Principal agent problems

This is Joseph.

I am not usually all that bright but this new law confuses me:

The second provision relates to a campaign by investors and Democrats to prod the SEC into forcing corporations to disclose their political spending. The idea gained steam from a 2011 petition by a group of corporate law experts arguing that the Citizens United decision made corporate disclosure especially urgent. The petition has attracted 1.2 million public comments, the most in the SEC's history. The budget bill prohibits the agency from spending any funds to "finalize, issue, or implement" any rule on disclosure of political contributions.

As the petition observed, shareholder interest in such disclosure was so strong that more than half the companies in the Standard & Poor's 100 index had voluntarily adopted the policy by 2011. But the pace of adoption had slowed considerably in recent years, suggesting that SEC action is needed.

Indeed, the Supreme Court in Citizens United placed great weight on the value of disclosure -- perhaps naively so. "With the advent of the Internet," Justice Anthony M. Kennedy wrote for the majority, "prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters." Disclosure would enable shareholders to "determine whether their corporation’s political speech advances the corporation’s interest in making profits, and citizens can see whether elected officials are 'in the pocket’ of so-called moneyed interests."

But as the law professors noted, this system doesn't work unless shareholders "have information about the company’s political speech....Absent disclosure, shareholders are unable to hold directors and executives accountable when they spend corporate funds on politics in a way that departs from shareholder interests."

Now, stop me if you have heard this before but don't the shareholders actually own the company?  How does allowing the managers of a company (owned by other people) conceal information about the use of corporate resources help matters?  Companies are already dealing with a host of principal agent problems but these can only be compounded by allowing these things to do done in secret.  If the political goals of the company advance the interests of the shareholders then should this not be the sort of thing that corporate executives should be able to easily justify? 

I can understand that transparency can be hard and that some forms of corporate practice need to be kept secret.  But this is a direct category of spending company profits (e.g. potential shareholder value) on what could be distinct from the best interests of the shareholders. 

Why would we not want more transparency?

Albert and Pogo's Christmas

Before Doonesbury, there was Pogo. Throughout the Post-War era, Walt Kelly's sharp but gentle political satire (best summed up by Kelly's line "We have met the enemy and he is us.") was obligatory reading for anyone who followed the news.

But before the comic strip, there were children's funny animal comic books like this. You won't find any explicit political commentary, but that doesn't mean they couldn't be subversive in their own way.

Via Mippyville.

Public subsidy of health care costs

This is Joseph

I was reading a fact checking article, and I encountered a very important set of cost estimates that bear repeating.  The OECD estimates health care costs.  It's not surprising that total US health care costs are very high.  What I found more useful to think about was the amounts that the United States ($4,197), the United Kingdom ($2,802), and France ($3,247) spent in terms of public support for health care.  Yes, the US already leads in government provided health care costs (as well as being more than double total costs for either of these countries).

Now I know that this example doesn't give many clues as to how to fix these high costs.  However, it does really start to make the question of whether market forces are really reducing costs in the health care sector seem critical.

I should also point out, that the UK has a very lean system and people may legitimately question if it is too lean for emulation on this side of the pond.  It works, but it makes some painful choices,  However, French health care (almost exactly half in total cost what the US pays) has a very good reputation (even among Libertarians) and may be a place where we can learn a lot about how to decrease total heath care expenses while keeping up the higher level of service that is a clear revealed preference in the United States.

The last piece here is the cost of innovation.  It's a complex topic, but it is clear that some cases of increased costs for medical services, like drugs, are not entirely about innovation but may involve some elements of profit-taking as well.  Insofar as there are innovations that won't exist if Americans do not subsidize them (thus making life better for everyone), it is worth asking if a) this is really the best way to generate these innovations and b) if there is not a way we couldn't average the costs out among other advanced nations based on treaties (it's got to be worth a try, right?).

Happy Holidays!

In the war on Christmas, it was the evangelicals who took the first shot (literally)

I grew up in the Bible Belt and spent all of my formative years arguing with fundamentalists so I feel comfortable with the following claim: in the past 40 years, the conservative movement has had a larger impact on the evangelical community than the evangelical community has had on the conservative movement. Obviously in these situations, influence always runs both ways, but the changes on one side have been greater and far more strategically useful. The very fact that we have an alliance between conservative Catholics, Protestants, and Mormons says volumes.

