I can look about 15 degrees to the right of dead ahead. Everything else hurts. I had a bunch of different things I wanted to write about. I got a few things up but it will have to be tomorrow before I can do some real writing.
James Pilant
“Inside Job” The Director Speaks
Charles Ferguson directed the documentary “Inside Job.” He writes about his thoughts and conclusions from creating the documentary.
One of the things he found puzzling (as do I), doesn’t doing serious long term damage to the nation’s infrastructure like roads, bridges and education become a concern for the financial elites since over time it damages their American investments?
Here’s the answer. (from the article) –
The financial services industry and the most successful American multinational firms now obtain rapidly increasing fractions, often already the majority, of their investment, employees, and revenues from (a) other wealthy individuals and corporations and/or (b) outside the United States. Over the last two decades their political interests, contributions, and lobbying have gradually followed these larger trends. As a result, the political duopoly has overseen a massive disinvestment in the future of the United States and the American people, and a massive transfer of wealth from the bottom 90% of the population to the top 1%. Taxes on dividends, high incomes, capital gains, and estates have sharply declined, while tuition at public universities, hours worked per family, household debt, and government deficits have all increased.
They have no interest in the long term future of the nation. This nation is similar to the Wild West idea of Robbers’ Roost.
Robbers’ Roost is a town hidden in the hills where the outlaws go to hang out. There is no law there. They do what they feel like. They are safe from the sheriff and all those people they took stuff from.
The United States is going to be a great big friendly place for people with lots of money and few morals. One law for them. One law for us.
James Pilant
The trailer –
This Is Not A Recovery
I wrote this back in August. I haven’t changed my mind one bit. Whenever I read this nonsense about an economic recovery, I’m struck by how far away the commentator is from actual American life and how close he is to Washington.
So says Paul Krugman at the New York Times. And he’ right. This is the New Great Depression, the second in American history. It will always be remembered by future generations as Great Depression II, the second great depression. Just like the first world war failed to solve the problems that would eventually lead to the second world war, the same problems bit us a second time. The humiliating thing is that if we had continued with the protections from the first great depression we could have avoided much of the damage. But the claims and promises of an irresponsible and incompetent economic elite have led America and the rest of the world into disaster, a disaster these same creatures do not believe is happening since it has no effect on them except a persistent worry that their profession is being “demonized.” Demons would have had serious difficulty in doing more damage to more innocent lives.
James Pilant
What The Market Will Bear?
I reported a few days ago that David Lazarus of the Los Angeles Times had written a good article explaining the dispute between banks and retailers over the higher costs of credit cards as opposed to cash. He has a new column today explaining the strange phenomena of a poll backing the bank’s side of the argument happily presented to all and sundry as consumer opposition to any change in the current system. Strangely enough I worked on a doctorate for a while and I remember a few scant traces of my survey research teaching. The methods used in the Visa card survey are completely useless for getting statistically accurate data. They essentially did push polling where you ask loaded questions to get the answers you want. A properly phrased set of questions can get you positive numbers for the proposition that there are too many mothers and we should thin the herd.
Lazarus reports that credit card fees on a retail transaction might be as little as a few pennies per purchase. Lazarus also points out that retailers wonder why larger transactions cost more than smaller ones. Its a computer process, just numbers. Does a computer seemed more fatigued after a seven digit transaction than a three digit transaction? Does it demand overtime or organize a protest or form a union? Does it take longer breaks? Where’s the pain justifying higher fees for a hundred as opposed to ten dollar transaction? But there’s more.
Let me quote from the article –
Ken Clayton, senior vice president of the American Bankers Assn., said the cost of processing credit card transactions should be whatever the market will bear.
“Who puts the value on the price of a ticket Jack Nicholson pays to watch the Lakers?” he asked. “It’s however much Jack Nicholson wants to pay to sit in the front row.”
