Republicans, Democrats and ‘the true underlying political economy of deficits’

Kenneth Rogoff:

It is a post-financial-crisis myth that austerity-minded conservative governments always favor fiscal prudence, while redistribution-oriented progressives view large deficits as the world’s biggest free lunch. This simplistic perspective, while perhaps containing a grain of truth, badly misses the true underlying political economy of deficits.

The fact is that whenever one party has firm control of government, it has a powerful incentive to borrow to finance its priorities, knowing that it won’t necessarily be the one to foot the bill. So expect US President-elect Donald Trump’s administration, conservative or not, to make aggressive use of budget deficits to fund its priorities for taxes and spending.

The most accurate framework for thinking about government budget deficits in democracies was proposed in the late 1980s by the Italian scholars Alberto Alesina and Guido Tabellini, more or less simultaneously with two Swedes, Torsten Persson and Lars Svensson. While their approaches differ slightly in detail, the basic idea is the same: You give money to your friends while you can. If there is less money to go around later, when the opposition party gets its turn in power, well, that’s just too bad.

One only has to recall recent US economic history to confirm the insight of the Italian/Swedish model — and to see the absurdity of claims that Republicans always aim to balance the budget while Democrats always try to spend beyond the country’s means.

Prison massacres in Brazil

Great analysis by Benjamin Lessing on the Monkey Cage:

Brazil’s prison gangs wield immense power on the streets, and driving the violence is a dynamic of competitive expansion. After dominating and transforming the criminal underworlds of their respective home states in the 1990s, the PCC and the CV are now colonizing prisons, urban peripheries and trafficking corridors throughout the country. The scramble for Brazil’s criminal markets is on.

[…]

Street criminals can have many reasons to obey prison-gang rules. The most important is probably the one a Rio trafficker gave me: “Whatever you do on the outside, you have to answer for on the inside.” Moreover, the likelier you are to go to prison, the stronger your incentives to stay friendly with the gang that runs the place. This means that higher incarceration rates and anti-gang crackdowns can actually increase prison gangs’ influence over street-level actors (as I argue in this Monkey Cage post and a forthcoming paper).

This influence, David Skarbek shows, allows prison gangs in Southern California to govern otherwise unruly and violent urban drug markets, increasing overall profits and taxing the surplus. Indeed, from Los Angeles to Rio, prison gangs’ projection of power has transformed retail drug markets. These are usually fragmented, because it is difficult for one organization to control much turf. Mass incarceration solves this elegantly, arresting street criminals and physically confining them where prison gangs can easily reward obedience and punish defection.

[…]

The CV originally spread when officials unwisely dispersed its leaders among Rio’s prisons. PCC leaders have also been transferred to or arrested in other states, where they invariably founded local chapters. Conversely, some local copycat prison gangs were founded by inmates who spent time in PCC-controlled prisons in São Paulo.

It is probably better than most articles published about the massacres in Brazilian media. (I say “probably” because I admit I have not been following the coverage thoroughly.)

‘Burke was right’

Larry Summers, about Davos:

Edmund Burke famously cautioned that “the only thing necessary for the triumph of evil is for good men to do nothing.” I have been reminded of Burke’s words as I have observed the behavior of US business leaders in Davos over the last few days. They know better but in their public rhetoric they have embraced and enabled our new President and his policies.

Japan and the ‘Galapagos syndrome’

In the Japan Times, William Pesek asks: “Can Spotify crack CD-loving Japan?

The compact disc is still king for Japan’s 127 million people. Tower Records locations still thrive in cities around the nation, presenting quite a paradox. Japanese consumers proudly count themselves among the perennial early adopters of new technologies like robots, and yet cling to mediums going the way of the eight-track tape and mini disc (even fax machines are still wildly popular). As the CD goes virtually extinct and digital downloads thrive everywhere else, they account for about 80 percent of Japanese sales.

