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Tuesday, December 5, 2017

Pope Francis: Possessing Nuclear Weapons is Indefensible

Pope Francis said late in 2017 that the nuclear arms race had become irrational and immoral. The irrationality itself rendered even just the possession of nuclear weapons as immoral, according to the pope. Whereas past popes had recognized deterrence as a legitimator, both irrationality and the extent and “upgrading” of such weapons were factors in Pope Francis’s admittedly personal view. Yet was his basis only moral, or religious in nature?

The full essay is at "The Pope on Nuclear Weapons."

On the Place of Religion in Business: Refusing to Serve Gays

The U.S. Supreme Court heard oral arguments in December 2017 in a case on whether a baker in Colorado had been justified in refusing to sell a wedding cake to a same-sex couple. He claimed that his Christian faith forbid him from making wedding cakes for gay couples. “I follow Jesus Christ,” he declared when interviewed at his store. The Gospels are silent on the issue of homosexuality—it being said to be a sin only in the Old Testament—so the inference that following Jesus requires opposition to gay marriage (not to mention that homosexuality is an important issue in following Jesus) can be questioned. If the inference is tenuous, then it is the baker’s ideological stance that was actually at issue before the court. More broadly, is religion vulnerable to acting as a subterfuge, or cover, for what are really personal prejudices?
In terms of constitutional law, the baker contended that the First Amendment, “whose guarantees of free speech and religious exercise supersede any state law, exempts him from [Colorado’s] antidiscrimination act,” which has covered sexual orientation since 2007.[1] The question, I submit, is whether free speech and religious exercise are salient in a business context. 

The full essay is at "Refusing to Serve Gays."



[1] Jess Bravin, “Supreme Court Set to Hear Gay-Rights Case,” The Wall Street Journal, December 4, 2017.

Monday, December 4, 2017

Advertisers Remove Ads on YouTube: Fair to YouTube and Video-Producers?

One day after Thanksgiving in 2017, “a fresh wave of advertisers suspended commercials on Youtube after their ads showed up next to videos that appeared to attract pedophile viewers.”[1] Youtube had removed ads from roughly 3 million videos, but the company’s use of human and AI checkers simply could not keep pace with the number of uploaded videos. Even so, Diageo, maker of Smirnoff and Johnnie Walker (alcohol drinks), announced it would hold off its ads until “appropriate safeguards are in place.”[2] Mars and Adidas took a similar line. The question is whether those advertisers were being fair to Youtube and even the producers of the videos.

The full essay is at Advertisers and YouTube.

[1] Stu Woo and Sam Schehner, “YouTube Deals With Another Advertiser Backlash,” The Wall Street Journal, November 25-26, 2017.
[2] Ibid.

Sunday, December 3, 2017

Unsustainable Structural Fiscal and Federal Imbalances: The American Union

The nonpartisan Congressional Budget Office (CBO) announced on January 26, 2011 that the U.S. Government’s budget deficit for the year would soar to nearly $1.5 trillion, which represents $414 billion more due to the extension of the Bush tax cuts. The deficit had been $1.4 trillion in 2009 and $1.3 trillion in 2010. According to the New York Times, based on the CBO, “the deficits of $1.4 trillion in 2009 and $1.3 trillion in 2010 are, when measured as a share of gross domestic product, the largest since 1945 — representing 10 percent and 8.9 percent of the nation’s output.” The budget officials also projected the deficit for 2012 would be $1.1 trillion. These figures dwarf the budget deficits even of the 1980s.

Cult of the Leader: The Case of North Korea

Baudrillard writes of "hyper-reality," which arises when productions—perhaps created by publicists and other spin doctors—become the reality that is taken seriously at the expense of the originals.  The modern art of Andy Warhal provides an analogy. His portraits are not exactly pure "copies" of the originals, so his way of depicting reality should not be identified as the definitive truth. Such “hyper-reality” can become the stuff of leadership. DePree (1989, p.19) writes that the first responsibility of a leader is to define reality. According to Nanus (1992, p.61), “leaders create realities through the force of vision.” The reality envisioned is a social reality. Although it can include the leader, the content of the vision is usually distinguished from the messenger.

Material from this essay has been incorporated into The Essence of Leadership: A Cross-Cultural Foundation, which is available in print and as an ebook at Amazon. 


Sources:


DePree, M. Leadership is an Art (Doubleday, New York, 1989).

Nanus, B.: 1992, Visionary Leadership: Creating a Compelling Sense of Direction For Your Organization (Jossey-Bass: San Francisco).


Russia’s Common Economic Area: Not Another European Union

On January 1, 2012, a new version of the common economic area between Russia, Belarus and Kazakhstan came into effect. The three countries had already founded a customs union in 2007. As of the end of 2011, Kyrgyzstan and Tajikistan were still in talks about joining as well. Putin insisted that integration with the E.U. could take place by 2015. I cannot help but wonder if E.U. leaders were aware of this possible union of unions. It could be argued that Putin was making several category mistakes.


The full essay is at "Essays on the E.U. Political Economy," available at Amazon.

