Category: business ethics

National Problem Fixable By Making Insignificant Changes In Business School

On By southwerkIn business ethics, Capitalism, Teaching

From Business Week –

Have business schools contributed to creating overconfident and self-focused leaders? I suspect many of you will nod your head in agreement. You might even declare that, by extension, business schools share blame for the economic crisis. As a business school dean, I take these perceptions seriously; there is enough in them to warrant careful reflection.

An antidote to overconfidence and self-focus in business leaders may lie in building more focused cultures in our business schools. Culture is the set of values and norms in an organization that shape behavior. It acts as an internal gyroscope for everybody in the organization to keep them in balance, acting ethically and in line with the larger interests. It is what people do “when the manager is not looking.”

Yes, all we have to do to fix our bizarre cultural worship of pirate CEO’s is to tinker with business school attitudes. The root of all evil is based in schooling probably in those ethics classes.

I get tired of hearing this nonsense. It is important to have good business schools. It is important that they communicate ethics, attitude, business knowledge and considerable training. But that’s it.

A business school is not like wading into a pool blessed by an angel and getting healed.

Overconfident attitudes and overly proud, ridiculously vain attitudes are not based in business school curriculum but in larger society.

If we want to change that, we give stockholders a say in how the company runs, put rigorous controls on executive salaries and change bonuses to consider long term contributions and actual contributions.

James Pilant

Bank Taxes

On By southwerkIn business ethics4 Comments

In the United States, the tax structure is based on an obsolete manufacturing model. The basis of the taxes is the income tax and corporate tax. But the biggest sector of the economy much larger than manufacturing is the financial sector. The financial sector engages in many activities that might be charitably called gambling. A transaction tax aimed solely at the speculative practices of Wall Street would raise hundreds of billions of dollars. Perhaps the tax system could be restructured to take into consideration the simple fact of where money is made in America.

This is a British commercial for a “Robin Hood” tax. I believe we should use such a tax for general revenues. Further, there can be little doubt, the United States could raise far more money with such a banking tax than could the British.

In the United States, the middle class is a continual target for fees and local taxes. The tax system need to be rethought and a greater reliance placed on a single tax system.

James Pilant

Police Unions And Pension Funds

On By southwerkIn business ethics, ethics

Back in the 1990’s police unions negotiated for benefits likes salaries, health insurance and pensions. During the early years of the first decade of the 21st Century, investment banking and, in fact, often regular banking left its conservative investment moorings and struck out into mortgage “securities” and other strange ideas of what an “investment” might be.

Cities and States (even universities) got caught up in the lure of easy investment profits. Pensions suffered when these “investments” disentegrated.

And this is one of the results – from the Baltimore Sun:

Union leaders, who stress the dangerous and grueling nature of police and fire work, have resisted the pension changes that the city has proposed, saying they constitute a violation of their contract.

“Some in city government are portraying this as a crisis,” said Bob Sledgeski, president of the firefighters union. “This has been long, ongoing neglect on the part of the city to follow their own experts’ advice. That’s not an accident, and 10 years does not a crisis make.”

City Council members, led by Helen L. Holton, chairwoman of the taxation and finance committee, have been scrambling for a solution to the pension problem before the fiscal year ends June 30.

Scores of police and firefighters have threatened to resign or retire if their benefits are significantly diminished. But city officials, grappling with a $121 million overall budget shortfall, say they cannot pay much more than the currently allotted $101 million pension contribution, although the city’s required obligations would be about $166 million if no changes are made in the way benefits are calculated.

I might have been more sympathetic to the city’s financial plight if they hadn’t played with the money.

That money was not a pile of gambling chips. It was a contractual promise.

These people being penalized are not wealthy entrepeneurs, they are the police and firefighters of the city.

Everyone talks about their sacrifice and bravery right up until it comes time to write the pension checks.

And then it looks like, well, it wasn’t really a promise. Apparently they only meant it if they could play with the money and not lose it.

And they lost it.

James Pilant

Lecture On Plato

On By southwerkIn business ethics, Capitalism, ethics3 Comments

Plato falls between Socrates and Aristotle. These three philosophers lived during the Athenian decline. This caused a great deal of turmoil in their lives and deeply influenced their philosophical views. Here is a lecture on Plato I found very enjoyable.

James Pilant




Lee J. Cobb – Blacklists In American

On By southwerkIn business ethics, Capitalism, ethics

Lee J. Cobb
Hollywood is a business and has been a business for a long time. Whether, studio system, independents or corporate, it has always been a business. During the red scare of the 1950’s, actors and writers were thrown out of work for having “communist” sympathies which generally meant having the wrong ideas at the wrong time. For instance, being opposed the fascists in Spain is okay if you were opposed later than the Spanish Civil War but opposition to the Spanish fascists is suspect if you were opposed during the civil war.

Are we entering a time when having the wrong beliefs, pro religious freedom (letting the followers of Islam build mosques in the United States), expressing opposition to government surveillance (being in league with the terrorists), or believing in progressive values (liberal fascists), can get you fired?

To save your job would you name the names of others who shared your “subversive” beliefs?

