Frantic efforts to contain radioactive leaks at the wrecked Fukushima Daiichi nuclear power plant have been dealt another blow after its operator said about 300 tonnes of highly contaminated water had seeped out of a storage tank at the site.
The leak is the worst such incident since the March 2011 meltdown and is separate from the contaminated water leaks, also of about 300 tonnes a day, reported recently.
Tokyo Electric Power Co (Tepco) said it did not know how the water leaked out or where it had leaked to, but it believed that the spillage had not flowed into the Pacific ocean.
Tepco’s spokesman, Masayuki Ono, said the water had seeped into the ground after breaching a concrete and sandbag barrier around the tank. Workers were pumping out the puddle and removing the remaining water from the tank, he added. Despite efforts to contain the spillage, the leak is already the most severe since the crisis began.
This is the worst leak since the 2011 disaster. Fukushima after the disastrous tsunami was a major disaster. It was on the news every day.
Now it’s slow motion disaster. Leakage continues into the ocean while experts solemnly intone that we shouldn’t worry because the ocean is big.
This is business ethics at its worse. A nuclear power plant was built on the coast near an earthquake fault. The safety systems we were repeatedly assured would never fail failed. We don’t find out from the government or the industry that there is a problem. The news media discovers the serious nature of the crisis. A corrupt industry downplays the incident with government connivance. As the disaster worsens, the lies and incompetence become more and more obvious, and gradually it becomes obvious that when confronted by a disaster, the nuclear industry simply has no idea how to fix the problem. This is contrary to what the industry has been saying for decades.
Remember, just repeat, “Nuclear industry is the future. It’s safe and cost effective. Only a handful of people have died in the rare nuclear accident compared to thousands in the coal industry. It’s only fearmongers and environmental cranks who oppose this future.”
See, after a while you feel better about everything?
Highly radioactive water from Japan’s crippled Fukushima nuclear plant is leaking into the ocean creating an “emergency” that the operator, TEPCO, may be unable to contain, said an official from the country’s nuclear watchdog.
“This contaminated groundwater has breached an underground barrier, is rising toward the surface and is exceeding legal limits of radioactive discharge, Shinji Kinjo, head of a Nuclear Regulatory Authority (NRA) task force,” told Reuters.
Tokyo Electric Power Co’s “sense of crisis is weak,” Kinjo said. “This is why you can’t just leave it up to Tepco alone” to deal with the ongoing disaster.
“Right now, we have an emergency,” he said.
A total of up to 40 trillion becquerels of radioactive tritium may have leaked into the ocean since the disaster, said TEPCO, insisting that it was within legal limits.
Two and a half years after the Fukashima tragedy Japan does not want to admit how serious it is, but it is obvious the drastic environmental implications are to follow, Harvey Wasserman, journalist and advocate for renewable energy, told RT.
RT: Japanese officials have admitted a leak at Fukushima has been happening for two years and is worse than earlier thought. Why did it take so long to evaluate the actual repercussions of the tragedy and take decisive measures to tackle them?
HW: The Japanese authorities have been covering up the true depth of the disaster because they don’t want to embarrass themselves and the global nuclear industry and they are trying to open up another nuclear plant in Japan. When the Japanese people now find out that the accident is worse than we thought and they have been leaking many tons of radioactive water into the Pacific Ocean for almost two and a half years, this is a catastrophe. Tokyo Electric has no idea how to control this accident. This is absolutely terrifying after two and a half years. To find out that these reactors have been out of control, now that they can’t control this they don’t know what’s going on. This is not a primitive backward country; this is Japan with advanced technology. It has very serious implications for nuclear power all over the world.
RT: Why the plant’s operator failed to contain the leak?
HW: Because they don’t know what to do. This has never happened before. You have three explosions; you have four nuclear reactors that are severely compromised. No one ever planned for this. This is an apocalyptic event. This is something that could contaminate the entire Pacific Ocean. It is extremely serious. The reality is that Tokyo Electric does not know what is happening and does not know how to control what is going on. Our entire planet is at risk here. This is two and a half years after these explosions and they are still in the dark. It’s terrifying.
The New York Times has recently reported that the workers at Fukushima are running out of places to store the water that has been used to cool the radioactive waste. The water is highly radioactive, and is leaking from its storage tanks at the rate of 75 gallons per minute. In other news, the Japanese government is changing the threshold for danger so that people may return. Thus, doses of less than 20mS/y are now acceptable.