When Corporate Governance Gets Cozy: Chair/CEO Combo as a Structural Conflict of Interest

Eric Jackson, an activist investor and hedge fund manager, charged Goldman’s board as being too cozy and too lacking in financial know-how to diligently oversee the top management. He claimed the board was packed with honchos who led companies that had paid large fees to Goldman. Allowing clients representation on a board is itself a structural conflict of interest because the client role is not in line with acting in the stockholders’ interest on the board. The hedge fund manager pointed to Indian steel magnate Lakshmi Mittal and former Fannie Mae chief James Johnson as cases in point. Related to the client orientation is an affinity to the management, whose managerial decisions bear on the clients. Indeed, Jackson noted that “these people seem to be favorably disposed to senior management’s way of thinking,” and are therefore unlikely to act as a check on CEO Lloyd Blankfein and his team.

The full essay is at Institutional Conflicts of Interest, available at Amazon.

Toward a Definition for Ethical Leadership: Disabusing the Pessimists

One consultant suggests that “the definition of leadership ethics is still unclear; its scope is broadening, making it a moving target.” This is not good news for the topic. Fortunately, the field may be making the task of definition unduly arduous. Scholarship is needed to ferret through the debris so a concept of ethical leadership can be constructed that is both academically rigorous and of use to practitioners, whether in advising and “doing” ethical leadership.

The complete essay is at "Toward a Definition for Ethical Leadership" For more, see also The Essence of Leadership at Amazon.

Greed and Christian Ethics in Profit-Seeking

In his 2011 Easter sermon, the Archbishop of Canterbury issued an outspoken attack on the greed consuming the world’s civilized nations. Speaking against the rush for oil, power and territory, the Rt. Rev. Rowan Williams argued that the comforts and luxuries that people take for granted can not be sustained forever. He forecast that civilization itself would one day collapse from the over-production and consumption.  

                             The Archbishop of Canterbury (The Telegraph)

On the State of the (American) Union: Getting Real

It is certainly more politic to declare the state of the union to be strong rather than weak. In his State of the Union speech in January 2011, President Obama ended by stating definitively, "The state of the union is strong." Even though particulars could doubtless be found to support his claim, I contend that he severely understated the weakness in the state of the union at the time.

The full essay is at "On the State of the Union."

Friday, December 1, 2017

Rolling the Dice: The E.U.’s Financial Regulatory Agency (the ESMA)

Even though the European financial sector integrated significantly during the first decade of the twenty-first century, the E.U. Government’s regulatory infrastructure and content did not keep up. As in the U.S. until 1933, state regulation carried the bulk of the weight. As the twenty-first century notably differs from the nineteenth, the relatively integrated financial sector in the E.U. means more risk is entailed in continuing to rely on state regulators. This is not good news for David Cameron, who in late 2011 tried and failed at a European Council meeting to hold strengthened enforcement of state-deficit limits hostage by demanding protection for state-level financial regulation over federal regulation. Like South Carolina was in the nineteenth century, United Kingdom was decidedly in the states’ rights camp as late as a decade into the twenty-first.

The full essay is at "Essays on the E.U. Political Economy," available at Amazon. 

A Structural Conflict of Interest in Deutche Bank: Beyond Proprietary Holdings

While creating and selling mortgage-based securities to some of its clients, Deutsche Bank AG was not only advising other clients to bet the other way, but also sometimes doing it itself, according to the Wall Street Journal. A trader at the bank would help create an index that made it easy for the bank to bet against housing even as sales people at the bank were selling the securities as if there were no downside to the American housing market. Then some of the tax-payer money was paid by the US Government to AIG to reimburse Deutsche’s hedge-fund clients who had bought the mortgage securities. American regulators looked at whether there were misrepresentations made to the hedge fund managers who bought the mortgage-backed securities even as Deutsche Bank was betting against the housing market.

The full essay is at Institutional Conflicts of Interest, available at Amazon.

ECB Loans: A Backdoor Bailout?

On December 8, 2011, the ECB announced that it would loan 489.2 billion euros (c. $640 billion) at 1% interest to 523 E.U. banks for a three-year term. Carl Weinberg, chief economist at a consulting firm, said that by making the move, the ECB had “shown a path toward averting catastrophic collapse in Europe.” The move has been likened to that of the Federal Reserve after the collapse of Lehman Brothers in 2008. It was hoped that the E.U. banks would use the money to buy state bonds—particularly those of Spain and Italy, which were not able to “directly tap” ECB funds. According to Investor’s Business Daily, however, early signs pointed to bank declining to purchase the riskier debt. While understandable given Angela Merkel’s objections to the ECB serving as a backdoor bailout of profligate states over their heads in debt, the ECB’s refusal to put conditions on how the loans could be used may have undercut the central bank’s effort to relieve bank liquidity (and state debt) problems in the E.U.

The full essay is at "Essays on the E.U. Political Economy," available at Amazon.

Democracy Deficit in the E.U.’s State-Rights Federalism: The Debt Crisis

Holding back additional transfers of governmental sovereignty from the state legislatures to the E.U.’s legislative chambers not only inevitably pushes power to non-democratic E.U.-level  institutions, notably the ECB; the democratic basis even at the state level can be compromised.

The complete essay is at Essays on Two Federal Empires.

Carbon-Dioxide Emissions amid Global Warming: A Species’ Death-Wish

Global emissions of carbon dioxide from fossil-fuel burning rose 5.9 percent in 2010, the largest amount on record, according to an analysis released in early December, 2011 by the Global Carbon Project. According to the analysis as reported by the New York Times, “the increase, a half-billion extra tons of carbon pumped into the air, was almost certainly the largest absolute jump in any year since the Industrial Revolution, and the largest percentage increase since 2003.” 

The full essay is at "Carbon Emissions: A Species' Death-Wish."