The Incontrovertible Firm

“How Disclosed NSA Programs Protect Americans, and Why Disclosure Aids Our Adversaries”

The official title of the recent and rare public US House Select Committee on Intelligence oversight hearing of the NSA

For the past three years, I have used this blog as a forum(to an admittedly limited readership) to rail against the security state. A particular gripe has been that while the admission of the thing has always been acknowledged the violation it constituted nonetheless usually remained outside the purview of consideration.1 At best, the violation may have been treated as a secondary or tertiary one. But this dereliction(of intellectual method) can no longer stand. The past two weeks, Edward Snowden, a NSA contractor, has now verifiably leaked what has hitherto been the elephant in the room: the totalitarian US surveillance enterprise.

And make no mistake, it is an enterprise. I call it The Firm, borrowing heavily from Anthony de Jasay’s heterodoxical method of Rational Choice that treats the State as a type of unitary actor2. But the Firm encompasses more than the what is traditionally thought to mean by the State. It stretches across an integrated nexus of political economy, media, academia, ingraining itself into every institution of civil society. As I have previously stated, the Firm is a rational choice casting of libertarian class theory.

The key insight of LCT–in contradistinction to liberal social contract theory–is that the State and civil society are in conflict. Liberalism holds that the State is an artificial construct to secure civil societal ends. However, practice has demonstrated that the State instead serves to subvert societal institutions, using them as “natural hosts” to effectuate an artificial process of political economy. Borrowing from Bastiat, we might depict this a the transformation of law as an instrument of justice(specifically, as the correction of injustice) to one of a perpetuation of injustice(plunder). The division of class then refers to those who depend on this perpetuation of injustice(or benefit from it) vs those who do not3.

In the jargon of rational choice, we would cast LCT as the “incentive-incompatibility problem” of collective choice to abide by the “unanimity” of the so-called social contact. In plain terms, this simply means that “constitutions” are not rational constraints against the rule-making power or authority of the State. If we dispense with this myth, then we can begin to actually examine the actual rational pattern of collective choice. What we often find is a hierarchical organization pattern serving as a de-facto decision-making rule. In public choice, a decision-making rule is the type of collective action method that imposes the decision-making costs(the price we pay for civilization) for participation in organized society. For Buchanan and Tullock, the only legitimate decision-making rule is unanimity4. In practice, this means super-majoritarian constitutional rules and amendments are the only legitimate decision-making rules.

In the original “Calculus of Consent,” side payments create marketable property rights in voting which often mitigate the external and decision-making costs of legislative action. However, later developments in the theory by Tullock advanced the idea of “rent-seeking” and the all pay auction at the methodological core of treating government/politics like a market. This rent-seeking game, however, can be very wasteful–in theory, infinitely wasteful. So, following Oliver Williamson’s treatment of The Firm–firms are DROs that arise as institutional mechanisms to mitigate wasteful bargaining costs–firms arise in political competition as means to fray the wasteful costs of the Tullock rent-seeking game5. This introduces the Firm as potential method of collective action. If we can identify high external costs of a firm’s rule making that nonetheless remain impervious to correction or reform, then we can explain this by treating these costs as decision-making costs. This would then gives us the Firm as a decision-making rule. And the Firm as a decision-making rule gives us “the State as its own Agency.”

Empirically, a firm can be demonstrated via a rent-seeking condition of rents >> outlays within a given market sector(of political economy). However, to show the Firm is not sufficient to show a decision-making rule.6 For this, we have to demonstrate external costs of the Firm equate to decision-making costs. A clear way to demonstrate this is to show a rule which overrides one derived from a legitimate decision-making rule. Put differently, showing enforcement of a firm’s rule that is blatantly unconstitutional is sufficient to show that firm as a decision-making rule.

For example, the public choice method excludes a statement such as “total surveillance is the price we must pay for the security to participate in organized society” because total surveillance overrides a number of rules derived from a legitimate decision-making rule, the unanimity of the bill of rights. To treat these costs as external costs is contra the public choice method because these costs are, in fact, decision-making ones. Now public choice per se certainly does not exclude legislative actions from imposing decision-making costs(if the decision-making rule is a simple majority system, then this is to be expected), but the standard method encounters an agency problem in explaining how decision-making costs are passed off as external costs to thwart a decision-making rule rooted in unanimity. Particularly, if this agency exhibits a concerted, coordinated organization pattern that encompasses military and intelligence organs, congressional leaders, the Dept. of Justice, media and journalistic organs, tech, telecommunication and defense industry sectors, political science academia and the like, etc. The agency problem is further compounded by an apparent legality established by secret courts, the public disclosure of such carrying a penalty of “aiding the enemy” and espionage. This is a vexing problem for standard public choice theory because there is a manifest agency afoot that appears to equate the public to “the enemy.”

