I am a 53 year old teacher. I have double major in Speech and Criminal Justice resulting in a Bachelor's degree from Northeastern State University in Oklahoma and a law degree.
Nothing scrambles the conventional wisdom on contemporary class politics in the US like a white-collar strike. In our neoliberal era, we’re told that unions might have once been appropriate for the soot-faced and burly proletarians of the 1930s. But since most of those workers have long since disappeared, labor unions — the logic follows — are also no longer necessary.
But not all skilled (and deeply exploited) laborers go to work with a hardhat and a lunch pail. And just like their union brothers and sisters in warehouses and factory floors across the country, the struggle for real union representation is every bit as radicalizing.
Eliza Skinner has spent the past year writing jokes for the E! television show Fashion Police. Skinner pens about 200 jokes per episode (almost a full work week’s as far as ‘hours worked’), pitching them at a weekly meeting with the host, Joan Rivers, and the show’s producers. For this, she is paid roughly $500 a week.
What is unique about this arrangement, in comparison with Hollywood norms, is the intensity of the work (the 30-40 hours of work are usually compressed into 3 days), and the meagerness of the compensation. Fashion Police writers’ paychecks say: “Hours worked: 8” every week, regardless of the actual time spent on crafting their contributions to the show. This exploitation is especially galling because the tempo of TV production often requires marathon stretches on the writer’s part: as long as 17 hours in a row, in the case of awards specials. “8 hours. $500,” Skinner marvels. “To write a hit TV show–– one of the top rated shows on the network.”
We live in a nation where airline pilots, adjunct professors and Hollywood writers make little more than the minimum wage. Is it a good idea? Does it constitute economic justice for these highly skilled professions? I’m sure a solid majority favors having airline pilots and a smaller majority, college professors. However, a good argument could be made that we can live without a good part of our television viewing. On the other hand, I do not deny that it is hard work and demands creativity and intelligence.
The owners here, have a number one show and pay their writers a small sum for working concentrated hours not even bothering to pay overtime, that’s pretty pathetic. Economic justice implies paying a fair wage. The economic value of their labor far outweighs the salary.
What’s the business ethics here? What’s a fair salary? Is economic justice even a thought in Hollywood? Those are important questions. What the producers are getting is writers working for little more than an unskilled worker flipping burgers. The producers are also making large sums of money from the effort of the workers. So, the question boils down to this – Are you content to have businesses pay the least possible to get the most possible labor? Or Is there a fair salary based on the productivity of the workers?
Austerian doctrine states that if we can get the deficit down even during periods of economic slowdown and massive unemployment, we shall see an economic upturn. So far this hasn’t happened anywhere on earth. (There are some claims that two former states of the Soviet Union have done okay with it. I don’t believe that. If you want to, that’s okay. It’s just that I don’t go to the former Soviet Union for my economic data.)
But they have managed to move the economy. Their philosophy has resulted in the destruction of 2.2 million jobs and that’s only in the United States. Ideas move the world, and here we have solid evidence that bad ideas can move the world in the wrong direction.
Hospital Prices No Longer Secret As New Data Reveals Bewildering System, Staggering Cost Differences
When a patient arrives at Bayonne Hospital Center in New Jersey requiring treatment for the respiratory ailment known as COPD, or chronic obstructive pulmonary disease, she faces an official price tag of $99,690.
Less than 30 miles away in the Bronx, N.Y., the Lincoln Medical and Mental Health Center charges only $7,044 for the same treatment, according to a massive federal database of national health care costs made public on Wednesday.
Americans have long become accustomed to bewilderment and anxiety when confronting health care bills. The new database underscores why, revealing the perplexing assortment of prices for medical care, with the details of bills seemingly untethered to any graspable principle.
Even within the same metropolitan area, hospitals charge prices that differ by staggering degrees for the same procedures. People without health insurance pay vastly higher costs for care when less expensive options are often available nearby. Virtually everyone who seeks health care winds up paying inflated prices in one form or another as these stark disparities in price sow inefficiencies throughout the market.
Given the opportunity to charge without oversight, hospitals developed a byzantine pricing system that was favorable to them in every way. I am shocked. I want the free market fundamentalists to come here and take a long good look. This is reality. Market actors misusing the system to cruelly abuse their customers and our only hope of salvation, the much maligned government. That is, unless, you want to wait for the hospitals to wake up and realize that the free market is better for everybody? Maybe their profits blind them to the unearthly beauty of your doctrine? What do you think?
