The IMF’s Fourteenth Jacques Polak Annual Research Conference – Some Observations

Last week, the IMF held its annual research conference, which was open to members of the public who registered prior to the conference as guests. I attended the two-day conference and have a few observations.

One of the striking things about this conference was the concern about unemployment, especially long-term unemployment and youth unemployment. The worry is that these factors can cause long-term damage to the economy. One paper by three Federal Reserve Board staffers, including David Wilcox, Director of the Division of Research and Statistics and former Treasury Assistant Secretary for Economic Policy during the Clinton Administration, got particular attention in this regard. The paper – “Aggregate Supply in the United States: Recent Developments and Implications for the Conduct of Monetary Policy” – is technical but its conclusions after reporting on model simulations are not reassuring. It argues that the “natural rate of unemployment” has increased and that potential GDP decreased by 7% in the wake of the financial crisis. During the seminar, Wilcox indicated particular concern about unemployment. In his New York Times column, Paul Krugman, who gave the keynote speech at the conference, called this paper the “blockbuster” of the conference.

There was also consideration of what the government should do about an economy mired in a slower than desired recovery. Stanley Fischer (the former head of the Israeli Central Bank, the former deputy head of the IMF, and a renowned economics professor at MIT), who was the honoree of the conference, said that the next revision of his textbook will say that the “zero-bound” does not mean that monetary policy is done, since Bernanke has had some success with quantitative easing. Larry Summers and others indicated that QE has not been enough. The obvious implication is more aggressive fiscal policy, which was more clearly embraced by some speakers than others. I did not hear much deficit hand-wringing, though. Given its history, it is somewhat surprising to hear this at the IMF. It is nice to see people taking to heart the famous statement attributed, perhaps falsely, to Keynes that, when the facts change, he changed his mind.

The last session at the IMF conference included talks by Stanley Fisher and three of his former students – Ben Bernanke, Larry Summers, and Ken Rogoff. Summers' speech was particularly interesting and it was the most entertaining talk I've seen him give. He seemed less constrained in what he said since he is not currently a candidate for any public post. He got a laugh from the IMF staffers in the audience when he suggested that there be a key they could hit when preparing an IMF country report which would insert at the end a statement to the effect that, whatever was being proposed for the near-term, long-term financial prudence in government budgets was, of course, of the utmost importance (or something like that). 

An amusing aspect of the conference was that an author would discuss his or her paper and it would all sound perfectly reasonable. Then, sometimes, the discussant would declare that he or she found the paper very interesting and learned a lot from it. But then sometimes the discussant would next politely but effectively demolish the paper by saying that it was based on too many simplifying assumptions and did not take into consideration x, y, or z. The discussant would conclude by saying that the authors should come up with something akin to a unified field theory (okay, those are my words) on the particular issue they were working on. This would leave the audience on a barren plain, with no guidance about where to go or what to think.

What was missing during the conference was much discussion of the links between economic distress and political developments. I can understand why the Fed and the IMF would want to steer clear of any such discussion, but it remains the case that political developments can affect economic performance and economic performance can affect politics. Severe economic developments can spur groups both on the left and the right. Sometimes this can lead to disastrous consequences; sometimes these movements fizzle out. It depends both on the circumstances and the political culture of a particular country. In the U.S., the rise of the Tea Party is partly due to hard economic times. My guess is that this movement will eventually fizzle out. But how long can countries in the European "periphery" be subject to austerity measures and high unemployment without negative political ramifications? After all, some of these countries were dictatorships not that long ago.

Complicated econometric techniques would not be that useful in looking at the political dimension of hard economic times, and using these techniques, however unrealistic the assumptions sometimes have to be when using them, is what economists are now comfortable doing.

It would be good if economists and political scientists worked together on the feedback effects between economics and politics. Maybe some will, but the institutional separation between economics and political science departments seems to be a high barrier.

Some Recent Articles Criticizing the Affordable Care Act

Critics of the Affordable Care Act are having a field day. Reasons include the well-publicized problems of the federal website for those shopping for health insurance under the ACA, the cancellation of existing insurance plans for some who acquired insurance as individuals, and the President’s false assurances that everybody could keep their existing plans if they “liked” them.. Some of the criticism I have run across comes from well-off, self-employed people; some is purely motivated by politics; and some make come from conservative analysts making valid criticisms and sometimes constructive suggestions.