The NSA as a Decision-Making Rule

Now let us return to Edward Snowden. What Snowden actually discovered amounted to a NSA/Intel decision-making rule. However, Snowden’s documentation trove, when fully revealed, will elucidate just how much of these rules are actually oriented around enforcing a 21st century mercantilist political economy rooted in data analytics(which I have dubbed “The Fifth Monopoly”). The so-called “liberty vs security trade-off debate” is a phony one. The decision-making cost is not this:

total surveillance is the price we must pay for the security to participate in organized society

Rather, it is this:

total surveillance is the price we must pay for the operational security of American dominance and control of the global political economy of data analytics

The latter is a decision-making cost that can only be implemented by decision-making rule such as the NSA. If we go by Russ Tice, a noted NSA whistleblower from the Bush tenure, the NSA, for all intents and purposes, is now the agency of the US government. This would put the US as a full-blown secret intelligence State.

Conclusion

The method of The Firm is an anathema to the traditional classical liberal schools of Chicago and Virginia because of the inversion of Milton Friedman’s famous relationship regarding capitalism and freedom. Capitalism is a necessary(though not sufficient) condition for political freedom. The Firm, however, employs a method that predicts a rent-seeking pattern that will eventually produce a decision-making rule that will displace legitimate decision-making rules rooted in unanimity. The Firm’s succinct relationship motto: Capitalism is a sufficient(though not necessary) condition to destroy liberal political freedom.

Still, one may ask how can capitalism result in a totalitarian regime of social control? Perhaps this short answer: when you stop being the customer and instead become the product itself. But “why” is not really the pertinent question here. Rather, the pertinent question is “why not”? From “incentive-incompatibility problem” of collective choice outlined above, there is no reliable “why not” constraint.

1 for the most part, radical libertarianism excluded

2 The Firm differs a bit from de Jasay’s account in that the former is squarely rooted in public choice, which is a narrower subset of rational choice. But the conclusions derived from each are more or less identical.

3IMHO, Class Theory is only a coherent methodological tool when it is institutionalized, i.e., classes are cast in institutional terms. In this sense we would say there are a class of institutions, or an institutional arrangement, that is entirely dependent on an artificial process of political economy, without which, it would disappear literally overnight.

4 Unanimity is required because of the potentially high external costs of collective action. By definition, an external cost is that cost to a party who did not choose to incur that cost. Unanimity ensures the cost is thus a decision-making one and not an external one. In other words, unanimity ensures “consent.”

5 Theoretically, Firms are a difficult thing to explain. But empirically, they obviously exist and are a fundamental organizational unit of market rent-seeking. It is simply not plausible to acknowledge them in free-market competition but deny them in political competition. Its not a defensible position(that is, there is no rational argument that necessarily explains them away in political competition, particularly given the difficulty of a rational argument to begin with to explain their existence in a free market). Legal distinctions/arguments are a red herring.In political competition they may not take the form of a de jure entity, but they are nonetheless, a de facto one.

6 Tullock himself had wrestled with the apparent persistence of Firms in (political) rent-seeking and succeeded in partially explaining them away by resorting to intellectual gymnastics vis-a-vis the efficiency of the rent-seeking technology. However, the persistent of firms would only be treated as an anomaly, and its attendent costs viewed primarily as external. The anomaly perhaps existentially threatened the validity of public choice as a method, but the threat was not viewed as something that extended to liberal democracy itself.

The Copyright Alert System Now Being Rolled Out at Major ISPs

In the next two months, AT&T, Time Warner, Verizon and Comcast will implement the The Copyright Alert System program developed by The Center for Copyright Information. Of course, The Center for Copyright Information is a RIAA and MPPA front. The monitoring system that will be used will rely on the MarkMonitor service that has been in place for a numbers of years now. The “monitors” will be The Center for Copyright Information, i.e., RIAA and MPAA. Once again, these entities have been monitoring bitTorrent traffic for years. Indeed, a recently presented Security Research Paper concludes that you can expect to be tracked within 3 hours of firing up a torrent client.

The primary change is that in lieu of direct legal action(which can be frictional), the RIAA/MPAA, using the aforementioned ISPs as agents, can now engage in a relatively frictionless enforcement operation. And this is where the data analytics begin to kick in. Large-scale users will still be subject to the same modis operandi legal action but the voluminous data that has been collected over the years by the likes of MarkMonitor will now be used as a queryable data repository against which the new data will be used–according to whatever algorithm employed–to trigger the Copyright Alert Notifications to end users via that user’s ISP(serving an agency role of a Sheriff, more or less).

Evasion tactics? Well forget about things like Tor. Tor works over the tcp protocol(and can’t handle the load of p2p file sharing to begin with). bitTorrent these days works over udp. Sophisticated encryption techniques like mse/pe to me are more about thwarting ISP throttling, but in this case it is not the ISPs who are the monitoring agent. The best evasion technique is to use a udp proxy. But I imagine that a reliable service with tolerable speed is going to cost money which begs the question a bit of why not simply spend the money on a paid download music service. That was basically my decision around 6 years ago when the opportunity costs of evasion(when the monitoring really began to pick up) well exceeded the monthly subscription cost of a paid service.

Of course, the Copyright Alert System is just harbinger of things to come. These types of arrangements up and down the IT stack will increase by orders of magnitude under the formal adoption of whatever “cybersecurity act” that eventually passes(once again, because the basic top-level rules will be enacted via fiat, i.e, executive decision, the subsequent proposal and adoption of a legislative act is an absolute certainty). And this, of course, just exposes the silliness of the “network neutrality debate” because “network traffic” should always be understood to mean “authorized network traffic.” The arbitration between “authorized” and “unauthorized” traffic will be subject to the most relentless data analytics imaginable.

