Pilant's Business Ethics

Business Ethics Blog

Tag: Wall street (Page 1 of 6)

Is Obama Pointless?

o005Is Obama Pointless?

At the time of his election, it would have been expected that the presidency of Barack Obama would have created a climate more favorable to business ethics. This did not happen. Business ethics were not in any way part of the White House’s agenda. Under Obama, even mild interest in prosecuting business crime is absent. Under Obama, corporate cooperation with the White House has been a continuing priority from the Affordable Healthcare Act to the bizarre HAMP plan to “help” struggling homeowners. Both were business ethics nightmares. The President had run on a platform of open government, and yet a few months after taking office met with the insurance companies and cut a deal insuring their participation and profits in the new healthcare act. HAMP was turned into a deadly and devastating weapon to be used against homeowners, the banks ceaselessly manipulating the rules to force homeowners out while collecting billions of dollars in fees.

I could go on. Where this President could have sided against corporations, but he has avoided this, and is an advocate of enhanced corporate power. If the trans-pacific trade deal were to go into effect, corporations would gain many of the powers of sovereign nations. As if, giant corporation do not have enough influence in the government, the treaty would allow them to sue nations to prevent rules such as regulations on pollution from going into effect.

This President has failed in his duty to protect the American people from corporate villainy, in particular the great Wall Street investment firms.

The lesson of the Obama administration is that influence is better than righteousness, connections than a commitment to the public interest and expediency more powerful than morality.

James Pilant

What the hell is Barack Obama’s presidency for? | Gary Younge | Comment is free | The Guardian

Barack Obama has now been in power for longer than Johnson was, and the question remains: “What the hell’s his presidency for?” …

via What the hell is Barack Obama’s presidency for? | Gary Younge | Comment is free | The Guardian.

From around the web.

From the web site, FCPA Compliance and Ethics Blog

http://tfoxlaw.wordpress.com/tag/obama/

Still this resistance may be changing. In an article in the New York Times (NYT), entitled “Obama Urged To Back Plan To List Owners Of Shell Firms”, Ravi Somaiya reported that “Anticorruption activists have urged President Obama to back a plan to publicly register the owners of shell companies in the United States and around the world, a move they say is essential to thwart corrupt government officials, tax evaders and money launderers who rely on an opaque financial system.” ..

From the web site, Deadly Clear.

http://deadlyclear.wordpress.com/2013/01/18/hamp-the-modification-scam-and-now-settlement-sham/

See, the banks are not in the mortgage business to loan, they are in it to default and profit by defaults; to collect servicing fees and bid on defaults in the market and to sell a house multiple times… until their investors got wise and wanted their money back.  Thus, the creation of TARP, and then HAMP, a scam to support the banks by foaming the runway, deceiving the mortgagors that they could actually get a modification while they paced the timing of their foreclosures. These bailout plans were never for you and me.

 

You Have To Prosecute Individuals

 

You Have To Prosecute Individuals

There has been much anger in the financial press about JPMorgan having to pay a multi-billion dollar fine. It has been strangely charged that this is a government attack on capitalism. No, actually the bank broke the law and failed over and over again to act in an intelligent manner about its investments or its clients. But Gretchen Morgenson is absolutely right. This kind of fine isn’t really getting tough with the banks. It’s merely carrying on the long tradition of banks paying some proportion of the losses they caused while criminal prosecution as individuals is off the table. 

There is no real penalty here. The billions are just the cost of doing business. The bank has paid out fines before. The bank will pay out fines again. The fun and enormous profits of reckless speculation will remain.

There will only be an effective deterrent when wrongdoers are punished personally by fine and imprisonment.

You can’t attack prevent crime by attacking organizations with minor financial penalties. You could effectively if you were willing to pull the corporate charter from the bank and destroy it, or seize all of its assets. But I see no willingness to do that. The only effective tool present is the power to prosecute individuals.

It is bizarre to tell students to act with business ethics when they can read everyday in the news of the incredible money being made by individuals under the cover of banks deliberately, knowingly breaking the law. But even that is eclipsed by the simple and horrible fact that we do not impose penalties on individuals.

