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Agency theory explains why the country is in a funk

Posted by John David Powell on Friday, November 06, 2009 9:58:53 AM
Even before the polls opened on Tuesday, pundits and spinners were managing election-night expectations. The pros of politics and journalism can read the polls as well as the rest of us. Better, in fact. They knew Republican candidates in Virginia and in New Jersey had better-than-even chances to win their races.

One African-American talk-show host, and an unabashed supporter of the president, emphatically warned victories by Robert McDonnnell in Virginia and Chris Christie in New Jersey should not be interpreted as referendums on Barack Obama. Virginia, he pointed out, historically elects a governor from the party not occupying the White House. Then why bother, one wonders, to hold gubernatorial elections in Virginia?

Exit polls seemed to support the belief that Obama’s job performance was not on the minds of voters. In Virginia, for instance, 56 percent of the voters said Obama was not a factor in their choices.

That’s what they said, but other exit-poll data suggest thoughts of the president were present in the backs of their minds. In CNN’s exit poll, 50 percent of Virginia’s voters said they did not approve of the way President Obama is doing his job, and 94 percent of those voters picked the Republican candidate for governor. Forty-nine percent said they approved of Obama’s job performance, yet 20 percent of them voted for McDonnell. That means about 47 percent of Virginia’s voters who were split down the middle regarding the way the Democratic president leads the nation chose the Republican to lead their state. That’s a big number political advisers from both parties will dig into deeper as they prepare for next November’s important mid-term elections.

But, the spin is already in on that one, too, a full year in advance. We’re already reminded that the party in the White House always loses seats in Congress in the mid-terms. Once again, they’re managing our expectations instead of addressing our concerns.

The post-election analyses from both parties and from political observers fail to address the fact that our country is in a funk, pure and simple. American’s feel leaderless and confused. We cast a wary eye toward elected officials and institutions. Every day, we see lawmakers bickering instead of legislating; journalists inciting instead of reporting; preachers politicking instead of pastoring; and a president campaigning instead of leading.

And now, even after what could be described as a voting-booth warning shot, and in spite of overwhelming evidence that the economy is the runaway concern of our fellow citizens, Congressional leaders act like spoiled and petulant children in their drive to present to the president a healthcare overhaul bill just in time for Christmas. There’s a reason for this inane behavior from those we look to for leadership and guidance. Economists know it as agency theory; political scientists call it the principal-agent problem.

In its basic form, agency theory suggests that a corporation is a set of contracts between resource holders. An agency relationship occurs when principals hire agents to act on their behalf to perform certain services. In other words, stockholders hire managers to run the company. In a republic such as ours, voters elect individuals to represent them in government.

This theory, for our purposes here, shows that managers do not always act in the best interests of stockholders, and elected officials do not always act in the best interests of their constituents. This is why corporate executives have golden parachutes and other perks not available to lower-level employees and stockholders. And, it explains why lawmakers often take positions that place their political careers head of the wishes of the people who elected them.

In the end, though, the finger of blame points back to the people with the ultimate responsibility: you and me, whether in our roles as stockholders or voters. We have only ourselves to blame if we re-elect a president who we believe is not leading, and if we re-elect a Congress (with a 29-percent approval rating) that we like less than George W. Bush (with a 41-percent favorability rating) who’s been out of office for nearly a year.
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The Last American Idol Standing: The degradation of the presidential primary process

Posted by John David Powell on Thursday, January 31, 2008 8:56:09 AM
Although people around the country are talking about it, no one seems to be saying anything.  The subject is the degradation of the presidential election process.  In this instance, we may define degradation as both the tarnishing and the humiliation of the grand tradition that is unique among the world’s democracies. 

Presidential campaigns have never been confused with genteel afternoon teas.  Political campaigns, by their nature, are nasty and unavoidable beasts.  But this year, more than any other, the battles among candidates, Democrats and Republicans, call to mind the bloody gladiatorial combats and savage-beasts fights staged in Rome’s Coliseum for the entertainment of the emperor and the citizenry.  The victor was the last man or beast standing.

Today, presidential primary campaigns play out on the television screen, the twenty-first century version of the Coliseum.  One does not need to stretch the imagination to draw a comparison between these contests and some weird hybrid of American Idol and Last Man Standing, which could carry the title of “The Last American Idol Standing.”

Each week, we parade the contestants in front of the nation’s citizens and require the combatants to draw political blood from their opponents.  Most participants survive to fight the next round.  In the meantime, a small segment of the nation decides which candidate provided the best entertainment and inflicted the greatest damage.  If the voters of a particular early-primary state cannot make up their minds, well-coifed and smooth-talking media stars tell them which candidate delivered the most damaging blows and which candidates cannot answer the bell.

And this is the model of democracy we encourage citizens of other nations to embrace.

The answer to why we subject ourselves to this political insanity is found, in part, in state bragging rights.  When addressing the question about why New Hampshire should be the first state to hold primaries, the Manchester Union Leader responded with, “We’ve earned it.”  Indeed.
 
Another part of the answer is money (doesn’t it always come down to that?).  Estimates show this year’s Iowa caucuses generated as much as $100 million for the state, with a fourth of that spent in Des Moines, according to the Greater Des Moines Convention and Visitors Bureau.  For New Hampshire, the “We Earned It” state, campaign-related economic benefits could surpass $250 million.

Millions of dollars in free publicity is another factor in the race to degrade our political process.  A study of the 2000 New Hampshire primary, conducted by the Library and Archives of New Hampshire Political Tradition and the New Hampshire Department of State, found that an estimated 20 million people heard positive messages about the state from the national media.  An estimated 14 million people were exposed to stories that touted the state as a place to visit or to do business.  The overall value of this media exposure, in terms of tourism promotion and economic development, came to $264 million.

In 2000, then-senator Slade Gorton (R-WA) and then-Democrat Joe Lieberman (ID-CT), introduced the Regional Presidential Selection Act in response to what they called an arbitrary and confusing process that gives a handful of states a disproportionate influence.

In testimony before the Committee on Rules and Administration, Gorton cited a review by the Congressional Research Service that concluded that almost 80 percent of the delegates needed to claim the nomination for either party in the 2000 primaries were allocated by March 7, which prompted the media to declare the nomination process was finished.

This front-loading phenomenon on the part of nearly half of the states effectively denied the electorate in the remaining states the chance to cast meaningful votes for the candidates of their choice.  This disenfranchisement of voters was not based on race, gender, or national origin.  Front-loading states silenced these voters for the sake of tourism promotion and economic development. 

The media are willing partners in the grab for economic gains.  Nearly five million viewers watched the Jan. 21 Democratic debate on CNN, making that event the highest-rated political debate in cable TV history.

The Gorton-Lieberman bill would have created a rotating, regional system with all states in a region holding primaries or caucuses on the same date, in March, April, May, or June.  The bill died in committee, however.

And so the question now may be, “How does this affect me?”  If, for instance, you supported Rudy Giuliani or John Edwards on Jan. 29, and you lived in a state other than Iowa, New Hampshire, Michigan, Nevada, South Carolina, or Florida, then you had to find another candidate on Jan. 30.

On Nov. 4, we all get a chance to decide between the last candidates standing.  Only, at this rate, they may not be the most-qualified candidates, just the least bloodied.

It is time for the voters to give the proverbial thumbs-down to the current primary practice and retake control of the process.  The opportunity of a citizen in one state to cast a meaningful vote for the candidate of his or her choice should not be a function of another state’s economic development strategy.

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