I will also offer a brief comment on unjustified triumphalism that thinks these issues can be magically skirted around. This belief is based on a fundamental mischaracterization of the internet as a horizontal, decentralized type of network. But it is not that. Rather, the internet is a type of scale-free, small network that follows a power law distribution. The network properties of scale-free invariance is much a product of quite a bit of centralized coordination. Simply, it is a mistake to think that technology alone can overcome the problem of political economy. Instead a necessary condition to be able to “route around the damage” is jurisdictional differentiation in political economy. I’ve been harping this point for a couple of years in my posts about Wikileaks. If the jurisdictional differentiation melts away then feel free to proceed straight to the outright pessimism of Evgeny Morozov and Richard Stallman who have given up on the anarchic promise of the internet. The alternative is a platform that turns out to be very well suited for tight control by Corporation and State. The evidence for this latter pessimism is the degree of rent-seeking in data analytics this little platform of ours affords(which makes the actions of State agency very much “rational” and hardly stupid in this space). The game is up when the cyber-security and “data czars” come rolling down the pike.

Finally, The Copyright Alert System is once again immediate evidence of a “Commercialist” anomaly with regard to political economic agency. Methodological individualism is hard pressed to explain ISPs acting as a Sheriff Agency (on behalf of the RIAA/MPAA) against their own customers. The model of The Firm, however, explains it quite well.

From WikiLeaks: How the Drug War Underlies The Firm

A Public Choice definition of “The Firm” is the agency that arises from the “incentive-incompatibility problem” of collective choice. This agency, however, is also an organ of political economy. The political economic construct of The Firm is what allows us to tie it to the classical concept of libertarian class theory(note: it is a mistake to try to relate the standard realm of public choice to the old French Laissez Faire model of political economy. To make this relation, you must more or less discard “methodological individualism” from the model of State actors. Hence, most, if not all, traditional public choice scholars will reject “The Firm” outright).

The positive model of “The Firm” allows us to make predictions. For one, the drug war will never peacefully end because the discretionary authority the drug war legitimizes is a core foundational component of The Firm. At best, any legalization efforts will simply result in a FDA, Bristol Myers Squibb, DEA triumvirate. In a real sense, the latter may actually provide the means for greater social control than outright illegality.

If the thing that “The Firm” maximizes is discretionary power or authority, then perhaps “The Matrix” is a better understood cultural descriptor than “The Firm.” However, the use of the term, “The Firm,” is illuminating because it reminds us that the agency in question is at its core a politically economic one. The Firm is the (protectionist) coordinated arena where the “competition” of capitalism takes place. It is the “market setter.”

As with “The Matrix,” it may be the case that the only way to fully understand “The Firm” is to see it for yourself. So below, I have posted a link from the recent WikiLeaks file dump. This is actually a publicly available document and not a secret one. But it is captured from the inner correspondence of the global intelligence firm, Stratfor.

International Narcotics Control Strategy Report: Money Laundering and Financial Crimes.

The introduction says it all: engineering an efficient international enforcement paradigm of anti-money laundering measures that starts with terrorism and drugs but under a “one-size-fits-all” vein can be effortlessly extended to any unauthorized monetary exchange. The table of contents provides the staggering breadth and scope of The Firm’s coordination.

To those that say “there is no firm,” I say positive science is useless if we do not believe what we see with our own eyes. To those who say “if you don’t like it, leave,” I say it is clear that there is no escaping the jurisdiction of The Firm.

Public Choice and The Firm

Some readers may be interested in this little exchange I had with Charles Rowley a few weeks back. Admittedly, I started the commentary with a bit of a snarky entrance, asking how the “Dean of Public Choice” could allow his heart to be captured and uplifted by a politician’s speech(more precisely, the speech of a politician’s wife). However, what followed was civil, and it perhaps sheds some illumination on the methodological differences between “classical liberals” and libertarians.

An important question is why “classical liberals” often seem to have a natural alignment with conservatives? My methodology, which I would deem to be consistent with “classical libertarianism,” finds this alignment to be fatal. But we are given a clue by Rowley’s rejection of the method of “The Firm.” Indeed, Rowley (although he is an admirer of de Jasay and counts him as a good friend) rejects de Jasay’s inclusion within the public choice discipline. Rowley writes:

Jasay’s work is not public choice. Jasay deals with an organic state, not methodological individualism. What would you do if you were the state is his question. There is no such thing as a state. Only a collective of individuals.

I would dispute Rowley’s contention. I think the agency of The Firm is quite real and apparent. Would one likewise say “there is no Microsoft or Google, there is only a collection of individuals?” Indeed, I would submit that the agency of The Firm(as a type of DRO) is a natural consequence of economic rent-seeking. And I would apply this consequence to both political economy and “the free market” by simply adopting the very generic definition of economic rent as “returns in excess of opportunity cost (noting, however, that a legal structure of the firm does not necessarily equal the limited-liability corporation. A DRO can have an arbitrary structure, although a certain degree of verticality and hierarchy is implicit).