Whatever the market will bear! Wow! You know if I can recall my Adam Smith (and I can), the free market is based on a free exchange of information about such things as pricing and he had a strong preference for small economic units that would actually compete. Strangely enough we have no idea what it costs banks to do these transactions. So, they deliberately withhold the knowledge of their costs and charge us whatever they want. Then, they pronounce with the certainty of a prophet from a vindictive and very strict religion that they can charge as much as the market will bear. Wow, doesn’t that strike you as a little unethical? I mean doesn’t it seem to you that if businesses can band together and claim that every transaction they process costs them up to 3% regardless of the advances in the speed and computing power of their operation, that they might be deceiving you and acting unfairly. Shouldn’t they be competing with each other? You know, that weird funny thing called the free market? What they are doing here sounds a lot like a monopoly. But it couldn’t be because that would be domination by a singly entity or cooperation by a number to control pricing and eliminate competition. Surely we don’t see any large economic units all practicing the same policies and withholding the same information. Right?
From wiki:
In economics, a monopoly … exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it.
Goodness? That must be one of those inaccuracies I hear when people criticize wikipedia. I better go to a better source.
From Black’s Law Dictionary –
“A privilege or peculiar advantage vested in one or more persons or companies consisting in the exclusive right (or power) to carry on a particular business or trade, manufacture a particular article or control the whole supply of a particular commodity. A form of market structure in which one or only a few firms dominate the total sales of a product or service.”
Black’s Law Dictionary, 5th edition, page 908.
You can’t trust anybody. That one must be wrong too.
Well, I wouldn’t worry the fees on retail transaction because our interests are being watched over the men running the banks. Who, you all know are honorable men. I will not wrong such honorable men.
I will not suggest that their business practices place a cruel burden on retailers. I will not argue that their interpretation of the free market is simplified child like understanding that wouldn’t get the a B in the fifth grade. I would never intimate that creating a push poll justifying their position suggests that they are in weak or vulnerable position with their argument.
Well, best wishes. I’ll try and make more concrete arguments the next time.
James Pilant
Gold Nanoparticles?
Scientists from Taiwan have discovered that if you place gold nanoparticles in the leaves of trees they produce a luminous reddish glow.
Street lights are an important part of our urban infrastructure — they light our way home and make the roads safe at night. But what if we could create natural street lights that don’t need electricity to power them? A group of scientists in Taiwan recently discovered that placing gold nanoparticles within the leaves of trees, causes them to give off a luminous reddish glow. The idea of using trees to replace street lights is an ingenious one – not only would it save on electricity costs and cut CO2 emissions, but it could also greatly reduce light pollution in major cities.
Gold nanoparticles are used in cancer treatment. They produce electricity in sunlight. Apparently the possible uses for them is enormous and we have only figured out a few.
James Pilant
Ho-Hyung (“Luke”) Lee – Realizing A Better World
One of the great pleasures of writing a blog is that you can say nice things about people. One of my friends on Facebook is Ho-Hyung (“Luke”) Lee.
This is from his web site, Realizing A Better World, –
In the Industrial Age, one plus one equaled two, using simple arithmetic. However, in the Modern Information Age, one plus one could produce 5, 10 or even 20, given the possibility of geometric progression. Such integration or synergistic effects can be achieved relatively easily with the increased communication capability that has resulted from the development of IT and networking technology. Moreover, the global information exchange enabled by the World Wide Web has made them more broadly realistic.
However, this increased communication capability has greatly influenced and brought major changes to all participants in the market. Almost all of the individual units on the supply side have greatly increased their productivity and efficiency. As a result, the ratio of employment to investment has been reduced. On the demand side, consumer knowledge and recognition have increased greatly, and this is directly linked to the abrupt escalation in consumer needs and wants. It is likely that this pressed the increase in consumer spending on the demand side.
He is a complex thinker, something of a specialist in markets. I enjoy his writing. I think you will too.
James Pilant
What I’m Reading Today
Marcos Gonzales writing at his blog Experification discusses cell phone charges based on rounding up seconds. This is in Holland. Nevertheless, it is not only definitely in the business ethics zone, it’s not hard to realize that if the cell phone companies are doing it there, they’re doing it here.
