Category: Government Failure

Ethics Roundup – Sunday – June 6th, 2010

On By southwerkIn business ethics, Government Failure

Could British Petroleum cease to exist? Check out this article from Minyanville.

Chris MacDonald in his June 5th blog entry discusses the play between rapidly developing technological complexity and regulatory science. MacDonald quotes from Kenneth Rogoff’s article, The BP Oil Spill’s Lessons for Regulators.

Chris MacDonald in a totally successful effort to keep my off balance has a new post on June 6th. Entitled Galarraga’s Corvette, MacDonald while admitting that everyone is entitled to an opinion points out that even though tax payer dollars are involved in the company’s continued operation that doesn’t mean every corporate action should be second guessed. He says managers are there to manage. I doubt that Chris MacDonald will be very surprised (or bothered) that I don’t always agree with him but he’s dead on this time. Nit picking day to day decisions is a waste of everybody’s time and the giveaway was a shrewd PR move. jp

Dani Rodrik writing in Project Syndicate, A World of Ideas, argues that the nation-state, globalization and democracy are all incompatible with each other and that at the most we can only have two of the three. It’s a thought provoking argument.

Gael O’Brien writing on her blog, The Week in Ethics, discusses the message of John Wooden. During his lifetime, Wooden created a “pyramid of success” comprised of fifteen elements. (The diagram is included in the article.)

Edward Lotterman writing in Twin Cities dot com discusses how salaries in different currencies vary, can be compared effectively and when they can’t be compared effectively. It’s a pretty piece of writing.

Jeffrey Seglin writing in his blog, The Right Thing, tells us that Panera Bread is opening a store where you pay what you believe is appropriate for their baked goods. The new store is opening in Clayton, Missouri. Seglin is interested in your opinion. I’d go to his site and let him know. (There was only one comment when I left.)

Rod Dreher writes that the BP spill is a rolling apocalypse.

Michael Hiltzik writing on the Los Angeles Times business page discusses online privacy. He is a champion of preserving the rights of the individual and when he talks people should listen. This is an issue of considerable importance to me.

Marian Wang writing in ProPublica reports that illnesses reported by the clean up workers on the gulf coast are caused by the oil and not by the host of other possibilities the oil company or the government will cook up.

Elizabeth Warren prophecies the coming collapse of the middle class.

You Can Make Money With The Flu! (and not just a little)

On By southwerkIn business ethics, Government Failure

“Scientists who drew up the key World Health Organisation guidelines advising governments to stockpile drugs in the event of a flu pandemic had previously been paid by drug companies which stood to profit, according to a report out today.”

This is the first sentence in the Guardian’s article on the trio of experts who wrote the WHO report. The news article authored by Randeep Ramesh, the Social Affairs editor at the Guardian finds all three scientists has ties to drug companies that would profit by the stockpiling recommended by their report.

Britain alone spent more than a billion pounds stockpiling medicines like tamiflu. All together the stockpiling of drugs by the various countries involved wound up costing more than seven billion dollars.

Should Shareholders Vote With Their Feet?

On By southwerkIn business ethics, Government Failure2 Comments

Loren Steffy says that has no effect. And as usual, he’s right. The current system of corporate governance effectively cuts the actual owners of a corporation out of any influence over who runs their corporation as well as all other decision.

Corporations are creatures of the law. They are statutory creations. If we as citizens of  the United States as well as being citizens of individual states (that do the chartering of corporations) want to change the rules, we can. But there has to be some political will.

Let me lay out for you this utterly radical thought. I believe that –

THE PEOPLE WHO OWN THE CORPORATIONS SHOULD HAVE SAY IN HOW THEY ARE MANAGED.

What do you think? Does that make me a communist? I think I am a purer capitalist than many in the business world because I actually believe in private property in a way they can’t wrap their minds around. If you own part of a company, why should your wishes be ignored because of the way the law and the organization are structured?

Shareholders should be primary factors in determining who runs the company and how the company is managed.

Selections of the CEO and the Board of Directors should require shareholder ratification. Executive compensation packages should require ratification by the shareholders. Shareholder meetings should be conducted electronically on a regular basis far more often than the once a year mandated now.

