Reading as I do about the crimes and stupidities of humankind in the field of ethics, it is hard to surprise me, even harder to astonish me. And yet, today that happened. The German ambassador to the United States wrote an essay entitled, “Germany Wants a Strong Greece.” And that is easy to believe if I wipe away the memories of the last five years.
Greece wants a strong Greece. Yes, when the Russians bombed Helsinki in 1939, the Russian foreign minister, Molotov denied it and said they were dropping bread to the poor oppressed people of the city. Maybe the Germans will drop a similar brand of bread on Greece. After all the Greeks are poor and oppressed.
Forgive me if I sound angry but I seem to recall an IMF study that shows under the agreement imposed almost entirely by the German Minister of Finance, Greece will not be able to pay off its debt in fifteen years and quite possibly never. Call me a cynic but a fifteen year period of austerity (possibly for much longer, eternity?) doesn’t sound like a deal someone made with a great love for the Greeks.
The events of the last few weeks include a refusal to deal with Greece by the European Union until it agreed in advance to their demands. Once this had been done, the Greeks were made to sell off 50 billions Euros worth of government property which is to be placed safely outside Greek control. The agreement doubled the sales tax in Greece putting the hammer down on any hope of a healthy tourist industry, one of Greece’s vital sources of revenue. I could go on, but why bother? It’s item after item after item.
The only large group of people who believe that the Germans have been kind to the Greeks are other Germans.
The Germans have almost single handedly imposed an economic regime on Greece which is almost certain to fail. The hardship imposed on the Greeks in roughly equivalent to that endured in the United States during the Great Depression and if the International Monetary Fund is right, it could last for decades.
Does that sound like a strong Greece?
Maybe the German word for strong means servile, weak and helpless?
I’m use to corporate flacks saying anything they are told to. But this? Maybe when you have needlessly crippled a country so that it will never pay off its debts, maybe when your own enormous debts have been forgive twice in the last century, maybe when you appear to all the world as great cruel bully, you should just keep a low profile?
Or maybe your self-righteousness is so overpowering, you just can’t believe that everyone just needs a little push to understand how wonderful you are. This is a German fantasy. The real surprise is that they apparently believe they are kind and generous, acting out of a genuine concern for the Greek people. God save all of us from that kind of love.
Germany Wants a Strong Greece | Peter Wittig
Germany wants a strong Greece, because a thriving Greek economy benefits the eurozone as a whole. This is why Greece and the other 18 eurozone members agreed on a comprehensive reform package that will help Greece regain economic competitiveness. Some of these reforms were quickly approved by the Greek parliament — by an overwhelming majority. They will make Greece more competitive and economically sound.
I was on Facebook the other day, and one of my relatives posted about Obama’s visit to Oklahoma. I spend the first 44 years of my life there and many of my relatives still live there. Some of the comments were, in my mind, bizarre. Obama was evil incarnate according to these individuals. One comment stood out. The writer claimed that anything whatsoever that Obama said was a lie. That is really over the top. It’s simply not possible to lie about every single thing. How would a person who believed such a thing have any opportunity, the smallest chance of analyzing a federal policy in terms of logic or benefit or usefulness with that kind of idea in mind?
I remember a few years ago, a famous cartoonist came out against Obama. He said it was because Obama was enforcing the federal marijuana laws against states where it had been legalized. I always thought that he had formulated a reason that made sense, not only that, he had taken a stance that the President or his administration could take notice of and change that decision if they so desired. You can change policy but if someone just hates you, there really isn’t anything you can do.
I have opposed Obama since the middle of the first term. I write about business ethics and his stance on that issue has been disastrous. Millions of Americans, who had been misled about the prospects of home ownership, often by deliberate fraud, had their homes taken from them. The government failed to act to save them or prosecute the venal thieves who took the most valuable thing that these people would ever own in the lives. And besides overlooking these crimes, the government under Obama’s leadership, failed to use the criminal law to prosecute the banks for their crime.