Sue Wall’s Blog is talking about the dangers of hiring the wrong real estate agent. She also recommends against selling right now. Here’s what she says in regard to business ethics –
I believe that, in several instances buyers are being misguided by their agents, who are hungry to make a sale. They somehow persuade their clients to disregard standard business ethics and respect. They show homes to their clients that would normally be out of their price range, hoping to “catch a deal” from a poor, desparate seller.
Florida Business Students get a Lesson in Ethics reads the blog headline. This refers to the cheating scandal at the University of Central Florida. Here’s what is said –
This news story just broke yesterday and it is sad that there is such a lack of integrity, especially in a business school. This is a timely piece because NECB is the first in the nation to offer a degree specifically in business ethics and compliance, but has been an educator of business people for over 100 years. As alumni of this institution, how do you feel about this video?
This is the video link the author refers to.
I am appalled and that the school offers a specific degree in Business Ethics makes it all worse. The current business philosophy is causing deterioration of ethics and morality in every aspect of this society. When the only value is money and the only goal is to get it, you get the current business environment.
Here’s a real estate broker talking about her struggles mastering her field. Quote –
You have to think old school, new school and anticipate the moves of the school with no foundation these days in real estate. Like any business, I’m sure you’re sitting there shaking your head, “It’s not rocket science!”. . .thanks Captain Obvious. It can be frustrating to see some folks advance in business. Prowess in marketing? Networking? Orrrr connections, which, hey, I get it, it’s a networking game, life/business that is and good on ya if you’re out shakin’ your tail feather to push your product or idea. Maybe it was that business ethics class (since I thought taking one was important) or one too many lock-ins at Baylake United Methodist as a kid but I think it’s weird push your product when there’s a very personal interest at heart.
This blog is called, “Real Estate.” It is written by McKenzie Laurence.
I’m impressed that she remembers some of that business ethics stuff.
James Pilant
Foreclosure Judges Fight The Good Fight
Alain Sherter (who I do not write enough about) has a excellent column titled, “How Local Judges are Putting the Feds to Shame In Halting Improper Foreclosures.”
Here’s a selection from it –
Consider this astonishing stat drawn from a WaPo story today: Courts in the area are estimated to be dismissing upwards of 50 percent of foreclosure cases against homeowners because of slipshod — or outright fraudulent — paperwork filed by lenders. Banks are appealing many of these decisions, a sign of just how afraid they are the rulings could embolden courts around the country to follow suit:
In millions of cases across the United States, local judges have wide latitude to impose sanctions on banks, free homeowners from their mortgage debts or allow the companies to proceed with flawed foreclosures. Ultimately, the industry is likely to face a messy scenario — different resolutions by courts in all 50 states.
Sherter puts his finger on what I try to communicate to my classes. Attorneys and Judges are not the Ogres portrayed on television. It is true that are some very, very bad attorneys. I hold them in contempt. But you would be astonished and impressed by the attorneys I’ve met who fight for their clients for little money, sometimes no money. This whole mortgage foreclosure mess would never have come to light, if it weren’t for attorneys working for next to nothing trying to keep people in their home.
He makes another point in both the title and inside the article.
Federal bank regulators are equally intent on keeping the foreclosure assembly line moving. That’s no surprise, given that they’re deeply implicated in the foreclosure mess. For instance, state financial supervisors turned to the OCC in 2007 after JPMorgan Chase (JPM) and Wells Fargo (WFC) stonewalled their investigations into improper foreclosures.
Not content to simply ignore the problem, the OCC actually made it worse. Protecting its authority to oversee national banks, a doctrine known as “preemption,” the agency shooed the state enforcers away. Then it asked the banks to look into the matter.
I said exactly the same thing in one of my posts – If you are waiting for the Obama administration to come your rescue, you are going to be waiting a long time.
James Pilant
UH HUH HER
“I’m always surprised when someone tells me they read the essays I post up here. I don’t know why I do it. Oh well, here’s another one.”
So says the author at the web site, UH HUH HER. (On each article the author is listed as “by the girl.”)