This uniqueness is a microcosm of challenges facing the economy. Like many outside disrupters — including Uber and Airbnb — Japan’s protectionist business climate is an incredibly tough nut to crack. Such advancements are greeted with great suspicion in a market prone to the “Galapagos syndrome.” The advent of Netflix and Hulu, for example, barely dented the video-rental market as chains like Tsutaya thrive. Japan has barely been touched by budget airlines, never mind the apps economy shaking up the West. Spotify can provide an earful on that after years of painstaking licensing negotiations.

Artists may have few qualms, of course. Taylor Swift and her ilk can give you earfuls about streaming slashing royalties. Japan’s homegrown pop idols, which massively outsell Western acts, in theory are pulling in comparatively more cash. David Bowie saw this coming as far back at the mid-1990s, warning that the internet would impede artists’ ability to monetize the music and recalibrated accordingly.

Who knows? Japanese people may be willing to pay for a Spotify (or Line Music, or Apple Music) subscription while still buying CDs.

Mount Stupid

This beautiful SMBC’s chart helps to explain at least three things:

  1. Why I say so much stupid stuff;

  2. Why I write way less than I would like to;

  3. Why opinion journalism in Brazil is so weak.

Mount Stupid, Saturday Morning Breakfast Cereal (SMBC)

Mount Stupid

Este belo gráfico do SMBC ajuda a explicar pelo menos três coisas:

  1. Por que eu falo tanta besteira;

  2. Por que eu escrevo bem menos do que gostaria;

  3. Por que o jornalismo de opinião no Brasil é tão fraco.

Mount Stupid, Saturday Morning Breakfast Cereal (SMBC)

Media criticism in Brazil

There is a lack of non-partisan media criticism in Brazil. What we usually see are opinions from people dissatisfied with the treatment that publications give to certain parties or persons, not with the quality of their journalism.

This gap also exists in the mainstream media, as Alberto Dines, co-founder of Observatório da Imprensa (“press observatory”), a media criticism website, likes to remind. It is a pity. The most prestigious publications would be, in theory, the ideal places for non-partisan criticism and coverage.

On January 28th, we had a surprise. Folha de S.Paulo, the most important newspaper in Brazil, published an article questioning the quality of journalism in the country. The hook was a cover story of Época, a weekly magazine.

As I’ll argue below, there’s not much meat to Época’s cover story. It appears that its reporters tried very hard to uncover something incriminating, but found only vague implications. Under normal conditions, most magazines might refrain from printing such an inflammatory cover without any proof of wrongdoing. But conditions are far from normal in Brazil at the moment. Suspicion of politicians — and of Rousseff’s government especially — now runs so deep that almost any implication can stick.

Seen this way, the cover may tell us more about the polarization of Brazil’s media and political landscape than it does about Rousseff’s ex-husband.

I did not translate that, the article was actually written in English. Because, sadly, it was not exactly a work from Folha, but from one of its blogs, From Brazil, edited by journalist Vincent Bevins. And the text’s author, Alex Cuadros, is not a member of Folha’s staff — he is a former Bloomberg Businesweek reporter and now works as a freelancer.

That is what it took for a text so hard on journalism — and which actually name names — to be published on the website of Brazil’s most influential newspaper. In other words, there is nothing new in the world of Brazilian press.

As for the piece itself, I have only one note for now. Cuadros writes:

It has long been an article of faith on Brazil’s left that the establishment media — Veja, Época, the Globo media group, and newspapers such as Folha de S.Paulo — are in league to undermine Lula, Rousseff, and their Workers Party. This is an exaggeration. While it’s true that these outlets generally lean to the right of Brazil’s political spectrum (if we define the center according to electoral outcomes since 2000), for the most part their reporting is responsible. Sometimes, it is crucial. In 2012, for example, O Estado de S. Paulo reported on the massively inflated price of a Petrobras refinery in the U.S. — long before Car Wash would uncover signs of embezzlement in the project.

Also, scoops from the establishment media have often exposed scandals involving the current opposition. Perhaps most famously, in a 1997 front-page story, Folha exposed the congressional vote-buying that paved the way for a constitutional amendment to allow President Fernando Henrique Cardoso, Lula’s longtime rival, to run for reelection. (The scandal was never officially investigated.)