Why does Norway have a 21-year maximum prison sentence?
There are essentially five goals of sentencing: retribution, incapacitation, deterrence, restoration, and rehabilitation. The last of these, rehabilitation, is probably one of the most controversial. In the U.S., for example, rehabilitation is considered a secondary goal, after retribution. Americans want their prisoners punished first and rehabilitated second.
This appeals to a societal sense of justice and fair play that has considerable cultural inertia in our country. Any talk of prioritizing rehabilitation ahead of retribution very typically generates complaints about how doing so will endanger public safety, ignore the needs of crime victims, and—most damning of all—coddle criminals.Never mind that certain forms of rehabilitation have been shown through research to reduce the risk of future offending, we want our pound of flesh first and foremost.
The same is not true the world over, though. Norway, by contrast, has a very progressive approach to sentencing that prioritizes rehabilitation as a primary strategy for reducing future criminal behavior. That doesn’t mean they don’t use prisons, it just means that the conditions of confinement are geared toward reducing the risk that an offender will return to a life of crime after release
As the author well notes, not everyone shares American’s passion for punishment. As I often tell my students, one of the reasons we should become familiar with other cultures is that any system that has functioned successfully over a long period of time has to have some good ideas, and every culture needs thought renewal and the occasional shake up to develop. This is one of those ideas that deserves examination.
(I honored to have the Ethics Sage, Steven Mintz, write a post for my blog. Please visit his blog at Ethics Sage.)
KPMG Insider Trading Scandal Damages the Reputation of the Accounting Profession
What possesses an audit partner to trade on inside information and violate the accounting profession’s most sacred ethical standard of audit independence from one’s client? Is it carelessness, greed, or ethical blindness? In the case of Scott London, the former partner in charge of the KPMG’s Southern California’s regional audit practice, it was some of each that motivated him to violate ethical standards and, in the course of doing so, causing the audit opinions signed by London on Skechers and Herbalife to be withdrawn by the accounting firm.
This case has a local twist as pointed out by Stephen Nellis in his column “Deckers, PCBC were victims of auditor leaks” in the April 19-25 Pacific Coast Business Times. Nellis notes that two companies affected are Goleta-based Deckers and Pacific Capital Bancorp, the former parent of Santa Barbara Bank & Trust now part of Union Bank.
Overall, Shaw is charged with leaking confidential information to his friend, Brian Shaw, about Deckers, Pacific Capital Bancorp, Manhattan Beach-based Skechers, and Los Angeles-based Herbalife. The leak of information about quarterly earnings information led to Shaw’s unjust enrichment of $1.27 million. Shaw, a jewelry store owner and country club friend of London repaid London with $50,000 in cash and a Rolex watch, according to legal filings.
The leaking of financial information about a company to anyone prior to its public release affects the level playing field that should exist with respect to personal and business contacts of the leaker and the general public. It violates the fairness doctrine in treating equals, equally, and it violates basic integrity standards. The KPMG scandal concerns me because a pattern of such improprieties may be developing.
In 2010, Deloitte and Touche was investigated by the SEC for repeated insider trading by Thomas P. Flanagan, a former management advisory partner and a Vice Chairman at Deloitte. Flanagan traded in the securities of multiple Deloitte clients on the basis of inside information that he learned through his duties at the firm. The inside information concerned market moving events such as earnings results, revisions to earnings guidance, sales figures and cost cutting, and an acquisition. Flanagan’s illegal trading resulted in profits of more than $430,000. In the SEC action, Flanagan was sentenced to 21 months in prison after he pleaded guilty to securities fraud. Flanagan also tipped his son, Patrick, to certain of this material non-public information. Patrick then traded based on that information. His illegal trading resulted in profits of more than $57,000.
The KPMG case is a particularly egregious one because it involves insider trading by an auditor of client stock. This incident jogged my memory and I came up with a characterization of London’s actions as “stupid is as stupid does.” Scott London, the partner in charge of audits of Herbalife Ltd. and Skechers USA Inc., traded on inside information for personal gain. KPMG resigned as the auditor of both companies after learning that London provided non-public information about the companies to a third party, who then used the information in stock trades. The firm fired London.