I taught business ethics against a backdrop of the federal government of the United States taking the law and making the biggest corporate crimes in the history of the world, a matter punishable by fines, a cost of doing business that has resulted in nothing but a wave, a moving wall of wrong doing that could right now take the world into a second financial catastrophe. It is a dereliction of duty that I cannot forgive or forget. Instead of taking the opportunity to make the international banking system a safe bulwark for the wealth of peoples and nations, it is now an international casino wreaking havoc upon weaker nations and constantly searching for the next shill, the next big score, knowing with absolute certainly that if they make a mistake they will be rescued with public money and at worst penalized with a fine. They have taken a nation of law that was often imperfect and created a two tier system where the wealthy and well connected walk free no matter what they have done.
But, once again, I, like the cartoonist I mentioned earlier, have an actual reason to oppose the President. I oppose him on a policy basis. This is principled upon the idea that in a democracy, we can stand for different things.
I’m a business ethics writer. So, it is entirely appropriate to ask, what about business ethics am I trying to say?
Very simple, for a few hundred years, Western Civilization, in particular, the United States, has been conducting an experiment in whether or not people can rule themselves. Democracy is a difficult process and the American example has features that made it even more difficult: for instance, a bifurcated legislature and three part government beset by “checks and balances.” This form of government requires opposing parties to cooperate in at least a minimal manner for government to function. Unreasoning hatred makes this impossible.
And there is another factor, the Enlightenment. The founders believed that their dramatic compromises (they clearly understood the foolishness of the two house legislature) would be mitigated by the enlightenment values of knowledge and reason. This nation, its businesses, its corporations, its legal systems, ad infinitum is meant to operate in a thinking environment of reason and logic.
How do you talk about ethics and good decision making in regard to the Presidency or any other issue, when human reason is removed from the equation? If instead of talking about the facts, we just emote?
Don’t for a minute doubt the temptation to hate in business ethics. When you review the millions of Americans who have and will have their property stolen by banking institutions most commonly investment banks, it is difficult to write without emotion. The knowledge that conscious evil wrong doing is not only tolerated but rewarded by billions of dollars in salaries, stock shares and other benefits is difficult to take.
This is what I want to say. Business ethics cannot function in an environment of unthinking emotion. We can only find our way as a free people by thinking with reason and facts and only then acting.
I know that reason and logic are often slow and they are often tedious. They often lack the black and white certainty of 1940’s Western or the latest article in any of countless blogs but they are the means by which the best decisions can be made.
Last month, I had an unusual experience, a week with very few business ethic issues. For a brief few days, it was hard to find a topic to write about. But that brief interruption in a cascade of moral decrepitude is over.
This week we have ExxonMobil caught paying millions to climate deniers after promising to its shareholders not to. This week we had the publication on the Internet of the 542 page Hoffman Report. It would appear from the report that members, psychologists, cooperated with the government in the practice of torture and that senior members of the American Psychological Association crushed attempts at inquiry and accountability.
And then we have bird flu. For many years, it has been argued that factory farming is dangerous to food production in the United States because this grouping of enormous, unprecedented populations of animals in small spaces with little genetic diversity is a formula for disaster. Well, now we know for a fact that this is true. Forty-eight million birds are dead and many more are going to die. We are very lucky in that the outbreak has thus far been limited geographically but what would have happened if we had been less lucky? – A future without chickens?
This is a business ethics issue. If you are operating a business based on an unsustainable model, you are not being ethical. If you are operating a business that endangers a major portion of the food supply for nations or the planet as a whole, it would be ethical to not or to take steps to limit the damage.
You get the idea. Throw in the Greek Crisis which I have written about here and here, and it has not been a good week for business ethics.
Sometimes, people infer that there is no such thing as business ethics and they point to the evidence of the daily headlines and published reports of business crime and stupidity.
But this isn’t true. Regularly there are stories of businesses sacrificing profit to do the right thing. There are stories of businesses that have held their employees even upper management liable for their crimes.
More importantly, there are tens of thousands of close or small corporate entities that have never and would never consider an illegal act and would shy away from the unethical. This includes most local banks and most professionals, doctors and lawyers.
We who struggle to encourage doing what is right by ethics and morality have not lost. If evil doings were pervasive in American markets, few would do business because without trust, capitalism does not function. For markets to work there must be a basic faith in fair and honest dealing.
Americans are a great and good people. It is just that the evil among us wield disproportionate influence in key industries. I realize that they have done catastrophic damage and these same people are protected from facing criminal and civil penalties by a government corruptly influenced by massive amounts of money. (Or should I say “corporate speech.”)
