Benjamin Franklin, Business Ethics, And A Whistle

Paul Elmer More’s biography of Franklin is one of those books designed to draw moral lessons at every possible point. Nevertheless, on occasion he does well in his almost manic pursuit of moral virtue.

Franklin had a rule – “Don’t give too much for the whistle.” This is why.

When ten years old the lad was taken from school and set to work under his father. But his education was by no means ended. There is a temptation to dwell on these early formative years because he himself was so fond of deducing lessons from the little occurrences of his boyhood; nor do I know any life that shows a more consistent development from beginning to end. There is, too, a peculiar charm in hearing the world-famous philosopher discourse on these petty happenings of childhood and draw from them his wise experience of life. So, for instance, at sixty-six years of age he writes to a friend in Paris the story of “The Whistle.” One day when he was seven years old his pocket was filled with coppers, and he immediately started for the shop to buy toys. On the way he met a boy with a whistle, and was so charmed with the sound of it that he gave all his money for one. Of course his kind brothers and sisters laughed at him for his extravagant bargain, and his chagrin was so great that he adopted as one of his maxims of life, “Don’t give too much for the whistle.” As he grew up, came into the world, and observed the actions of men, he thought he met with many, very many, who gave too much for the whistle,—men sacrificing time and liberty and virtue for court favor; misers, giving up comfort and esteem and the joy of doing good for wealth; others sacrificing every laudable improvement of the mind and fortune and health to mere corporal sensations, and all the other follies of exorbitant desire.

I think the author is a little over enthusiastic in his assessment of the effect of overpriced whistles, but the sentiment is accurate. We often give too much for the wrong things.

James Pilant

The Business Ethics of Benjamin Franklin – Truth, Sincerity, And Integrity

From the Project Gutenberg free book, The Autobiography of Benjamin Franklin –

Before I enter upon my public appearance in business, it may be well to let you know the then state of my mind with regard to my principles and morals, that you may see how far those influenc’d the future events of my life. My parents had early given me religious impressions, and brought me through my childhood piously in the Dissenting way. But I was scarce fifteen, when, after doubting by turns of several points, as I found them disputed in the different books I read, I began to doubt of Revelation itself. Some books against Deism fell into my hands; they were said to be the substance of sermons preached at Boyle’s Lectures. It happened that they wrought an effect on me quite contrary to what was intended by them; for the arguments of the Deists, which were quoted to be refuted, appeared to me much stronger than the refutations; in short, I soon became a thorough Deist. My arguments perverted some others, particularly Collins and Ralph; but, each of them having afterwards wrong’d me greatly without the least compunction, and recollecting Keith’s conduct towards me (who was another free-thinker), and my own towards Vernon and Miss Read, which at times gave me great trouble, I began to suspect that this doctrine, tho’ it might be true, was not very useful. My London pamphlet, which had for its motto these lines of Dryden:

“Whatever is, is right. Though purblind man
Sees but a part o’ the chain, the nearest link:
His eyes not carrying to the equal beam,
That poises all above;”

and from the attributes of God, his infinite wisdom, goodness and power, concluded that nothing could possibly be wrong in the world, and that vice and virtue were empty distinctions, no such things existing, appear’d now not so clever a performance as I once thought it; and I doubted whether some error had not insinuated itself unperceiv’d into my argument, so as to infect all that follow’d, as is common in metaphysical reasonings.

I grew convinc’d that truth, sincerity and integrity in dealings between man and man were of the utmost importance to the felicity of life; and I form’d written resolutions, which still remain in my journal book, to practice them ever while I lived. Revelation had indeed no weight with me, as such; but I entertain’d an opinion that, though certain actions might not be bad because they were forbidden by it, or good because it commanded them, yet probably these actions might be forbidden because they were bad for us, or commanded because they were beneficial to us, in their own natures, all the circumstances of things considered. And this persuasion, with the kind hand of Providence, or some guardian angel, or accidental favourable circumstances and situations, or all together, preserved me, thro’ this dangerous time of youth, and the hazardous situations I was sometimes in among strangers, remote from the eye and advice of my father, without any willful gross immorality or injustice, that might have been expected from my want of religion. I say willful, because the instances I have mentioned had something of necessity in them, from my youth, inexperience, and the knavery of others. I had therefore a tolerable character to begin the world with; I valued it properly, and determin’d to preserve it.

