Category: Government Failure

Honesty/Ethics in Professions (via Ethics Sage)

On By southwerkIn Government Failure1 Comment

From Professor Steven Mintz, The Ethics Sage taken from his post, Honesty/Ethics in Professions.

What should we make of such rankings? I think it reflects the fact that the public is smarter than politicians seem to believe. Bankers, for example, went from a ranking of 37% for high or very high ethics in 2006 down to 23% in 2010. Bankers are now tied with TV reporters. That seems about right. Each group seems to want to put their spin on a story whether it’s the supportability and relative safety of mortgage loans that led to the financial crisis or how one side of the political spectrum portrays the other as the evil incarnate.

The bottom line is the public has lost all respect for the political process that is driven by lobbyists who cozy up to members of Congress by acting as used car salespeople to promote their cause all the while advertising that that they are trying to help the public.

Professor Mintz argues that these poll numbers indicate that the public has lost all respect for the political process. I agree.

However, I would like to add that the public has virtually no way of taking any effective action whatever their feelings.

There is little chance of being elected to office in the United States without money usually a great deal of it. Most Americans cannot make the kind of contributions that makes them a player in political campaigns. Those few that can give that kind of money have different interests than most Americans. So, what most Americans want done will not be done while what a minority of Americans want will be done.

It seems hopeless to even try to think of how to change the system.

The influence of money in elections is not decreasing, it is increasing. The total costs of the 2006 congressional campaigns were about two and one half billion dollars. The 1998 races were a billion dollars less.

The two party system makes it difficult to run as a candidate with non-traditional views. Look at it as a consumer. Essentially we have two flavors of political thought that no one really likes and the way the system is set up we can’t have another flavor. Political thought is homogenized into a form non-threatening to major donors. You can only make one of two choices in an election both of whose party organizations are devoted to fund raising.

If that wasn’t bad enough, political thought is also marketed by the enormous media empires. Their influence is manifested in a common political view expressed by pundits in print or on television. Overwhelmingly the most influential are concentrated around a New York – Washington zone of media coverage. Sometimes referred to as the beltway, this small group generally determines what is politically acceptable and politically possible.

Another factor in public dissatisfaction is the power of international finance and global corporations. Although corruption and a casino mentality produced a financial cataclysm in 2007, a disaster that leaves us with ten percent unemployment even now, these giant organizations were never called to account but in fact rewarded with hundreds of billions of dollars in loans, trillions in financial guarantees and the privilege of borrowing from the Federal Reserve at zero percent interest. There have been no criminal prosecutions and their profits (and bonuses) have increased.

Because influence is concentrated with those who make large campaign contributions, most Americans have negligible influence in the government. Their concerns and needs do not appear important either to the government or media.

Day after day goes by with the government acting on issues critical to the interests of the donating classes and beltway philosophy.

This day by day continuous grinding repetition of political powerlessness creates a majority of Americans who hate the political system and consider the participants to be marginally better than criminals.

James Pilant

President Obama Finds New Chief Of Staff At JP Morgan Chase & Co

On By southwerkIn Government Failure

From CBS News –

U.S. Chamber of Commerce President Thomas Donohue, who has had a contentious relationship with the Obama White House, praised the appointment.

“Bill Daley is a man of stature and extraordinary experience in government, business, trade negotiations, and global affairs,” Donohue said. “He’s an accomplished manager and strong leader. We look forward to working with him to accelerate our recovery, grow the economy, create jobs, and tackle America’s global challenges.”

Some liberal activists and pundits, however, are wary of Daley’s ties to Wall Street, as well as his moderate views. Daley has expressed disapproval for the president’s health care reforms and reportedly for Wall Street reform as well.

This story says everything without any need for my comment.

James Pilant

“Comcast Owns the Internet” (via Chasing Fat Tails)

On By southwerkIn Government Failure

At the moment, a great deal of weeping over the defeat of net neutrality is justified. Unfortunately the war for the internet can be lost on more than one front at a time. So, “Chasing Fat Tails” explains.

