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.
What They Don’t Teach in Business School about Entrepreneurship – YouTube
This is from the Stanford School of Business, a panel discussion from the 2010 Conference on Entrepreneurship. This video is deliciously titled “What they don’t teach you in Business School about Entrepreneurship.”
The discussion about “ants and lions” comes along about thirty minutes in. Don’t miss it. It’s perceptive. The panelists are Mike Cassidy, Chuck Holloway, and Nazila Alasti.
The previous blog introduced two important questions any time-management process starts with. Here are a few tricks I found useful when aligning our time investments to our core objectives and principal goals.
But, the challenge of an entrepreneur and change leader is she is pulled in all different directions at the same time, which makes it extremely difficult to continually create success. Instead of racing and gaining, the entrepreneur lies on her back and is trampled by ants. Every day is filled with tens and hundreds of actions and activities all of which seem important somehow, but together nearly immobilize her. Like with so many, the passion slowly drains out of the entrepreneur, and her goals start fading. Instead of looking to the big goals, moving forward, the small things in life take over.
From the web site, Arnonuemann – Thought Leadership: (I highlighted the text beneath the pretty graph and the graph came with it. It looks nice, so I’m keeping it but if there is a problem, let me know and I’ll pull it immediately. jp)
Lessons from the ants : all for one ( mission ) and one is there for all ….
“But ants aren’t nature’s only high-functioning teams. Packs of wolfs, pods of dolphins, and prides of lions all share remarkable strategies in terms of leadership, connectivity, execution and organization. For nature’s teams, mission matters most. Bioteams are the physical manifestation of a mission. They organize on the fly, adjust strategies in real-time and redefine membership based on environmental demands. Just Google “unicoloniality” to learn more about how some of nature’s teams inherently understand what many human teams essentially do not: membership is a function of achieving the mission and not the other way around.”
There is so much confusion in the air. A lot of people do not even know what they want in Nigeria and you can’t really blame them! Do people have ambitions any longer or they just want to work and get salaries on pay day? Are there counselors aiding, guiding, and moulding the interests of young students in primary and secondary schools; and in Universities? Are parents interested in, and supportive of their children’s ambitions or they just want to bask in the vicarious “glory” of those big names (Engr, Esq, Dr, Pharm, Arch…) for their own ego fulfillment? Are there still career fairs in our secondary schools and tertiary institutions? The system is so dysfunctional that we are busy struggling to accept anything slapped on us simply because there is a salary. Each time I watch National Geographic Channel, the question I keep asking myself is: “how is it that a human being dedicate his / her life time to studying butterflies, ants, birds, lions etc if not passion?” Let s/he who has a passion to bake cakes go on to become a brand; let s/he who loves flowers go on to become a brand florist; let s/he who loves to bake bread go on to become a household baker; let s/he who wants to be a great restaurateur go on to cook great meals; let s/he who sees a niche in mobile toilets go on to fill the void, let s/he who wants to be a great photographer go on to capture the memories etc. That will be Entrepreneurship and it won’t matter if you have chains of degrees or not. Passion would be the catalyst but certainly not running to grab a steering out of frustration from not getting relevant jobs.
I listened to this video and enjoyed it, particularly the discussion of Adam Smith and Milton Friedman early in the lecture.
Dean Guthrie’s background in Chinese studies is particularly interesting to me, since I also have a great interest in the nation’s culture. I am less sanguine about that nation’s prospects than he is. China’s long term geographical and political ambitions are not compatible with continued economic cooperation with the United States.
There’s no way to appreciate fully the contributions of Nobel Prize-winning economist Milton Friedman (1912-2006), who would have turned 99 years old this weekend, to the growth of libertarian ideas and a free society.
This is the man, after all, who introduced the concept of school vouchers, documented the role of government monopolies on money in creating inflation, provided the intellectual arguments that ended the military draft in America, co-founded the Mont Pelerin Society, and so much more. In popular books such as Capitalism and Freedom and Free to Choose, written with his wife and longtime collaborator Rose, he masterfully drew a through-line between economic freedom and political and cultural freedom.
The federal government appears to be under the impression Wall Street CEO’s are better at managing the United States Treasury than trained economists.[26][27][28] America has over two centuries of proof that bankers and legislators cannot be trusted with the people’s money,[29] yet, despite forewarnings from Adam Smith to Milton Friedman, Washington ignores the experts and continues helping itself to the Treasury.
America has gained and lost many times,[30] learning repeated lessons the central government continues committing: monetary stupidity. In truth it is useless to wonder why Washington continues creating and wreaking economic havoc when it is obvious that human nature has proven those with power will continue doing harm[31] as long as mankind exists. It is for this reason economics was invented, is practiced and taught: too often, lack of common sense has been in charge of money and the need for fiscally wise minds analyzing trade and industry is cost effective to society overall. That being said, financiers tend not to listen to the money-wise discussed here: men who forewarned disaster if certain fiscal policies were not implemented, and devised solutions to resolve and repair monetary failure.
To all fellow men and women out there who may have deep fondness for the liberal capitalist model of economic adaptation, I hope that you can make some adjustments in your cognitive banks. Capitalism is not a permanent facet of human life, but merely one among various epochs that will come to pass. Only impermanence is sacrosanct in the cosmos, so please refrain from singing hallelujah to a world system that is on its death knell as I articulated in a previous article.
And please refrain from swallowing hook-line-&-sinker the contentious propaganda of Francis Fukuyama about the ‘end of history’, that accordingly history had concluded with the galvanization of liberal capitalism, that history makes no more sense. Fukuyama’s theory is a slapstick narrative of hyper-valuation of the ‘mad economics’ of late capitalism and hypo-statization of reality that has no relation at all to the real in the world out there. Fukuyama had taken as ‘real’ what is actually ‘virtual’, and froze time much like unto a fairy tale of timelessness, of history-less Nietzschean moment that is fit more for infants than for adult humans.
