Handouts in Averting the Fiscal Cliff: The Price of Politics?

What is that nebulous thing called politics? Might it be that the practice is essentially exploiting or creating what are known as principal-agent costs? That is, might politics boil down to a skill in the agent (elected representative) in putting his political or economic interests ahead of doing the bidding of his principal(s) (i.e., his constituent body).  
In the U.S. Senate bill in early 2013 to obviate the “fiscal cliff,” for example, the Democrats may have agreed to benefits for the Republican lawmakers’ campaign backers in exchange for going along with a more progressive federal income tax system. Among the added provisions were special expensing rules for certain film and television productions—no doubt those made by particular campaign contributors. The provision for tax-exempt financing for the New York Liberty Zone around the former World Trade Center may also have been a favor to a particular someone. Lest it is wondered what an extension of the American Samoa economic development credit was doing in an expedited measure to obviate the “fiscal cliff,” the answer may have had to do with a particular Republican lawmaker’s relationship with someone having an interest in American Samoa. I can only speculate here, as I was not privy to the actual relationships and negotiations. However, the sheer strangeness of such provisions in such a bill suggests that the particular political or economic interests of particular Republican lawmakers may have been the culprit.

 Is money the language of politics?    citizen.org

The full essay is at "Handouts in Averting the Fiscal Cliff."

Americans on How Political Campaigns Are Funded: A Black Hole in the Center of the Political System

Considering the widening cultural and political divides in American society that were on full display in Congress during the first half of the 2010s, uncovering a general will stretching across partisan lines as well as across a the continent and beyond would proffer a rare opportunity for significant legislative output. Furthermore, such a case would enable us to assess whether the elected representatives of the People were indeed representing, and, if so, whom. That is to say, the political distance between the People and their political class could be measured. I contend as respecting the stance of the People on money in politics and public governance, much unity and, unfortunately, much distance can be discerned, at least as of the end of May 2015 when a New York Times/CBS News telephone-poll was taken.

A Rockefeller Republican turned populist? (Getty Images)

The full essay is at “Americans on How Political Campaigns Are Funded.” 

Spanked by Stockholders: Citigroup

In April 2012, Citigroup’s shareholders voted against the bank’s proposed $15 million compensation for the CEO, Vikram Pandit. This was the first time a majority on a stockholder vote—in this case, 55 percent—united in opposition to what was considered “outsized compensation at a financial giant.”[1] Shortly thereafter, a major stockholder sued Citigroup for breach of fiduciary duty (owed to the stockholders) for excessive executive compensation. Nevertheless, the prognosis is not so bad for the “top brass” on Wall Street; they need not worry unless the votes were to become binding and managements were barred from voting proxies.

The full essay is at "Spanked by Stockholders."

1. Jessica Greenberg and Nelson Schwartz, “Shareholders in Citigroup Reject Executive Pay Plan,” The New York Times, April 18, 2012.