I find it difficult to understand why more people particularly in the world of business don’t read Franklin’s Autobiography. It’s a relatively brief book. I can read it easily in a couple of day in my spare time. It’s an easy read. It’s very straightforward writing, a writing style in which you are approached as if you were an old friend.

It is a multitude of good books all in itself. It’s an English book for in it he explains how to develop a writing style and improve it. It’s a book of business advice, explaining how to make a good start, how to maintain a business and how to retire from it. It’s a self help book, laying out a plan of perfections set up daily for the course of a year. It’s a book of politics, where one can learn how to move with assurance through the hallways of power. It’s a community development manual in which the first civic booster in the United States explains how it’s done. It’s a book of science, explaining how to think and how to get results. And it’s possible to keep on going explaining over and over again how it applies to different areas of learning.

In the book we see the beginnings of those attitudes, those thought processes, now considered to be quintessentially American.

It’s worthy of any person’s time.

James Pilant

I Sent The Following To The Arkansas Attorney General’s Office.

Subject -Ohio Attorney Generaly Press Release
Details:

Cordray: Refiling Affidavits is an Insult to the Justice System

I don’t usually print press releases, but I REALLY like this one!

From the Ohio Attorney General Web Site –

COLUMBUS, Ohio) — In response to Wells Fargo’s statement acknowledging that it “made mistakes” and that affidavits in 55,000 foreclosures filed by the bank did not “adhere” to the law, Ohio Attorney General Richard Cordray offers the following statement:

“The big mortgage servicers and financial firms continue to demonstrate their belief that they do not need to play by the same rules as everyone else who uses our court system. The suggestion by Wells Fargo and its colleagues at several other national firms that they can cure fraudulent testimony by simply refiling new affidavits and continuing to proceed toward foreclosures shows they do not recognize the seriousness of the problem they have created. There is no simple ‘do-over’ for false testimony that will be likely to avoid sanctions and penalties imposed by the courts. Their brazen efforts to minimize their financial exposure by sweeping these problems under the rug are an insult to the justice system in this country. These disclosures by Wells Fargo will now become the focus for a new prong of our on-going investigation.”

Earlier this month, Cordray filed a lawsuit against GMAC for issuing false affidavits in many Ohio foreclosure cases. He has taken a hard-line approach with national loan servicers operating in Ohio in the wake of the foreclosure crisis. In July 2009, Ohio was the first state to file a lawsuit against a loan servicer for violating the state’s consumer laws. Since then, two other cases have been filed in addition to the case against GMAC.

Okay, guys, there it is. I’ve been talking about it for weeks. This is fraud. It’s not mishandled paperwork. It’s not routine. It’s not something that “wouldn’t have changed the outcome in the vast majority of cases.” It’s illegal. It’s lying to the court. It’s telling Judges what you know to be untrue on oath.

The Ohio Attorney General has the guts to get out there and say it. The President won’t. The Wall Street Journal won’t. The Treasury department won’t.

But I have almost from the beginning.

It’s time for a foreclosure freeze, a moratorium until the industry gets its house in order. It’s time for action not just in Ohio but all over the fifty AND the federal government.

The American people have a right to believe that there is one type of law for all people be they in the banking industry or other citizens.

Let us go forward as a nation not just Ohio and punish these criminal acts.

James Pilant

Bayer and The Bees (via Your Daily Dose: The Ethics Behind Pharmaceutical Marketing )

This is a fine business ethics essay from my friends at “Your Daily Dose” in this case, Christine. (If you are reading this, Christine, I will be happy to use your whole name, should you desire it.)

The writing is clever. The information is interesting. The business ethical question dead on point.

Doesn’t get any better than that!

James Pilant

Bayer and The Bees So when I was in high school, my physical science teacher explained to a classroom of generally disinterested students the phenomenon of Colony Collapse Disorder: or the dying off of our world's honeybees. The idea is simple: without honeybees, there is decreased pollination. Without pollination, there are fewer plans….Continue up the steps of the food chain until you get to us. No more humans! The catastrophe is caused the worldwide decline in … Read More

via

Robo Signing Began With Debt Buyers

From the St. Louis Dispatch –

When Michael Gazzarato took a job that required him to sign hundreds of affidavits in a single day, he had one demand for his employer: a much better pen.

“They tried to get me to do it with a Bic, and I wasn’t going – I wasn’t having it,” he said. “It was bad when I had to use the plastic Papermate-type pen. It was a nightmare.”

The complaint could have come from any of the autograph marathoners in the recent mortgage foreclosure mess. But Gazzarato was speaking at a deposition in a 2007 lawsuit against Asset Acceptance, a company that buys consumer debts and then tries to collect.