But they could not make enormous profits from a weak and villainous people. It is the very goodness, the basic humanity and hard work of the American people that gives the unethical and the immoral the opportunity to become rich.
We, the ethical and moral, are duty bound to struggle for what is right and true Victory is not inevitable. It never is. But that does not mean that the fight is pointless. Even in defeat, there is a glory in the fight well fought and a glory in having fought on the right side.
David Dayen wrote the quote from which I take my title. Here’s the line –
As a side note, some in the Greek government did in fact see this coming, if you believe former Finance Minister Yanis Varoufakis. But to prepare for such sadistic behavior on the part of the central bank is akin to preparing for an ambush by a psychopath.
An Ambush by a Psychopath
I think my title is entirely appropriate. What we have here is an assault on a nation’s sovereignty and integrity on the same scale as on a nation that lost a war. This more resembles a dictated peace to a conquered people than an economic agreement.
Let’s be absolutely clear. By the International Monetary Fund’s own research, the Greeks cannot pay their debt under this kind of plan. It isn’t possible.
This isn’t about money. You would have thought with all this talk about the financial crisis and the amounts of money being thrown about on this and that, not to mention the incredible savagery and just plain nastiness of a horde of editorial writers condemnation of the Greeks and their government, that this was about financial responsibility and the payment of loans. It’s not.
I’ve already established above that the IMF says this deal can’t work. I read a good part of that leaked report. Basically it says that the Eurozone’s terms are impacting the economy so dramatically, the Greeks are not going to be able to generate enough growth for rising income to make possible debt repayments in the amounts now contemplated. More bluntly, the economy is so badly damaged by austerity, that they will never be able to pay back the debt.
So, if it isn’t about money, what is it about? David Dayen has his point of view as follows:
None of the satellite countries in the German empire missed the message. Step out of line, try to reverse an austerity agenda that has brought recession, if not outright depression, to the countries forced into its maw, and you will be pulverized, humiliated, forced to grovel and beg forgiveness.
... Whole nations, states, counties and communities can get into financial trouble and if we do, who we will turn to for help? Banks, the IMF, or state imposed administrators, technocrats from business, banking and corporate law will be our only choices and what will they demand? You can see it right here, right now. This will be the prototype in the future for dealing with creditor governments, whatever their size. If we have a great a power differential like they have in Greece there will be no negotiations. You will accept what is offered to you and you will do it without question. And above all else, forget that democracy thing.
What is being implied her is that it is not the people that are sovereign; it is the international financial system of interlocking banks, finance ministers and multinational corporations.
David Dayen is angrier at Germany and with good reason. But I think the Germans are not so much imperialists in the traditional sense but modern neo-liberals who see reality in just one way, a world of “makers and takers.”
Just like in the United States, we’re not talking so much about money as we are talking about virtue, and a lack of virtue must be punished.
The Germans view themselves as moral arbiters punishing the unworthy. They are cheerfully forgetful about their banks part in the debacle, suffer incredible amnesia over other nations’ forgiveness of its debts in the past and have forgotten all about the profits made from Greece on German weapons’ sales (Remember the 130 Leopard 2A4 type tanks?)
And who lacks moral virtue more than anyone else? – The undisciplined mob, the people, the ones who keep the good honest virtuous bankers from their just deserts. You know, the people, the greedy ones that want retirement when they’re old and medicine when they’re sick and some form of government assistance when the “right” people tank the economy periodically.
The people of Greece got out of line. They weren’t virtuous. When they were told to go without jobs, without benefits, etc. etc., they got mad and their anger translated into votes. How dare they?
David Dayen says this is a warning to other members of the European Community. He is right and wrong on this point. He is right in that the Europeans are being sent a message but wrong about where the message is really intended.
It’s for all of us, certainly, the towns, counties, cities and states of this United States. We are all being warned. We are being told where real power lies and that obedience is expected.
An Ambush by a Psychopath
The rise and fall of the German Empire: What Greece’s crippling bailout deal reveals about the future of Europe – Salon.com
(As a side note, some in the Greek government did in fact see this coming, if you believe former Finance Minister Yanis Varoufakis. But to prepare for such sadistic behavior on the part of the central bank is akin to preparing for an ambush by a psychopath. There’s not much for one to do.)
