This week in Business Ethics is marred by the death by ovarian cancer of Ruth Bader Ginsburg. She died during the week of Rosh Hashanah which in Jewish lore means she is particularly blessed. Here is a guide for my readers unfamiliar with the surrounding concepts.
Currently that American Institution, the Post Office, is under attack. Don’t believe me? A federal judge called the changes: “a politically motivated attack on the efficiency of the Postal Service” It is very poor business ethics indeed to sabotage a public agency, a public good for all Americans, for private gain. I found a good article on the importance of the sorting machines which I include here as well as the article I got the federal judge quote from.
Tragically there appears to be increasing violence surrounding requests that people wear masks and practice social distancing. In a particularly callous attack, a 67 year old gas station worker suffered a fractured skull after being assaulted with a pipe. It is a particularly bitter reality that during a worldwide pandemic, many Americans are unwilling to pull together in the wake of the viral threat to protect each other from infection. This generation of Americans is half helpless to act on behalf of the common good. Many believe in the crass nonsense of libertarianism and similar beliefs that the only interest is self interest. The generations of Americans that sacrificed in the face of war and epidemic must be astonished at this willingness to sacrifice our fellow Americans out of simple pig headedness.
Are we entering the Pyrocene, the age of fire? Stephen Pyne suggests in the High Country News that is indeed the case. He says that in previous ages we had ice ages and this current situation is the other side of the coin, that is, ages of fire. It’s a good read and a fairly brief one. It is attached below.
Over the last twenty years, financial institutions including the often mentioned five, HSBC, JPMorgan, Deutsche Bank, Standard Chartered and Bank of New York Mellon (BNY Mellon), conducted about 2 trillion dollars in suspicious activity. Rest assured this is a developing story and we are going to hear more as the particulars work their way to the surface.
Federal charges of among other charges, commercial bribery, were filed against six individuals who are charged with bribing Amazon employees to gain an unfair advantage. The bribes totaled about $100,000. Temporary suspensions of competitor accounts was one of the means used to gain advantage.
This kind of crime causes people to buy inferior or even dangerous goods. Let’s hope Amazon acts to clean up its staff.
New York filed a 2 billion dollar lawsuit against Johnson & Johnson for its role in the opoid crisis, that is, encouraging opoid use and downplaying the risks of addiction. Since Oklahoma has already won a case and 500 million dollars from the company, one has to wonder why the state has waited this long and is that the correct amount?
How is it that a video in which a man committed suicide live on Facebook does not violate their standards and is still up? Facebook says it has a policy against suicide and videos showing self harm but isn’t enforcing it.
We begin with the wave of fires creating waves of destruction in the American West. Governor Gavin Newsom says the debate over climate change is finished. He says in these California fires you can see the results of climate change with your own eyes. I strongly agree but I felt that the fires in Australia last year should have ended the debate. This is further evidence.
Climate change is going to be a continuing issue in business ethics. How are businesses, particularly, the international corporations, going to act on this issue? Their responses will be as important as that of many medium size nations.
Let’s segue to a somewhat nostalgic and yet current note, that is, vinyl records have outsold CD’s for the first time since the 1980’s. That may be just a chimera though since streaming services are seizing the lion’s share of the market.
There is a famous insurance fraud case making the rounds on social media. A woman in Slovenia cut off her hand with a band saw claiming it was an accident that happened while cutting branches. Unfortunately for her claim, she had just taken out five insurance polices which would have resulted in an award of more the equivalent of more than a million US dollars. This was certainly suspicious but her boyfriend’s internet searches on artificial hands done before the loss clinched the case for fraud.
Apparently another case of stupid criminals but a very sad one (although the hand was reattached).
California’s legislature faced with a shortage of firefighters and inmates showing bravery and tenacity fighting the wave of fires has passed a law making it easier for them to expunge their records and become firefighters.
As a form of positive business ethics, I am impressed by the act. It seems to me simple justice that those on the frontline of fighting these terrible and now increasingly regular fires should be rewarded.
Rio Tinto’s CEO Jean-Sébastien Jacques, is going to resign following the destruction of sacred aboriginal sites. The company attempted to deal with the crisis by canceling bonuses but considering the harm done this was a non-starter.
This was an appalling crime and there is no real penalty. Under the law, they could destroy at will any cultural artifact on the land they controlled. The Juukan Gorge rock shelters had shown evidence of continuous human habitation for 46,000 years. They were an irreplaceable evidence of human history completely unique.
