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Winter Is Coming ... to the World Cup

Can switching up seasons save the 2022 tournament in Qatar?

What do you do to make the crazy idea of a World Cup in Qatar a little less crazy? If you're Joseph "Sepp" Blatter, president of global soccer's governing body, you switch the tournament from the summer to the winter. Apparently, he didn't realize that making a winter World Cup a success may be an even bigger challenge.

The decision to award Qatar the 2022 World Cup was perhaps the most bizarre in FIFA's history. Until then, every host country had been decent at soccer and had boasted a population bigger than the tournament's total attendance. Today, Qatar has about the same population, about 1.8 million, that Uruguay did when it hosted the first World Cup in 1930. But attendance then was below 600,000; at the last World Cup, in South Africa in 2010, 3.2 million seats were filled.

Either a lot of people are going to have to go to Qatar to match that figure, or the Qataris are each going to have to attend a lot of matches. Unlike most people, they can probably afford to, with income per capita soon to hit $100,000. There isn't exactly a lot of competition in the market for flights to Doha, either; only a handful of airlines fly there from outside the region.

Climate has been another obvious issue. The Qataris promised to build air-conditioned stadiums, but they may have neglected the fact that much of what's enjoyable about a World Cup happens outside, in the streets and plazas of the host cities, where people chant, kick balls around, and watch matches on big screens until late at night.

This omission is not surprising. In most of the recently constructed Gulf cities, there's very little street life to speak of. The fun happens inside private compounds, clubs, restaurants, and hotels. The locals whizz around in expensive cars, and the only people on the streets -- especially in the heat of the day -- tend to be male migrant workers. Often, they don't even have the benefit of sidewalks.

Putting the fun back into the World Cup is going to be a challenge for Qatar, as it tries to turn itself into a $200 billion soccer Disneyland. Of course, the legions of wealthy businessmen -- they do tend to be men -- whose companies buy up thousands of seats won't be out on the streets. But soccer isn't just for them.

The first step, moving the tournament to the winter, now has the influential endorsement of Blatter, who has been FIFA's president for the past 15 years. His decision has provoked outrage among the real powers in soccer: the top professional teams. For starters, these teams are rarely pleased when their millionaire players go off to play for their respective countries; it's just another opportunity for them to get injured. But placing the tournament in the middle of their seasons, when the players are supposed to be at peak fitness and involved in as many as five lucrative competitions, is equivalent to FIFA stealing part of the return on some very big investments.

By the same token, though, the switch to the winter could lead to better soccer games at the World Cup. When teams full of top players fail to meet expectations in the tournament, as France did when it exited after the first round in 2002, observers often blame the rigors of the August-to-May schedule used by most of Europe's big leagues. Players usually take a couple of months off in the summer to recuperate. When they can't, the strain sometimes shows.

But the real problem with switching the tournament to the winter has to do with the success of the tournament for FIFA and soccer itself. Sports fans usually enjoy more than one sport. In the winter, several sports besides soccer are in full swing: American football, basketball, ice hockey, and, in 2022, the Winter Olympics. By contrast, summer World Cups coincide with the monotonous middle of the baseball season, some car races, a few international cricket matches, and little else of global importance.

As a result, a winter World Cup will face some stern competition for the casual viewer's attention. Will Americans turn off the NFL playoffs to watch Iran play Tunisia? Will the Chinese skip the NBA to tune into Belgium versus Ecuador? At the margins, people who might have switched on a match or two in the summer -- and perhaps become long-term fans of the game -- may make another choice.

The winter is also a tougher time for many fans to travel. Except in the lightly populated Southern Hemisphere, most countries have school breaks in the summer. In Europe, which has the biggest base of soccer fans with enough money to go to Qatar, several big countries have fairly standard vacation periods in the summer, too. Faced with the prospect of going to a culturally conservative country without a lot of well-known attractions beyond the World Cup itself, traveling fans may simply opt to stay home.

It seems very likely that the inflow of tourists to Qatar will be much smaller than the 300,000 who came to South Africa during the 2010 World Cup. The Qataris may well protect FIFA's ticket sales by putting rear ends in seats, even if they're the same rear ends over and over. Where FIFA stands to lose is in the broadcast revenues. If fewer people are expected to watch, advertising will be less valuable, and networks won't pay as much to show the games.

Yet FIFA executives are unlikely to fret much about this. They'll still be wined and dined to the heights of extravagance in Qatar, and they may already have received some rich payoffs for picking the host country in the first place. In this game, only the sport of soccer will lose.