In a comment, I outlined a long-winded microeconomic foundation for the Agency of the State. This agency is real. But we can arrive at it via a microeconomic method. As I like to say, I can draw line from Public Choice to de Jasay to the class theory of the French Laissez Faire economists.

Interestingly, in the place of The Firm, Rowley advocated an alternative model of “The Prince,” which is the name I bequeathed to the method that emerges from “The Dictator’s Handbook.” I have not actually the read the book, but it is clear(from reading reviews and Rowley’s comments) that The Prince has universal application–it applies to both institutions of State and Civil Society. So to save “methodological individualism” as a method(almost treating it as an end to be preserved rather than as means), Rowley appears willing to dispense with a compelling insight of liberal social theory: individuals with different interests and ends can nonetheless use reason as a tool to coordinate these interests to mutual advantage.1 This insight simply cannot survive The Prince.

Once again, “classical liberalism” derived from a Public Choice method constrained by the classical liberal bounds regarding the agency of the State is simply not coherent.

1 The Better Angels of our Nature

Roberts Affirms the Total State Model

Yesterday, the Roberts court affirmed the Obama defense of the so-called “Affordable Care Act.” To me, it is not a particularly surprising result. Two years ago, I noted that the Obama Admin’s principal argument relied on the classification of the mandate as a tax and that the legislation–all 2000 pages plus–was carefully crafted to categorize any penalty as an excise tax. As I wrote at the time, Obama–his “socialist” caricature notwithstanding–wasn’t arguing the case by making appeals to the Communist Manifesto. He was merely relying on past American constitutional precedent. He had “the firm’s” legal team carefully draft the new rules of the health care political economy to pass compliance strictly with the firm’s monopoly power to tax.

And it passed the compliance test. Indeed, John Roberts used this decision to affirm the role of his court to be the adjudicators of compliance and not the arbiters of constraint. Really, the judiciary is the only possible monkey wrench in a model of total government by political competition/rent-seeking. Yesterday, Roberts proclaimed that the role of the judiciary is not to save us from democracy, which, of course, means “the firm.”

We simply pose a simple question to Mr. Roberts: who wrote that 2000 page piece of legislation? Who could compose an entire model of political economy from the mere power to tax in a fully “compliant” manner. Justice ain’t that blind, sir….

Incredibly, there are some so-called libertarians who are hailing this decision as a bulwark against the future regulatory State because of some speculative nonsense that Roberts has now taken the “commerce clause” off the table. Sheeeeyyyyyytttttt. The regulatory state ultimately derives from the power to tax. The Firm more or less is the regulatory state. It is not going anywhere.

Let us dispense with the romance and the delusion. Politics is a rent-seeking game. Richard Posner and the Chicago School had it wrong. It is not a game where nothing is being redistributed, that is, where outlays = rents. Tullock and the Virginia School have the better model but resorted to a ridiculous “inefficient market hypothesis” to try to save liberalism in a public choice context when it became apparent that rents >> outlays. Tullock, himself, in explaining why he couldn’t convert to the libertarianism, more or less admitted that he simply preferred the blue pill to the red pill–he was too married to the institutionalism he was critiquing to defect.

If we accept that firms can arise in a “free market” of horizontal trading partners because a hierarchy of economic governance can sometimes prove to maximize economic rents relative to a regime of horizontal trading partners–as a consequence of the frictional costs of bargaining–we have to accept the reality of “firms” in political competition. It is indefensible to hold a position of firms as a consequence of economic rent-seeking in a free market but no firms as a consequence of rent-seeking in political competition. Yes, we can think of political parties as “firms,” but the actual firm is the State.

Today we know(or we should know) that Madisonian Democracy is a horribly flawed political concept. The idea that high institutional frictional costs constrain political competition/rent-seeking is just wrong. On the contrary, the high institutional transaction costs are what actually guarantee the emergence of “the Firm.” Equal competitive agents(“gangs”) fighting over rents in a highly frictional environment can be literally infinitely wasteful. To avoid this, you thus have a type of hierarchical, economic governance that emerges–the Firm.

John Roberts, “evil genius,” I think not. I think the evil geniuses are these libertarian think tanks and mags that keep propagandizing “proper role of government,” “limited government,” and demonstrate infinite capacity to find “silver linings” in libertarian-conservative fusionism. You doubt the “State as Firm?” Well, sometimes you just have to actually give a demonstration of the empirical reality. Below is just the “legislative component” of “the Firm.” Do you see any silver linings, any evidence of limited government, any evidence that it matters one fuck whether it is the monopoly power to tax or to “regulate” regarding the ends of our Firm?