English: Reigate Town Hall The old town hall was built in 1708. According to the wooden plaque that still hangs inside, it was purchased and returned to the ‘corporation… for the benefit of the inhabitants’ in 1922. It is now home to a cafe. (Photo credit: Wikipedia)
The Benefit Corporation
The rise of the benefit corporation, a type of corporate form that didn’t exist before 2010, is remarkable in its speed. This kind of corporation offers an organization not tied to the narrow goal of short term profit maximization. While the “judgment rule” seems to offer corporations a freer decision making climate to be environmentally friendly and exist with some freedom from being sued for loss of share value, there is some legal uncertainty. The Benefit Corporation removes all doubt. This kind of corporation does not exist for profit maximization.
This offers the opportunity for building purposeful organizations with a stated and legal responsibility to do no harm. This is a far better model than the soulless machines of destruction we often experience as the modern corporation.
This may herald a new era in corporate social responsibility. It only takes a small adjustment in the law to have tremendous effects on the culture over time. This may be one of those historical adjustments.
James Pilant
For my students, the most important concepts here for study are the “judgment rule” and “short term profit maximization.”
Delaware Gov. signs landmark social entrepreneurship law
The benefit corporation, the brainchild of the nonprofit B Lab, is predicated on a simple idea: use the power of business to solve social problems. Companies incorporated under legal frameworks like the one passed in Delaware strive to maximize profits, but can do so while also pursuing a broad range of social and environmental goals, from low carbon emissions to generous employee benefits and transparency in governance. Under traditional corporate law, a firm’s fiduciary responsibility to its shareholders to maximize profits is privileged over other commitments to social or environmental responsibility. The benefit corporation amends this, legally enshrining the interests of stakeholders, including employees, customers, the community and the environment, alongside those of shareholders. Among other things, benefit corporation status shields a company’s social and environmental objectives when it is up for sale. Today, there are at least 200 legally registered benefit corporations (and likely many more, as some states don’t currently track their incorporation), including large companies like Patagonia and many smaller ones like Vermont-based WomenLead and New York-based Clay Marketing. The “shared value” created by these companies is heralded by benefit corporation enthusiasts as a radical refashioning of contemporary capitalism.
From Wikipedia: (I included this section from the Wikipedia article because I want you, kind reader, to get a grasp on the speed of the change in corporate law. Business law tends to be very conservative and usually slow moving, but not in this case. jp)
In April 2010, Maryland became the first U.S. state to pass benefit corporation legislation. As of January 2013 California, Hawaii, Illinois, Louisiana, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, South Carolina, Vermont, and Virginia had all passed legislation allowing for the creation of benefit corporations. Legislation is also pending in Illinois that establishes a new type of entity called the “benefit LLC,” making available to limited liability companies the same opportunities afforded to Illinois corporations under the state’s Benefit Corporation Law.[1] Passage of the bill would make Illinois the first state to offer a social enterprise the opportunity to be a benefit L3C.[2]
Maryland’s legislation was signed into law on April 13, 2010 and became effective on October 1, 2010.
Virginia’s legislation was signed into law on March 26, 2011 and became effective on July 1, 2011.
Vermont’s legislation was signed into law on May 19, 2010 and became effective on July 1, 2011.
New Jersey’s legislation passed on January 10, 2011 and became effective when it was signed into law on March 1, 2011.
Hawaii’s legislation was signed into law on July 8, 2011 and became effective upon signing.
California’s legislation was signed into law on October 9, 2011 and became effective on January 1, 2012.
New York’s legislation was signed into law on December 12, 2011 and became effective on February 10, 2012.
Louisiana’s legislation became law on May 31, 2012 and went into effect on August 1, 2012.
South Carolina’s legislation became law on June 6, 2012 and became effective the same day.
Massachusetts’ benefit corporation legislation became law on August 7, 2012 and became effective on December 1, 2012.
Illinois’s legislation was signed into law on August 2, 2012 and went into effect on January 1, 2013.
Pennsylvania’s legislation became law on October 24 and will become effective on January 22, 2013.
Washington, D.C. legislation was signed by the Mayor on February 8, 2013 will go into effect after 30 days of congressional review.