Evangelicals have also been convinced to abandon other positions that did not play well on Fox News. Around this time of year, when my thoughts go back to childhood Christmases, one position in particular always comes to mind.
[Courtesy of Joe Bob Briggs]

Why I am unlikely to write a naked emperor post about Talking Points Memo

At the risk of pointing out the obvious, Donald Trump managed to make most of the media's Very Serious People look awfully foolish, but a few pundits have managed to be remarkably prescient. Paul Krugman was quick to push back against Nate Cohn's multiple announcements of Trump's demise (no doubt pissing off his editors at the NYT, but what's one more black mark at this point?). Jonathan Chait also deserves credit for sharp analyses that broke from the pack. Charles Pierce has had a good run too.

That said, I don't think anyone's done better on the Trump beat than Josh Marshall, though he's been notably reticent about taking victory laps. From the beginning, Marshall has had the best grasp of the relationship between Trump and the Republican base.

Again and again over the last six months we've seen Donald Trump take memes and messages which are either implicit in mainstream Republican politics or explicit on the fringes of conservatism and make them loud and explicit. That might be on bashing Mexican immigrants, banning Muslims or any number of other examples. Now we're seeing the same thing with Vladimir Putin.

As I've written on a number of occasions and as many others have noticed, US Republicans are really, really into Vladimir Putin. Yes, yes, they think he's a menace, threatening us in Ukraine and Syria and so forth, overmanning President Obama on various fronts. But it's been pretty clear that for many Republicans, while they decry him as evil and awful, they actually like the way he acts. He doesn't pussyfoot around. He doesn't do nuance. If he doesn't get respect, he invades. He doesn't dilly-dally around in Syria, he just goes in and starts shooting. My erstwhile pals over at Bloomberg news several weeks ago had a lede that read something to the effect of, Barack Obama has been hemming and hawing about a Syria no fly zone for years, Putin just took over the skies overnight.

Booyah!

Trump is now on this, too. First saying he's proud to have the admiration of such a respected leader like Vladimir Putin. And this morning, well, if Putin occasionally has to kill a domestic critic, at least he knows how to lead.

"The world’s first $200 million STAR WARS fan-film"

[Appeared previously in the pop culture blog.]

I'm not planning to see the new Star Wars film (I'm assuming you've heard about it). I'll probably catch some of it eventually on TV or via some streaming service, but I don't anticipate paying any money for it or giving it two plus dedicated hours of my time. This isn't because I didn't care for the last three or because I haven't liked anything I've seen from the director. I didn't and I haven't but those are minor points. I don't want to see the latest Star Wars film because, with the possible exception of another Genndy Tartakovsky short, I don't want to see any new Star Wars films.

The original trilogy was an attempt by what was then "new Hollywood" to reinvent the classic swashbuckler. It was, of course, incredibly successful commercially and reasonably successful artistically, though the various elements – – Errol Flynn meets Joseph Campbell meets, a bit later, David Lean – – never really coalesced and the problem got only worse as the series progressed .

Where the franchise does still hold some interest is as a cultural and marketing phenomena. I'll have more to say about the marketing later; for the cultural, the best take I've seen comes from Bob Chipman. Chipman is a good critic but he's also something more valuable and more difficult to find: a broadly knowledgeable and self-aware fanboy.

Viewed objectively, the prequels are “bad films” for the same reasons that plenty of other (substantially worse!) special-effects blockbusters are bad films: Poorly scripted, badly acted, tonally askew, etc. But as a young-ish fanboy back in the day, what really bugged me was that they didn’t “feel” STAR WARS enough, by which of course I mean that they didn’t remain slavishly devoted to the aesthetic and trappings I’d grown up obsessed with and didn’t throw out nearly enough references and callbacks and, well… “Star Wars” stuff. Whatever bad things you can say about THE PHANTOM MENACE, you can’t accuse George Lucas of pandering to the audience – that was ATTACK OF THE CLONES

My point is: I’ve long held a sneaky (and depressing) suspicion that if the prequels had been exactly as lacking on a technical filmmaking and storytelling level BUT had also been suitably packed to the gills with the requisite amount of fan-service, said fans would’ve largely overlooked those flaws and still be arguing their merits today.