Foreclosure Review In New Settlement Leaves Homeowners In Banks’ Hands
For more than a year, housing advocates and their allies worried that a review of foreclosed loans managed by banking regulators was vulnerable to mortgage industry interference.
On Monday, the Office of the Comptroller of the Currency and the Federal Reserve Board — the two regulatory bodies that had taken the lead in making the nation’s largest banks accountable for rampant foreclosure fraud — announced that homeowners no longer need worry about the independence of the reviews. The regulators, essentially admitting that the reviews were too difficult to conduct, and that assigning appropriate compensation to those most harmed by the banks was no longer a priority, said the mortgage companies themselves will determine how to distribute $3.3 billion to more than 4 million homeowners forced into foreclosure in 2009 or 2010.
Housing advocates, while acknowledging that the foreclosure reviews were flawed, said they don’t understand how turning the process over to mortgage companies improves a system already insufficiently independent.
“The regulators have decided to replace the fox in the henhouse with the wolf,” said John Taylor, president of the National Community Reinvestment Coalition, a Washington-based housing nonprofit. “It is just incomprehensible to me that they could not find a third party that has the wherewithal and independence to fairly determine what the damage is to homeowners.”
Is this good business ethics? Well, let’s look at it from the mortgage companies’ point of view. They made an enormous profit by misleading courts and mortgage holders as to who actually owned the property. In many cases, they told clients that they should skip payments, usually three payments, explaining to them that they would then qualify for government programs like HAMP. Once the home owner had skipped the payments, the bank immediately foreclosed. It terms of money, it was an incredible success.
Let’s analyze based on the Social Responsibility. Social responsibility rests on four pillars: economic, legal, philanthropic, ethical, and philanthropic.
Did the mortgage companies profit? Yes, but it depends on which stakeholders you look at. The shareholders did well. The employees did very well. The customers, at least as far as mortgage holders, were crushed. They are unlikely to ever be customers again. It is very difficult for families to buy a home in the first place. A second bite after foreclosure is not likely. The community was hurt badly by the thousands of empty homes, the collapse of the housing industry and the larger economic bust.
But let us have a special look at our last major shareholder, the regulatory agencies. They came, they saw, they said it was too difficult and gave it all back to the banks after extracting a promise that the banks will be good and give back 3.3 billion of the money they stole in the first place. It would appear the regulators are doing okay. They have shed their responsibilities to the public, which is always much easier than doing your job.
Was it legal? No. The banks violated the law thousands of times, perhaps hundreds of thousands. They lied routinely in official documents requiring affidavits and, for all intents and purposes, were in the business of stealing homes. They have, however, walked away unscathed.
Was it ethical? You have lying on a cosmic scale and theft of the property in the many billions of dollars. I don’t feel further analysis is required here.
And finally, was it philanthropic? Did they give back to the community? This is a pure case of negative philanthropy. The banks often had no concept of what to with the homes they took. They often didn’t care for them. Sometimes, they found it cheaper just to bulldoze them. They took value out of the community and replaced it with negative costs.
This is another sorry episode, which I will wonder if it is wise to mention to my business students? Should I tell them that stealing people’s homes will make you enormously rich while you with virtually no penalties? I am honest. I will. But I would rather not have negative business ethics taught so well by the mortgage companies. It makes what I do look foolish.
Major banks have once again agreed to a settlement, this time worth $8.5 billion, to compensate homeowners whose homes were fraudulently foreclosed upon in 2009 and 2010 through practices such as “robo-signing.” JP Morgan Chase, Bank of America, and and Wells Fargo will pay $3.3 billion to homeowners, and the remaining $5.3 billion will reduce mortgage bills and forgive principals on homes that were sold for less than what the owners owed on their mortgages. 3.8 million homeowners will be eligible to receive compensation ranging from a few hundred dollars to a maximum of $125,000.
In another settlement, Bank of America has agreed to pay the federal housing finance agency, Fannie Mae, $11 billion for selling the agency bad mortgages that defaulted, causing Fannie Mae to assume all the losses. $3.6 billion will be used to compensate for the bad mortgages, and $6.75 billion will be used to buy back mortgages.
Both of these agreements are part of a process to mitigate the impacts of the housing crisis and to hold the banks accountable for their role in both creating the housing bubble and in using questionable, if not fraudulent, methods in servicing their loans and processing foreclosures. Having faced significant losses, Bank of America continues to move out of the mortgage market, and in the deal with Fannie Mae, it agreed to sell the servicing and collection rights for 2 million loans, totaling $306 billion. Some economists and analysts are concerned that as the major banks shift away from mortgage lending, the industry is being consolidated into the hands of a few banks. However, though the housing market is recovering slowly, banks, such as Bank of America, might not be in a position to compete, given the losses they’ve already incurred and the problems they’ve had in servicing loans.
Housing advocates, while acknowledging that the foreclosure reviews were flawed, said they don’t understand how turning the process over to mortgage companies improves a system already insufficiently independent.
“The regulators have decided to replace the fox in the henhouse with the wolf,” said John Taylor, president of the National Community Reinvestment Coalition, a Washington-based housing nonprofit. “It is just incomprehensible to me that they could not find a third party that has the wherewithal and independence to fairly determine what the damage is to homeowners.”
Regulators said the review process, which sought to determine if specific loans were unfairly foreclosed upon, was too costly and time-consuming. Under the new deal, 10 mortgage companies, including Bank of America, Wells Fargo and JPMorgan Chase, will pay $8.5 billion. Of that, $3.3 billion is earmarked for direct payments to “eligible borrowers” whose foreclosures were handled improperly. The remaining $5.2 billion will help struggling borrowers with programs such as loan modifications.
And finally, from the web site, 4Closure Fraud (reprinted from ProPublica):
The Independent Foreclosure Review was supposed to be a full and fair investigation of the big banks’ foreclosure abuses, and it was trumpeted as the government’s largest effort to compensate victimized homeowners. Federal regulators, who designed the review, forced banks to spend billions to carry it out. Millions of homeowners were eligible and hundreds of thousands submitted claims. But Monday morning, the very regulators who launched the program 18 months ago announced that it had all been a massive mistake and shut it down.
