Thanks for following my work. I deeply appreciate it. I’ll be back as soon as I can. jp
CASE STUDY: Sankofa – Fairtrade and ethically sourced products (via Get Aktiv)
Is this the future? – Businesses not just devoted (or not devoted) to profit but to social change or just fairness? My good friend at Get Aktiv has a long, well written article going into considerable depth about a particular business. I would like you to read it. I am trying to work out in my mind how businesses are likely to change over the next twenty years. I think he is discussing a movement with great potential for changing the way we think about business and, in particular, corporations.
James Pilant
via Get Aktiv
Wells Fargo Ordered To Pay 203 Million Dollars In Fees
Wells Fargo is one of the four largest banks in the United States. The bank received 25 billion dollars in TARP money (the bailout). But the bank charged 203 million dollars in overdraft fees since 2001 in violation of the law. They made their money by paying out checks and card fees largest to smallest instead of in the order they were received. This enabled the bank to stack overdraft fees.
He ordered the bank to pay back the 203 million dollars they made using the practice of largest to the smallest.
Here’s a news story reporting the decision –
I love irony, the irrational collision of one situation with another – and for that irony lets look at
Wells Fargo’s Vision Statement –
“We want to satisfy all of our customers’ financial needs, help them succeed financially, be the premier provider of financial services in every one of our markets, and be known as one of America’s great companies.”
Apparently manipulating the order of payout to artificially increase the number of overdraft fees “helps consumers succeed financially.”
Here’s a very different take on overdraft fees –
Are all overdraft fees always unfair? Of course not. If there was no penalty the banks would be faced with an avalanche of bouncing checks. There are many defenders of banks who say they are justified. Wrong! That’s not the question. If you only ask it one way, that is, should banks be able to charge overdraft fees, the argument always goes to the bank. But the question here is “are the fees reasonable.”
What does it cost a bank to process an overdraft?
Why doesn’t the bank charge based on the size of the overdraft rather than charging the same for $1.25 overdraft as for a much larger amount?
How much money does the bank make on overdrafts?
When you start looking at the facts, it becomes a messy problem. There are a lot things to figure in to the situation. Nevertheless, Wells Fargo’s practice is simply unfair.
There are other banks that use the practice. Will they be forced by the courts to payback the fees as well? Wells Fargo is appealing the decision. Stay tuned. I’ll tell you how it comes out.
James Pilant
Buffett Says No Second Recession – I Hope He’s Right!
In an item from Yahoo News, Buffet is bullish on the economy. Normally I would place a lot of importance on what he has to say. However, as you see in the article, he company just made a 27 billion dollar deal that stands to lose considerable sums in a pessimistic environment. He may be more stoking the stock price than giving a reasoned opinion.
Warren Buffett ruled out a second recession in the U.S. and said businesses owned by his Berkshire Hathaway Inc. are growing.
“I am a huge bull on this country,” Buffett, Berkshire’s chief executive officer, said today in remarks to the Montana Economic Development Summit. “We will not have a double-dip recession at all. I see our businesses coming back almost across the board.”
Berkshire bought railroad Burlington Northern Santa Fe Corp. for $27 billion in February in a deal that Buffett, 80, called a bet on the U.S. economy. The billionaire’s outlook contrasts with the views of economists such as New York University Professor Nouriel Roubini and Harvard University Professor Martin Feldstein, who have said the odds of another recession may be one in three or higher.
“I’ve seen sentiment turn sour in the last three months or so, generally in the media,” Buffett said. “I don’t see that in our businesses. I see we’re employing more people than a month ago, two months ago.”
Roubini has been very successful at predicting economic problems. His web site is here. It would be a good decision to make it a favorite of yours. He knows his business and has no railroad purchase to influence his judgment one way or another.
James Pilant
Did White Collar Crime And Fraud Trigger The Meltdown?
I’ll let the video speak for itself. But in my mind, the answer is a solid yes. It’s the cost of the pervasive lack of business ethics, a willingness to commit crimes in the pursuit of enormous amounts of money.
Four Thousand Children Die Each Day From The Lack Of Clean Drinking Water!
Bloggers all over the world are joining together to call attention to the lack of clean water and its health effects. WaterAid keeps a web site.
Here’s one of their commercials –
Is Slavery A Thing Of The Past – Not Yet
It appears that there is still a need for cheap plantation labor, enough demand and enough profit to reinvent slavery.
The Brazilian authorities say they have rescued 95 farm workers who were being kept in slave-like conditions in two south-eastern states, the official Agencia Brasil reports.
Forty-four workers at a sugar-cane plantation in Rio de Janeiro state were not registered and had no clean drinking water or safety equipment.
But that’s more the tip of the iceberg than a major step – From the BBC in 2004 –
At least 25,000 people are working as slave labourers in Brazil, according to a new report obtained by the BBC.
The study, carried out on behalf of the International Labour Organization, says workers are living in conditions unfit for animals.
The bulk of them are working in the Amazon region, clearing forest so the land can be used for cattle and crops.
The as yet unpublished report says members of the political elite are among the landowners responsible.
As we see over and over again, political elites use their influence to flout the law. Read this –
The report does praise efforts by Brazil’s left-wing government to tackle the issue, but it says a culture of impunity persists where politicians and judges are among the landowners responsible for perpetuating slave labour.
This kind of injustice is dangerous for all free men. The profits that can be made off slave labor are enormous and the vicious mind set it produces in the privileged class bleeds over into the press, the schools and the government.
James Pilant
Corporations Have To Give Back!
From Patrick Dixon, the Futurist.
I think that one was a little short, so here is one of more size. I like what he has to say especially when he talks about passion and the individual.
The Growth Of CSR – Corporate Social Responsibility
Well, these statistics are encouraging but whether CSR is a form of green washing, PR or a simple waste of time and resources on the one hand or a promising corporate move toward some limited form of responsibility, I’ll leave up to you.
Salvatore Giunta Awarded Medal Of Honor
Salvatore Giunta is the only living recipient of the Medal of Honor from the gulf war conflict. There have been seven awards. All the others died during their heroic acts and never saw their awards.
This is definitely not Business Ethics. However, it is a matter of honor. Mr. Giunta displays a decision making that would seem idiotic to the beltway bloviators. He displays a patriotism that seldom figures into the business practices of “American” companies and the pseudo-citizens of our corporate board rooms.
I have been called shrill. What do you call it when one man is willing to lay down his life for his fellow man, while News Corp. (Fox News) waxes rich on software purchased from our nation’s enemy, North Korea? Are both patriots? Are both decisions reflective of honor? Are both decisions the result of a commitment to freedom and the security of the United States?
I’ll tell you the answer. Only one fits the criteria of patriot.
I’m proud to live in the same country with him.
James Pilant
Pilant's Business Ethics Blog 
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