The policies of Alexander Hamilton and Abraham Lincoln are guides to the Chinese Communists and their economic policies.
Irony?
James Pilant
American Policy Not Fair To The Middle Class
RT is really laying it on the line. I sometimes disagree with their take on things, but I agree with this one.
James Pilant
Is “Grownups” The Worst Film Of 2010, NO!
It may well be the worst film of the decade.
I saw it all the way through. Here’s how that happened.
My wife likes Adam Sandler and we saw the preview. It looked funny and romantic. So, we and our 17 year old son set out to see the film. We sat him between us. It was just an accident but it changed the whole night. After about a half hour, I wanted to walk out but I didn’t want to spoil the film for Renee. Renee wanted to walk out on the film but didn’t want to spoil the film for me. Since, Jake was sitting between us, neither one of us could explain our exuberant hatred of the film. So, I saw the whole thing.
When you see a film like that, there should be some kind of celestial balance, a cosmic sense of fairness, that gives you the time back.
Here’s the preview –
Every single workable joke is in that preview. Watch it twice, you’ll then know every thing you’ll ever want to know about the film.
What does this have to do with Business Ethics? They knew what a turkey this was as soon as they had the film put together and they still put it out there when they should have taken it out to sea and given it a decent watery grave, or burned it on funeral pyre or, similarly, sent it straight to video.
It wasn’t just unethical, it was cruel.
James Pilant
Bailed Out Banks In Trouble Again?
From the Huffington Post –
Nearly 100 banks previously rescued by the federal government are again poised to fail, despite billions of dollars of support from the American Treasury.
The number of banks on the brink of collapse rose from 86 to 98 during the summer months, according to analysis of federal data from the Wall Street Journal. The banks in question have received $4.2 billion dollars in aid through the Troubled Asset Relief Program (TARP). Most of the troubled institutions are relatively small.
The latest sign of distress in the financial system suggests the bailout may have simply been a stopgap solution for a sector still contending with the aftershocks of the greatest banking crisis in 80 years.
If you own a business in the United States and you lose money instead of making it you go out of business. If you are a bank, the government runs to you with large bags of money and gets you back on your feet.
But twice? It’s only been two years. Is the government going to save these banks and, if so, do it again in two years.
What’s the ethics here?
Those who have committed crimes should be punished? Okay, have the banks been investigated for fraud?
The incompetent should not be rewarded for botched work or destroying their business. Has the government in the previous bailout or in the one likely to happen now, asking about competence and cleaning house in these institutions? Shouldn’t those who have ruined the banks by poor management find jobs elsewhere?
Ethically, is it wise to encourage the kind of behavior you get when you bail out failing institutions? Doesn’t that encourage immoral activity like risk taking? Doesn’t that give bank officials the impression that risky behavior is to be encouraged? If you win, you win big. If you lose, your dear Uncle Sam will find money for you?
What do you as a citizen want to happen? Maybe the government should’ve asked that question, “What results are we looking for in this bailout?” two years ago?
James Pilant
National Problem Fixable By Making Insignificant Changes In Business School
From Business Week –
Have business schools contributed to creating overconfident and self-focused leaders? I suspect many of you will nod your head in agreement. You might even declare that, by extension, business schools share blame for the economic crisis. As a business school dean, I take these perceptions seriously; there is enough in them to warrant careful reflection.
An antidote to overconfidence and self-focus in business leaders may lie in building more focused cultures in our business schools. Culture is the set of values and norms in an organization that shape behavior. It acts as an internal gyroscope for everybody in the organization to keep them in balance, acting ethically and in line with the larger interests. It is what people do “when the manager is not looking.”
Yes, all we have to do to fix our bizarre cultural worship of pirate CEO’s is to tinker with business school attitudes. The root of all evil is based in schooling probably in those ethics classes.
I get tired of hearing this nonsense. It is important to have good business schools. It is important that they communicate ethics, attitude, business knowledge and considerable training. But that’s it.
A business school is not like wading into a pool blessed by an angel and getting healed.
Overconfident attitudes and overly proud, ridiculously vain attitudes are not based in business school curriculum but in larger society.
If we want to change that, we give stockholders a say in how the company runs, put rigorous controls on executive salaries and change bonuses to consider long term contributions and actual contributions.
James Pilant
Taxing The Wall Street Casino
This is from the summary of a Paper called: Taxing the Wall Street Casino. It can be found on this web page which belongs to The Institute for Policy Studies.
The report indicates that such a tax would produce would have the potential to generate $177 billion per year.
Financial speculation taxes could’ve made a real difference if they’d been in place before recent financial fiascos:
• Flash Crash: If a financial speculation tax of 0.25 percent on securities trades had
been in place for just the 20 minutes of wildest trading on May 6, 2010, the day of
the stock market “flash crash,” it could have generated $142 million in revenue. That’s
more than $7 million per minute. Big-time investors might have thought twice before
placing their bets, instead of relying on computer-driven high-frequency trading.
