You carry one with you all the time. You may have more than one. Your cell phone is indispensable. It keeps you in contact. It is the center of your social life.
And it could be dangerous. Cell phones put out radiation. If you hear a computer, a radio, or a television set make strange noises, that’s some of the power the cell phone is throwing out.
How much radiation? Well, sometimes cell phone companies tell you. It can be on some inconspicuous place on the box or in the manual.
That’s really not fair. We have a right to know what we’re being exposed to.
Alain Sherter’s work appears on BNET. He is a great writer and thinker whose work often points in original directions. His outrage over the ethical shortcomings of American business mirrors my own.
Banks that foreclose on a home must first prove they own the mortgage. So affirmed the top Massachusetts court today in ruling against U.S. Bancorp (USB) and Wells Fargo (WFC) in a decision could boost homeowners fighting foreclosure and end up costing banks billions.
One financial expert told Bloomberg the ruling could “open the floodgates” to similar suits in the state and bolster cases around the nation. Financial pundit Barry Ritholtz also called the ruling a victory for the rule of law and property rights, noting in a related post discussing the case:
This is more than a technical issue; at risk is whether we, as a nation, are going to allow corporate entities to violate existing law, or even worse, attempt to create their own, extra-legal, non democratic policies.
Certainly investors seem worried. U.S. Bancorp and Wells shares immediately dipped on the news, with broader bank stocks also tumbling. It’s no secret why. As the “robo-signing” furor has shown, banks for years have flouted legal requirements to document their right to seize homes. Foreclosure affidavits were rubber-stamped or even faked. Local laws regarding property transfers were ignored. Financial firms eager to mince mortgages up into securities violated rules intended to establish a clear chain of title in foreclosure cases.
Alain Sherter’s regular column, Financial Folly, is an invaluable guide to the shenanigans of the financial world. I recommend him to you.
My question is not whether or not that this is the way children communicate now but whether or not it cuts cost. My principle concern is to cut the costs my students pay for textbooks. In Community College with relatively inexpensive tuition, textbook can account for more than a fourth of student costs. This is not fair.
I would like for the State of Arkansas to consider allowing the replacement of textbooks with electronic media with just such a measure but not just for school districts but for public colleges across the state.
Perhaps we should think of the risky lenders on Wall Street less like ivy league educated scum individuals and more like bold Western heroes. Here let me provide some music.
However, some of you may not feel that the mantle of Western hero does not fit them well. How about this one?
Well, now that I’ve got that off my chest. Let’s discuss the issue. First a quote from the actual study:
We find that, after controlling for unobserved lender and area characteristics as well as changes over time in the macroeconomic and local conditions, lenders that lobby more intensively (i) originate mortgages with higher loan-to-income ratios, especially after 2004; (ii) securitize a faster growing proportion of loans originated; and (iii) have faster growing mortgage loan portfolios.
This is research language, an arcane format similar in many ways to spell casting in Lord of the Rings. Let me translate: We worked hard to do a fair study and we discovered that lenders who did a lot of lobbying made stupid decisions.
So, here we come to the meat of the matter. The more lobbyists you hire, the more money you spend on influencing the government; the more likely you are to take risks.
Of course, you could turn it around. The more money and lobbyists financial institutions send to Washington, the more Washington protects them from laws and regulations while simultaneously shielding them from the effects of their ridiculous decisions.
We all learned in civics class that bankers and financiers are careful to protect their investors from loss while our Senators, Representatives and President would never fail to protect us from financial sector decisions that could destroy millions of jobs and damage the economic fabric of the planet.
We all know that a new Democratic President wouldn’t appoint all of his economic advisors from the very firms receiving bailout money. We all know that no Congress would give hundreds of billions of dollars of loans to private companies without setting up a mechanism to get the money back. We all know that should by some mischance all our protections fail and our financial system comes within a matter of minutes of total collapse that new rules and regulations would be put in place to stop that from happening again.