Instead, 10 banks have agreed to pay a total of $3.3 billion in cash to the 3.8 million borrowers who had been eligible for the review. That’s an average of around $870 per borrower. But typical of a process that’s been characterized by confusion, delays and secrecy, regulators said the details of how the money will be doled out were not yet available.
The headline number for the settlement is $8.5 billion, but that includes $5.2 billion in “credits” the banks will receive for actions they take to avoid foreclosures, such as providing loan modifications. That’s very similar to the separate $25 billion settlement reached last year between five banks, 49 states and the federal government. That settlement has been criticized for awarding credit to banks for things they were already doing.
This is a brief video in which Robert Dolan, at that time, Dean of the Ross School of Business at the University of Michigan, held forth on a number of issues particularly business ethics. He begins the discussion by talking about the slow down in hiring in the financial sector and the effect on the students, moves into a discussion of how business ethics should be ingrained into the courses rather than a set of separate courses, and he ends with a good discussion of executive compensation.
His idea of action-based learning is used at the Ross School of Business and explained in some detail on their web site. I recommend you watch the video and, if an educator, read the web site explanation.
The most commonly asked question–How is Ross going to maintain its competitive advantage with its action-based learning and what is the school’s high-level strategy going forward?–elicited this response:
“While there was some recent debate surrounding whether or not we should abandon our action-based learning as the cornerstone of our brand and pick a ‘new horse,’ the faculty has chosen to ‘feed and care for the horse we’ve got.’ In other words, the school recognizes that we do action-based learning better than any of our competitors and it should prevail as our primary differentiating factor. Moving forward, Ross looks to grow this strategy by taking it abroad.”
Dean Dolan is also committed to boosting Ross’s global footprint via the strategic placement of international offices, starting in India and then China, the MSJ reports. Having offices in Hyderabad, Mumbai or Bangalore will help Ross better source field-based Multidisciplinary Action Projects (MAP), and offices with local roots will facilitate placement of Ross students in India better than efforts based in the U.S.
Question: How does the Ross School integrate real world business problems in the classroom?
Robert Dolan: Well, there’s a number of ways. I guess I’ll start out by talking about the way that we do it is maybe as a little bit distinctive among business schools. I think the signature element of our school, our MBA program in particular, compared to others, is what we call action based learning.
So right now, for example, all of our 425 first year MBA students would not be found in Ann Arbor. They would be scattered around the globe in about 90 teams, working on real world problems. So what we’ve done to try to differentiate our students and really provide value added was probably about 10 years ago, slightly before I got to the school, we instituted what we called, this map project, which we call multidisciplinary action projects. So we, since, built that up and really invested in it as our point of differentiation.
For the second time in three years, the Stephen M. Ross School of Business has been named the No. 1 business school in North America by the Wall Street Journal.The Ross School is one of only two business schools to be ranked in the top four every year since the Wall Street Journal began its rankings in 2001.
“We’re happy the Wall Street Journal has again ranked us as the best MBA program in the country,” said Ross School Dean Robert J. Dolan. “The Journal’s ranking is particularly gratifying as it reflects the sentiment of hiring companies that see our graduates at work every day.”
There are two things that have really struck me this week: Osborne’s proposals to make real term cuts to welfare and the impending arrival of a new royal baby. To my mind these things are inextricably linked. Before you ask this isn’t bourn of too many mince pies and mulled wine before Christmas.
We are increasingly living in a polarised society of haves and have nots. The Tories are trying to weave a narrative that pits ‘strivers’ against ‘scroungers’. However, our attitude to the news of a royal baby to me shows how confused our attitude to the state and state provision has become. The British Monarchy is a cornerstone of our social structure but one that is arguably funded by the public purse. Currently, the monarchy receives 15% of Crown Estate income amounting to about £200 million a year. Debatably this land isn’t private land but land kept in trust for the public. Further, there are myriad costs of running the monarch including security and special occasions such as the Jubilee celebrations. While the public subsidy for the monarchy has been subject to trimming, few have expressed anything but delight at a new addition to ‘the firm’.
This piece doesn’t seek to make the case for a Republic but instead to probe why we can express unreserved joy at the impending royal birth and simultaneous disgust at so called scroungers and their families. Osborne’s decision to increase welfare benefits by 1%, under the rate of inflation will mean real term cuts for many. One of the groups who will be adversely affected by these cuts are mums (and dads for that matter) who will be hit by below inflation rises to child benefits and working tax credits. This has been termed the mummy tax by Labour. The term seeks to highlight the impact of Osborne’s tax cut on real families who rely on these benefits to work and support their families.
The author, Sara Ibrahim, works in law like me. I find her juxtaposition of royal family and welfare recipients to be clever and I recommend you read it in full.
The problem of haves and have nots is not a purely British phenomenon. The United States has increasingly become two societies with different laws, expectations and responsibilities for the different classes. Single mothers with three convictions for marijuana possession can wind up with fifteen years in prison while bankers who launder nine billion dollars in drug money are unprosecuted.
Business ethics under these circumstances become more and more a matter for humor. Business ethics cannot exist in a moral vacuum. There has to be support from the press, the church and the state. Having two societies moving in different directions complicates that support and promotes the moral vacuum.
There maybe some of my readers who may find some justification for very large differences in income. But is it so easy to justify two standards of law, one for the great mass of Americans and another for the one percent?
There’s nothing new about the attempt to divide “benefit claimants” from deserving working people. Tough settlements for the welfare system have long been justified by claims to be cutting largesse from an undeserving poor. But neat categories like these have long been confounded by reality, and changes in the welfare system over the past 20 years have made them all but nonsensical. As Resolution Foundation analysis shows, 60% of the chancellor’s benefit squeeze hits working households. Whatever the rhetoric, it’s so-called strivers that bear the brunt of the cuts.