When I started blogging my first concern was if anyone at all was reading my stuff. The first month I blogged I got 13 hits. I didn’t know how to use the administrative screen so most of those were probably just me looking at it. I’m doing much better these days and it feels good. But there is also that thought, “Why are people reading my stuff?” I’m careful not to ask. It deforms your feedback. People almost always want you to feel good often when they need to say, “Stop doing that.”
I am not surprised that people read her web site. The writing ranges from academic to humor and sometimes it is … Well look at this –
I miss the smell of dog on my hands. The last two years have been the first in twenty that I haven’t had a dog. I’m not that person who pats dogs in passing when they’re tied up outside the milk bar—I’m the person who chats to them intently for ten minutes , and then labours in the oily smell of fur on my hands for hours afterwards.
It’s pretty. But she is quite willing to hit you a little harder –
In my first blog entry I highlighted what I saw to be a huge irony belying the notion that in order to fix the problems caused by excessive consumption, we need to consume more (albeit differently). I now know that this irony is representative of the difference between ‘anti-consumerist’ and ‘anti-consumption’. However, prior to acquiring this knowledge, I dared to point out said irony to my eccentric, long-time greenie, sometimes-activist father. His response was to inform me that he was ‘baffled’ as to the point I was making, and that there is a premium to pay in order to foster the development of sustainable and humane businesses. Having subsequently raised this idea myself in class, I was dismayed to discover that the there was a strong view that such practices will not encourage actual development, but rather just increase ‘ethical’ marketing. While I agree that the contemporary fetishizing of everything ‘green’ (and red) has resulted in a marked increase in products that appeal to the conscious consumer’s sensibilities without actually offering them anything, this stance implies to me that we should do nothing. It’s been pointed out that ethical consumption is almost exclusively a middle-class phenomenon, and is inextricably tied to notions of neo-liberalism and moral selving. I do also agree with these ideas to an extent, but I think we risk throwing out the baby with the bathwater if we take them on exclusively. Maybe I’m an optimist (for which I make no apologies) but I like to think of the middle-class as having an opportunity, nay, a responsibility, to use their spending power to demand better of big-business for the long term benefit of the economically impoverished. We broke it, we ought to at least try to fix it.
It’s a fun web site, often thoughtful. Be very sure that I do not share some of the ideas and beliefs discussed. Nevertheless, an interesting site with good writing.
James Pilant
The Lively World Of Ethics!
Let’s take a little run around the internet and see what other blogs are saying about business ethics.
The web site, Modern Pensees, takes a very tough stand on society as a whole considered in the light of the cheating scandal at UCF Business School.
The Ethical Dilemma, subtitled as Life as a “do it all” deals with ethics from a Christian perspective.
Jayaribcm’s Blog is a very learned and well written. He has recently discussed corporate governance and corporate social responsibility in his blog. If you are a student writing a paper or a columnist looking for background, this is a good web site.
Homophilosophicus writes about business ethics from an Irish perspective. He subtitles his web site, “A commentary of the perplexed.” This guy writes well. He’s a teacher, and I would like to be one of his students. It’s obvious he believes in the importance of his craft. I appreciate that.
Ricks Picks is an interesting concept. Each day he lists three web sites he recommends. He recommends business ethics sites from time to time, which is why it came up on my search. It’s a fun approach and it makes sense when one has a busy schedule. I looked at his picks, they’re pretty good.
Leading In Context LLC is discussing business ethics as applied to ethical consumerism.
The web site, UH HUH HER, discusses the ethics of consumerism. It is written “by the girl.” “The girl” can write. It’s a little off beat, but she knows what she’s talking about. I’d give it a look.
Well, this is the different ways people talk about business ethics in their blogs. We ranged from very conservative Christianity to a CSR expert in India, to a dedicated teacher in Ireland and finally wound up reading a post “from the girl.” I’m glad you went with me. This was great fun, albeit very time consuming. Still I met some new people. Some of them are warriors in the field of ethics. They will probably become allies and friends. You can join the struggle, too.
James Pilant
Pilant's Business Ethics Blog 
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