Athan Theoharis, Emeritus Professor of History, Marquette University, has just published a new extended essay on surveillance policy and the lessons of the Cold War—"Expanded Power: The FBI, the NSA, and the Struggle between National Security and Civil Liberties in the Wake of 9/11" —documenting how the same policies and procedures adopted during the Cold War years were employed after 9/11 with similar adverse impacts on civil liberties and democratic procedures. Here is an abstract.
The full paper can be found here: http://www.nowandthenreader.com/expanded-power/
___________________________________________________________________________________
In the aftermath of 9/11, and in response to complaints about the nation’s intelligence gathering (which might have prevented the terrorist attack), the Bush administration granted expanded powers of surveillance to the Federal Bureau of Investigation and the National Security Agency. The aim was to enable these agencies to uncover terrorist plots before they could be executed. In short, the agencies were to become more pro-active in preventing criminal actions, rather than simply investigating them after the fact.
This expanded authority necessarily rekindled a perennial debate in American history: the proper balance between national security and civil liberties,between the government’s need to know and
its citizens’ right to basic freedoms of privacy and thought. In this provocative essay, the foremost historian of the FBI considers the record of the past to assess the results of the broadened powers of the
present. Surveying the experience of World War II and the cold war, and comparing them with present-day activities, Athan Theoharis concludes that Americans may feel marginally safer, but at a dangerous cost to their freedoms and to the tenor of our political dialogue. To read more:
http://www.nowandthenreader.com/expanded-power/
Saturday, July 21, 2012
Thursday, July 19, 2012
Bill to Shorten Prison Sentences
By William Fisher
Public blowback over thousands of men and women wrongly sentenced to long prison sentences based on flawed forensics twenty years ago has led to the introduction of new bills in Congress designed to put the faux science on a scientific fact-based footing.
The Forensic Science and Standards Act of 2012 has been written “To establish scientific standards and protocols across forensic disciplines.” It was introduced by Sen. Jay Rockefeller, Democrat of West Virginia, a member of the Senate Committee on Commerce, Science and Transportation committee, and Reps. Eddie Bernice Johnson, Donna Edwards and Daniel Lipinski, members of the House Committee on Science, Space and Technology.
Twenty years ago, sloppy, inaccurate and misleading conclusions were presented to juries in some 10,000 cases. There were hundreds, perhaps thousands, of incorrect convictions based on faulty analyses, particularly of hair. A DOJ-FBI Task Force claimed it was studying the matter. But if it found anything illuminating, it turned that material over to the prosecutors, not to defense counsel. A senior special agent – a specialist in hair analysis – was fired. But that was it; the Task Force concentrated on that one forensics official. Whistleblowers claim there were many others who were guilty of the same types of corner-cutting and downright dishonesty.
The proposed legislation would establish federal grants to help create forensic-science standards, in an effort to help reduce wrongful convictions based on flawed forensic results. It would
The Innocence Project, the public service law firm which tries to free prisoners through analysis of DNA, said in a statement:
“On Friday, leaders of the Senate Commerce Committee and the House Science Committee took a giant step forward in ensuring that forensic science is based on strong scientific research and governed by consistent and meaningful standard.”
The organization added, “For far too long, the forensic science disciplines have suffered from the lack of these components, resulting in practices that hamper law enforcement’s ability to solve crimes and contribute to wrongful convictions. The bills that were filed today are an important component of ensuring that forensic sciences are based on solid, reliable research. We urge Congress to act quickly to enact this legislation and to develop and support mechanisms for the practical implementation of the resulting research and standards.”
For example, last November Science Daily wrote of a man with a low IQ who had confessed to a gruesome crime. Confession in hand, the police sent his blood to a lab to confirm that his blood type matched the semen found at the scene. It did not.
“The forensic examiner testifies later that one blood type can change to another with disintegration. This is untrue,” Science Daily wrote. “The newspaper reports the story, including the time the man says the murder took place. Two witnesses tell the police they saw the woman alive after that. The police send them home, saying they ‘must have seen a ghost’."
After 16 years in prison, the falsely convicted man is exonerated by DNA evidence. But for all the years he was not exonerated, the jury placed more credence in a confession than in a scientific DNA test. Further, once a jury learns of a confession, it is less likely to dig into DNA tests aggressively. Research has shown that confessions can be every bit as unreliable as eyewitness identifications.
The proposed legislation still has a long way to go. The Senate version has no co-sponsors, of any party. House Republicans control the calendar and they are far more interested in repealing the Affordable Care Act than in passing any new legislation. It’s unlikely that any progress will be evident until the Lame Duck Session. Most Congresses over the last decade have seen similar bills introduced but never passed and often killed before any vote.
The proposed legislation is casting a cloud of negative credibility over the forensics discipline in general, despite the FBI lab having updated and upgraded many of its forensic protocols. For example, the continuing development of DNA has mandated that no hair tests can be considered authoritative unless they are carried out with DNA. And the presence of DNA has demolished much of the junk science mythology that surrounded forensics for years.
The Bill’s sponsors hope that the collaboration of a number of non-DOB/FBI organizations will help boost the review’s credibility. Working with the DOJ /FBI will be "The National academy of Sciences, The Washington Post, the Innocence Project and the National Association of Criminal Defense Lawyers, among others. All have all called for strengthened forensic science and standards."
This artilcle originally appeared on the pages on Prism Magazine
Tuesday, July 17, 2012
Penn State / Louis Freeh (Part III)
By William Fisher
Last week, this reporter did a story in this blog about the scandal that arose in the mid-1990s at the FBI criminal laboratory when it was revealed that results of forensic tests on as many as 10,000 cases had been falsified or otherwise presented to juries in ways that were scientifically unfounded and virtually guaranteed to produce guilty verdicts.
Until last Friday, that is.
That was the day the Washington Post announced that the DOJ would now perform analyses of an undetermined number of the cases that were tried during this period and resulted in guilty verdicts. Those convicted are scattered throughout prisons all of the US. Some have completed their sentences and have been released.
And today, Prism learned that when Freeh was running the task force investigating sloppy forensic testing he was encouraging FBI personnel to do exactly the opposite of what he did while investigating the Penn State pedophile scandal.
“He did everything in his power to cover them up,” referring to the many mistakes made by FBI forensic specialists in their analyses, particularly their analyses of hair. The protocol used in the analysis was found to be seriously flawed and unprofessionally applied. The outcome was that many were convicted and sentenced to long imprisonments on the strength of unreliable testing.
These remarks came from C. Fred Whitehurst, the former FBI Special Agent, the whistleblower whose revelations created a firestorm of criticism of the FBI lab which, until then, had been regarded as the gold standard of forensic analysis.
Whitehurst charged that, “In light of the most recent revelations about FBI lab failures requiring 10,000 more cases to be reviewed we should read of this pot calling the pan black.”
In a report released this morning, former FBI Director Louis Freeh writes that "the most powerful men at Penn State failed to take any steps for 14 years to protect the children who [former Penn State assistant football coach Jerry] Sandusky victimized. Messrs. Spanier, Schultz, Paterno and Curley never demonstrated, through actions or words, any concern for the safety and well-being of Sandusky’s victims until after Sandusky’s arrest."
