Hungary: An Election in Question
Part IV: The New Electorate (in which Some are more Equal than Others)
Kim Lane Scheppele
Princeton University and the Institute for Advanced Studies, Princeton
24 February 2014
Hungary’s governing party Fidesz didn’t just rewrite the rules for the upcoming Hungarian election. The governing party changed the electorate as well. Different categories of citizens can now vote in different kinds of ways, which creates the very real possibility of unjust discrimination.
The 2014 election features two new voting systems that restructure the electorate and its options.
One permits each major nationality (i.e. minority) group in Hungary to elect a representative of its group to the parliament on a “preferential” basis that requires only one-quarter as many votes to claim the mandate. This system of positive discrimination may look admirable, but in practice limits rather than expands voting options of minority populations, as we will see.
The other gives the right to vote to ethnic Hungarians who never had permanent residency in Hungary. These are people to whom the new constitution has given a route to expedited citizenship upon application. New Hungarian citizens can now register and vote more easily than citizens who have permanent residency but who are abroad on election day. As a result, new dual citizens with the most tangential relationship to Hungary can more easily influence the election than can long-standing citizens whose primary political identity rests in Hungary.
In both cases, these voters with new options are being herded toward Fidesz-friendly results and away from support for the united opposition both because of the new rules and because of the confusing and misleading communications issuing from the offices in charge of running the election. Let’s take these new sorts of voters one by one.
In a move welcomed by the Venice Commission, the new election framework lays out a system in which members of 13 designated ethnic minority groups may vote for a “nationality list.” Though it is called a list, in practice it consists of one person because each minority group can only elect one representative in this new “preferential” way, while all subsequent representatives from the group are elected according to the more demanding conditions necessary to elect a representative on a party list.
While Germans, Romanians, Ukrainians and other registered groups possess the right to elect a minority representative in theory, the Roma constitute the only group who are likely to be able to muster the numbers to elect such a representative in fact.
This new system of nationality representation, however, comes with a number of catches.
First, members of minority groups who want to take advantage of this possibility must sacrifice their ability to use their second vote for a party list when they use their second vote to elect a nationality representative. This system therefore limits the incentives for political parties to court minority voters since minority voters cannot vote for parties if they vote for the nationality representative, further marginalizing them.
Then, minority voters must register in advance to take advantage of this option. According to the Electoral Procedure Law (Law XXXVI of 2013), minority voters must register at least two days before the election. Once they register, they cannot change their minds on election day itself to vote for a party list instead. (They can change their minds before the registration deadline.) The only choice that the registered minority voters have when election day comes is to vote for the representative of their group on offer, or to fail to cast their second ballots. This system, as a result, locks in the minority vote before the end of the campaign. Unlike the situation for any other voter, minority voters cannot decide in response to the full campaign whom to support.
Finally, and most consequentially, the specific candidate chosen to stand for election as a representative of the minority group must be, by law, selected by the national minority self-government, a body that was elected by each minority group in a special election four years ago. (These self-government organizations have been elected periodically since the mid-1990s to ensure representative decision-making bodies for minority affairs.) But the national minority self-government for the Roma at the moment is run by a group called Lungo Drom, whose leader, Flórián Farkas, is a Fidesz MP.
In short, if Roma choose to vote for a nationality representative, they cannot vote for a political party and their only choice is to elect a Fidesz MP, using their second votes that could have been used for any party list. Registering to “vote minority” therefore gives Roma no party choice at all. They must vote for a governing party representative.
Roma don’t have to register to vote for the nationality list if they don’t want to. But a letter sent in January from each local Election Office to all voters announced on the first page that Roma would have to register if they wanted to vote, and only on the second page explained in not-entirely-clear prose that Roma had to register only if they wanted to vote for the minority representative. In even more confusing language, the letter revealed that in doing so, Roma would lose the ability to use their second vote to for vote a political party.
When the letter went out, Roma started to register to vote in substantial numbers, largely unwittingly, for the minority representative. So far, the Election Office has not issued any correction, raising questions about what it was doing with its initial letter telling Roma to register to vote. Given that Roma who registered would find themselves excluded from being able to vote for the party lists on election day and would only have the option of voting for a Fidesz MP instead, this mix-up is worrying, especially when the governing party staffed the new Election Office.