In resigning the two audit accounts, KPMG said it was withdrawing its blessing on the financial statements of Herbalife for the past three years and of Skechers for the past two. KPMG stressed, however, that it had no reason to believe there were any errors in the companies’ books. Both companies said they are moving to find new auditors.
In a statement that should raise red flags for all CPA firms that audit public companies, KPMG stated it had concluded it was not independent because of alleged insider trading. Independence is the foundation of the accounting profession and the cornerstone of an audit conducted in accordance with generally accepted auditing standards. The public (i.e., shareholders and creditors) relies on auditors’ independence, objectivity, and integrity to ensure that the audit has been conducted in accordance with such standards and that the financial statements are free of material misstatements.
I’m having a hard time understanding the stupidity and moral blindness of London in this case. Surely he knew of his ethical obligations. All audit firms supposedly have been carefully assessing independence in the aftermath of financial frauds in the late 1990s and early 2000s (i.e., Enron and WorldCom). Firms generally have quality controls in place to prevent compromises to audit independence.
Trading on insider information for cash and gifts is bad enough, and when done by an audit partner it is unforgiveable. Even more baffling to me is that the quid pro quo for passing along stock tips about clients to a friend for London was to receive cash and gifts in return. According to London, he received a discount on a watch, and the friend bought him dinners from time to time and on a couple of occasions gave him $1,000 to $2,000 in cash. A cynic might say he sold himself cheap.
So, what happens next? Both Herbalife and Skechers will need to have their financial statements re-audited, not an inexpensive proposition. Even though the companies were not at fault, the public may misunderstand and think the companies were complicit in the matter.
For KPMG, the insider trading investigation is a setback. The accounting firm has worked hard to rehabilitate its reputation after coming under scrutiny last decade in a wave of corporate accounting scandals and the firm’s role in the marketing of fraudulent tax shelters. KPMG paid large nine-figure settlements to resolve lawsuits related to accounting scandals at the drugstore chain Rite-Aid and Oxford Health Plans. In 2005, the firm paid a $456 million penalty to the government related to tax fraud.
I have to wonder whether insider trading by partners at Deloitte and KPMG portends a larger scandal on the horizon. It seems every ten years or so the accounting profession finds itself in a “pickle” and hauled before Congress to explain its actions. It is about that time following financial frauds at Enron, WorldCom and a host of other companies. I don’t know how to get the message across to those in the profession that every time such incidents occur, and now insider trading, the public loses patience with the profession and doubts begin to surface about whether the profession truly acts to protect the public interest.
Blog Posted by Steven Mintz, aka Ethics Sage, on April 12, 2013
Low-Wage Workers Feel Worse Off Now Than During Recession: Survey
The survey revealed that many people at the lowest rung in the workplace view their jobs as a dead end. Half were “not too” or “not at all” confident that their jobs would help them achieve long-term career goals. And only 41 percent of workers at the same place for more than a decade reported ever receiving a promotion.
Yet 44 percent of employers surveyed said it’s hard to recruit people with appropriate skills or experiences to do lower-wage jobs, particularly in manufacturing (54 percent). While 88 percent of employers said they were investing in training and education for employee advancement, awareness and use of such programs among the lower-wage workers was only modest.
Although President Barack Obama made it a national goal to “equip our citizens with the skills and training” to compete for good jobs, the survey shows a U.S. workforce that has grown increasingly polarized, with workers and their bosses seeing many things differently.
Seventy-two percent of employers at big companies and 58 percent at small ones say there is a “great deal” or “some” opportunity for worker advancement. But, asked the same question, 67 percent of all low-wage workers said they saw “a little” or “no opportunity” at their jobs for advancement.
Freddie Mac Unaware Of Homeowner Complaints, Inspector General Concludes
For more than five years, many homeowners who complained about mortgage industry foreclosure abuses have wondered whether anyone with a financial stake in keeping them in their home was paying attention. On Thursday, with the release of a new report from a federal watchdog, they got their answer: No.
The report, by the inspector general of the Federal Housing Finance Agency, says banks and other companies that manage more than 10 million home loans for Freddie Mac “largely failed” to alert the mortgage giant to the most serious category of homeowner complaints, despite a requirement they do so. These “escalated complaints” often include the most serious allegations of misconduct, including improper fees, misapplied mortgage payments and a frustrating cycle of lost paperwork and unreturned calls. In some instances, the mismanagement has led to a wrongful foreclosure.