But Whitehurst says that “While I was reporting issues at the FBI crime lab, FBI Director Louis Freeh was doing every thing he could to shut me down including coming at me with proposed criminal charges, referrals for fitness for duty (psych evals), destroying my career, moving me around the lab like a rag doll, ruining my wife's career. This man has no conscience and he is accusing Penn State managers of not taking any steps. He ought to be ashamed. Before the lab scandal is over you will find that Freeh was right in the middle of it. He did EXACTLY what the Penn State folks did.”
The task force remained operational for years, but is generally thought to have done virtually nothing to identify or alleviate the conditions of thousands sent to prison on the basis of faulty forensics.
Until last Friday, that is.
That was the day the Washington Post announced that the DOJ would now perform analyses of an undetermined number of the cases that were tried during this period and resulted in guilty verdicts. Those convicted are scattered throughout prisons all of the US. Some have completed their sentences and have been released.
And today, Prism learned that when Freeh was running the task force investigating sloppy forensic testing he was encouraging FBI personnel to do exactly the opposite of what he did while investigating the Penn State pedophile scandal.
“He did everything in his power to cover them up,” referring to the many mistakes made by FBI forensic specialists in their analyses, particularly their analyses of hair. The protocol used in the analysis was found to be seriously flawed and unprofessionally applied. The outcome was that many were convicted and sentenced to long imprisonments on the strength of unreliable testing.
These remarks came from C. Fred Whitehurst, the former FBI Special Agent, the whistleblower whose revelations created a firestorm of criticism of the FBI lab which, until then, had been regarded as the gold standard of forensic analysis.
Whitehurst charged that, “In light of the most recent revelations about FBI lab failures requiring 10,000 more cases to be reviewed we should read of this pot calling the pan black.”
In a report released this morning, former FBI Director Louis Freeh writes that "the most powerful men at Penn State failed to take any steps for 14 years to protect the children who [former Penn State assistant football coach Jerry] Sandusky victimized. Messrs. Spanier, Schultz, Paterno and Curley never demonstrated, through actions or words, any concern for the safety and well-being of Sandusky’s victims until after Sandusky’s arrest."
But Whitehurst says that “While I was reporting issues at the FBI crime lab, FBI Director Louis Freeh was doing every thing he could to shut me down including coming at me with proposed criminal charges, referrals for fitness for duty (psych evals), destroying my career, moving me around the lab like a rag doll, ruining my wife's career. This man has no conscience and he is accusing Penn State managers of not taking any steps. He ought to be ashamed. Before the lab scandal is over you will find that Freeh was right in the middle of it. He did EXACTLY what the Penn State folks did.”
The task force remained operational for years, but is generally thought to have done virtually nothing to identify or alleviate the conditions of thousands sent to prison on the basis of faulty forensics.
The article above appeared on the pages of Prism Magazine
Last week, this reporter did a story in this blog about the scandal that arose in the mid-1990s at the FBI criminal laboratory when it was revealed that results of forensic tests on as many as 10,000 cases had been falsified or otherwise presented to juries in ways that were scientifically unfounded and virtually guaranteed to produce guilty verdicts.
Until last Friday, that is.
That was the day the Washington Post announced that the DOJ would now perform analyses of an undetermined number of the cases that were tried during this period and resulted in guilty verdicts. Those convicted are scattered throughout prisons all of the US. Some have completed their sentences and have been released.
And today, Prism learned that when Freeh was running the task force investigating sloppy forensic testing he was encouraging FBI personnel to do exactly the opposite of what he did while investigating the Penn State pedophile scandal.
“He did everything in his power to cover them up,” referring to the many mistakes made by FBI forensic specialists in their analyses, particularly their analyses of hair. The protocol used in the analysis was found to be seriously flawed and unprofessionally applied. The outcome was that many were convicted and sentenced to long imprisonments on the strength of unreliable testing.
These remarks came from C. Fred Whitehurst, the former FBI Special Agent, the whistleblower whose revelations created a firestorm of criticism of the FBI lab which, until then, had been regarded as the gold standard of forensic analysis.
Whitehurst charged that, “In light of the most recent revelations about FBI lab failures requiring 10,000 more cases to be reviewed we should read of this pot calling the pan black.”
In a report released this morning, former FBI Director Louis Freeh writes that "the most powerful men at Penn State failed to take any steps for 14 years to protect the children who [former Penn State assistant football coach Jerry] Sandusky victimized. Messrs. Spanier, Schultz, Paterno and Curley never demonstrated, through actions or words, any concern for the safety and well-being of Sandusky’s victims until after Sandusky’s arrest."
But Whitehurst says that “While I was reporting issues at the FBI crime lab, FBI Director Louis Freeh was doing every thing he could to shut me down including coming at me with proposed criminal charges, referrals for fitness for duty (psych evals), destroying my career, moving me around the lab like a rag doll, ruining my wife's career. This man has no conscience and he is accusing Penn State managers of not taking any steps. He ought to be ashamed. Before the lab scandal is over you will find that Freeh was right in the middle of it. He did EXACTLY what the Penn State folks did.”
The task force remained operational for years, but is generally thought to have done virtually nothing to identify or alleviate the conditions of thousands sent to prison on the basis of faulty forensics.
Until last Friday, that is.
That was the day the Washington Post announced that the DOJ would now perform analyses of an undetermined number of the cases that were tried during this period and resulted in guilty verdicts. Those convicted are scattered throughout prisons all of the US. Some have completed their sentences and have been released.
And today, Prism learned that when Freeh was running the task force investigating sloppy forensic testing he was encouraging FBI personnel to do exactly the opposite of what he did while investigating the Penn State pedophile scandal.
“He did everything in his power to cover them up,” referring to the many mistakes made by FBI forensic specialists in their analyses, particularly their analyses of hair. The protocol used in the analysis was found to be seriously flawed and unprofessionally applied. The outcome was that many were convicted and sentenced to long imprisonments on the strength of unreliable testing.
These remarks came from C. Fred Whitehurst, the former FBI Special Agent, the whistleblower whose revelations created a firestorm of criticism of the FBI lab which, until then, had been regarded as the gold standard of forensic analysis.
Whitehurst charged that, “In light of the most recent revelations about FBI lab failures requiring 10,000 more cases to be reviewed we should read of this pot calling the pan black.”
In a report released this morning, former FBI Director Louis Freeh writes that "the most powerful men at Penn State failed to take any steps for 14 years to protect the children who [former Penn State assistant football coach Jerry] Sandusky victimized. Messrs. Spanier, Schultz, Paterno and Curley never demonstrated, through actions or words, any concern for the safety and well-being of Sandusky’s victims until after Sandusky’s arrest."
But Whitehurst says that “While I was reporting issues at the FBI crime lab, FBI Director Louis Freeh was doing every thing he could to shut me down including coming at me with proposed criminal charges, referrals for fitness for duty (psych evals), destroying my career, moving me around the lab like a rag doll, ruining my wife's career. This man has no conscience and he is accusing Penn State managers of not taking any steps. He ought to be ashamed. Before the lab scandal is over you will find that Freeh was right in the middle of it. He did EXACTLY what the Penn State folks did.”