Without justice, how we expect people less favored than bank executives to believe in the law?

James Pilant

Why JPMorgan May be Getting off Easy

In a criminal investigation, JPMorgan Chase is facing action from federal authorities who suspect that the bank turned a blind eye to Madoff’s Ponzi scheme. That’s yet another headache in a week of migraines for America’s largest bank; last Friday JPMorgan Chase reached a tentative $13 billion settlement with federal prosecutors for its alleged manipulation of mortgage securities, which helped trigger the Great Recession. There may be more pain to come as the megabank faces litigation on a number of fronts.

http://occupyamerica.crooksandliars.com/diane-sweet/why-jpmorgan-may-be-getting-easy#sthash.lIimWj0v.dpbs

From around the web.

From the web site, Democracy Now!

Subverting Pensions for Profit

 Subverting Pensions for Profit

 

There are real plots, real conspiracies. It’s a sad thing that people sometimes unite not for ethical or moral principles but for the destruction of people’s lives, for predation, for money at any cost.

 

One of the constant themes in the lust for profits has been the conversion of public goods into private possessions: public and charity hospitals often run by churches converted into private property; parks, highways, parking meters, converted into private ventures, America’s public lands opened up for fracking in the one of the greatest land grabs in all of recorded history … I can go on and on. Subverting pensions for profit is just the latest fad in the series.

 

Here is another one, public pension funds being converted into Wall Street Piggy Banks, looted with fees and then fed into speculation for anyone’s profit but the pension fund’s. It is as if the national looting of the last generation, the conversion of pensions into the predatory and vicious 401K’s didn’t generate enough profit, we must never stop looting, never stop stealing, never stop creating fictitious crises to be exploited.

 

Maybe this one can be stopped. I would like to see that.

 

James Pilant

 

The right’s sinister new plot against pensions – Salon.com

 

http://www.salon.com/2013/10/10/the_rights_sinister_new_plot_against_pensions/

 

As state legislatures prepare for their upcoming sessions, you will no doubt hear a lot about public pensions. More specifically, you will hear allegations that states are going bankrupt because of their pension obligations to public employees. These claims will inevitably be used to argue that states must renege on their pension promises to retirees.This is what I’ve called the Plot Against Pensions in a report I recently completed for the Institute for America’s Future. Engineered by billionaire former Enron trader John Arnold, championed by seemingly nonpartisan groups like the Pew Charitable Trusts and operating in states throughout America, this plot is not designed to strengthen pensions or to save taxpayer money, as its proponents claim. It is designed to slash public employees’ guaranteed retirement income in order to both protect states’ corporate welfare and, in some cases, enrich Wall Street.Consider the math of state budgets. According to Pew’s estimates, “The gap between states’ assets and their obligations for public sector retirement benefits (is) $1.38 trillion” over 30 years. As the Center for Economic and Policy Research notes, this gap was not caused by benefit increases, as conservatives suggest. Data prove that most of it was caused by the stock market decline that accompanied the 2008 financial colla

 

via The right’s sinister new plot against pensions – Salon.com.

From around the web.

From the web site, Brave New World.

http://bravenewworldnews.com/2013/10/01/the-plot-against-pensions/

Finding: Conservative activists are manufacturing the perception of a public pension crisis in order to both slash modest retiree benefits and preserve expensive corporate subsidies and tax breaks.

 

States and cities have for years been failing to fully fund their annual pension obligations. They have used funds that were supposed to go to pensions to instead finance expensive tax cuts and corporate subsidies. That has helped create a real but manageable pension shortfall. Yet, instead of citing such a shortfall as reason to end expensive tax cuts and subsidies, conservative activists and lawmakers are citing it as a reason to slash retiree benefits.

 

Finding: The amount states and cities spend on corporate subsidies and so-called tax expenditures is far more than the pension shortfalls they face. Yet, conservative activists and lawmakers are citing the pension shortfalls and not the subsidies as the cause of budget squeezes. They are then claiming that cutting retiree benefits is the solution rather than simply rolling back the more expensive tax breaks and subsidies.