His job was to sign affidavits, swearing that he had personally reviewed and verified the records of debtors – a time-consuming task when done correctly.

Sound familiar?

That’s right. This brilliant idea was thought up by debt collection agencies, the ones that buy up debts for pennies on the dollar and then sell them back and forth trying to make a buck.

Now, all we have to do is figure out what incredible genius thought you could use the same practice with mortgages.

Mortgages are a different ball park. In the United States property cannot change hands without a written contract. Further, land is surrounded by laws and guarantees dating back centuries. Robo signing on unsecured debts like credit cards is probably pretty stupid but robo signing on mortgages is just asking for hard core exciting trouble and they are getting it.

Hold on to your hats, this scandal just keeps getting better by the day!

James Pilant

How To Use Research To Change Policy!

I ran across this on the internet. In Australia they do what’s called jump racing. It has been controversial for many years. The public opposes it by high majorities but after the last series of scandals, the racing industry made cosmetic changes and in that manner common to all industrial operations all over the world announced that everything was fixed.

Well, they didn’t fix it. So, Animals Australia created this report.

WARNING – Graphic Images!

This is devastating. It’s powerful. It’s incredible. This is how the internet, advocacy, policy making, journalism, intelligence and solid hard work come together to change the way things work.

Before the internet is divied up into corporate pie, there is still time for this kind of activism, telling truth to power.

James Pilant

It’s Scholarship Scam Time!

From the Kansas City Star –

Generally, be wary of scholarship pitches that involve application fees, scholarship matching services that guarantee success and sales pitches that are disguised as financial aid seminars, said Mark Kantrowitz, publisher of FinAid ( http://www.finaid.org).

Kantrowitz said he’s been seeing more loan scams that involve advance fee payments. The lure is an unusually low-interest educational loan, with the requirement that you pay a fee to receive the funding.

Of course, after you pay, the loan never materializes. Legitimate loans, on the other hand, deduct the fees from the disbursement checks.

Here are three variations of tuition scams to watch for, according to FinAid:

•Scholarships for profit: This type of fake program draws thousands of applications for scholarships and charges fees of $5 to $35 for processing. The promoters actually pay out a scholarship or two and take a hefty profit on the rest of the money. Your odds of winning the lottery are better.

•Eye on the prize: In this case, you’re notified that you’ve won a scholarship worth thousands of dollars, but you’re required to pay a disbursement fee or the taxes before the prize is released.

•The match game: Be wary of scholarship matching services that guarantee you’ll win money or they’ll return your funds.

I thought I would pass it along. Are the scammers increasing in number or is it just in reach? Are there not so many, but with computers and modern communications they can run many more scams simulaneously?

I don’t know. Maybe some of both.

Whenever you are in trouble and, right then, right there, on television or on the computer or on a roadside sign, the miraculous answer appears, it probably isn’t the answer. I am very sorry to have to tell you that.

It’s not as if the world wasn’t cruel enough.

James Pilant

Bank Agrees To Modify Your Mortgage – Then Kicks You Out – Standard Practice!

From the Washington Post

Across the country, struggling homeowners are increasingly tripped up by mortgage lenders that press ahead with foreclosures regardless of any effort they make to provide borrowers with relief on unaffordable mortgages.

Amid the worst housing crisis since the Great Depression, mortgage companies have established a dual-track approach toward troubled homeowners, negotiating with them over loan modifications while trying to seize their homes.

Top government officials have been urging lenders to redouble their efforts at modifying burdensome loans and have barred lenders from foreclosing on homeowners who are seeking to rework their mortgages under a federal program. Mortgage companies, however, have continued to pursue this two-track strategy, with a widening toll especially on those homeowners who have been trying to resolve their mortgage difficulties before they snowball, according to federal and state officials and consumer advocates.

During the last month, several major lenders have temporarily halted thousands of foreclosure cases amid reports that fraudulent court documents and improper procedures have been used to evict people from their homes. But disarray within the mortgage industry goes much further. And the foreclosure pause has done little to address the common industry practice of taking homes from people who’d been led to believe they could save them.

“It’s still happening everywhere,” said Arizona Attorney General Terry Goddard, who has tried to bar the dual-track process in his state, one of the hardest hit by the foreclosure crisis. “It’s one of the largest complaints I get. . . . The lenders need to make a choice. What do they want: a foreclosure or a loan modification?”