Why is the formula of “skivers and strivers” showing signs of age? One reason is Labour’s system of tax credits, which changed welfare by supporting low and middle income working households – the group the chancellor claims to be talking to. Tax credits themselves were in part a political move, to change the debate about welfare and poverty. But they also reflected new economic realities: childcare costs had soared, and many parents, particularly women, could not afford to work. Meanwhile, low pay had crept up to epidemic levels. For the one in five working people who now earn below £7.50 an hour, in-work support is vital.
Plenty of political announcements made at this time of year are little more than conference fodder. They grab a headline and a round of applause and that’s the last we hear of them. But George Osborne’s proposals to cut another £10bn from welfare don’t fall into that category. They were buried in the detail of previous policy statements and it was only a matter of time before they bubbled to the surface. Conference season is the ideal time because it allows some posturing against the modern folk devil – the feckless scrounger.
We only have media reports of Osborne’s speech at the moment, and we’ve no idea what’s going on behind the scenes, but a key element to this story is going to be how it plays out within the Coalition.
Clearly the New Victorians of the Conservative party are full-speed ahead for cutting welfare, with a strongly Malthusian undertone that if we lose a few scroungers along the way through starvation then that’ll save us a bit of money.
At the Autumn Statement we were told that the Chancellor is increasing spending on infrastructure whilst cutting spending on welfare. Such statements are confusing “infrastructure” for “lumps of rock”.
There are two reasons that you would increase spending on infrastructure. The first is that you believe that the spending itself will be good for the economy: the money will create jobs, the newly employed people will buy new things, shops will employ more people, etc.
The second reason might be that you believe that the underlying framework of your system could be more efficient. The classic example would be that late trains cost people time working, so you invest in better train lines.
However, in practice, I see very little notable difference between what Osborne sees as ‘welfare’ and what he sees as ‘infrastructure’ – other than who it is for. What the Chancellor calls infrastructure, I could call corporate welfare.
Law and order is a tricky business and the best of us are sometimes tested and found wanting largely because of the ambivalence of the mandate of police. Law is codified, made formal in various acts-the IPC, CrPC, evidence, etc. But what is order? Is there a permanent, ordained, immutable order? A preferred order? An ideal state of order? The construction of the meaning of order is exclusively the area of police expertise.
The law obligates a police officer of appropriate rank present on the scene of trouble to do everything within his legal means to prevent trouble and disperse the mob. It is a responsibility, not a privilege and powers to discharge this responsibility inhere in him; he does not enjoy it during the pleasure of somebody. Now the DGP says it was on his orders that the police force did not react. That says it all. Law must take a bow before the dictates of order
I have great respect for the thinking of my colleague and friend, Manoje Nath. We in America should pay more attention to the ideas and philosophy of criminal justice. Surely, the experiences of policing in a nation of 1.4 billion people have have some valuable lessons.
The short excerpt above does not do justice to the article. It is constructed in a carefully designed pattern, very fine writing. So, I recommend you go read the article in its entirety. In addition, I couldn’t help but notice that his remarks were published in a good number of Indian publications.
James Pilant
P.S. This may seem off the pattern of business ethics but I also teach criminal justice courses and justice is a critical element in ethical analysis. (JP)
1. Need for Reforms
It is the duty of the State to protect fundamental rights of the citizens as well as the right to property. The State has constituted the criminal justice system to protect the rights of the innocent and punish the guilty. The system, devised more than a century back, has become ineffective; a large number of guilty go unpunished in a large number of cases; the system takes years to bring the guilty to justice; and has ceased to deter criminals. Crime is increasing rapidly everyday and types of crimes are proliferating.
The citizens live in constant fear. It is therefore that the Govt of India, Ministry of Home Affairs constituted the Committee on reforms of Criminal Justice System to make a comprehensive examination of all the functionaries of the Criminal Justice System, the fundamental principles and the relevant laws. The Committee, having given its utmost consideration to the grave problems facing the country, has made its recommendations in its final report, the salient features of which are given below: …
Way back in 1604, House of Lords Judge Sir Edward Coke ruled that “the house of everyone is to him as his castle and fortress, as well for his defence against injury and violence as for his repose.” There was serious concern for the privacy of a living a being as the contested and universally acceptable verdict says “The midnight knock by the police bully breaking into the peace of the citizen’s home is outrageous in law’. Agreeing with him, Justice Douglas explained that the Free State offers what a police state denies – the privacy of the home, the dignity and peace of mind of the individual.
“That precious right to be left alone is violated once the police enter our conversations,’’ the two thinking judges said as they unwittingly laid the foundation of the hope for a nation “where the mind is without fear and the head is held high…”
It’s a pleasant surprise that Lord Coke’s concern was echoed recently by Indian Supreme Court judges AK Patnaik and Swatanter Kumar as they examined the significance of the Right to Information Act.
And finally from the web site, a PDF file, MEASURES FOR CRIME VICTIMS IN THE INDIAN CRIMINAL JUSTICE SYSTEM by Kumaravelu Chockalingam: (This is a very brief section from a 13 page paper. jp)
II. OVERVIEW OF THE INDIAN CRIMINAL JUSTICE SYSTEM
India derived its criminal justice system from the British model. There is a clear demarcation of the role
and powers and functions of the Legislature, Executive, and Judiciary. The judiciary is independent and there
is a free press. The penal philosophy in India has accepted the concepts of prevention of crime and treatment
and rehabilitation of criminals, which have been reiterated by many judgments of the Supreme Court.
Victims have no rights under the criminal justice system, and the state undertakes the full responsibility to
prosecute and punish the offenders by treating the victims as mere witnesses.
