[quote=patientrenter]Do we agree that only government can change the agent – principal problem? And that agents have the upper hand in lobbying our govt reps?
I don’t see how this can change. The general public howls for foreclosure forebearance, but barely recognizes the agent principal problem. I am usually optimistic, but here I wonder if we’ve crossed the point of no return. Our pols are pretty much captive to these agents. If this is the case, then there will be ever larger amounts of ‘stupid’ money that’s taken advantage of. I don’t like it, but as Authers points out, it does open opportunities to those who choose to take advantage. [/quote]
I don’t think the government can change the principal-agent problem unless shareholders (the principals) are willing to do their part (that is, pay attention and vote accordingly) as well. But I think the regulatory structure can encourage much better behavior, that’s for sure. And help keep losses from moving to the public at large.