But stories like the one I’ve mentioned from Veja, by making spurious leaps based on trumped-up evidence, undermine the credibility of the entire media. Rather than illuminating, they obfuscate, and serve to deepen the already extreme polarization of politics here.

I do not know if he noticed, but the two positive examples he gives are from daily papers, and the two big targets of his attacks are weeklies. Although we can find many errors from the former and big scoops from the latter, I think that makes for a good illustration of the work of the main news publications in Brazil in the last years. Newspapers in general have done a better and more balanced job, while magazines have been using their more analytical and interpretive approach (if not opinionated) to distort the facts at will.

Finally, an anecdote. After the article appeared, Diego Escosteguy, Época’s editor-in-chief, unfollowed Cuadros on Twitter. Ouch. That hurt.

Crítica de mídia na grande imprensa

Falta crítica apartidária de mídia no Brasil. As opiniões que vemos por aí são, geralmente, de gente insatisfeita com o tratamento que os veículos dão a determinados partidos ou pessoas, não com a qualidade do jornalismo por eles praticado.

Essa lacuna existe também na grande imprensa, como não se cansa de lembrar Alberto Dines, do Observatório da Imprensa. É uma pena. Os títulos de maior prestígio seriam, em tese, o espaço ideal para coberturas e críticas apartidárias.

Ontem (28/1), uma surpresa. A Folha publicou um artigo questionando a qualidade do jornalismo no país, tomando como gancho uma reportagem de capa da revista Época.

As I’ll argue below, there’s not much meat to Época’s cover story. It appears that its reporters tried very hard to uncover something incriminating, but found only vague implications. Under normal conditions, most magazines might refrain from printing such an inflammatory cover without any proof of wrongdoing. But conditions are far from normal in Brazil at the moment. Suspicion of politicians — and of Rousseff’s government especially — now runs so deep that almost any implication can stick.

Seen this way, the cover may tell us more about the polarization of Brazil’s media and political landscape than it does about Rousseff’s ex-husband.

Ué, em inglês? Sim. O texto não foi bem uma obra da Folha, mas sim de um de seus blogs, o From Brazil, do jornalista Vincent Bevins. E seu autor, Alex Cuadros, não pertence aos quadros do jornal — ex-Bloomberg Businessweek, hoje ele trabalha como freelancer.

Em outras palavras, nada de novo no universo da grande imprensa brasileira. Só assim mesmo para um artigo tão crítico ao jornalismo — e que dá nome aos bois — sair no site do mais influente jornal do país.

Quanto ao texto em si, tenho apenas uma observação, por enquanto. Cuadros escreve o seguinte:

It has long been an article of faith on Brazil’s left that the establishment media — Veja, Época, the Globo media group, and newspapers such as Folha de S.Paulo — are in league to undermine Lula, Rousseff, and their Workers Party. This is an exaggeration. While it’s true that these outlets generally lean to the right of Brazil’s political spectrum (if we define the center according to electoral outcomes since 2000), for the most part their reporting is responsible. Sometimes, it is crucial. In 2012, for example, O Estado de S. Paulo reported on the massively inflated price of a Petrobras refinery in the U.S. — long before Car Wash would uncover signs of embezzlement in the project.

Also, scoops from the establishment media have often exposed scandals involving the current opposition. Perhaps most famously, in a 1997 front-page story, Folha exposed the congressional vote-buying that paved the way for a constitutional amendment to allow President Fernando Henrique Cardoso, Lula’s longtime rival, to run for reelection. (The scandal was never officially investigated.)

But stories like the one I’ve mentioned from Veja, by making spurious leaps based on trumped-up evidence, undermine the credibility of the entire media. Rather than illuminating, they obfuscate, and serve to deepen the already extreme polarization of politics here.

