The Principal-Agent Problem

The Principal-Agent Problem

This appears to be a breakthrough in the textbook principal-agent problem. The textbook tells us that it should be the principal, in the case, the Israeli Lobby, which should bear the Asymmetric information costs of monitoring the conflict of interest on the part of it’s agent, in this case the American Political Parties.

However, in our real world example, we see the actual agency costs being borne by the agency and not the principal.

Imagine a principal hiring an agency for a stock broker, and the manager of agency keeping the principal up to date on how the personal habits/views of the agent assigned account executive might potentially negatively impact the principal.

Another example of how the Public Choice model of government agency wrecks the textbook.

Of course it’s comical to view the DoubleThink of government agency in action. We have an Israeli Lobby holding a public forum for the purpose of debunking charges of the Democrats that Republicans want to cut aid to Israel. And the the Israeli Lobby ostensibly excludes Ron Paul because he is accused of being too much like Barack Obama, the one, of course, who–as leader of the Democrats– is orchestrating the Democratic attack against Republicans in terms of accusations/warnings of aid cutting to Israel.

To me, the obvious Principal-Agent Problem is “representative democracy;” specifically, voting as a means of securing agency. The problem is particularly compounded when we factor Jesus’ Eschatological intent into the equation.

History, if there is going to be one that survives, will mock us; Zeus only had lightning bolts. Jesus had hydrogen bombs…

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