Category: Business Ethics

Competition Takes It on the Chin in the Rental Car Market

On By southwerkIn Business Ethics

Hertz to buy car hire rival Dollar Thrifty for $2.3 billion | Reuters

Hertz Global Holdings (HTZ.N) agreed to buy rival Dollar Thrifty Automotive Group (DTG.N) for about $2.3 billion in a deal that puts about 95 percent of the U.S. car rental market in the hands of three companies.

The sale ends more than two years of on-off takeover talks for Dollar Thrifty involving Hertz, the No. 2. U.S. car rental company, and third-ranked Avis Group Inc (CAR.O) that have been plagued by disagreements over price and doubts about regulatory approval.

Avis could still make a further bid. The deal has no break-up fee and Dollar Thrifty is allowed to solicit another offer for 30 days, a person familiar with the matter told Reuters.

If it is confirmed, the deal will cement Hertz’s position as the number two and leaves Avis far behind in third. Privately held Enterprise Holdings, with its Alamo, National and Enterprise brands, is far and away the market leader.

Hertz to buy car hire rival Dollar Thrifty for $2.3 billion | Reuters

Isn’t buying out your competition and controlling most of the market moving toward a monopoly? Is that the free market in operation. No, but there will be many that claim it is. “Creative Destruction” is the rule – if you are a free market fundamentalist – religion without a God unless you can consider the filthy green, a deity.

Is it ethical? Well, it’s legal. For our corporate world that is quite enough.

Competing in terms of product or price or service is hard. Buying them out, easy.

James Pilant

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Is the Justice Department Gutless?

On By southwerkIn Business Ethics3 Comments
How do we make sense of this? Goldman Sachs emails call their own investments “junk” and “crap,” and Goldman Sachs salespeople refer to clients as “muppets” and “elephants.” Yet the Justice Department says there is not enough evidence to bring a case on behalf of Goldman Sachs investors who lost vast sums of money.Seal of the United States Department of Justice

Seal of the United States Department of Justice (Photo credit: Wikipedia)

Goldman Sachs prosecution fails: Why can’t the Justice Department fight Wall Steet?

Now that that’s out of the way, I can say what we are all thinking: Really? Are you kidding me? Wall Street continues to get away scot-free? The Justice Department prosecutes Roger Clemens for perjury—spends countless resources, hours, and energy worrying about steroids in baseball—yet seems incapable of making cases against the big Wall Street firms that engineered the greatest lies, frauds, and scams in our economic history. I am as outraged, disappointed, and furious as you are. Have they no backbone, shame, or sense of what justice is all about? It does nothing for my already waning faith in this Justice Department.

Goldman Sachs prosecution fails: Why can’t the Justice Department fight Wall Steet?

Apparently the great “vampire squid,” is immune to prosecution. In their e-mails they virtually admitted they were committing fraud. What does the Justice Department need in the way of evidence to prosecute? It seems to me if you are well connected enough and big enough, an infinite amount of evidence would still not be enough.

This is another example of America’s two tiered justice system – one for regular citizens and another for the privileged. There is a certain irony in the phrase, land of the free. It seems that some are apparently more free than others.

Business Ethics – Did that play any role here? You bet it did. By systematically breaking the rules, abusing it customers and blatantly lying, Goldman Sachs made billions of dollars. It is a pure lesson in why the phrase, business ethics, often evokes sneers or knowing giggles. I’ve seen and heard them.This is a lesson in negative business ethics, the other side of teaching what is right, teaching to do what is wrong.

We are systematically educating our young to be financial criminals, to reject the values of the righteous and embrace less than the moral minimum.

Our society has an opportunity here to create a society fit for no one but the predators.

Is that where you want to live?

James Pilant

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Komen Charity Forgot Who Its Contributors Were

On By southwerkIn Business Ethics

Nancy Brinker resigns from Komen: Does the CEO’s departure even matter for the breast cancer organization?

Part of why Komen is likely to fail at picking up the pieces is that the entire battle exposed some tensions in its base of support—tensions that had largely been minimized by the genuine desire of a broad coalition to fight breast cancer. Part of what made the organization such a behemoth is that Komen was able to put together the traditional supporters of women’s health care, who are pro-choice and have feminist leanings, with more conservative women who had previously been afraid of the immodest implications of talking openly about breast health. They did this by pointedly desexualizing the issue in a sea of pink ribbons and teddy bears, something the more feminist supporters could ignore because of the greater good. Prior to the Planned Parenthood debacle, Komen seemed largely apolitical—not outwardly judging those of us who want comprehensive health care that includes an adult understanding that people are going to have sex. By crossing that line, they forced their supporters into a sluts vs. church ladies battle. Now the feminist side perceives the organization as swarming with prigs whose support for your health stops as soon as they know you’ve touched a penis, and a handful of prominent resignations can’t really do much to change that.

Nancy Brinker resigns from Komen: Does the CEO’s departure even matter for the breast cancer organization?

