Business Ethics Roundup 1/1/11!


Let’s start with a small disclaimer here. I have 42 business ethics web sites (by my definition which is broad) listed on my favorites in that single category. I have 56 business ethics “related” sites on my favorites. So, I ‘m never going to to get more that a partial glimpse at what’s going on. With that out of the way, let’s start the new year rolling!

The Crane and Matten Blog explain why business ethics is more significant culturally than CSR.

Here’s a quote CSR is also, as might be expected, a lot more business-friendly than business ethics. In fact, people often tend to use CSR when they’re talking about the good things companies are doing, and business ethics (or a lack of them) when talking about the bad things they do.

The Ruder Finn Ethics Blog discusses ethics and giving while providing some fascinating statistics.

Here’s a quote We give for many different reasons. We may give as an expression of friendship and love or just reciprocate. Retailers, economists and Wall Street eagerly all hope that people will spend much this year are and thus sustain the slow recovery of our economy. The National Retail Federation expects an increase in 2010 Holiday sales of 2.3% to $447.1 billion. (Gifts from the rich to the rich.)

From the web blog, Business Ethics Training, we have a review of the book, Ship of Fools: How Corruption and Stupidity Sank the Celtic Tiger.

Here’s a quote With all the talk of toxic assets (real estate) and the resulting fallout in the States – its easy to overlook what happened in Ireland. Particularly the situation with NAMA (National Asset Management Agency), that holds the toxic assets.

From the web site, Ethix: Business Technology Ethics, we have a book review of After the Fall: Saving Capitalism From Wall Street—and Washington by Nicole Gelinas

Here’s a quote Gelinas key message is that capitalism needs clear rules in order to flourish, and that must include allowing bad businesses to fail. Bail outs only encourage further bad behavior, and what we have seen in the recent financial meltdown is simply a lesson forgotten from what happened in the 1920s and ’30s.

David Yamada’s Minding the Workplace has several posts. I recommend you read his year end closing, but the one I discussing is the next to the last. He explains what one should do if bullied at work.

Here’s a quote There’s a lot of cheap and sometimes dangerous “one size fits all” advice out there on how to handle workplace bullying situations, especially in newspaper work advice columns. These resources are no substitute for understanding the dynamics of workplace bullying and how they relate to one’s specific circumstances.

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


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

James Pilant

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


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

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

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

Internet Dead.


From Steven Axelrod on Salon

The internet as we know it is officially doomed, as of today, and I’m already feeling nostalgic. Funny that a technology could move so fast across the landscape of my life – from a geeks-only fluke to a curiosity, to a useful tool, to a powerful engine of procrastination and finally a central venue for all my communications, research, entertainment and shopping, only to be reduced to the closed down, controlled, censored corporate cash cow it’s about to become, with the Obama administration’s blessing.

Internet, we barely knew ye.

But of course the Proprietors of our Nation couldn’t allow this internet business to go on the way it was heading. What a frightening thought – free, unobstructed communications, with no control and no profit … people just saying whatever they want, whenever they want, leaking documents, downloading YouTube videos that make Proprietor-controlled media outlets look like liars. You knew there’d be repercussions after the “Colbert bombed at the Press Association Dinner” narrative was reduced to one more punchline, a million downloads later.

He’s right. It will take a while but these things you’re reading like my blog, the sites you surf will probably go the way of the dodo bird and the passenger pigeon.

You might be curious as to why I’m not outraged myself.

In fact, my most fire breathing, screaming fits of anger were over this issue some months ago.

I simply realized that the Obama administration will sell out the internet in a total reversal of the President’s stated position. As far as the President is concerned, words have no meaning. He says whatever is necessary to get whatever he wants at the time.

You want to argue with me.

If so much as one person objects, I will happily put up the You Tube videos where the President declares that he absolutely supports net neutrality and will not compromise. I put them up on a previous post. It took me about a minute to find four separate events where he said these things.

So, it was inevitable.

The best guide to this President’s actions are to go on You Tube, run the issue and see what the President said during the campaign. Expect him to do the opposite and you will only rarely be wrong.

The independence of the internet was critical to the kind of support and networking, the Obama campaign used to win election in 2008. You see, the President isn’t even smart.

It was unwise politically, damaging his own campaign infrastructure and limiting the influence of the blogosphere which did so much for him during the campaign. It also alienates the aforementioned bloggers, who if they are anything like me, will never forget this latest outrage.

I’m not going to forget it.

What happens to me and this blog. Well, I’m going to keep going and I have a monitor that tells me the loading speed for the web site, when it gets longer than say five seconds, I’ll start considering shutting down.

I am stubborn though, maybe I’ll hang on until it’s just me and some close friends who tell me that they log on when don’t or can’t.

And it gets better. Our President is planning on fixing the tax code next year.

Of course, he’s going to cut up Social Security like a butchered steer, George W. Bush’s dream come true.

I’d like someone to tell me what the hell happened?

I want to know.

I can get being betrayed.

I can get changes of allegiance.

