Ethics and the Personal Finance Industry

On March 17, 2013 By southwerkIn Business Ethics

The personal finance industry can’t save us – Salon.com

How does the industry prey on our fears about our inability to save and plan for the future?

We can’t articulate that for all too many of us our problem is not an inability to manage and invest money effectively; it’s that we’re expected to do more and more with less and less. So we think we are individually messing up, that we lack the financial skills and smarts to get ahead. The financial services industry presents itself as our savior. But by doing that, it has to confirm our cultural bias that we are alone responsible for our financial fates.

You see this dynamic especially in personal finance and investment initiatives aimed at women, which contain an almost odd mix of the language of empowerment and infantalization. They tell us we are women, we are so strong because we do so much more around the home and work than men, but yet we are financial illiterates who have no clue. In fact, both sexes have low financial knowledge. Men have more money than women for the most obvious of reasons: they earn more.

You mention the work of economist Teresa Ghilarducci, “the most dangerous woman in America.” Who is afraid of her and why?

It became very clear to me while reporting this book that Teresa Ghilarducci had hit a nerve in the financial services sector that no one else had. The reason, to me, was obvious. Most other people discussing retirement reform schemes (Auto IRAs, Save More Tomorrow and the like) were talking about expanding the role – or at least the bottom line of — the current dominant players on the retirement scene. I mean the retail brokerages, the 401(k) plan providers, the dominant mutual fund companies and the like. Ghilarducci’s Guaranteed Retirement Accounts calls BS on this model. First, she points out how much money the current retirement is making on what we think is our money. Second, her model would bring new players in, and I mean new, powerful players – state pension funds, institutional investors, and hedge funds – into the game.

The personal finance industry can’t save us – Salon.com

Ethics and the Personal Finance Industry

Personal responsibility. I believe in it. I recognize the power of it, the usefulness of it. But circumstances have to be taken into consideration. We do get injured, become ill and suffer accidents. We can be killed by natural disaster or more mercifully, have homes or businesses destroyed. Choice and environment interact to produce our reality.

Here we have a situation which the personal finance industry proclaims loudly and persistently that if you only change your decision making and be tough on yourself, that you can attain financial stability and even possible eventual wealth. I would prefer that industry to look at this situation from a business ethics stand point and promise less because personal choice is only part of the equation. If a great majority of the American people had shared in the profits of the increased production and financialization of the last thirty years, I think most financial suffering might be attributable to poor planning. But here again, we have circumstances, downward wage pressure, very high unemployment, a replacement of stable pension with the disastrous 401K’s, the changes in the bankruptcy act, the plague of student loans, etc.

Americans of the middle class suffer from real wage pressure and for many, no amount of planning will fix those problems. Americans of the lower class are simply in the midst on an ongoing week to week, day to day, financial disaster.

Financial planning can be useful but only in proportion to the amount of disposable income in the individual cases. If the disposable income is inadequate, no amount of planning can fix it. Promising magical fixes from non-existent resources is not ethical. Financial planning is not for everybody.

James Pilant

From around the web –

From the web site, Personal Finance for Beginners:

Your questions in personal finance would revolve around the following:

How much money will be needed by you at various points in the future?
Where will this money come from (e.g. savings or borrowing)?
How can you protect yourself against unforeseen events in your lives, and risk in financial markets?
How can family assets be best transferred across generations (bequests and inheritance)?
How do taxes (tax subsidies or penalties) affect personal financial decisions?
Your Personal financial decisions will involve paying for education, financing durable goods such as real estate and cars, buying insurance, e.g. health and property insurance, investing and saving for retirement. Personal financial decisions may also involve paying for a loan.

From the web site, Finance for Youth: The Blog:

A couple of days ago, a young student approached me and asked me for some career advice. The student wanted to understand a little more about what banking and finance is about, and how it measures up in terms of their “dream job“. I was very impressed with this young student, because unlike many of their peers, they were actually trying to look at their future and start planning. This student, to be fair, is part of an advanced group of students. They get tutoring as part of their regular school day, they have additional instruction in note-taking and other study skills, and they are in advanced Math and English classes. They have a leg up over many students already. This young person seemed to have a leg up on even this group.

