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.
Banks Will Always Suck At Trading, Badly Need A Volcker-Like Rule: Study
A new study by economists Arnoud Boot at the University of Amsterdam and Lev Ratnovski at the International Monetary Fund finds that recent blow-ups in the banking sector — JPMorgan Chase’s $6.8 billion “London Whale” losses and that whole financial-crisis thingy, to name two — are not isolated events, but “a sign of deeper structural problems in the financial system.”
The only prescription? Less trading by big dumb banks.
“Without policy action, crises associated with trading by banks are bound to recur,” Boot and Ratnovski write in a blog post about the paper. “Even strong supervision will not be able to prevent them. Consequently, it appears necessary to restrict trading by banks.”
If you read the fuller article, and I recommend you do, you will find that banks have incentives to do what is essentially speculative trading. Right now with interest rates low, there is a terrible temptation to take their money and gamble with it since there is little profit in traditional investments. And, of course, why do legitimate investments in business, industry and homes, when you can make so much more money speculating?
The banks have to be regulated to perform their traditional functions of lending to build a strong economy. We protect banks from collapse and insure their deposits with taxpayer money because when they loan money that develops the economy and creates opportunities. What we are getting now is a lot less useful investing and a lot more gambling at the public’s expense.
Rob Goodman and Jimmy Soni writing in the Huffington Post describe why Stoicism is still relevant today. I selected a passage from their first reason that the philosophy was designed for tough times. I’ve read Marcus Aurelius and Epictetus, so I’m familiar with Stoicism but I don’t believe endurance is enough but otherwise I admire stoicism and find its practitioners admirable.
Stoicism was born in a world falling apart. Invented in Athens just a few decades after Alexander the Great’s conquests and premature death upended the Greek world, Stoicism took off because it offered security and peace in a time of warfare and crisis. The Stoic creed didn’t promise material security or a peace in the afterlife; but it did promise an unshakable happiness in this life.
Stoicism tells us that no happiness can be secure if it’s rooted in changeable, destructible things. Our bank accounts can grow or shrink, our careers can prosper or falter, even our loved ones can be taken from us. There is only one place the world can’t touch: our inner selves, our choice at every moment to be brave, to be reasonable, to be good.
The world might take everything from us; Stoicism tells us that we all have a fortress on the inside. The Stoic philosopher Epictetus, who was born a slave and crippled at a young age, wrote: “Where is the good? In the will…If anyone is unhappy, let him remember that he is unhappy by reason of himself alone.”
While it’s natural to cry out at pain, the Stoic works to stay indifferent to everything that happens on the outside, to stay equally happy in times of triumph and disaster. It’s a demanding way of life, but the reward it offers is freedom from passion — freedom from the emotions that so often seem to control us, when we should control them. A real Stoic isn’t unfeeling. But he or she does have a mastery of emotions, because Stoicism recognizes that fear or greed or grief only enter our minds when we willingly let them in.
A teaching like that seems designed for a world on edge, whether it’s the chaotic world of ancient Greece, or a modern financial crisis. But then, Epictetus would say that — as long as we try to place our happiness in perishable things — our worlds are always on edge.
The One Percent judge a member of the 47% percent.
The One Percent Manifesto (Tongue in Cheek)
I read with delight the article, “I am a job creator: a manifesto for the entitled.” Steven Pearlstein has a talent for satire. The article was wonderful. The piece lampooned the bizarre beliefs of many of the one percenters, the guys who believe the 47% are a raggedy band of freeloaders who need some Ayn Randian discipline. These are my favorite paragraphs below but I really think you should read the whole article to get the flavor of the writing.
James Pilant
I am entitled to a healthy and well-educated workforce, a modern and efficient transportation system and protection for my person and property, just as I am entitled to demonize the government workers who provide them.
I am entitled to complain bitterly about taxes that are always too high, even when they are at record lows.
I am entitled to a judicial system that efficiently enforces contracts and legal obligations on customers, suppliers and employees but does not afford them the same right in return.
I am entitled to complain about the poor quality of service provided by government agencies even as I leave my own customers on hold for 35 minutes while repeatedly telling them how important their call is.
