Month: January 2020

Kathleen Kingsbury of the NYTimes editorial page is proudly announcing that instead of following their historic practice of talking with the candidates off-the-record and then announcing an endorsement they will be utterly “transparent.”

On Jan. 19, the @nytimes editorial board will publish our choice for the Democratic nomination for president. It won’t be the first time we’ve endorsed a candidate — we’ve been doing that since 1860 — but we aim to make it our most transparent endorsement process to date. Historically, endorsement interviews are off-the-record — meaning nothing said leaves the room, other than the board’s final judgement.

[But now,] in a first for @nytopinion, all presidential candidate interviews will be on the record and filmed. Next week, we’ll be publishing the full, annotated transcripts online.

What an awful idea, sure to neuter whatever influence the NYTimes might once have had.

Here’s the problem. Under the off-the-record system a candidate could sit down with some smart people and say things like “look, I know tariffs won’t help but the WTO will knock them down anyway and I need to appeal to my base.” Or, “taxes on billionaires won’t raise enough to fund everything I want but to raise taxes on the middle class we need the middle class to know that everyone is going to pay their fair share.” Or “Our troops are demoralized and the plan isn’t working.” If everything is recorded, none of this can happen.

Indeed, what possible value-added can the NYTimes make with a “transparent,” “public” process? Everything that will be said, has been said.

In contrast, a non-transparent, off-the-record process can reveal new information because less transparent can be more honest. The off-the-record system isn’t a guarantee of useful information, as the NYTimes has its biases and the off-the-record system only works because it is coarse, but coarse systems can reveal more information.

The demand for transparency seems so innocuous. Who could be against greater transparency? But transparency is inimical to privacy. And we care about privacy in part, because we can be more honest and truthful in private than in public. A credible off-the-record system leaks a bit of honesty into the public domain and thus improves information overall. Too much transparency, in contrast, makes the world more opaque.

Using detailed data on individual campaign contributions to Democrats and Republicans, our estimates show that firms are considerably more likely to announce a merger, complete a merger, and a have shorter time-to-completion when their political attitudes are closer. Furthermore, acquisition announcement returns and post-merger operating performance are significantly higher when the acquirer and the target have more similar political attitudes.

That is from a new research paper by Duchin, Farroukh, Harford, and Patel.  Via the excellent Kevin Lewis.

Farmers are getting billions of dollars in bailout money to compensate for the trade war with China. If big banks or big business were being bailed out there would be an uproar but big farmer bailouts seem immune to opposition as Dan Charles points out in this piece from NPR:

…a few weeks later, the USDA announced another $16 billion in trade-related aid to farmers. It came on top of the previous year’s $12 billion package, for a grand total of $28 billion in two years. About $19 billion of that money had been paid out by the end of 2019, and the rest will be paid in 2020.

…it’s an enormous amount of money, more than the final cost of bailing out the auto industry during the financial crisis of 2008. The auto industry bailout was fiercely debated in Congress. Yet the USDA created this new program out of thin air; it decided that an old law authorizing a USDA program called the Commodity Credit Corp. already gave it the authority to spend this money.

“What’s unique about this is, [it] didn’t go through Congress,” Glauber says. Some people have raised questions about whether using the Commodity Credit Corp. for this new purpose is legal.

This is a telling example of how politics works–the process rather than the fundamental question determines much of the outcome. In this case, since the spending was not authorized by Congress there was no debate. No debate in Congress meant no opportunity for soundbites, no debate in the media and thus no debate among the public. The battle for attention was lost before it was begun. On the plus side there was no opportunity for grandstanding in Congress either and the money was approved and spent quickly.