Indirect Bribing with Plausible Deniability

From a new working paper by Stefano Della Vigna, Ruben Durante, Brian Knight, and Eliana La Ferrara

We examine the evolution of advertising spending by firms over the period 1994 to 2009, during which Silvio Berlusconi was prime minister on and off three times, while maintaining control of Italy’s major private television network, Mediaset. We predict that firms attempting to curry favor with the government shift their advertising budget towards Berlusconi’s channels when Berlusconi is in power. Indeed, we document a significant pro-Mediaset bias in the allocation of advertising spending during Berlusconi’s political tenure. This pattern is especially pronounced for companies operating in more regulated sectors…

In the United States, Lyndon Johnson made his fortune, working through Lady Bird, in similar ways. As Robert Caro wrote in Means of Ascent:

As one businessman puts it: “Everyone knew that a good way to get Lyndon to help you with government contracts was to advertise over his radio station.”

Jack Shafer, drawing on Caro, summarizes the details in The Honest Graft of Lady Bird Johnson.

Hat tip: John van Reenen.


The surge of money into and out of DC after 9/11 was breathtaking.

In a country like India, it is a known fact that you can't get much done without bribes. So I wonder how that fact plays with companies who have strict, no-bribery ethics policies when they build an off-shoring facility, say in Bangalore or Hyderabad. How do they explain their success in getting something like that done?

This meets my priors so I want to believe it.

But what's the counter-factual?

A Halliburton Cheney study would be interesting.

The wackos have picked all the meat off that dead horse.

As if LBJ & Berlusconi are novel.

"The politician who steals is worse than a thief. He is a fool.
With all the grand opportunities around for the man with a political
pull, there's no excuse for stealin' a cent."

>> George Washington Plunkett of New York City Tammany Hall


Rahul 2, Z 0

Was LBJ an even worse president than W and JFK? How about O? Then there's FDR. Is there some hoodoo on presidents known by initials?

Certainly worse than JFK or W. Better than O, or Carter. Probably better than FDR.

LBJ is a lock for worst president of the modern era.

JFK doesn't strike me as particularly bad, especially his handling of Cuban Missile Crisis seemed solid.

How one ranks O vs W likely has much to do with one's personal political affiliations.

"How one ranks O vs W likely has much to do with one’s personal political affiliations."

I think it's pretty hard to get any kind of reasonable evaluation of a President until at least 20 years or so after they left office and at least 10 years after they are out of public life and/or dead.

JFK's handling of the Cuban Missile Crisis was solid? How can you claim that?

The Soviet Union wanted to protect their vassal state despite not having the power to do so. So they huffed and they puffed. They created a scare. They bluffed JFK. And he fell for it. The USSR couldn't have won a war with the West over Cuba. They would have been lucky to be able to destroy New York even if they had been insane enough to use nuclear weapons. But JFK fell for it.

And he blinked. He gave in. He ripped up the Monroe Doctrine - the cornerstone of US foreign policy in the Western Hemisphere. He guaranteed that the Cuban regime would be safe. And for what? A Soviet promise not to blow up the world which they had no intention of doing anyway?

One of the worst US Foreign policy disasters in the Cold War.

Aha, so that's what the point of advertising is.

LBJ was worse than W and JFK.
The way to judge how bad a president was is to look at their "permanent" programs--the ones that live on and have permanent ill effects.
That makes Prof. Wilson the worst prexy every, as the Fed is the worst government institution ever created. The income tax is a bad one too.
Under FDR we got the New Deal communism with lots of laws and regs that still exist. Social Security was one of the worst.
LBJ gave us the Great Society communism, Mediscare and Mediscam.
O scores a dud with OcommieScar.sov, which hopefully will be repealed in 2017.

You can also score them by the body count, LBJ looks worst than O and W on that count too.

LBJ beats O and W in the body count award, but the Dishonest One, Lincoln, is the all-time U.S. career winner.
Truman wins the one-day mass murder award.
Happy Anti-President's Day.

He also presided over the transformation of the Cold War nuclear threat from pretty serious to potentially civilization destroying.

I understand Kennedy and the Soviets share some of the blame, but LBJ was the guy in charge when things went from not-good to catastrophically bad.

By your own standards, I'd say that LBJ did pretty well. We just happen to disagree about good and bad programs.

W gave us the DHS and the security theater. Pretty darned bad, if you ask me, but then there's Pierce.

W was against DHS. He went along eventually when Congress was going to do it anyways.

Wilson also gave the world "self-determination" as a goal, which split the empires as it was interpreted as "each ethnic group deserves its own state". One wonders how much awfulness would have been avoided if the Ottoman Empire and Austria-Hungary had stayed intact, instead of splintering into dozens of little countries whose ill-defined borders cause wars to this day.

So the best presidents are the ones who decided to not do anything, for fear that it might turn out poorly? How is it a president's fault that a bad program isn't removed after they leave office? Is the ghost of Wilson preventing us from getting rid of the Fed?

In answer to your first question, I would say generally yes. There is no end to the bad things that have resulted from government heads trying to do good.

Government programs mean a whole bunch of people whose standard of living depends on the programs' continued existence. We still have a Postal Service, for example.

I'd file this under the category "Studies of the Blazingly Obvious." Money follows power. We've known that since Halliburton won the contract to restore the Ziggurat of Ur from King Nabonidus after they "handled" the Labashi-Marduk problem for him.

Yes, the problem is that often the obvious cannot be documented.

No, the problem is people have so little confidence in their eyes and ears they demand social scientists produce proof of what we used to know as common knowledge. Observing is so dangerous, no one bothers to do it. But, when reality is infinitely negotiable, what's the point of observing anything anyway?

Never encountered a situation where what you thought was obvious, wasn't obvious in hindsight?

Yes but only a small percent of the really obvious.

On President's Day it can't hurt to actually review some of the things the founder of the country had to say:

And some other reflections on the CinC:

I find it offensive we have a holiday celebrating the patriarchy.

Happy Bloody Mary Day!

If memory serves, the Bloody Mary was invented, or at least popularized, by one of the worst chauvinists in American letters. The pale penis people cast a long shadow.

Michelle Obama received about a quarter of a million dollar payoff from the U. of Chicago Hospitals when her husband was elected to the U.S. Senate.

When the BHO family moved to DC and Mrs. Obama resigned, the position she had there was eliminated.

Any data or backup here, stevie - or just some unfounded slander off of briebart.stupid...

Ronald Reagan delivered a speech in Japan after his presidency ended. He was paid an enormus sum, something like $4,000,000 - went to his library maybe. This was a short while after some presidential decree he made that helped the Japanese sell tv sets in the USA.

BEIJING, Feb. 21 (Xinhua) -- A Beijing-based Tibetology scholar has criticized the Dalai Lama's Friday meeting with U.S. President Barack Obama in the White House, saying it was another "anti-China farce." "Once again, the Dalai Lama slipped into the White House Map Room for a so-called 'unofficial meeting' with Obama. This was another farce against China," said Lian Xiangmin, a researcher with the China Tibetology Research Center, in a signed article.

Comments for this post are closed