None of the satellite countries in the German empire missed the message. Step out of line, try to reverse an austerity agenda that has brought recession, if not outright depression, to the countries forced into its maw, and you will be pulverized, humiliated, forced to grovel and beg forgiveness.
Below is a quote from an article from Huffington Post. It is reported in it that the Eurozone is not just demanding that Greece capitulate to its desires, they must do it before negotiations can even start. There is not even the semblance of respect for a nation state or its people.
Picture yourself in negotiations. You’ve gotten behind in your mortgage and you want more time. The bank says that before they will even talk to you, negotiate with you in any way, you must sign over your income and submit to the banks’s recommendations of how and what kind of work you should do. That’s what the Greeks are being asked to do. Take all your bargaining chips off the table. Only when you are powerless and helpless, will we deign to speak to you. Give in now and we may show mercy.
There is really not much historical precedent for this. The only thing I can think of are the Austro-Hungarian demands on Serbia to yield up its sovereignty in the wake of the assassination of Archduke Ferdinand.
There are five things about these bailout talks that really bother me. First, the unfairness of it. To start with, the bulk of the bailout money has gone to foreign lenders and little has been used to bolster the economy. Second, we’re not dealing here with sovereign states or even groups of sovereign nations. We’re dealing with finance ministers and technocrats, essentially international bankers. They’re not elected. They can’t be voted out. Essentially, they can do pretty much what they want and the only people they are beholding to are other bankers. Democracy is irrelevant. Third, the Greek people are suffering terrible pain. The unemployment rate is more than 25% and the youth unemployment rate is more than 50%. And I can on and on about the other damaging effects of austerity. Fourth, the Greeks are being told with great specificity what they must do. The Eurozone is making a mockery of the power of national governments to conduct their own affairs. The Greeks want to impose a tax on businesses. The Eurozone says no. But the Eurozone doesn’t stop there. They tell the Greeks how they want the money raised and expect them to do it. They want a value added tax (VAT) and cuts in pensions. There’s more but you get the idea. The Greeks want to do a variety of things to raise revenue and the Eurozone and the IMF are staying on script: privatization, lower income taxes, cuts in social services and reduced regulation. And the last thing that bothers me and most important, it can happen to us. Whole nations, states, counties and communities can get into financial trouble and if we do, who we will turn to for help? Banks, the IMF, or state imposed administrators, technocrats from business, banking and corporate law will be our only choices and what will they demand? You can see it right here, right now. This will be the prototype in the future for dealing with creditor governments, whatever their size. If we have a great a power differential like they have in Greece there will be no negotiations. You will accept what is offered to you and you will do it without question. And above all else, forget that democracy things.
What is being implied her is that it is not the people that are sovereign, it is the international financial system of interlocking banks, finance ministers and multinational corporations.
I am sure that there are people reading this that believe that I am over reacting. Many hold the belief that if the Greeks overspent they should pay the money back. That does not sound unreasonable. But it is the highest level of hypocrisy imaginable to impose conditions that will make paying the debt impossible.
If you were one of my students, I would expect one of you to ask, “How do you know that the Greeks can’t pay under those conditions?” And I, of course, delighted by student intelligence and initiative will reply that the IMF has a paper out saying that they can’t pay under current conditions. Read below from The Guardian.
So, the Eurozone already has evidence that they are essentially putting Greece into a state of permanent depression. Why would they want to that?
They aren’t saying. But I have a theory. All over Europe, there are people who are worried about what’s happening. Like me they wonder why nation states should bow before financial interests. They wonder why whether people should go without education, pensions and healthcare while the rich have a reduced tax burden and they pay higher taxes for less and less. They wonder much the same way we do in the United States, why their votes matter so little. Greece is an example of the power that can be brought on any show of defiance. Questioning the economic order has consequences, severe consequences. Don’t vote, comply. Economic value is the sole determinate in policy and practice. Humanity, compassion, honor, patriotism, and Christianity are all irrelevant concerns. The money must be paid, not to the people, not to the governments but to the banks. It is the money that votes.
Eurozone Leaders Meet, As Greece’s Debt Crisis Talks Continue
Euro zone leaders told near-bankrupt Greece at an emergency summit on Sunday it must enact key reforms this week to restore trust before they will open talks on a financial rescue to keep it in the European currency area.