An example of an unhappy well-off person is Lori Gottlieb, a Los Angeles marriage and family therapist and writer. This past Sunday the print edition of the New York Times published her article on her health insurance travails – “Daring to Complain About Obamacare.” She has two major complaints. First, she thinks the premium increase of $5400 a year over what she had been paying for her canceled plan by for a new plan offered by her insurance company, Anthem Blue Cross, is too much. Her second complaint is the lack of sympathy from her Facebook “friends” when she complained about this on her FB page. The problem with the first complaint is that she apparently has not done any research on what other plans might be available to her. She incidentally would not be dealing with the federal website but the California one, since California has set up its own exchange. Also, she does not mention that her out of pocket costs will be less than any premium increase, since as a self-employed person she can deduct the cost of health insurance as a business expense. The second complaint is pure whining from a person who probably has a relatively high income. Nevertheless, it is true that, if all she knew about the ACA was what the President said, she is right to complain that she was misled. (I would point out that anyone who thought about it had to know that the President’s assurances could not be taken at face value, since insurance companies can always change their plans, cancel policies, raise premiums, and change the membership of its network of providers. More criticism of Gottleib’s article from the progressive left can be found here.)

Today, the Administration bowed to the intense political pressure and announced that it will allow non-compliant plans to continue offering the plans to existing customers throughout 2014. This should please Gottleib.  However, it is not clear how this will work. We will see if private insurance companies and state regulators go along. The new policy does raise an adverse selection issue, which could affect the risk pools on the exchanges. On the other hand, many in the individual insurance market eligible for subsidies may find that to be the cheaper and better option.

Keith Hennessey, who was Director of the National Economic Council in the George W. Bush Administration, has posted on his blog three articles expressing his outrage at the President Obama’s “lies.” He even went so far as to create a flow chart about this. To me, these posts are purely political, but they probably do not accomplish much since most visitors to his blog, except for a few like me, are already convinced that the Obama Administration is terrible at economic policy. His posts are examples of what Ana Marie Cox (founder of and former Wonkette, now serious Guardian columnist) calls “faux outrage.” Unfortunately, Hennessey does not seem interested in making constructive suggestions. (Incidentally, Hennessey’s making unfavorable comparisons between the current Administration and the one he worked for regarding their relative propensities to mislead is a bit rich, even if the major issues in this regard in the Bush Administration did not fall under his bailiwick. In the future, he might want to proceed more cautiously on this topic.)

In the remarkably stupid category of criticism of the ACA is an article by someone who should know better, Edward Lezear, who was Chairman of the Council of Economic Advisers in the George W. Bush Administration – “President Obama, is a 'substandard' health plan really substandard?” In this article, Professor Lezear compares existing insurance plans to the base Ford Focus he chose to buy when he worked for the White House. Even putting aside that cars and health insurance plans are hardly the same thing, would he really want to drive a car that did not meet the minimal safety standards required by the federal government and not be subject to recall if problems develop? Consumers do want government standards when it comes to cars. That is probably enough said about this article, which, as it appears on the Fox News website, is another example of preaching to the choir.

James Capretta, who was an Associate Director of OMB in the first term of the George W. Bush Administration and is clearly no friend of the Obama Administration, recently wrote an article critical of the ACA website issues – “It's Already Too Late to Avoid the Train Wreck.” Capretta uses stronger language than necessary when he writes this at the end of his article that “[t]he Obama administration is in a very dangerous place.” This detracts from the valid point Capretta makes about the website problems. He argues that, even if the website problems are fixed by the end of November, this only gives people about two weeks to sign up for coverage by January 1 (the deadline is December 15.) This may cause problems for both the website and the people having to decide what plan to sign up for and filling out the necessary website forms. That is a genuine concern. The Administration does need to be thinking about contingency plans if the first two weeks of December become a logistical nightmare.

Finally, writing for the Real Clear Politics website, Robert Pollock, who used to be an editor of the opinion pages of the Wall Street Journal makes a suggestion worth considering (“Fixing Obamacare: The Federal Charter Solution”). He suggests that it would greatly simplify the regulatory situation for health insurance plans if there was an option for them to get a federal charter. Health insurance plans that opted for the federal charter would then not be subject to a maze of different regulatory requirements in the 50 states (and, I would add, in the District of Columbia and potentially other places, such as Puerto Rico). This would be similar to the federal charter that is available to commercial banks which choose to be supervised by the Office of the Comptroller of the Currency. It is also similar to the private health insurance plans made available to federal employees and retirees under the Federal Employee Health Benefits Program. These plans are subject to regulations of and overseen by the Office of Personnel Management, a federal government agency, and not by state regulatory authorities. I have not seen any discussion of this issue in the ACA context, but I think Mr. Pollock has made a constructive suggestion, though one that may be politically difficult to implement because of possible strenuous opposition by state governments.  