The banks are playing it both ways. They foreclose on you when you are delinquent on payments and they foreclose on you when you get your payments modified with them since you’re not paying the full amount. Confused? Think how you would feel after reaching an agreement with the bank to lower your payments and your house is auctioned!

Take a look at the case of Mr. Roberts.

In Centreville, Woodrow Roberts III said he enrolled last October in a loan modification program with Bank of America. At the time, he was still current on his $3,000-a-month payments but wanted some relief until he could find a second job. The bank agreed to trim the monthly payment by $600 for a three-month trial period and consider Roberts for a permanent modification, he recalled.

After three months, he said, he heard nothing from the bank. “I called in every week to see the status of my loan,” Roberts said. “After a year of phone calls and no real information, I received a letter in the mail.” It said he had been rejected for a modification and that he owed more than $8,800 – the total he’d thought his payments had been reduced over the course of the year plus fees. If he didn’t pay, the letter warned, his home would be sold at a foreclosure auction Nov. 12.

“If I knew this type of program could risk everything, I would have never entered into this program,” Roberts said. He explained he can’t afford to pay the sum demanded all at once and hasn’t been allowed to spread it out over time.

In response to a reporter’s question about the case, Bank of America spokeswoman Jumana Bauwens said Roberts was turned down for a permanent loan modification under the federal program because his income was too high to qualify. But she said the bank is now reviewing whether he is eligible for alternative relief.

Sounds like he had a deal to me. But he didn’t. The deals only work one way. If the bank wants to go with the deal, it’s fine. If they don’t, your home is auctioned and they don’t feel obligated to talk to you about it.

Here’s some more –

The Mortgage Bankers Association said lenders often file initial foreclosure paperwork as they work to modify a loan. John Mechem, an MBA spokesman, said they want to make sure that if the modification effort fails, they can promptly move forward with the foreclosure, which can take up to three years to complete depending on the state. Fannie Mae, Freddie Mac and the Federal Housing Administration impose deadlines for filings on loans these agencies guarantee or own, he said.

But Phillip Robinson, a lawyer at the nonprofit law firm Civil Justice Inc. in Baltimore said, “Attorneys and housing counselors here and all over the country complain every day about this kind of thing.”

I don’t understand. I thought if you called and talked to someone at a bank, a loan office, etc., and they said they would take the payment late, they would take a buyout, they would accept a lower payment over a longer time, etc, etc, that we had a deal.

Apparently not. If you’re negotiating a mortgage with a bank, and they agree to modify it, you need to get it in writing. What’s the catch? I don’t see why they should let you have any such evidence of their intent. When they can decide to foreclose or not regardless of the arrangements they have made with you, why should they put anything on paper?

If you have a mortgage, and you have made arrangements with a bank, have a backup plan in case foreclosure is pushed through anyway.

James Pilant

Mortgage Companies Get Public Money For Properties They Don’t Own?

Mortgage companies enrolled in the Obama administration’s signature foreclosure-prevention initiative may be receiving taxpayer funds despite not having a legal right to the home or to the mortgage, a top Treasury Department official revealed Wednesday.

But despite faulty or missing paperwork, the Obama administration allows mortgage companies to boot homeowners from the program, sticking the borrowers with massive bills that often leave them worse off.

During an oversight hearing, Phyllis Caldwell, Treasury’s housing rescue chief, acknowledged during questioning that Treasury doesn’t know whether mortgage companies and the owners of mortgages are receiving public money under “false pretenses.” Treasury is investigating, she said.

The contradiction highlights what many critics of the past two administrations’ policies have claimed for some time: they exert overwhelming force when it comes to saving financial institutions, but merely modest assistance when it comes to distressed homeowners.

So, let me get this straight, the federal government in this case the Treasury Department, has been kicking hundreds of thousands of people out of their program (HAMP) to keep their homes but the mortgage companies have been getting the money whether or not they owned the homes?

Actual human beings have had to fill out tons of paperwork (my understanding is that the initial application is a seventy page document), provide endless reams of evidence of income, etc., get relatively little aid and more often than not get kicked out of the program.

On the other hand, the banks who have been receiving federal funds (HAMP funds), have not had to prove they owned the property to collect benefits?

At what point, did the phrase, double standard, become the Administration’s sole approach for mortgage foreclosures?

They can’t be troubled to find obvious bank problems but happily squish homeowners for the smallest application fault? Thanks a lot, White House, for lining up with the little guys!

James Pilant