James Pilant

h/t ars technica Net neutrality has long been the goal of people who care about keeping the Internet free from corporate influence.  The Internet has tremendous potential, but it can only be realized if all users have access to fast speeds that deliver all content at the same rate.  Otherwise Internet Service Providers will be able to privilege some content and users over others, the Internet will balkanize, and the tremendous benefits of a wired … Read More

via Chasing Fat Tails

January 2011 Update of THE GREAT DEPRESSION of DEBT (via Wbrussee’s Weblog)

On By southwerkIn Government Failure

Warren Brussee is a book author and has a detailed plan to fix our economic problems. I don’t agree with everything in it but there is a lot I like. He’s an intruiguing author who has thought seriously about these topics. I’d like you to read his blog post and maybe even buy his book.

James Pilant

“The Great Depression of Debt” is a hardcover updated edition of “The Second Great Depression, Starting 2007, Ending 2020.”  “The Great Depression of Debt” can be purchased at most bookstores or at Amazon.com: http://www.amazon.com/Great-Depression-Debt-Survival-Techniques/dp/0470423714 HAPPY NEW YEAR EVERYONE! WHAT ENDED THE FIRST GREAT DEPRESSION? A quick review on what happened during 1930 to 1945.  In trying to fight the depression, our count … Read More

via Wbrussee's Weblog

Buying Your Child Into A College!

On By southwerkIn business ethics, Capitalism, ethics, Government Failure, monopoly, Teaching2 Comments

From the Huffington Post –

Dr. Michael Bardwil donated $40,000 to his alma mater, a Jesuit school in Houston, Texas, after a school administrator advised it would guarantee his son admission. So when his son was rejected earlier this year, Bardwil was upset.

ABC reports that a school administrator asked that Bardwil donate $100,000 to the school, and in return the prestigious college preparatory would offer admission to his son. When Bardwil pledged $50,000 over a five year period, he assumed it was a sure thing.

The elite colleges and universities admit about 1/3 of their students based on parental giving, another 1/3 based on legacy enrollments (their parents went there) and the last 1/3 on merit. This is one of the most significant reasons that the upper classes have solidified. It’s very difficult to move up in the world without going to one of these school. With only 1/3 of the enrollment based on merit, your children and mine have little chance of getting in. The open spots are so few, a student can’t get in on high scores but only with almost superhuman scores. That’s not fair.

We like to think this country is a meritocracy where you get ahead becaue you’re smart or hard working. But most of us understand the truth and that truth is that having good contacts, going to good schools and having upper class mannerisms are the basic requirements for success. These people live in a bubble world where no amount of incompetence, poor conduct or even criminal acts can knock them down. Now, I’m sure you can remind me of Madoff or some other corporate malefactor. But let me remind you that the world economy was savaged by the geniuses on Wall Street back in 2007 and not one has paid any penalty for their criminal acts or simple incompetence.

The middle class lives in a world where any failure can doom your career. They live in a world where you can do everything, absolutely everything they taught you in high school or college would gurantee you success and still everything can be taken from them, their jobs, their homes, their insurance, their benefits, their pensions, their investments – everything. The children of the middle class are thrown out into a world of diminishing opportunity and low paying jobs.

Let me repeat, one of the key factors is the difficulty of the children of the middle class to get into prestigious schools.

I see nothing on the horizon that will change those rules.

You see this is the hardcore, the never changing affirmative action, the big quota system. The guaranteed access to the best spots to those who already have money or status is a vicious assault on the concept of merit.

It is astonishing considering the amount of federal aid these institutions gobble up that they are not required to admit based on merit.

James Pilant

Business Ethics Roundup 1/1/11!

On By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, ethics, Government Failure, Philosophy of Business, White Collar Crime1 Comment

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.

Federal Reserve Gave Citibank 1.6 Trillion Dollars In Loans; Morgan Stanley – 2 trillion And Goldman Sachs – A Mere 600 Billion