And from the web site, Nancyeewing:

You need to make a plan of what you really want in life that money can buy. Then you must find out how to get the money it takes to finance it and finally start to implement this plan. This is the long term part of your financial life – the process of personal financial development from the state you are in right now – to the state you want to be in. This journey toward financial freedom is in my opinion the most interesting and exciting part of personal financing you can have.

Business Ethics and Religion

On March 16, 2013 By southwerkIn Business Ethics

Business Ethics and Religion

Business Ethics and Religion After the Financial Collapse (Theology on Tap) – YouTube

Richard Shields, PhD, Faculty of Theology,

Religion , churches have a lot to say about the economy

Have churches engaged in a transformative dialogue with the business community?

There seems to be a disconnect between the accumulated wisdom of religion and the logic of business in the world.

Another disconnect between the ethical core of people and the workplace …

“I’m just making a living.” Bricklayers at a death camp

“you gotta figure out the cost benefit ratios” fines as opposed to violation costs

“It’s up to the regulators.”

Neutral or amoral world of work

Business ethics seen as being imposed on business from the outside

Ethical norms based on the intrinsic interest in business

Discussion of Catholic Social Doctrine

From around the web –

From the web site, QDVF:

To this point, our discussion has centered on the limitations of modernism on business ethics – namely, moral relativism and a materialistic focus regarding ethical behavior. We next examine how the Christian worldview addresses these issues followed by how it might influence ethics research. Christian ethics founded on Scripture gives moral standards or a common platform that allow us to judge between right and wrong.

In business situations, people must decide what they ought to do and what ethical principles to follow. They must know that these principles are right and that it is reliable. This is not to say that an absolute moral law must be strictly followed given that the boundaries of moral law and its varied applications will always be debated. But the very idea of right and wrong makes sense only if there is a final standard by which we can make moral judgments (Colson and Pearcey, 1999).

From the web site, Conversation in Faith Weblog:

What, if anything, does Christianity offer to the business and the ethical decisions that people must make?

Honesty? Fairness? Trustworthiness? The Golden Rule? Honoring God by the way we conduct ourselves?

Yes,certainly. But if that is all we have to offer, it’s not substantially different than other faiths. Are Jews to be fair, trustworthy, and honest? Of course. Muslims? Of course. This degree of similarity isn’t surprising considering the close geographical, historical and cultural proximity of Judaism, Islam and Christianity. Christianity emerges from Judaism and Islam develops in a world shaped and influenced by Christianity and Judaism.

So again, what, if anything, constitutes a distinctly Christian business ethic? Perhaps we ought to ask, is there a uniquely Christian business ethic?

And from the web site, Catholic Analysis:

Amid the ongoing debate over issues of economics and ethics, Benedict XVI has addressed these issues on several occasions in recent months. On May 26 he spoke to a group of young people from Confindustria, the General Confederation of Italian Industry.

Every business, the Pope noted, should be considered first and foremost as a group of people, whose rights and dignity should be respected. Human life and its values, the Pontiff continued, should always be the guiding principle and end of the economy.

In this context, Benedict XVI acknowledged that for business, making a profit is a value that they can rightly put as an objective of their activity. At the same time the social teaching of the Church insists that businesses must also safeguard the dignity of the human person, and that even in moments of economic difficulties, business decisions must not be guided exclusively by considerations of profit.

Religion is a Ethical Double Edged Sword

On March 15, 2013 By southwerkIn Opinion

Religion is a Ethical Double Edged Sword

Faith-based prison programs: New study suggests religion may help criminals justify their crimes.