Leftist Prime Minister Alexis Tsipras will be required to push legislation through parliament to convince his 18 partners in the euro zone to release immediate funds to avert a state bankruptcy and start negotiations on a third bailout program estimated at up to 86 billion euros ($95.5 billion).
Six sweeping measures including tax and pension reforms must be enacted by Wednesday night and the entire package endorsed by parliament before talks can start, a draft decision by Eurogroup finance ministers sent to the leaders showed.
One of the problems we who teach business ethics have to deal with is the idea that there is a separation between business ethics and personal ethics. I’m sure everyone in the field has dealt with students (and business people) who believe that they should leave their ethics at the door when they go to work. That this belief is common is most unfortunate and produces a great deal of evil. The idea of two kinds of ethics is the worst kind of hypocrisy. And this is because what is basically being said here is that “I am a good person just so long as I am not at work.” I can’t find much comfort or consistency in having two codes of morality.
And what does this say about business in this nation? That this is a common belief does not speak well of the ethics of American business. The idea of a separate set of ethics strongly indicates diminished concern for ethics and a predilection for what is called in the law, sharp practice, taking advantage instead of fair dealing. Yet, how often have you heard the phrase, “It’s just business.” And that always means the same thing, “I wouldn’t normally make this decision but we are in the world of business and that’s what is done here.”
The Ethics Sage strongly believes that we should live by a common ethical code, a code we practice both in and outside the workplace. So do I.
The quote below is an excerpt from The Ethics Sage’s latest work. It can found here. As always I recommend that you read the full article and subscribe. His work is well worth reading.
Are there two standards of behavior — one for the workplace and one in personal life?
We all should live life under a set of values that guide our actions, whether at home or on the job. Ethically, you can’t justify lying in the workplace for the “greater good” while never doing that at home. Ethics is not like a spigot we can turn on and turn off. We are what we do in life and ethical people always strive to do the right thing without compromising one’s values or beliefs. It’s not an easy standard to live up to all the time.
Ethics is prescriptive and not descriptive. It is an ideal that we all should strive to achieve — to be better people and contribute to the betterment of society. It is not about how we do behave but is about how we should behave. No one is perfect all of the time. Ethical people make mistakes. In such cases, whether in business or in one’s personal life, the best way to handle the situation is to admit your mistake right away — don’t cover it up — promise never to do it again. And then follow through by acting ethically in the future.
Business executives and business owners need to realize that there can be no compromises when it comes to ethics, and there are no easy shortcuts to success. Ethics need to be cultivated throughout the organization. Top management needs to set an ethical tone at the top. Actions must match words. Managers who believe this to be the case and act accordingly set the stage for the ethical leadership that is so important in organizations today.
One of the subjects dealt with in my blogging is free market fundamentalism, a subject intertwined with Neo-Liberalism. What does this have to do with business ethics? These philosophies have real impacts on policy across the glove. They are often used to determine economic decisions for entire nations and corporations. If we as business ethics teachers stay away from the big questions because it is less controversial and easier to deal with the small, what kind of people are we?
It seems to me obvious that these philosophies are embedded in business interests across the globe. They are spread and encouraged by well financed think tanks, lobbyists and political contributions. This belief system practices wage discipline, privatization, the destruction of public services and the replacement of democratic institutions by business “experts.” Considering these facts, business philosophy should and must be an area of concern for business ethics. When a school board is superseded to allow an appointed body to defund public schools and create a parallel charter school system, democracy has been thwarted. When once well paid workers are reduced to food stamps and penury, we should discuss whether the power of business is being used for good or evil.
Much of the writing of traditional business ethics concerns the individual confronted with intellectual dilemma. I call this Micro Business Ethics. I’ve read textbooks where the focus was heavily aimed at this part of the field. For instance, each chapter opened up with an ethical question for an employee in business or corporation. More commonly, textbooks have sections dealing with individual ethics, organizational ethics and business philosophy, although I have one almost totally devoted to larger business philosophy and questions of ethics both national and international.
And all of these textbooks are labeled “Business Ethics.”
Why don’t we borrow from the field of economics? According to Wikipedia microeconomics “studies the behavior of individuals and small impacting organizations in making decisions.” That sounds like a good definition of Micro Business Ethics. How about adding a macro for the larger problems?