The task force remained operational for years, but is generally thought to have done virtually nothing to identify or alleviate the conditions of thousands sent to prison on the basis of faulty forensics.
The article above appeared on the pages of Prism Magazine
Penn State / Louis Freeh (Continued)
By William Fisher
When former FBI Director Louis Freeh was running the task force investigating sloppy forensic testing by the FBI lab some 20 years ago and mistakenly sending thousands to prison, Freeh was encouraging FBI personnel to do exactly the opposite of what he did while investigating the Penn State pedophile scandal.
“He did everything in his power to cover them up,” referring to the many mistakes made by FBI forensic specialists in their analyses, particularly their analyses of hair. The protocol used in the analysis was found to be seriously flawed and unprofessionally applied. The outcome was that many were convicted and sentenced to long imprisonments on the strength of unreliable testing.
These remarks came from C. Fred Whitehurst, the former FBI Special Agent, the whistleblower whose revelations created a firestorm of criticism of the FBI lab which, until then, had been regarded as the gold standard of forensic analysis.
Whitehurst charged that, “In light of the most recent revelations about FBI lab failures requiring 10,000 more cases to be reviewed we should read of this pot calling the pan black.”
In a report released this morning, former FBI Director Louis Freeh writes that "the most powerful men at Penn State failed to take any steps for 14 years to protect the children who [former Penn State assistant football coach Jerry] Sandusky victimized. Messrs. Spanier, Schultz, Paterno and Curley never demonstrated, through actions or words, any concern for the safety and well-being of Sandusky’s victims until after Sandusky’s arrest."
But Whitehurst says that “While I was reporting issues at the FBI crime lab, FBI Director Louis Freeh was doing every thing he could to shut me down including coming at me with proposed criminal charges, referrals for fitness for duty (psych evals), destroying my career, moving me around the lab like a rag doll, ruining my wife's career. This man has no conscience and he is accusing Penn State managers of not taking any steps. He ought to be ashamed. Before the lab scandal is over you will find that Freeh was right in the middle of it. He did EXACTLY what the Penn State folks did.”
The task force remained operational for years, but is generally thought to have done virtually nothing to identify or alleviate the conditions of thousands sent to prison on the basis of faulty forensics.
Prosecutors were notified by the FBI, but judges and defense counsel were not.
The article above appeared in the pages of Prism Magazine.
When former FBI Director Louis Freeh was running the task force investigating sloppy forensic testing by the FBI lab some 20 years ago and mistakenly sending thousands to prison, Freeh was encouraging FBI personnel to do exactly the opposite of what he did while investigating the Penn State pedophile scandal.
“He did everything in his power to cover them up,” referring to the many mistakes made by FBI forensic specialists in their analyses, particularly their analyses of hair. The protocol used in the analysis was found to be seriously flawed and unprofessionally applied. The outcome was that many were convicted and sentenced to long imprisonments on the strength of unreliable testing.
These remarks came from C. Fred Whitehurst, the former FBI Special Agent, the whistleblower whose revelations created a firestorm of criticism of the FBI lab which, until then, had been regarded as the gold standard of forensic analysis.
Whitehurst charged that, “In light of the most recent revelations about FBI lab failures requiring 10,000 more cases to be reviewed we should read of this pot calling the pan black.”
In a report released this morning, former FBI Director Louis Freeh writes that "the most powerful men at Penn State failed to take any steps for 14 years to protect the children who [former Penn State assistant football coach Jerry] Sandusky victimized. Messrs. Spanier, Schultz, Paterno and Curley never demonstrated, through actions or words, any concern for the safety and well-being of Sandusky’s victims until after Sandusky’s arrest."
But Whitehurst says that “While I was reporting issues at the FBI crime lab, FBI Director Louis Freeh was doing every thing he could to shut me down including coming at me with proposed criminal charges, referrals for fitness for duty (psych evals), destroying my career, moving me around the lab like a rag doll, ruining my wife's career. This man has no conscience and he is accusing Penn State managers of not taking any steps. He ought to be ashamed. Before the lab scandal is over you will find that Freeh was right in the middle of it. He did EXACTLY what the Penn State folks did.”
The task force remained operational for years, but is generally thought to have done virtually nothing to identify or alleviate the conditions of thousands sent to prison on the basis of faulty forensics.
Prosecutors were notified by the FBI, but judges and defense counsel were not.
The article above appeared in the pages of Prism Magazine.
Capitalism
This essay on Capitalism was written by Prof. Lawrence Davidson, who teaches history at West Chester University.
Pope John Paul II once remarked that "pervading nationalism imposes its dominion on man today in many different forms and with an aggressiveness that spares no one." Whatever else you might think of this Pontiff, he makes a good point here–and one applicable to the U.S.A. American politicians never tire of telling us that ours is the greatest nation on earth and, for the world’s sake, we must aggressively (often by war) expand our freedoms, as well as our general culture, to the ends of the earth. Actually, this is a message that has been repeated for two hundred years and "its dominion" here in the "land of the free" is manifest. For many citizens, this assumption is one of the primary reasons we invaded Iraq, are hanging on in Afghanistan, and swear eternal loyalty to the Israelis. It is probably the cas e that American political and civic leaders invoke God and national manifest destiny more than those of any other nationality.
Capitalism
This is the world’s prevalent economic system. It is based on private ownership of the means of production and the creation of goods and services for profit. Wage labor is an important element on the cost side of the capitalist ledger. So are things like safe working conditions and worker benefits. The capitalist impulse is to minimize costs in order to maximize profit. Left to themselves, capitalists will pay workers (white collar or otherwise) the lowest possible wages and deny or minimize other benefits. They will ignore worker safety and deny any responsibility for worker health. The only reason these important aspects of the work place prevail is because of the pressure put upon the capitalist system by unions on the one hand, and government regulatory agencies on the other. If you want to maximize the probability of economic breakdown, just destroy all effective government regulation of the economy and outlaw uni ons.
Part II - Ideologies at odds
Nationalism and capitalism are quite different ideologies, yet somehow Americans have conflated them. Take a list of what are considered the best things
about Capitalism: equality, achievement, freedom, growth and even happiness, and then compare them to a list of things considered the best about America: equality, opportunity for personal growth, freedom, a longer and fuller life. What do you know! They’re almost the same. This is odd and not a little illogical. Why so? Well, consider the fact that these ideologies operate in opposition one to another. And do so right out in the open.
Here is a good example. On 11 July 2012, Fred Grimm, a columnist for the Miami Herald wrote a piece entitled "This column was made in the U.S.A." In it he notes that "last year the Wall Street Journal surveyed employment data from a number of the nation’s heftier corporations...and found that while they were cutting their domestic workforces by 2.9 million over a decade, they had hired 2.4 million people overseas." What sort of jobs are being exported by American corporate executives with, one assumes, the approval of their largely American stockholders? It turns out that they are not just your mundane factory floor jobs. They also include the work of: accountants, radiologists, architects, mortgage banking officers, computer technicians, and journalists (outsourcing the writing of local news st ories to underpaid reporters in places like the Philippine).