Arkansas’s legislation was signed by Governor Mike Beebe on April 19, 2013 and will go into effect 90 days after sine die.
Guest post by Layton Olson. Layton specializes in representing tax exempt community, trade, and professional organizations at Howe & Hutton LTD.
Last month, a dozen companies committed to advancing social good filed to be classified as ‘Benefit Corporations’ in California. Their decisions represent a commitment to business strategies that systematically contribute financial, time, human, and other resources to charitable, educational and community improvement initiatives and institutions. California has joined the six states – Vermont, Maryland, New York, New Jersey, Virginia and Hawaii- that have enacted so-called public benefit or “B Corp” legislation since 2010. Colorado, North Carolina, Pennsylvania and Michigan and some cities have similar laws under consideration.
While traditional C Corporations are chartered to maximize benefit (i.e. profits) for shareholders, the B Corporation is legally chartered to consider and benefit stakeholders – a group that also includes employees, the environment, vendors, and the broader community… This legal status shields corporate directors from “stock-drop lawsuits,” in which shareholders can sue corporate leadership for knowingly acting in ways that decrease profits (i.e. raising social or environmental standards). Benefit Corporations must also publish an annual benefit report, which publicly discloses environmental and social performance using 3rd party reporting standards – therefore increasing transparency and accountability to shareholders and a burgeoning class of social investors.
What I learned at the workshop was that a benefit corporation is a new corporate legal structure that several states have established (Massachusetts passed BC legislation in August 2012) to provide an alternative to for-profit entities that want to include a public mission equally alongside seeking a profit. This is significant because historically, for-profit corporate legal structures bound CEOs and boards to pursue profit over all other considerations, regardless of the potential social and environmental costs. In addition, while not all corporate lawyers agree, founders and CEOs of traditional for-profit corporations perceived as making decisions that jeopardized the bottom line, can be fired.
Consequently, while there are many contributing factors to the numerous social and environmental challenges humanity’s faces, a very significant factor is the corporation’s pathological pursuit of profit at the expense of public health and environmental sustainability. This pathological pursuit of profit leads many corporate decision-makers to externalize as many costs as possible. As Joel Bakan, highlighted in his book, The Corporation, “It is no exaggeration to say that the corporation’s built-in compulsion to externalize its costs is at the root of many of the world’s social and environmental ills.” (My Emphasis, jp)
From the web site, Pennsylvania Nonprofit Law blog.
This new construct, called a “Benefit Corporation,” stresses sustainability along with financial success. More to the point, this new model is a boon to the non-profit world. It provides the opportunity for increased cooperation with a conscientious corner of the for-profit sector and the potential to leverage more sustainable impacts on business practices beyond existing corporations. Benefit or “B” Corporations redefine the modern notion of commercial success by valuing “stakeholders” above “shareholders.” Unlike traditional corporations, B Corporations must facilitate, and publicly report, positive social and environmental impacts through their work in order to register with the non-profit organization, B Lab (http://www.bcorporation.net). This third-party validation process provides a number of valuable benefits to participating businesses:
Save Money. B Corporations have the potential to deliver immediate financial value, and B Lab has already saved B Corps over $1M through service partnerships.
Set Yourself Apart. B Corporations differentiate themselves in the marketplace, and the certification process allows companies to generate press, meet sustainability requirements set by other companies, enhance reputation and mitigate potential trust erosion from consumers.
Find Common Ground. B Corporations offer a “common ground” for businesses that are committed to both the mission-driven ethos of the non-profit world and the best practices of the for-profit section.
Connect With Your Peers. Through B Lab, B Corporations are encouraged (and incentivized) to collaborate amongst themselves and share best practices in sustainability, marketing, finance, IT, and HR.
Grow Faster and Smarter. The raw numbers (http://www.bcorporation.net/resources/bcorp/documents/2011-AR_B-Index.pdf) demonstrate that registered B Corporations expand at a more consistent rate, work more closely with other area organizations, offer better benefits to their employees, and foster more positive change within their communities than traditional corporations.
From the web site, Class War in America. (I particularly enjoyed this post and recommend you visit the site and read the entire article. jp)
There’s a promising development in the capitalism department these days. It’s called the Benefit Corporation. It’s pretty new, and it’s important. This article in The Nation tells you what’s what.