I would define macro-economics as dealing with organizations larger than “close” corporations or sole proprietorships such as national and multi-national corporations up to international organization like the International Monetary Fund and including nation states like Greece. But instead of dividing the field of business ethics into two parts, I can’t help be feel that doctrine and philosophy need their own area of concentration which I would call simple business philosophy.
If the Olympics are so wonderful, why does there need to be a taxpayer guarantee?
Boston is considering bidding on a future Olympics specifically 2024. What could be a better idea? Think of the wonderful benefits the city could get from all those new facilities, the publicity and the tourism! There can’t be a downside to that, can there?
I try to think critically and intelligently about difficult issues. This is definitely a business ethics issue. For is it not common knowledge that while businesses may want to see new grand facilities and while they may appreciate good public relations and even love foreign tourists, corporations and businesses have expressed a strong aversion to bearing the costs for any of these things? It always seems to be somebody else’s money (read “taxpayer”) that we are discussing when we talk about these international sporting events. You’d think listening to the corporate spin that the giant multi-national corporations and local businesses were the equivalent of Oliver Twist being slapped in the chops for wanting just a little bit more.
Now Boston was the home of Benjamin Franklin and he may have been the original civic booster. His autobiography is literally one story after another of a proud man acting to make his city a better place.
What would he say?
When he considered the opening a print shop and a newspaper he carefully scoped out the current businesses, talking to everyone and literally walking the community. I believe we can draw from this form of planning that his first question would be “What evidence is there that an Olympics will turn a profit?”
But he wouldn’t stop there. Remember, he wasn’t just a printer, he was a legislator as well and he insisted on public accountability for taxpayer funds, and further, as a proud citizen of the City of Boston, he would want the taxpayers left holding the bag. So, his second question, closely related to the first, would be: “Can the Olympics be profitable for both businesses and the citizens of Boston?”
Where would he start to find the answers to these questions? Obviously, in the library. After all, the lending library was virtually the creation of Franklin. And we know which books he would go to. He loved history, science, any how to book and, above all, philosophy. Of the four, he would got to history for the answer to the question of Olympic profitability.
The first fact that would leap out at him would be that the Winter Olympics of 1984 at Sarajevo was the first Olympics during the modern era to turn a profit. The second thing he would see was that there wasn’t much profit. Sarajevo made the equivalent of ten million American dollars after spending an initial budget of 110.9 million dollars and operating expenses of 55.4 million dollars.
The next four Olympics, three Summer, 1984, 1988, 1992, and one Winter, 1988, all were profitable. In fact, the Seoul Olympics made about 300 million dollars on a 4 billion dollar outlay.
However, the 1992 Winter Olympics lost 67 million. The 1994 Lillehammer games indicate neither profit nor loss and the Atlanta Summer games of 1996 show a profit of 10 million dollars against an initial outlay of 1.8 billion dollars.
I have to quote an article for the numbers on the Nagano Winter Olympics of 1998. You’ll see why when you read it:
The officials who organized Nagano’s bid for the 1998 Winter Olympics were zealous about keeping track of expenses. As they directed a massive lobbying drive to win the Games for their town, they maintained careful records of it all–90 volumes to be exact, enough to fill 10 large cardboard boxes. Inside was a window on what it takes to woo members of the International Olympic Committee–luxury hotspring resorts, first-class air tickets and geisha, to name just a few entries. But it seems Nagano’s bidding committee was better at compiling records than preserving them. In 1992, after a citizen’s group demanded disclosure of the Olympic spending, the 90 volumes mysteriously disappeared. Their fate remained a mystery until the controversy over Salt Lake City’s bid for the 2002 Games erupted in December, prompting a bid committee member to come clean: I ordered them burned, said Sumikazu Yamaguchi, former vice secretary-general of the Nagano Olympic Bid Committee.
We may safely conclude that they lost a great deal of money.
Now, we arrive at Sydney Summer games of 2000 and a loss of 2.1 billion dollars.
Followed by the Salt Lake City Winter Games of 2002 which made a 101 million dollars profit.
The 2004 Athens Summer Olympics are a milestone in sports history. Let me quote:
The Torino Winter games of 2006 lost 3.2 million dollars resulting in the creation of a lottery by the Italian government to cover the costs.