Lincoln accepted fees that he regarded as fair, sometimes even refusing to accept fees. He was certainly not a “job creator,” not rich, by the standards of the time, and his wife tended to spend money freely. Certainly with a growing family and some political ambitions, he could have used more money but he was unwilling to treat his clients in what he regarded as an unfair manner whatever the professional customs of the time dictated. When confronted by an ethical dilemma, he went his own way. He did not appear to be concerned with the question, “What does everybody else do?”
James Pilant
Abraham Lincoln’s Legal Ethics
“CATCH ‘EM AND CHEAT ‘EM.”
The lawyers on the circuit traveled by Lincoln got together one night and tried him on the charge of accepting fees which tended to lower the established rates. It was the understood rule that a lawyer should accept all the client could be induced to pay. The tribunal was known as “The Ogmathorial Court.”
Ward Lamon, his law partner at the time, tells about it:
“Lincoln was found guilty and fined for his awful crime against the pockets of his brethren of the bar. The fine he paid with great good humor, and then kept the crowd of lawyers in uproarious laughter until after midnight.
“He persisted in his revolt, however, declaring that with his consent his firm should never during its life, or after its dissolution, deserve the reputation enjoyed by those shining lights of the profession, ‘Catch ’em and Cheat ’em.'”
And another story –
CREDITOR PAID DEBTORS DEBT.
A certain rich man in Springfield, Illinois, sued a poor attorney for $2.50, and Lincoln was asked to prosecute the case. Lincoln urged the creditor to let the matter drop, adding, “You can make nothing out of him, and it will cost you a good deal more than the debt to bring suit.” The creditor was still determined to have his way, and threatened to seek some other attorney. Lincoln then said, “Well, if you are determined that suit should be brought, I will bring it; but my charge will be $10.”
The money was paid him, and peremptory orders were given that the suit be brought that day. After the client’s departure Lincoln went out of the office, returning in about an hour with an amused look on his face.
Asked what pleased him, he replied, “I brought suit against ——, and then hunted him up, told him what I had done, handed him half of the $10, and we went over to the squire’s office. He confessed judgment and paid the bill.”
Lincoln added that he didn’t see any other way to make things satisfactory for his client as well as the other.
And another –
NEVER SUED A CLIENT.
If a client did not pay, Lincoln did not believe in suing for the fee. When a fee was paid him his custom was to divide the money into two equal parts, put one part into his pocket, and the other into an envelope labeled “Herndon’s share.”
And still one more –
“RATHER STARVE THAN SWINDLE.”
Ward Lamon, once Lincoln’s law partner, relates a story which places Lincoln’s high sense of honor in a prominent light. In a certain case, Lincoln and Lamon being retained by a gentleman named Scott, Lamon put the fee at $250, and Scott agreed to pay it. Says Lamon:
“Scott expected a contest, but, to his surprise, the case was tried inside of twenty minutes; our success was complete. Scott was satisfied, and cheerfully paid over the money to me inside the bar, Lincoln looking on. Scott then went out, and Lincoln asked, ‘What did you charge that man?’
“I told him $250. Said he: ‘Lamon, that is all wrong. The service was not worth that sum. Give him back at least half of it.’
“I protested that the fee was fixed in advance; that Scott was perfectly satisfied, and had so expressed himself. ‘That may be,’ retorted Lincoln, with a look of distress and of undisguised displeasure, ‘but I am not satisfied. This is positively wrong. Go, call him back and return half the money at least, or I will not receive one cent of it for my share.’
“I did go, and Scott was astonished when I handed back half the fee.
“This conversation had attracted the attention of the lawyers and the court. Judge David Davis, then on our circuit bench (afterwards Associate Justice on the United States Supreme bench), called Lincoln to him. The Judge never could whisper, but in this instance he probably did his best. At all events, in attempting to whisper to Lincoln he trumpeted his rebuke in about these words, and in rasping tones that could be heard all over the court-room: ‘Lincoln, I have been watching you and Lamon. You are impoverishing this bar by your picayune charges of fees, and the lawyers have reason to complain of you. You are now almost as poor as Lazarus, and if you don’t make people pay you more for your services you will die as poor as Job’s turkey!’