 

According to Pew, public pensions face a 30-year shortfall of $1.38 trillion, or $46 billion on an annual basis. This is dwarfed by the $80 billion a year states and cities spend on corporate subsidies. Yet, conservatives cite the pension shortfall not as reason to reduce the corporate subsidies and raise public revenue, but instead as proof that retiree benefits need to be cut.

 

Finding: The pension “reforms” being pushed by conservative activists would slash retirement income for many pensioners who are not part of the Social Security system. Additionally, the specific reforms they are pushing are often more expensive and risky for taxpayers than existing pension plans.

 

 

Enhanced by Zemanta

Not What We Expected

international student movement

international student movement

Not What We Expected

Political Animal – The suicide rate continues to soar; or, how our dysfunctional economy is literally killing us

Our pension system is a shambles and we’ve seen a wave of mortgage foreclosures. Many people in this economy have lost their jobs and everything they’ve worked hard for all their lives, and have no realistic prospects of finding a decent job ever again. They are understandably freaked out, stressed out, and depressed. Losing one’s job is one of the most traumatic things that can happen to a person, especially in this dismal economy. Moreover, when people lose their jobs, they also tend to lose their health insurance. And without access to decent mental health care, many depressions go untreated.

In the Times, one expert has this to say:

“The boomers had great expectations for what their life might look like, but I think perhaps it hasn’t panned out that way,” she said. “All these conditions the boomers are facing, future cohorts are going to be facing many of these conditions as well.”

How many people in this country will end their working lives having seen a significant decline in their living standards, relative to the standards their parents enjoyed? For the first time in America, declining economic mobility is a reality for many of us. The dashed dreams and expectations so many Americans are experiencing may explain much of the increased suicide rate. This economy is literally killing us.

Political Animal – The suicide rate continues to soar; or, how our dysfunctional economy is literally killing us

I was a little boy when Walter Cronkite had a program called “The 21st Century.” It talked about the wonders we could look forward to in the new century. We had a lot of hope and belief in continuous progress. The United States had done so much and had been so successful, we knew things could only get better.

We were wrong. The 21st Century is not what we expected,  not in our wildest dreams. Some of what people thought was supposed to happen was silly: personal robots, etc; but economic insecurity? in the United States? No one would have believed that.

The middle class is severely damaged, opportunity more circumscribed than the Gilded Age. The dreams of building great cities, great wonders, etc. don’t even seem to exist.

For the 1% this is a golden age beyond all imagining, and yet they do not have enough. They want more.

Yes, some people in the face of this kind of world are opting to die. I’m not surprised. We were supposed to be better off not worse.

James Pilant

Doug Guthrie addresses Business Ethics

Doug Guthrie addresses Business Ethics

Business Ethics and Social Responsibility – YouTube

 

I listened to this video and enjoyed it, particularly the discussion of Adam Smith and Milton Friedman early in the lecture.

Dean Guthrie’s background in Chinese studies is particularly interesting to me, since I also have a great interest in the nation’s culture. I am less sanguine about that nation’s prospects than he is. China’s long term geographical and political ambitions are not compatible with continued economic cooperation with the United States.

James Pilant

The glacier like movement of business ethics

The glacier like movement of business ethics

 

From around the web –

From the web site, Capitalism and Friedman:

There’s no way to appreciate fully the contributions of Nobel Prize-winning economist Milton Friedman (1912-2006), who would have turned 99 years old this weekend, to the growth of libertarian ideas and a free society.

This is the man, after all, who introduced the concept of school vouchers, documented the role of government monopolies on money in creating inflation, provided the intellectual arguments that ended the military draft in America, co-founded the Mont Pelerin Society, and so much more. In popular books such as Capitalism and Freedom and Free to Choose, written with his wife and longtime collaborator Rose, he masterfully drew a through-line between economic freedom and political and cultural freedom.

From the web site, Lisa Richards, Rock and Roll Politics:

The federal government appears to be under the impression Wall Street CEO’s are better at managing the United States Treasury than trained economists.[26] [27] [28]  America has over two centuries of proof that bankers and legislators cannot be trusted with the people’s money,[29] yet, despite forewarnings from Adam Smith to Milton Friedman, Washington ignores the experts and continues helping itself to the Treasury. 