Was it ethical for Komen to embrace right wing politics and cut off funding to one of the most prominent sources of women’s health care? Apparently a great number of Komen’s event participants and contributors believe the organization’s decision was at odds with their own moral beliefs. What is interesting here is how Komen so misunderstood its base. Isn’t that one of the fundamental rules of any business organization – that you should understand who your “customers” are. By any measure, Komen failed this rule and the organization may never recover.

James Pilant

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Stock Market Increasingly More Casino Capitalism than Investment

On By southwerkIn Business Ethics1 Comment

Wall Street trading debacles raises fears | McClatchy

Rep. Maxine Waters, D-Los Angeles, the top Democrat on the panel’s subcommittee that oversees capital markets, said she was very concerned about the volatility triggered by Knight. She supports hearings on the broader effects of the incident and other recent trading troubles.

“Like the problems with the Facebook initial public offering, events like this only further serve to undermine investor confidence in the markets,” Waters said. “Though we don’t yet know exactly what caused the problem with Knight Capital, with a drumbeat of financial market snafus continuing, it’s clear that the industry, with guidance from regulators, needs to strengthen their internal controls.”

Indeed, investors have stuck mostly to the sidelines after suffering crippling stock losses during the financial crisis. Many people have steered clear of sinking money into stocks, worried that big institutional investors and their high-speed tools can manipulate the market.

Knight’s losses reaffirmed Los Angeles retiree Robert Altman’s decision to pull nearly all of his investments out of stocks. Altman said his distaste for the market’s wild swings and technical glitches may confirm industry fears that recent Wall Street technical mishaps could scare off retail investors.

“I’m out of it,” said Altman, 73, who has plowed his savings into municipal bonds. “The little guy has no business in the market anymore.”

Wall Street trading debacle raises fears | McClatchy

Business ethics would seem to dictate that investors’ money should be handled with care. After all, the human beings  who invest have interests like long term returns to enable them to live a decent life. But as we can see from the headlines, stock market investment is more a matter of being sheared like a sheep than a fair deal . We’ve had enough scandals to call on the government to act. However, the interests that make money by these methods are well placed, very influential. If you want a safe investment, there are better places to go.

James Pilant

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Is Wal-Mart a Criminal Enterprise? Read Ethics Bob’s Take on the Subject!

On By southwerkIn Business Ethics

Vast Mexico Bribery Case Hushed Up by Wal-Mart « Ethics Bob

The headlines are from Saturday’s New York Times. The news article details how Walmart de Mexico—that nation’s largest employer—regularly paid huge bribes to Mexican government officials to approve permits for new stores; how senior management of the Mexican subsidiary was party to the bribery; how Walmart headquarters in Arkansas investigated the allegations of bribery, and how, when the investigations turned up hard evidence, hq proceeded to bury it.

Vast Mexico Bribery Case Hushed Up by Wal-Mart « Ethics Bob

Ethics Bob is using Wal-Mart’s recent bribery problems as a subject for class discussion in his business ethics class. I am using it in my business classes as well. I would be curious as to his classes’ response. Mine has been that there will be long term consequences for the company. Ethics Bob is tough on the company and he’s teaching business ethics where I am teaching the more generic business law. He may be getting a more critical response than I.

James Pilant

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Simplesimon8 Scourges Wall Street!

On By southwerkIn Business Ethics

The great Facebook debacle Part 2 #mugs #muppets « simplesimon8

So what’s changed since the demise of Lehmans and the financial crisis of the last few years. Not much by the look of things. Seems that the rich are getting richer, the middle classes are still a great target and the poor, well nobody gives a damn about them anyway!

Common sense, don’t partake in an IPO without it!

The great Facebook debacle Part 2 #mugs #muppets « simplesimon8

Another of my comrades on WordPress weighs in on the Facebook Investment Debacle. I recommend you read the article and put this web site in your favorites.

To my colleague at Simplesimon8, “Keep fighting the good fight.”

James Pilant

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The Web Site, Striking Thoughts, has a Tough Opinion Concerning the Facebook Investment Debacle!

On By southwerkIn Business Ethics

Wall Street Bitch-slaps us (again) | Striking Thoughts

This mess will be interesting to watch as it plays out. At this point I will go as far as agreeing with Business Insider:

“In one of the biggest IPOs in history, in which a huge amount of stock was sold to small investors, privileged Wall Street insiders once again got top-notch information…and individuals got the shaft.”

Wall Street Bitch-slaps us (again) | Striking Thoughts

Striking Thoughts is right on target and I recommend you read his thoughts.

To my colleague at “Striking Thoughts” I give a hearty thumbs up!”

James Pilant

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System Rigged Against Small Investor.

On By southwerkIn Business Ethics

Facebook IPO: Retail Investors Lose Out While Wall Street Clients Make Profits

In case a reminder was needed, the fallout from the Facebook IPO illustrates that Wall Street appears to be designed to serve the well-connected at the expense of ordinary people.

Ordinary investors may have lost as much as $630 million collectively from the plunge in Facebook’s stock following its public debut, Bloomberg reports. These are the same people who used hundreds or even thousands of dollars of their prized savings to bet on the stock only to have its value drop to way below its opening price of $38 per share.