What kind of people are these to disintegrate and destroy cultural artifacts at will? And what kind of nation allows its cultural treasures to be annihilated without a hint of caution or penalty?
And finally, I would like to add my voice to Emily Stewart‘s writing in Vox. She is calling for providing all citizens of the United States with Internet. I strongly agree. If we are going to advance as a nation, that is a minimal requirement. Further, in a crisis like the current pandemic we have already seen the importance of being connected.
But please read the article, the author is detailed and impressive.
This week had some interesting aspects. After a deluge of foreign seeds began arriving in the United States, Amazon was caught without an appropriate policy. Well, now they have one. You can’t send seeds by Amazon. Looks like they went for simplicity in their policy making.
The Atlantic story about our president’s general contempt for veterans has made major waves in the political world. However, the editor of the magazine says there is more to come! More dramatic news than this is hard to imagine but nothing about our current political climate can be described as normal. Next week should be interesting.
An alligator skin handbag worth roughly $26,000 was destroyed in Australian customs for lacking a permit. This calls attention to the crime of animal parts being marketed to our jaded upper class. The struggle against this kind of nonsense is critical to preserving endangered species.
Americans appear to be obsessed with self-improvement. They want to be smarter, better looking and more confident. And to satisfy this need, there are books, films, courses, and the occasional cult.
The Nxivm cult used its clients’ needs for self-improvement, in particular the quest to find meaning in their lives, against them.
Sometimes I walk through the self-help sections of bookstores and marvel at the offerings. The books say you can be better at any worthwhile goal, often immediately. I am a Black Belt and it takes years (in my case – seven) to learn martial arts. This has given me a healthy skepticism about claims of speedy success. There is no golden road to improving yourself.
For instance, weight training. I learned a lot about lifting weights when I was using it to supplement my body development. Many of the books promise powerful benefits in six weeks of training and they are very often illustrated with before and after pictures. In actual fact, it takes about six months to get visual results with weightlifting and only with a strong routine. There are good internet articles on how the before and after pictures can be manipulated.
So, I have a healthy skepticism about claims of speedy improvement, etc.
But Nxivm got around the skepticism. Your first intro was someone of the first rank in society, often an heiress or a leader in a field. (The same method of recommendation is often used in Ponzi schemes.) And as you progress in the training you meet more and more opinion leaders and everything is designed to appear professional and well organized. The elements that in America are the epitome of our ruling class were used to sell what eventually turned out to be a tawdry sex cult where women were systematically degraded and manipulated in the name of liberation.
I would love to name a simple cure for cult recruiting, but there is none. We are taught or more correctly sold on the idea that self-improvement can be made easy and that it is purchasable. The fact is that we develop meaning in our lives by focused thinking, by experience and by our actions. Each of us can generate self-worth in multiple ways.
I know — I know. Relying on our own efforts seems like such a slender reed when confronted with our often-overwhelming reality of pandemic, bizarre politics and global disasters. But that is where the struggle for meaning takes place. You can quit, embrace a cult, settle for a religion, do just whatever your group does, conform, …
But the battle for who we are is always going to be internal, intensely personal, and dependent on our own struggles.
Power in the state is justified only by the state’s ability to protect the people over which it asserts that power. British rule over the whole of the United Kingdom has been self-serving to the point of criminal inequality. Its power is no longer justified.
If you want power over me then you had better be ready to prove to me that you deserve that power. The sole justification of the state’s power over the lives of people is its ability to provide for the freedom, security, and the welfare of those people. Britain is currently ranked as the twenty-third wealthiest nation in the world, and yet, staggeringly, it is the six most unequal in the developed world in terms of income. After four decades of unchecked Thatcherite neoliberalism, with money being sucked up to the top of the economy, no less than twenty percent of the population are trapped below the poverty line. Income inequality in Britain is greater today than it was when Charles Dicken wrote Hard Times.
I believe that income inequality here in the United States as well as in Great Britain and Ireland have a moral component. There is something unseeemly in the economic benefits of a society flowing to a handful of its members while much of the population loses ground and becomes more insecure.
If you watch the actors in 1960’s television programs like Gunsmoke, you’ll often seen the stuntmen playing small parts as members of crowds, parties, jurors, etc. In the episodes where there were no stunts to be performed it was customary to make sure they still had some income. And it wasn’t just in Hollywood that this kind of kindness was practiced, there was an expectation that there would be human decency in all walks of life.