     America has gained and lost many times,[30] learning repeated lessons the central government continues committing: monetary stupidity.  In truth it is useless to wonder why Washington continues creating and wreaking economic havoc when it is obvious that human nature has proven those with power will continue doing harm[31] as long as mankind exists.  It is for this reason economics was invented, is practiced and taught: too often, lack of common sense has been in charge of money and the need for fiscally wise minds analyzing trade and industry is cost effective to society overall.  That being said, financiers tend not to listen to the money-wise discussed here: men who forewarned disaster if certain fiscal policies were not implemented, and devised solutions to resolve and repair monetary failure.  

And finally, from the web site, UNLADTAU:

To all fellow men and women out there who may have deep fondness for the liberal capitalist model of economic adaptation, I hope that you can make some adjustments in your cognitive banks. Capitalism is not a permanent facet of human life, but merely one among various epochs that will come to pass. Only impermanence is sacrosanct in the cosmos, so please refrain from singing hallelujah to a world system that is on its death knell as I articulated in a previous article.

And please refrain from swallowing hook-line-&-sinker the contentious propaganda of Francis Fukuyama about the ‘end of history’, that accordingly history had concluded with the galvanization of liberal capitalism, that history makes no more sense. Fukuyama’s theory is a slapstick narrative of hyper-valuation of the ‘mad economics’ of late capitalism and hypo-statization of reality that has no relation at all to the real in the world out there. Fukuyama had taken as ‘real’ what is actually ‘virtual’, and froze time much like unto a fairy tale of timelessness, of history-less Nietzschean moment that is fit more for infants than for adult humans. 

 

Enhanced by Zemanta

Is the Justice Department Gutless?

How do we make sense of this? Goldman Sachs emails call their own investments “junk” and “crap,” and Goldman Sachs salespeople refer to clients as “muppets” and “elephants.” Yet the Justice Department says there is not enough evidence to bring a case on behalf of Goldman Sachs investors who lost vast sums of money.Seal of the United States Department of Justice

Seal of the United States Department of Justice (Photo credit: Wikipedia)

Is the Justice Department Gutless?

Goldman Sachs prosecution fails: Why can’t the Justice Department fight Wall Steet?

Now that that’s out of the way, I can say what we are all thinking: Really? Are you kidding me? Wall Street continues to get away scot-free? The Justice Department prosecutes Roger Clemens for perjury—spends countless resources, hours, and energy worrying about steroids in baseball—yet seems incapable of making cases against the big Wall Street firms that engineered the greatest lies, frauds, and scams in our economic history. I am as outraged, disappointed, and furious as you are. Have they no backbone, shame, or sense of what justice is all about? It does nothing for my already waning faith in this Justice Department.

Goldman Sachs prosecution fails: Why can’t the Justice Department fight Wall Steet?

Apparently the great “vampire squid,” is immune to prosecution. In their e-mails they virtually admitted they were committing fraud. What does the Justice Department need in the way of evidence to prosecute? It seems to me if you are well connected enough and big enough, an infinite amount of evidence would still not be enough.

This is another example of America’s two tiered justice system – one for regular citizens and another for the privileged. There is a certain irony in the phrase, land of the free. It seems that some are apparently more free than others.

Business Ethics – Did that play any role here? You bet it did. By systematically breaking the rules, abusing it customers and blatantly lying, Goldman Sachs made billions of dollars. It is a pure lesson in why the phrase, business ethics, often evokes sneers or knowing giggles. I’ve seen and heard them.This is a lesson in negative business ethics, the other side of teaching what is right, teaching to do what is wrong.

We are systematically educating our young to be financial criminals, to reject the values of the righteous and embrace less than the moral minimum.

Our society has an opportunity here to create a society fit for no one but the predators.

Is that where you want to live?

James Pilant

Enhanced by Zemanta

System Rigged Against Small Investor.

System Rigged Against Small Investor.

Facebook IPO: Retail Investors Lose Out While Wall Street Clients Make Profits

In case a reminder was needed, the fallout from the Facebook IPO illustrates that Wall Street appears to be designed to serve the well-connected at the expense of ordinary people.