The House Legislative Component of The Firm

Committee Chairperson Ranking Member
Subcommittee
Agriculture Frank Lucas (R-OK) Collin C. Peterson (D-MN)
Conservation, Energy, and Forestry Glenn Thompson (R-PA) Tim Holden (D-PA)
Department Operations, Oversight, and Credit Jeff Fortenberry (R-NE) Marcia Fudge (D-OH)
General Farm Commodities and Risk Management Mike Conaway (R-TX) Leonard Boswell (D-IA)
Livestock, Dairy, and Poultry Tom Rooney (R-FL) Dennis Cardoza (D-CA)
Nutrition and Horticulture Jean Schmidt (R-OH) Joe Baca (D-CA)
Rural Development, Research, Biotechnology, and Foreign Agriculture Timothy V. Johnson (R-IL) Jim Costa (D-CA)
Appropriations Hal Rogers (R-KY) Norm Dicks (D-WA)
Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Jack Kingston (R-GA) Sam Farr (D-CA)
Commerce, Justice, Science, and Related Agencies Frank Wolf (R-VA) Chaka Fattah (D-PA)
Defense Bill Young (R-FL) Norm Dicks (D-WA)
Energy and Water Development Rodney Frelinghuysen (R-NJ) Pete Visclosky (D-IN)
Financial Services and General Government Jo Ann Emerson (R-MO) José Serrano (D-NY)
Homeland Security Robert Aderholt (R-AL) David Price (D-NC)
Interior, Environment, and Related Agencies Mike Simpson (R-ID) Jim Moran (D-VA)
Labor, Health and Human Services, Education, and Related Agencies Denny Rehberg (R-MT) Rosa DeLauro (D-CT)
Legislative Branch Ander Crenshaw (R-FL) Mike Honda (D-CA)
Military Construction, Veterans Affairs, and Related Agencies John Culberson (R-TX) Sanford Bishop (D-GA)
State, Foreign Operations, and Related Programs Kay Granger (R-TX) Nita Lowey (D-NY)
Transportation, Housing and Urban Development, and Related Agencies Tom Latham (R-IA) John Olver (D-MA)
Armed Services Buck McKeon (R-CA) Adam Smith (D-WA)
Emerging Threats and Capabilities Mac Thornberry (R-TX) Jim Langevin, (D-RI)
Military Personnel Joe Wilson (R-SC) Susan Davis (D-CA)
Oversight and Investigations Rob Wittman (R-VA) Jim Cooper (D-TN)
Readiness Randy Forbes (R-VA) Madeleine Bordallo (D-GU)
Seapower and Projection Forces Todd Akin (R-MO) Mike McIntyre (D-NC)
Strategic Forces Mike Turner (R-OH) Loretta Sanchez (D-CA)
Tactical Air and Land Forces Roscoe Bartlett (R-MD) Silvestre Reyes (D-TX)
Budget Paul Ryan (R-WI) Chris Van Hollen (D-MD)
Education and the Workforce John Kline (R-MN) George Miller (D-CA)
Early Childhood, Elementary and Secondary Education Duncan D. Hunter (R-CA) Dale Kildee (D-MI)
Health, Employment, Labor, and Pensions Phil Roe (R-TN) Rob Andrews (D-NJ)
Higher Education and Workforce Training Virginia Foxx (R-NC) Ruben Hinojosa (D-TX)
Workforce Protections Tim Walberg (R-MI) Lynn Woolsey (D-CA)
Energy and Commerce Fred Upton (R-MI) Henry Waxman (D-CA)
Commerce, Manufacturing and Trade Mary Bono Mack (R-CA) G. K. Butterfield (D-NC)
Communications and Technology Greg Walden (R-OR) Anna Eshoo (D-CA)
Energy and Power Ed Whitfield (R-KY) Bobby Rush (D-IL)
Environment and the Economy John Shimkus (R-IL) Gene Green (D-TX)
Health Joe Pitts (R-PA) Frank Pallone (D-NJ)
Oversight and Investigations Cliff Stearns (R-FL) Diana DeGette (D-CO)
Ethics Jo Bonner (R-AL) Linda Sánchez (D-CA)
Financial Services Spencer Bachus (R-AL) Barney Frank (D-MA)
Capital Markets and Government-Sponsored Enterprises Scott Garrett (R-NJ) Maxine Waters (D-CA)
Domestic Monetary Policy and Technology Ron Paul (R-TX) William Clay, Jr. (D-MO)
Financial Institutions and Consumer Credit Shelley Moore Capito (R-WV) Carolyn B. Maloney (D-NY)
Insurance, Housing and Community Opportunity Judy Biggert (R-IL) Luis Gutierrez (D-IL)
International Monetary Policy and Trade Gary Miller (R-CA) Carolyn McCarthy (D-NY)
Oversight and Investigations Randy Neugebauer (R-TX) Michael Capuano (D-MA)
Foreign Affairs Ileana Ros-Lehtinen (R-FL) Howard Berman (D-CA)
Africa, Global Health, and Human Rights Chris Smith (R-NJ) Karen Bass (D-CA)
Asia and the Pacific Donald A. Manzullo (R-IL) Eni Faleomavaega (D-AS)
Europe and Eurasia Dan Burton (R-IN) Gregory Meeks (D-NY)
Middle East and South Asia Steve Chabot (R-OH) Gary Ackerman (D-NY)
Oversight and Investigations Dana Rohrabacher (R-CA) Russ Carnahan (D-MO)
Terrorism, Nonproliferation, and Trade Ed Royce (R-CA) Brad Sherman (D-CA)
Western Hemisphere Connie Mack IV (R-FL) Eliot Engel (D-NY)
Homeland Security Peter T. King (R-NY) Bennie Thompson (D-MS)
Border and Maritime Security Candice Miller (R-MI) Henry Cuellar (D-TX)
Counterterrorism and Intelligence Pat Meehan (R-PA) Jackie Speier (D-CA)