Benefit corporations are characterized by three things: (1) The purpose of such companies is to support the triple bottom line. That is, they are sworn to protecting the environment and doing good things for the community as well as earning profit; (2) Their social accountability standards are high; (3) They work to build sustainable businesses that are designed to last.
I have shown many films in class over the last five years. I tend to shy away from documentaries and use commercial movies to make points. For instance, I use the film, Sabrina, to bring up the issue of class differences, and it is a consistently successful film commanding class attention and getting intelligent responses when they analyze the influence of class.
However, I have two documentaries that have been consistently successful in class use. One of them is Gasland, the other King Corn.
King Corn is story of two men who do a simple experiment in the pursuit of truth. Concerned by the diminishing life spans of Americans, they discover that their diet is primarily corn. They journey to Iowa and grow an acre of corn to see how the process works. They talk to many people in their travels and these conversations are the best part of the film.
The issues of corn, overproduction, factory farming and high fructose corn syrup are very controversial and can be very emotional. The documentary’s approach, the humble seeker after truth, sets the emotional level very low and the film is amusing and relaxing. Nevertheless my students do leave the film uneasy about the state of American agriculture and there are usually a good many comments about what we should be eating.
I usually add some lecture material on the Cuban Embargo, and go into more depth on the high fructose corn syrup controversy.
If you are a fellow instructor I recommend you use the film. It used to be available of Netflix but now you have to purchase it or find it on the web.
As Ian and Curt discover, almost everything Americans eat contains corn. High-fructose corn syrup, corn-fed meat, and corn-based processed foods are the staples of the modern diet. America’s record harvests of corn are supported by a government subsidy system that promotes corn production beyond all market demand. As Ian and Curt return to Iowa to watch their 10,000-pound harvest fill the combine’s hopper and make its way into America’s food, they realize their acre of land shouldn’t be planted in corn again—if they can help it.
Engrossing and eye-opening, KING CORN is a fun and crusading journey into the digestive tract of our fast food nation where one ultra-industrial, pesticide-laden, heavily-subsidized commodity dominates the food pyramid from top to bottom – corn. Fueled by curiosity and a dash of naiveté, college buddies Ian Cheney and Curt Ellis return to their ancestral home of Greene, Iowa to figure out how the modest kernel conquered America.
There is legislative logic to the flood of cheap corn-based foods. In 2005, federal subsidies spent $9.4 billion in taxpayer money to promote corn production. For Iowa farmers, these payments often mean the difference between profit and loss on a given acre. With subsidies promoting production beyond market demand, the raw materials for an obesity epidemic are readily at hand.
My father calls this part of the U.S. “God’s Country”. And I do believe that he is correct. It is an amazing place in our country, and in the world. But now the corn grown there is not for us to feast on as it used to be. It is used primarily for manufactured sweeteners and animal feed. You can learn more about this when you see the film by two young men determined to discover the genesis and path of our food production. They set out on a journey to grow one acre of corn, and they learned more than they ever knew they would. See King Corn. You can rent it at your local video store. It is worth a watch.
Live from the Union Square subway: A big food message that tips its hat to changing consumer perception. When I saw this poster, the first thing I thought of was the film King Corn. The filmmakers explain that grass-fed cows used to take 2-3 years to get fat and ready for our beef consumption. Once we started feeding them corn, however, they got to the same weight in just 15 months. By changing the diet of our cows, we’re forcing them into false maturation. With this, and so many of our industrial food ways, we wrestle nature into the ground.
On the odyssey of the pilgrim researcher, many experts are consulted. In the set up they visit a lab where they have their hair analyzed to get the data version of the typical American eater. Yup, the hair speaks counter-intuitive truth to reason: a diet of soda and hamburgers and snack foods delivers what they suspected: the main ingredient in their hair is corn. Look in the bioinformatic mirror and you read what you eat/are.
One of the strengths of the film is their respect for the Iowa farmers they encounter. They don’t assume anything about their informants’ lives, opinions or class affiliation. They refrain from interpreting and judging what they learn, but the knowledge they acquire complicates the decisions they have to make. And despite their restraint, those complications are ethical ones.