The Election Office seems to be contributing to the confusion over the system for Roma voting in other ways as well. While the law clearly says that the nationality voters clearly have until two days before the election to lock in their vote for the nationality candidate (Law XXXIV of 2013, section 249), Ilona Pálffy, the head of the National Election Office announced in a press briefing to the Hungarian International Press Association on 29 January 2014 that nationality voters would have to register no later than eight days before the election and could not change their minds after that.
In fact, when I was interviewing officials and party representatives in Budapest about the new election framework recently, I often got different answers from different people about what the law required. When one gets an answer from the head of the National Election Office that differs so strikingly from the plain wording of the law, however, that is especially alarming. Will Roma be told, if they try to change their minds in the last week and “unregister” from the nationality list, that they can’t do so even though the law says otherwise? I hope that the National Election Office clarifies just what they believe the rule is – before the election.
It’s not just the Roma who have new rules about voting this time. The other newly registered group of voters consists of ethnic Hungarians living abroad who were given the right to apply for citizenship under the new Fidesz constitution. For historical reasons, the only Hungarians whose ancestors lost their citizenship en masse were living in the territories that had been part of historic Hungary but that were allocated to neighboring states by the Treaty of Trianon in 1920. (Hungarians who left Hungary for other countries before or since retained their citizenship unless they explicitly renounced it.) This constitutional change made millions of ethnic Hungarians eligible for expedited citizenship, the vast majority still living in the neighboring countries.
As a result of the new citizenship law, about 575,000 Hungarians, primarily from the Trianon territories, have become citizens in the last year. (I’ll call them the Trianon Hungarians.) And as of mid-February, about 150,000 of them had registered to vote. But the deadline for registering to vote is 22 March so only then will it be clear how many of the new citizens will be new voters as well.
In three of Hungary’s neighbors, Ukraine, Slovakia and Austria, dual citizenship is not permitted. Ethnic Hungarians from these states who acquire Hungarian citizenship would lose their first citizenship if a second citizenship were discovered. (There is an exception for Austrian-Hungarian dual nationals who were refugees in 1956 and whose dual citizenship is specially protected by a treaty, but other Hungarians are not included under this treaty.)
To protect its nationals in the neighboring states, then, the Hungarian government has decided that the non-resident citizenship rolls should remain a state secret. As a result, the associated voter list remains secret as well. But how can a government run a fair election with secret voter rolls?
After opposition protest, the government agreed to allow members of the National Election Commission (including representatives of the parties running national lists) as well as international observers to see the foreign voters’ registration list (Law XXXVI of 2013 on Electoral Procedure, amended by Law LXXXIV of 2013). But the opposition parties and international observers are not permitted to take notes on the list or reproduce it in any way. Given these limitations, however, how anyone apart from the election officials check the list against the voters who actually vote or and how can political parties outside the government locate these voters to send them election materials? One cannot memorize hundreds of thousands of names and their identifying characteristics. So it is not clear if this level of access to the secret voter lists will be enough to ensure a fair vote.
The logistical problems raised by the non-resident voters don’t end there. In particular, there are few checks on either the process of voter registration or on the actual voting so as to ensure that those casting ballots are who they say they are, or that the ballots faithfully reflect what these voters decide. While applying for citizenship requires an appearance at a consulate or embassy, registering to vote does not. In fact, nowhere in the process does any official have to see precisely who it is that is either registering to vote or voting.
Instead, Trianon Hungarians can register on the internet, filling in a form that asks for information that is quite widely known about a person, especially in tightly knit communities. All you need to provide to register are your name, your maiden name (where applicable), the town and district where you were born, either your date of birth OR your personal ID number, and your mother’s name.
How does the National Election Office that registers the applicants know if the person actually named on the form was the person who filled out the registration request? Nowhere in the process is there an official check of identification or even the requirement of a signature, photograph or other validating evidence. (The general problem is captured in that famous cartoon where a dog sits at a computer and says “On the internet, no one can tell if you’re a dog.”) And, as we will see, the information doesn’t even have to strictly match what the Election Office has on file for that person.
Ballots will be sent out to whoever registers in the name of a citizen without any way to definitively tell whether it is the citizen herself who registered or whether the address to which the ballot will be sent is in fact the address of the voter. Given that voting will reveal that one has taken out dual citizenship in some countries where it is illegal, a voter might well want the ballot sent somewhere other than her home address in any event.