The Beijing Summer Olympics are interesting subject. Here’s a quote:
On March 6, 2009, the Beijing Organizing Committee for the Olympic Games reported that total spending on the games was “generally as much as that of the Athens 2004 Olympic Games”, which was equivalent to about US$15 billion. They went on to claim that surplus revenues from the Games would exceed the original target of $16 million. Other reports, however, estimated the total costs from $40 billion to $44 billion, which would make the Games “far and away the most expensive ever”.
So, it depends on whose numbers you want to believe. If we assume their original plan of spending about 15 billion and making 16 million in profits, we are back at very limited returns on large investments. If we believe the estimates of 40 to 44 billion, we are talking losses far greater than the catastrophe of Athens. But the Chinese government claims they made about 146 million dollars.
The Vancouver Winter Olympics made 925 million dollars (Canadian) on an outlay of about 6.4 billion dollars for the initial budget.
The London Summer Olympics made 52.8 million pounds with an initial budget of 14.6 billion dollars.
Franklin would conclude that there were many people both in and outside of Boston willing to invest but that the bulk of the investment and virtually all the risk lay on the taxpayers, the citizens of Boston. The citizens of his city were being asked to insure that there would be no losses in a highly speculative venture which had historically on most occasions made no money, that when it did make money, the profits were very limited and that when it lost money, the losses could be catastrophic.
Benjamin Franklin would never have agreed to this type of scheme.
The Corporate Consultant Working For Free To Kill The Boston Olympics
The effort that would become No Boston Olympics began in November 2013, when Chris Dempsey and Liam Kerr, friends since they met while campaigning for Gov. Deval Patrick, were sitting on Kerr’s living room couch in Boston’s Beacon Hill neighborhood. For months they had listened to organizers from Boston 2024 tout benefits the Olympics could bring the city, such as new transportation investments and a shot of economic stimulus.
Dempsey and Kerr, though, saw nothing but risk. Their primary problem was Boston 2024’s request for a taxpayer guarantee, the government backing the International Olympic Committee requires should private financing fall short. Looking at previous Olympics, they saw that such a guarantee often turned out poorly for host cities and their residents.
“Our goal,” Dempsey said, “has been to tell the other side of the story.”
Democracy and Neo-Liberalism = Mongoose and Cobra? Right now, the Greeks are gearing up for an election that will decide how much the people of that nation will concede in the negotiations with the Euro-Zone. If you have followed the talks, you might be troubled at the how the Euro-Zone Bureaucrats are interfering with the internal affairs of Greece. Greece wanted to raise taxes on the wealthy and impose a one-time tax on businesses. They were told no. Greece wanted to increase spending on tax enforcement. They were told no.
But it wasn’t just about saying no. The Greeks were told to increase “value added taxes,” a kind of sales tax. These fall most heavily on the lower classes. And they were told they should cut the number of pension holders and the amount they get (roughly 800 a month measured in American dollars). Needless to say these bureaucrats (technocrats?) are unelected and their preferences strongly tend to the economic prescriptions of the International Monetary Fund. These prescriptions while being applied to Greece at the moment are familiar to any American who follows economic policy discussions. They are privatization, a lessening of regulations, means-testing for government aid, a dramatic reduction in social services to force salary discipline, and lowered taxes on businesses and the wealthy. These in the neo-liberal mind will eventually produce an economic utopia although success has eluded them thus far. .
People given the power of the vote are an obstacle in the path of these kinds of changes. Democratic peoples tend to lean toward the ideas that privatization of commonly held public goods like parks are opportunities for businesses to charge them for things that were once free. That regulations no matter how often they are called drags on the economy are for the public’s protection. And they feel that they have a right to a decent retirement and other government aids in the face of an increasingly unsure economic environment. Many people also believe that businesses and the wealthy are not carrying their fair share of the tax burden.
But democracy is not always an effective obstacle. International organizations like the IMF, the World Bank, and Euro-Zone among many others work to limit the effects of democracy using loans, a legion of technocrats, and literally tons of learned documents explaining that what people believe to be in their best interest is not.