As the Wall Street Journal noted, this has been going on for a while now. Back in a 12 January 2004 edition of the Harvard Business School’s online publication, Working Knowledge, James Heskett told us that "arguments based on accepted [those accepting are not named] macroeconomic theory generally come down in support of the free exportation of jobs." But then Heskett quoted Brad Leach’s observation that "the real question is how to deal with the disproportionality of this impact: the broad, shallow, positive impact on product prices versus the narrow [sic], deep, negative impact on individuals."
In other words, American capitalism has been sticking it to American nationalism, at least to the extent of destroying a minimum of 2.9 million jobs over the past decade. Is this an example of capitalism promoting achievement, or growth, or happiness? Certainly not for those 2.9 million American ex-employees. So just how could American corporations, the executives and stock holders of which are, one assumes, loyal and patriotic Americans, do such a thing?
Part III - Capitalism Wins
Well, it would seem that nationalism has met its match. It has been overwhelmed by that which lies at the heart of capitalism: profit. Thus, consider a hypothetical American corporation A which makes socks in town X and has done so for a hundred years. At some point corporation A finds itself confronted with competition from cheaper socks made abroad and allowed into the U.S. by the millions of pairs because of laws placed on the books by free-market American Senators and Congresspersons. These foreign socks are being willingly purchased, instead of A’s more expensive domestic brand, by red blooded American consumers. So the executives of corporation A face a serious problem. It does not take them long to figure out that if they move out of town X, where the labor costs are relatively high, and relocate to some foreign country with no unions or government regulations, their labor costs will go down and their competitiveness and profitability will go up. But to do so wi ll destroy the economic basis of town X and the lives of its patriotic citizens who have loyally served corporation A for generations. So what do you do? Well, just ask the residents of all the defunct textile towns on the U.S. east coast from New England to the Carolinas.
Very few entrepreneurs or their customers are going to admit that such issues as cost, profit and price are more important than every one of those things listed as the best of capitalism and nationalism. No, they will just ignore the distinctly second place status of equality, freedom, doing your best, growth and happiness, etc., and they will pretend that the economic destruction of workers’ lives is an unavoidable consequence of commonsense business. Blame it on the natural laws of macroeconomics if you must. When the time comes for Mexican or Chinese or Indian workers to organize and achieve regulation of their industries so as to obtain decent wages and benefits, their lives in turn will be ruined as their employers run away to other places with lower labor costs, fewer required benefits and lower corporate taxes. For when it comes to the so-called commonsense demands of business, profits are more important than life itself (though not the financial well-being of th e investors).
Part IV - Coping Mechanisms
I think that a growing number of Americans, witnessing the long running exportation of their livelihoods, do sense that the ground is moving under their feet. A 19 November 2011 New York Times op-ed by Charles Blow entitled "Decline of American Exceptionalism" reports that a Pew Research Center poll found that just 49% of Americans agreed with the statement "our people are not perfect but our culture is superior to others." That was down from 60% in the year 2002.
It is hard to see your culture as superior when so many jobs are being shipped abroad. Yet, if we can extrapolate out from the Pew poll, nearly half the nation still seems to manage it. How do they do it? Here are some suggestions:
1. Displacing a sense of powerlessness. Whether you are the victim or it is your neighbor, one just doesn’t know what to do about the situation. But it helps to believe that, even though jobless, you live in a great country, the power and traditions of which assure that you are better off than some worker in an Indonesian sweatshop turning out upscale Nikes. Holding on to that thought, many of the displaced buck up and start looking for other, usually less lucrative, work. Some of them may also take to beating up their kids or spouses when frustrations of the job search run high.
2. Dealing with cognitive dissonance. One has two contradictory concepts in one’s head at once (the U.S. is the greatest show on earth vs. too many of our jobs are being exported, contributing to the fact that a lot of us are getting poorer) and it is uncomfortable. So one naturally tries to reconcile the problem. For instance, you can tell yourself that the dichotomy is temporary and will disappear after a period of economic adjustment. Or, this is a great opportunity to get retrained for a position better than the one you just lost (ignoring the fact that the effectiveness of retraining programs is now being called into question).
3. The phenomenon of volunteering. For those who have lost their jobs but retain enough of a pension or savings to live on (usually an older crowd approaching retirement age) they can take solace in the world of volunteers. Actually, this is a pattern of work which allows a lot of non-profit, and some for-profit businesses as well, to get free labor. So the worker ends up doing for free what he or she should rightly be paid for–particularly in an avidly capitalist society like ours. It is a cockeyed sort of situation, but it does allow many older, displaced workers, to salvage some self-esteem even while they are exploited.
Part V - Conclusion
Most often our lives are too narrowly focused to allow us to understand the larger economic and political forces impacting us. We know our local area, we know the work we do (or did), and we know what those in leadership positions tell us. But all of this knowledge turns out to be inadequate when we are hit by debilitating social change. Then, most of us feel helpless and passively resign ourselves to what we consider fate, or perhaps God’s will.
We are trained from childhood to behave like this. Remember temper tantrums? When our children throw them they soon learn that it doesn’t work. As adults we seem to have carried over the lesson. Relatively small numbers of us do occasionally loudly protest our situation, but with rare exceptions what do we learn? It doesn’t work. Perhaps we should try harder.
The ideals of capitalism, so ardently believed in, turn out to be false except for (as the current saying goes) the fortunate 1%. And those of nationalism? They too are drilled into our heads from childhood. But, alas, they cannot substitute for one’s supper.
Pope John Paul II once remarked that "pervading nationalism imposes its dominion on man today in many different forms and with an aggressiveness that spares no one." Whatever else you might think of this Pontiff, he makes a good point here–and one applicable to the U.S.A. American politicians never tire of telling us that ours is the greatest nation on earth and, for the world’s sake, we must aggressively (often by war) expand our freedoms, as well as our general culture, to the ends of the earth. Actually, this is a message that has been repeated for two hundred years and "its dominion" here in the "land of the free" is manifest. For many citizens, this assumption is one of the primary reasons we invaded Iraq, are hanging on in Afghanistan, and swear eternal loyalty to the Israelis. It is probably the cas e that American political and civic leaders invoke God and national manifest destiny more than those of any other nationality.
Capitalism
This is the world’s prevalent economic system. It is based on private ownership of the means of production and the creation of goods and services for profit. Wage labor is an important element on the cost side of the capitalist ledger. So are things like safe working conditions and worker benefits. The capitalist impulse is to minimize costs in order to maximize profit. Left to themselves, capitalists will pay workers (white collar or otherwise) the lowest possible wages and deny or minimize other benefits. They will ignore worker safety and deny any responsibility for worker health. The only reason these important aspects of the work place prevail is because of the pressure put upon the capitalist system by unions on the one hand, and government regulatory agencies on the other. If you want to maximize the probability of economic breakdown, just destroy all effective government regulation of the economy and outlaw uni ons.