Não sei se ele reparou, mas os dois exemplos positivos que dá são de jornais diários, e os dois grandes alvos de suas críticas são revistas semanais. Embora também sejam vários os tropeços dos primeiros e os acertos das segundas, acho que isso é uma boa ilustração da atuação dos principais veículos jornalísticos do país nos últimos anos. Os jornais, em geral, têm feito um trabalho melhor e mais equilibrado. As revistas usam a sua abordagem mais analítica e interpretativa (quando não opinativa) para distorcer os fatos ao seu bel-prazer.

Por fim, uma anedota. Após a publicação do artigo, Diego Escosteguy, editor-chefe da Época, deixou de seguir Cuadros no Twitter. Essa doeu.

‘Brazil’s fall’

Com o título acima, Dilma Rousseff estampa a capa da primeira edição da Economist em 2016. A publicação traz dois textos sobre o Brasil — um editorial e uma reportagem.

O editorial faz um resumo dos problemas do país e sugere medidas para amenizá-los. A revista acredita que Nelson Barbosa pode ter mais sucesso que Joaquim Levy em sua empreitada (por motivos semelhantes aos mencionados por Bernardo Guimarães), mas não demonstra otimismo em relação à realização das reformas necessárias.

It is therefore hard, despite Mr Barbosa’s advantages, to feel optimistic about the prospects for deep reform. Voters hold politicians in contempt. The opposition is bent on impeaching Ms Rousseff, a misguided battle that could dominate the political agenda for months. The PT has no appetite for austerity. Achieving the three-fifths support in both houses of Congress needed for constitutional reforms will be a tall order.

A reportagem basicamente aprofunda os pontos do editorial. Entre outras coisas, cita crises passadas, o papel da Constituição de 1988 nos problemas estruturais, a possibilidade de dominância fiscal e as dificuldades políticas.

They [prominent economists] forecast a “muddling-through” in which Ms Rousseff holds on to her job, Congress passes a few modest spending cuts and tax rises, including a financial-transactions levy, the Central Bank continues to fight inflation, the cheap real boosts exports and investors don’t panic. After three years of this, the theory goes, an electorate fed up with stagnation and sleaze will give the PSDB a clear mandate for change. […]

But the fact that muddling through may be possible does not mean it is assured. It hinges on the hope that politicians come to their senses more quickly than they have done in the past (witness the lost decade begun in the 1980s). It also assumes that Brazil’s penchant for consensus will hold its people back from social unrest on the sort of scale that topples regimes in other countries. The anti-government protests of 2015 were large, drawing up to a million people in a single day. But they were middle-class affairs which took place on sporadic Sundays, causing Ms Rousseff more annoyance than grief. As wages sag and unemployment rises, though, tempers could flare. If they do there will be every chance of a facile populist response that does even deeper economic damage.

Assim como o ensaio de Kenneth Maxwell publicado em agosto na New York Review of Books, a matéria da Economist oferece uma boa síntese dos recentes acontecimentos e da atual situação do Brasil. São ótimos textos para, por exemplo, enviar a amigos ou conhecidos estrangeiros que queiram se informar um pouco sobre o país.

[Atualização] O Estadão traduziu a reportagem da Economist.

Racial map of Brazil

Pata, an data visualization agency, made an interactive map of racial distribution in Brazil.

What you are seeing is an interactive map of racial distribution in Brazil. Through it you can see the geographic distribution, population density, and racial diversity of the Brazilian people. Each dot on the map represents one person. The location and color of the dots are based on the IBGE (Brazilian Institute of Geography and Statistics) Census 2010, available online; each color on the map represents one of race options possible in that census.

The map was created by us from Pata; the inspiration and the basis of the code used to generate the map came from Dustin Cable, a former researcher at the Cooper Center for Public Service at the University of Virginia, and author of a racial map of the United States . He, in turn, was inspired by Brandon Martin-Anderson from the MIT Media Lab, and Eric Fischer, mapmaker/programmer.

More information here.

The US racial map can be viewed on this page.

