Making The Evil Suffer!

On By southwerkIn business ethics, Capitalism, ethics, Philosophy of Business3 Comments

People ask me what can be done about corporate crime. Usually I say, “Enforce the laws we have on the books and make them do real prison time as well as pay fines.” That will go along way to stopping that kind of crime.

But there is something, we all can do – we can take our moral responsibilities seriously.

You see we depend on the state to enforce the law and generally we assume that is enough. It is not.

When a white collar criminal walks the street after a wrist slap of a fine, justice is defied and the nation tarnished.

But You have a duty to justice as well. People would think twice about committing crime if the passive acceptance that justice was done by prison or fine disappeared as people realized their continuing duty. How do you exercise your duty for justice? When you meet one of these thieves, walk to the other side of the street, refuse to shake their hand. When these criminals are hired by a new company that explains blithely that they want their expertise, you can stop doing business with that company.

But above all it is our silence that demonstrates our lack of commitment to the principles of justice and citizenship. These criminal should be afraid to walk the streets not because of physical danger but because they are likely to be cut or insulted.

“White collar” criminals (and I truly hate that phrase – whoever commits serious crimes against the larger society to the tune of millions of dollars is a scoundrel and a disgrace to be shunned and despised just like the lowest bank robber) live in a cocoon of comfort. They go to the right churches, have the right friends, zealous business writers will minimize or deny their guilt, and their connections in industry and government continue unabated. Everything they hear is that everybody does it and if only the little people, the little people like you, could understand their job pressures and the unreasonable nature of the regulations, and the cruelty of the prosecutor and the randomness of it all – (other people have done worse so why arrest me), you would not persecute them like Christ on the Cross but honor their contributions to society.

You have a duty to justice to shock them out of that cocoon, to make it hard for them to get work, to stigmatize them and make them suffer. Justice does not stop at the prison door. If we can maintain records of where pedophiles live, surely we can track the financial offenders who have stolen so much and damaged society so thoroughly.

It is for you as well as the government to wield the sword of justice. Do not forget your duty. Do not forget your nation and your responsibility to it. Remember the evil that these men have done.

Do not harm them physically, take them down a peg. Don’t hurt their bodies, hurt their feelings.

I tell you truly when the great malefactors of this society are punished by the public in this fashion, a very large portion of this kind of crime will simply disappear.

When we act as negatively toward a white collar criminal as we do a man wearing a shirt and pants with opposite patterns, when we are as critical of these criminals as we are of people who live on the streets, when we are as uncomfortable in their presence as when a thoughtless person talks loud and long on their cell phone, they will change their behavior.

James Pilant

The Problem of Monopoly

On By southwerkIn Capitalism

The Problem of Monopoly

You are probably aware that one of the airlines will no longer serve food on flights. This is an outgrowth of the concentration of airlines as their numbers diminish. If you don’t have to compete; you don’t have to provide services or make your pricing competitive. Every American who uses air travel will face increasing fees and dismal service because in a monopoly you don’t have to do a good job or provide a decent service. You have to pay them anyway.

James Pilant

This is Edward Lotterman writing in the Pioneer Press –

Increasing monopoly power can get you coming and going, especially at the airport. The decreased competition in air travel resulting from successive mergers among airlines has already increased air fares. Now a pending take-over of Dollar Thrifty Automotive Group by either Hertz or Avis promises to reduce competition once you are off the plane.

But these days, questions of monopoly power seem a dead issue in Congress and among the general public. Such apathy is true even in the face of growing concentration in banking and financial services, where just three banks now hold a third of all deposits and are making well over half of new mortgage loans. Teddy Roosevelt must be turning over in his grave.

Deathbonds! Gambling On Death – Just The Elderly!

On By southwerkIn Capitalism, Economic measurement, ethics, Government Failure, Philosophy of Business1 Comment

In a special report, Reuters tells a fascinating and horrifying story, a tale of intrigue, death and bizarre financial manipulation.

This story is about life settlement products. It’s a very comfortable sounding name for something far more sinister, the purchase of insurance policies statistically figured to pay off because of the death of the original owner.

From the article –

Life settlement products first appeared in the mid-1990s. Typically, the market is fed by elderly individuals with life expectancies of between 3 and 12 years. U.S. settlement companies buy these life insurance policies at a fraction of their face value, but above their cash surrender values, picking up the tab for insurance premiums and collecting on the death benefit — or policy maturity.

Industry proponents say that as long as the models used to predict the deaths of underlying policy holders are broadly correct, a suitably large portfolio should offer a healthy return, despite the industry’s often eyewatering commissions and fees — as much as 10 percent upfront — and the lack of generally agreed rules about how to value portfolios.