Cybersecurity, Infrastructure Protection, and Security Technologies Dan Lungren (R-CA) Yvette Clarke (D-NY)
Emergency Preparedness, Response, and Communications Gus Bilirakis (R-FL) Laura Richardson (D-CA)
Oversight, Investigations, and Management Michael McCaul (R-TX) William R. Keating (D-MA)
Transportation Security Mike D. Rogers (R-AL) Sheila Jackson Lee (D-TX)
House Administration Dan Lungren (R-CA) Bob Brady (D-PA)
Oversight Phil Gingrey (R-GA) Zoe Lofgren (D-CA)
Elections Gregg Harper (R-MS) Bob Brady (D-PA)
Judiciary Lamar S. Smith (R-TX) John Conyers (D-MI)
Courts, Commercial and Administrative Law Howard Coble (R-NC) Steve Cohen (D-TN)
Constitution Trent Franks (R-AZ) Jerrold Nadler (D-NY)
Intellectual Property, Competition, and the Internet Bob Goodlatte (R-VA) Mel Watt (D-NC)
Crime, Terrorism, and Homeland Security Jim Sensenbrenner (R-WI) Bobby Scott (D-VA)
Immigration Policy and Enforcement Elton Gallegly (R-CA) Zoe Lofgren (D-CA)
Natural Resources Doc Hastings (R-WA) Ed Markey (D-MA)
Energy and Mineral Resources Doug Lamborn (R-CO) Rush D. Holt (D-NJ)
Fisheries, Wildlife, Oceans and Insular Affairs John Fleming (R-LA) Gregorio Sablan (D-MP)
Indian and Alaska Native Affairs Don Young (R-AK) Ben R. Luján (D-NM)
National Parks, Forests and Public Lands Rob Bishop (R-UT) Raúl Grijalva (D-AZ)
Water and Power Tom McClintock (R-CA) Grace Napolitano (D-CA)
Oversight and Government Reform Darrell Issa (R-CA) Elijah Cummings (D-MD)
Federal Workforce, U.S. Postal Service and Labor Policy Dennis A. Ross (R-FL) Stephen Lynch (D-MA)
Government Organization, Efficiency and Financial Management Todd Platts (R-PA) Ed Towns (D-NY)
Health Care, District of Columbia, Census and the National Archives Trey Gowdy (R-SC) Danny K. Davis (D-IL)
National Security, Homeland Defense and Foreign Operations Jason Chaffetz (R-UT) John F. Tierney (D-MA)
Regulatory Affairs, Stimulus Oversight and Government Spending Jim Jordan (R-OH) Dennis Kucinich (D-OH)
TARP, Financial Services and Bailouts of Public and Private Programs Patrick McHenry (R-NC) Michael Quigley (D-IL)
Technology, Information Policy, Intergovernmental Relations and Procurement Reform James Lankford (R-OK) Gerry Connolly (D-VA)
Rules David Dreier (R-CA) Louise Slaughter (D-NY)
Legislative and Budget Process Pete Sessions (R-TX) Alcee Hastings (D-FL)
Rules and the Organization of the House Rich Nugent (R-FL) Jim McGovern (D-MA)
Science, Space and Technology Ralph Hall (R-TX) Eddie Bernice Johnson (D-TX)
Space and Aeronautics Steven Palazzo (R-MS) Jerry Costello (D-IL)
Technology and Innovation Ben Quayle (R-AZ) Donna Edwards (D-MD)
Research and Science Education Mo Brooks (R-AL) Dan Lipinski (D-IL)
Investigations and Oversight Paul Broun (R-GA) Donna Edwards (D-MD)
Energy and Environment Andy Harris (R-MD) Brad Miller (D-NC)
Small Business Sam Graves (R-MO) Nydia Velazquez (D-NY)
Agriculture, Energy and Trade Scott Tipton (R-CO) Mark Critz (D-PA)
Healthcare and Technology Renee Ellmers (R-NC) Cedric Richmond (D-LA)
Economic Growth, Tax and Capital Access Joe Walsh (R-IL) Kurt Schrader (D-OR)
Contracting and Workforce Mick Mulvaney (R-SC) Judy Chu (D-CA)
Investigations, Oversight and Regulations Mike Coffman (R-CO) Jason Altmire (D-PA)
Transportation and Infrastructure John Mica (R-FL) Nick Rahall (D-WV)
Aviation Thomas Petri (R-WI) Jerry Costello (D-IL)
Coast Guard and Maritime Transportation Frank LoBiondo (R-NJ) Rick Larsen (D-WA)
Economic Development, Public Buildings and Emergency Management Jeff Denham (R-CA) Eleanor Holmes Norton (D-DC)
Highways and Transit John J. Duncan, Jr. (R-TN) Peter DeFazio (D-OR)
Railroads, Pipelines, and Hazardous Materials Bill Shuster (R-PA) Corrine Brown (D-FL)
Water Resources and Environment Bob Gibbs (R-OH) Tim Bishop (D-NY)
Veterans’ Affairs Jeff Miller (R-FL) Bob Filner (D-CA)
Disability Assistance and Memorial Affairs Jon Runyan (R-NJ) Jerry McNerney (D-CA)
Economic Opportunity Marlin Stutzman (R-IN) Bruce Braley (D-IA)
Health Ann Marie Buerkle (R-NY) Mike Michaud (D-ME)
Oversight and Investigations Bill Johnson (R-OH) Joe Donnelly (D-IN)
Ways and Means Dave Camp (R-MI) Sander Levin (D-MI)
Health Wally Herger (R-CA) Pete Stark (D-CA)
Human Resources Geoff Davis (R-KY) Lloyd Doggett (D-TX)
Oversight Charles Boustany (R-LA) John Lewis (D-GA)
Select Revenue Measures Pat Tiberi (R-OH) Richard Neal (D-MA)
Social Security Sam Johnson (R-TX) Xavier Becerra (D-CA)
Trade Kevin Brady (R-TX) Jim McDermott (D-WA)