“The results are shocking on a number of different levels,” said Steve Linick, the FHFA inspector general, in an interview with The Huffington Post. “It is surprising that servicers were not reporting in such large numbers, that Freddie was not on top of this, and that [the FHFA] did not catch it in its exam.”
Four of the largest bank servicers — Bank of America, Wells Fargo, Citigroup and Provident — reported no escalated cases to Freddie Mac, despite handling more than 20,000 over a 14-month period, according to the report. Freddie Mac examiners did not notice that the mortgage companies were failing to disclose the complaints, nor did the FHFA, which relied on “incomplete” Fannie Mae examinations, the report concludes. The FHFA oversees the bailed out lenders Freddie Mac and Fannie Mae.
Officers Say NYPD Sets Quotas For Stop-And-Frisks And Arrests | ThinkProgress
New York police officers testifiedthis week that their office set quotas for both the number of police stops and arrests. Officers Adhyl Polanco and Pedro Serrano are two of the more than 100 witnesses to testify during a trial in a class action challenge to the New York Police Department’s rampant use of “stop and frisks,” a practice with constitutional implications in which an officer stops someone suspected of a crime, and may subsequently frisk that individual if they have justification for doing so.
The Department has conducted more than 5 million stops since Mayor Bloomberg took office in 2002, more than 85 percent of which targeted blacks or Latinos and only 12 percent of which resulted in criminal charges. Both Serrano and Polanco testified that supervisors required at least 20 summonses and one arrest each month, and that they were pressured to stop individuals — regardless of the grounds for doing so — under threat of punishment. Polanco also said police later added a stop-and-frisk quota of five per month. During the trial, Polanco played an exchange he recorded in 2009. The New York Daily News reports:
In the tapes, one of Polanco’s supervisors is heard demanding that cops make their “20 and 1” quota and lambasting those who came up short.
“If you want to be a zero, I’ll treat you like a zero,” patrol Sgt. Marvin Bennett fumed on tape.
Polanco also recorded his patrol commander, Lt. Andrew Valenzano, telling officers to meet their quotas by ticketing bicyclists.
“If you see people over there on bikes, carrying the bags, you know, good stops,” Valenzano says on tape. “That’s what we need.”
Officer Angel Herran, a union delegate, was taped telling officers the quota was agreed to “in this last contract.”
“They’re telling you to ‘go make money,’ ” Herran is heard saying.
NYPD Spent 1 Million Hours Over Last Decade On Marijuana Arrests, Analysis Finds | ThinkProgress
New York Police Department officers have spent 1 million hours making 440,000 marijuana arrests between 2002 and 2012, according to a new report from the Drug Policy Alliance. DPA put together the data in response to a request from New York City and New York State, as they consider measures to decriminalize marijuana. Each of these arrests can cost $1,000 to $2,000, according to a 2011 DPA estimate, costing New York City $75 million in just a single year (2010). The report explains:
In our ongoing research about marijuana possession arrests in New York, we have found that a basic misdemeanor arrest for marijuana possession in New York City varied from a minimum of two or three hours for one officer, to four or five hours or even longer for multiple officers. […]
Public defender system struggles under huge caseloads | McClatchy
Anyone who’s ever been arrested or watched a television cop show knows the fundamental right Gideon helped win for every American:
“If you cannot afford to hire a lawyer, one will be appointed to represent you.”
But this month, the 50th anniversary of that landmark Supreme Court ruling, here in Gideon’s home state and elsewhere around the country, the criminal justice system continues to struggle to live up to the promise demanded by the Supreme Court in 1963.
“The truth is we clearly haven’t,” said Abe Krash, a Washington, D.C., lawyer who helped represent Gideon in his Supreme Court case. “In public defender offices, there are many extremely conscientious attorneys, but they are tremendously underfunded and overburdened.”
A 2011 report by the Justice Policy Institute found that most of the country’s public defender offices and systems lacked enough attorneys to meet nationally established caseload guidelines. Also, the report found that most defender offices did not have sufficient support staff, such as investigators and paralegals.
“When defenders do not have access to sufficient resources, they may be unable to interview key witnesses, collect or test physical evidence, or generally prepare and provide quality defense for their client, resulting in poorer outcomes for the client,” according to the institute’s report.
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