A new study in the academic journal Theoretical Criminology (hat tip to the Vancouver Sun) suggests that, far from causing offenders to repent of their sins, religious instruction might actually encourage crime. The authors surveyed 48 “hardcore street offenders” in and around Atlanta, in hopes of determining what effect, if any, religion has on their behavior. While the vast majority of those surveyed (45 out of 48 people) claimed to be religious, the authors found that the interviewees “seemed to go out of their way to reconcile their belief in God with their serious predatory offending. They frequently employed elaborate and creative rationalizations in the process and actively exploit religious doctrine to justify their crimes.”

First of all, many interviewees had only a vague notion of the central tenets of their faiths. Take, for example, an 18-year-old robber whose “street name” was Que:

Que: I believe in God and the Bible and stuff. I believe in Christmas, and uh, you know the commitments and what not.

Int: You mean the Commandments?

Que: Yeah that. I believe in that.

Int: Can you name any of them?

Que: Ahhh … well, I don’t know … like don’t steal, and uh, don’t cheat and shit like that. Uhmm … I can’t remember the rest.

Faith-based prison programs: New study suggests religion may help criminals justify their crimes.

Religion has not been a consistent force for morality. Savage wars, greed, theft and torture have all been favored by Christianity at various points in history. Other religions have similar checkered pasts. It is not surprising that prison preaching is not having the quite the effect expected.

It doesn’t help that the Bible is a complex work whose division into single verses complicates understanding. (I promise you that if you read the bible organized as paragraphs and books not verses, you will find that it is a much more consistent and eloquent document than when it is organized into brief comments – that get tossed like missiles by varying denominations and zealots of all stripes.)

It might do well to conduct studies to find out what religious systems are most effective in curbing recidivism.

I doubt that will happen. The results could be very dangerous. After all, what would people say if the Muslim Brotherhood was most effective in curbing later crime.

James Pilant

From around the web –

From the web site, Thoughtful Faith:

The United States keeps no official statistics on religious beliefs of inmates. The claim that atheists were under-represented in prisions was seemingly started, by Rod Swift, who wrote it on his website, and publicized the claim through the internet and sceptical magazines. He claims that he received an email from an employee of the Federal Bureau of Prisons, Denise Golumbaski. According to this email, 0.2% of those surveyed specifically answered they were “atheist” and 19.8% give no answer. This compares with 0.5% of the US population at the time who identified as atheist, and 4 to 6% (according to Gallop) who gave no answer.

From the web site, The Penal System: (This is an interview with Pete Brook – it’s fascinating – you should read it!)

People have to care about each other. It’s just really bizarre in a country that has professed Christian ideals that when it comes to the prison system people don’t seem to love their neighbour, they seem to hate their neighbour. They seem to have an incredible amount of indifference towards the fortune of their neighbour. I mean I’m not a religious person I’m not saying that you should let these people out because of Christian ideals. It makes it easy when I’m chatting to my parents because they’re catholic and I’m like Jesus is all about visiting people in prison and stuff. But it’s a very easy line of argument to use when you’re dealing with conservatives. You should care because that’s what you talk about elsewhere.

And from the web site, Prison Uncensored:

Our conservative government has also taken away funding for religious groups other than Christians in an effort to save money. Before the government looks at saving nickels and dimes in the prison system perhaps they should look at how much money is wasted by other government departments, maybe our Defense Minister could not waste billions of taxpayer dollars.

Bullying by Mob

On March 14, 2013 By southwerkIn Business Ethics

Bullying by Mob

Janice Harper: What the Stanford Prison Experiment Can Teach Us About the Workplace

A focus on interpersonal conflicts between the bad bully and the good worker focuses on seemingly inherent qualities of individuals, and fails to explain the sheer brutality that ensues when bullying expands to include multiple people engaged in shunning, gossiping about, sabotaging, and making accusations and reports against a targeted worker. The collective bullying of a worker is called “mobbing,” and it typically ensues when a worker does or says something to annoy management, and management declares or demonstrates that the worker is unwanted. When that happens, it takes little effort to persuade the broader workforce to turn against the worker.