In fact, the Trianon Hungarians are the only ones allowed to vote by mail ballot, which longtime elections observers know is always the easiest place for fraud to sneak into an election operation. Hungary plans to use the usual double-envelope safeguard – where a voter fills in an attestation of identity attached to an outer envelope while the ballot itself is sealed in in an anonymous inner envelope that can be separated from this attestation once it is confirmed. So far, so good.
But there is precious little control over the envelopes themselves as they make their way to be counted. Not only does the ballot not have to be actually mailed, but the law permits bundlers to go around collecting ballots and then delivering them en masse to an embassy, consulate or other designated location. There are no checks on what these bundlers do with the ballots in their care and nothing to check whether they in fact they turn in all of the ballots they were given. There is even no way to tell whether bundlers who may well know the personal details of voters are filling in the ballots themselves or changing what they were given. Self-appointed bundlers can show up at any of the designated locations and deliver votes in unlimited numbers.
The number of ballots delivered to or cast at the polling places in the neighboring states must by law be registered each day in the run-up to the election, which means that consulate staff must tally the number of votes each day without anyone present from an election committee to supervise the opening and checking of the ballot boxes. Given how few checks are in place to check potential foul play in the foreign votes (or simply to give assurances that no foul play was attempted), this could be quite serious.
But surely these foreign ballots can’t really influence a national election? In Hungary, perhaps they can. Hungary has about 8 million registered voters, but only 5.1 million voters actually cast ballots in 2010. If most of the 500,000+ new citizens register to vote and actually vote, Trianon Hungarians could account for up to one-tenth of the electorate. These voters can only cast one ballot for the party list and cannot vote in a single-member district, which limits their impact on the overall result. (And it is another site of inequality.) But given that so much of this process of foreign-voter balloting is unverifiable in any rigorous way, even a modest effect on the election casts some doubts on the process.
The fairness of this system for counting foreign votes is made worse when one considers the other group of foreign-based voters who are treated differently from the Trianon Hungarians. Citizens who still have permanent residence in Hungary, but who are living abroad, must cast their vote in a decidedly more onerous way. Let’s call this latter group the Expat Hungarians.
Rather than permit Expat Hungarians to vote by mail, as the Trianon Hungarians are allowed to do, the government has insisted on sticking with the old system in place since 2006 for such voters: they have to vote at embassies or consulates. As a result, Expat Hungarians living or working in the UK, for example, must go to London, no matter where in the UK they live. Ditto with German-based Hungarians who have to travel to Berlin, Dusseldorf, or Munich. Expat Hungarians living in the US must travel to Washington, New York or Los Angeles. How much easier (and less expensive) it would be to vote by mail! But they are not allowed to do so.
Moreover, unlike the Trianon Hungarians, Expat Hungarians are not allowed to vote unless they show up in person and present ID (a passport, for example). Since Trianon Hungarians can vote without ever seeing an election official, no in-person identification is ever required of them. But such identication is required of the Expat Hungarians.
How many citizens are in the Expat Hungarian group? The government says at least 300,000 – but other estimates say as many as 500,000 – Hungarians are living or working outside the country without having given up their official permanent residence in Hungary. This, too, could be a substantial voting bloc, especially as their status gives them the chance to cast two votes just as if they were in the country. (One of those votes goes for the party list and the other for the constituency in which they are still registered.) But they have a much harder time casting their votes because they have to travel, often long distances, to do so.
Not surprisingly, however, the two groups of Hungarians living abroad have different political profiles. Hungarians in the Trianon territories would cast their votes overwhelmingly for Fidesz, if the polls are to be believed. A recent poll said 80% of ethnic Hungarians in Romania, for example, would vote for the governing party.
By contrast, Expat Hungarians are more likely to support the united opposition, or at least so the united opposition believes. While Expat Hungarians are no doubt a diverse group, the people most likely to move are probably the Hungarians who know languages and have networks, which implies that they may be younger and/or better educated. While young people are divided in their political views, the better educated voters are much more likely to vote for the united opposition. Either way, the sheer number of Expat Hungarians and the onerousness of the procedure for voting combine to depress voter turnout, which as we have seen, will benefit Fidesz.