Ordinary investors may have lost as much as $630 million collectively from the plunge in Facebook’s stock following its public debut, Bloomberg reports. These are the same people who used hundreds or even thousands of dollars of their prized savings to bet on the stock only to have its value drop to way below its opening price of $38 per share.

Facebook IPO: Retail Investors Lose Out While Wall Street Clients Make Profits

Is it moral or ethical to have a rule system which allows the large institutional investors to thrive while penalizing the small investors? Does this encourage responsible investment and make Americans better people?

I think not.

This kind of thing drives people away from investment and it should. That the game is rigged is obvious to the most casual observer. It takes an enormous amount of advertising and badly written text books to get people to buy stock.

Now let’s differentiate here. I heartily approve of investment, that is, buying stock in a company to collect regular dividends and over time have the value of the company go up. That is investment. It carries some risk but it is not the kind of risk carried by those that believe they can buy and sell stock hour by hour, day by day, and make a profit thereby. That is speculation and speculation is inherently risky.

But not all speculators are equal. Let Facebook be a warning to all small investors. Whether you win or lose, investment banks will win.

This is wrong.

It damages faith in the system because the system doesn’t deserve it. If people don’t believe in the basic fairness of society than they will begin to act in ways that are detrimental to that society.

More simply, if playing by the rules doesn’t work, they’ll try something else.

Justice and fairness are for everybody and when they are denied we all suffer.

We should always have in the back of our minds the basic concept of fairness in our dealings. That is how you build a just and fair society.

You punish the wicked and protect the innocent. Is it hard to understand that rule?

James Pilant

 

Will Wall Street Be Punished?

If a Highway Robber Has to Go to Jail, Why Does the Elite on Wall Street Get to Stay Home?

Will Wall Street Ever Face Justice? – NYTimes.com

Four years after the disintegration of the financial system, Americans have, rightfully, a gnawing feeling that justice has not been served. Claims of financial fraud against companies like Citigroup and Bank of America have been settled for pennies on the dollar, with no admission of wrongdoing. Executives who ran companies that made, packaged and sold trillions of dollars in toxic mortgages and mortgage-backed securities remain largely unscathed.

Meager resources have been applied to investigate the financial assault on our country, which wiped away trillions of dollars in household wealth and has resulted in 24 million people jobless or underemployed. The Financial Crisis Inquiry Commission, which Congress created to examine the full scope of the crisis, was given a budget of $9.8 million — roughly one-seventh of the budget of Oliver Stone’s “Wall Street: Money Never Sleeps.” The Senate Permanent Subcommittee on Investigations did its work on the financial crisis with only a dozen or so Congressional staff members.

Will Wall Street Ever Face Justice? – NYTimes.com

Phil Angelides, the author of the above column, shares an identical opinion to mine. Justice has not been served. Will Wall Street be punished?

I wrote extensively about the mortgage crisis back when business writers considered it a matter of a few small mistakes in the paperwork that weren’t worth getting upset over. I watched day by day as we learned about robo-signing, error laden foreclosures sometimes on homes that the client owned outright, and the use of a federal government program called HAMP to push people out of their homes and force them to pay outrageous penalties. The federal government did not even keep records of what HAMP was doing for the first six months and the fact that it was run by a twenty year bank veteran did not surprise. There wasn’t any fox in the hen-house, there was a rabid lion operating with permission to prey at will.

Millions of Americans suffered. Barely treading water, troubled by lost jobs, debts and predatory banks, the hard-working people of America were thrown an anvil by a federal government laden with former bankers in every conceivable position. It’s a sad story and reflects badly on the President of the United States who promised us better.

I was not surprised when the claims of homeowners and criminal prosecution of these mortgages companies were settled for a pittance. It would have been one of the saddest days of my life if in the months leading up to the settlement I had not experienced over and over again a federal government immune to the calls of justice and accountability. The settlement was just another nail in the coffin of fairness, a level playing field of law for the middle class and those who would prey upon them.

It remains to be seen whether or not a White House now deserted by its Wall Street Financial Backers will pursue a tougher attitude toward enforcement of the law.