I guess I’m just cranky. I am getting older. Of course, I do teach Business Ethics and watching these event unfold hits me in the gut. It’s like teaching medicince in a place where they just kill the patients to save money.
Is it moral to tax banks to repay the public funds given them?
Is this a hard question?
If you run a restaurant, a filling station; if you sell insurance, automobiles, real estate; if you own a garage, a body shop or rent movies; will the government come and give you money to save your business in this time of troubles?
If you make particularly stupid and greedy decisions that result in your firm’s danger of failure, should this increase the probability of government help?
There is a Bible verse that may have relevance here. Psalm 37:21 The wicked borroweth, and payeth not again: but the righteous sheweth mercy, and giveth.
Well, the righteous have giveth and some may consider it just for the banks to pay back what they have received.
In the fourth quarter, Merrill lost 14 billion dollars.
What do you get bonuses for? I was under the mistaken impression that these were rewards for performance. Apparently they have other uses.
However, there is a counter argument, Thomas F. Cooley, writing in an opinion piece for Forbes magazine writes that bonuses and other benefits are closely tied to shareholder interests and demonstrates this by using graphs. He graphs shareholder interests against executive benefits. I quote: The observations cover the years 1992 to 2006. Our sample consists of information on 31,587 executives, employed by 2,872 companies, for a total of 33,896 company-executive matches and 167,822 executive-year observations.
His graphs indicate correlation between stockholder interests and compensation. I am not convincedin this instance. I am not opposed to high executive compensation provided it is approved by the shareholders and rewarded for successful performance. I am very opposed to executive compensation paid for out of public funds for a disastrous performance.
My problem with Mr. Cooley’s graph isn’t in its accuracy but in my perception that it does not analyze the problem at hand – the correlation between investment banks success and their executive bonuses with an appropriate analysis of how government funds played out in that success.
High executive compensation might work well in dozens of industries. Does it work well in these? And if it does not, what should we be doing instead?
Is it ethical to consider a business successsful if it can get government rescue money totalling billions of dollars to put it in the black? If so, is it then ethical to pay bonuses based on a success purchased with public money?
I had the misfortune and the opportunity to think over the long break. The misfortune was due to my trip to Tulsa. I have a dramatic allergy response to the city either the phosphorous laden Arkansas River or the emissions of the oil refineries or both. I was down and in a lot of pain for several days. But on a larger note, I thought. I am 53 years old and I am not sure what happens next. Gail Sheehy called my age, the age of mastery. I don’t feel like a master of my career or much of anything else.
So, I thought. I apologize for the lack of posts. I wanted to clarify what it was I was trying to do. I wanted to clarify to myself my purpose and to set some goals for this savage year. Yes, savage year. I predict a rough year for me and, more particularly my students. They have come seeking new lives and all this economy has to offer them is pain. They seek an American dream that barely exists.
Why should I write this when so few read it? I wrote my previous blog for more than a year and never gained an audience. I finally deleted it feeling it was of no significance. This one is different. It is different because I am using it as a tool to seek kindred souls and develop my thought.
I want to talk about ethics seriously and without backing away in educational jargon from confronting the evils of our time. Of particular concern are two issues. One is the total lack of protections for our internet communications. We as a people are entitled to some kind of protection for our e-mail and other posts. The second is privatization in the state of Arkansas, my home. I sense something in motion. I worry about the assets of the people of this state being turned over to private interests for their unjust and cruel enrichment.
Sometimes, I would fold my tent and walk away. I could read, listen to music, play my games and let the sweet things of life escape me away from the tedium of the continuing struggle for significance, for the struggle against evil, for that action that says I stand and while I live I will try to do what’s right. Let me quote Tennyson:
Tho’ much is taken, much abides; and tho’
We are not now that strength which in old days
Moved earth and heaven; that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
Not a great post, but my post. A new year. Continued struggle. 2o10
Pilant's Business Ethics Blog 
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