On the buying of the Washington Post

by Eric on August 5, 2013

The last time the Washington Post was suffering financial difficulties and looking for a buyer, the President of the United States took an interest in getting it a politically sympathetic owner. This was back in early 1933, during the last long lame-duck presidency, when Herbert Hoover was in the White House refusing his appointees’ entreaties to do something about the financial collapse. He claimed he wouldn’t do anything about the nation’s banks unless he had Franklin Roosevelt’s cooperation – and he wouldn’t have Franklin Roosevelt’s cooperation unless Roosevelt swore he would maintain the gold standard and forswear deficit spending.

But Hoover was willing to expend his presidential influence in trying to find the Post a buyer who wasn’t the Democrat and then-Roosevelt-backer William Randolph Hearst.

After talking about the Post with Hoover, newspaper owner Frank Gannett sent an auditor to look the paper over. He found that while the Post had made $23,907 in 1929, it had lost $117,335 in 1930; $140,364 in 1931; and an estimated lost of $275,000 in 1932. Ad revenues had dropped from $1.37 million in 1929 to $629,000 for the eleven months of 1932 with available information.

In consequence, Gannett wrote to Hoover, “the property does not present a very attractive picture.” He went on, “I hate to see the paper go to Hearst. Yet, he seems to be the only one who could afford it at this time, to make any payment for it.” Gannett concluded, “However, if support for the project could be developed, I would be glad to do my part in trying to get control of it and make it a forceful spokesman for the party.”

Notwithstanding his thrashing in the November elections, Hoover, even out of office, wanted the Post to go to “a strong man,” as he wrote on March 28. After leaving DC, Hoover tried to get his former Secretary of the Treasury, Ogden Mills, to join Senator George Moses and Post editor Ira Bennett in a group to buy the Post when it went up for auction on June 1.

Eugene Meyer was still running the Federal Reserve System, though not for long – Roosevelt had declared privately on March 25 that Meyer was on his way out. Meyer was a friend of Hoover’s – though like most of the country he was not, in March of 1933, much enamored of Hoover’s presidency. Nevertheless, he and his wife Agnes remained in touch with the former president.

Meyer bought the Post at auction on June 1, and made himself president, and his wife Agnes vice president. Hoover sent his congratulations. Agnes wrote back that she looked forward to “the opportunity to build up a really strong and independent paper in Washington under present circumstances seemed too important to be renounced.”

Eugene Meyer hired Ralph Robey away from the New York Evening Post “particularly to fight the inflationary policies of Mr. Roosevelt and his crowd, who” – Meyer said with evident annoyance – “thought they could cure the depression by raising the price of gold which was devaluating the dollar and repudiating the explicit contract of government to pay in dollars of the same weight of gold and fineness.” Meyer also objected strongly to the Agricultural Adjustment Administration, and other New Deal measures.

Post reporters complained afterward that Meyer “went over their articles and changed them so that their writers were all disgusted.”

Will we find someday that Barack Obama cared who the Post went to? Will Jeff Bezos take a role in determining the paper’s content? Stay tuned…

Migration and the least advantaged

by Chris Bertram on August 5, 2013

One reason to favour a more open and liberal migration regime is because of the gains in economic efficiency and prosperity it would bring, because of the benefits brought by younger and more active workers who pay more in taxes than they take in benefits, and so on. But when people voice this argument, there’s one response that is almost instantly trotted out. This is to say that, even if it true that a more open regime is better in the aggregate, it isn’t better for the least advantaged among the indigenous population because labour market competition from the incomers depresses wages and often leaves low-skilled native workers out of a job. Now conceding, if strictly for the sake of argument, that there might be other reasons to restrict immigration (cultural impacts on the native poor, whatever …) and focusing on the economic argument alone, I can’t see that this objection makes much sense. If there’s something that is good in the aggregate, but has bad distributive consequences, the solution is surely to use the tax-and-transfer system to fix those distributive outcomes. You could either do this directly (maybe, for example, taxing the surplus to fund a citizen’s or basic income) or indirectly, by funding better education or training. But it doesn’t seem to make much sense for forego the aggregate benefit.

Now an objection to this might be that, given a lack of confidence that political leaders will actually introduce such redistributive measures (rather than, say, letting aggregate gains flow to the one per cent), it is rational for indigenous workers and their political representatives to lobby for tighter labour protectionism via immigration controls. But given the obvious downsides to that second-best strategy, particularly in its divisiveness and its fostering of xenophobia and racism, it seems clear that the left should prefer to take the aggregate benefits and redistribute them. Certainly it seems as if the left should be making such an argument rather than just pandering to “anxieties” among their traditional constituencies as the likes of “Blue Labour” tend to do.

Two questions occur to me. First, am I right about the “in principle” economics of this? Second, are there respectable political counterarguments, even if I am right about the economics?

[Note that this post is not about the right of the state to restrict migration, a matter on which I’m far more sceptical than most people. It concedes that right for the sake of argument and focuses on what the best policy should be.]