I definitely understant political expediency.

But this President makes decisions that don’t even make sense from an election point of view.

Earlier, I said that you could take the opposite of what the President said as a guide, but there is another one. If there are two options and one is the more politically foolish, the White House chooses that one.

Net neutrality is dead. Happy Christmas.

James Pilant

Is Regulation A Form Of Socialism?


The Economist says that many of the charges of socialism directed at financial regulation are misplaced. Such regulation has been a normal part of the American economy for more than fifty years and was in effect during the height of the cold war.

Apparently all over the United States, charges of socialism and communism are bandied about as if Soviet style governing committees has sprung up all over the United States. Ironically, many of these same individuals are worried by the specter of Sharia law, not a likely possibility and fully contradictory to a anti religious Marxism. The latest and quite possibly strangest concept of all is liberal facism. Liberals were opposed to both Italian and German fascism early on and paid for it in blood. Yet the example of their courage to the point of sacrificing everything has no effect on the current dialogue. It is okay to affiliate one of the opposing belief systems that brought down Nazism because the phrase, National Socialist, has the word, socialist, in it? Is that academic analysis? Does that bespeak intelligence? Or judgment?

Read what the Economist has to say.

From the Economist

The Economist is in favour of free markets, but both words are important. If banks are too big to fail, then their cost of capital is implicitly subsidised. This creates barriers to entry and encourages risk-taking at the taxpayers’ expense; the market is thus not truly free. In an ideal world, we ought to be able to let banks fail in the same way that we let widget manufacturers fail. But since bank failures have a devastating economic impact, we need to have some approach to regulating them. Markets also have externalities, a concept long established in academia; a chemical company cannot be free to pollute a river, for example.

To say that any further regulation is socialism, or that any consideration of inequality is misguided, seems wilfully blind. If banks earn huge profits, and their traders huge bonuses, only because of an implicit state subsidy, that seems a legitimate matter of public concern. For those who believe this is the road to Cuba, one might easily respond that the other camp is on the road to 18th century France, where wealth was concentrated in the hands of a tiny, hereditary elite. A gross caricature? No more than the Cuba example. After all, the evidence suggests that social mobility is falling in America and Britain, probably because the wealthy can gain advantages for their offspring via private education.

The issues of education, a level playing field and “too big to fail” are not going away. The issue of whether to regulate or not to regulate is a legitimate one. There is no religious imperative to not regulate. The same people who say that Marxism failed and would have failed no matter how it was practiced are unwilling to believe the same thing about unregulated markets, but the evidence is clear. Unregulated markets are inherently predatory. There is no historical example that can be pointed to where this was not the case.

Market choice and regulation are choices of policy. They require intelligence to apply. They are not matters of faith.

James Pilant

A 12 Cent Credit Card Fee?


From the Houston Chronicle

A proposed cap on the fees that banks charge for debit card transactions would substantially reduce the cost for businesses. But it’s started a death watch for debit card rewards and renewed predictions that free checking is done for.

At issue is who will ultimately benefit from the savings? The Federal Reserve’s proposal to cap these fees, officially known as interchange fees, at 12 cents per transaction would enable retailers to pass on annual savings of $10 billion to $13 billion to consumers. But banks and card networks maintain that retailers will pocket the savings. This would leave consumers to bear the brunt of the new law through higher costs for banking and reduced rewards programs.

In releasing its proposal Thursday, Fed staff members said they found the cost to banks for processing is between 7 cents and 12 cents per transaction. Yet every time a customer swipes a debit card, the average fee is 44 cents.

The banks are making out like bandits and then telling us it’s for our benefit. I always worry when someone says they are doing something for my own good. I can’t help but feel that someone is going to hit me.

Banks love to bill as if some dedicated employee was carefulling examining the transaction, which was undoubtedly true in 1947. The actual current circumstances is a high speed computer instantly calculating the transaction.

We can adjust for the times.

James Pilant

Commerce Department Calls For Internet Privacy!


From the Star Tribune

The Commerce Department is calling for the creation of a “privacy bill of rights” for Internet users to set ground rules for companies that collect consumer data online and use that information for marketing and other purposes.

The proposal, outlined in a report Thursday, is intended to address growing unease about the vast amounts of personal information that companies are scooping up on the Internet — from Web browsing habits to smart phone locations to Facebook preferences. That data is often mined to target advertising.

The new report is intended to guide lawmakers, industry and a White House group looking at the issues surrounding Internet privacy.

Absolutely necessary.

There’s enough tracking software on my computer to slow it down (and I play Fallout 3, that means power). We don’t even know who these people are. Who is playing with our data? Who’s selling it? And for what purpose? Scammers? Is is the Russian Mafia, the Communist Chinese or the North Koreans operating in the only area where their technology is equal to the West (there might be another exception for counterfeiting, they’re really good at that)?

This proposal is important and I hope something comes of it.

James Pilant

World’s Most Ethical Companies (via Something About Business)


Something About Business has an interesting post today about the most ethical companies of 2010. It’s interesting and I call your attention to it.

