Showing posts with label principal-agent problems. Show all posts
Showing posts with label principal-agent problems. Show all posts

Monday, July 29, 2024

Pulling the Curtain Back on President Biden’s Retirement Address

There is an expression in politics referring to how legislation is made; it is likened to the making of sausage, the public display of which is not generally desired. Furthermore, it is unrealistic and even counter-productive for the American electorate to know the intricate mechanisms by which a bill makes its way through Congress before being signed by the president to become a law. Nevertheless, the strategic and self-interested manipulation of public perception by elected representatives in order that the electorate will have an overstated positive view of its representatives, who can have more discretion and thus power with the vote of confidence, is counter to an effective democratic republic, which after all is distinct from direct democracy. I contend that the desire to falsely manipulate popular opinion went into President Biden’s address on his decision to serve only one term, as well as in the comments of high ranking members of his party in support of his decision not to run for reelection. That there might be more political capital, not to mention a better legacy, in being straight with the American people is a possibility that seems to elude American politicians.


The full essay is at "President Biden's Retirement Address."

Tuesday, July 15, 2014

Wall Street’s Maker-Taker Rebate: An Inherent Conflict of Interest

On June 14, 2014, the U.S. Senate Investigations Committee held a hearing on “High-Speed Stock Transactions and Insider Trading.” The issue at hand concerned the payments that wholesale brokers and exchanges make to brokers for going through the brokers and exchanges, respectively. An academic study had found that the broker or exchange that pays the most is not typically the most efficient, and thus in the best interest of the investor. Essentially, the payments give rise to a conflict of interest for the retail broker, who is supposed to put the client’s financial interest first, before his or her own. Is greater disclosure, such as Sen. Levin suggested, sufficient? I contend that a conflict of interest that is inherently unethical warrants complete removal, rather than merely countervailing measures.


The entire essay is at “Maker-Taker Rebate