The Business Ethics of Benjamin Franklin – Truth, Sincerity, And Integrity

From the Project Gutenberg free book, The Autobiography of Benjamin Franklin –

Before I enter upon my public appearance in business, it may be well to let you know the then state of my mind with regard to my principles and morals, that you may see how far those influenc’d the future events of my life. My parents had early given me religious impressions, and brought me through my childhood piously in the Dissenting way. But I was scarce fifteen, when, after doubting by turns of several points, as I found them disputed in the different books I read, I began to doubt of Revelation itself. Some books against Deism fell into my hands; they were said to be the substance of sermons preached at Boyle’s Lectures. It happened that they wrought an effect on me quite contrary to what was intended by them; for the arguments of the Deists, which were quoted to be refuted, appeared to me much stronger than the refutations; in short, I soon became a thorough Deist. My arguments perverted some others, particularly Collins and Ralph; but, each of them having afterwards wrong’d me greatly without the least compunction, and recollecting Keith’s conduct towards me (who was another free-thinker), and my own towards Vernon and Miss Read, which at times gave me great trouble, I began to suspect that this doctrine, tho’ it might be true, was not very useful. My London pamphlet, which had for its motto these lines of Dryden:

“Whatever is, is right. Though purblind man
Sees but a part o’ the chain, the nearest link:
His eyes not carrying to the equal beam,
That poises all above;”

and from the attributes of God, his infinite wisdom, goodness and power, concluded that nothing could possibly be wrong in the world, and that vice and virtue were empty distinctions, no such things existing, appear’d now not so clever a performance as I once thought it; and I doubted whether some error had not insinuated itself unperceiv’d into my argument, so as to infect all that follow’d, as is common in metaphysical reasonings.

I grew convinc’d that truth, sincerity and integrity in dealings between man and man were of the utmost importance to the felicity of life; and I form’d written resolutions, which still remain in my journal book, to practice them ever while I lived. Revelation had indeed no weight with me, as such; but I entertain’d an opinion that, though certain actions might not be bad because they were forbidden by it, or good because it commanded them, yet probably these actions might be forbidden because they were bad for us, or commanded because they were beneficial to us, in their own natures, all the circumstances of things considered. And this persuasion, with the kind hand of Providence, or some guardian angel, or accidental favourable circumstances and situations, or all together, preserved me, thro’ this dangerous time of youth, and the hazardous situations I was sometimes in among strangers, remote from the eye and advice of my father, without any willful gross immorality or injustice, that might have been expected from my want of religion. I say willful, because the instances I have mentioned had something of necessity in them, from my youth, inexperience, and the knavery of others. I had therefore a tolerable character to begin the world with; I valued it properly, and determin’d to preserve it.

I find it difficult to understand why more people particularly in the world of business don’t read Franklin’s Autobiography. It’s a relatively brief book. I can read it easily in a couple of day in my spare time. It’s an easy read. It’s very straightforward writing, a writing style in which you are approached as if you were an old friend.

It is a multitude of good books all in itself. It’s an English book for in it he explains how to develop a writing style and improve it. It’s a book of business advice, explaining how to make a good start, how to maintain a business and how to retire from it. It’s a self help book, laying out a plan of perfections set up daily for the course of a year. It’s a book of politics, where one can learn how to move with assurance through the hallways of power. It’s a community development manual in which the first civic booster in the United States explains how it’s done. It’s a book of science, explaining how to think and how to get results. And it’s possible to keep on going explaining over and over again how it applies to different areas of learning.

In the book we see the beginnings of those attitudes, those thought processes, now considered to be quintessentially American.

It’s worthy of any person’s time.

James Pilant

Why False Affidavits Matter

I found this video today. It’s short and precise. I recommend you watch it. It explains (generally speaking) the affidavit’s importance in law.

Good Stuff!

Stay tuned. I spend hours a day reading about the foreclosure mess from major news sources, internet sites, legals sources and the foreign press.

I’ll keep you up to date.

James Pilant

Just For Fun – Aqua!

Aqua had a major hit some years ago with a novelty song called “Barbie Girl.” Less said the better.

Occasionally (okay, that’s a lie, regularly) I prowl the internet looking for music. One of my most favorite pieces of music is the Association’s intro music to the film, Goodbye Columbus. It’s almost impossible to find but I keep at it.

Anyway, I find Aqua’s novelty song and find a large number of other songs they have done. They are pretty good.