Part II - Ideologies at odds
Nationalism and capitalism are quite different ideologies, yet somehow Americans have conflated them. Take a list of what are considered the best things
about Capitalism: equality, achievement, freedom, growth and even happiness, and then compare them to a list of things considered the best about America: equality, opportunity for personal growth, freedom, a longer and fuller life. What do you know! They’re almost the same. This is odd and not a little illogical. Why so? Well, consider the fact that these ideologies operate in opposition one to another. And do so right out in the open.
Here is a good example. On 11 July 2012, Fred Grimm, a columnist for the Miami Herald wrote a piece entitled "This column was made in the U.S.A." In it he notes that "last year the Wall Street Journal surveyed employment data from a number of the nation’s heftier corporations...and found that while they were cutting their domestic workforces by 2.9 million over a decade, they had hired 2.4 million people overseas." What sort of jobs are being exported by American corporate executives with, one assumes, the approval of their largely American stockholders? It turns out that they are not just your mundane factory floor jobs. They also include the work of: accountants, radiologists, architects, mortgage banking officers, computer technicians, and journalists (outsourcing the writing of local news st ories to underpaid reporters in places like the Philippine).
As the Wall Street Journal noted, this has been going on for a while now. Back in a 12 January 2004 edition of the Harvard Business School’s online publication, Working Knowledge, James Heskett told us that "arguments based on accepted [those accepting are not named] macroeconomic theory generally come down in support of the free exportation of jobs." But then Heskett quoted Brad Leach’s observation that "the real question is how to deal with the disproportionality of this impact: the broad, shallow, positive impact on product prices versus the narrow [sic], deep, negative impact on individuals."
In other words, American capitalism has been sticking it to American nationalism, at least to the extent of destroying a minimum of 2.9 million jobs over the past decade. Is this an example of capitalism promoting achievement, or growth, or happiness? Certainly not for those 2.9 million American ex-employees. So just how could American corporations, the executives and stock holders of which are, one assumes, loyal and patriotic Americans, do such a thing?
Part III - Capitalism Wins
Well, it would seem that nationalism has met its match. It has been overwhelmed by that which lies at the heart of capitalism: profit. Thus, consider a hypothetical American corporation A which makes socks in town X and has done so for a hundred years. At some point corporation A finds itself confronted with competition from cheaper socks made abroad and allowed into the U.S. by the millions of pairs because of laws placed on the books by free-market American Senators and Congresspersons. These foreign socks are being willingly purchased, instead of A’s more expensive domestic brand, by red blooded American consumers. So the executives of corporation A face a serious problem. It does not take them long to figure out that if they move out of town X, where the labor costs are relatively high, and relocate to some foreign country with no unions or government regulations, their labor costs will go down and their competitiveness and profitability will go up. But to do so wi ll destroy the economic basis of town X and the lives of its patriotic citizens who have loyally served corporation A for generations. So what do you do? Well, just ask the residents of all the defunct textile towns on the U.S. east coast from New England to the Carolinas.
Very few entrepreneurs or their customers are going to admit that such issues as cost, profit and price are more important than every one of those things listed as the best of capitalism and nationalism. No, they will just ignore the distinctly second place status of equality, freedom, doing your best, growth and happiness, etc., and they will pretend that the economic destruction of workers’ lives is an unavoidable consequence of commonsense business. Blame it on the natural laws of macroeconomics if you must. When the time comes for Mexican or Chinese or Indian workers to organize and achieve regulation of their industries so as to obtain decent wages and benefits, their lives in turn will be ruined as their employers run away to other places with lower labor costs, fewer required benefits and lower corporate taxes. For when it comes to the so-called commonsense demands of business, profits are more important than life itself (though not the financial well-being of th e investors).
Part IV - Coping Mechanisms
I think that a growing number of Americans, witnessing the long running exportation of their livelihoods, do sense that the ground is moving under their feet. A 19 November 2011 New York Times op-ed by Charles Blow entitled "Decline of American Exceptionalism" reports that a Pew Research Center poll found that just 49% of Americans agreed with the statement "our people are not perfect but our culture is superior to others." That was down from 60% in the year 2002.
It is hard to see your culture as superior when so many jobs are being shipped abroad. Yet, if we can extrapolate out from the Pew poll, nearly half the nation still seems to manage it. How do they do it? Here are some suggestions:
1. Displacing a sense of powerlessness. Whether you are the victim or it is your neighbor, one just doesn’t know what to do about the situation. But it helps to believe that, even though jobless, you live in a great country, the power and traditions of which assure that you are better off than some worker in an Indonesian sweatshop turning out upscale Nikes. Holding on to that thought, many of the displaced buck up and start looking for other, usually less lucrative, work. Some of them may also take to beating up their kids or spouses when frustrations of the job search run high.
2. Dealing with cognitive dissonance. One has two contradictory concepts in one’s head at once (the U.S. is the greatest show on earth vs. too many of our jobs are being exported, contributing to the fact that a lot of us are getting poorer) and it is uncomfortable. So one naturally tries to reconcile the problem. For instance, you can tell yourself that the dichotomy is temporary and will disappear after a period of economic adjustment. Or, this is a great opportunity to get retrained for a position better than the one you just lost (ignoring the fact that the effectiveness of retraining programs is now being called into question).
3. The phenomenon of volunteering. For those who have lost their jobs but retain enough of a pension or savings to live on (usually an older crowd approaching retirement age) they can take solace in the world of volunteers. Actually, this is a pattern of work which allows a lot of non-profit, and some for-profit businesses as well, to get free labor. So the worker ends up doing for free what he or she should rightly be paid for–particularly in an avidly capitalist society like ours. It is a cockeyed sort of situation, but it does allow many older, displaced workers, to salvage some self-esteem even while they are exploited.
Part V - Conclusion
Most often our lives are too narrowly focused to allow us to understand the larger economic and political forces impacting us. We know our local area, we know the work we do (or did), and we know what those in leadership positions tell us. But all of this knowledge turns out to be inadequate when we are hit by debilitating social change. Then, most of us feel helpless and passively resign ourselves to what we consider fate, or perhaps God’s will.
We are trained from childhood to behave like this. Remember temper tantrums? When our children throw them they soon learn that it doesn’t work. As adults we seem to have carried over the lesson. Relatively small numbers of us do occasionally loudly protest our situation, but with rare exceptions what do we learn? It doesn’t work. Perhaps we should try harder.
The ideals of capitalism, so ardently believed in, turn out to be false except for (as the current saying goes) the fortunate 1%. And those of nationalism? They too are drilled into our heads from childhood. But, alas, they cannot substitute for one’s supper.
Corporate Social What? Redux.
By Guy Gravenson
My cousin Guy, who lives in Mexico, decided to get into our little debating gig about whether anything good is likely to come from trying to teach corporate responsibility to some of the most irresponsible executives on earth. Here’s his take:
What is missing in all this back and forth, Bill, is the question of education, K-12. Educating the young. You suddenly don't come to a new set of ethics or morals as a grown person. You learn that in your formative years. And if you haven't learned it by high school, you get some standin to take your test or a crib sheet or hidden cell phone to slide you the answers. Corruption starts as soon as the teacher's back is turned.