King Corn is a documentary about two men, Ian Cheney and Curt Ellis, who study where their food comes from. The film begins with the realization that corn is in most of our foods and that it is one of the most productive and most subsidized grains in the United States. Iowa alone produces 2 trillion corn crops which is the largest in American history and is enough to feed the entire United States (Wolfe, Cheney, Ellis, & Miller, 2012). Ian and Curt move to Iowa to plant their own crop of corn and then follow it through the food system. They end up raising all sorts of questions about the food we eat, how it is farmed, and what happens to it after the harvest.
It’s just amazing to see how much Earl Butz‘s farm policy in the 1970s, which I’m sure he enacted with really good intentions, has changed family farms, our health, and our environment, and all for the worse. Does that mean the old farm policy of the 50s and 60s would work now? I don’t know. But something has got to give, and the farmers in the documentary were in agreement that the ridiculous amounts of corn they produce are, well, ridiculous.
I wish I knew what the solution was. Simply educating consumers to make informed choices is a start, but I just don’t think it’s enough, not when our government is pouring giant subsidies on a crop that no one can eat.
Milton Friedman’s Dumbest Idea (The article actually says “the world’s dumbest idea,” but it is longer than the recommended length for titles if you are doing “search engine optimization and I had to cut it. jp)
English: Portrait of Milton Friedman (Photo credit: Wikipedia)
I wish I had written the article below. I love every word of it, and the most astonishing thing about this writing is where it appears, in Forbes. That takes by breath away. How did he get past the editor?
Well, enough of that –
The article is very much what I have been saying in previous articles on this web site and in public, that is, the idea that a corporation’s sole purpose is to make money for the shareholder is ridiculous. I’d start my analysis with “non-profits,” and get more legally critical as I went through the various kinds of corporations and what they were used for.
Generally speaking, articles dealing with the crisis focus on derivatives, Sallie Mae, the business press, rating agencies, etc. They all share blame and a lot of it. I have always been convinced that the underlying problem was greed, self interest, the corrosive effects of Milton Friedman’s bizarre doctrine of economic utopia, and the replacement of critical scrutiny by frantic cheerleading in the financial press, and I have some more villains to name.
Bogle doesn’t dodge the ethical question. He wonders how we got here and how we can get out. He longs for the day when businessmen understood the value of trust and fair dealing. I’m not surprised to find that Mr. Bogle has no simple solution. It took four decades of worship of the financial means of production of little more than electronic impulses to triumph over the creation of actual goods. This isn’t going to be easy, and it it likely to fail subjecting this country to a chain of financial meltdowns each one of which will severely damage the lives of millions of Americans who will bear the chief cost not only of their way of life but paying for the meltdown themselves out of their “widow’s mite.”
This is capitalism run off the tracks. Greed out weighed simple good judgment. Obvious signs of trouble, not just obvious but certain evidence of approaching disaster, were ignored as money piled up.
The market was supposed to be self regulating. Read a little Milton Friedman. This economic freedom to innovate was supposed to lead to better lives for all Americans, perhaps the whole world. This utopia, this nirvana, has thus far failed to appear. But incomes in a handful of the well placed are measured in the billions.
Now, you could make a good argument that this kind of business thought (Milton Friedman, etc) actually falls into the second level where self interest and avoidance of punishment become primary concerns. However, making moral decisions at the second level of Kohlberg’s six stages is just about as insulting as reasoning at the first.
My second point is when business is considered only as a money making endeavor, all the other levels of moral development don’t just become irrelevant, they become a block and a hazard to making maximum profit.
If you are short on time, please read the brief excerpt below, but if you have time click on the link and read the whole article. It merits it.
No popular idea ever has a single origin. But the idea that the sole purpose of a firm is to make money for its shareholders got going in a major way with an article by Milton Friedman in the New York Times on September 13, 1970.
As the leader of the Chicago school of economics, and the winner of Nobel Prize in Economics in 1976, Friedman has been described by The Economist as “the most influential economist of the second half of the 20th century…possibly of all of it”. The impact of the NYT article contributed to George Will calling him “the most consequential public intellectual of the 20th century.”
Friedman’s article was ferocious. Any business executives who pursued a goal other than making money were, he said, “unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.” They were guilty of “analytical looseness and lack of rigor.” They had even turned themselves into “unelected government officials” who were illegally taxing employers and customers.