I think I’ve gotten so outraged over the many things that seem so unfair to me, that for a moment I’ve lost perspective. There are nice days. There are people trying to do the right thing. There is hope. But sometimes when confronted with walls and walls of information showing the pain of people in this country and the indifference of Washington and the sense of the entitlement of the financial elites, it’s hard to see the light.

Let’s listen to a little Aqua and relax for a minute (or in this case, 3:23).

or (3:32).

As always, I very much appreciate your kindness in reading my stuff.

James Alan Pilant

Charlie LeDuff On What An American Male Is Supposed To Be

I often discuss the strange set of demands made upon the American male in this society. Take a look at this. I ran across this quote in my internet meanderings. It’s delicious.

The following to the end of the last quote is from wikipedia.

The preface of US Guys includes this quote on Leduff’s view of the American male:

The American man has been taught that while it is better to avoid a fight; that honor cannot always be defended with reason. He should never admit fear. He should always strive to put the blade in his adversary’s chest, not his back. An American man should know how to load and fire a gun. He should know how to ride a horse, bet on a horse, bet on the stock market, and bet on the cards. A good man should know a woman’s body and know how to please her. His woman, in turn, should never speak anything but well of him in public. An American man should have been raised in the church, rejected the church and eventually found virtue in the church.

The American man should be educated. He should work. He should honor his debts and live within his means. He should be able to recite poetry and have bits of true philosophy at his fingertips. He should be able to play an instrument and know how to help a rose grow. An American man should know how to dress and speak his language well. He should be handy and mechanically inclined and yet his nails must be clean. A man should have children, and at some point his children should reject him. And in the course of his life, a man’s children should return and find virtue in him.

This is what an American man should be. Of course, no such man has ever existed, and no man probably ever will.

Here’s Charlie LeDuff talking about “Greed.” (It’s a documentary.)

To My Turkish Readers! Welcome!!

I want to extend an especially warm welcome to my readers from the great nation of Turkey.

Originally I was not sure anyone would want to read my stuff, but I have discovered a sizable and often critical (that’s what I want) audience.

But it’s amazing to discover people from other parts of the world reading my stuff. I have readership in Australia and India. (I find India fascinating.)

But my Turkish contingent is most welcome!

James Pilant

The Rules!

Right now, all over America, there is a single perception. We, the people, live by one set of rules. The financial institutions of this nation live by another.

The one we live by requires that we obey the law and should we fail, there are many penalties which include fines, jail time and public disgrace.

The great investment firms live by laws that are flexible, that bend with circumstance and desire. When they commit crimes, the offenses are considered civil matters. When they are found liable in civil court, the amount of fines compared to their profits are laughably small. When they violate regulations, the violations are either ignored, minimized or papered over. And when finally they commit such acts as endanger the welfare of the nation and it people, even then the law is not applied to them and they receive money and not punishment.

And never, under any circumstances is the flow of their profits and in particular, their bonuses, to endangered at any time under any circumstances.

The nation is bleeding.

It bleeds every day.

It’s bleeding credibility.

It’s bleeding honor, morality and ethics.

To many in this society, these are all jokes, the subject of humor.

To the great financial houses, the flag means the convenient locale with the least regulations. They live here and obey the rules here only when it is convenient. They are Americans of convenience.

We have spawned a series of institutions in this country that exist to its financial and ethical detriment.

They do not build value. They take it.

They do not limit risk. They increase it.

Can this nation long survive with two standards?

I do not believe this nation can long survive, half held to rules and half not.

It will either become all of one or all of the other.

Which one?

James Pilant

The Dumbest Quote for the Day

I teach in Northwest Arkansas. Students here tend to feel that because they are from Arkansas and go to a small college that they are going to have trouble competing with students from name schools. I always tell them that they are just as smart as students from anywhere in the country. As evidence of this, I point to the litany of stupidity, overreaching and greed by these graduates of name universities in the banking industy.

Well today, I got a new quote to use:

It’s not a surprise that we know we have crises every five or ten years. My daughter came home from school one day and said, ‘daddy, what’s a financial crisis?’ And without trying to be funny, I said, ‘it’s the type of thing that happens every five, ten, seven, years.’ And she said: ‘why is everybody so surprised?’ So we shouldn’t be surprised…

This is from JPMorgan CEO Jamie Dimion. That’s right. You heard it clearly. This financial crisis is just “the type of thing that happens every five, ten, etc.” Do you mean the financial crisis that destroyed a large proportion of the value of American homes, came within an inch of destroying the international banking system and has put millions of people out of work? That one? It seems to me the others were a lot smaller – much, much, much smaller. I hope he is better in other aspects of teaching his children. The story of Santa Claus has more validity.