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Daniel Altman

Should the Fed Be More Reserved?

When you can't say what you mean, stop talking.

Remember how Ben Bernanke's Federal Reserve was supposed to be all about openness and transparency? Somehow he and his colleagues still gave the markets whiplash by talking about how monetary policy might change in the future. It's certainly useful to have some idea of what the Fed's officials are thinking. But if they're lousy at making their points clearly, what else can they do?

When Bernanke took over as chairman, he emphasized transparency as the keystone of his approach to policy. He took a professorial and explanatory approach in his appearances before Congress, in contrast to the deliberately nebulous pronouncements of Alan Greenspan. He also changed the Fed's disclosure process to share more of its data and publish the minutes of its meetings more quickly. And in January 2012, the Fed committed to holding inflation near 2 percent -- its first-ever numerical target, suggested by Bernanke at his nomination hearing eight years ago.

Never before has the public had such a direct view into the making of monetary policy, in the United States or anywhere else. What we saw hasn't always been pretty. The Fed's governors and regional bank presidents have had some healthy debates about economic trends and ways of dealing with the recent slump. But they've also missed worrying signals of crisis and recession, worried about inflation that never arrived, and changed their minds several times about the use of their monetary tools.

More recently, their frank approach to communication has caused disruption in global financial markets and the economy. On June 19, Bernanke gave a press conference in which he seemed to hint that the Fed would stop buying assets in financial markets, putting an end to its "credit easing" strategy, and markets everywhere tumbled. But within a week, other Fed officials were pouring cold water on the notion that the policy would change anytime soon, or at least before the economy appeared much stronger. It took weeks, however, before the genie was back in the bottle and the markets were calm.

The media has had a field day with all of this, of course, raising questions about the overall value of the new transparency. Confidence in the Fed, whose officials already suffer regular attacks from Republicans in Congress, may be eroding; seeing the inside of the sausage factory doesn't necessarily make the end product more appetizing. On the other hand, the public is now getting information about the economy sooner than it did before.

In fact, the true value of transparency may be in knowing a bit more about how the Fed governors do their job: what data they follow, what they think is important, what triggers would lead to what decisions. This information allows economists, investors, and anyone else to critique the Fed's thinking. If the governors are missing something, the public can try to let them know.

Yet there's still the problem of people misunderstanding the Fed, particularly when it talks about the future.

Bernanke's attempt to describe the coming direction of American monetary policy actually misled millions of people, making it just as bad, if not worse, than Greenspan's riddles. The day before his speech, the interest rate on the 10-year Treasury was 2.2 percent; a week later, it was 2.6 percent, even though the Fed's officials tried to reassure investors that they would continue to inject credit into the markets. There's less risk of this happening when the Fed discloses the minutes of its meetings or tries to explain past and current policy; in these cases, the connections between words and deeds are clearer.

If the Fed wants to telegraph its plans -- and recent evidence suggests it does, to avoid causing disruptions and volatility in the markets -- there are better ways. One possibility is to automate policy by setting plans of action for a series of circumstances -- saying that when X happens, the Fed will do Y. For example, Narayana Kocherlakota, president of the Minneapolis Fed, suggested last year that the Fed keep short-term interest rates low until the unemployment rate fell to 5.5 percent, unless inflation began to rise.

Another option is simply to eliminate opportunities to change policy. The Fed's Federal Open Market Committee, which makes decisions on interest rates, is required by law to meet four times a year. Lately, its practice has been to meet eight times a year, plus the occasional emergency meeting. What better way to signal that a policy will remain in place, barring anything urgent, than to cancel the committee's meetings for a few months?

A third alternative that could work in conjunction with (or instead of) either of the first two would be to attach some kind of consequences to a failure to carry out stated policy. In other words, a Fed chair could promise to resign if the Fed did not keep the target for short-term interest rates fixed for the next nine months, or did not adhere to a rule like the one Kocherlakota proposed. This threat might not be credible, though, if a resignation would disrupt markets even more than changing policy.

All of these mechanisms are designed to help the Fed commit itself to policy in the future. In each case, the policy needs to be specified in a way that's clear and verifiable; the commitment is no good if no one can tell if the Fed followed through. Bernanke is an expert economist who is undoubtedly well aware of how such mechanisms are structured. He has six more months to save the Fed from mistakes like the one he made.

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