Just as Zimbardo talks about the slippery slope of evil that begins with the subject mindlessly taking the first step toward aggression through a seemingly minor action, when mobbing begins, workers are not initially encouraged to be cruel to the targeted worker. Far from it; they are told the worker must go, that it is the worker’s own doing, and the worker will be better off if they just move on. The first step onto the slippery slope of mobbing behavior thus often begins with something as simple as agreeing with management that the targeted worker must go — even if the decision to terminate the worker is clearly arbitrary or punitive or in some cases illegal, such as retaliation for reporting sexual harassment, discrimination or unlawful behavior.

Janice Harper: What the Stanford Prison Experiment Can Teach Us About the Workplace

I have seen a lot of articles on workplace bullying but they tend to focus on single perpetrators. This talks about mobbing, a phenomenon where multiple people bully a worker. This is not uncommon. Please go to the web site and read the full article. It’s worth your while.

James Pilant

From around the web –

From the web site, Mobbing and Bullying:

A recent study showed that about 35 percent of students who are bullied experience post traumatic stress disorder (PTSD) symptoms. This study echoes the findings of workplace mobbing research done by Dr. Heinz Leymann in the early 1980’s and has been validated many times by targeted individuals with whom I have worked. If we understand that bullying and mobbing attack the spiritual, psychological and emotional health of the individual as well as the physical, we also must consider that the damage done in an organization by this behavior goes beyond those directly involved.

From the web site, EndMobbing:

Mobbing is the targeting of persons in workplaces and schools by another individual or group of individuals in order to degrade, humiliate, and ultimately remove them from the workplace or school organization. This removal can be through firing, expulsions, or because the target can no longer tolerate the conditions and leaves of his or her own accord. The consequences for victims of mobbing are usually devastating. For its victims, mobbing affects physical heath, psychological and emotional health, relationships with family members, and, for workers, financial health. Mobbing also tends to erode a victim’s belief in a fair and just world. Mobbing is different from bullying because the workplace or school organizations are also involved, either through failure to act to protect their members when they have a responsibility to act, or through “blaming the victim” and joining the attack in progress on the victim, usually acting through official, bureaucratic channels. Secrecy and lack of transparency among organizational leaders and the presence of a hostile workplace culture are common indicators of mobbing-prone organizations.

And from the web site, The Hidden Evil’s Weblog:

Mobbing sometimes continues after individuals have left the organization. Although this can rarely be proven, slandering continues… This ongoing mobbing, even after the individuals are no longer connected with the organization, seems to justify the Mobbers previous behavior & upholds the organization s decision. They try to defend themselves by continuing to destroy the victim s reputation… Dianna: the next minute I thought, Howe can all these people just go along with this? Yet I would think, I can t blame these people. I know they have to go along with this for their own survival

Executives Have Vivid Imaginations

On March 13, 2013 By southwerkIn Opinion

Executives Have Vivid Imaginations

American Workers Lack Common Sense Skills, Executives Say

Workers lack communication, collaboration, critical thinking and creative skills executives say, according to a recent survey by the American Management Association. Turns out, bosses aren’t too excited about their underlings’ abilities, a prospect they’re getting more worried about considering such skills will be more important amid a changing business landscape, they say.

The number of executives rating their employees as below average increased across all four areas since the survey was last taken in 2010. Almost 20 percent of workers lack at least average creative skills, according to executives.

American Workers Lack Common Sense Skills, Executives Say

Yes, there has been a collapse in worker capabilities since that grand old time of American capability: 2010! That’s right. According to these executives (experts?), in the last three years, workers have become more incompetent. At a time, when the pool of available workers desperate for employment has been the highest since the great depression and they having the pick of the litter, the workers just aren’t as good.

Do you know what this means? It means these executive get together, talk a lot and gripe, then they take surveys. Next year, they may decide the food is bad or they don’t like the weather or they’ll go back to complaining about, that old favorite, “economic uncertainty.”

The idea that educational and judgment standards have dropped across the board in this country in three short years is simple nonsense. There is no change in the educational system, in hiring, or anything else, that would explain such a change. It’s just imagination, a particularly vivid imagination. What’s worse is that some people take this kind of survey nonsense seriously.