Republicans Disappoint on Health Care: Excessive Negativity, No Constructive Proposals, and Bad Politics

The reactions to the problems with the website for the health insurance “exchanges” or “marketplaces” set up by the federal government for the majority of states which decided not to set it up for themselves are not surprising. (The websites for the marketplaces set up by states and the District of Columbia are, according to press reports, operating much better than the federal website.) The Democrats are very concerned and worried; some are quite critical of the Administration; and they want this fixed as soon as possible. The Republicans are saying that the problems with the website are evidence for their contention that the Affordable Care Act (“Obamacare,” though I will refer to the law as “ACA,” which is a less politically charged term) is way too complicated, that the Administration is incompetent, and that the law will collapse of its own weight because the financing is based on too rosy assumptions and because the ACA is an inherently flawed restructuring of the U.S. health care system. Some go further and use the website’s problem to rift on the failure of liberalism or, in a remarkably stupid article, “progressive government.”

The Democrats’ reactions are natural and understandable. I will focus in this post on the Republican’s reactions and attacks on the ACA and argue that they are disappointing, demonstrate a bankruptcy in policy ideas and proposals, and, unless most everything goes terribly wrong with the ACA over the coming year, are not helpful to the Republicans politically. Republicans should be offering creative ideas to improve the U.S. health care system while preserving the role of private insurance companies. It is interesting in this regard that the current complexity charge the Republicans throw at the ACA help make the case for a single-payer system (essentially some form of Medicare for everybody), which some Democrats would prefer. In other words, Republicans should be wary of an ACA failure, since this would increase the probability that the U.S. will eventually adopt a single-payer system. What the Republican attack on the ACA fails to take into account is that the health care system in the U.S. prior to the law’s enactment was unsustainable. The U.S. was (and is) paying more per capita on health care than other industrialized countries, while not covering everybody and achieving poorer public health results. In addition, though it has come down recently, health care inflation has been too high and an aging population means more demands on the U.S. health care system. While one can criticize the ACA – it is far from perfect – the status quo ante is not an option, but many Republican are giving the impression that this is what they want. One who does not is Michael Gerson, but the sketchy idea he proposes, health insurance vouchers for everyone, is far from a fully thought-out proposal.

The ACA can be fairly attacked for not doing enough to contain the cost of health care. Republicans who do that use this to make the case that the ACA is too expensive, and, therefore, should be repealed. They do not offer proposals about what to do about the cost of health care and it is far from transparent pricing practices (for example, see Steven Brill’s long March 4, 2013, Time article, “Bitter Pill, Why Medical Bills are Killing Us”).

Perhaps Republicans think that market competition alone will solve this, but it did not under the health care system existing prior to enactment of the ACA. Further, they fail to acknowledge that part of the reason for the excessive cost of health care in the U.S. is the much higher administrative costs here than in other countries. Part of this is due to the overly complex billing system and the need for health care providers to deal with multiple insurance companies and policies with different coverages and allowances. Some standardization among insurance companies and policies might help in reducing administrative costs.

Another blind spot of Republican is that they seem to worry about costs only when it is the government that is footing the bill. However, excessive health care costs are a problem whether it is paid for by private insurance and patients or is paid for partly or completely by the government. Even if one does not believe that affordable basic health care should be something a country as rich as the U.S. should provide all its citizens one way or another, one needs to concede that excessive spending on health care is not conducive to a well-functioning economy. Society as a whole is paying the health care bill, regardless of government involvement. 

Also, it is clear that there is no perfect health care system and that there will always be complaints. For example, after World War II, the government of Clement Attlee set up a health care system in Britain which is probably the most socialist of the major industrial countries. I took the opportunity while traveling in England a few years ago of asking people what they thought of the National Health Service. Though the people I talked to were hardly a representative sample, I received a variety of responses ranging from highly positive to quite critical. (For those with the means, there is option of paying for supplemental private health insurance, which apparently can mean less waiting time to see doctors.) However, that the country as a whole is proud of the NHS was made evident during the opening ceremony of the 2012 London Olympics, in which it was featured.

