For me, the "fun" item this morning is this notion that Trump and Kelly have agreed to a truce.
BREAKING: The @WSJ is reporting that White House Chief of Staff John Kelly is “safe” in his position after reaching a truce with President Trump.https://t.co/2kiZ8dUatJ— Paul Szoldra (@PaulSzoldra) March 16, 2018
The only possible response to this is Whuck?!! As in WTF?!!! It directly challenges the core notions of principal-agent relations (remember, I didn't start out on that theoretical track but succumbed to it thanks to a NATO book on delegation). While we may forget, Trump is the principal--the boss--who has hired an agent--John Kelly--to do his bidding. John Kelly's job as Chief of Staff is to manage Trump's time, information flow, and activities so that Trump can be successful. Kelly is not a peer of or equal to Trump--he is a subordinate. In principal-agency theory, the agent can often have conflicting incentives or interests so that they do not want to work hard or they want to do the job the way they see fit (both are called shirking). So, much of the trick in P-A theory for the principals is figuring out ways to vary the discretion the agent has, design systems of oversight, and the provide rewards for good behavior and penalties for bad.
Perhaps a truce could be considered one of the means by which the principal makes sure the agent is behaving appropriately? Ordinarily, no way. Because in a normal p-a relationship, the agent can't threaten the boss. What does it mean to have a truce? That both sides will stop firing on the other, right? Well, how does a subordinate get away with saying that I'll stop attacking you if you stop attacking me? There should be no real latitude there.
Of course, the challenge is this: Trump is a truly shitty principal. The evidence: normal principals do not fire, compel to resign, or lose dozens of operatives in the course of a year. Principals ordinarily do not want to waste time and effort with the churn of replacing personnel. What happens when principals lose their agents? They have to find new ones, and if one picks the most suitable ones first, then one loses something when replacing generation after generation of agents--the quality of the individuals may go down, the distance between the preferences of the agent and of the principal may widen, etc.
Trump is a lousy principal because not because he delegates lots of discretion to his agents. He is lousy in part because he revises the delegation contract all the time--giving responsibility to a person and then overriding them capriciously. His form of oversight is rivalry: encouraging the various agents to compete with each other. This would be fine if Trump was as smart as FDR.... but he is not. So, instead of getting conflicting advice and then deciding which path is best, Trump requires his people to compete to suck up to him and undercut each other, which they do, leading to all kinds of communications breakdowns, policy failures, and public displays of incompetence. Finally, Trump's main form of incentive (other than allowing his people to steal from the American people) is to humiliate them. Not sure that works for long. So, bad delegation, bad oversight, bad incentives.
Which ultimately means that one of his agents threatens him, leading to a truce. This means that political scientists using principal-agency theory in the future will need focus less on why agents might shirk and more on why principals might screw up their relationships with their agents.
In short, lots of presentations start with "here's this puzzle," and Trump is providing ample puzzles for the next generation. Good luck, kids.
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