But somehow, somewhere, the accountants took over and the world of business began to focus not on human beings, making a product, or even some modicum of service to the nation, but on pure profit. And that profit is realized more and more by turning away from investment and from making products to stock manipulation chiefly by stock buy backs – companies buying their own stock instead of looking toward the future or anywhere else.
Human decency, compassion, and kindness are outmoded models of conduct in the modern business world. In fact, they are often considered gateway “drugs” to the theft of monies from the shareholders. Pensions, disaster relief, scholarships, etc; are all stealing from the worthy investor and giving to the undeserving fellow citizens like our children.
Morality and citizenship are key factors in the success of modern civilizations. What can become of us in a land where greed is the only rationale for every action? We’ll get what’s happening now, a loss of faith in our basic institutions, the perception that every politician, every pundit, every newspaper, every television station are bought and paid for, and that playing by the rules is a game for suckers.
We are seeing the breakdown of this society and quite possibly the end of our civilization.
Rick Snyder is upset that Hilary Clinton is “politicizing” the Flint water crisis. He is upset at her cruel, cruel words. He did not comment on the even crueler words ofBernie Sanders calling upon him to resign. It is wrong to politicize events beyond the control of elected officials such as natural disaster but the Flint water disaster is natural only if you consider the Governor and his decision making natural and I do not. For at every single turn from the decision to change Flint’s water to the lies told the public about the water and finally the refusal to take action until weeks after the city declared a state of emergency, the responsibility rests in the hands of Governor Rick Snyder.
Snyder set up a system where bankrupt municipalities were seized and run as feudal provinces by a direct appointee of the Governor. The Governor’s choice to run the city decided to save a few million dollars by changing the source of the city’s water. When the city residents and the city officials complained, they were ignored. When the complaints grew in size and seriousness, the people of Flint were deliberately lied to. The agencies of the state government tasked with protecting the citizens concealed evidence and lied about the danger. Only when the evidence became overwhelming did the Governor take action.
And now, now at the last moment when the damage is done – when thousands of children have been exposed to forbidden levels of lead in their water, Rick Snyder is now doing something for the people of Flint, years too late to cure the results of his own decision making. And when he gets called on his actions, on his decisions and often his lack of them, he says we shouldn’t politicize the issue.
It is a political issue. It is the result of political decisions by Rick Snyder and the city managers he appointed. And when you have a political issue, you solve it by political means.
Hilary Clinton and Bernie Sanders are not politicizing crisis. They are talking about a political crisis, a crisis of judgment in government. It is fair game. No lead laden meteorite struck Flint. No storm commingled sewage and fresh water. The city manager appointed by Governor Rick Snyder decided to use a contaminated water supply to save money. That’s politics.
Like the Wizard of Oz, Snyder is asking us to ignore that man behind the curtain. But that man failed to act when his citizens were being harmed by lead contaminated water. That man is very much the center of this story. And whether or not the Governor now gets it and is now delivering clean water and testing kits is irrelevant.
It was the willingness to consider democracy an unfortunate obstacle in the way of an efficient government that is at the root of the problem. Flint could have continued with its elected government, that government, an elected government responsible and living among their own citizens, were hardly likely to have poisoned their children to save money. But the State acting through the office of the Governor seized control of the city and ran it with only one priority in mind, to squeeze as much money as humanly possible out of the municipality.
Snyder was imposing a corporate ethos on a city in a democracy. The bottom line is everything in a corporate environment. In a city, the lives and health of children get higher priority. When those priorities collided, which one prevailed? The corporate ones. — “So the water tastes bad? Get used to it.”
This is the United States and the people are supposed to have redress of grievances. Their local government rendered irrelevant and ignored, the people of Flint had nowhere to turn.
And this may be the future of all us. The corporate ethos is invading every part of law and decision making. If the bottom line is all that matters – if, as in this case, avoiding bankruptcy was the only goal, then of what importance are your lives, your jobs and the welfare of your families?
Take a look at the children of Flint. Their ordeal is just beginning. The consequences of lead poisoning are permanent and incurable.
A fellow blogger said something very kind about my work and I went and looked at his. I like it. It’s reflective and intelligent. Below is a paragraph that I not only like but I have wondered exactly the same thing!
One of the strangest phenomenon I see in dealing with wealth in this country is the bizarre dichotomy between the view of what is enough for “them,” and what is enough for “me.” In a Koch brothers interview, one of the brothers pointed out that if you put a 30K workers salary on an international scale that put the worker in top one percent of the planet’s income earners. Apparently this made him feel that Americans should be content and maybe consider themselves a little fat and happy.