I tell you what, let’s ask the workers if their bosses have become less competent over the last three years. In fact let’s survey the workers the same way we do “executives” about basic skills and who has them. Then we could compare. That would be interesting statistics.

James Pilant

From around the web –

From the web site, Ideagency:

Obviously, the notion that Americans aren’t hard-working isn’t supported by the statistics. Beyond the numbers, however, my experience working with my own clients support Begala’s argument. The people I meet – whether they work in finance, manufacturing, retail, technology or health care – are not lazy. Far from it. Despite the lack of raises, bonuses, and other perks that have been severely cut back (or eliminated), the vast majority of employees I encounter are diligent, industrious, and proud of the work they do. I would imagine this holds true for most workers.

From the web site, Irregular Times Diaries:

Yesterday, Senator John McCain was giving a political speech in front of the AFL-CIO’s Building and Construction Trades Department, when he blasted American workers as lazy, ungrateful people incapable of doing a good day’s work

Senator McCain said it was necessary for farmers to employ illegal aliens because American workers are too lazy and wimpy. McCain thought that he was being clever when he rhetorically offered to pay anyone in the audience 50 dollars an hour to pick lettuce.

And from the web site, Understanding China, One Blog at a Time:

A commenter recently called me a malingerer, surprised by such harsh words, I rushed to m-w.com to see just what the word meant— malingerer “to pretend or exaggerate incapacity or illness (as to avoid duty or work)” Reflecting on those harsh words, as I scanned the interweb aimlessly, I came across the following photos. And although I would not say that I am a malingerer (in terms of feigning illness) one could argue that I am currently not devoting all of my neurons to the task of making money for any one company , thus the word loafer may be more appropriate..

Banks Poor Record Keeping Strikes Again

On March 12, 2013 By southwerkIn White Collar Crime

Debt collectors assisted by poor bank record keeping.

Banks Poor Record Keeping Strikes Again

Big Banks Face Investigation Into Whether They Helped Debt Collectors Pursue Faulty Judgments

The largest U.S. banks face a multi-state investigation into whether they helped debt collectors pursue faulty judgments against credit card customers, according to people familiar with the matter.
At issue is whether weak record-keeping by banks or a failure to pass accurate information to collection agencies harmed consumers.
The allegations against the banks echo those central to last year’s $25 billion federal-state mortgage settlement to resolve charges that the banks “robo-signed” documents and pursued foreclosures with faulty information.
This latest probe targets the same banks, including Bank of America, JPMorgan Chase, Citigroup and Wells Fargo, said the sources who spoke on condition of anonymity because the investigations are continuing.
As with the mortgage cases, the investigation focuses on the banks’ poor paperwork and their weak tracking of the debts.

Big Banks Face Investigation Into Whether They Helped Debt Collectors Pursue Faulty Judgments

Poor record keeping or phrasing it differently, a reckless indifference to the property rights of mortgage holders, is in the news again. The banks originally used their record keeping to facilitate seizing properties they lacked proper title to. But that wasn’t the only damage being done. It would appear they sold to debt collectors, debts owed to them by the mortgage holders dependent on the very same records they misused for years. You would think they would have noticed there would be a problem but no, people don’t like to think about their mistakes and crimes. So, we have former bank clients who owe no money being hounded by debt collectors.

Has anything been done to discourage these practices? It seems the profit never ends and no one is penalized? Does that mean that the banks can preserve for use over the next decades? Are these going to become standard bank practices?

These practices of poor record keeping and lying affidavits are illegal but with scarcely any penalty imposed they are undeniably profitable.

Aren’t these what Milton Friedman referred to as the “rules of the game,” and if you play by those, isn’t everything okay, you know – free choice, freedom to choose?

I suppose the feds will follow the usual practice of fining the banks a pittance and then allowing them to choose who should receive monetary relief if anyone at all.

This may not discourage the banks from continuing these kinds of acts.

