Category: business ethics

Irish Banking System Saved – Irish Public Clobbered

On By southwerkIn business ethics, Capitalism, ethics, Philosophy of Business2 Comments

This is from the Associated Press –

Ireland’s international bailout boosted its bank stocks Monday, but outraged many hard-pressed taxpayers, who questioned why the government’s pension reserves must be ravaged as part of a deal that burdens the whole country with the mistakes of a rich elite.

Shares in Ireland’s banks rose sharply as markets were encouraged by the bailout’s immediate focus on injecting €10 billion into the cash-strapped lenders out of a total of €67.5 billion ($89 billion) in loans.

But the Irish were shocked by a key condition for the rescue — that the government use €17.5 billion of its own cash and pension reserves to shore up its public finances, which have been overwhelmed by recession and exceptional costs of a runaway bank-bailout effort.

Opposition leaders and economists warned that the EU-IMF credit line’s average interest rate of 5.8 percent would be too high to repay. They also questioned why senior bondholders of Ireland’s struggling banks — chiefly other banks in Britain, Germany and the U.S. — still weren’t being asked to bear some costs.

Here’s what’s been happening. About twenty years ago, the Irish bought in to the Friedman Economic Theories (FREE MARKET) and freed their system from the chains of regulation. After that, the economy took off like a rocket. Actually the economy did take off but only for certain sectors of the economy particularly the financial industry. All that rocket climb was just a bubble of speculation and when the cloud of dust settled the state banks were deep in the hole. The Irish nationalized the banks and have since bailed them out to the tune of 100 billion dollars. This is smaller than the the U.S. bailout (TARP) but from a very, very much smaller nation (4.5 million people).

They are getting to a loan to keep their economy afloat from other European nations. To get it, they have to put the nation’s pensions funds up as a guarantee. People are unhappy about this.

But here’s the kicker. This is what is really making people mad. The bondholders of these banks are not required to pay for any portion of this at all. Zero!

If they had turned away the huge profits made during the “Celtic Lion” period like a benevolent aristocracy, I might cut them some slack but they didn’t quibble about taking the money. And now the Irish people, in particular, the ones that never profited from the whole economic de-regulation, speculation nightmare, are going to pay for it.

James Pilant

No Weapons, No Blood! – How About Some Raw People Power?

On By southwerkIn business ethics, ethics3 Comments

Eric Cantona, a famous soccer player, calls for de-funding the banks by the general population withdrawing their money.

“No weapons, no blood,” Cantona said, invoking the calling card of notorious French bank robber Albert Spaggiari, who in 1976 made off with millions of francs after tunneling his way into a branch of Societe Generale.

Cantona’s call has been taken up by “Stop Banque,” a France-based movement that is advocating a run on banks on Dec. 7. The group’s Facebook page has 10,872 fans and has spawned a number of other Facebook groups, including “Revolution by withdrawing banks’ money,” which calls on citizens to strike “a terrible blow” at the heart of the global economy. It currently has just over 300 followers.

A French soccer star who played for the U.K.’s Manchester Untied for nearly five years, Cantona is nothing short of a living legend to many of his fans. He was named the team’s player of the century in 2001 and is fondly nicknamed “King Eric.”

His call for a financial revolution has prompted France’s economy minister to speak out. On Wednesday, Christine Lagarde told him to stick to football not finance, telling a news conference, “Mr. Cantona is no stranger to controversy. He is a great footballer, but I’m not sure we need to pay heed to all his suggestions.”

Doesn’t sound like a bad suggestion to me. The banks appear to have little to fear from the feds. Maybe being afraid of us would frighten them into acting more like members of the community and less like pirates.

James Pilant

Google Investigated

On By southwerkIn business ethics, ethics

The BBC reports that a European Investigation will be launched over complaints about Google.

EU launches antitrust probe into alleged Google abuses

The European Commission has launched an investigation into Google after other search engines complained that the firm had abused its dominant position.

The EC will examine whether the world’s largest search engine penalised competing services in its results.

The probe follows complaints by firms including price comparison site Foundem and legal search engine ejustice.fr.

What we are talking about here is search results. You enter a search on Google and ten results come up on the first page. There are often thousands and, on occasion, millions of hits. The order of these hits is vital to web site success. If you are selling something, for instance, like coffee and your search result puts you at 213, you’re not going to sell very much coffee.

Google’s competitors are alleging that the company manipulates its search results to make competitors, well, less competitive. They allege that their place in the hierarchy, say fifteenth in a search, would be seventh if the “real” results were posted.

This is the kind of problem you can expect with a company that controls a very large part of the market and has components that compete with other companies that use the Internet.

James Pilant

It’s All Bad… (via The Truth About PR…if Any?)

On By southwerkIn business ethics, ethics

I really enjoyed the author’s take on the PR industry. At this point, I wanted to quote from the article but don’t let me spoil. Enjoy!

James Pilant

It's All Bad...   In research for this blog I came across a very interesting idea from J. Parsons, writer of Ethics in Public Relations. In his book, he delves into the contradictions which lie in the PR industry in regards to lying, misleading and withholding truths. In one chapter he notes Thomas Birch, a professor at the University of Oregon who suggested that ‘To lie to someone is to lead them to act in a manner in which they would not have acted had yo … Read More

via The Truth About PR…if Any?