The Hungarian Civil Liberties Union working with Együtt/PM (Together-Dialogue for Hungary, now part of the Unity Alliance) has challenged this disparate treatment of the two groups of foreign voters before the Constitutional Court. But even though the petition was filed in November 2013, the Constitutional Court has not yet decided. (A reminder: The Constitutional Court now has a solid majority since the government was able to name the 8th judge out of 15 in April 2013.) So it appears that the election will go forward with this double standard for Hungarians living abroad.
As the election nears, there are reports of worryingly bad advice for these foreign voters coming from election officials. Consulates in the US were given flyers prepared by local election offices that provided voting instructions for Expat Hungarians in the US. But these flyers specified the wrong election day. While election day in Hungary is 6 April, Hungarian voters in North America have to cast their ballots on 5 April, because of the time difference, in order to meet the deadlines set out in the law. If they followed the instructions they were given by their election office, they would be disqualified from voting.
Expat Hungarians in the UK were sent letters by their local election offices that gave them the wrong location of the London polling station. It turns out that, even though Expat Hungarians are generally supposed to vote at embassies and consulates, in some places (like London) voters actually have to go someplace else. But they were not told the correct location.
The Hungarian Civil Liberties Union has protested these flyers and asked that they be recalled.
The head of the National Election Office admitted that mistakes were made. But she did not apologize. Instead she said, rather oddly that she “simply does not trust some of her colleagues.”
Coming on top of the confusing letter sent by the Election Office to all voters in Hungary about Roma registration, a letter that seemed to imply that all Roma had to register to vote at all, these flyers misinforming US and UK voters about when they need to cast their ballots causes particular concern.
The Election Office website doesn’t even appear to be neutral. On its site, the Election Office features a video from an unclear source, containing much nationalist imagery – and not so coincidentally Prime Minister Viktor Orbán himself. It tells voters that “the nation” (meaning ethnic Hungarians) can vote on 6 April – a thinly veiled appeal to voters who overwhelmingly support the governing party (when they are not supporting Jobbik). Just why the Election Office has such a partisan message on its website has so far not been explained. The link is here to a website less likely to take the video down under criticism so you can see it for yourself.
From anecdotal evidence, the Election Office seemed to be making it easier for Trianon Hungarians to register to vote than for Expat Hungarians to register to vote abroad. Expat Hungarians were reporting that their registration was refused if they missed a diacritical mark, omitted some details of their home address, and failed to match the exact form of their mothers’ name that was in the official register. In fact, the complaints from Expat Hungarians were becoming so numerous that it caused us to go back and look at the law.
And sure enough, right there in paragraphs 84 and 92 of the Electoral Procedure Law (Law XXXVI of 2013), we see the reason. Election officials were explicitly told in this law to ignore typos, spelling mistakes, different forms of writing (e.g. Cyrillic), the use of foreign names to denominate geographical locations, or the provision of names, birth place, birth names and mother’s names in a different language. If any of those things are wrong with the form, so that the form does not in fact match the government’s register of citizens, the form must nonetheless be approved.
But this easy registration – permitted even with mistakes on the form – holds true only for the Trianon Hungarians. Expat Hungarians have to provide information that matches exactly the information in the government’s database. Hence the large numbers of rejections when Expat Hungarians tried to register to vote.
By the start of the political campaign on 15 February, more than 150,000 Trianon Hungarians had managed to register to vote, but only 5,000 Expat Hungarians had been able to do so, according to the MTI national news service. (Remember the two groups of voters are now roughly the same size.) The Election Office admitted that it had rejected at least 10% of the Expat applications. Expats who have been sharing notes abroad believe that number is actually much higher.
Hungary now has two different and quite large groups of foreign voters operating under two different systems of rules. And not surprisingly, the voters more likely to vote for Fidesz will have a much easier time casting their ballots than the voters who have less clear political affiliations or who are clearly more likely to vote for the united opposition.