A solution? Leave K-6 pretty much as it is now, a time to learn basic skills, to socialize and get into sports, and keep the brats out of the house for half a day for the parents to recover. At middle-school time, give all kids a FREE tablet (Kindle or iPad, whatever).
The tablet has no phone, no internet, so social networking sites. Just lessons, a library to get the answers -- and a connection to an adult mentor from the school. Kids work on their own or with peers to complete the lessons, whether programmed learning, multiple choice or composition. This is basic middle school stuff ... English, Math, Social Studies, Science, Civics (ethic lessons here), Second language...etc. Tests are taken back at the school, supervised, serious. If you fail a course you have to repeat it over the summer to graduate middle school. Then you hand back your tablet in exchange for a cap and gown.
Graduates go on to virtual High School. There can be a real high school in the neighborhood, of course, but students need only to check in to meet with teachers one-to-one and to do group assignments, social stuff. There are no class hours, except appointment times. The High School becomes a study hall. Again, all lessons are on individual FREE tablets, but these are not interchangable. They have a fingerprint match entry and other safeguards against theft/plagiarism. You carry it with you for 4 years. How fast you get through HS is up to you. You work at your own speed ... you take pop quizzes for your own edification. You just have to pass Government Regent tests -- standardized national tests (not State tests) on your climb out of high school. You have to pass 5 core subjects, and 5 elective subjects in each of those 4 years. Core manditory subjects: English composition, Math (algebra, geometry, trig,) Science (biology, chemistry, physics) Second Language, and American History. 5 elective subjects can be anything from logic to computer literacy, to theatre, to basic business administration, -- or anything teachable that interests the young person. So you need 40 credits to graduate High School -- and an optional 10 additional points in a particular field of interest or out-of-school volunteer/intern work that will go a long way to get you into college. After you pass your 40 credits, you have to take a day's worth of tests on everything you've learned (a comprehensive, like an S.A.T.) and an interview before a body of educators who will try to give you insight on where they think you should go next. Even help exceptional students to get to the college of their choice.
Of course, you can drop out whenever you want -- and clean off tables at Wendy's.
My cousin Guy, who lives in Mexico, decided to get into our little debating gig about whether anything good is likely to come from trying to teach corporate responsibility to some of the most irresponsible executives on earth. Here’s his take:
What is missing in all this back and forth, Bill, is the question of education, K-12. Educating the young. You suddenly don't come to a new set of ethics or morals as a grown person. You learn that in your formative years. And if you haven't learned it by high school, you get some standin to take your test or a crib sheet or hidden cell phone to slide you the answers. Corruption starts as soon as the teacher's back is turned.
A solution? Leave K-6 pretty much as it is now, a time to learn basic skills, to socialize and get into sports, and keep the brats out of the house for half a day for the parents to recover. At middle-school time, give all kids a FREE tablet (Kindle or iPad, whatever).
The tablet has no phone, no internet, so social networking sites. Just lessons, a library to get the answers -- and a connection to an adult mentor from the school. Kids work on their own or with peers to complete the lessons, whether programmed learning, multiple choice or composition. This is basic middle school stuff ... English, Math, Social Studies, Science, Civics (ethic lessons here), Second language...etc. Tests are taken back at the school, supervised, serious. If you fail a course you have to repeat it over the summer to graduate middle school. Then you hand back your tablet in exchange for a cap and gown.
Graduates go on to virtual High School. There can be a real high school in the neighborhood, of course, but students need only to check in to meet with teachers one-to-one and to do group assignments, social stuff. There are no class hours, except appointment times. The High School becomes a study hall. Again, all lessons are on individual FREE tablets, but these are not interchangable. They have a fingerprint match entry and other safeguards against theft/plagiarism. You carry it with you for 4 years. How fast you get through HS is up to you. You work at your own speed ... you take pop quizzes for your own edification. You just have to pass Government Regent tests -- standardized national tests (not State tests) on your climb out of high school. You have to pass 5 core subjects, and 5 elective subjects in each of those 4 years. Core manditory subjects: English composition, Math (algebra, geometry, trig,) Science (biology, chemistry, physics) Second Language, and American History. 5 elective subjects can be anything from logic to computer literacy, to theatre, to basic business administration, -- or anything teachable that interests the young person. So you need 40 credits to graduate High School -- and an optional 10 additional points in a particular field of interest or out-of-school volunteer/intern work that will go a long way to get you into college. After you pass your 40 credits, you have to take a day's worth of tests on everything you've learned (a comprehensive, like an S.A.T.) and an interview before a body of educators who will try to give you insight on where they think you should go next. Even help exceptional students to get to the college of their choice.
Of course, you can drop out whenever you want -- and clean off tables at Wendy's.
Saturday, July 14, 2012
Corporate Social What?
By William Fisher
The misconduct of the financial industry no longer surprises most Americans. Only about one in five has much trust in banks, according to Gallup polls, about half the level in 2007. And it’s not just banks that are frowned upon. Trust in big business overall is declining. Sixty-two percent of Americans believe corruption is widespread across corporate America. According to Transparency International, an anticorruption watchdog, nearly three in four Americans believe that corruption has increased over the last three years. (New York Times, July 12, 2012)
A good friend of mine is trying to teach corporate social responsibility on the heels of Libor and so many, many other shameful deceptions – or worse . That must be like flying into the eye of the hurricane on a mosquito. The perfect storm caused not only by banking and financial interests, but also by manufacturers, service companies, just about everyone whose mission is the turn a profit.
What in the world could you be teaching them? Maybe your focus is on what they could do to become socially responsible that they clearly are not doing now?
In all honesty, I would be hard put to name a single company I felt was and had been acting in a socially responsible manner. In fact, I’d do much better with the inverse proposition. No shortage of villains out there!
Back in the 70s and 80s I used to lecture and write a lot about CSR. Back in the those days, we were able to point to at least a few companies that we thought were acting responsibly – Cummins Engine, Caterpillar, General Electric, and a few others.
Huge companies couldn’t slow down to catch their breath and implement real programs; it was liberal lipservice. Smaller companies just struggled to stay afloat. And most of them didn’t.
I daresay we are now experiencing a repeat of that situation – with the added disadvantage that the people know. Thanks to the web, 24-hour news cycles, etc. companies acting irresponsibility have no place to hide.
The usual sponsorships of social services, educational, athletic, and artistic programs looked to be tinier than usual in relation to what needed to be done. Most of these are good programs, well thought-out. But they are implemented largely in isolation, with little coordination among donors and sponsors.
And as one after another after another of those donors is exposed as corner-cutting, smarmy-talking prevaricators caught with both hands in the cookie jar, so the American public loses what little faith it may once have had in the indestructible pillars of American capitalism.
What to do? Nothing? Not acceptable!
So I found myself thinking the most simplistic, eighth-grade solution. And knowing that my economist friends would be all over me in a nano-second.
So, being a rabid risk-taker, I posited the following:
Ten of millions of people are out of work.
Big multinational companies and financial institutions are stuffed with cash they borrowed at zero interest from the Fed.
They are not lending that money; they are sitting on it until demand rises for their products and services.