How did the Nobel-prize winner arrive at these conclusions? It’s curious that a paper which accuses others of “analytical looseness and lack of rigor” assumes its conclusion before it begins. “In a free-enterprise, private-property system,” the article states flatly at the outset as an obvious truth requiring no justification or proof, “a corporate executive is an employee of the owners of the business,” namely the shareholders.
Come again?
If anyone familiar with even the rudiments of the law were to be asked whether a corporate executive is an employee of the shareholders, the answer would be: clearly not. The executive is an employee of the corporation.
But Friedman also produced a less felicitous legacy. In his zeal to promote the power of markets, he drew too sharp a distinction between the market and the state. In effect, he presented government as the enemy of the market. He therefore blinded us to the evident reality that all successful economies are, in fact, mixed. Unfortunately, the world economy is still contending with that blindness in the aftermath of a financial crisis that resulted, in no small part, from letting financial markets run too free.
The Friedmanite perspective greatly underestimates the institutional prerequisites of markets. Let the government simply enforce property rights and contracts, and – presto! – markets can work their magic. In fact, the kind of markets that modern economies need are not self-creating, self-regulating, self-stabilizing, or self-legitimizing. Governments must invest in transport and communication networks; counteract asymmetric information, externalities, and unequal bargaining power; moderate financial panics and recessions; and respond to popular demands for safety nets and social insurance.
The birth of the shareholder value movement is commonly traced to a speech Jack Welch gave at New York’s Pierre hotel in 1981, shortly after taking the helm at GE. In that famous speech, entitled “Growing Fast in a Slow-Growth Economy,” Jack Welch outlined his beliefs in selling underperforming businesses and aggressively cutting costs in order to deliver consistent profit rises that would outstrip global economic growth. He told analysts then, “GE will be the locomotive pulling the GNP, not the caboose following it…,” according to reports of the speech.
Jack Welch said in the interview given on 11-March-2009 that he never meant to suggest that setting, and meeting, profit expectations quarter after quarter in an effort to boost a company’s share price should be the main goal of corporate executives.
“It is a dumb idea,” he said. “The idea that shareholder value is a strategy is insane. It is the product of your combined efforts – from the management to the employees”.
What he was talking about is the commonly held belief that the purpose of business is to increase shareholder value. That belief is variously attributed to Milton Friedman, Adam Smith, and perhaps common sense. BUT, it was the operating principle that resulted in two market busts and innumerous scandals in the past decade. The fact that Welch was one of the main proponents certainly adds a fair amount of gravitas to his comments.
Profitability, shareholder value, and measures like economic value added (EVA) completely miss a point that Welch articulated so well. Namely, increased “shareholder value” is a result, not a strategy.
Political Animal – The minimum wage, part 2: Casey Mulligan fail edition; or, the $100 minimum wage gambit
The vague suggestion that perhaps that minimum wage really does not “confer benefits on the poor” teeters dangerously close to the “opinions on the shape of the earth differ” school of journalism. Let’s talk specifics here. The impact of the minimum wage, and particularly the impact of the minimum wage on employment, is, as economist John Schmitt has noted, one of the most studied topics in all of economics. The results are most definitely in, and contrary to the clear impression Mulligan is trying to give, there is little reason to believe that the outcome from the years 2007 through 2009 would be any different than the results we have from any other year before that. And contrary to the neoclassical dogma so beloved by University of Chicago types, the overwhelming body of the most rigorous empirical evidence shows little or no relationship between employment and the minimum wage. When there does seem to be a negative relationship, it tends to be extremely small.
A review of the literature, and a summary of various theories as to why Econ 101 minimum wage models don’t turn out to hold up in the real world, can be found in Schmitt’s excellent recent report for the Center for Economic and Policy Research. The reasons are complicated, and there are competing hypotheses, but basically what it comes down to is that the many of the assumptions required for perfect competition in the labor market don’t hold. I know, I know — try to recover from the shock.
Banks Will Always Suck At Trading, Badly Need A Volcker-Like Rule: Study
A new study by economists Arnoud Boot at the University of Amsterdam and Lev Ratnovski at the International Monetary Fund finds that recent blow-ups in the banking sector — JPMorgan Chase’s $6.8 billion “London Whale” losses and that whole financial-crisis thingy, to name two — are not isolated events, but “a sign of deeper structural problems in the financial system.”
