Oddbean

Great example of Miguel Anxo Bastos on the public sector. You don't play poker the same way when you play with real money than with buttons or matches. When you play with real money you assume the profits and losses directly, when you do it with buttons or matches you assume neither profits nor losses. There you have the difference between public and private management. The cards are played differently, with different prudence, when there is a profit and a loss than when there is not. That is the difference between public administration and the private sector. The public administration has no incentive to do well, it lacks the basic element of the market economy, the calculation of benefits and costs. https://m.primal.net/MYqo.mp4

Valid. Furthermore, publicly-traded companies with well-networked execs and typical passive shareholders have exactly the same "Principal-Agent" problems that public administration has, and for the same reasons. Compensation with Options is a bandaid, the main deterrent is various federal agencies and the volumious mass of regulations and laws enforceable against corporate managers. (Mostly at taxpayer expense...) Government is fiat. Corporations are fiat, too, especially large and highly traded ones.