On the other hand we have this from the short selection below where a man struggles from paycheck on an annual salary of 450K.
There has to be some kind of conflict between these two points of view.
When people run businesses they don’t come in neutral in regard to how the feel about what is and is not an adequate income. What does a person who feels that 450,000 dollars a year is a week to week struggle do in regard to paying the workers? And what does it say when a multi-billionaire can statistically analyze away income inequality by simply increasing the sample size to encompass the entire planet?
If you believe that 30k is a worthy and fully adequate income, what kind of business ethics are you likely to practice? Are you more likely to sell payday loans? – attach some new fees to your banking practices?
If you believe that 450k is so little money that you have to struggle paycheck to paycheck what kind of business are you likely to run? I have to acknowledge here that I have no concept what that would look like mentally but it is still troubling.
Income inequality is a wound on this country driving us apart and it by its very nature is an ethical problem that drives business wrong doing.
Marguerita Cheng, a certified financial planner and CEO of Blue Ocean Global Wealth, has a client in the Washington, DC area who makes $450,000 to $600,000 a year but lives paycheck to paycheck. He spends a lot of it on keeping peace with his ex-wife.
Close to half a million a year sounds like a lot, but he has to pay $8,000 per month to his ex-wife and both of their kids are in private high school. Four years of private high school cost $150,000.
“He basically uses his bonus to cover the private high school tuition,” Cheng said. “I understand that this is an extraordinary situation. I’ll share a saying that my dad taught me: ‘Money may not buy happiness, but it can buy peace.’ In this situation, sometimes you have to do what you have to do to keep an ex-spouse happy.”
Cheng’s client is not alone. Many Americans struggle to make-ends meet on six-figure paychecks – which by some are considered “upper income” or even rich.
Reading as I do about the crimes and stupidities of humankind in the field of ethics, it is hard to surprise me, even harder to astonish me. And yet, today that happened. The German ambassador to the United States wrote an essay entitled, “Germany Wants a Strong Greece.” And that is easy to believe if I wipe away the memories of the last five years.
Greece wants a strong Greece. Yes, when the Russians bombed Helsinki in 1939, the Russian foreign minister, Molotov denied it and said they were dropping bread to the poor oppressed people of the city. Maybe the Germans will drop a similar brand of bread on Greece. After all the Greeks are poor and oppressed.
Forgive me if I sound angry but I seem to recall an IMF study that shows under the agreement imposed almost entirely by the German Minister of Finance, Greece will not be able to pay off its debt in fifteen years and quite possibly never. Call me a cynic but a fifteen year period of austerity (possibly for much longer, eternity?) doesn’t sound like a deal someone made with a great love for the Greeks.
The events of the last few weeks include a refusal to deal with Greece by the European Union until it agreed in advance to their demands. Once this had been done, the Greeks were made to sell off 50 billions Euros worth of government property which is to be placed safely outside Greek control. The agreement doubled the sales tax in Greece putting the hammer down on any hope of a healthy tourist industry, one of Greece’s vital sources of revenue. I could go on, but why bother? It’s item after item after item.
The only large group of people who believe that the Germans have been kind to the Greeks are other Germans.
The Germans have almost single handedly imposed an economic regime on Greece which is almost certain to fail. The hardship imposed on the Greeks in roughly equivalent to that endured in the United States during the Great Depression and if the International Monetary Fund is right, it could last for decades.
Does that sound like a strong Greece?
Maybe the German word for strong means servile, weak and helpless?
I’m use to corporate flacks saying anything they are told to. But this? Maybe when you have needlessly crippled a country so that it will never pay off its debts, maybe when your own enormous debts have been forgive twice in the last century, maybe when you appear to all the world as great cruel bully, you should just keep a low profile?
Or maybe your self-righteousness is so overpowering, you just can’t believe that everyone just needs a little push to understand how wonderful you are. This is a German fantasy. The real surprise is that they apparently believe they are kind and generous, acting out of a genuine concern for the Greek people. God save all of us from that kind of love.
Germany Wants a Strong Greece | Peter Wittig
Germany wants a strong Greece, because a thriving Greek economy benefits the eurozone as a whole. This is why Greece and the other 18 eurozone members agreed on a comprehensive reform package that will help Greece regain economic competitiveness. Some of these reforms were quickly approved by the Greek parliament — by an overwhelming majority. They will make Greece more competitive and economically sound.