James Pilant

Banks Too Big for Justice

On March 11, 2013 By southwerkIn White Collar Crime

Banks Too Big for Justice

Eric Holder Admits Some Banks Are Just Too Big To Prosecute

When the Attorney General of the United States admits some banks are simply too big to prosecute, it might be time to admit we have a problem — and that goes for both the financial and justice systems.

Eric Holder made this rather startling confession in testimony before the Senate Judiciary Committee on Wednesday, The Hill reports. It could be a key moment in the debate over whether to do something about the size and complexity of our biggest banks, which have only gotten bigger and more systemically important since the financial crisis.

“I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy,” Holder said, according to The Hill. “And I think that is a function of the fact that some of these institutions have become too large.”

Holder’s comments don’t come as a total surprise. His underlings had already made similar confessions to The New York Times last year, after they declined to prosecute HSBC for flagrant, years-long violations of money-laundering laws, out of fear that doing so would hurt the global economy. Lanny Breuer, formerly in charge of doling out the Justice Department’s wrist slaps to banks, told Frontline as much in the documentary “The Untouchables,” which aired in January.

Eric Holder Admits Some Banks Are Just Too Big To Prosecute

I have said several times before that there are two standards of justice in this country. If you had any doubts as to the truth of that statement, this should end them.

It is a sad day when certain corporations have essentially gained the powers and immunities of sovereign states.

What horrors, what crimes, are we yet to suffer, when the law cannot protect us?

James Pilant

Swartz Charged with Many Crimes to Force Guilty Plea

On March 11, 2013 By southwerkIn Politics

Swartz Charged with Many Crimes to Force Guilty Plea

Aaron Swartz: Eric Holder calls Aaron Swartz case “a good use of prosecutorial discretion.”

Earlier this morning, the Senate Judiciary Committee grilled Attorney General Eric Holder on topics ranging from drones to marijuana policy. About an hour into the oversight hearing, Sen. John Cornyn, a Republican from Texas, asked Holder about the DOJ’s prosecution of Aaron Swartz, the programmer and Internet activist who committed suicide in January. Among other things, Swartz had been charged under the Computer Fraud and Abuse Act for using MIT’s computer network to unauthorizedly download millions of academic journal articles from a subscription database called JSTOR. He was facing a maximum sentence of 50 years in prison.

…

The DOJ may have only intended for Swartz to go to jail for a couple months. It’s clear, though, they would’ve had no problem with sending him away for a few years, too. I think Sen. Cornyn put it nicely: “If you’re an individual American citizen, and you’re looking at criminal charges being brought by the United States government, with all of the vast resources available to the government, it strikes me as disproportionate, and one that is basically being used inappropriately, to try to bully someone into pleading guilty to something that strikes me as rather minor.”

Holder claimed that the Department of Justice had conducted “a good examination” of the Swartz prosecution, and came away from it satisfied that there had been no prosecutorial misconduct. And maybe there wasn’t, if you’re judging the prosecutors on whether they deviated from standard DOJ practice. But there is a flaw in the system if the DOJ’s best route to get the sentence it’s looking for is to threaten defendants with disproportionate prison terms. That might be an effective prosecutorial tactic, but that’s not justice.

Aaron Swartz: Eric Holder calls Aaron Swartz case “a good use of prosecutorial discretion.”

So, a federal prosecutor stacks charges on what should be a single offense in order to get someone to plead guilty. Is that justice? Does it bear any resemblance to justice?

Swartz had a strong defense but by the stacking the charges the feds had placed him in a situation where if he lost he could serve fifty years.

It sounds to me that if you wanted to, as a federal prosecutor, you could force people to settle even if they were innocent – just stack the charges so that the risk of losing will put in jail for decades then offer a few months. You generate another trophy for that wall and don’t actually have to go to court and take your case to a jury.

That’s not justice, it’s just a use of overwhelming government resources to force the win.

Tell me, if I put you in a situation like Swartz where you could serve up to fifty years in prison and they offer you three to six months, and you have done nothing, would you take the deal?

Are you willing to rely on your innocence in court, and risk fifty years? You have to think about it, don’t you?

Let’s make it a little tougher. You can’t afford your own attorney and the government is willing to spend several million dollars and thousands of hours investigating you. Every corner of your life will be turned upside down. You’ll go bankrupt from fees. You probably won’t be able to hold a job because of the regular court appearances and your reputation just went through the shredder.

Do you still want to plead innocent or will you take the three months just to make it stop?

James Pilant

From around the web:

From the web site, Another Anthro Blog:

Information is power. But like all power, there are those who want to keep it for themselves. The world’s entire scientific and cultural heritage, published over centuries in books and journals, is increasingly being digitized and locked up by a handful of private corporations. Want to read the papers featuring the most famous results of the sciences? You’ll need to send enormous amounts to publishers like Reed Elsevier.

There are those struggling to change this. The Open Access Movement has fought valiantly to ensure that scientists do not sign their copyrights away but instead ensure their work is published on the Internet, under terms that allow anyone to access it. But even under the best scenarios, their work will only apply to things published in the future. Everything up until now will have been lost.

That is too high a price to pay. Forcing academics to pay money to read the work of their colleagues? Scanning entire libraries but only allowing the folks at Google to read them? Providing scientific articles to those at elite universities in the First World, but not to children in the Global South? It’s outrageous and unacceptable.

From the web site, Gateways: A Dramaturgical Blog:

Not only was Swartz a computer science genius, he was also heavily devoted to freedom of information—which is where he found himself getting into trouble. His friend, journalist and science fiction novelist Cory Doctorow, says he was a “full-time, uncompromising, reckless and delightful shit-disturber.” His first target was PACER.gov, a website that provides court documents to the public for a small fee (about 8 cents per page). In 2008, Swartz, funded by his own money, single-handedly moved the information on to a public website. He released over 18 million pages, an estimated total value of 1.5 million dollars. The FBI investigated the situation, but no charges were filed against him.

Shortly after, Swartz founded DemandProgress.org, a website devoted to internet activism. The website was integral in taking down the Stop Online Piracy and the Protect IP Acts of 2011, two bills which allowed the government more control over what could and could not be posted and shared on the internet (they deserve their own blog post—next week, perhaps).

And from the web site, Justrecently’s Weblog:

What got him into conflict with the judicial system, after some earlier and less significant jostles, was breaking into M.I.T. computer networks in 2010 and 2011, to access JSTOR and to download documents from there. It was apparently meant to be a demonstration, to underline his case that documents like JSTOR’s should be freely available. It had long been argued that such documents should be free because they are produced at public expense, writes the New York Times. The NYT has a detailed account of Swartz’ JSTOR activity. The indictment says that JSTOR’s servers were brought down by his action on several occasions, Wired wrote in September 2012.

It’s apparently a Computer Fraud and Abuse Act (CFAA) which was applied by federal prosecutors. The 9th U.S. Circuit Court of Appeals, in limiting reach of the CFAA, said that violations of employee contract agreements and websites’ terms of service – crucial in Swartz’ case, apparently, at least if up to the prosecutors – were better left to civil lawsuits, also according to Wired. But this ruling wasn’t binding for Massachusetts, and the prosecutors insisted that their charges against Swartz should go on. The maximum penalty – potentially – could have amounted to 35 years in prison, and a million USD penalty. The chief prosecutor in charge was Steve Heymann, who had previously brought hacker Albert Gonzales into jail with a 20-year term.

Two Standards of Justice

On March 10, 2013 By southwerkIn White Collar Crime

Two Standards of Justice

Senator Elizabeth Warren

Elizabeth Warren: Banks Get Wrist Slaps While Drug Dealers Get Jail

During a Senate Banking Committee hearing about money laundering, Warren (D-Mass.) grilled officials from the Treasury Department, Federal Reserve and Office of the Comptroller of the Currency about why HSBC, which recently paid $1.9 billion to settle money laundering charges, wasn’t criminally prosecuted and shut down in the U.S. Nor were any individuals from HSBC charged with any crimes, despite the bank confessing to laundering billions of dollars for Mexican drug cartels and rogue regimes like Iran and Libya over several years.

Defenders of the Justice Department say that a criminal conviction could have been a death penalty for the bank, causing widespread damage to the economy. Warren wanted to know why the death penalty wasn’t warranted in this case.

“They did it over and over and over again across a period of years. And they were caught doing it, warned not to do it and kept right on doing it, and evidently making profits doing it,” Warren said of HSBC. “How many billions of dollars do you have to launder for drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution like this?”

Elizabeth Warren: Banks Get Wrist Slaps While Drug Dealers Get Jail

We could start by marveling at the idea that any rational human being could contemplate a fine as a penalty for international subversion? This subversion involved laundering money so it could be used anywhere in the economic system, thus, making it available to pay for bribes, drug smuggling, murder and kidnapping.

We could wander casually over to our second problem which is bankers, especially the international and investment variety, and wonder what made them so special? It is a simple matter to document one law for them and one law for the rest of us. That is the why Ms. Warrent’s example hits home. We are living by two sets of laws, one harsh and punitive and another for the banks.

Let us conclude with out third problem, where do get off allowing banks to attack foreign governments? Can there be any doubt in anyone’s mind that laundering billions in drug cartel money is the equivalent of a direct attack on the nation of Mexico and a more minor, by comparison, attack on this country, the United States?

It might be better if instead of thinking of the HSBC bank as a financial institution but more as a hostile foreign power willing to exploit our financial system for profit. I believe that is a more accurate reading of how it views its status in the world.

I don’t think Mexico feels safer after we fined HSBC. They may not feel that we have sent a message to those who would empower those who actively kidnap and murder in their country?

How would you feel about this if you lived in Mexico? Does it make you feel secure in American protection anywhere on earth?

James Pilant

Big Business and Government

On March 9, 2013 By southwerkIn International

Big Business and Government

Global Ethics Forum: Power, Inc.: The Epic Rivalry Between Big Business & Government – YouTube

Garten Rothkopf CEO David Rothkopf talks about the conflict between big business and government.

“He explains that we are in a crisis. There has been a net loss of jobs in this country over the last ten years. Social mobility is declining. Inequality is increasing. Our democratic system is under threat by massive corporate power because of the Supreme Court’s decision in Citizen’s United that perverts the right of free speech to include money.

What gives the average citizen a voice? that would be the government. Government is a leveler.

Historically the battle between church and state was the last big battle on the same scale as this one. It was not really a battle over religion. It was an economic battle – who had the authority to tax.

The one country that has done the most to empower corporations is the United States. This country is born of the industrial era.

Even early on corporations had an outsize influence. In the Dartmouth college case, the Supreme Court decided that states could not revoke charters once granted essentially giving corporations immortality.

Later we saw the courts use the 14^th amendement for its first fifty years arguing the corporations should have the same rights as people. Yet people are not immortal. People do not possess legions of lawyers to get laws passed.

Today, most of the value bearing instruments are created by the private sector mainly derivatives. Only about five major powers are able to have currencies on their own.

Nations unable to compete with corporations in terms of power should be considered semi-states.

Markets don’t promote competition (read Adam Smith) efficiency is achieved by scale.

The current size of corporations is larger than could have been imagined in the past. Fundamental shifts in power are occurring.

More than half people on the ground in our last two wars were private contractors

In America – the political process is corrupted by money and Internationally – no institutions capable of dealing with this issue exist.

We need to ask ourselves – What produces the kind of society we aspire to?

As the economic center of gravity moves so does the intellectual center. Right now that center is moving to Asia.

Government is the only way the average person has a seat at the table. ”

(Forgive my poor summary – I wrote notes as it went along.)

James Pilant

Ethics and the Personal Finance Industry

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How can you teach business ethics with a straight face in this kind of environment? A bank participates in the systematic subversion of a friendly government, makes billions of dollars and is then fined a small proportion of its profits.This is not an

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