The Senate Legislative Component of The Firm

Committee Chairman Ranking Member
  Subcommittees
Agriculture, Nutrition and Forestry (5) Debbie Stabenow (D-MI) Pat Roberts (R-KS)
Commodities, Markets, Trade and Risk Management Ben Nelson (D-NE) Saxby Chambliss (R-GA)
Conservation, Forestry and Natural Resources Michael Bennet (D-CO) John Boozman (R-AR)
Jobs, Rural Economic Growth and Energy Innovation Sherrod Brown (D-OH) John Thune (R-SD)
Livestock, Dairy, Poultry, Marketing and Agriculture Security Kirsten Gillibrand (D-NY) Mike Johanns (R-NE)
Nutrition, Specialty Crops, Food and Agricultural Research Bob Casey (D-PA) Richard Lugar (R-IN)
Appropriations (12) Daniel Inouye (D-HI) Thad Cochran (R-MS)
Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Herb Kohl (D-WI) Roy Blunt (R-MO)
Commerce, Justice, Science, and Related Agencies Barbara Mikulski (D-MD) Kay Bailey Hutchison (R-TX)
Defense Daniel Inouye (D-HI) Thad Cochran (R-MS)
Energy and Water Development Dianne Feinstein (D-CA) Lamar Alexander (R-TN)
Financial Services and General Government Richard Durbin (D-IL) Jerry Moran (R-KA)
Homeland Security Mary Landrieu (D-LA) Dan Coats (R-IN)
Interior, Environment, and Related Agencies Jack Reed (D-RI) Lisa Murkowski (R-AK)
Labor, Health and Human Services, Education, and Related Agencies Tom Harkin (D-IA) Richard Shelby (R-AL)
Legislative Branch Ben Nelson (D-NE) John Hoeven (R-ND)
Military Construction, Veterans Affairs, and Related Agencies Tim Johnson (D-SD) Mark Kirk (R-IL)
State, Foreign Operations, and Related Programs Patrick Leahy (D-VT) Lindsey Graham (R-SC)
Transportation, Housing and Urban Development, and Related Agencies Patty Murray (D-WA) Susan Collins (R-ME)
Armed Services (6) Carl Levin (D-MI) John McCain (R-AZ)
Airland Joe Lieberman (I-CT) Scott Brown (R-MA)
Emerging Threats and Capabilities Kay Hagan (D-NC) Rob Portman (R-OH)
Personnel Jim Webb (D-VA) Lindsey Graham (R-SC)
Readiness and Management Support Claire McCaskill (D-MO) Kelly Ayotte (R-NH)
SeaPower Jack Reed (D-RI) Roger Wicker (R-MS)
Strategic Forces Ben Nelson (D-NE) Jeff Sessions (R-AL)
Banking, Housing, and Urban Affairs (5) Tim Johnson (D-SD) Richard Shelby (R-AL)
Economic Policy Jon Tester (D-MT) David Vitter (R-LA)
Financial Institutions and Consumer Protection Sherrod Brown (D-OH) Bob Corker (R-TN)
Housing, Transportation, and Community Development Robert Menendez (D-NJ) Jim DeMint (R-SC)
Securities, Insurance, and Investment Jack Reed (D-RI) Mike Crapo (R-ID)
Security and International Trade and Finance Mark Warner (D-VA) Mike Johanns (R-NE)
Budget Kent Conrad (D-ND) Jeff Sessions (R-AL)
Commerce, Science and Transportation (7) Jay Rockefeller (D-WV) Kay Bailey Hutchison (R-TX)
Aviation Operations, Safety, and Security Maria Cantwell (D-WA) John Thune (R-SD)
Communications, Technology, and the Internet John Kerry (D-MA) Jim DeMint (R-SC)
Competitiveness, Innovation, and Export Promotion Amy Klobuchar (D-MN) Roy Blunt (R-MO)
Consumer Protection, Product Safety, and Insurance Mark Pryor (D-AR) Pat Toomey (R-PA)
Oceans, Atmosphere, Fisheries, and Coast Guard Mark Begich (D-AK) Olympia Snowe (R-ME)
Science and Space Bill Nelson (D-FL) John Boozman (R-AR)
Surface Transportation and Merchant Marine Infrastructure, Safety, and Security Frank Lautenberg (D-NJ) Roger Wicker (R-MS)
Energy and Natural Resources (4) Jeff Bingaman (D-NM) Lisa Murkowski (R-AK)
Energy Maria Cantwell (D-WA) Jim Risch (R-ID)
National Parks Mark Udall (D-CO) Richard Burr (R-NC)
Public Lands and Forests Ron Wyden (D-OR) John Barrasso (R-WY)