Discrimination among different classes of citizens is therefore endemic in the new election system. Roma voters are forced to choose between voting for a nationality representative or a party list, and they are locked into their choice ahead of the election, which other voters are not. Trianon Hungarians can register to vote online with many mistakes in their application, and yet will be issued a ballot to vote by mail while Expat Hungarians have to meet the exact letter of the data in the government’s database in order to register. Then these Expat Hungarians have to show up in person at an embassy or consulate (or some other unannounced location) to show further identification in order to be able to vote. That is all assuming, of course, that they are given correct information about where and when to vote.
It’s not an equal system. And given that so much of this system will be new for everyone, the election offices’ bungling of instructions again and again raises a real cause for concern. It should cause special concern because so far, all of the “bungles” point in one direction – toward getting Roma to register to vote for the Fidesz MP, toward giving Fidesz-friendly voters the easiest possible path to voting and toward giving those of opposition or uncertain political leanings every roadblock imaginable, from refusing their registration on technical grounds to giving misinformation about voting dates and polling places.
As George Orwell famously said in Animal Farm, “All animals are equal, but some animals are more equal than others.” The same is now true of citizens in Hungary.
This is the final post of a new series from my Princeton colleague Kim Lane Scheppele, head of Princeton’s Law and Public Affairs Program.
Hungary: An Election in Question
Part V: The Unequal Campaign
Kim Lane Scheppele
Princeton University and the Institute for Advanced Studies, Princeton
24 February 2014
Officially, the election campaign in Hungary starts 50 days before an election, so the race began in earnest on 15 February for the 6 April election. Once the campaign period starts in Hungary, special rules ensure that all parties are treated equally.
But as Anatole France once said, “In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets, and steal loaves of bread.”
We’ve already seen how the new system in Hungary was designed to push opposition parties into an uncomfortable alliance and to require they win by a substantial margin to win at all. And we’ve seen how the system of minority and foreign voting has opened the doors for Fidesz voters while closing them to those who would vote for opposition parties.
Not surprisingly, the rules for the campaign period itself also have a similar logic.
A free and fair election requires that all contesting parties have equal access to the media to get their message out. The new Law on Election Procedure, which regulates media access during the campaign period, formally complies with formal equality. For the first time since the first post-communist election, the parties running national lists will receive equal numbers of free minutes on public television to make their case to the public. This is a victory for equality and transparency.
But a closer look at the small print reveals that it is a trap. The law allocates only 600 minutes total for all parties with national lists (including the “nationality” lists) and it requires that these minutes be equally divided. If, as the head of the National Election Commission predicted in his 29 January press conference with the Hungarian Foreign Press Association, there are 10 or 12 national lists contesting in the April election, each party would be entitled to 50-60 minutes to be used over 50 days. One minute per day on television is not much – especially when those minutes appear on the public television station, which is the least watched major television station in the country.
In addition, what the law gave with one hand it took away with the other. The election law originally gave free minutes on public television while simultaneously banning paid advertising on commercial television, a move which the not-yet-packed Constitutional Court struck down in December 2012 as a violation of free speech rights. The government then added this provision directly to the Constitution in April 2013 through the infamous Fourth Amendment. The European Commission found this provision contrary to European law and threatened a legal action over it. Eventually, the Hungarian government backed down and modified the commercial broadcast ban in the Fifth Amendment to the Constitution passed in September 2013, permitting all parties to advertise in the commercial broadcast media during the election campaign.
But here, too, there was a catch: parties are only allowed to run campaign ads on commercial television if the commercial broadcasters donate the time and give this free time to all national lists equally. It is hard to imagine a for-profit television station giving free advertising time to all parties equally, especially when there are likely to be 10-12 lists. So it was not surprising that all of the commercial channels, the most watched channels in Hungary, have already said that they will not run campaign ads in this election cycle. In fact, there will be no prime ministerial debates either.
So the EU pressure and resulting constitutional amendment designed to open up the commercial media to campaign advertising have produced absolutely nothing. The only campaign ads on television during the campaign this year will be on the public broadcaster alone.
So how else can the parties and candidates get their message out?
Parties are allowed by the campaign law to advertise without limit on billboards. But, as it turns out, most of the display advertising space in the country is owned by companies in the possession of the circle of oligarchs close to Fidesz (Mahir, Publimont and EuroCity). If the opposition parties buy billboard space, the proceeds go straight into the pocket of the Fidesz family of companies.