• AIG Collapse: A financial speculation tax on the insurance giant’s $440 billion worth
of exceptionally risky credit default swaps would’ve amounted to as much as $1.1 billion,
enough to cover the annual salaries of 20,696 elementary school teachers.
• Greek Tragedy: When Greece cut a derivatives deal with Goldman Sachs designed to
conceal their dangerously oversized debts, a financial speculation tax would have raised
the cost of the shady maneuver significantly. A levy of 0.25 percent on the $10 billion
deal would’ve amounted to $25 million. In the United States and many countries around
the world, there is growing momentum behind proposals to place a very small tax on trades of stock, currency,
derivatives, and other financial assets. Such “financial speculation taxes” would have dual benefits: 1) greater
market stability by curbing short-term speculation that can lead to dangerous bubbles and 2) massive revenues
that could be used for urgent needs, like jobs, health, and climate programs.
Stabilizing Markets and Curbing Excessive Speculation•
Global Precedents: Financial speculation taxes in the UK and many other countries
have had little impact on productive economic growth or investment. Other G-20
countries are pressing the United States to institute such a tax.
• Tax Would Target Reckless Behavior, Not Small Investors: Proposals to institute
a financial speculation tax pending in Congress would exempt retirement funds
and the first $100,000 in trades made by an individual each year. The tax would be
paid almost entirely by wealthy investors engaged in high-risk activity.
Bank Taxes
In the United States, the tax structure is based on an obsolete manufacturing model. The basis of the taxes is the income tax and corporate tax. But the biggest sector of the economy much larger than manufacturing is the financial sector. The financial sector engages in many activities that might be charitably called gambling. A transaction tax aimed solely at the speculative practices of Wall Street would raise hundreds of billions of dollars. Perhaps the tax system could be restructured to take into consideration the simple fact of where money is made in America.
This is a British commercial for a “Robin Hood” tax. I believe we should use such a tax for general revenues. Further, there can be little doubt, the United States could raise far more money with such a banking tax than could the British.
In the United States, the middle class is a continual target for fees and local taxes. The tax system need to be rethought and a greater reliance placed on a single tax system.
James Pilant
Police Unions And Pension Funds
Back in the 1990’s police unions negotiated for benefits likes salaries, health insurance and pensions. During the early years of the first decade of the 21st Century, investment banking and, in fact, often regular banking left its conservative investment moorings and struck out into mortgage “securities” and other strange ideas of what an “investment” might be.
Cities and States (even universities) got caught up in the lure of easy investment profits. Pensions suffered when these “investments” disentegrated.
And this is one of the results – from the Baltimore Sun:
Union leaders, who stress the dangerous and grueling nature of police and fire work, have resisted the pension changes that the city has proposed, saying they constitute a violation of their contract.
“Some in city government are portraying this as a crisis,” said Bob Sledgeski, president of the firefighters union. “This has been long, ongoing neglect on the part of the city to follow their own experts’ advice. That’s not an accident, and 10 years does not a crisis make.”
City Council members, led by Helen L. Holton, chairwoman of the taxation and finance committee, have been scrambling for a solution to the pension problem before the fiscal year ends June 30.
Scores of police and firefighters have threatened to resign or retire if their benefits are significantly diminished. But city officials, grappling with a $121 million overall budget shortfall, say they cannot pay much more than the currently allotted $101 million pension contribution, although the city’s required obligations would be about $166 million if no changes are made in the way benefits are calculated.
I might have been more sympathetic to the city’s financial plight if they hadn’t played with the money.
That money was not a pile of gambling chips. It was a contractual promise.
These people being penalized are not wealthy entrepeneurs, they are the police and firefighters of the city.
Everyone talks about their sacrifice and bravery right up until it comes time to write the pension checks.
And then it looks like, well, it wasn’t really a promise. Apparently they only meant it if they could play with the money and not lose it.
And they lost it.
James Pilant
My Wife Broke Her Leg On Christmas Eve
Gnerally speaking this is not a common post. It was bit of surprise. I told the people at the emergency room that since on Christmas Eve there was virtually no one waiting for the doctor that we would be back next year and, in fact, make all of our emergency room visits on major holidays.
That was as good as it got.
Aside from regular presents, my spouse got a brand new pair of crutches. They are actually kind of shiny.
I may be a bit short on posting the next few days. Things are complex.
You have my holiday best wishes.
Don’t be too concerned, I’m sure we can figure all this stuff out at my house.
James Pilant
Lecture On Plato
Plato falls between Socrates and Aristotle. These three philosophers lived during the Athenian decline. This caused a great deal of turmoil in their lives and deeply influenced their philosophical views. Here is a lecture on Plato I found very enjoyable.
James Pilant
Pilant's Business Ethics Blog 
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