Water and Power Debbie Stabenow (D-MI) Mike Lee (R-UT)
Environment and Public Works (7) Barbara Boxer (D-CA) Jim Inhofe (R-OK)
Children’s Health and Environmental Responsibility Amy Klobuchar (D-MN) Lamar Alexander (R-TN)
Clean Air and Nuclear Safety Tom Carper (D-DE) John Barrasso (R-LA)
Green Jobs and the New Economy Bernie Sanders (I-VT) John Boozman (R-AR)
Oversight Sheldon Whitehouse (D-RI) Mike Johanns (R-NE)
Superfund, Toxics and Environmental Health Frank Lautenberg (D-NJ) Mike Crapo (R-ID)
Transportation and Infrastructure Max Baucus (D-MT) David Vitter (R-LA)
Water and Wildlife Ben Cardin (D-MD) Jeff Sessions (R-AL)
Finance (6) Max Baucus (D-MT) Orrin Hatch (R-UT)
Energy, Natural Resources, and Infrastructure Jeff Bingaman (D-NM) John Cornyn (R-TX)
Fiscal Responsibility and Economic Growth Bill Nelson (D-FL) Mike Crapo (R-ID)
Health Care Jay Rockefeller (D-WV) Chuck Grassley (R-IA)
International Trade, Customs, and Global Competitiveness Ron Wyden (D-OR) John Thune (R-SD)
Social Security, Pensions, and Family Policy Debbie Stabenow (D-MI) Tom Coburn (R-OK)
Taxation and IRS Oversight Kent Conrad (D-ND) Jon Kyl (R-AZ)
Foreign Relations (7) John Kerry (D-MA) Richard Lugar (R-IN)
Western Hemisphere, Peace Corps and Narcotics Affairs Robert Menendez (D-NJ) Marco Rubio (R-FL)
Near Eastern and South and Central Asian Affairs Bob Casey, Jr. (D-PA) Jim Risch (R-ID)
African Affairs Chris Coons (D-DE) Johnny Isakson (R-GA)
East Asian and Pacific Affairs Jim Webb (D-VA) James Inhofe (R-OK)
International Operations and Organizations, Human Rights, Democracy and Global Women’s Issues Barbara Boxer (D-CA) Jim DeMint (R-SC)
European Affairs Jeanne Shaheen (D-NH) John Barrasso (R-WY)
International Development and Foreign Assistance, Economic Affairs, and International Environmental Protection Ben Cardin (D-MD) Bob Corker (R-TN)
Health, Education, Labor, and Pensions (3) Tom Harkin (D-IA) Mike Enzi (R-WY)
Subcommittee on Children and Families Patty Murray (D-WA) Richard Burr (R-NC)
Subcommittee on Employment and Workplace Safety Barbara Mikulski (D-MD) Johnny Isakson (R-GA)
Subcommittee on Primary Health and Aging Bernie Sanders (I-VT) Rand Paul (R-KY)
Homeland Security and Governmental Affairs (5) Joe Lieberman (ID-CT) Susan Collins (R-ME)
Contracting Oversight (Ad Hoc) Claire McCaskill (D-MO) Rob Portman (R-OH)
Disaster Recovery and Intergovernmental Affairs (Ad Hoc) Mark Pryor (D-AR) Rand Paul (R-KY)
Federal Financial Management, Government Information and International Security Thomas Carper (D-DE) Scott Brown (R-MA)
Investigations (Permanent) Carl Levin (D-MI) Tom Coburn (R-OK)
Oversight of Government Management, the Federal Workforce and the District of Columbia Daniel Akaka (D-HI) Ron Johnson (R-WI)
Judiciary (6) Patrick Leahy (D-VT) Chuck Grassley (R-IA)
Administrative Oversight and the Courts Amy Klobuchar (D-MN) Jeff Sessions (R-AL)
Antitrust, Competition Policy and Consumer Rights Herb Kohl (D-WI) Mike Lee (R-UT)
The Constitution, Civil Rights and Human Rights Dick Durbin (D-IL) Lindsey Graham (R-SC)
Crime and Terrorism Sheldon Whitehouse (D-RI) Jon Kyl (R-AZ)
Immigration, Refugees and Border Security Chuck Schumer (D-NY) John Cornyn (R-TX)
Privacy, Technology and the Law Al Franken (D-MN) Tom Coburn (R-OK)
Rules and Administration Chuck Schumer (D-NY) Lamar Alexander (R-TN)
Small Business and Entrepreneurship Mary Landrieu (D-LA) Olympia Snowe (R-ME)
Veterans’ Affairs Patty Murray (D-WA) Richard Burr (R-NC)

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…