As it turns out, however, having the opposition enrich the governing party through the purchase of billboard space was the least of the problems with the monopoly on billboards. One of the leaders of the Unity Alliance told me on a recent trip to Budapest that all of the billboards in the country are sold out for the duration of the campaign and not available for purchase. But one can see already that Fidesz-friendly billboards are everywhere. As I write, Budapest streets, streetcars, metro stations and other public spaces are flooded with Fidesz-friendly ads, using the spaces owned by the Fidesz-friendly companies.
What about newspapers? Fidesz has a large group of party-friendly newspapers, owned by their oligarch allies. By contrast, the Unity Alliance has a smaller group of much-poorer newspapers that are sympathetic to them. So far, no advertisements from the allied opposition have appeared in the Fidesz-friendly media which don’t need the money while advertisements for Fidesz have already appeared in the opposition papers which cannot afford to turn down paying ads.
So the media landscape is severely tilted against the Unity Alliance, which now needs to get a new message out to let people know what this new joint party is all about.
If most of the regular broadcast and print media are not open to the democratic opposition, however, surely, of course, the parties can plaster the light posts, bus stops, trees, walls and other public surfaces with posters and handbills, right? Actually, not.
A law from 2011 that received virtually no attention at the time it was passed bans commercial advertisements and political messages from major thoroughfares around the country. It is billed as a safety measure, designed to keep drivers’ eyes on the road. Suddenly the law came into public view, however, when a late-Friday-afternoon prime ministerial decree on 17 January 2014 added campaign posters to the list of advertisements already banned by this prior law. Now no campaign ads can be placed within 50 meters of a major road or 100 meters of a highway, joining the prior ban on other kinds of posters.
A Budapest ordinance adds to the spaces from which political posters are banned. Acting in the name of environmentalism and heritage preservation, the Fidesz-dominated Budapest City Council has prohibited political posters from going up on bridges, on metro station walls, in street underpasses, on statues and memorials – and on trees. A 26-page addendum to the law adds many specific places where posters may not be placed, and the list includes almost every major square and public meeting point in the city.
Of course, incumbent parties can find many ways to keep themselves in the public eye, so restrictions on the media disproportionately tend to affect challengers. So how is the opposition supposed to get its message out for this campaign given that all of the traditional avenues are blocked?
Well, there’s the internet. But anyone who has read the comments sections of Hungarian newspapers, blogs or other public spaces on the internet (even the Krugman blog!) knows how quickly government-supporting trolls try to occupy and dominate the space. And while internet-based media like Facebook are good at reaching the young and the educated, it is still not a universal medium.
What about mailing campaign literature to supporters and reaching them by phone? A recent announcement from the head of the data protection office (the office whose independence is being questioned in an infringement action before the European Court of Justice) seems to limit even this sort of access to voters by parties.
According to Attila Péterfálvi, the government’s data protection official, political parties must notify him when they intend to keep lists of their supporters. (EU law, by the way, does not require the regulation of such lists, but confines its scope to lists kept by the government.) Péterfálvi told the parties that they may not use for campaign purposes lists of addresses in the phone book, nor may they call people who have not explicitly indicated that they welcome campaign calls. The Election Office added to this privacy protection by sending all voters a letter that explains how to opt out of receiving campaign materials. So access to voters through these traditional means has been limited in the name of data privacy.
Perhaps the opposition can hold campaign rallies and stage personal appearances by the candidates to reach voters? But already a friend in Debrecen tells me that the Unity Alliance has had a hard time finding a place to hold a rally there because all of the spaces large enough for such a gathering are controlled by the Fidesz allies. They have either forbidden all political rallies or charge so much for the use of the space that the opposition parties cannot afford it.
Which brings us to campaign finance reform as another aspect of the campaign regulation in which rich and poor alike are banned from sleeping under bridges.
The new campaign finance law attempts to regulate campaign spending by publicly funding campaigns. Before the Fidesz reforms, campaign finance was completely non-transparent and had few enforceable rules. It was listed as one of the policy areas most deserving of reform by Transparency International, so change is a good thing.
On the surface, the campaign finance picture looks much better. All of the parties running national party lists get equal amounts of public money (between € ¬475,000 and € 2 million, depending on the number of candidates fielded) and each candidate gets a fixed amount of money in addition (about € 3400). This will provide transparent funding for all parties equally, something very much needed.