The longer they sit on it, the more the banks love them.
But suppose President Obama did something really off the wall?
Suppose he sat down with the shareholders of the Fortune 500 and tried to persuade them each, for a period of time, to take a 50% haircut on the profits they’re now making on the stocks and bonds of these dinosaurs. Corporations and banks would put their cash to work by hiring unemployed people – starting with those fired or furloughed when the economy tanked. The government would subsidize any losses these investors would incur.
And here comes the big IF. The government would need to be trusted as the rescuer of last resort.
If, by some miracle of alchemy, charisma, and pragmatism, the FatCats agreed, a lot of folks would have jobs again – not makework, not entry-level no-income internships, but real jobs to put real meals on the table and be able to afford to pay real mortgages, and jobs that opened up the possibility of the industrial and financial innovation that seems to have gotten lost in the past decade.
Now, dear readers, tell me the many reasons this won’t work!
First to weigh in was Chip Pitts, who happens to be the friend who’s lecturing on CSR at Oxford this summer. Here’s his take:
“I think that something like this could be part of the solution, a la the New Deal, but you’re right that the economists would object, and likely on grounds that those jobs are (“the market has spoken”) no longer needed, by definition, since they’re not there and (from the companies’ standpoint and the economy’s standpoint the economy is still working pretty well for the elites). Thus, there is a legitimate concern that this could result in ‘makework’.”
He continued: “Some of that would be OK, but it would be better if we found work for people in new jobs that could stand on their own in this increasingly competitive global environment. It would thus seem to me to be more a priority to think about how to rejigger and restart the economy using methods calculated to create new technologies and jobs that are definitely needed for the sectors likely to be most in demand in the future which also have social and environmental purpose.”
He added, “CSR and rights-based businesses can spur some of that by creating new products, services, and business models, like GE’s Ecomagination and Healthmagination, Unilever’s Shakti program, Grameen Danone’s joint venture, etc. But we also need lots of other old and new ideas, including continuing education, job training, starting entirely new social enterprises and small business – all which might be better, more sustainable and resilient investments and approaches.”
I’m sorry to be such a sourpuss, but I can’t resist pointing out that all these proposed initiatives are spoken in the future tense. Maybe they’re going to happen someday, but they haven’t happened yet. Yet now is when they are most needed. What have we been doing since 2008 and well before?
Well, it took a bone fide economist to shake me from my torpor. He came in the person of Dr. Jack N. Behrman, Associate Dean Emeritus at the University of North Carolina Business School. In his usual characteristic plain-speaking language, this non-academic academic delivered this IED:
“Now, who is going to do what about it -- what with the big financiers corrupting Congress and the Supreme Court? They are interested in only one thing -- jimmying the election and then the U.S. economy so they control it for their own selfish reasons. No sense of ‘noblesse oblige’--nor social responsibility, and B-school faculty have come to their senses too late, having mushed the brains of their students with ‘profit-maximization’ goals.”
A somewhat more hopeful note was struck by another old friend reader, Ludwig Rudel, who ran a successful property business after serving as one of the first American development specialists ever deployed to South Asia.
Lu asks:
“Who possibly can be against enhancing corporate social responsibility? It is asking others to behave better! No cost to me! Next you will try to reform or eliminate prostitution. Good Luck.”
“Me ... I prefer incentives. It is generally thought that the unemployment problem will not go away until the housing sector is stabilized. I have been waiting four years for our President to do something ‘off the wall to solve that.”
“How about this? FNMA will buy any and all of a bank's mortgages, either performing or non-performing, for homes still occupied by mortgagees for 80% of the outstanding principal, excluding penalties and fees, (no appraisal required) if the bank can prove they actually own the mortgage. FNMA can then offer to rewrite the house owner's mortgage paper at that (80%) value, for the first 5 years at an APR of 2%, the second 5 years at 4% and the last 20 years at 6% (since FNMA can obtain short term funds at virtually 0%). Then, for those mortgagees that such terms still can't be made to work, FNMA will handle foreclosure at its own cost.
“Such mortgages would be very affordable and attractive to owners. The banks would get out from under. It costs them more than 20% to foreclose. The cost to the taxpayer would be minimal.”
“Maybe it would be possible to persuade the banks that they will get brownie points on their social responsibility ledger for doing this.”
OK, but at this rate accumulating enough Brownie points is going to take a while. Maybe we should try Girl Scout Cookies?
Then comes the coup de grace. Artist Tony Benn, my favorite Marxist didact, blind-sides me with this:
“Without wanting to sound totally defeatist but most likely post-Marxist. Capital has and will always be amoral. Teaching it morality will always be sinking water into the desert of morality. The point of the State whichever one we can elect coherently and cohesively is to ameliorate the worst excesses of Capital. Until we all wake up to that awful but sobering realization then expecting a CEO to change the mindset of two centuries that started with the French revolution we are just dealing with the chimera and the spectacular nature of Capital.”
He adds: “And yes, this is the post-Marxist bit, until the contradictions of Capital are revealed or better still betrayed to itself not much is likely to happen. When the generals stop obeying orders of the ruling classes then the image cracks. Vis, the revolutions such as they are in the North Africa crescent. The Syrian general class jumping ship...pip pip!
If the ancient Greek philosopher Diogenes were to go out with his lantern in search of an honest many today, a survey of Wall Street executives on workplace conduct suggests he might have to look elsewhere.
A quarter of Wall Street executives see wrongdoing as a key to success, according to a survey by whistleblower law firm Labaton Sucharow released on Tuesday.
In a survey of 500 senior executives in the United States and the UK, 26 percent of respondents said they had observed or had firsthand knowledge of wrongdoing in the workplace, while 24 percent said they believed financial services professionals may need to engage in unethical or illegal conduct to be successful.
Sixteen percent of respondents said they would commit insider trading if they could get away with it, according to Labaton Sucharow. And 30 percent said their compensation plans created pressure to compromise ethical standards or violate the law.
The misconduct of the financial industry no longer surprises most Americans. Only about one in five has much trust in banks, according to Gallup polls, about half the level in 2007. And it’s not just banks that are frowned upon. Trust in big business overall is declining. Sixty-two percent of Americans believe corruption is widespread across corporate America. According to Transparency International, an anticorruption watchdog, nearly three in four Americans believe that corruption has increased over the last three years. (New York Times, July 12, 2012)
A good friend of mine is trying to teach corporate social responsibility on the heels of Libor and so many, many other shameful deceptions – or worse . That must be like flying into the eye of the hurricane on a mosquito. The perfect storm caused not only by banking and financial interests, but also by manufacturers, service companies, just about everyone whose mission is the turn a profit.
What in the world could you be teaching them? Maybe your focus is on what they could do to become socially responsible that they clearly are not doing now?
In all honesty, I would be hard put to name a single company I felt was and had been acting in a socially responsible manner. In fact, I’d do much better with the inverse proposition. No shortage of villains out there!
Back in the 70s and 80s I used to lecture and write a lot about CSR. Back in the those days, we were able to point to at least a few companies that we thought were acting responsibly – Cummins Engine, Caterpillar, General Electric, and a few others.