O debate sobre a reorganização das escolas em São Paulo

Guilherme Lichand, na Folha:

Quem está certo, afinal? Resposta curta: não sabemos. Esse é o chamado “problema fundamental da inferência”: não observamos o mundo contrafactual em que tudo é igual, exceto a política que queremos avaliar.

A maneira mais segura e controlada de aprender a resposta seria “pilotando” a iniciativa: algumas escolas seriam sorteadas para serem reorganizadas (“grupo de tratamento”), enquanto outras não (“grupo de controle”). Em seguida acompanharíamos ao longo do tempo variáveis como frequência escolar, notas e evasão de todos os alunos, comparando aqueles cujas escolas foram reorganizadas com os demais.

Também monitoraríamos o tempo de deslocamento de casa até a escola, e as despesas da família com transporte.

[Atualização – 15/12] A Economist desta semana tem matéria e editorial sobre estudos randomizados controlados (RCT, randomised controlled trial).

Da matéria:

RCTs are being used more often to assess social policy in America, France and Scandinavia. In Britain there has been a flurry evaluating educational innovations—including one called “Teensleep”, in which the treatment group starts school at 10am (the idea is that they will learn more after a lie-in). Often the results are underwhelming, though no less important for that. A randomised experiment in New York showed that paying all teachers in a school more if their pupils do better in tests does not raise attainment.

But the emerging world remains far ahead. In Britain and America RCTs are mostly used to test minor policy tweaks, not fundamental reforms. In poorer countries, by contrast, they are being used to design welfare systems and measure corruption.

Do editorial:

To live in a modern democracy is to be experimented on by policymakers from cradle to grave. Education is intended to mould an upstanding future citizen; a prison sentence, to reshape someone who has gone astray. But without evidence, those setting policy for schools and prisons are little better than a doctor relying on leeches and bloodletting. Citizens, as much as patients, deserve to know that the treatments they endure do actually work.

Os parágrafos de ‘Grande Sertão: Veredas’

Em sua coluna na Folha, Ruy Castro escreveu o seguinte:

Há pouco, caiu-me às mãos uma edição recente do “Grande Sertão: Veredas”, de Guimarães Rosa. Abri-a e gelei. Rosa concebeu seu romance num bloco maciço, de 600 páginas, sem parágrafos, como se a fala do narrador Riobaldo fosse um novelo sem fim, e assim o publicou. As pausas do original estavam na música do texto.

Pois esta edição da Nova Fronteira esquartejou-o em 1.800 parágrafos. A exemplo do que vão fazer com Shakespeare, por que também não o “traduzem” para o português?

Achei estranho ele dizer isso, pois não conheço edição de “Grande Sertão: Veredas” sem parágrafos (ou com apenas um). Entrei em contato com Ruy e com a Nova Fronteira, mas não obtive resposta.

Em um artigo na Granta, Daniel Galera também diz que o livro de Guimarães Rosa não tem parágrafos.

É curioso. Aparentemente, a primeira edição de “Grande Sertão”, da editora José Olympio, já tinha o texto dividido em parágrafos. Eles também aparecem em reproduções de rascunhos do livro datilografados por Rosa, como as exibidas em uma exposição de 2006 no Museu da Língua Portuguesa, em São Paulo.

[Atualização – 22/12] Os parágrafos de ‘Grande Sertão: Veredas’, parte 2

Brazil’s weird justice

In Brazil, “the courts treat suspects too harshly, and convicts too leniently,” says the Economist:

Gratifying as it may be to see billionaires behind bars, some lawyers are troubled by Mr Moro’s penchant for locking up suspects before they go on trial. Most are loth to challenge a charismatic judge. Those who publicly object tend to work for one of the innumerable defence teams. All 11 directors of the comically named but serious Institute for the Defence of the Right to Defence are thus employed. Heloisa Estellita, a professor of criminal law at the Fundação Getulio Vargas Law School in São Paulo, is one of the few public critics of Mr Moro’s methods who is independent. She thinks he has wrongly “used pre-trial detention to extract plea bargains”. […]