(I recommend you put “Something About Business” on your favorites.)

James Pilant

In my last post, I briefly mentioned some companies that have shown very poor examples of ethics in past business relations. Just today, I came across an Ethisphere Institute report that instead, detailed the acknowledgment of companies who were the most ethical in 2010. The World’s Most Ethical (WME) companies were awarded because they demonstrated real and sustained ethical leadership within their field. There are no set maximum or minimum awar … Read More

via Something About Business

Note – The Ethisphere Institute 2010 Report of the top 100 ethical companies opens with this-

 The World’s Most Ethical Companies designation recognizes companies that truly go beyond making statements about doing business “ethically” and translate those words into action. WME honorees demonstrate real and sustained ethical leadership within their industries, putting into real business practice the Institute’s credo of “Good. Smart. Business. Profit.”

There is no set number of companies that make the list each year. Rather, the World’s Most Ethical Company designation is awarded to those companies that have leading ethics and compliance programs, particularly as compared to their industry peers. This year, there are 100 World’s Most Ethical Companies. Of these companies, 26 are new to the list in 2010 and 24 companies dropped off from the 2009 list. These “drop offs” generally occurred because of litigation and ethics violations, as well as increased competition from within their industry.

For the list itself, please go to the link.

Retailer Replaces Stolen Nativity Scene!


OVERLAND PARK, Kan. — KMBC.com
Costco has given an Overland Park family a miniature ox and donkey to replace the ones stolen from nativity set while they were at church.

Wendy Connelly said her children, Wendy, Lorelei and Gryffin, were disappointed when the animals were taken from their yard. The nativity set was a gift from their grandma.

“They’ve been praying and praying for this, and they even said a prayer again last night and on our way to school. So, it was really exciting to see it happen,” Connelly said.

Connelly said they called Costco headquarters to find the replacement and there was only one display left in the country.

Connelly said her daughter, Lorelei, was heartbroken when the animals disappeared.

“It’s very heartwarming to see her now with her animals back and taking good care of them as usual,” Connelly said.

The family told KMBC’s Kerri Stowell said they’ve rigged a special system so the new pieces don’t wander off.

This is the kind of business philosophy we need, the kind of thing you can show as an example to others.

Congratulations, Costco!

James Pilant

Can A Nation Still Succeed After Letting The Banks Fail? Yes!


James Saft
<This is James Saft, a columnist for Reuters.

From Reuters – em>

Iceland’s remarkable return to growth shows once again that in this crisis the best policy is often the one that will make international partners most angry.

Having been reviled and chastised when it refused to make good the outsize debts of its banks, Iceland this week capped a striking turnaround when it announced that its economy expanded by 1.2 percent in real terms in the most recent quarter, its first such rise in two years.

This is in stark contrast to Ireland, whose pliability and inability as a member of the euro zone to act unilaterally leaves it with a still crashing economy which must service ever more debt by making ever deeper cuts to public spending.

Iceland, which sailed into the crisis in 2008 as essentially a small fishing fleet with a massive hedge fund attached, looked its predicament square in the eye and followed a set of policies seemingly designed to tick off both its friends and enemies, doing its small but mighty best to beggar its neighbors by letting its currency crash, imposing capital controls and, crucially, refusing to make whole the global creditors of its three failed international banks.

While an International Monetary Fund and multilateral package was eventually agreed, and a deal with Britain and the Netherlands over debts from Icesave Bank are currently being hammered out, Iceland’s leaders, at least the current ones, seem convinced that making bank creditors share its pain was the right course.

“The difference is that in Iceland we allowed the banks to fail. These were private banks and we didn’t pump money into them in order to keep them going; the state should not shoulder the responsibility,” Iceland’s president, Olafur Grimsson, said last month, tweaking the nose of EU officials who are insisting that Ireland make good all senior creditor calls on its own distended banking system.

“Bondholders should not rely on the government stepping in and bailing them out,” Iceland Central Bank governor Mar Gudmundsson said last week. “They should do their due diligence.”

“I think the Irish are accepting that they were probably too fast in guaranteeing the whole liabilities of banks. Now this is turning out to be a big burden because the assets of these banks turned out to be much worse than they thought.”

Indeed. Though Iceland has a 6.3 percent budget deficit this year, it is on track to soon record a surplus, while Ireland’s deficit this year is 32 percent if the cost of bank bailouts is included. Similarly, Iceland’s unemployment rate has fallen by almost a quarter to 7.3 percent, as against more than 14 percent in Ireland.

Iceland let its banks fail and refused to use public funds to save them. Now, they are making an economic comeback.

They held the shareholders responsible for what their corporate leadership did. Isn’t that bizarre? That you could make people who own banks pay for the losses they incurr? Now we here in the United States suffer with a exceptionally healthy profitable financial sector now sitting on hundreds of billions of dollars it was expected to loan to small businesses and they have paid not one farthing for the terrible crimes they have committed.

James Pilant