And I’d been worried that I’d get a chance to test this hypothesis ever since it became clear that Disney and Lucasfilm were intent on selling THE FORCE AWAKENS based almost-exclusively around proving that they’d been listening to the last decade-plus of fanboy complaints; with a pre-release hype machine that ignored almost all discussion of story, themes or characters in favor of: “We’re using practical effects and models again!” “NO midichlorians!” “X-Wings and Tie-Fighters and Storm Troopers and The Falcon!” “Luke, Leia, Han and Chewie are all back!” Heck, they even went so far as to hire JJ Abrams – a remarkably UN-remarkable talent whose only skillset of genuine note is being an exceptional mimic of the style and feel of other peoples’ movies. If ever there was going to be a recipe to make O.G. STAR WARS fans spontaneously combust with joy *regardless* of whether or not the movie was actually any damn good, this was it.

BUT! My hypothesis will have to wait for another day. Because in spite of all that (and, if we’re being far, probably because of some of it) STAR WARS: THE FORCE AWAKENS is a pretty damn good movie. And since it in no way needed to be, I suppose that’s damn impressive in its own right.

Make no mistake though: What we’ve got here is effectively the world’s first $200 million STAR WARS fan-film – and I don’t use that designation to be flippant nor entirely critical. THE FORCE AWAKENS is scratching a nostalgia itch out of pure profit motive, but for good or ill the attachment generations of filmgoers have to the sights, sounds and characters of the original trilogy is a real, palpable thing that exists on a level above the base toy-salesmanship that grew to feed off of it. Yes, the narrative is pretty much a leisurely stroll down memory lane (with frequent detours onto Homage Avenue) but mostly feels organic and natural about it at least until you stop and start questioning the coincidences that have always been a big part of the series’ storytelling.

Our annual Toys-for-Tots post

[Slightly modified from last year.]

A good Christmas can do a lot to take the edge off of a bad year both for children and their parents (and a lot of families are having a bad year). It's the season to pick up a few toys, drop them by the fire station and make some people feel good about themselves during what can be one of the toughest times of the year.

If you're new to the Toys-for-Tots concept, here are the rules I normally use when shopping:

The gifts should be nice enough to sit alone under a tree. The child who gets nothing else should still feel that he or she had a special Christmas. A large stuffed animal, a big metal truck, a large can of Legos with enough pieces to keep up with an active imagination. You can get any of these for around twenty or thirty bucks at Target, Wal-Mart or Costco. Toys-R-Us had some good sales last year;

Shop smart. The better the deals the more toys can go in your cart;

No batteries. (I'm a strong believer in kid power);*

Speaking of kid power, it's impossible to be sedentary while playing with a basketball;

No toys that need lots of accessories;

For games, you're generally better off going with a classic;

No movie or TV show tie-ins. (This one's kind of a personal quirk and I will make some exceptions like Sesame Street);

Look for something durable. These will have to last;

For smaller children, you really can't beat Fisher Price and PlaySkool. Both companies have mastered the art of coming up with cleverly designed toys that children love and that will stand up to generations of energetic and creative play.

* I'd like to soften this position just bit. It's okay for a toy to use batteries, just not to need them. Fisher Price and PlaySkool have both gotten into the habit of adding lights and sounds to classic toys, but when the batteries die, the toys live on, still powered by the energy of children at play.

Believe it or not, I was working on a post arguing that mainstream journalism had declined in quality when this came up

[Update: the message appears to be getting through, at least to public editor Margaret Sullivan.]

There is no publication in the country, perhaps even in the world, with a reputation like that of the New York Times. It is almost universally considered the standard for American newspapers. For that reason, I would argue that journalistic lapses at the New York Times should, in effect, count triple. First, there is the damage that always comes from bad journalism, second there is the additional impact of having unreliable news coming from what is considered a reliable source, and third there is the chilling effect on the standards of other publications. "If they can cut corners, why can't we?"

That is why developments like these are so troubling. Here's Josh Marshall:

I was talking about this with one of our editors as I came back to New York on the train yesterday. And one key piece of reporting was this piece in The New York Times which reported: None of the background checks "uncovered what Ms. Malik had made little effort to hide — that she talked openly on social media about her views on violent jihad."

That seems pretty clear cut. Now it also appears to be false. And as Erik Wemple notes here, it's a huge difference, much more than a simple difference between posting a private message and posting on your timeline. One set of facts is roughly the equivalent to finding out after the fact that Malik had discussed jihad with friends via email. The other makes the entire government counter-terrorism operation seem incompetent. Even unintentionally, it amounts to mainstream media disinformation.

The Times is kinda sorta correcting itself now and saying it will look into how it got this wrong. The LATimes, which actually got the key fact right, is also in CYA mode.

...

I say this with some discomfort. Because I have many friends at the Times. And I am certain I will hear from them. But I highlight this because it is a pattern with the Times - to some extent with the elite media generally, but particularly the Times.