“Judge O. L. Davis, the leading lawyer in that part of the State, promptly applauded this malediction from the bench; but Lincoln was immovable.
“‘That money,’ said he, ‘comes out of the pocket of a poor, demented girl, and I would rather starve than swindle her in this manner.'”
From – LINCOLN’S YARNS AND STORIES
A Complete Collection of the Funny and Witty Anecdotes that made Abraham Lincoln Famous as America’s Greatest Story Teller With Introduction and Anecdotes
Recently, a presidential candidate referred to bottom 47% of the American population as self identified victims. Abraham Lincoln had a different view of the poor. He had a deep concern for the less fortunate in society as is illustrated by this story (below). Would we lived in such times that this kind of judgment (and the kind of man who would make it) were honored and esteemed. Instead we are told to worship and respect the “job creators,” the PR name for what are often little more than predators.
James Pilant
“AND YOU DON’T WEAR HOOPSKIRTS.”
An Ohio Senator had an appointment with President Lincoln at six o’clock, and as he entered the vestibule of the White House his attention was attracted toward a poorly clad young woman, who was violently sobbing. He asked her the cause of her distress. She said she had been ordered away by the servants, after vainly waiting many hours to see the President about her only brother, who had been condemned to death. Her story was this:
She and her brother were foreigners, and orphans. They had been in this country several years. Her brother enlisted in the army, but, through bad influences, was induced to desert. He was captured, tried and sentenced to be shot—the old story.
The poor girl had obtained the signatures of some persons who had formerly known him, to a petition for a pardon, and alone had come to Washington to lay the case before the President. Thronged as the waiting-rooms always were, she had passed the long hours of two days trying in vain to get an audience, and had at length been ordered away.
The gentleman’s feelings were touched. He said to her that he had come to see the President, but did not know as he should succeed. He told her, however, to follow him upstairs, and he would see what could be done for her.
Just before reaching the door, Mr. Lincoln came out, and, meeting his friend, said good-humoredly, “Are you not ahead of time?” The gentleman showed him his watch, with the hand upon the hour of six.
“Well,” returned Mr. Lincoln, “I have been so busy to-day that I have not had time to get a lunch. Go in and sit down; I will be back directly.”
The gentleman made the young woman accompany him into the office, and when they were seated, said to her: “Now, my good girl, I want you to muster all the courage you have in the world. When the President comes back, he will sit down in that armchair. I shall get up to speak to him, and as I do so you must force yourself between us, and insist upon his examination of your papers, telling him it is a case of life and death, and admits of no delay.” These instructions were carried out to the letter. Mr. Lincoln was at first somewhat surprised at the apparent forwardness of the young woman, but observing her distressed appearance, he ceased conversation with his friend, and commenced an examination of the document she had placed in his hands.
Glancing from it to the face of the petitioner, whose tears had broken forth afresh, he studied its expression for a moment, and then his eye fell upon her scanty but neat dress. Instantly his face lighted up.
“My poor girl,” said he, “you have come here with no Governor, or Senator, or member of Congress to plead your cause. You seem honest and truthful; and you don’t wear hoopskirts—and I will be whipped but I will pardon your brother.” And he did.
From – LINCOLN’S YARNS AND STORIES
A Complete Collection of the Funny and Witty Anecdotes that made Abraham Lincoln Famous as America’s Greatest Story Teller With Introduction and Anecdotes
Take the day in 1992 when both Republican Senator Warren Rudman and Democrat Paul Tsongas made headlines declaring that everybody was at fault for the country’s fiscal condition at the time, from then-President Bush to the democrat-controlled Congress, to the American people. Responsible economists later credited Rudman and Tsongas for spurring reforms that helped lead to the Clinton era surpluses.
Around the same time, retired senator and conservative eminence gris Barry Goldwater denounced the followers of émigré philosopher Leo Strauss – so-called “neocons” – for hijacking Goldwater’s beloved movement over cliffs of romantic delusion. A more recent example of post retirement candor came When G.W. Bush’s ex-Treasury Secretary, Paul O’Neill, revealed a swamp of backroom dealings and ineptitude, explaining that he was “old and rich” and unafraid to speak his mind. On the other side, some claim that Senator Joe Lieberman really came into his own when he ran as an independent, shrugging off party discipline (if such a thing exists, among democrats.)