I started out to write about gun control. Halfway through, I realized I know little about the issue. I should probably read more on it before I write on it. So instead, this is about Westerns. Django comes from a deep American tradition. Even though it is nominally based on the Italian form of that American tradition, the Italians like Sergio Leone and Sergio Corbucci (who directed the original Django in 1966), were just borrowers. The classic American Western is built on classic American ideas: That the individual, and not the collective, is the most important component of a society, and that violence, especially gun violence, is the most legitimate way to settle both societal and personal grievances. Anyone wishing to have a meaningful dialogue with those who support gun ownership in this country had better understand that fundamental ethos.
I have often told my students that a great paper could be written tracing the last century of American culture by examining seminal Western films. From Stagecoach (1939) to The Searchers (1956); from The Wild Bunch (1969) to Unforgiven (1993), each says something profound about the way we see ourselves. John Ford’s Stagecoach was the first fully mature Western of the talking era, and its message is clear. The banker is evil, the bourgeois ineffectual. As the heroic couple (outlaw and prostitute) ride off at the end, they are said to be “free from the blessings of civilization,” perhaps the most succinct statement of the Western philosophy.
Our moral choices are very often not made based on reason and judgment but by habit and practice. American history has left us patterns of behavior that we habitually use. The history of the American West has left several problematic behavior patterns. First, we have a worship of outlaws. Vicious scum like Jesse James and Billy the Kid occupy volumes of complimentary literature, films and television.
I was interviewing a criminal once while I was working at a U.S. Probation office. I asked him why he committed crimes. He told me that he was an outlaw, a man who could not be limited in his behavior by society, a man outside the law. I was looking at a pathetic wrongdoer, a man who had brought misery and pain into the lives of everyone who knew him, but in his mind he was a heroic figure out of the Old West. It is not unusual in criminal justice to encounter criminals who consider themselves heroic figures, who were only doing what they “had” to do.
There isn’t much allure in doing the intelligent, rational thing when your culture prefers irrationality and violence.
Fortunately, America has counterbalancing traditions as well. Democracy, the ballot over the gun, is also a force embedded in this culture.
To act ethically and morally, reason is a critical factor, but there must also be an awareness of the cultural habits that often (always?) influence our decision making. Historically, Americans tend to lean toward gun use when confronted with problems. This may have been more appropriate in the Old West than now. It probably made more sense at the time.
Acting with reason, using logic, understanding history, will eventually undermine the culture of violence. We have advanced as humans by limiting the use of violence by ritualizing it, making it inappropriate in most circumstances. That struggle continues.
Business ethics is as much propelled by culture and habit as it is by intelligence.
We by our writing and our actions are creating a different perceived reality in ethics. It will one day take its place as cultural habit.
Let us live in the knowledge that our action and beliefs in many ways create perceived reality. That a heavy responsibility that we should take seriously.
I think most Americans – left, right and center – can at least agree that there is something disquieting happening at the core of American public culture these days. It’s something that often pops up as public displays of anger and vitriol that many times flirts with paranoid delusion. Maybe it’s always been there and we just never were exposed to it on a mass scale before the Twitterverse. Regardless, we live in a culture where violent rampages against strangers, though never condoned, are now simply not beyond the pale of American daily life. We call such acts unacceptable, and then by our continuing inability to address how to stop them, we quietly accept them.
Yeah so, humans are occasionally capable of unspeakable violence. News flash. Still, the nature of these incidents and their commonality suggest that this is an American thing, a revelation that puts an ugly stain on that old trope of American exceptionalism.
But I want to know why, as Americans, we tolerate and indeed seem to relish representations of violence, while at the same time we’re so fearful of actual violence that some of us are stockpiling weapons in our homes to prepare ourselves for the worst.
In the old days—not that long ago, in the scale of human history—a whole town used to turn out for a festive viewing of a hanging.
Today in places where conservative Islam reigns, women are stoned to death in public spectacles of participatory violence.
But how different is that, really, from the great American past-time of engaging in virtual violence of the most vicious sort?
America is the most violent, militarized society on Earth and Americans are the greatest exporters of violence, both physical and virtual, to the rest of the world.
We need to start looking much harder at the way our culture encourages violence by selling us the story that real men enjoy violence and can handle it with insouciance.
The real solution however, Gilligan says, is treating violence as a public health issue or as part of preventive medicine.
“In preventive medicine, we learned 150 years ago that cleaning up the water supply and the sewer system was much more effective in preventing epidemics of cholera and other infectious diseases than all the doctors and medicines and hospitals in the world just dealing with people one individual at a time.
“And I say here too, rather than focusing on primarily, say, trying to identify which individuals are maybe most at risk of becoming violent, the more efficient method of reducing the level of violence in our society would be to look at our environment and change it,” Gilligan said.
It’s no easy task. Gilligan said a first step for him would be to ban assault weapons and large capacity magazines. But he said the bigger picture is to tackle socioeconomic issues.
“We do have epidemics of violence when the unemployment rate increases, when economic inequality increases … And these tend to come down when we either ameliorate the effects of unemployment — for example, unemployment insurance — or find ways to protect people from utter humiliation and loss of status,” he said.
He went even further, saying that society as a whole needed to adopt a perspective “that we will not abandon or neglect or ignore anyone, that we will regard ourselves as responsible for the welfare of everybody.”
“I realize this sounds like pie in the sky … But I think it is possible to create a less aggressive and less violent society,” Gilligan said. “It’s just that it’s a matter of generations. It’s not something that happens overnight.”
While all eyes are on Newtown for a few days, killings continue around the United States without much notice. Trigger happiness is an instinct difficult to separate from the ease with which guns can be obtained. Their availability in America is in abundance, price is cheap, the reasons to possess them many. To show off as trophies, to hunt, to “protect,” to satisfy one’s macho instinct; or because it is every American’s right to carry arms. Such mindset is absolutist. Such faith in the superiority of culture, which feeds on the idea of “American exceptionalism” that gives the United States a divine mission, is fatally flawed. For man cannot remain unaffected by what he does to fellow humans. At this time of sorrow, it would be appropriate to also think of the many young and the innocent killed in America’s foreign wars.