Mr. Dimion has an MBA from Harvard Business School. You see, my students are just as smart as their students. The evidence is clear. I don’t think I could get any of my students to claim that the current financial crisis is a kind of “seasonal” phenomenon and that we shouldn’t be surprised when the elite educated bankers screw up on in a manner barely conceivable in fiction.

James Pilant

(First published in January of this year.)

Do The Banks Have Proof Of Ownership?

I’m not the only one who has suspicions that the banks might not have the necessary proof of ownership. Read the following from the Wall Street Journal

Under a far gloomier scenario, the problems created by using robo-signers may be irrelevant if, instead of being lost, mortgage documents weren’t ever properly transferred during each step of the securitization process, says Adam Levitin, a professor of law at Georgetown University. If that happens, “the whole system comes to a halt,” he says. Investors could argue in court that they never owned the mortgages backing their money-losing securities.

Banks and their attorneys say such fears are overblown. Procedures for transferring loans into mortgage-backed securities “are sound and based on a well-established body of law governing a multi-trillion dollar secondary mortgage market,” said Tom Deutsch, the executive director of the American Securitization Forum, in a statement Friday.

I love that second paragraph. Here look at the key phrase, “Procedures for transferring loans into mortgage backed securities are sound and based on well established law…” Wow, you’d think the founding fathers were doing it! Well, this vast body of jurisprudence has existed since that grand old year of history, 2002? I doubt if any of it has been tested in court. His statement is more hopeful than true. You see the transfer of property is one of the most important procedures in the law. It’s surrounded over and over again by legal protections many of them requiring specific procedures. Now, you might ask me if during the Go Go years of financial mismanagement, the mid years of the first decade of this century, that the banks and their mortgage creating boiler rooms did all that proper procedure? Not a chance. Not even a little chance.

Some of the mortgage companies were giving out mortgages with NO capital of their own and Wall Street still bought them. If you’re giving people mortgages with not a single cent of your money on the line, how much do you care about good paperwork?

James Pilant

Is A College Education Worth $800,000?

The number, 800,000 dollars, has been used often to describe the advantage of a college education over a high school diploma. However according to new data, the actual value is $450,000 dollars. If that isn’t bad enough, according to the American Institutes for Research, it’s only worth $279,893.

Let’s figure it up. The number of working years used is forty. So if we divide 800,000 by forty, we get 20,000 dollars a year in advantage over someone with a high school diploma. Now let’s look at the revised figures. At 450,000 dollars, a college degree adds 11,250 dollars, which is much less impressive than 20,000 dollars. But if the American Institutes for Research is correct, it is only worth about 7,000 dollars.

Now, none of this takes into consideration, the costs of college itself, in particular the burden of paying off students loans which can easily get into the tens of thousands.

Am I discouraging you from pursuing a higher education? Certainly not, there are many advantages, intellectual and otherwise for going to college. I do want you to be aware that we might want to contemplate some kind of structural change in how we pay for education and how education is rewarded in the job market.

And be cautious about these kinds of statistics. The first decade of the twenty first century was cruel to the middle and lower classes. They lost a lot of economic ground. One of the things that was hit hard was earning power. Whole classes of jobs disappeared. The very, very few new jobs carried much lower salaries and reduced benefits.

Take a look at this film on college costs:

James Pilant

(This is a repost of a column I wrote some months ago.)

Could A Foreclosure Freeze Damage The Housing Market?

Well, of course, it will. Massive wrong doing has consequences for the innocent. That is the nature of illegal acts. That is the nature of speculation and greed. People without fault are injured.

So, we have competing values here. Should the health of the economy and the suffering of the innocent be a bar on prosecuting thousands upon thousands of mortgages done outside the rules of the law.

I’m going to come down on the side of the rule of law.

I teach business ethics. You can’t have business ethics just through teaching and exhortation. They have to be backed up by penalties. If the suffering of the innocent is a bar to prosecution, it sends a clear signal that cutting corners, skirting the law, deliberately disobeying the law, have little or no consequences as long as the perpetrators can point at economic hostages and say, “Oh, but we can’t harm them.”

You cannot avoid prosecuting the guilty in the business community over and over again without them getting the message that there are no consequences. They will realize (or have realized) that the law does not apply to them.

Once they know this, what will happen to the rest of us?

Here’s the CBS News Story – Beware it has a commercial.

James Pilant