It’s one thing to talk about free market capitalism and then not do it. That’s wretched hypocrisy. Let’s talk about it capitalism sincerely and act on our beliefs. To make capitalism a reality in the corporate board rooms of the United States we would have to make a connection between ownership and power. Why should CEO’s appointed without shareholder input and acting in opposition to shareholder wishes, be able to make their own policy, and choose their own boards. They are essentially acting as if the corporation was their personal plaything and not a duty to the real owners.

We can do better.

James Pilant

Maybe A First Step Toward Financial Reform?

On By southwerkIn business ethics, Government Failure

Alain Sherter writes for BNET that perhaps what we should be looking for is a series of steps toward financial reform over a period of years instead of feeling that the very modest financial reform bill passed by Congress is the end of the process.

That’s very optimistic on his part. I consider a solid victory for wall street, a humiliating defeat for the nation and its people. This charade of public concern, private deal making and campaign fund collection demonstrates why American democracy is disintegrating in the face of corporate money.

Here’s the kind of leadership we need and deserve instead of the bloodless passionless leadership we have.

Jon Talton Tells It Like It Is!

On By southwerkIn business ethics, Economic measurement, Government Failure

Jon Talton writes a new post entitled: BP: Not ‘Beyond Petroleum’ but just beyond peak; Market cap blues. It’s magnificent. You should give it your utmost attention.

Did Barney Frank Just Kill Real Reform?

On By southwerkIn Government Failure

Did Barney Frank Just Kill Real Reform?

Alain Sherter writing on BNET thinks so.

It’s a sad day. But it’s been years now since the word, reform, became a joke and cover for every ridiculous, mendacious and counterproductive scheme developed by the mind of the bottom dwelling scum eating legislator to squirm along the channel of campaign contributions.

So, we’re getting “reform.” Very little or nothing masquerading as substance. Great. It’s like substituting grass for all those green vegetables in your diet. It looks green. And isn’t that the same thing?

James Pilant

Here’s a video of Barney Frank. He would seem to have not been a reliable prophet of the mortgage crisis.

Is This Really An Economic Recovery?

On By southwerkIn business ethics, Government Failure

Ron Dreher asks that question and he links to quite a few articles with different takes on the subject.

He begins his article with, “Consumer confidence and spending is up, as are new home sales. Good news, right? Clusterstock has 25 questions to put to people who think the economic recovery is real.”

Let’s hear from a real expert:

Are We Going The Way Of The Weimar Republic?

On By southwerkIn Government Failure

Rod Dreher asks that very question in his May 25th Column from belief.net. I believe (and hope) that he is mistaken. We lack the pain of losing the first World War and many of the strains on the fabric of society that they had that are not present here. Nevertheless it’s a good read. I like Dreher. I don’t always agree with him. But agreeing with me is only a small part of being a good writer. (a very small part)

This is a short video on Weimar:

One Thousand Banks Closed?

On By southwerkIn Government Failure2 Comments

One Thousand Banks Closed?

Could 300 to 400 banks be closed by the government this year? It’s likely. Currently 185 banks have been seized by the government. Another 300 would almost reach the halfway point to a thousand and it is highly unlikely that the current economic crisis will have significantly improved in a single year.

James Dunne, senior managing principal of Sandler O’Neill, said 300 to 400 banks could be seized this year, especially as institutions start to deal with deteriorating commercial real estate loans.

He believes as I do that the collapsing real estate market is going to produce serious losses in bank income. Those of you who take my classes are well aware of my predictions of a serious commercial real estate crisis and a further increase in the seriousness of our current economic plight.

The FDIC reports there are 702 banks on its problem bank list. Of course historically only a little more than a fourth of the banks on the list have failed. I believe we are in a far more serious economic crisis than we have seen before and I strongly agree with James Dunne’s numbers except that I think will be worse. I’ll predict 450 closures by the end of this year.

This is going to be a long, hard economic crisis and we have NOT encountered the worst.

James Pilant

80% Of Americans Think Washington Is Broken

On By southwerkIn Government Failure3 Comments

80% Of Americans Think Washington Is Broken

What happened? Somebody slap them? How did it take so long? For two decades our Congressman unleashed a tidal wave of speculation that has cost millions of Americans their homes, jobs and the self respect that goes with those things.

Apparently reality has to slap American on both cheeks for recognition to hit. Just Great!

James Pilant