At what point, did we as a society arrive here? We are at a place where gambling on the time of death of the elderly is a legitimate way of making money. I’m not talking about life insurance. That’s a long term deal in which both parties benefit. I’m talking about buying out insurance policies for a fraction of their value and making a killing on the early deaths of the holders.

Well, let’s look at the rule of the business world’s favorite economist – “There is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud”

I would note that what counts as the “rules of the game” seems to be rather flexible, and if you can figure out why any businessman would engage in free and open competition, you’re one up on me. As for deception and fraud, on everything from bank fees to credit cards, making sure that knowledge is limited and initial offers inviting, has created whole industries based on oversell by obscuring the facts.

I would argue that the only part of that statement, that businesses in the United States heard, was the unconditional purpose of making money as the only, single rationale for business. This rule is not a fact, it is the beginning of an economic religion.

That’s how you get gambling on old dead people. It’s making money. It’s within the rules. There is competition. The deception or fraud does not directly violate law.

It takes an economic religion, a new set of sacred beliefs, to overrule the pangs of conscience, to disregard the duty of religion, to escape the burden of civilization and to be deaf to the pleas of the patriot.

That’s why we are here, a national moral vacuum.

James Pilant

Vice President Biden to Democratic Base: ‘Stop Whining’

On By southwerkIn Government Failure

Every once in a while you hear something you find hard to believe. This is a good example.”Stop whining.”

Would the Vice-President be directing that insult at the people who gave money, worked door to door and voted for him and the President?

Now whether the Democrats or Republicans do well in the coming election does not concern me. They have failed in their duty to protect the public from predatory lending, credit card gamesmanship, borderline fraud in the mortgage industry and many other persistent evils. So, “a plague on both their houses.”

However, the phrase, “Stop whining,” caught my attention. My blessed readers, if a single one of you thinks this will motivate the base, I want you to tell me. Just make a comment, a short phrase – “Biden knows what he’s doing.” That’s all I want to hear.

Just tell me that to someone, somewhere this make sense.

If so, I will never bring it up again. In fact I may very well give up saying anything about Joe Biden. That may well be the wisest course.

James Pilant

Americans Believe Recession (Depression) Is Not Over

On By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, Economic measurement, ethics, Government Failure, Philosophy of Business1 Comment

From a CNN story –

Seventy-four percent of Americans believe the economy is still in a recession, according to a new CNN/Opinion Research Corporation poll. Only 25 percent think the downturn is over.

One-third of Americans say the recession is serious, while another 29 percent characterize it as moderate.

Only the elite in the beltway believe the ridiculous idea that we have successfully come through the recession. I don’t understand how the numbers could add up to anything but a continuing crisis.

Unemployment – 9.6 percent – This doesn’t count those who have given up seeking work, so the real number is probably closer to 15.

Financial Markets – All Better? – NO – Federal Reserve Governor Kevin Warsh said on Tuesday that financial markets have not fully recovered after the financial crisis and that economic growth is currently weighted to government expansion.

Hiring – All better? – NO – U.S. chief executive officers’ view of the economy darkened in the third quarter, with top executives saying they were less willing to hire new workers as they fear sales growth will slow.

Consumer Confidence – Optimistic? – NO – When it comes to attitudes about the economy, Americans continue to see the glass as half empty, according to the latest reading on consumer morale. The Consumer Confidence Index fell to 48.5 in September — its lowest level in 7 months — and down from August’s negatively revised level of 53.2, the Conference Board, a New York-based research group that compiles the index, said Tuesday.

How long can I keep going? How long have you got?

The politicians and the commentators feel your pain from a safe distance. You’re just more economic data and an annoying one. If you would only believe, everything would be fine. Everybody is doing well. You just don’t see it because you can’t see the big picture obstructed as it is by your suffering. Don’t be pessimistic. Don’t you know that this is America and a good attitude can solve all your problems?

I get tired. You get up and you hear these criticisms of hard working Americans and the utter lack of comprehension of the beltway elites as to what the world is really like, and the next day it happens again. The cycle never ends. Americans are lazy, self-indulgent, and fat. They need to get tough, get smart and do what we, the real people, the people that count do. Learn from us, they say. These creatures who don’t live in a world of labor and pain, who live by manipulating money, shaping opinion, and other ill defined processes. They know how to fix your lives. Right, and I can build a nuclear weapon with a little barb wire and an old tire.

Well, tomorrow will be another day and the cycle will begin again.