Now, the NHS is not a model for the U.S.; it is not compatible with our political culture. There are other options. While no option will please everybody, it is necessary for the U.S. health care system to be fixed, both to be true to our values of compassion and fairness and to mitigate a growing burden on the economy.

While today’s Republican Party gives the impression, sometimes explicitly and sometimes implicitly, that they do not consider compassion and fairness as appropriate goals of government, it is somewhat surprising that the party seemingly does want to address the economic implications of increasing health care costs, especially if this means more government involvement. In fact, some in the party are desirous of making Medicare less generous because of its costs, but reducing Medicare expenditures by raising the age of eligibility may not reduce total health care expenditures. In fact, it may increase them because Medicare apparently has been better at keeping the prices in pays health care providers in check than private insurance companies. Republicans should not ignore that excessive spending on health care by society as a whole is excessive spending on health care, no matter who, in the first instance, is doing the spending or how it is financed.

There is a consensus that the House Republicans made a mistake by adopting the strategy of its Tea Party faction in shutting down the government and threatening a government default if they did not get their way in defunding or delaying provisions of the ACA. While there is less of a consensus on the current Republican strategy of attacking the ACA, the persistent negativity is also a political mistake. Michael Gerson is right about that. Now that the Obama Administration and Congress have used ideas, including the individual mandate, originating in conservative think tanks and implemented in Massachusetts with the support of then Governor Mitt Romney, the Republicans are not advancing any proposals to fix the health care system. They are apparently betting on the ACA’s collapse as a way to win back the Presidency and both houses of Congress. Even with the website problems, that is likely to prove to be a bad bet. Some important aspects of the ACA, for example, those involving pre-existing conditions and increasing the age for which young people are eligible to be covered on their parents’ insurances are popular. No doubt the insurance subsidies to those who qualify will also be popular. And, as pointed out in the New Yorker, contrary to Republican claims, the ACA in fact benefits many small businesses by lowering their health insurance costs and promotes entrepreneurship, since leaving a job to start a small business does not mean losing access to affordable health insurance. Republicans should favor that.

When I worked at Treasury, some of the political appointees there would sometimes cryptically say that you can’t beat something with nothing. As a purely political matter, the Republicans should develop sensible health care proposals that they can sell. Being in favor of the status quo ante is both bad policy and bad politics. Perhaps due to their frustrations and their internal problems, that seems to be the Republican position. A political strategy which can only possibly succeed if there is a near-term collapse of the ACA, and maybe not even then, is symptomatic of larger problems the Republicans have in defining themselves in a way palatable to the American electorate.

Debt Limit/Government Shutdown and the Annual Meetings of the World Bank/IMF

Beginning this Friday, October 11 and through the weekend, the World Bank and the IMF will be holding their annual meetings in Washington, DC. This is a very large event, and, in addition to government officials from around the world, a large group of private sector bankers and other individuals employed in the financial sector will be attending various meetings, conferences, and seminars in Washington. The World Bank/IMF will be offering seminars beginning tomorrow, October 8, to participants, press, and guests. Some large banks and other private organizations will hold their own events, including the Institute of International Finance.

It is likely that many of those present will be talking among themselves and some publicly about the government shutdown and the potential for a U.S. government default. While the financial and government types who will be in Washington have many disagreements, including the appropriate response of governments to economies mired in slow growth or recession, the outlook for the euro, the advisability of increased financial regulation, bank capital requirements, etc., almost all of them will agree that a U.S. government default on its debt could well be catastrophic for the world economy. The press will likely take note as this critical mass of well-informed commentators and market participants make their views known. The pressure on Speaker Boehner and the House Republicans will increase.

Larry Summers, Stephen Leacock, and Women

Below is a letter to Mr. Stephen Leacock, a Canadian writer, humorist, and academic, who died in 1944.

Dear Mr. Leacock:

Recently, I had the pleasure of reading your 1922 book, My Discovery of England. As it would no doubt not surprise you, I found it amusing, even though some of it is a bit dated from my vantage point in the early 21st century.