Facebook IPO: Retail Investors Lose Out While Wall Street Clients Make Profits

Is it moral or ethical to have a rule system which allows the large institutional investors to thrive while penalizing the small investors? Does this encourage responsible investment and make Americans better people?

I think not.

This kind of thing drives people away from investment and it should. That the game is rigged is obvious to the most casual observer. It takes an enormous amount of advertising and badly written text books to get people to buy stock.

Now let’s differentiate here. I heartily approve of investment, that is, buying stock in a company to collect regular dividends and over time have the value of the company go up. That is investment. It carries some risk but it is not the kind of risk carried by those that believe they can buy and sell stock hour by hour, day by day, and make a profit thereby. That is speculation and speculation is inherently risky.

But not all speculators are equal. Let Facebook be a warning to all small investors. Whether you win or lose, investment banks will win.

This is wrong.

It damages faith in the system because the system doesn’t deserve it. If people don’t believe in the basic fairness of society than they will begin to act in ways that are detrimental to that society.

More simply, if playing by the rules doesn’t work, they’ll try something else.

Justice and fairness are for everybody and when they are denied we all suffer.

We should always have in the back of our minds the basic concept of fairness in our dealings. That is how you build a just and fair society.

You punish the wicked and protect the innocent. Is it hard to understand that rule?

James Pilant

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Rational Choice Beats Patriotism?

On By southwerkIn Business Ethics

Chuck Schumer Denounces Eduardo Saverin Defenders, Nazi Comparisons As ‘Appalling’ (UPDATE)

Grover Norquist, the head of Americans for Tax Reform, said Schumer and Casey’s legislation was similar to laws the Nazis wrote before World War II to make Jews pay to leave the country. “He probably just plagiarized it and translated it from the original German,” said Norquist, according to The Hill.

Schumer, taking to the Senate floor, called the comparison outrageous.

“I know a thing or two about what the Nazis did. Some of my relatives were killed by them,” he said. “Saying that a person who made their fortune specifically because of the positive elements in American society, in turn, has a responsibility to do right by America is not even on the same planet as comparing to what Nazis did to Jews.”

Chuck Schumer Denounces Eduardo Saverin Defenders, Nazi Comparisons As ‘Appalling’ (UPDATE)

I remember watching the film, Gettysburg. At the high water mark of the South, Pickett’s Charge, the confederates are almost to the top of the ridge, then the Union troops stand up to meet the charge, the American flag unfurled in the wind. I was so proud, my heart beat fast, and I wanted to be with those troops to fight that fight.

Eduardo Saverin is abandoning the United States. The United States has showered him with benefits and protections during all the time that he has lived here. He owes his enormous fortune to the opportunities and the laws found here.

This seems to be less than apparent to some commentators who have likened laws meant to punish those who discard their citizenship and duties as a form of Nazism. These men have also said that Saverin is merely exercising “rational choice” in his behavior.

I am enraged by this.

Memorial day is next week. Several hundred thousand Americans died often in the most ghastly ways so that this person could have the benefits of citizenship.

Every single day, he was protected by millions of serving Americans who live as soldiers, sailors and airmen.

Locally, he was protected by harm by police, fireman and ambulance services – all paid for directly or subsidized by taxes.

For all the time that he lived in this country, he drove on public roads, walked on public sidewalks, and benefitted from the kindness and law abiding nature of the good and great people that make up this country.

By his actions he makes it clear that these mean nothing to him – they are responsibilities that get in the way of profit and profit is the only “rational” choice.

In this kind of morality, patriotism is merely a burden, an inconvenience, an obstacle on the path of financial maximization.

This person has renounced his American citizenship, an honored status for money.

There is no sum worth giving up being an American. Not now – not ever.

James Pilant

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America’s Financial Sector, Infested with Criminals?

On By southwerkIn Business Ethics

Charles Ferguson: How Financial Criminalization Crashed the Economy, and the Culprits Got Off Scot-Free

It is no exaggeration to say that since the 1980s, much of the American (and global) financial sector has become criminalized, creating an industry culture that tolerates or even encourages systematic fraud. The behavior that caused the mortgage bubble and financial crisis was a natural outcome and continuation of this pattern, rather than some kind of economic accident.

It is important to understand that this behavior really is seriously criminal. We are not talking about neglecting some bureaucratic formality. We are talking about deliberate concealment of financial transactions that aided terrorism, nuclear weapons proliferation, and large-scale tax evasion; assisting in concealment of criminal assets and activities by others; and directly committing frauds that substantially worsened the worst financial bubbles and crises since the Depression.

Charles Ferguson: How Financial Criminalization Crashed the Economy, and the Culprits Got Off Scot-Free

I agree with Charles Ferguson. I’ve been following our financial disasters over the last five years and they are in many ways criminal enterprises, not that the Obama Administration seems to care.

We live in a nation with two standards of justice, one for the little people and one for a privileged elite.

I do not think I need to tell you of the horrible effects of injustice. The criminals will break the law again. The criminals will gain in power. The criminals will become even richer.

That is quite the lesson for our children and the larger society. Don’t work. Don’t labor. Steal. That’s the way of American Investment banking.

James Pilant

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