Political parties can still accept private money, though, up to a defined limit. But of course there is a catch. Now, suddenly, no campaign may accept private money from a foreigner (understandable). But, in addition, no party may accept money from a “legal person” – meaning any company, NGO, foundation or trust. After the US Supreme Court decision in Citizens United, permitting corporations to give unlimited cash to American campaigns, the ban on corporate donations in Hungary may seem a great idea to Americans. But context is everything. Fidesz is funded by a set of oligarchs tied to the party who can give virtually unlimited amounts as individuals. The Unity Alliance, by contrast, has been funded by party-allied foundations, which now cannot contribute to the campaign. The campaign finance regulations are, like Anatole France’s aphorism, designed to equally prohibit what the rich don’t need and the poor can’t do without.
But there is clearly an election coming because, on the streets of Budapest, there are huge billboards and posters everywhere attacking the Unity Alliance.
Civil Unity Forum (CÖF) Election Poster, seen everywhere in BudapestCÖF is a civil society group aligned with Fidesz, unregulated by the election laws.
These ads (see above) show the three of the leaders of the Unity Alliance (Mesterházy, Bajnai and Gyurcsány) with a Socialist former deputy major of Budapest (Miklós Hagyó) who is currently facing trial for corruption. Hagyó is not running for any office in this election, so he is there on the posters to convey guilt by association. The message, which blares “They don’t deserve another chance” shows all of the men holding placards of the sort featured in police mug shots. And seen also in the photo is the clown, who has been making appearances at events of these candidates, following them around to make fun of them. These sorts of messages are unregulated by the campaign finance rules – or in fact by any campaign rules at all.
Why not? They’re not sponsored by Fidesz but instead by the CÖF (which stands for Civil Összefogás Fórum or the Civil Unity Forum). As it turns out, civil society organizations can advertise without being limited by either the campaign media rules or the campaign finance rules. As a result, CÖF has plastered the city with election ads on billboards owned by Fidesz-friendly billboard companies, and none of these ads count toward Fidesz’s money or media allocations under the election law.
Of course the united opposition could do this also, if it had the wealthy backers. But virtually all of the wealth in Hungary stands behind Fidesz. And even if there were rich backers of the united opposition, they would still have to buy the billboard space from Fidesz-friendly companies, billboard space that is now conveniently all sold out.
The Orbán government vociferously insists that it is still a democracy. But in its four years in power, the Orbán government has been preparing for the moment when it actually has to get through an election in order to still be able to make that claim. Not surprisingly, this government of lawyers has created a complex legal framework in which the rules may appear to be neutral, but they don’t have neutral effects.
Fidesz has designed a system that allows it to face an apparently contested election without the real possibility of losing. With this election, then, Hungary has mastered the art of appearing to be something it is not – a true democracy holding free and fair elections.
Seventh up yesterday (if you’ve made it this far) was “Changes (Repost):”
Reposting to put this at the top of the blog for the next few hours.
Some news: I have informed Princeton that I will be retiring at the end of next academic year, that is, in June 2015. In August 2015 I will join the faculty of the Graduate Center, City University of New York, as a professor in the Ph.D. program in economics. I will also become a distinguished scholar at the Graduate Center’s Luxembourg Income Study Center. You can read all about it in the Graduate Center’s announcement.
None of this will have any effect on my work at the New York Times, so unless you’re just curious about the guy behind the column and blog, you needn’t read further.
So, why am I doing this? It is in no sense a commentary on Princeton, which has been a wonderful place for me professionally and personally. In particular, I can’t praise Princeton’s intellectual quality enough: it has been a great honor to be affiliated with a superb public policy school and an equally superb economics department.
Instead, my move reflects some hard thinking about how I can best make use of my time.
Fairly obviously, the center of gravity of my work has shifted over time toward more of a public policy focus; and of course I also have a fairly unusual role as an academic who is also a columnist at the world’s greatest newspaper. Meanwhile, I’m now 61, and I realized that it’s time to take a hard look at where I really want to be at this point.
In terms of geography, the answer seemed clear on reflection:
somewhere near Zabar’s New York is the best place to pursue my current interests. Given that decision, I sought an academic base.