The article goes on to point out that candor is almost suicidal under the rules of our current system. Excellent thought. What I found more interesting was Brin’s awareness of Leo Strauss, the man behind the curtain of much of the modern Neoconservative movement. I wouldn’t have expected a scientist to have read so deeply into politics.
Yes, Strauss is mentioned in the histories you can find on the web about Neoconservatism but few point out his critical role in the movement, nor do they emphasize the manipulative nature of his teaching. The articles talk about Strauss teaching about a return to Classical values – this is utter nonsense, Strauss was designing a new political elite from his students, manipulative and power hungry. We will be dealing with his minions for decades to come. He planted the dragon seeds that bedevil our foreign policy even today. And they will be pulling many other strings as well.
So, Mr. Brin has impressed me and I wish him well. I think we share many of the same thoughts.
Abraham Lincoln on being presented with a moral conundrum chose to “bend” the rules. Generally speaking, it is wrong to break the rules but it is also wrong to unquestionably obey them under all circumstances. Lincoln knew when to bend the rules.
When a surveyor, Mr. Lincoln first platted the town of Petersburg, Ill. Some twenty or thirty years afterward the property-owners along one of the outlying streets had trouble in fixing their boundaries. They consulted the official plat and got no relief. A committee was sent to Springfield to consult the distinguished surveyor, but he failed to recall anything that would give them aid, and could only refer them to the record. The dispute therefore went into the courts. While the trial was pending, an old Irishman named McGuire, who had worked for some farmer during the summer, returned to town for the winter. The case being mentioned in his presence, he promptly said: “I can tell you all about it. I helped carry the chain when Abe Lincoln laid out this town. Over there where they are quarreling about the lines, when he was locating the street, he straightened up from his instrument and said: ‘If I run that street right through, it will cut three or four feet off the end of ——’s house. It’s all he’s got in the world and he never could get another. I reckon it won’t hurt anything out here if I skew the line a little and miss him.”‘
The line was “skewed,” and hence the trouble, and more testimony furnished as to Lincoln’s abounding kindness of heart, that would not willingly harm any human being.
From – LINCOLN’S YARNS AND STORIES
A Complete Collection of the Funny and Witty Anecdotes that made Abraham Lincoln Famous as America’s Greatest Story Teller With Introduction and Anecdotes
Adam Levin: The Alarming Ties Between Debt Collectors and District Attorneys
Consider what’s happening here. The debt collection companies are using the letterhead of the prosecutor’s office to threaten consumers with criminal prosecution and possible jail time. In reality, they’re in no position to back that threat up — but from reading the letter, the consumer has no way to know that. The truth is that in the vast majority of cases, the prosecutor’s office has no idea when these letters are mailed or who is receiving them, and has conducted no investigation to determine whether the claim of unpaid debt is actually true. Thus, the debt collectors are apparently mailing official letters without effective oversight — and often without even having the evidence they would need to prove that the recipients actually owe the alleged debts. In short, no case.
“I would say that roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt,” Noach Dear, a civil court judge in Brooklyn who sees up to 100 such cases a day, told the New York Times.
This is, indeed, outrageous. To have prosecuting attorneys renting out their letterhead to private companies at all diminishes their office and, at the end of the day, betrays the public trust. To do this without weighing the merits of each individual case betrays the fundamental American ideal of due process and turns the phrase “innocent until proven guilty” on its head. Finally, to allow private companies to use the power and prestige of public office to coerce consumers, using the fear of criminal charges and imprisonment to bully them into compliance — well, that is so clearly abusive that it’s hard to imagine how anyone could defend it (not that they haven’t tried).
Debt collectors have a terrible reputation in this country for misconduct and often direct law breaking. For prosecutors to form an alliance with them, loaning them some of the powers of the state, is simply unconscionable.