Huge companies couldn’t slow down to catch their breath and implement real programs; it was liberal lipservice. Smaller companies just struggled to stay afloat. And most of them didn’t.
I daresay we are now experiencing a repeat of that situation – with the added disadvantage that the people know. Thanks to the web, 24-hour news cycles, etc. companies acting irresponsibility have no place to hide.
The usual sponsorships of social services, educational, athletic, and artistic programs looked to be tinier than usual in relation to what needed to be done. Most of these are good programs, well thought-out. But they are implemented largely in isolation, with little coordination among donors and sponsors.
And as one after another after another of those donors is exposed as corner-cutting, smarmy-talking prevaricators caught with both hands in the cookie jar, so the American public loses what little faith it may once have had in the indestructible pillars of American capitalism.
What to do? Nothing? Not acceptable!
So I found myself thinking the most simplistic, eighth-grade solution. And knowing that my economist friends would be all over me in a nano-second.
So, being a rabid risk-taker, I posited the following:
Ten of millions of people are out of work.
Big multinational companies and financial institutions are stuffed with cash they borrowed at zero interest from the Fed.
They are not lending that money; they are sitting on it until demand rises for their products and services.
The longer they sit on it, the more the banks love them.
But suppose President Obama did something really off the wall?
Suppose he sat down with the shareholders of the Fortune 500 and tried to persuade them each, for a period of time, to take a 50% haircut on the profits they’re now making on the stocks and bonds of these dinosaurs. Corporations and banks would put their cash to work by hiring unemployed people – starting with those fired or furloughed when the economy tanked. The government would subsidize any losses these investors would incur.
And here comes the big IF. The government would need to be trusted as the rescuer of last resort.
If, by some miracle of alchemy, charisma, and pragmatism, the FatCats agreed, a lot of folks would have jobs again – not makework, not entry-level no-income internships, but real jobs to put real meals on the table and be able to afford to pay real mortgages, and jobs that opened up the possibility of the industrial and financial innovation that seems to have gotten lost in the past decade.
Now, dear readers, tell me the many reasons this won’t work!
First to weigh in was Chip Pitts, who happens to be the friend who’s lecturing on CSR at Oxford this summer. Here’s his take:
“I think that something like this could be part of the solution, a la the New Deal, but you’re right that the economists would object, and likely on grounds that those jobs are (“the market has spoken”) no longer needed, by definition, since they’re not there and (from the companies’ standpoint and the economy’s standpoint the economy is still working pretty well for the elites). Thus, there is a legitimate concern that this could result in ‘makework’.”
He continued: “Some of that would be OK, but it would be better if we found work for people in new jobs that could stand on their own in this increasingly competitive global environment. It would thus seem to me to be more a priority to think about how to rejigger and restart the economy using methods calculated to create new technologies and jobs that are definitely needed for the sectors likely to be most in demand in the future which also have social and environmental purpose.”
He added, “CSR and rights-based businesses can spur some of that by creating new products, services, and business models, like GE’s Ecomagination and Healthmagination, Unilever’s Shakti program, Grameen Danone’s joint venture, etc. But we also need lots of other old and new ideas, including continuing education, job training, starting entirely new social enterprises and small business – all which might be better, more sustainable and resilient investments and approaches.”
I’m sorry to be such a sourpuss, but I can’t resist pointing out that all these proposed initiatives are spoken in the future tense. Maybe they’re going to happen someday, but they haven’t happened yet. Yet now is when they are most needed. What have we been doing since 2008 and well before?
Well, it took a bone fide economist to shake me from my torpor. He came in the person of Dr. Jack N. Behrman, Associate Dean Emeritus at the University of North Carolina Business School. In his usual characteristic plain-speaking language, this non-academic academic delivered this IED:
“Now, who is going to do what about it -- what with the big financiers corrupting Congress and the Supreme Court? They are interested in only one thing -- jimmying the election and then the U.S. economy so they control it for their own selfish reasons. No sense of ‘noblesse oblige’--nor social responsibility, and B-school faculty have come to their senses too late, having mushed the brains of their students with ‘profit-maximization’ goals.”
A somewhat more hopeful note was struck by another old friend reader, Ludwig Rudel, who ran a successful property business after serving as one of the first American development specialists ever deployed to South Asia.
Lu asks:
“Who possibly can be against enhancing corporate social responsibility? It is asking others to behave better! No cost to me! Next you will try to reform or eliminate prostitution. Good Luck.”
“Me ... I prefer incentives. It is generally thought that the unemployment problem will not go away until the housing sector is stabilized. I have been waiting four years for our President to do something ‘off the wall to solve that.”
“How about this? FNMA will buy any and all of a bank's mortgages, either performing or non-performing, for homes still occupied by mortgagees for 80% of the outstanding principal, excluding penalties and fees, (no appraisal required) if the bank can prove they actually own the mortgage. FNMA can then offer to rewrite the house owner's mortgage paper at that (80%) value, for the first 5 years at an APR of 2%, the second 5 years at 4% and the last 20 years at 6% (since FNMA can obtain short term funds at virtually 0%). Then, for those mortgagees that such terms still can't be made to work, FNMA will handle foreclosure at its own cost.
“Such mortgages would be very affordable and attractive to owners. The banks would get out from under. It costs them more than 20% to foreclose. The cost to the taxpayer would be minimal.”
“Maybe it would be possible to persuade the banks that they will get brownie points on their social responsibility ledger for doing this.”
OK, but at this rate accumulating enough Brownie points is going to take a while. Maybe we should try Girl Scout Cookies?
Then comes the coup de grace. Artist Tony Benn, my favorite Marxist didact, blind-sides me with this:
“Without wanting to sound totally defeatist but most likely post-Marxist. Capital has and will always be amoral. Teaching it morality will always be sinking water into the desert of morality. The point of the State whichever one we can elect coherently and cohesively is to ameliorate the worst excesses of Capital. Until we all wake up to that awful but sobering realization then expecting a CEO to change the mindset of two centuries that started with the French revolution we are just dealing with the chimera and the spectacular nature of Capital.”
He adds: “And yes, this is the post-Marxist bit, until the contradictions of Capital are revealed or better still betrayed to itself not much is likely to happen. When the generals stop obeying orders of the ruling classes then the image cracks. Vis, the revolutions such as they are in the North Africa crescent. The Syrian general class jumping ship...pip pip!
If the ancient Greek philosopher Diogenes were to go out with his lantern in search of an honest many today, a survey of Wall Street executives on workplace conduct suggests he might have to look elsewhere.
A quarter of Wall Street executives see wrongdoing as a key to success, according to a survey by whistleblower law firm Labaton Sucharow released on Tuesday.
In a survey of 500 senior executives in the United States and the UK, 26 percent of respondents said they had observed or had firsthand knowledge of wrongdoing in the workplace, while 24 percent said they believed financial services professionals may need to engage in unethical or illegal conduct to be successful.
Sixteen percent of respondents said they would commit insider trading if they could get away with it, according to Labaton Sucharow. And 30 percent said their compensation plans created pressure to compromise ethical standards or violate the law.
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