Back when I was reporting on 9/11 and the Iraq War and all the different elements of counter-terrorism and national security policy in the early Bush years, I would do my own reporting but also pore over the best reporting to find nuggets of factual details I would weave, with links and credit, into what I was writing on TPM. The Post was simply peerless for this, a constant wealth of information. The Journal was too, though not quite as full as the Post. And there were of course many others, Knight-Ridder, various newspapers, blogs, etc. But the Times was consistently poor.

Or perhaps a better way to put it was that it was poor for my needs. It aimed at such a general audience and seemed focused on writing the broad, definitive piece that articles were published with such a level of vagueness that there weren't a lot of factual details to work with.

So it wasn't that they were wrong or inaccurate necessarily - just vague and unspecific.

Except when they were totally wrong. We know all about Judith Miller's reporting and that of many others' at the Times that credulously accepted bespoke 'leaks' from government officials in the years just after 9/11. Then there was this more recent example of the FBI criminal probe into Hillary Clinton which turned out not to exist.

But what may bother me even more than this inaccurate and shoddy work is the apparent lack of concern from the NYT. Not only are we seeing the same careless and unprofessional mistakes, we are seeing them made by the same people.

Here's Charles Pierce:

The New York Times has a serious source pollution problem. As is now obvious, somebody fed the paper bad information on San Bernardino murderess Tashfeen Malik's social media habits. It was said that she was posting jihadist screeds on Facebook. The Times hyped the scoop by stating pretty clearly that the government—and the administration running it—slipped up. It was the inspiration for endless bloviating about how "political correctness is killing people" at Tuesday night's Republican debate. Then comes FBI director James Comey to say that, no, there were no public Facebook posts that the government missed because there weren't any at all.

More than a few people have noted that two of the three reporters who were fed this story also had their bylines on the notorious (and thoroughly debunked) piece about how the FBI had launched a "criminal inquiry" into Hillary Rodham Clinton's alleged mishandling of classified materials in her e-mails. Pretty clearly, somebody's peddling bad information and its apparent purpose is to submarine both the current Democratic administration and the prospective one. I'm more concerned about that than I am about the Times' having fallen for it. If the same source is responsible for both of these debacles, then that source should be outed by the reporters who currently are twisting in the wind.

Fall flashback -- If I were writing it today I'd make more of Romano's title -- "This is the way Trump ends"

[I wrote this back in September. It got lost in the confusion until I started digging through the ever-growing draft pile. Apologies for the delay.]

I've meaning to drop the naked emperor thread for a while but I keep coming across interesting examples of the different ways that the respectable, non-partisan press tries to deal with Donald Trump while maintaining all the bizarre conventions it has come to rely on over the past few decades.

The latest case comes from Yahoo's Andrew Romano (late of Newsweek), who manages to come up with an end-of-Trump narrative that doesn't rely on repeating the name Herman Cain over and over. The rise of Trump makes the mainstream press corp incredibly uncomfortable (for reasons that, as discussed previously, have remarkably little to do with him promoting xenophobia and racist birther conspiracy theories).  Romano (who is very conventional -- just look at the Newsweek link) does his best to tell a story with a reassuring ending. Unfortunately, getting there entails various painful-to-watch contortions.

It's bad enough when you have to build you thesis around a handful of man-in-the-street quotes, but when those quotes don't even support your thesis...

Before the battleship event, I walked up and down the long line of ticket holders— an estimated 800 supporters paid as much as $1,000 to behold the candidate in the flesh — and asked a simple question: What do you like most about Trump? Everybody gave me the same answer. Each person phrased it differently, but it all basically boiled down to one thing — the single characteristic, more than wealth, fame or narcissism, that best defines the Donald.

Disrespect.

Trump disrespects politics. He disrespects the process. He disrespects the rhetoric. He disrespects his fellow candidates. And his fans love that, because they really, really disrespect politics, too.

“It’s his frankness,” said Mark Gutierrez, a Marine Corp veteran and retired L.A. Water and Power employee. “He’s not worried about being politically correct. He’s just going to tell it like it is. The things that people are feeling, he’s saying.”

His wife, Darlene, nodded. “There’s too much political correctness,” she told me. “People are tired of listening to all these meek and regular promises that the candidates make every four years. Trump just says, ‘This is the way it’s going to be.’”