Democracy limited by international treaty to allow corporations to sue in supra-national judicial systems does not have the historical or traditional power of a nation state. This is currently the most significant move by international business to curb human rights and democratic authority. It is epitomized by the Trans-Pacific Partnership, a secret agreement reaching into every part of business law and strengthening the power and influence of corporations, other business interests and the wealthy.
Democratic values and patriotism are not obsolete because it is in the interest of international business to make them so.
Nations and the societies therein are successful because of the wisdom of the learned, the courage of the brave and the obedience of the citizen. Wisdom, courage and obedience are all irrelevant in a world where monetary interest is the sole measure of success.
Congress Weighs in on Holding IMF Accountable for Damage Caused by Failed Policies in Greece | Mark Weisbrot
It is not surprising that the very idea of a referendum would provoke the ire of the eurozone authorities. Unlike the European Union, which has a different history, the eurozone project has become a fundamentally anti-democratic project. It has to be; the people currently running it want to reverse, as much as possible, decades of social progress on issues that are vital to Europeans. But you don’t have to take my word for it: there is a paper trail of thousands of pages that spell out their political agenda. The IMF conducts regular consultations with member governments under Article IV of its charter, and these result in papers which contain policy recommendations. There were 67 such consultations for EU countries during the four years of 2008 to 2011, and the pattern was striking: budget tightening was recommended in all 27 countries, with spending cuts generally favored over tax increases. Cutting health care and pension spending, reducing eligibility for disability and unemployment compensation, raising retirement ages and increasing labor supply were also overwhelmingly common recommendations.
The European authorities took advantage of the crisis and post-crisis years to impose parts of this agenda on the weaker eurozone economies: Spain, Italy, Portugal, Ireland and most brutally of all, Greece. More than 20 governments fell as a result, until finally, in Greece on January 25, a government was elected that said no. The goal of the European authorities, therefore, is to topple this government. This has been apparent since the ECB cut off its main line of credit to Greece on February 4.
Research by the Center for Responsible Lending is showing that it isn’t just one type of loan doing the damage but a combination of loans. For instance, a predatory mortgage can lead a family to payday loans, etc. That results in a perfect financial story as debt cascades from different kinds of loans.
It is obvious that there are two tiers of financial services. One, where people can go and get car loans, home loans, etc. at reasonable rates and with opportunities for adjustment in the event of financial difficulty. These tend to be provided by local banks. The other is, to be blunt, predators profiting from many individuals inability to access regular financial services like banks.
Business ethics does not have proper language to deal with these different kinds of financial services. The same words are used for predator and community benefactor. It should be obvious to all that providing a car loan at a reasonable rate is a benefit to the community. It means that a human has access to a vehicle and can pursue economic ends like having a job and buying groceries. A car in this case is a production good. It creates value. But a predatory lender siphons money out of the financially disadvantaged, those that cannot for one reason or another access regular financial services. It siphons money and instead of a valuable production good, we have limited production good always riding a narrow dividing line between benefit and deficit.
The report (discussed below) shows how different kinds of predatory lending combine to produce financial disaster. One bad loan leads to another.
In this country, we have a long history of limiting the power of lenders with anti-usury laws limiting the interest rates that can be charged. It is time to revive that tradition and begin once again the work of building a fair system of financial services devoted to building the American economy and not systematically draining the resources of the poorest among us.
Immediate Costs of Predatory Financial Practices Are Steep, But They Are Just the Tip of the Iceberg | Michael Calhoun
Since 2012, the Center for Responsible Lending (CRL) has been measuring the effect of different predatory lending practices in our State of Lending research series. We have shown that predatory mortgage terms result in higher rates of foreclosure; that certain auto lending practices result in racial discrimination; and that trapping people in debt is the payday lending business model. Our final chapter, The State of Lending in America and Its Impact on U.S. Households: Cumulative Costs of Predatory Practices shows lending abuses are inter-related and that they set off chain reactions that have long-term consequences, derailing economic opportunity for millions of Americans and weakening the U.S. economy.
Abusive loans do not exist in a vacuum and borrowers who fall victim to one abusive loan are more likely to fall victim to another. Our report finds that 54.5 percent of those who have had a car-title loan have also had a payday loan, and 62.8 percent of consumers who recently used a payday loan also have a credit card. The costs of abusive loans compound over time because loans with harmful features lead more often to defaults, bankruptcies or the loss of a critical asset such as a car or home.