Pre-trial detention should not be used to browbeat them into co-operating with investigations or to signal the gravity of the charges they face. The Lava Jato inquisitors deny they are doing this, but readers of Blackstone’s report will wonder. Timothy Otty, its lead author, has written human-rights opinions on behalf of Abdullah Ocalan, a Kurdish separatist leader, and detainees at the American prison in Guantánamo Bay. “Just as it was wrong to jettison the protection of liberty and right to fair trial as part of the war on terror, so it would be wrong in the fight against corruption,” says Mr Otty. […]

However, “the law can be as weirdly indulgent as it is harsh,” says the periodical. “Convicts are entitled to go home while they exhaust their appeals,” and that can take years.

Many critics of the system, including Mr Moro, think convicts should have to file appeals from their jail cells. That would make sense. So would an overhaul of the criminal code which left at liberty people presumed innocent and guaranteed them a fair trial.

Exagero nas prisões da Lava Jato

Diz a última edição da Economist, em texto intitulado “Weird justice”, com a linha fina “The courts treat suspects too harshly, and convicts too leniently”:

Pre-trial detention should not be used to browbeat them into co-operating with investigations or to signal the gravity of the charges they face. The Lava Jato inquisitors deny they are doing this, but readers of Blackstone’s report will wonder. Timothy Otty, its lead author, has written human-rights opinions on behalf of Abdullah Ocalan, a Kurdish separatist leader, and detainees at the American prison in Guantánamo Bay. “Just as it was wrong to jettison the protection of liberty and right to fair trial as part of the war on terror, so it would be wrong in the fight against corruption,” says Mr Otty.

Blackstone é um escritório de advocacia em Londres contratado pela defesa do empresário Marcelo Odebrecht.

A revista ainda diz que os condenados, por outro lado, podem ficar em casa enquanto recorrem das sentenças impostas e cita o caso do jornalista Antonio Pimenta Neves, ex-diretor de redação do Estado de S. Paulo, que ficou anos em liberdade antes de ser preso, em 2011, pelo assassinato da ex-namorada Sandra Gomide, que ocorreu em 2000.

Não achei tradução desse texto no site do Estadão, que tem os direitos de publicação de conteúdo da Economist em português. Talvez o jornal discorde da revista.

A Folha, por outro lado, publicou dias antes um editorial com tom semelhante:

Há sinais muito claros, contudo, de que está em curso o fenômeno da hipercorreção no sistema judicial. Procurando sanar uma evidente distorção, responsáveis pelas investigações e sobretudo magistrados têm incorrido em outro erro de grandes proporções.

Muitos dos investigados têm sido mantidos atrás das grades sem que exista nada parecido com um julgamento definitivo. A opção pelo encarceramento provisório, no entanto, só deve ser evocada quando a aplicação de medidas alternativas –suspensão da função e tornozeleira eletrônica, por exemplo– se mostrar incabível. […]

No caso específico da Lava Jato, alegações vagas sobre a possibilidade de que os réus insistam na prática dos crimes ou interfiram nas investigações têm bastado para privá-los da liberdade. […]

Tais exageros não podem continuar.

‘FT’ e ‘NYT’: Dilma não deve sair

Editorial do Financial Times, com a linha fina “A presidente deve continuar no cargo, apesar dos apelos por impeachment”:

Mas ele [impeachment] deve acontecer? Além disso, faria alguma diferença se ocorresse? Dilma não foi acusada de corrupção. […]

Além disso, mesmo se Dilma for removida, provavelmente apenas veremos outro político medíocre tomar o seu lugar — e então tentar implementar a mesma estabilização econômica que ela está tentando fazer.

Editorial do New York Times:

Forçar Dilma a deixar o cargo sem qualquer evidência concreta de irregularidade causaria danos sérios a uma democracia que tem ganhado força há 30 anos, sem qualquer benefício para contrabalançar. E não há nada que sugira que qualquer um dos líderes de prontidão faria um trabalho melhor com a economia.