Below is a quote from an article from Huffington Post. It is reported in it that the Eurozone is not just demanding that Greece capitulate to its desires, they must do it before negotiations can even start. There is not even the semblance of respect for a nation state or its people.
Picture yourself in negotiations. You’ve gotten behind in your mortgage and you want more time. The bank says that before they will even talk to you, negotiate with you in any way, you must sign over your income and submit to the banks’s recommendations of how and what kind of work you should do. That’s what the Greeks are being asked to do. Take all your bargaining chips off the table. Only when you are powerless and helpless, will we deign to speak to you. Give in now and we may show mercy.
There is really not much historical precedent for this. The only thing I can think of are the Austro-Hungarian demands on Serbia to yield up its sovereignty in the wake of the assassination of Archduke Ferdinand.
There are five things about these bailout talks that really bother me. First, the unfairness of it. To start with, the bulk of the bailout money has gone to foreign lenders and little has been used to bolster the economy. Second, we’re not dealing here with sovereign states or even groups of sovereign nations. We’re dealing with finance ministers and technocrats, essentially international bankers. They’re not elected. They can’t be voted out. Essentially, they can do pretty much what they want and the only people they are beholding to are other bankers. Democracy is irrelevant. Third, the Greek people are suffering terrible pain. The unemployment rate is more than 25% and the youth unemployment rate is more than 50%. And I can on and on about the other damaging effects of austerity. Fourth, the Greeks are being told with great specificity what they must do. The Eurozone is making a mockery of the power of national governments to conduct their own affairs. The Greeks want to impose a tax on businesses. The Eurozone says no. But the Eurozone doesn’t stop there. They tell the Greeks how they want the money raised and expect them to do it. They want a value added tax (VAT) and cuts in pensions. There’s more but you get the idea. The Greeks want to do a variety of things to raise revenue and the Eurozone and the IMF are staying on script: privatization, lower income taxes, cuts in social services and reduced regulation. And the last thing that bothers me and most important, it can happen to us. Whole nations, states, counties and communities can get into financial trouble and if we do, who we will turn to for help? Banks, the IMF, or state imposed administrators, technocrats from business, banking and corporate law will be our only choices and what will they demand? You can see it right here, right now. This will be the prototype in the future for dealing with creditor governments, whatever their size. If we have a great a power differential like they have in Greece there will be no negotiations. You will accept what is offered to you and you will do it without question. And above all else, forget that democracy things.
What is being implied her is that it is not the people that are sovereign, it is the international financial system of interlocking banks, finance ministers and multinational corporations.
I am sure that there are people reading this that believe that I am over reacting. Many hold the belief that if the Greeks overspent they should pay the money back. That does not sound unreasonable. But it is the highest level of hypocrisy imaginable to impose conditions that will make paying the debt impossible.
If you were one of my students, I would expect one of you to ask, “How do you know that the Greeks can’t pay under those conditions?” And I, of course, delighted by student intelligence and initiative will reply that the IMF has a paper out saying that they can’t pay under current conditions. Read below from The Guardian.
So, the Eurozone already has evidence that they are essentially putting Greece into a state of permanent depression. Why would they want to that?
They aren’t saying. But I have a theory. All over Europe, there are people who are worried about what’s happening. Like me they wonder why nation states should bow before financial interests. They wonder why whether people should go without education, pensions and healthcare while the rich have a reduced tax burden and they pay higher taxes for less and less. They wonder much the same way we do in the United States, why their votes matter so little. Greece is an example of the power that can be brought on any show of defiance. Questioning the economic order has consequences, severe consequences. Don’t vote, comply. Economic value is the sole determinate in policy and practice. Humanity, compassion, honor, patriotism, and Christianity are all irrelevant concerns. The money must be paid, not to the people, not to the governments but to the banks. It is the money that votes.
Eurozone Leaders Meet, As Greece’s Debt Crisis Talks Continue
Euro zone leaders told near-bankrupt Greece at an emergency summit on Sunday it must enact key reforms this week to restore trust before they will open talks on a financial rescue to keep it in the European currency area.
Leftist Prime Minister Alexis Tsipras will be required to push legislation through parliament to convince his 18 partners in the euro zone to release immediate funds to avert a state bankruptcy and start negotiations on a third bailout program estimated at up to 86 billion euros ($95.5 billion).
Six sweeping measures including tax and pension reforms must be enacted by Wednesday night and the entire package endorsed by parliament before talks can start, a draft decision by Eurogroup finance ministers sent to the leaders showed.