In a Boston Review article titled “The Power and the Glory: Myths of American Exceptionalism” in the Summer 2005 edition, Howard Zinn wrote these words: “Divine ordination is a very dangerous idea, especially when combined with military power (the United States has 10,000 nuclear weapons, with military bases in a hundred different countries and warships on every sea). With God’s approval, you need no human standard of morality.” It is this state of mind that haunts America today.
Although the world is sadly marked by “hotbeds of tension and conflict caused by growing instances of inequality between rich and poor, by the prevalence of a selfish and individualistic mindset which also finds expression in an unregulated financial capitalism,” as well as by various forms of terrorism and crime, I am convinced that “the many different efforts at peacemaking which abound in our world testify to mankind’s innate vocation to peace. In every person the desire for peace is an essential aspiration which coincides in a certain way with the desire for a full, happy and successful human life. In other words, the desire for peace corresponds to a fundamental moral principle, namely, the duty and right to an integral social and communitarian development, which is part of God’s plan for mankind. Man is made for the peace which is God’s gift.
Pope Slams Capitalism, Inequality Between Rich And Poor In New Years Message
I do not believe that the headline is an accurate description of the Pope’s brief statement. The Pope says “unregulated financial capitalism.” It would appear to me we are talking about unregulated financial markets and there is probably a veiled reference to the banking scandals of 2012.
I have read a good deal about Catholic Social Doctrine but had never considered it anti-capitalistic. I had certainly noted it as being extremely hostile to free market fundamentalism but I don’t mistake that belief system for capitalism.
Maybe the headline was just meant to attract readers to click in on it, but I think what the Pope says about our current financial system is worth reflecting on.
“The answer is obviously complex. If by “capitalism” is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a “business economy,” “market economy” or simply “free economy.” But if by “capitalism” is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality and sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative. …
What grasped my total interest and attention was his just attack on unrestrained capitalism without any ethics. He wrote, “Once profit becomes the exclusive goal, if it is produced by improper means and without the common good as its ultimate end, it risks destroying wealth and creating poverty. “ As someone who has been concerned with anarcho-capitalism (an economic system that destroys government regulation of the economy, and creates anarchy within the global economic system) I think the Pope’s comments on capitalism is timely.
The conscious deregulation of the economy that started during the Reagan administration in the U.S. reached its climax during President George W. Bush’s tenure and has brought the global economic chaos the world is in at the moment. Their bankrupt economic theory of the market policing itself, has proven to be as hollow as their dreams of making trillions of dollars without manufacturing anything.
The pope said economic models that seek maximum profit and consumption and encourage competition at all costs had failed to look after the basic needs of manyThousands of peace marchers carrying rainbow banners released balloons in cold St Peter’s Square as the pope spoke.
A longer version of the Pope’s annual message was sent to heads of state, government and non-governmental organizations on December 14th.
Reuters reports that in that message “the Pope called for a new economic model and ethical regulations for markets, saying the global financial crisis was proof that capitalism does not protect the weakest members of society.”
The pope said economic models that seek maximum profit and consumption and encourage competition at all costs had failed to look after the basic needs of many and could sow social unrest.
Insight: How Colombian drug traffickers used HSBC to launder money | Reuters
In a typical transaction, a middleman in a drug cartel would offer to deliver consumer goods, such as computers or washing machines, to Colombian businesses on favorable terms. Another person in the United States would buy the goods from firms using funds from drug trafficking, and fulfill those orders.
Money launderers exploited the laxness of HSBC in policing shadowy money flows, the Department of Justice said earlier this month. Failures included not conducting due diligence on customers, not adequately monitoring wire transfers or cash shipments and not having enough employees to run anti-money laundering systems. U.S. Assistant Attorney General Lanny Breuer called the lapses “stunning failures of oversight.”
The situation was so bad, according to the Department of Justice, that in 2008, the head of HSBC’s Mexican operations was told by Mexican regulators that a local drug lord described the bank as “the place to launder money.”
The Chaparro probe, led by ICE and the Justice Department, converged over the past two years with two other investigations – led by federal prosecutors and investigators in West Virginia and by the Manhattan district attorney – resulting in this month’s settlement with HSBC.
HSBC and its employees avoided criminal indictments, as the bank agreed instead to a deferred-prosecution deal that forces it to strengthen controls and accept a compliance monitor.
Where to start? This bank has committed crimes on a scale almost beyond comprehension.
Our first question; is this good business ethics? Under Friedman analysis that a corporation’s sole purpose is to serve the shareholders, the HSBC’s actions were a marvelous success. The bank paid a fraction of its profits on its wrongdoing. Further it evaded any prosecution and the resulting loss in prestige and publicity damage that would have resulting from actual criminal punishments. But even more important when looking at the profit side of the ledger, a precedent has been set that if a bank has reached a certain size, it is beyond prosecution. This insures that banks of this size can in the future launder money with confidence that it will both be profitable and free from criminal charges.
Is this bad business ethics? The bank laundered about nine billion dollars in drug money from the Mexican cartels. These financed the drug trade smoothing the shipment of drugs into the United States and other countries. It paid for assassinations and kidnappings, bribery of public officials, and the creation of large heavily armed criminal mafias capable of exerting control over large geographical areas. The was at the very least a subversion of the government and economy of Mexico. Similar but smaller effects were felt in the United States.
However, this is not the whole story, the banks also laundered money for Saudi and Bangladeshi clients who were highly likely involved in terrorists activities and in some cases known have links to terrorists. I don’t think I need remind you that the United States has embarked and continues a “war” against terrorism. The bank actively subverted that war. In addition, the money helped finance rogue regimes like Iran in defiance of American sanctions, strengthening the nation’s enemies, and making those regimes more able to resist reform and democracy.
There can be no doubt that the religions of Christianity, Islam, and Judaism and a giant list of smaller religions would find these acts in violation of their rules of ethical conduct.
Philosophically, unless you consider Friedmanism, a legitimate source of wisdom, almost all philosophical schools with the probable exception of Nietzsche, would condemn the bank’s actions.