Your book does not strictly limit itself to England but makes room for some of your favorite notions. You might have wanted to constrain yourself on some of these, especially if you cared to appeal to readers some ninety years in the future, about whom, though, you probably did not give much thought. But your passages on the aptitudes and appropriate education of women, which begin as a criticism of Oxford University’s policy of admitting women but quickly become more general, are really over the top.

I should point out in this connection that an American, Mr. Lawrence H. Summers, currently very much alive and a sometimes academic, found himself in a heap of trouble when he made remarks more than eight years ago about the underrepresentation of women in the science and engineering professions. He was at the time President of Harvard University, but found his tenure in that position cut short the following year, owing in part to these remarks. Mr. Summers is an economist and is hoping to become head of the U.S. central bank, but his remarks on women in the sciences are still remembered, especially by those who would prefer someone else for the job.

While you apparently did not harbor ambitions to be head of the Bank of Canada, content with your career as a famous humorist, writer, and professor of Political Economy and Chair of the Department of Economics and Political Science at McGill University, there is some superficial similarity between you and Mr. Summers. I would not want to stretch it too far. Your sense of humor – I think it would not insult Mr. Summers to say – is vastly different and more developed than his. I do believe, though, that you both rightly share a high regard for your own abilities.

Further, I suppose 1922 was a much different time than 2005 when Mr. Summers made his remarks, in particular with respect to what we now call “political correctness.” Still, your remarks about women, which go way beyond anything Mr. Summers said, have the ability to grate.

For his part, Mr. Summers hypothesized that the curve representing the distribution of native abilities in the hard sciences is somewhat fatter at the very high end for men than for women. He did not say that the average women had less ability than the average man. He makes clear that he is “talking about people who are three and a half, four standard deviations above the mean in the one in 5,000, one in 10,000 class. Even small differences in the standard deviation will translate into very large differences in the available pool…” Now whether or not there are such differences in the far-out tails of the distributions of certain intellectual abilities between the populations of men and women is highly debatable, as Mr. Summers was quickly made to realize. He even seemed to have an inkling he was headed for trouble. From the transcript of the event, at the conclusion of Mr. Summers’ remarks, there was this exchange between him and the moderator:

Q: Well, I don't want to take up much time because I know other people have questions, so, first of all I'd like to say thank you for your input. It's very interesting – I noticed it's being recorded so I hope that we'll be able to have a copy of it. That would be nice.

LHS: We'll see. (LAUGHTER)

But Mr. Leacock, in your book, you are talking about averages, not far-out tails. In fact, you dismiss the exceptional woman as irrelevant. Let me quote you:

The fundamental trouble is that men and women are different creatures, with different minds and different aptitudes and different paths in life. There is no need to raise here the question of which is superior and which is inferior (though I think, the Lord help me, I know the answer to that too). The point lies in the fact that they are different.

But the mad passion for equality has masked this obvious fact. When women began to demand, quite rightly, a share in higher education, they took for granted that they wanted the same curriculum as the men. They never stopped to ask whether their aptitudes were not in various directions higher and better than those of the men, and whether it might not be better for their sex to cultivate the things which were best suited to their minds. Let me be more explicit. In all that goes with physical and mathematical science, women, on the average, are far below the standard of men. There are, of course, exceptions. But they prove nothing. It is no use to quote to me the case of some brilliant girl who stood first in physics at Cornell. That's nothing. There is an elephant in the zoo that can count up to ten, yet I refuse to reckon myself his inferior.

And you keep on going, digging a deeper hole for yourself, at least as far as posterity is concerned:

The careers of the men and women who go to college together are necessarily different, and the preparation is all aimed at the man's career. The men are going to be lawyers, doctors, engineers, business men, and politicians. And the women are not.

There is no use pretending about it. It may sound an awful thing to say, but the women are going to be married. That is, and always has been, their career; and, what is more, they know it; and even at college, while they are studying algebra and political economy, they have their eye on it sideways all the time. The plain fact is that, after a girl has spent four years of her time and a great deal of her parents' money in equipping herself for a career that she is never going to have, the wretched creature goes and gets married, and in a few years she has forgotten which is the hypotenuse of a right-angled triangle, and she doesn't care. She has much better things to think of.