Read Lee J. Cobb’s account –

From Wikipedia –

Later, Cobb explained why he “named names” saying:

When the facilities of the government of the United States are drawn on an individual it can be terrifying. The blacklist is just the opening gambit—being deprived of work. Your passport is confiscated. That’s minor. But not being able to move without being tailed is something else. After a certain point it grows to implied as well as articulated threats, and people succumb. My wife did, and she was institutionalized. The HUAC did a deal with me. I was pretty much worn down. I had no money. I couldn’t borrow. I had the expenses of taking care of the children. Why am I subjecting my loved ones to this? If it’s worth dying for, and I am just as idealistic as the next fellow. But I decided it wasn’t worth dying for, and if this gesture was the way of getting out of the penitentiary I’d do it. I had to be employable again.

— Interview with Victor Navasky for the 1982 book Naming Names

What’s worth dying for? What will it take before you sell out your friends for actions you don’t consider crimes?

James Pilant

Obama Broke His Promise To “Take A Back Seat To No One” On Net Neutrality

On By southwerkIn business ethics, ethics2 Comments

From Freepress’ news release –

“The new rules are riddled with loopholes, evidence that the chairman sought approval from AT&T instead of listening to the millions of Americans who asked for real Net Neutrality. These rules don’t do enough to stop the phone and cable companies from dividing the Internet into fast and slow lanes, and they fail to protect wireless users from discrimination. No longer can you get to the same Internet via your mobile device as you can via your laptop. The rules pave the way for AT&T to block your access to third-party applications and to require you to use its own preferred applications.

“Chairman Genachowski ignored President Obama’s promise to the American people to take a ‘back seat to no one’ on Net Neutrality. He ignored the 2 million voices who petitioned for real Net Neutrality and the hundreds who came to public hearings across the country to ask him to protect the open Internet. And he ignored policymakers who urged him to protect consumers and maintain the Internet as a platform for innovation. It’s unfortunate that the only voices he chose to listen to were those coming from the very industry he’s charged with overseeing.”

Well, just another day with the President’s decisions. In a way, it’s entertaining. After all, with many politicians their previous statements are often a guide to their actions. But with the President, it’s one surprise after another.

James Pilant

Just A Few Bank Burglaries?

On By southwerkIn business ethics, ethics, Government Failure, White Collar Crime

Felix Salmon writing in Reuters’ Analysis and Opinion –

In order to know that cases like these are “a tiny percentage of foreclosures,” you need to know what that percentage is, n’est-ce pas? So this defense is not particularly convincing, unless and until we can see some numbers. Surely, mistakes like these would happen occasionally even during the boom years. But if the percentages are rising, that’s clear empirical evidence that overwhelmed servicers are doing an increasingly shoddy job.

Next time a newspaper wants to write about this particular trend, then, let’s get the names of those bank representatives on the record, let’s ask them how they know that the proportion of dreadful mistakes they make is “tiny” or “minuscule,” and let’s be a bit more determined that we should be the ones making the determination as to how small the percentage is, rather than the bank’s own flacks.

Exactly. I made the same point several months ago when the banks said that only a handful of mortgages had been mishandled. The banks were lying about the scale of the problem. It turned out there were minimally hundreds of thousands. This does not give one confidence in bank claims of “just a few cases,” “a few bad apples,” and all those other things you say when you don’t want to admit the scale of your crimes.

I don’t believe Mr. Salmon is mistaken in his assessment. Breaking into people’s homes and taking their stuff is an extremely intimidating tactic. You can just imagine the desk bound suits chortling over a business lunch about how they forced the deadbeats out.

Let’s get some lawsuits going. They are the public’s last line of defense and we can be quite sure law enforcement, politicians and regulatory agencies will sit this one out.

James Pilant

Net Neutrality – Obama Caves, A Young Turks Interview With Timothy Karr

On By southwerkIn business ethics, Corporate Social Responsibility, ethics, Government Failure, Philosophy of Business, President Obama1 Comment

This is 18 minutes and 23 second. A bit long for many of my readers. Nevertheless, this is a good explanation about how the new rules amount to a surrender on net neutrality.

James Pilant

Will Wall Street Ever Pay For Its Crimes? Or Just Its Fair Share Of Taxes?

On By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, ethics, Government Failure, Philosophy of Business, President Obama, White Collar Crime

These are brief interviews with Les Leopold. Here is a sample of his writing from Huffington Post –

We got into this crisis because Wall Street invented and pedaled fantasy financial instruments that turned out to be junk. While their party lasted, those complex derivatives were a gold mine for the largest financial institutions. According to the New York Times, the profits from the nine largest commercial banks “from early 2004 until the middle of 2007 were a combined $305 billion. But since 2007, those banks have marked down their valuations on loans and other assets by just over that amount.” In other words, the profits weren’t real.

He also has a book called The Looting of America: How Wall Street’s Game of Fantasy Finance Destroyed Our Jobs, Pensions, and Prosperity—and What We Can Do About It.

Can Chinese Students Save American Mill Town?

On By southwerkIn business ethics, Capitalism, Government Failure

An infusion of Chinese students would probably be good for any American town. But the reason is unusual. Some American communities have been devastated by free trade. These story is a tale of a community that has no resources.

James Pilant