James Pilant

Phil Angelides talk about the real cause of the financial shortcomings in state budgets

(Banksters are to blame NOT TEACHERS)

 

Enhanced by Zemanta

Wall Street Suffers “Hard Times”

Wall Street Suffers “Hard Times”

A few weeks ago there was a controversy over grants given to Planned Parenthood by the Susan Komen foundation. The vice president confronted by complaints that poor women would lose their access to health care responded dramatically –

Karen Handel, a former GOP candidate who ran on a pro-life platform, shows her true colors. She just happens to be Susan G. Komen’s Vice President of Public Policy now. “Just like a pro-abortion group to turn a cancer orgs decision into a political bomb to throw. Cry me a freaking river”

Disdain for poor women and their need for medical currently fashionable among some groups of Americans. There is a suspicion in some quarters that the top 1% find paying for social services an unwelcome burden.

Now, of course this behavior is contrary to the Greek concept of virtue ethics, modern Protestant business ethics and Catholic social doctrine. However a proportion of the the 1% are getting their comeuppance. It is a small comeuppance but nevertheless, any comeuppance is better than none.

Please read this excerpt –

Wall Street’s Average Cash Bonus Expected To Fall To $121,000

Wall Street cash bonuses for 2011 are expected to drop 14 percent and profits are expected to drop by half for the second year in a row, according to a forecast Wednesday by New York state Comptroller Thomas DiNapoli.

That would result in cash bonuses of $19.7 billion. Profits are expected to be less than $13.5 billion in 2011, compared to $27.6 billion in 2010.

The average cash bonus is expected to be $121,150 for 2011, down from $138,940 in 2010. Bonuses peaked before the recession in 2006 at $191,360.

Wall Street’s Average Cash Bonus Expected To Fall To $121,000

You read it right. Wall Street bonuses will only be $13.5 billion dollars. It’s a trifle, a small amount of money. Of course, it would pay for all the college tuition in the United States for the next year and still have a couple of billion walking around money left. But like I said that’s just a smidgeon on Wall Street.

You probably noticed that the average payout on Wall Street will be $121,000.

Let’s see what is said about this –

The average cash bonus is expected to be $121,150 for 2011, down from $138,940 in 2010. Bonuses peaked before the recession in 2006 at $191,360.

DiNapoli said the forecast for this bonus season shows continued hard times on Wall Street two years after the recession officially ended. The securities industry lost 28,000 jobs, including 9,600 that had been briefly recovered before the slide began in April.

“Continued hard times!” Wow! $121,150 is almost three times the average salary in the United Stand and these people also draw a regular salary. Average salary at Goldman Sachs is $367,057. But we know they’re suffering. 

Well to quote the former vice president of the Susan Komen Foundation, “Cry me a freakin river!”

James Pilant

Here is my take on the 1% with a little help from Garfunkel and Oates.

Save the Rich

Enhanced by Zemanta

Bill Moyers Fights the Good Fight

Here is a selection of the words of Bill Moyers. The first is from Salon and is in print today, February 14th, Valentine’s day. The next three are closing remarks from episodes of Bill Moyers’ Journal. You might say that this is a valentine to Bill. May he live a hundred years and continue to inspire us every day of that time.

James Pilant

America’s billionaire-run democracy – 2012 Elections – Salon.com

We are drowning here, with gaping holes torn into the hull of the ship of state from charges detonated by the owners and manipulators of capital. Their wealth has become a demonic force in politics. Nothing can stop them. Not the law, which has been written to accommodate them. Not scrutiny — they have no shame. Not a decent respect for the welfare of others — the people without means, their safety net shredded, left helpless before events beyond their control.

The obstacles facing the millennial generation didn’t just happen. Take an economy skewed to the top, low wages and missing jobs, predatory interest rates on college loans: these are politically engineered consequences of government of, by and for the 1 percent. So, too, is our tax code the product of money and politics, influence and favoritism, lobbyists and the laws they draft for rented politicians to enact.

America’s billionaire-run democracy – 2012 Elections – Salon.com

Plutocracy and Democracy Do Not Mix

Bill Moyers on Greed

Bill Moyers on the American Dream

Enhanced by Zemanta

Page 1 of 6

Powered by WordPress & Theme by Anders Norén