Further back in the line, a clothing designer named Gina Calabrase echoed what the Gutierrezes were saying. “Instead of being wishy-washy, Trump makes decisions,” Calabrase explained. “He’s saying things that a lot of people aren’t going to like. Usually, a politician would back off in that case. But Trump sticks to it. He owns it — like it or not.”

When Trump supporters talk about their candidate being frank and decisive, Romano hears "disrespect." This probably tells us far more about the reporter than about the reportee.

I really don't snack that much

From Ken Levine:

Have you noticed how, as journalists have gotten worse, comedians have started stepping up to fill the gap?

I told you to keep an eye on these College Humor guys.

In the Heart of the Sea – – another example of the strange economics of filmmaking technology

As previously mentioned, the digital revolution has increased the productivity of pretty much everybody involved in the filmmaking process but the greatest impact has been in the field of visual effects. The time and money required to get the impressive and impossible on the screen have decreased by orders of magnitude. Which makes it all the more strange that increasingly visual effects are causing long delays and huge cost overruns.

From Deadline (emphasis added):

In fact, the biggest problem for ITHOTS was its lofty production cost. I understand that the cost originally started at $85M but swelled as the director and his crew contended with the challenges of shooting on the water (always costly), followed by VFX which was the primary reason why the film was delayed from its original March 13 date to December 11.

Distracted by the large flock of black swans

[I'm rushing this out and scheduling an early posting because, as previously suggested, Jonathan Chait is writing a very sharp series of post along these lines and I'm afraid he's is going to beat me to the punch.]

In recent years, a large part of the foundation of the GOP strategy has been the assumption that, if you get base voters angry enough and frightened enough, they will show up to vote (even in off year elections) and they will never vote for the Democrat (even when they really dislike the Republican candidate).

Capitalizing on that assumption has always been something of a balancing act, particularly when you constantly attack the legitimacy of the electoral system ("The system is rigged!" "The last election was stolen!" "Make sure to vote!"). With the advent of the Tea Party movement, it's gotten even more difficult to maintain that balance.

I don't want to get sucked into trying to guess what constitute reasonable probabilities here – – I'm just throwing out scenarios – – but it certainly does seem likely that, if he doesn't get the nomination and does not choose to run as an independent, Trump will still make trouble and things will get ugly.

Keep in mind, Trump's base started out as the birther movement. They came into this primed to see conspiracies against them. Now the RNC has given them what appears to be an actual conspiracy to focus on.

I don't think we can entirely rule out the possibility of Trump calling for a boycott of the vote to protest his treatment but even if it doesn't come to that, it seems probable that, should we see a great deal of bitterness and paranoia after the convention, the result will not help Republican turnout.

What kind of magnitude would we be talking about? It's still too early to say and even if it weren't, I wouldn't feel qualified to speculate, but it would be an interesting conversation to follow among political scientists.

At the very least, the possibility of something big happening down-ballot, though perhaps still not likely, is more likely than it was in the days before Trump.

Damn you, Jonathan Chait

I've been meaning to write a post walking through the different scenarios for the GOP primary (working title: "I was distracted by the flock of black swans"):

I. Trump gets the nomination

II. Trump doesn't and instead
     A. Fades away and/or decides to play nice (that second one just got even less likely)
     B. Runs as an independent
     C. Causes as much trouble as possible

Unfortunately, while I've been procrastinating, Chait has been writing, producing a string of really sharp posts that are on track to anticipate all of the major points I wanted to make. He already gave us the definitive brief analysis of Scenario I and today he covers most of what I wanted to say about II.B.

Chait is the only news analyst I've seen so far who is seriously thinking through the GOP's dilemma: they can't afford to keep Trump but they can't afford to lose his supporters. The Republican model requires very high turn-out from the base. Pissing off a large segment of those voters could have significant consequences.

Chait actually goes so far as to suggest that the party's best way out of this dilemma might be the much-feared third party run:

2. A Trump independent candidacy would have down-ballot benefits for the party. Trump would split apart the Republican vote at the presidential level, but the socially conservative white working-class voters who turn out to vote for him would overwhelmingly pull the lever for Republicans in Congress (and in state elections). The deepest risk Republicans face is the prospect of an electoral wipeout that puts its control of Congress at risk. An independent Trump candidacy would close off such a prospect.

"Confessions of a Republican," Johnson, 1964

I don't want to draw too strong an analogy here -- this is a very different time --but there certainly are parallels. Compare this with the wording of some recent Brooks' columns on the Donald. Of course, the acid test for Brooks will come if Trump or Cruz gets the nomination.