Capitalism is in a crisis. This is not an isolated example of few individuals’ greed. This is a giant financial institution deliberately acting against the interests of its host countries and financing murder and mayhem around the world. But further, have we not seen banking incompetence and law breaking on a massive scale on a regular basis since the 2008 financial crisis. This hardly seems to be passing phase.
This particular bank makes more money than most of the nations on earth. Its power to cause harm is enormous and it deliberately, over a long period of time, with direct knowledge of its leadership, caused that kind of harm.
This is a moral and ethical bankruptcy that is not just wrong but endangers the long term welfare of citizens in the United States and the rest of the world.
It’s hard to think of any phrase more sad when have knowledge of these crimes than, HSBC Avoids Criminal Charges.
James Pilant
From Matt Taibbi, Rolling Stone
Though this was not stated explicitly, the government’s rationale in not pursuing criminal prosecutions against the bank was apparently rooted in concerns that putting executives from a “systemically important institution” in jail for drug laundering would threaten the stability of the financial system. The New York Times put it this way:
Federal and state authorities have chosen not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system.
It doesn’t take a genius to see that the reasoning here is beyond flawed. When you decide not to prosecute bankers for billion-dollar crimes connected to drug-dealing and terrorism (some of HSBC’s Saudi and Bangladeshi clients had terrorist ties, according to a Senate investigation), it doesn’t protect the banking system, it does exactly the opposite. It terrifies investors and depositors everywhere, leaving them with the clear impression that even the most “reputable” banks may in fact be captured institutions whose senior executives are in the employ of (this can’t be repeated often enough) murderers and terrorists. Even more shocking, the Justice Department’s response to learning about all of this was to do exactly the same thing that the HSBC executives did in the first place to get themselves in trouble – they took money to look the other way.
From further down in the article:
On the other hand, if you are an important person, and you work for a big international bank, you won’t be prosecuted even if you launder nine billion dollars. Even if you actively collude with the people at the very top of the international narcotics trade, your punishment will be far smaller than that of the person at the very bottom of the world drug pyramid. You will be treated with more deference and sympathy than a junkie passing out on a subway car in Manhattan (using two seats of a subway car is a common prosecutable offense in this city). An international drug trafficker is a criminal and usually a murderer; the drug addict walking the street is one of his victims. But thanks to Breuer, we’re now in the business, officially, of jailing the victims and enabling the criminals.
This is the disgrace to end all disgraces. It doesn’t even make any sense. There is no reason why the Justice Department couldn’t have snatched up everybody at HSBC involved with the trafficking, prosecuted them criminally, and worked with banking regulators to make sure that the bank survived the transition to new management. As it is, HSBC has had to replace virtually all of its senior management. The guilty parties were apparently not so important to the stability of the world economy that they all had to be left at their desks.
The following are findings from the Senate report:
HSBC Bank USA, N.A., known as HBUS [pronounced H-Bus] functions as the U.S. nexus for HSBC’s worldwide network. HSBC has 7,200 offices in more than 80 countries and 2011 profits of $22 billion; HBUS has 470 branches across the United States with 4 million customers. HBUS provides accounts to 1,200 other banks including more than 80 HSBC affiliates.
In 2010, HSBC was cited by its federal regulator, the Office of the Comptroller of the Currency (OCC), for multiple severe anti-money laundering deficiencies, including a failure to monitor $60 trillion in wire transfer and account activity; a backlog of 17,000 unreviewed account alerts regarding potentially suspicious activity.
HBUS offered correspondent banking services to HSBC Bank Mexico, and treated it as a low risk client, despite its location in a country facing money laundering and drug trafficking challenges. The Mexican affiliate transported $7 billion in physical U.S. dollars to HBUS from 2007 to 2008, outstripping other Mexican banks, even one twice its size, raising red flags that the volume of dollars included proceeds from illegal drug sales in the United States.
Foreign HSBC banks actively circumvented U.S. safeguards at HUBS designed to block transactions involving terrorists, drug lords, and rogue regimes. In one case examined by the Subcommittee, two HSBC affiliates sent nearly 25,000 transactions involving $19.4 billion through their HBUS accounts over seven years without disclosing the transactions’ links to Iran.
HBUS provided U.S. dollars and banking services to some banks in Saudi Arabia and Bangladesh despite links to terrorist financing.
The HSBC deal includes a deferred prosecution agreement with the Manhattan district attorney’s office and the Justice Department. The deferred prosecution agreement, a notch below a criminal indictment, requires the bank to forfeit more than $1.2 billion and pay about $700 million in fines, according to the officials briefed on the matter. The case, officials say, will claim violations of the Bank Secrecy Act and Trading with the Enemy Act.
Prosecutors found that HSBC had facilitated money laundering by Mexican drug cartels and had moved tainted money for Saudi banks tied to terrorist groups.
On November 11 HSBC said it had “reached agreement with United States authorities in relation to investigations regarding inadequate compliance with anti-money laundering and sanctions laws.” The bank is also expected to reach a settlement over the matter with Britain’s Financial Services Authority, according to a person with direct knowledge of the matter.
November 10, federal and state authorities also won a $327 million settlement from Standard Chartered, a British bank. The bank, which in September agreed to a larger settlement with New York’s top banking regulator, admitted processing thousands of transactions for Iranian and Sudanese clients through its American subsidiaries. To avoid having Iranian transactions detected by Treasury Department computer filters, Standard Chartered deliberately removed names and other identifying information, according to the authorities.
But HSBC is not being indicted and nobody will be criminally prosecuted because of the perceived or projected threat to the financial system if such a large bank and its officers were penalized criminally for commission of crimes that everyone agrees did take place. Why? Because HSBC is too big to indict.
The obvious answer here is to dismantle the mega banks that are so big that their every move produces swings in the financial markets. Instead DOJ and other law enforcement agencies have given a green light to anyone who can build a bank that big. They can now commit crimes with impunity, which is to say that we are guaranteed to see repeat behavior. Now when a smaller bank engages in the same illicit schemes, it too can point to the fact that law enforcement decriminalized what is clearly a crime under all applicable statutes.