James Pilant

My Buddy, Andrew, Comments On The Posting – Are Businessmen Smarter Than Children

On By southwerkIn business ethics, Capitalism, Government Failure, Philosophy of Business

As usual, Andrew has something clever to add to one of my posts. I would like you to read it. jp

A few years ago, I did an internship at the CSX Rail Yard in Waycross, GA. One day in the middle of september, I came in to hear that the EPA man was coming today to inspect the yard. As the intern, I was at the bottom of the food chain, and it was my job that day to escort the EPA man around to all of the facilities in the yard.

The inspection lasted until a little after lunch time. At almost every facility we went to, he wrote stuff down in this book he carried with him. At the end of the inspection, we went and met with the Plant Manager of the Locomotive Service/Repair Station, who is the man in charge of the entire yard. That day, CSX got fined $350,000 for environmental hazards and failure to comply with EPA regulations.

What suprised me is the reaction to this. CSX considered this a victory! “We ONLY got charged $350,000!!”. I understand that type of money is a drop in the bucket for what the major railroads make, but the moral issue there is what upset me.

I just thought I’d share my example to help further verify what you learned in law school.

Our Continuing Coverage – More On BRICKED Bank!

On By southwerkIn business ethics, Capitalism, ethics, Philosophy of Business2 Comments

Cameron Hope organized the bricking and had this to say. –

‘We blocked the doorway as a way of saying that the banks are open but the safe is shut.

‘The banks are stifling the recovery from the recession by not lending businesses any money.

‘Savers are getting nothing, borrowers are getting nothing and the banks are doing whatever they like. Some of the banks are even owned by the taxpayer and still they won’t lend.

‘This protest is saying enough is enough and the Government needs to step in and make the banks lend.’

The Daily Mail’s Make the Banks Lend campaign, on behalf of small firms turned down for credit, argues that the banks have money to spare, thanks to enormous funds provided by the taxpayer.

Instead of lavishing this cash on bankers’ bonuses, banks should be lending it at affordable rates to small enterprises – the backbone of the economy. Small and medium concerns provide 57% of all private sector jobs.

It is clever protest that is getting headlines around the world. However, Barclays Bank was not the original target. The protesters were unable to brick up the offending bank. So they picked another bank conveniently located. Press reports indicate that Barclays has a good reputation for continuing to give out small business loans.

If you read this column, you know I’m no shill for the banks. The offending bank was actually “Natwest.” If you want to deny them business, please do, but Barclays did not deny this businessman and his friends a loan.

(One of my clever readers, M. Perry, adds a helpful comment. –
Nat West was the original target to be bricked up because of its location in the centre of Bournemouth. HOWEVER, HSBC was in fact the bank that refused the loan, jeopardising Mr Hope’s business.)

James Pilant

Bank BRICKED Closed In Loan Dispute!

On By southwerkIn business ethics, Capitalism, ethics

In Great Britain, in the city of Bournemough, a Barclays bank was bricked closed by a group of protesters angry that the bank was not willing to make loans to small businesses. They said and I quote that it was “like talking to a brick wall.” The angry protesters removed the wall after two hours after the police ordered them to do so.

One of the protesters said –“Over the last year we’ve had different problems with the banks thinking things are getting better and better but they are not, they are getting worse.

“Any charges they put on nobody can argue with them, that’s if you can get any money in the first place.

“Overdrafts have been taken away from us, it is never-ending. You go into a bank and there’s nothing there, the bank’s open but the safe is shut”

“You go into a bank and there’s nothing there, the bank’s open but the safe is shut.”

Maybe some of our bank customers know how to brick up a building?

James Pilant

International Price Fixing

On By southwerkIn business ethics, Capitalism, Economic measurement, ethics, Government Failure, Philosophy of Business

You don’t make real money by competing. You make real money by not competing.

Price fixing is one of the tried and true methods of generating great profit. You form an alliance with all the others in your business and agree nobody gets a better price.

China Airlines has agreed to pay 40 million dollars in fines for the practice.

They were fixing international cargo rates for shipments to the United States from 2001 to 2006. I find it difficult to believe that their profits were anywhere near as small as 40 mil. Since it was a conspiracy, who else was involved? I want to see some prosecutions. I want to see some justice. Although the pro-business policies of the current administration would seem to mitigate any real penalties for these kinds of practices.

James Pilant

I Have Done 350 Postings On This Web Blog!

On By southwerkIn business ethics

I have written 350 posts in over a little less than a year. That’s a lot of work. But you, my readers, have made it much more a pleasure than a labor. Because, your praise, your criticisms, have allowed me to adapt as time has gone by, and far more importantly, made me feel that what I had to say had some validity and importance.

Thank You!

James Alan Pilant