Here too the answer seemed clear: more and more of my work has focused on issues of income inequality, and nobody does more important work producing the hard data on which all of this work relies than the Luxembourg Income Study, directed by Janet Gornick, professor of political science and sociology at the Graduate Center of CUNY. So I approached Janet about the possibility of some kind of affiliation with LIS that would give me both an office and the ability to interact with the excellent group LIS has assembled in New York.
That is indeed going to happen, but to my surprise the Graduate Center offered me a faculty position as well, which I quickly realized would be a wonderful thing. The Graduate Center is a remarkable locus of public affairs-oriented scholarship, and is in the process of assembling an incredible team associated with LIS. I couldn’t imagine a better place for me at this point; I also, to be honest, like the idea of being associated with a great public university.
I suppose there’s also a bit of coming home here. I grew up in the New York suburbs, and always imagined that “the city” was where intellectuals went to live once they, as my grandmother used to say, reached “mature adultery.” At any rate, I truly do love New York, so that there will be
a lot more good restaurants a lifestyle gain to complement the professional advantages.
So there you have it. Again, this will have no effect on my work for the Times.
Yesterday’s eighth and penultimate post was “Did Inflation Phobia Cause the Great Recession?”:
We now know that many key people at the Fed spent 2008, the year of financial doom, obsessing about inflation, which wasn’t a threat at all. This is not good; what’s even not-gooder is that, as David Glasner and others have pointed out, the central bankers who got this so completely wrong remain in positions of great influence, and show no sign of having rethought their views.
But can we say that the Fed’s inflation-phobia caused the panic, and maybe even the Great Recession? I don’t think so.
That’s not to deny that the inflation phobia was a remarkable thing. Inflation in early 2008, like the later blip in 2010-11, was driven by commodity prices, and especially by gasoline prices. And the evidence is just overwhelming that while spikes in gas prices can push inflation up or down in the short run, they have no, zero, zip predictive power over inflation looking forward.
Here are two quick-and-dirty graphs covering the period since 1986. First, annual averages of the rate of change in gasoline prices versus the rate of change of overall CPI:
A fairly strong relationship; in fact, gas prices explain a significant part of inflation variation year to year. But should you look at a gas price spike and worry that it presages a general rise in inflation? No, a thousand times no. Here’s the annual change in gas prices against the inflation rate over the next three years:
Not a hint of sustained impact. So you really have to wonder about people for whom it is always 1979, who always take any bump in gas prices as a reason to worry about runaway inflation.
Incidentally, do these people react to falling gas prices by worrying about deflation or at any rate below-target inflation? My impression is no. We’ll be able to test that once we see the 2009 transcripts, but I’ll bet that the inflation hawks of 2008, so worried about rising prices then, showed no comparable concern over the impacts of plunging commodity prices the next year. In other words, I’m pretty sure that we’re seeing a general proclivity toward finding reasons to tighten, rather than simply a flawed model.
So plenty of blame to be sent the Fed’s way. But was inflation phobia that crucial in the crisis and the slump that followed and continues to this day? I’d say no, for two reasons.
First, preventing the financial crisis would have taken a lot more than cutting the Fed funds rate to zero in September 2008 rather than December. We were in the midst of an epic housing bust, which was in turn causing a collapse in the value of mortgage-backed securities, which in turn was causing a collapse of confidence in financial firms. Cutting rates from very low to extremely low a few months earlier wouldn’t have stopped that collapse.
What was needed to end the run on Wall Street was a bailout — both the actual funds disbursed and the reassurance that the authorities would step in if necessary. And that wasn’t in the cards until, as Rick Mishkin observed in the transcripts, “something hit the fan.”
Second, even avoiding the financial panic almost surely wouldn’t have meant avoiding a prolonged economic slump. How do we know this? Well, what we actually know is that the panic was in fact fairly short-lived, ending in the spring of 2009. It doesn’t really matter which measure of financial stress you use, they all look like this:
Yet the economy didn’t come roaring back, and in fact still hasn’t. Why? Because the housing bust and the overhang of household debt are huge drags on demand, even if there isn’t a panic in the financial market.
So a pox on inflation phobia, and boo for the inflation-phobes who have learned nothing. But they didn’t cause the mess we’re in.
Yesterday’s last post was “Friday Night Music: Manhattan Transfer:”
For obvious reasons: