British Haves and Have Nots

On January 7, 2013 By southwerkIn Economic Justice

British Haves and Have Nots

There are two things that have really struck me this week: Osborne’s proposals to make real term cuts to welfare and the impending arrival of a new royal baby. To my mind these things are inextricably linked. Before you ask this isn’t bourn of too many mince pies and mulled wine before Christmas.

We are increasingly living in a polarised society of haves and have nots. The Tories are trying to weave a narrative that pits ‘strivers’ against ‘scroungers’. However, our attitude to the news of a royal baby to me shows how confused our attitude to the state and state provision has become. The British Monarchy is a cornerstone of our social structure but one that is arguably funded by the public purse. Currently, the monarchy receives 15% of Crown Estate income amounting to about £200 million a year. Debatably this land isn’t private land but land kept in trust for the public. Further, there are myriad costs of running the monarch including security and special occasions such as the Jubilee celebrations. While the public subsidy for the monarchy has been subject to trimming, few have expressed anything but delight at a new addition to ‘the firm’.

This piece doesn’t seek to make the case for a Republic but instead to probe why we can express unreserved joy at the impending royal birth and simultaneous disgust at so called scroungers and their families. Osborne’s decision to increase welfare benefits by 1%, under the rate of inflation will mean real term cuts for many. One of the groups who will be adversely affected by these cuts are mums (and dads for that matter) who will be hit by below inflation rises to child benefits and working tax credits. This has been termed the mummy tax by Labour. The term seeks to highlight the impact of Osborne’s tax cut on real families who rely on these benefits to work and support their families.

The author, Sara Ibrahim, works in law like me. I find her juxtaposition of royal family and welfare recipients to be clever and I recommend you read it in full.

The problem of haves and have nots is not a purely British phenomenon. The United States has increasingly become two societies with different laws, expectations and responsibilities for the different classes. Single mothers with three convictions for marijuana possession can wind up with fifteen years in prison while bankers who launder nine billion dollars in drug money are unprosecuted.

Business ethics under these circumstances become more and more a matter for humor. Business ethics cannot exist in a moral vacuum. There has to be support from the press, the church and the state. Having two societies moving in different directions complicates that support and promotes the moral vacuum.

There maybe some of my readers who may find some justification for very large differences in income. But is it so easy to justify two standards of law, one for the great mass of Americans and another for the one percent?

James Pilant

From around the web –

From the web site, The Guardian:

There’s nothing new about the attempt to divide “benefit claimants” from deserving working people. Tough settlements for the welfare system have long been justified by claims to be cutting largesse from an undeserving poor. But neat categories like these have long been confounded by reality, and changes in the welfare system over the past 20 years have made them all but nonsensical. As Resolution Foundation analysis shows, 60% of the chancellor’s benefit squeeze hits working households. Whatever the rhetoric, it’s so-called strivers that bear the brunt of the cuts.

Why is the formula of “skivers and strivers” showing signs of age? One reason is Labour’s system of tax credits, which changed welfare by supporting low and middle income working households – the group the chancellor claims to be talking to. Tax credits themselves were in part a political move, to change the debate about welfare and poverty. But they also reflected new economic realities: childcare costs had soared, and many parents, particularly women, could not afford to work. Meanwhile, low pay had crept up to epidemic levels. For the one in five working people who now earn below £7.50 an hour, in-work support is vital.

From the web site, Alex’s Archives:

Plenty of political announcements made at this time of year are little more than conference fodder. They grab a headline and a round of applause and that’s the last we hear of them. But George Osborne’s proposals to cut another £10bn from welfare don’t fall into that category. They were buried in the detail of previous policy statements and it was only a matter of time before they bubbled to the surface. Conference season is the ideal time because it allows some posturing against the modern folk devil – the feckless scrounger.

We only have media reports of Osborne’s speech at the moment, and we’ve no idea what’s going on behind the scenes, but a key element to this story is going to be how it plays out within the Coalition.

Clearly the New Victorians of the Conservative party are full-speed ahead for cutting welfare, with a strongly Malthusian undertone that if we lose a few scroungers along the way through starvation then that’ll save us a bit of money.

And finally from the web site, Liberal Conspiracy:

At the Autumn Statement we were told that the Chancellor is increasing spending on infrastructure whilst cutting spending on welfare. Such statements are confusing “infrastructure” for “lumps of rock”.

There are two reasons that you would increase spending on infrastructure. The first is that you believe that the spending itself will be good for the economy: the money will create jobs, the newly employed people will buy new things, shops will employ more people, etc.

The second reason might be that you believe that the underlying framework of your system could be more efficient. The classic example would be that late trains cost people time working, so you invest in better train lines.

However, in practice, I see very little notable difference between what Osborne sees as ‘welfare’ and what he sees as ‘infrastructure’ – other than who it is for. What the Chancellor calls infrastructure, I could call corporate welfare.

Police Theory, Manoje Nath

On January 4, 2013 By southwerkIn Opinion

Police Theory, Manoje Nath

Musings, the web site of Manoje Nath:

What Law? Whose order?

Law and order is a tricky business and the best of us are sometimes tested and found wanting largely because of the ambivalence of the mandate of police. Law is codified, made formal in various acts-the IPC, CrPC, evidence, etc. But what is order? Is there a permanent, ordained, immutable order? A preferred order? An ideal state of order? The construction of the meaning of order is exclusively the area of police expertise.

The law obligates a police officer of appropriate rank present on the scene of trouble to do everything within his legal means to prevent trouble and disperse the mob. It is a responsibility, not a privilege and powers to discharge this responsibility inhere in him; he does not enjoy it during the pleasure of somebody. Now the DGP says it was on his orders that the police force did not react. That says it all. Law must take a bow before the dictates of order

Musings

I have great respect for the thinking of my colleague and friend, Manoje Nath. We in America should pay more attention to the ideas and philosophy of criminal justice. Surely, the experiences of policing in a nation of 1.4 billion people have have some valuable lessons.

The short excerpt above does not do justice to the article. It is constructed in a carefully designed pattern, very fine writing. So, I recommend you go read the article in its entirety. In addition, I couldn’t help but notice that his remarks were published in a good number of Indian publications.

James Pilant

P.S. This may seem off the pattern of business ethics but I also teach criminal justice courses and justice is a critical element in ethical analysis. (JP)

From around the web –

From the the Recommendations of the Malimath Committee on reforms of Criminal Justice System: (This is a very small piece of a very large set of recommendations.)

1. Need for Reforms
It is the duty of the State to protect fundamental rights of the citizens as well as the right to property. The State has constituted the criminal justice system to protect the rights of the innocent and punish the guilty. The system, devised more than a century back, has become ineffective; a large number of guilty go unpunished in a large number of cases; the system takes years to bring the guilty to justice; and has ceased to deter criminals. Crime is increasing rapidly everyday and types of crimes are proliferating.

The citizens live in constant fear. It is therefore that the Govt of India, Ministry of Home Affairs constituted the Committee on reforms of Criminal Justice System to make a comprehensive examination of all the functionaries of the Criminal Justice System, the fundamental principles and the relevant laws. The Committee, having given its utmost consideration to the grave problems facing the country, has made its recommendations in its final report, the salient features of which are given below: …

From the web site, Daily News and Analysis, from an article by Rakesh Bhatnagar.

Way back in 1604, House of Lords Judge Sir Edward Coke ruled that “the house of everyone is to him as his castle and fortress, as well for his defence against injury and violence as for his repose.” There was serious concern for the privacy of a living a being as the contested and universally acceptable verdict says “The midnight knock by the police bully breaking into the peace of the citizen’s home is outrageous in law’. Agreeing with him, Justice Douglas explained that the Free State offers what a police state denies – the privacy of the home, the dignity and peace of mind of the individual.

“That precious right to be left alone is violated once the police enter our conversations,’’ the two thinking judges said as they unwittingly laid the foundation of the hope for a nation “where the mind is without fear and the head is held high…”

It’s a pleasant surprise that Lord Coke’s concern was echoed recently by Indian Supreme Court judges AK Patnaik and Swatanter Kumar as they examined the significance of the Right to Information Act.

And finally from the web site, a PDF file, MEASURES FOR CRIME VICTIMS IN THE INDIAN CRIMINAL JUSTICE SYSTEM by Kumaravelu Chockalingam: (This is a very brief section from a 13 page paper. jp)

II. OVERVIEW OF THE INDIAN CRIMINAL JUSTICE SYSTEM
India derived its criminal justice system from the British model. There is a clear demarcation of the role
and powers and functions of the Legislature, Executive, and Judiciary. The judiciary is independent and there
is a free press. The penal philosophy in India has accepted the concepts of prevention of crime and treatment
and rehabilitation of criminals, which have been reiterated by many judgments of the Supreme Court.
Victims have no rights under the criminal justice system, and the state undertakes the full responsibility to
prosecute and punish the offenders by treating the victims as mere witnesses.

American Violence

On January 3, 2013 By southwerkIn Opinion

American Violence

Jon Eig: Lincoln and Django: The Way of the Gun

I started out to write about gun control. Halfway through, I realized I know little about the issue. I should probably read more on it before I write on it. So instead, this is about Westerns. Django comes from a deep American tradition. Even though it is nominally based on the Italian form of that American tradition, the Italians like Sergio Leone and Sergio Corbucci (who directed the original Django in 1966), were just borrowers. The classic American Western is built on classic American ideas: That the individual, and not the collective, is the most important component of a society, and that violence, especially gun violence, is the most legitimate way to settle both societal and personal grievances. Anyone wishing to have a meaningful dialogue with those who support gun ownership in this country had better understand that fundamental ethos.

I have often told my students that a great paper could be written tracing the last century of American culture by examining seminal Western films. From Stagecoach (1939) to The Searchers (1956); from The Wild Bunch (1969) to Unforgiven (1993), each says something profound about the way we see ourselves. John Ford’s Stagecoach was the first fully mature Western of the talking era, and its message is clear. The banker is evil, the bourgeois ineffectual. As the heroic couple (outlaw and prostitute) ride off at the end, they are said to be “free from the blessings of civilization,” perhaps the most succinct statement of the Western philosophy.

Jon Eig: Lincoln and Django: The Way of the Gun

Our moral choices are very often not made based on reason and judgment but by habit and practice. American history has left us patterns of behavior that we habitually use. The history of the American West has left several problematic behavior patterns. First, we have a worship of outlaws. Vicious scum like Jesse James and Billy the Kid occupy volumes of complimentary literature, films and television.

I was interviewing a criminal once while I was working at a U.S. Probation office. I asked him why he committed crimes. He told me that he was an outlaw, a man who could not be limited in his behavior by society, a man outside the law. I was looking at a pathetic wrongdoer, a man who had brought misery and pain into the lives of everyone who knew him, but in his mind he was a heroic figure out of the Old West. It is not unusual in criminal justice to encounter criminals who consider themselves heroic figures, who were only doing what they “had” to do.

There isn’t much allure in doing the intelligent, rational thing when your culture prefers irrationality and violence.

Fortunately, America has counterbalancing traditions as well. Democracy, the ballot over the gun, is also a force embedded in this culture.

To act ethically and morally, reason is a critical factor, but there must also be an awareness of the cultural habits that often (always?) influence our decision making. Historically, Americans tend to lean toward gun use when confronted with problems. This may have been more appropriate in the Old West than now. It probably made more sense at the time.

Acting with reason, using logic, understanding history, will eventually undermine the culture of violence. We have advanced as humans by limiting the use of violence by ritualizing it, making it inappropriate in most circumstances. That struggle continues.

Business ethics is as much propelled by culture and habit as it is by intelligence.

We by our writing and our actions are creating a different perceived reality in ethics. It will one day take its place as cultural habit.

Let us live in the knowledge that our action and beliefs in many ways create perceived reality. That a heavy responsibility that we should take seriously.

James Pilant

From around the web –

From the web site, Eyewitness Blues:

I think most Americans – left, right and center – can at least agree that there is something disquieting happening at the core of American public culture these days. It’s something that often pops up as public displays of anger and vitriol that many times flirts with paranoid delusion. Maybe it’s always been there and we just never were exposed to it on a mass scale before the Twitterverse. Regardless, we live in a culture where violent rampages against strangers, though never condoned, are now simply not beyond the pale of American daily life. We call such acts unacceptable, and then by our continuing inability to address how to stop them, we quietly accept them.

Yeah so, humans are occasionally capable of unspeakable violence. News flash. Still, the nature of these incidents and their commonality suggest that this is an American thing, a revelation that puts an ugly stain on that old trope of American exceptionalism.

From the web site, Transition Times:

But I want to know why, as Americans, we tolerate and indeed seem to relish representations of violence, while at the same time we’re so fearful of actual violence that some of us are stockpiling weapons in our homes to prepare ourselves for the worst.

In the old days—not that long ago, in the scale of human history—a whole town used to turn out for a festive viewing of a hanging.

Today in places where conservative Islam reigns, women are stoned to death in public spectacles of participatory violence.

But how different is that, really, from the great American past-time of engaging in virtual violence of the most vicious sort?

America is the most violent, militarized society on Earth and Americans are the greatest exporters of violence, both physical and virtual, to the rest of the world.

Most perpetrators of violence—again, both real and virtual—are men. Men are the greatest victims of violence too, though women and children bear a disproportionate share, given that they are far less likely to be pulling the triggers.

We need to start looking much harder at the way our culture encourages violence by selling us the story that real men enjoy violence and can handle it with insouciance.

From the web site, 90.9 WBUR:

The real solution however, Gilligan says, is treating violence as a public health issue or as part of preventive medicine.

“In preventive medicine, we learned 150 years ago that cleaning up the water supply and the sewer system was much more effective in preventing epidemics of cholera and other infectious diseases than all the doctors and medicines and hospitals in the world just dealing with people one individual at a time.

“And I say here too, rather than focusing on primarily, say, trying to identify which individuals are maybe most at risk of becoming violent, the more efficient method of reducing the level of violence in our society would be to look at our environment and change it,” Gilligan said.

It’s no easy task. Gilligan said a first step for him would be to ban assault weapons and large capacity magazines. But he said the bigger picture is to tackle socioeconomic issues.

“We do have epidemics of violence when the unemployment rate increases, when economic inequality increases … And these tend to come down when we either ameliorate the effects of unemployment — for example, unemployment insurance — or find ways to protect people from utter humiliation and loss of status,” he said.

He went even further, saying that society as a whole needed to adopt a perspective “that we will not abandon or neglect or ignore anyone, that we will regard ourselves as responsible for the welfare of everybody.”

“I realize this sounds like pie in the sky … But I think it is possible to create a less aggressive and less violent society,” Gilligan said. “It’s just that it’s a matter of generations. It’s not something that happens overnight.”

And finally from the web site, Reflections – Deepak Tripathi’s Diary:

While all eyes are on Newtown for a few days, killings continue around the United States without much notice. Trigger happiness is an instinct difficult to separate from the ease with which guns can be obtained. Their availability in America is in abundance, price is cheap, the reasons to possess them many. To show off as trophies, to hunt, to “protect,” to satisfy one’s macho instinct; or because it is every American’s right to carry arms. Such mindset is absolutist. Such faith in the superiority of culture, which feeds on the idea of “American exceptionalism” that gives the United States a divine mission, is fatally flawed. For man cannot remain unaffected by what he does to fellow humans. At this time of sorrow, it would be appropriate to also think of the many young and the innocent killed in America’s foreign wars.

In a Boston Review article titled “The Power and the Glory: Myths of American Exceptionalism” in the Summer 2005 edition, Howard Zinn wrote these words: “Divine ordination is a very dangerous idea, especially when combined with military power (the United States has 10,000 nuclear weapons, with military bases in a hundred different countries and warships on every sea). With God’s approval, you need no human standard of morality.” It is this state of mind that haunts America today.

Pope Criticizes Unregulated Financial Capitalism

On January 2, 2013 By southwerkIn Economic Justice

Pope Criticizes Unregulated Financial Capitalism

Pope on New Year’s Day: find inner peace in God

Although the world is sadly marked by “hotbeds of tension and conflict caused by growing instances of inequality between rich and poor, by the prevalence of a selfish and individualistic mindset which also finds expression in an unregulated financial capitalism,” as well as by various forms of terrorism and crime, I am convinced that “the many different efforts at peacemaking which abound in our world testify to mankind’s innate vocation to peace. In every person the desire for peace is an essential aspiration which coincides in a certain way with the desire for a full, happy and successful human life. In other words, the desire for peace corresponds to a fundamental moral principle, namely, the duty and right to an integral social and communitarian development, which is part of God’s plan for mankind. Man is made for the peace which is God’s gift.

Pope on New Year’s Day: find inner peace in God

I was reading the online news when I ran across this headline from Huff Post Religion: (Above is the exact quote from the Pope’s short statement.)

Pope Slams Capitalism, Inequality Between Rich And Poor In New Years Message

I do not believe that the headline is an accurate description of the Pope’s brief statement. The Pope says “unregulated financial capitalism.” It would appear to me we are talking about unregulated financial markets and there is probably a veiled reference to the banking scandals of 2012.

I have read a good deal about Catholic Social Doctrine but had never considered it anti-capitalistic. I had certainly noted it as being extremely hostile to free market fundamentalism but I don’t mistake that belief system for capitalism.

Maybe the headline was just meant to attract readers to click in on it, but I think what the Pope says about our current financial system is worth reflecting on.

James Pilant

From around the web –

From the web site, Front Porch Republic:

“The answer is obviously complex. If by “capitalism” is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a “business economy,” “market economy” or simply “free economy.” But if by “capitalism” is meant a system in which freedom in the economic sector is not circumscribed within a strong juridical framework which places it at the service of human freedom in its totality and sees it as a particular aspect of that freedom, the core of which is ethical and religious, then the reply is certainly negative. …

From the web site, Political Snapshots:

What grasped my total interest and attention was his just attack on unrestrained capitalism without any ethics. He wrote, “Once profit becomes the exclusive goal, if it is produced by improper means and without the common good as its ultimate end, it risks destroying wealth and creating poverty. “ As someone who has been concerned with anarcho-capitalism (an economic system that destroys government regulation of the economy, and creates anarchy within the global economic system) I think the Pope’s comments on capitalism is timely.

The conscious deregulation of the economy that started during the Reagan administration in the U.S. reached its climax during President George W. Bush’s tenure and has brought the global economic chaos the world is in at the moment. Their bankrupt economic theory of the market policing itself, has proven to be as hollow as their dreams of making trillions of dollars without manufacturing anything.

And finally from the web site, Here and Now 2012 Indy Info:

The pope said economic models that seek maximum profit and consumption and encourage competition at all costs had failed to look after the basic needs of manyThousands of peace marchers carrying rainbow banners released balloons in cold St Peter’s Square as the pope spoke.

A longer version of the Pope’s annual message was sent to heads of state, government and non-governmental organizations on December 14th.

Reuters reports that in that message “the Pope called for a new economic model and ethical regulations for markets, saying the global financial crisis was proof that capitalism does not protect the weakest members of society.”

The pope said economic models that seek maximum profit and consumption and encourage competition at all costs had failed to look after the basic needs of many and could sow social unrest.

HSBC Avoids Criminal Charges

On January 1, 2013 By southwerkIn Business Ethics

HSBC Avoids Criminal Charges

Insight: How Colombian drug traffickers used HSBC to launder money | Reuters

In a typical transaction, a middleman in a drug cartel would offer to deliver consumer goods, such as computers or washing machines, to Colombian businesses on favorable terms. Another person in the United States would buy the goods from firms using funds from drug trafficking, and fulfill those orders.

Money launderers exploited the laxness of HSBC in policing shadowy money flows, the Department of Justice said earlier this month. Failures included not conducting due diligence on customers, not adequately monitoring wire transfers or cash shipments and not having enough employees to run anti-money laundering systems. U.S. Assistant Attorney General Lanny Breuer called the lapses “stunning failures of oversight.”

The situation was so bad, according to the Department of Justice, that in 2008, the head of HSBC’s Mexican operations was told by Mexican regulators that a local drug lord described the bank as “the place to launder money.”

The Chaparro probe, led by ICE and the Justice Department, converged over the past two years with two other investigations – led by federal prosecutors and investigators in West Virginia and by the Manhattan district attorney – resulting in this month’s settlement with HSBC.

HSBC and its employees avoided criminal indictments, as the bank agreed instead to a deferred-prosecution deal that forces it to strengthen controls and accept a compliance monitor.

Insight: How Colombian drug traffickers used HSBC to launder money | Reuters

Where to start? This bank has committed crimes on a scale almost beyond comprehension.

Our first question; is this good business ethics? Under Friedman analysis that a corporation’s sole purpose is to serve the shareholders, the HSBC’s actions were a marvelous success. The bank paid a fraction of its profits on its wrongdoing. Further it evaded any prosecution and the resulting loss in prestige and publicity damage that would have resulting from actual criminal punishments. But even more important when looking at the profit side of the ledger, a precedent has been set that if a bank has reached a certain size, it is beyond prosecution. This insures that banks of this size can in the future launder money with confidence that it will both be profitable and free from criminal charges.

Is this bad business ethics? The bank laundered about nine billion dollars in drug money from the Mexican cartels. These financed the drug trade smoothing the shipment of drugs into the United States and other countries. It paid for assassinations and kidnappings, bribery of public officials, and the creation of large heavily armed criminal mafias capable of exerting control over large geographical areas. The was at the very least a subversion of the government and economy of Mexico. Similar but smaller effects were felt in the United States.

However, this is not the whole story, the banks also laundered money for Saudi and Bangladeshi clients who were highly likely involved in terrorists activities and in some cases known have links to terrorists. I don’t think I need remind you that the United States has embarked and continues a “war” against terrorism. The bank actively subverted that war. In addition, the money helped finance rogue regimes like Iran in defiance of American sanctions, strengthening the nation’s enemies, and making those regimes more able to resist reform and democracy.

There can be no doubt that the religions of Christianity, Islam, and Judaism and a giant list of smaller religions would find these acts in violation of their rules of ethical conduct.

Philosophically, unless you consider Friedmanism, a legitimate source of wisdom, almost all philosophical schools with the probable exception of Nietzsche, would condemn the bank’s actions.

Capitalism is in a crisis. This is not an isolated example of few individuals’ greed. This is a giant financial institution deliberately acting against the interests of its host countries and financing murder and mayhem around the world. But further, have we not seen banking incompetence and law breaking on a massive scale on a regular basis since the 2008 financial crisis. This hardly seems to be passing phase.

This particular bank makes more money than most of the nations on earth. Its power to cause harm is enormous and it deliberately, over a long period of time, with direct knowledge of its leadership, caused that kind of harm.

This is a moral and ethical bankruptcy that is not just wrong but endangers the long term welfare of citizens in the United States and the rest of the world.

It’s hard to think of any phrase more sad when have knowledge of these crimes than, HSBC Avoids Criminal Charges.

James Pilant

From Matt Taibbi, Rolling Stone

Though this was not stated explicitly, the government’s rationale in not pursuing criminal prosecutions against the bank was apparently rooted in concerns that putting executives from a “systemically important institution” in jail for drug laundering would threaten the stability of the financial system. The New York Times put it this way:

Federal and state authorities have chosen not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system.

It doesn’t take a genius to see that the reasoning here is beyond flawed. When you decide not to prosecute bankers for billion-dollar crimes connected to drug-dealing and terrorism (some of HSBC’s Saudi and Bangladeshi clients had terrorist ties, according to a Senate investigation), it doesn’t protect the banking system, it does exactly the opposite. It terrifies investors and depositors everywhere, leaving them with the clear impression that even the most “reputable” banks may in fact be captured institutions whose senior executives are in the employ of (this can’t be repeated often enough) murderers and terrorists. Even more shocking, the Justice Department’s response to learning about all of this was to do exactly the same thing that the HSBC executives did in the first place to get themselves in trouble – they took money to look the other way.

From further down in the article:

On the other hand, if you are an important person, and you work for a big international bank, you won’t be prosecuted even if you launder nine billion dollars. Even if you actively collude with the people at the very top of the international narcotics trade, your punishment will be far smaller than that of the person at the very bottom of the world drug pyramid. You will be treated with more deference and sympathy than a junkie passing out on a subway car in Manhattan (using two seats of a subway car is a common prosecutable offense in this city). An international drug trafficker is a criminal and usually a murderer; the drug addict walking the street is one of his victims. But thanks to Breuer, we’re now in the business, officially, of jailing the victims and enabling the criminals.

This is the disgrace to end all disgraces. It doesn’t even make any sense. There is no reason why the Justice Department couldn’t have snatched up everybody at HSBC involved with the trafficking, prosecuted them criminally, and worked with banking regulators to make sure that the bank survived the transition to new management. As it is, HSBC has had to replace virtually all of its senior management. The guilty parties were apparently not so important to the stability of the world economy that they all had to be left at their desks.

From around the web –

From the web site, Wall Street on Parade:

The following are findings from the Senate report:

HSBC Bank USA, N.A., known as HBUS [pronounced H-Bus] functions as the U.S. nexus for HSBC’s worldwide network. HSBC has 7,200 offices in more than 80 countries and 2011 profits of $22 billion; HBUS has 470 branches across the United States with 4 million customers. HBUS provides accounts to 1,200 other banks including more than 80 HSBC affiliates.
In 2010, HSBC was cited by its federal regulator, the Office of the Comptroller of the Currency (OCC), for multiple severe anti-money laundering deficiencies, including a failure to monitor $60 trillion in wire transfer and account activity; a backlog of 17,000 unreviewed account alerts regarding potentially suspicious activity.
HBUS offered correspondent banking services to HSBC Bank Mexico, and treated it as a low risk client, despite its location in a country facing money laundering and drug trafficking challenges. The Mexican affiliate transported $7 billion in physical U.S. dollars to HBUS from 2007 to 2008, outstripping other Mexican banks, even one twice its size, raising red flags that the volume of dollars included proceeds from illegal drug sales in the United States.
Foreign HSBC banks actively circumvented U.S. safeguards at HUBS designed to block transactions involving terrorists, drug lords, and rogue regimes. In one case examined by the Subcommittee, two HSBC affiliates sent nearly 25,000 transactions involving $19.4 billion through their HBUS accounts over seven years without disclosing the transactions’ links to Iran.
HBUS provided U.S. dollars and banking services to some banks in Saudi Arabia and Bangladesh despite links to terrorist financing.

From the web site, Hue and Cri:

The HSBC deal includes a deferred prosecution agreement with the Manhattan district attorney’s office and the Justice Department. The deferred prosecution agreement, a notch below a criminal indictment, requires the bank to forfeit more than $1.2 billion and pay about $700 million in fines, according to the officials briefed on the matter. The case, officials say, will claim violations of the Bank Secrecy Act and Trading with the Enemy Act.

Prosecutors found that HSBC had facilitated money laundering by Mexican drug cartels and had moved tainted money for Saudi banks tied to terrorist groups.

On November 11 HSBC said it had “reached agreement with United States authorities in relation to investigations regarding inadequate compliance with anti-money laundering and sanctions laws.” The bank is also expected to reach a settlement over the matter with Britain’s Financial Services Authority, according to a person with direct knowledge of the matter.

November 10, federal and state authorities also won a $327 million settlement from Standard Chartered, a British bank. The bank, which in September agreed to a larger settlement with New York’s top banking regulator, admitted processing thousands of transactions for Iranian and Sudanese clients through its American subsidiaries. To avoid having Iranian transactions detected by Treasury Department computer filters, Standard Chartered deliberately removed names and other identifying information, according to the authorities.

And finally from the web site, LIVINGLIES:

But HSBC is not being indicted and nobody will be criminally prosecuted because of the perceived or projected threat to the financial system if such a large bank and its officers were penalized criminally for commission of crimes that everyone agrees did take place. Why? Because HSBC is too big to indict.

The obvious answer here is to dismantle the mega banks that are so big that their every move produces swings in the financial markets. Instead DOJ and other law enforcement agencies have given a green light to anyone who can build a bank that big. They can now commit crimes with impunity, which is to say that we are guaranteed to see repeat behavior. Now when a smaller bank engages in the same illicit schemes, it too can point to the fact that law enforcement decriminalized what is clearly a crime under all applicable statutes.

Alec Foege Calls for Change

On December 31, 2012 By southwerkIn Opinion

Alec Foege Calls for Change

“The Tinkerers”: How corporations kill creativity by Alex Foege – Salon.com

In August 2010, Paul Krugman published a piece in the New York Times titled “America Goes Dark.” He described how the United States, “a country that once amazed the world with its visionary investments in transportation, from the Erie Canal to the Interstate Highway System” was now dismantling its infrastructure.

Krugman’s main point was that the U.S. government was not investing stimulus funds in the tools needed for our own economic growth. Three decades of antigovernment rhetoric had convinced many Americans that spending taxpayer funds on anything was a waste of taxpayer funds. But government—the US government, specifically—had built this country into an innovative economic powerhouse by investing in “lighted streets, drivable roads and decent schooling for the public as a whole.”

I would take Krugman’s point one step further and argue that the American government and people helped the country grow both by investing in innovation and by committing themselves to the traditional tinkerer spirit. A sophisticated, cutting-edge infrastructure was the perfect crucible for the kind of innovation the United States embodied.

The point about the devolution of tinkering in American life is not that we have lost a physical connection to the work that we do. It’s that the notion that we can fix any problem or achieve any goal that we set for ourselves has deteriorated into a sanitized, corporatized version of what constitutes achievement.

Corporate America has grown rigid as it has grown larger. Despite the dot-com era’s many images of creative whizzes reweaving the very fabric of innovation, it remains extremely difficult for the freethinking alchemists of today to perform their peculiar strain of magic and thrive while doing it.

“The Tinkerers”: How corporations kill creativity – Salon.com

This was a great article much longer than the brief excerpt I have placed here. If at all possible, please go to Salon and read the whole thing. The gentleman has several books out, so you might want to look into acquiring those as well.

I have been told by people flying into the United States how run down the place looks. There are reports that say this country needs about 2.2 trillion dollars just to get even in terms of infrastructure.

Yet, these pressing needs seem to register very little as a governmental concern. We’ve already had collapsing dikes and bridges. What kind of crisis will it take to make this a critical issue that gets addressed?

Maybe the flesh is willing but the spirit is weak? Where’s that “can do” spirit that built buildings, monuments and wonders of technology? Where has that gone?

I like to read yearbooks from the 1960’s, Britannica, World Book, etc. and in them I find a spirit of optimism and a certainty of success that no longer is predominant in our culture. Much of our current angst can be traced to the thought that things are only going to get worse.

I agree with Mr. Foege, we need change.

We need to act and we can’t wait for the “road fairy” to repair out problems.

James Pilant

P.S. You could argue that there is no business ethics here. After all we aren’t speaking of deliberate sabotage of America’s infrastructure. Certainly I hope not. But business ethics is also a positive force. Good business ethics would embrace creativity and long term growth as manifested in infrastructure development and preservation.

From around the web,

From the web site, ASCE, American Society of Civil Engineers:

In mid-January, the American Society of Civil Engineers (asce) convened a series of five roundtables in Washington, D.C., that were
conceived as in-depth discussions of how best to address the nation’s significant infrastructure deficiencies, which threaten not only the safety
and welfare of the public but also the nation’s economic growth and competitiveness. Each roundtable had its own moderator and slate of
participants, and the participants included well-respected political leaders, policy leaders, and members of asce who are well versed on the
subject of critical infrastructure. The starting points for these discussions were the five key solutions outlined in asce’s 2009 Report Card for
America’s Infrastructure, which was released in March 2009. In essence what these roundtables were striving to achieve was to develop a
framework for giving full dimension to these solutions and securing for them positions of high visibility and high priority on the national agenda.
which was released in 2003. The 2001 report card conferred an overall grade of D+; the 2005 report card, a D; and the 2009 report card, a D. The 2003 progress report
also conferred a grade of D. These assessments have trained a spotlight on the fact that America’s critical infrastructure—principally its roads, bridges, drinking
water systems, mass transit systems, schools, and systems for delivering energy—may soon fail to meet society’s needs. The underlying threats—and these threats are quite significant—are those of deteriorating
economic strength within the global marketplace and a diminished quality of life across the spectrum of American society.

From the web site, Class Warfare Blog:

Now is the time to act to bring up the level of repair of our infrastructure. The reasons?
• the cost of borrowing the money to do this is approximately 0%. We will never get a better deal.
• the number of out-of-work construction workers is huge which has depressed the cost of labor.
• the money paid to the architects and engineers and laborers and suppliers of raw materials and truck drivers will be spent almost immediately by those folks which will stimulate the economy. Plus there is time for the money those folks spend to be spent again (by the subsequent recipients) before the next year is out, amplifying the effect. (Economists call this the multiplier effect. In this case $1 spend on construction creates well over $1 of economic activity.)
• the problems with our infrastructure will only get worse and will cost even more as time goes on. It is not like they will “heal themselves” like a cold will if you just wait.
• all of the expenditures will go to Americans and American companies. The jobs cannot be “outsourced.”

If China is willing to lend us the money to make this nation stronger, creating jobs that generate more than enough tax revenue to pay off those loans, we will be fools if we don’t act. The more we wait the more it costs us in the long run.

From the web site, Reboot Illinois:

“Over the next several decades, Illinois’ infrastructure needs will likely exceed $300 billion, yet the state does not have a comprehensive plan to address this critical need. There are real costs associated with underfunding of infrastructure: shipping and travel delays, congestion, pollution, and diminished economic growth.” State Budget Crisis Task Force Illinois Report.

And finally, from the web site, Save America’s Infrastructure:

For the U.S. economy to be the most competitive country in the world we need a first class infrastructure system—transport systems that move people and goods efficiently and at reasonable cost by land, water and air; transmission systems that deliver reliable, low-cost power from a wide range of energy sources, and water systems that drive industrial processes as well as the daily functions in our homes. Infrastructure is the foundation that connects the nation’s businesses, communities and people, driving our economy and improving our quality of life.

ASCE urges the administration and Congress to focus on policies that will create jobs and continue to grow the economy. ASCE will work with the new Congress and the President to rebuild and revitalize the very foundation of our national economy. Roads, bridges, levees, and dams not only provide security, but also allow businesses to move goods, reach global markets, grow their market share and create new jobs.

Jewish Business Ethics: “Perfecting the World”

On December 28, 2012 By southwerkIn Business Ethics

Jewish Business Ethics: “It Was Only Business”

Are Business Ethics an Oxymoron?

Our daily business ethics speak far louder than the words we utter in synagogue.

by Rabbi Benjamin Blech

And if Harvard MBAs get it, and corporate titans understand it, we certainly ought to focus our attention on the issue of business ethics as one of the most relevant concerns of anyone interested in tikkun olam – perfecting the world.

When we talk about the importance of business ethics as a barometer of spirituality, we need to remind ourselves of the remarkable passage in the Talmud that tells us that after we leave this earth to face our divine judgment, there are many things we will be queried about as the heavenly court reviews our lives. Yet the very first question posed will be: “Were your business dealings conducted honestly?”

And no one will be able to justify his misdeeds by claiming “It was only business!”

Are Business Ethics an Oxymoron?

I want to put more in the blog about religious ethics. I strongly believe that it is neglected and often discarded in discussions of business ethics. But religion has much to say about business conduct from the Old Testament’s demand for just weights to Islam’s ban on interest payments.

James Pilant

From around the Web –

From the web site, Business Ethics Review, here is a post by Yasir Samad:

If the company never seriously thought about whether it is ethical and corporate social responsibility issues, these six can provide guidance to start the process. Although it is important to behave ethically, it is equally important to get the message to the public if a company wants to take advantage of “doing well”.
1. Define what your company stands for and what values it places on the market. Public awareness of these values? Do they have a positive reaction to them?
2. Check the internal and external relations of the company. Do not they make sense and reflect the values of society? Public and the media frequently proclaim the guilt of the association. To search for new relationships with companies that meet ethical standards.
3. Understanding what the public expect from a company today. Are you ready to meet those expectations?
4. Check the location of assets, liabilities, and promises of brands, products, public sector and community initiatives.
5. Compare your public profile, in which private actions. Are in conflict?
6. Do not be shy about spreading the word through the media, employees and community.

From the web site, Richard James Sharp’s Blog:

Ethics involves the notion of morals however they’re different but interrelated concepts (Ethics and morality, n.d.; Tallman 2009). Morals are the individual establishment between right and wrong whereas ethics occurs in the context of groups of individuals who build shared values and standards creating a culture in which decisions influencing the causal relationship of right and wrong exist (Clawson 2006 ; Hrebiniak 2005 ; Klebe Treviño, Pincus Hartman & Brown 2000 ; Northouse 2009 ; Schein 2004). There’s a philosophical question of whether businesses have ethics due to the notion that business is apart from society (Longstaff 1991). However, individual people who constitute the business are part of multiple collectives defining the wider societal and cultural values environment in which ethics resides and the business operates (Huntsman 2008 ; Longstaff 1991).

And finally, from the web site, Bhavin Gandhi’s Blog:

Have you ever saw the definition of business? If you have then you know what I am talking about. In defining a business, ethics don’t play in to the picture at all. Sole purpose of a business is to increase the value for its stakeholders. Thus, can you blame those businesses, who are taking advantage ofthe lower tax policies in Ireland to increase their net income? It might be morally wrong forthose businesses to show all of their profit in Ireland, while they get their 50-70% profitfrom United States, but you can’t do anything about that. As more and more countries loosen their tax policies to attract foreign businesses, there would always be somecompanies who want to move there to increase their net profit by paying lower taxes there.

Netflix Hammers Privacy Protections

On December 27, 2012 By southwerkIn Business Ethics

Netflix Hammers Privacy Protections

Netflix now has the right to share your viewing habits – Salon.com

After nearly two years of intense lobbying, Netflix has won the reform it needs to integrate its services with Facebook. Ars Technica first reported that the Senate quietly passed a reform to the Video Privacy Protection Act (VPPA) last week, giving video streaming companies the right to share your data for up to two years after asking for your permission once. (Mother Jones notes that “The Senate didn’t even hold a recorded vote: The bill was approved by unanimous consent”).

Netflix now has the right to share your viewing habits – Salon.com

This is a government subsidy to a business, in this case, a particular business. The act gives away a right to privacy with no return to the consumer.

Is this good business ethics? One of the first tests of ethics is the question, “Is it legal?” The “reform” makes what was previously illegal into a legal act. It’s also intensely profitable. This passes the sole test of Friedman’s code, “Does it enhance shareholder value?” Yes, it makes more money for the company. I would expect the company’s value to be enhanced.

But this is slicing good business ethics pretty thin. It’s legal and profitable. But so are a great many things that we can be ashamed of.

Is it bad business ethics? It takes a public good, privacy, and converts it to private profit. What did consumers gain from allowing Netflix to sell their information to other companies? That easy, they won the right to be specifically targeted in advertising. Their viewing habits can be used to get a handle on their political beliefs, whether they have children, etc.

It might be argued that the consumer has to give permission to access his records. A blanket right has been abolished and replaced with a private opt out clause. One of the things I have learned is that few of my students even though they are computer literate have any concept of how their data can be used against them. Considering that observation and the mass of e-mails we are bombarded with, I find it unlikely an informed decision is going to be made in many cases.

A company has been profited at a cost to the public interest. It is a government subsidy with all that implies. The company could have done better.

James Pilant

From around the Web –

From the web site, 33 Bits of Entropy: (This article highlights another important issue in online privacy. jp)

New lines will need to be drawn defining what is acceptable data-release policy, and in a way that takes into account the actual re-identification risk instead of relying on syntactic crutches such as removing “personally identifiable” information. Perhaps there will need to be a constant process of evaluating and responding to continuing improvements in re-identification algorithms.

Perhaps the ability of third parties to discover information about an individual’s movie rankings is not too disturbing, as movie rankings are not generally considered to be sensitive information. But because these same techniques can lead to the re-identification of data, far greater privacy concerns are implicated.

From the web site, Tech of the Hub:

Today, Netflix presented at the F8 conference to talk about their planned integration with Facebook. You can see what you friends are watching and they can see what you are watching on Facebook. Not only on a granular level, but Facebook will present what it finds to be interesting trends among your friends’ viewing habits. Mark Zukerberg’s example showed that four of his friends just watched movies staring Johnny Depp. Netflix will be integrating with both Facebook’s newly announced Timeline as well as their OpenGraph platform. Facebook will have similar integration with Hulu.

And, finally, from the web site, Addicting Info:

An archaic 1988 law, the Video Privacy Protection Act, currently prevents the sharing of your video watch lists, such as with services like Netflix or Hulu, on social media outlets such as Facebook or Google+. Earlier this month, the US Senate put through an upgrade to the bill to address this issue, to little notice. It was a minor correction to an old set of laws. But when the US House got ahold of it, they put forth some edits, which is where the problem begins.

These changes, as reported by the ACLU, divorces the bill from a larger set of laws, called the Electronic Communications Privacy Act. In so doing they eliminated protections which were in place to require a warrant for accessing of cloud-based private electronic communications and other content, such as email, private social network posts, any information stored on cloud based servers. Instead, a subpoena is all that is required, a legal process but one which does not require the due diligence of a warrant, not even requiring an active investigation to acquire.

Ethics Bob and Zero Dark Thirty

On December 26, 2012 By southwerkIn Opinion

Ethics Bob and Zero Dark Thirty

This is Ethics Bob’s take on the recent movie, Zero Dark Thirty. As with all of his work, it merits reading.

James Pilant

Zero Dark Thirty: Did torture lead us to Osama bin Laden? « Ethics Bob

For many years before Zero Dark Thirty, arguments raged about whether torture was acceptable, and the arguments turned largely on whether torture—euphemized into enhanced interrogation because torture is illegal—was effective. Arguing for torture was the CIA; opposing it was most of the FBI. FBI agents reported that detainees that were treated decently, even kindly, were founts of valuable intelligence until CIA interrogators took over and turned to torture, at which point the detainees clammed up.

Bigelow’s and Boal’s sources were largely CIA, so it figures that they were told that torture played an important role. Had their sources been FBI the movie’s depiction of the interrogations would have different.

So did torture lead us to UBL? I’m inclined to think that it was of little help, but I can’t really know. See the movie and keep an open mind.

Zero Dark Thirty: Did torture lead us to Osama bin Laden? « Ethics Bob

Here is the trailer –

What’s my take? Torture is against American and International law. If an American uses torture, he should be prosecuted for the crime or handed over to international authorities for punishment.

James Pilant

From around the web –

From the web site, Daily Speculations:

Is it worth a come-see? Assuredly. By the fanatic long lines even late at night, this is the pic to see. And probably 90% went out satisfied. But is it /all that/? Not so sure. Bigelow earns her stripes/, *The Hurt Locker*/ won Best Pic of 2008, and merited it. Moreover, probably few directors could have landed this baby as well as she. But somehow I think the hype is selling this sizzle more than the steak.

From the web site, People’s Blog for the Constitution:

Just to reiterate the consensus: torture did not help national security. The chairs of the Senate intelligence and armed services committees, in addition to a recent Republican presidential nominee and torture survivor, and the acting head of the CIA, have all publicly announced that the film’s depiction of torture exaggerates its usefulness.

In fact, as they have all confirmed, the information that led to the death of Osama bin Laden was gained through traditional intelligence methods, not the unconstitutional “enhanced interrogation” human rights abuses illegally concocted by former Vice President Dick Cheney, Ninth Circuit Judge Jay Bybee, and others.

Not only was torture unhelpful as an interrogation method, it was actively counterproductive: it fueled the recruitment of new terrorists by our nation’s enemies, and undermined our nation’s moral standing in the world, degrading the “smart power” that was responsible for our triumph over the Soviet bloc and the relative peace in the decades following WWII.

And, finally, from the web site, Indies Unchained:

In my opinion, Zero Dark Thirty does not glorify torture. The film is very objective. It shows us what happened and it’s up to us to determine how we feel about it. I think a lot of people are used to being told what to think and mistake the clinical representation of these events as condoning torture. However, showing and endorsing are not the same thing. A lot of people are misinterpreting what’s happening in the film, have already made up their mind before they’ve seen the film, or worse, actively lie about what happens in the film to better support their own arguments. After all, how can we confront them when we haven’t seen the film? Many have claimed this is the sequence of events in the film: Chastain’s character and the CIA physically and mentally torture prisoners, get information, find Bin Laden. This is not true. Chastain and the CIA torture a prisoner in the beginning of the film, but he gives them no information. Over and over he refuses to tell them anything. They get the information from him by tricking him.

You can argue the film says they were able to trick him because of all torture he was subjected to, but in a scene where Chastain watches countless interrogation tapes that involve and don’t involve torture the film goes out of it’s way to show that she found the same information from many people who were not tortured at all. Every prisoner that was tortured in the tapes said nothing. Plus, the film shows multiple terrorists attacks that happen while the CIA is still using torture techniques. Wouldn’t a pro-torture film ignore those events to perpetuate their pro-torture agenda? In the context of the whole film it seems pretty obvious Zero Dark Thirty is not pro-torture. Furthermore, the idea that is glorifies torture is asinine. These sequences are disturbing and sickening. There’s nothing enjoyable about watching these scenes, and if you understand cinematic language it’s glaringly obvious we’re meant emphasize with the people being tortured. The CIA agents are the monsters.

Teaching with Purpose

On December 22, 2012 By southwerkIn Teaching

Teaching with purpose

I’m one of the NRA’s “bad guys” – Salon.com

Why do I do this? I teach creative nonfiction. More importantly, I teach critical thinking skills, which, if Wayne LaPierre is any example, are in short supply in this country. I insist that students read books about difficult topics precisely because I want students to understand how to pick apart a difficult argument and how to see through the eyes of someone else, or because I simply want to see if my students’ vision of life squares up with those that they read. Sometimes, they are able to see themselves depicted in those pages, and sometimes they are able to examine their own prejudices (be they class, gender, race or education level) by being forced to look at the world through the eyes of the other.

I’m one of the NRA’s “bad guys” – Salon.com

I, too, teach critical thinking skills. It’s an uphill battle. My students having endured years of NCLB testing are superb factual test takers but have little experience with expressing an informed opinion. Quite often, a request for an opinion results not in an informed opinion based on any kind of fact or thinking but a reiteration of the worst elements of talk radio and 24 hours “news.” Simple tests where opinions and facts are listed and the student asked to identify which is which are routinely failed even by good students.

Business ethics and business law both demand higher level thinking skills. Deciding what should be done when there are ethical questions can well depend on religious beliefs, philosophical perceptions, life experience and practical considerations all at once. Critical thinking is key to making intelligent business decisions both routine and ethical.

James Pilant

From across the web –

From, http://izygekev.wordpress.com/ –

Critical thinking refers to a process of judgment taken after an analytical evaluation of a problem. It can be developed through the practice of intentional analyzing of every situation in life. Critical thinking skills can be developed by inculcating a habit of analytical and strategic thinking. If you can get yourself into the habit of analyzing every situation critically, you will gradually acquire critical thinking skills.

Your educational background plays a major role in the development of your thinking skills. Education that requires you to think analytically, the education that instills in you the principles of analytical thinking and reasoning leads you to become a critical thinker. The development of problem solving and reasoning skills since an early age is an excellent way of developing critical thinking skills. Fields that require you to acquire and evaluate information before reaching a conclusion indeed help in the development of critical thinking skills. Exposing yourself to questions that stimulate thinking can develop critical thinking skills.

From the web site, vive la internet –

No one always acts purely objectively and rationally. We connive for selfish interests. We gossip, boast, exaggerate, and equivocate. It is “only human” to wish to validate our prior knowledge, to vindicate our prior decisions, or to sustain our earlier beliefs. In the process of satisfying our ego, however, we can often deny ourselves intellectual growth and opportunity. We may not always want to apply critical thinking skills, but we should have those skills available to be employed when needed.
Critical thinking includes a complex combination of skills. Among the main characteristics are the following:

Rationality
We are thinking critically when we
• rely on reason rather than emotion,
• require evidence, ignore no known evidence, and follow evidence where it leads, and
• are concerned more with finding the best explanation than being right analyzing apparent confusion and asking questions.

From the web site, Rliberni’s Blog, Radical Language –

How do we focus on the teaching of Critical Thinking skills in a standardized test focused curriculum?
What a fun topic for me this week (per usual for edchat). I actually almost missed it as I was running late from a meeting. Don’t tell my superintendent, but I may have pushed the speed limit a bit in a school vehicle to get to my computer.
As an administrator for the past 9 years, I have wrestled with this question often. I feel horrible about focusing so much on the test when I know that focusing on the test probably isn’t what is what our kids need for being better thinkers.

Many strong opinions were shared during this amazing fast paced hour of learning. It is hard to argue that critical thinking skills are vital to be taught and what we SHOULD be teaching. However, it is scary for teachers and administrators to deviate from not teaching to the tests when the system is currently set up with sanctions and penalties for those schools that do not do well on the tests. It was agreed by many, including me, that great teaching that includes teaching students how to think, rather than what to think, while ultimately produce strong results.