The only prescription? Less trading by big dumb banks.
“Without policy action, crises associated with trading by banks are bound to recur,” Boot and Ratnovski write in a blog post about the paper. “Even strong supervision will not be able to prevent them. Consequently, it appears necessary to restrict trading by banks.”
If you read the fuller article, and I recommend you do, you will find that banks have incentives to do what is essentially speculative trading. Right now with interest rates low, there is a terrible temptation to take their money and gamble with it since there is little profit in traditional investments. And, of course, why do legitimate investments in business, industry and homes, when you can make so much more money speculating?
The banks have to be regulated to perform their traditional functions of lending to build a strong economy. We protect banks from collapse and insure their deposits with taxpayer money because when they loan money that develops the economy and creates opportunities. What we are getting now is a lot less useful investing and a lot more gambling at the public’s expense.
A few weeks ago there was a controversy over grants given to Planned Parenthood by the Susan Komen foundation. The vice president confronted by complaints that poor women would lose their access to health care responded dramatically –
Disdain for poor women and their need for medical currently fashionable among some groups of Americans. There is a suspicion in some quarters that the top 1% find paying for social services an welcome burden.
Now, of course this behavior is contrary to the Greek concept of virtue ethics, modern Protestant business ethics and Catholic social doctrine. However a proportion of the the 1% are getting their comeuppance. It is a small comeuppance but nevertheless, any comeuppance is better than none.
Please read this excerpt –
Wall Street’s Average Cash Bonus Expected To Fall To $121,000
Wall Street cash bonuses for 2011 are expected to drop 14 percent and profits are expected to drop by half for the second year in a row, according to a forecast Wednesday by New York state Comptroller Thomas DiNapoli.
That would result in cash bonuses of $19.7 billion. Profits are expected to be less than $13.5 billion in 2011, compared to $27.6 billion in 2010.
The average cash bonus is expected to be $121,150 for 2011, down from $138,940 in 2010. Bonuses peaked before the recession in 2006 at $191,360.
You read it right. Wall Street bonuses will only be $13.5 billion dollars. It’s a trifle, a small amount of money. Of course, it would pay for all the college tuition in the United States for the next year and still have a couple of billion walking around money left. But like I said that’s just a smidgeon on Wall Street.
You probably noticed that the average payout on Wall Street will be $121,000.
Let’s see what is said about this –
The average cash bonus is expected to be $121,150 for 2011, down from $138,940 in 2010. Bonuses peaked before the recession in 2006 at $191,360.
DiNapoli said the forecast for this bonus season shows continued hard times on Wall Street two years after the recession officially ended. The securities industry lost 28,000 jobs, including 9,600 that had been briefly recovered before the slide began in April.
“Continued hard times!” Wow! $121,150 is almost three times the average salary in the United Stand and these people also draw a regular salary. Average salary at Goldman Sachs is $367,057. But we know they’re suffering.
Well to quote the former vice president of the Susan Komen Foundation, “Cry me a freakin river!”
When I developed high blood pressure, I had to start eating healthy. It was a shock to find out how much it cost to eat healthy. The food in the supermarket was laden with high fructose corn syrup or salt. Once I had eliminated food that wasn’t good for me, there were a lot fewer choices and with a few exceptions (frozen vegetables), they cost more. One of the most important things I did was to drop soda pop from my diet. That helped a lot with my weight.
It seems to me that the way food is made and marketed in the United States is inimical to having a healthy diet. That a few large companies control food distribution in the nation does not surprise me.
There is something bizarre in the fact that costs more to eat healthy than badly.
James Pilant
Willie Nelson: Why We Must Occupy Our Food Supply
What does this matter for those of us who eat? Corporate control of our food system has led to the loss of millions of family farmers, the destruction of soil fertility, the pollution of our water, and health epidemics including type 2 diabetes, heart disease, and even certain forms of cancer. More and more, the choices that determine the food on our shelves are made by corporations concerned less with protecting our health, our environment, or our jobs than with profit margins and executive bonuses.
This consolidation also fuels the influence of concentrated economic power in politics: Last year alone, the biggest food companies spent tens of millions lobbying on Capitol Hill with more than $37 million used in the fight against junk food marketing guidelines for kids.
Pilant's Business Ethics Blog 
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