Mr. Summers also addressed this issue, but in a somewhat different way, and does not draw your conclusion that there should therefore be a difference in the curriculum offered to men and to women. Here is part of what he said:

…I've had the opportunity to discuss questions like this with chief executive officers at major corporations, the managing partners of large law firms, the directors of prominent teaching hospitals, and with the leaders of other prominent professional service organizations, as well as with colleagues in higher education. In all of those groups, the story is fundamentally the same. Twenty or twenty-five years ago, we started to see very substantial increases in the number of women who were in graduate school in this field. Now the people who went to graduate school when that started are forty, forty-five, fifty years old. If you look at the top cohort in our activity, it is not only nothing like fifty-fifty, it is nothing like what we thought it was when we started having a third of the women, a third of the law school class being female, twenty or twenty-five years ago. And the relatively few women who are in the highest ranking places are disproportionately either unmarried or without children, with the emphasis differing depending on just who you talk to. And that is a reality that is present and that one has exactly the same conversation in almost any high-powered profession. What does one make of that? I think it is hard-and again, I am speaking completely descriptively and non-normatively-to say that there are many professions and many activities, and the most prestigious activities in our society expect of people who are going to rise to leadership positions in their forties near total commitments to their work. They expect a large number of hours in the office, they expect a flexibility of schedules to respond to contingency, they expect a continuity of effort through the life cycle, and they expect – and this is harder to measure – but they expect that the mind is always working on the problems that are in the job, even when the job is not taking place…

Part of the difference, of course, is that Mr. Summers is speaking about the people who get to the top of their professions and you are talking about averages. But you really get into trouble when you discuss what is most appropriate for women. What were you thinking? If you were around today, you would have noticed great changes in the role of women in society. You would not have lasted, much less reached, the pinnacle of the Department of Economics and Political Science at McGill University if you were still writing such things. Fortunately, for this book, the issue of women suffrage for federal elections in Canada had already been settled, though women had to wait until 1940 to vote in Quebec provincial elections. You wisely forgo discussion of this issue, though you are said to have opposed women suffrage.

Nonetheless, I did enjoy your book, filled as it with wry and pointed observations. Your political outlook could probably be characterized as socially and economically conservative, sprinkled with some libertarianism. While I would agree with your attitude towards prohibition, some of the other things you propound as obvious may seem less so to many of us today. Your aversion to government intervention of interference in the economy (“bring back the profiteer”) is a case in point. Perhaps, as you experienced the 1930s, your ideas about the proper role of government in the economy evolved. Not being an expert on the evolution of your ideas, I do not know.

Also, I daresay, you seem to have the notion that societies are fixed. It is this view of a static society that seems to cramp your imagination. Philosophical conservatives have a point when they say that much of human nature is fixed, but this inclines them too much toward a pessimistic and fatalistic view.  Societies are dynamic. We can debate whether the American civil rights leader of the mid twentieth century, Dr. Martin Luther King, Jr., was mostly correct when he said (the statement may not have been original): “The arc of the moral universe is long, but it bends toward justice.” But what is irrefutable is that societies are dynamic, and what seemed impossible at one point in time may become considered normal at some future point. Sometimes it does not even take that long. Look at the evolution of attitudes toward same-sex marriage in many western industrial countries.

It is, though, your views on women which are the most shocking. They marred the otherwise enjoyable experience of reading your book.

                                                                        Sincerely yours,

                                                                        Norman Carleton                                                                                         

CFTC Investigating Goldman’s Aluminum Warehouse Practices

According to news reports, the CFTC is currently investigating allegations that Goldman Sachs has been manipulating the price of aluminum by releasing it too slowly from warehouses it owns through a subsidiary. The CFTC will probably develop a fuller story of what did or did not happen than was contained in the original New York Times article on this subject, which I criticized. This is clearly something the CFTC should investigate.

A Brief Note on Possible Abuses of NSA Information

When I posted some comments on the NSA in July, I was worried about potential abuses of NSA information in the future. I was unaware of any current abuses. On August 7, though, Reuters published an article that reports on possible misuse of NSA information by the Drug Enforcement Administration (“DEA”) and the IRS.  Apparently, there was an IRS manual that was used to train law enforcement agents “to ‘recreate’ the investigative trail to effectively cover up where the information originated [the NSA], a practice that some experts say violates a defendant's Constitutional right to a fair trial.”  According to the article, the origin of the initial information was concealed “not only from defense lawyers but also sometimes from prosecutors and judges.”

Probably any law enforcement agents engaged in this practice justified it to themselves because it helped in their fight against bad guys. But it is not the way law enforcement is supposed to work.