, while some liberal Democrats criticize it as a giveaway to Wall Street.
Yes, it’s an affront to free-market capitalism – but so what? Do you want your Lockean right to be destitute?
How the deal went down
The inevitability effect began last Friday, when Secretary Paulson (and others who Actually Knew Something) came together and created a tenuous bipartisan Coalition of the Sober who recognized we had better do something.
That meeting [with Congressional leaders – Ed.] had moments of drama, including a blunt warning by President Bush. “If money isn’t loosened up, this sucker could go down,” he said. It ended with angry recriminations after House Republicans scotched a near-agreement from earlier in the day.
Mr. Paulson scrambled to revive the talks, and they resumed almost immediately. Congressional and Treasury staff then worked all of Friday and through the night, ending in the predawn.
Twenty-four hours later, the New York Times quoted President Bush:
“There is now widespread agreement on the major principles. We must free up the flow of credit to consumers and businesses by reducing the risk posed by troubled assets.”
That’s the magic moment – widespread agreement on principles leaves lots of room for inevitability effects.
Officials briefed on the negotiations said that there were fewer than a dozen substantive points of disagreements, but many details left to be worked out.
Many details? Many running boards. Many reluctant bargainers.
Which leads to a feeding frenzy that’s among the sorriest sights in
We want in!
Aides described a tense meeting on Saturday afternoon that included Senator Max Baucus, Democrat of Montana, shouting at Mr. Paulson about executive pay caps.
Outside, stunned tourists visiting the Capitol watched as camera operators shoved one another to get footage of lawmakers talking outside of the meeting room.
At one point, when too much information was leaking out, staff members’ BlackBerrys were confiscated and collected in a trash bin.
While Congressional Republicans sent only their chief negotiators, Mr. Blunt and Senator Judd Gregg of
That must have been fun.
My priority! Mine!
With this cast of characters and scorecard for proposals, let’s look at who got what, as reported in a later New York Times:
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