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The Pawn Stars and the Fiscal Cliff

By December 10, 2012 One Comment
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To prepare to write about the looming fiscal cliff I read long essays in The Atlantic, The New Yorker and Time.  After doing that, I decided the best way to see some deals go down was to ignore Washington and instead watch a few episodes of Pawn Stars on the History Channel.

Talk about hardball negotiating and old-fashioned horse trading. A half hour with the Old Man, Chumlee, Big Hoss and Rick restores your faith in the power of the almighty dollar to bring people together. The pawn shop guys will buy anything they think there is a market for – it doesn’t matter to them if it’s a pirate’s peg leg or a Super Bowl ring. When they are stumped they call in an expert, who magically arrives within a few minutes, sheds light on the value of the item in question, and then gets out of the way so a deal can be reached. 

Pawn Stars is sort of the anti-Antiques Roadshow.  While people often are giddy on the Antiques Roadshow, there is a different ethos on Pawn Stars. Instead of getting breathtaking “insurance value” or “auction value” quotes from upscale antique dealers, people get a cold slap of reality from the pawn shop guys, who, by virtue of having the cash, have the upper hand.  The pawn shop guys close the deal quickly and almost always on their terms. 

What has struck me recently is the sense that both John Boehner and Barack Obama have been acting like the pawn shop guys, intimidating and low-balling and waiting for the other guy to cave. But apart from the political theatre of it, who really has the stronger hand?  Both of them can’t be the pawn shop guys – somebody’s going to come out ahead on this deal.  This time around it’s the President with his calls for higher tax rates on the wealthiest Americans.  Why is Obama going to win on this? Because no action is required for Obama to win.  The Bush-era tax cuts for those at the highest income levels will automatically expire on January 1.  For that not to happen, both houses of Congress and the President have to pass new tax cuts for the rich.  Think our divided government will get together to do that?

Are you worried a deal won’t be reached?  My advice is to not let the inflamed rhetoric of the “official statements” and proposals and counterproposals make you anxious.  Negotiating through the media is not how the deal will get done.  That’s just posturing and posing and flexing to appeal to their constituents.  The real deal will get made behind closed doors.  And a deal will be made. 

Until that happens, expect more posturing.  And if you get sick of how long it drags on and on, tune into Pawn Stars, where everything gets wrapped up in half an hour with time left over to bid on a set of George Washington’s teeth and Sean Connery’s toupee.  Those guys have a can-do attitude our political leaders would do well to emulate.  I can already sense a Chumlee for Congress groundswell starting.  Can you?

 

Jeff Munroe

Jeff Munroe is the editor of the Reformed Journal. 

One Comment

  • Mark DeKoster says:

    Interesting post and I like the analogy. It is perhaps more to reality then even intended in the choice of Pawn Stars although not because they are both standing on the same ground. It is the case of Obama playing the Pawn Stars and Boehner playing the mark coming in the door. Whether or not it should be, the Pawn industry is not one that is held in high regard for integrity nor are the people who use the services of a pawn shop always considered to be of high character as well.

    First to clear up a couple of items. There will be no deal. Boehner caves or he doesn't. As you pointed out he has no leverage, calling caving a deal only further muddies the already murky swamp of politics in Washington.

    Next, on January 1 the current tax rates for all taxpayers will revert back to the Clinton era rates. Under Bush all taxpayers got their rates reduced, not just the rich. Obama and the democrats are not talking about tax cuts for anyone. They are talking about who will get their taxes raised. Obama and the democrats are trying to raise taxes. By talking about letting the current rates expire on just the top 2% they hide that the rates will expire on all and it will take a fight on the part of the republicans to restore the Bush rates to all who pay income taxes, not just the top 2%.

    However back to my point, in Pawn Stars there are no real negotiations as there are no real issues to negotiate. Like the current situation in Washington it is simply take it or leave it. Oh sure there is the occasional bone thrown out on the show to suggest that the person looking to part with their property actually has a negotiating leg to stand on, but that's a straw dog more than a bone. The only “negotiation” going on resides in whether the persons (Boehner) who own the property have the fortitude to keep it or give in. It is strictly an internal determination to stand firm on what they value or give in.

    Likewise the Pawn Stars (Obama) don't have to do anything, take the offer and give in or keep it and deal with your valuables. Neither side has to deal nor can they, they don’t have anything in common, which is a requirement for negotiation and that is the current case in Washington. There is only door number 1 or door number 2. There is no door number 3.

    There is no common ground. The "fiscal cliff" looms because the federal government is spending too much not because it is taxing too little. Punishing the rich for being rich, I mean raising taxes on the rich will not even put a dent in the federal deficit. As it is the top 5% already pay just under 60% of all taxes collected on income. Raising taxes will, as history has shown again and again, cause revenue to go down. But it will play well to the envy crowd who somehow imagine that they are poor because someone else is rich.

    Hopefully Boehner will not cave and play the part of the person who looks the Pawn Stars in the eyes and walks out of their store without taking the money, the path of least resistance. I doubt that he will do so.

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