Business Ethics Question (via Jennifer’s Road To Riches)

On By southwerkIn business ethics, Capitalism

This is an opinion of one of fellow bloggers. I liked what she had to say. I hope you do too.

James Pilant

Homework Question: Do you think that computer monitoring of employees by businesses is ethically justified? Make logical arguments either for or against the practice. Since I am typing this on a work computer that is being monitored I should probably say yes I think it is justified but I don't. A company is paying you to do a certain job. If you are completing that job on a daily basis why do they need to see what you are doing the rest of the ti … Read More

via Jennifer's Road To Riches

British Call For Executive Bonus Regulation

On By southwerkIn business ethics, Capitalism, ethics, Government Failure

British Business Secretary Vince Cable calls for stiff bonus regulations.

From the BBC –

Mr Cable said disclosure was vital.

Speaking to BBC Radio 4’s Today programme, he said the potential scale of 2010 bank bonuses remained “of considerable concern to the government”.

He added: “I’ve launched a consultation in my own department on corporate governance that takes in issues of remuneration and disclosure, and it may well be that that’s a better way of tackling it.

“I wouldn’t just cover banks, but highly paid executives in general. But we have to have a system whereby executive pay is available to shareholders so they can make proper decisions from it.”

Isn’t this something we should be talking about? Currently, business bonuses are at all time highs while the middle class barely hang on. Why don’t we talk about austerity for someone who isn’t a homeowner or a worker?

All over the United States, salaries have been stagnant for decades or even reduced. Some fields have diminished in size or virtually ceased to exist. Why should business bonuses be immune for the same kinds of cuts?

From further down in the article –

Mr Cable said he was “not persuaded” that banks realised they needed to limit bonuses, saying excessive remuneration in the sector remained a “major irritant”.

He added that if the banks gave out substantial bonuses at a time when the wider population faces the impact of austerity measures, it would be a “major provocation”, and that the government had the power of raising taxation to deal with the matter.

We’re not even having a discussion about this. Why is it always the middle class that gets hit? Why do they talk about Social Security and Medicare when there is so much money among so few who accomplish so little? How is it that Americans who paid into Social Security their entire working lives can be referred to as the “Greediest” generation as if they were two bit thieves?

James Pilant

How to stay safe while shopping online (via Axxera Inc.)

On By southwerkIn business ethics, ethics

I read through Axxera’s advice on avoiding online scams and liked it. Please click on the link below if you find this an important topic and take the opportunity to learn more.

James Pilant

While shoppers are looking for the hottest deals from online retailers to kick off their holiday shopping, cybercriminals are also looking to "score big" – by stealing shoppers' personal and financial information. This year, cyber thieves got off to an early start and Norton expects them to continue their nefarious holiday scams. Norton has observed spam messages promoting replica watches, health products, free gift cards, and other fake product … Read More

via Axxera Inc.

Daily Show – What If I Were Treated Like A Corporation

On By southwerkIn business ethics

Here’s a clip from the Daily Show kindly sent me by one of my fellow instructors.

James Pilant

Jayaraman Rajah Iyer Comments On The Post – The Homeowner As Victim, Not Deadbeat (via Chasing Fat Tails)

On By southwerkIn business ethics, ethics7 Comments

What Google gave me when I asked for a picture of Jayaraman Rajah Iyer.
Jayaraman Rajah Iyer (his web site) comments –

Reading the article I find it is devoide of the human element. A computer goes by some numbers and ticks off an Action letter that is taken as sacrosanct even to the extent of putting up a lock in a house that ought not to be attached. I’ve got a feeling these mortgage service agencies are paid on the basis of number of notices issued and they act indiscriminately. It is bank’s responsibility to assure action taken is legitimate to start with. My suggestion is Article 13 UNCAC: Participation of Society. Let consumer group be formed in every precinct, represented by a Trustee in the Board of the banks who would oversee the effective functioning of the foreclosure procedures from setting-up to execution.

It’s an interesting idea. I’ll need some more data on Article 13 UNCAC.

James Pilant

Matt Taibbi Shoots And Hits!!

On By southwerkIn business ethics, Capitalism, ethics, Government Failure, Philosophy of Business, White Collar Crime

Matt Taibbi is as usual dead on target. He does a veritible Indian War Dance on the horrors of the foreclosure crisis. Read the paragraph below and then go spend a delightful (quality of writing) and painful (financial corruption) story.

The moral angle to the foreclosure crisis — and, of course, in capitalism we’re not supposed to be concerned with the moral stuff, but let’s mention it anyway — shows a culture that is slowly giving in to a futuristic nightmare ideology of computerized greed and unchecked financial violence. The monster in the foreclosure crisis has no face and no brain. The mortgages that are being foreclosed upon have no real owners. The lawyers bringing the cases to evict the humans have no real clients. It is complete and absolute legal and economic chaos. No single limb of this vast man-­eating thing knows what the other is doing, which makes it nearly impossible to combat — and scary as hell to watch.

Excellent, exactly. This is not a moral crisis where six million Americans suddenly decided to buy too much house. This is a moral crisis where the biggest financial institutions in the world decided to take the home owners of America on a little trip into world finance. The banks had a hell of a vacation. The home owners never made it back.

James Pilant