On By southwerkIn ethics, Government Failure, President Obama

Bernie Sanders
Matt Taibbi writing in Rolling Stone –

I was in Washington last week and visited Bernie in his office, mainly to talk about the incredible results of the Federal Reserve audit, about which I’ll be writing more in the upcoming weeks and after the New Year. The audit of the Fed was undertaken because Bernie and a few other members of congress fought very hard during the Dodd-Frank regulatory reform debate to force open Ben Bernanke’s books, and as a result we now know the staggering details of the secret bailout era. We know that Citigroup received $1.6 trillion in loans, and Morgan Stanley $2 trillion, and Goldman Sachs – the same Goldman Sachs that bragged about how quickly it paid back its $10 billion TARP bailout – over $600 billion. We know that hedge fund billionaires who moved their corporate addresses to the Cayman Islands to avoid U.S. taxes were rewarded by their buddies in government with huge Fed loans; we know that the U.S. government likewise has been extending massive loans to a variety of Japanese car companies at a time when many American auto workers in Detroit have seen their wages cut in half, to $14 an hour. There’s that and there’s more on the outrage front, and we know it all because Sanders kicked and screamed and stamped his feet about Fed secrecy until just enough other members of the Senate decided to go along with him.

The TARP bailout was just a small part of the benefits showered on Wall Street, a Wall Street than in spite of the enormous public funds necessary to keep them operating paid out enormous bonuses.

But just for fun, and because I enjoy it, let’s see what Matt thinks about President Obama.

I contrast this now to the behavior of Barack Obama. I can’t even count how many times I listened to Barack Obama on the campaign trail talk about how, as president, he would rescind the Bush tax cuts as soon as he had the chance. He stood up and he said over and over again – I can still hear him saying “Let me be clear!” with that Great Statesman voice of his, before he went into this routine – that the Bush tax cuts were wrong and immoral. He said more than once that they “offended his conscience.” Then, just as he did with drug re-importation and Guantanamo and bulk Medicare negotiations for pharmaceuticals and the issue of whether or not he would bring registered lobbyists into his White House and a host of other promises, he tossed his campaign “convictions” in the toilet and changed his mind once he was more accountable to lobbyists than primary voters. He pulled an Orrin Hatch, in other words, only he did it serially.

I can live with the president fighting for something and failing; what I can’t stand is a politician who changes his mind for the sake of expediency and then pretends that was what he believed all along. You just can’t imagine someone like Sanders doing something like that; his MO instead would be to take his best shot for what he actually believes and let the chips fall where they may, budging a little maybe to get a worthwhile deal done but never turning his entire face inside out just to get through the day. This idea that you can’t be an honest man and a Washington politician is a myth, a crock made up by sellouts and careerist hacks who don’t stand for anything and are impatient with people who do. It’s possible to do this job with honor and dignity. It’s just that most of our politicians – our president included, apparently – would rather not bother.

Thanks, Matt!

James Pilant

Just A Few Bank Burglaries?

On By southwerkIn business ethics, ethics, Government Failure, White Collar Crime

Felix Salmon writing in Reuters’ Analysis and Opinion –

In order to know that cases like these are “a tiny percentage of foreclosures,” you need to know what that percentage is, n’est-ce pas? So this defense is not particularly convincing, unless and until we can see some numbers. Surely, mistakes like these would happen occasionally even during the boom years. But if the percentages are rising, that’s clear empirical evidence that overwhelmed servicers are doing an increasingly shoddy job.

Next time a newspaper wants to write about this particular trend, then, let’s get the names of those bank representatives on the record, let’s ask them how they know that the proportion of dreadful mistakes they make is “tiny” or “minuscule,” and let’s be a bit more determined that we should be the ones making the determination as to how small the percentage is, rather than the bank’s own flacks.

Exactly. I made the same point several months ago when the banks said that only a handful of mortgages had been mishandled. The banks were lying about the scale of the problem. It turned out there were minimally hundreds of thousands. This does not give one confidence in bank claims of “just a few cases,” “a few bad apples,” and all those other things you say when you don’t want to admit the scale of your crimes.

I don’t believe Mr. Salmon is mistaken in his assessment. Breaking into people’s homes and taking their stuff is an extremely intimidating tactic. You can just imagine the desk bound suits chortling over a business lunch about how they forced the deadbeats out.

Let’s get some lawsuits going. They are the public’s last line of defense and we can be quite sure law enforcement, politicians and regulatory agencies will sit this one out.

James Pilant

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

On By southwerkIn business ethics, Corporate Social Responsibility, ethics, Government Failure, Philosophy of Business, President Obama1 Comment

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?

On By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, ethics, Government Failure, Philosophy of Business, President Obama, White Collar Crime

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.