I’m not the only one that thinks so – here’s J.F. Quackenbush from the web site, Disinformation:
So here’s the deal, it’s a crime to write a bad check if you know that the bank isn’t going to honor the instrument. But in most states, in order to be convicted the State has to prove that you knew the check was going to bounce when you wrote it. That’s hard which is as it should be, because the crime here is not owing a debt, it’s fraud. We don’t do debtors prisons anymore, and for good reason. Bankruptcy law is explicitly mandated by the Constitution because it has long been understood that not all debts are equal, and sometimes it’s for the best in our society if we just let people off the hook and give them a clean financial slate to start over.
This, of course, drives the vampires of the collection industry, who make money by buying debts for pennies on the dollar and then brutalizing the people who owe those debts who can’t afford to pay them, and in the meantime making all manner of threats and coercive promises to keep those debtors out of bankruptcy so that the vampires can continue to feed.
Prosecutors’ job is to enforce the law. One important part of that job is exercising some discretion over who to prosecute. That’s especially important in bad check cases. People bounce checks all the time, usually unintentionally. That doesn’t make them crimes. So a prosecutor’s job is to sort out the crimes from the accidents. Under the new arrangement, everybody gets contacted by a debt collector, which then demands even more money for a budgeting class — the profit from which goes into the collector’s pocket.
The excuse for this program is that district attorneys’ offices were overwhelmed with merchant requests to go after bounced checks where they were unable to collect the debt and alleged fraud. Um, what about saying “no” unless the amount at issue was significant, say at least a few hundred dollars, or having the merchant provide evidence of intent? Instead, this scheme allows the debt collectors to get a windfall from people who’ve stuffed up on relatively small checks (the two examples in the article were each under $100) as well as contributing to erosion of public faith in the legal system.
Consumer attorneys did succeed in getting one debt collector that engaged in this practice, American Corrective Counseling Services, to file for Chapter 11 in the face of class action suits. But its successor CorrectiveSolutions carries on with the same dubious practices and has “partnerships” with more than 140 district attorneys’ offices.
The DAs office, it appears, is literally selling the use of their stationary. In exchange for letting debt collectors appear both a lot more official and for falsely suggesting that law enforcement is pursuing criminal action, the debt collectors “sell” a “financial accountability” class, from which some of the proceeds get kicked back to the DAs’ offices.
59 Seconds, Think a Little, Change a Lot by Richard Wiseman is a book I have enjoyed. Below is a quotation from the book. I think you should consider buying it. I was going to put up an image of the cover but Amazon has a giant copyright notice on the thing and I learned from a miserable experience with CBS news that positive comments and a recommendation don’t matter a damn.
Dunn and her colleagues have conducted several studies on the relationship between income, spending, and happiness. In one national survey , participants were asked to rate their happiness, state their income, and provide a detailed break-down of the amount spent on gifts for themselves, gifts for others, and donations to charity. In another study Dunn measured the happiness and spending patterns of employees before and after they each received a profit-sharing bonus of between $3,000 and $8,000. Time and again, the same pattern emerged. Those who spent a higher percentage of their income on others were far happier than those who spent it on themselves.
This is a fascinating passage. Apparently Greed is not the only important human value. It would seem that contrary to Ayn Rand, altruism is not evil but a useful tool in the full and happy life. It’s amazing what you can learn from research.
Everyone is very brave including America’s allies.
Gary Cooper
I’m very fond of Gary Cooper films. “Love in the Afternoon” is one of my all time favorites. It is odd to think that I who have loved the film for more than two decades have now arrived at the same age as Gary Cooper in that film. Here below is that film – http://www.tudou.com/programs/view/FLXUYnBwLXI/
I don’t know whether or not you can work the link. It’s a Chinese web site and they may be suspicious of occidentals.
But back to The Story of Dr. Wassell. Dr. Corydon Wassell was an Arkansan, a very real person not a fictional archetype. The story is full of references to Arkansas including a long soliloquy to Arkansas catfish. The film is fun to watch but the heroics so incredible as to defy rational belief. Of course, that is to be expected in a wartime film. This is directed by Cecil B. DeMille and carries his trademark taste for complex action sequences. If you are not tolerant of heroism without limits, you probably will find the film ridiculous. An interesting side note is that Wassell was a uncredited advisor on the film and all of the money he was due from the film he donated to charity.
Pilant's Business Ethics Blog 
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