Trump’s Cheap Talk

I totally approve.

Just before “markets” opened on Monday, March 23, Trump announced that his people were in communication with some senior party in Iran. Discussions were in the works over wrapping up the three-week war.

Was this just nonsense? No one really knows, but markets have assigned some weight to the prospect that the United States and some faction ostensibly representing the Iranian regime may have serious talks and subsequently cut a deal. Oil prices instantly dropped more than 10%.

I am no better situated than anyone to know what is really going on, but my own sense is that the announcement of impending talks could amount to something approaching “cheap talk.”

In game theoretic terms, cheap talk is sometimes understood as cheap-and-easy messaging that, by virtue of being cheap-and easy, might be hard to take seriously … but might yet help parties caught up in fraught negotiations to concentrate on certain plausible, commonly-understood, candidate outcomes. Cheap talk can promote coordination. That’s the theory.

My own working view of Trump’s negotiating tactics is that quasi-cheap talk is an important component. He may put out these grand-sounding pronouncements. If these pronouncements lead to desired results, then there we are. And, if they lead nowhere?: Trump will just let it slide.

For example, nothing came of efforts to discourage the North Koreans from developing nukes as well as intercontinental delivery systems. But, no one really expects the mafia regime that is the ruling clique in North Korea to offensively use these things. The regime develops the capability in order to discourage others—the United States, South Korea, Japan, whomever—from interfering in its internal affairs. So, Trump lets it go. No one notices, and that is that.

The Iranians, in contrast … Trump and others—especially the Israelis—assign non-trivial weight to the prospect that the Iranians would be disposed to loose-off with a nuke.

I myself have a hard time believing that any party who could be unambiguously identified as the culprit would deploy nukes. But, that would not preclude that same party from deploying nukes through channels that might provide plausible deniability. Why not give Hezbollah a nuclear device? And how could anyone retaliate? Would that party nuke Lebanon merely to get back at Hezbollah? In other words: Does exploiting stateless actors enable a mischief maker to get away with great mischief?

We will see where this talk of negotiation goes. An idea that occurred to me is that making the announcement could really confound the various parties that currently comprise the regime. Who are the Americans talking to, some of them must wonder? “They’re not talking to us. And if some other Iranian faction is talking on our behalf … that could be bad. That faction could sell us out.”

The Iranians have carried on about how their leadership has been decentralized and is thus resilient in the face of efforts to “decapitate” it. But, this-announcing-we’re-talking business could make various factions wonder which capo the Trump people are cutting deals with. No one wants to get cut out.