“The Tinkerers”: How corporations kill creativity by Alex Foege – Salon.com
In August 2010, Paul Krugman published a piece in the New York Times titled “America Goes Dark.” He described how the United States, “a country that once amazed the world with its visionary investments in transportation, from the Erie Canal to the Interstate Highway System” was now dismantling its infrastructure.
Krugman’s main point was that the U.S. government was not investing stimulus funds in the tools needed for our own economic growth. Three decades of antigovernment rhetoric had convinced many Americans that spending taxpayer funds on anything was a waste of taxpayer funds. But government—the US government, specifically—had built this country into an innovative economic powerhouse by investing in “lighted streets, drivable roads and decent schooling for the public as a whole.”
I would take Krugman’s point one step further and argue that the American government and people helped the country grow both by investing in innovation and by committing themselves to the traditional tinkerer spirit. A sophisticated, cutting-edge infrastructure was the perfect crucible for the kind of innovation the United States embodied.
The point about the devolution of tinkering in American life is not that we have lost a physical connection to the work that we do. It’s that the notion that we can fix any problem or achieve any goal that we set for ourselves has deteriorated into a sanitized, corporatized version of what constitutes achievement.
Corporate America has grown rigid as it has grown larger. Despite the dot-com era’s many images of creative whizzes reweaving the very fabric of innovation, it remains extremely difficult for the freethinking alchemists of today to perform their peculiar strain of magic and thrive while doing it.
This was a great article much longer than the brief excerpt I have placed here. If at all possible, please go to Salon and read the whole thing. The gentleman has several books out, so you might want to look into acquiring those as well.
Yet, these pressing needs seem to register very little as a governmental concern. We’ve already had collapsing dikes and bridges. What kind of crisis will it take to make this a critical issue that gets addressed?
Maybe the flesh is willing but the spirit is weak? Where’s that “can do” spirit that built buildings, monuments and wonders of technology? Where has that gone?
I like to read yearbooks from the 1960’s, Britannica, World Book, etc. and in them I find a spirit of optimism and a certainty of success that no longer is predominant in our culture. Much of our current angst can be traced to the thought that things are only going to get worse.
I agree with Mr. Foege, we need change.
We need to act and we can’t wait for the “road fairy” to repair out problems.
James Pilant
P.S. You could argue that there is no business ethics here. After all we aren’t speaking of deliberate sabotage of America’s infrastructure. Certainly I hope not. But business ethics is also a positive force. Good business ethics would embrace creativity and long term growth as manifested in infrastructure development and preservation.
In mid-January, the American Society of Civil Engineers (asce) convened a series of five roundtables in Washington, D.C., that were conceived as in-depth discussions of how best to address the nation’s significant infrastructure deficiencies, which threaten not only the safety and welfare of the public but also the nation’s economic growth and competitiveness. Each roundtable had its own moderator and slate of participants, and the participants included well-respected political leaders, policy leaders, and members of asce who are well versed on the subject of critical infrastructure. The starting points for these discussions were the five key solutions outlined in asce’s 2009 Report Card for America’s Infrastructure, which was released in March 2009. In essence what these roundtables were striving to achieve was to develop a framework for giving full dimension to these solutions and securing for them positions of high visibility and high priority on the national agenda. which was released in 2003. The 2001 report card conferred an overall grade of D+; the 2005 report card, a D; and the 2009 report card, a D. The 2003 progress report also conferred a grade of D. These assessments have trained a spotlight on the fact that America’s critical infrastructure—principally its roads, bridges, drinking water systems, mass transit systems, schools, and systems for delivering energy—may soon fail to meet society’s needs. The underlying threats—and these threats are quite significant—are those of deteriorating economic strength within the global marketplace and a diminished quality of life across the spectrum of American society.
Now is the time to act to bring up the level of repair of our infrastructure. The reasons?
• the cost of borrowing the money to do this is approximately 0%. We will never get a better deal.
• the number of out-of-work construction workers is huge which has depressed the cost of labor.
• the money paid to the architects and engineers and laborers and suppliers of raw materials and truck drivers will be spent almost immediately by those folks which will stimulate the economy. Plus there is time for the money those folks spend to be spent again (by the subsequent recipients) before the next year is out, amplifying the effect. (Economists call this the multiplier effect. In this case $1 spend on construction creates well over $1 of economic activity.)
• the problems with our infrastructure will only get worse and will cost even more as time goes on. It is not like they will “heal themselves” like a cold will if you just wait.
• all of the expenditures will go to Americans and American companies. The jobs cannot be “outsourced.”
If China is willing to lend us the money to make this nation stronger, creating jobs that generate more than enough tax revenue to pay off those loans, we will be fools if we don’t act. The more we wait the more it costs us in the long run.
“Over the next several decades, Illinois’ infrastructure needs will likely exceed $300 billion, yet the state does not have a comprehensive plan to address this critical need. There are real costs associated with underfunding of infrastructure: shipping and travel delays, congestion, pollution, and diminished economic growth.” State Budget Crisis Task Force Illinois Report.
For the U.S. economy to be the most competitive country in the world we need a first class infrastructure system—transport systems that move people and goods efficiently and at reasonable cost by land, water and air; transmission systems that deliver reliable, low-cost power from a wide range of energy sources, and water systems that drive industrial processes as well as the daily functions in our homes. Infrastructure is the foundation that connects the nation’s businesses, communities and people, driving our economy and improving our quality of life.
ASCE urges the administration and Congress to focus on policies that will create jobs and continue to grow the economy. ASCE will work with the new Congress and the President to rebuild and revitalize the very foundation of our national economy. Roads, bridges, levees, and dams not only provide security, but also allow businesses to move goods, reach global markets, grow their market share and create new jobs.
Pilant's Business Ethics Blog 
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