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Thursday, December 22, 2011

Leadership vs. Management: Change vs. Constancy?

In the "leadership vs. management" dichotomy, "management focuses on getting work done on time, on budget, and on target--in other words, steady execution and control--while leadership focuses on change and innovation." However, this contrast of implementation and innovation is a different dichotomy. Abstractly speaking, a category mistake may be involved in this false dichotomy. Change would be occurring in the execution of an innovative vision. In the realm of change alone, formulating and selling it can be distinguished from making the change. Therefore, the “leadership vs. management” distinction does not reduce to “change vs. status quo."

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. 

Thursday, December 15, 2011

Leadership in Europe: A Recipe for Reducing Legal Uncertainty

Concerning the legal environment of business, the lawyers who teach as full-time instructors in American business schools affirm that managers would rather have a challenging environment that they know than one that is characterized by headlines such as, “Legal Uncertainty Imperils EU Agreement.” At the E.U.’s parliament, which represents the E.U.’s citizens, the president of the European Council, Herman Van Rompuy, said in the wake of the agreement, “An intergovernmental treaty was not my first preference, nor that of . . . most of the member states . . . It will not be easy, also legally speaking. I count on everybody to be constructive, bearing in mind what is at stake.” Meanwhile, the Wall Street Journal was also reporting that investors were “largely dismissive” of the Council meeting  at which the extra-E.U. agreement on strengthening the enforcement mechanism of state deficit and debt limits had been reached at the end of the previous week. Alan Brown, chief investment officer at Schroders Investment Management, which had at the time almost $300 billion under management, said of the results of the Council meeting, “Yes, it was what I expected, and yes, I was disappointed.” Schroders was backing up this view with a modest bet against the euro. Relatedly, Barclays was forecasting the currency to fall from $1.30 on December 13, 2011 to $1.25 by June 2012. Besides the pessimism on the “intergovernmental treaty” as well as a possible increase of funds from the $500 billion cap on the agenda at a Council meeting in March 2012, the sheer uncertainty described by Van Rompuy lowers the value of the announced agreement and the outlook concerning the viability of the euro as well as the E.U. itself.



              Federalismus in Action: Jose Barosso of the E.U. Commission and Angela Merkel of Germany / NYT

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

Monday, December 12, 2011

The Visible Hand: Markets Forging a Stronger E.U.

Joschka Fischer, a former foreign minister of the state of Germany, said the agreement under which 17 state governments accept more oversight and control of their budgets by the European Union “was a big step, which was pushed on the Europeans by the markets.” Such pressure was necessary, given the conflict of interest bearing on state officials working at the federal level on a deal that would add a new competency to the E.U. “(I)n the end,” Fischer added, “the markets have limited the options of the political leaders, especially of Merkel, and pushed her into giving more support for the euro.” Giving more support for the euro meant giving more power to the E.U. at the expense of the state-level where Merkel has most of her power. From this vantage point (i.e., the power that state officials have at the E.U. level), it is amazing that the E.U. has been able to acquire any additional competencies.


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

Monday, December 5, 2011

The Democracy Deficit in Nominating Presidential Candidates

“Newt Gingrich is up, Herman Cain is out, and the attacks are getting sharper as the GOP primary campaign enters the final month.” The final month, that is, before “Iowa launches the contests that will choose the challenger to President Obama.” This has the ring of before time began, or before the beginning. That anything is decided before the beginning may seem metaphysically impossible even if it applies politically. One might demur, claiming that anything without a foundation ought not to be able to exist, let alone to stand. Can Americans borrow anything from the E.U.'s presidents that might improve how the U.S. president is selected?

The full essay is at Essays on Two Federal Empires.


Sunday, December 4, 2011

A Dilemma for the E.U.: A Convention or an Amendment?

In November 2011, European leaders began to talk about amendments to the E.U. that would “change the fundamental structure of the union.” Complicating the talks was ambiguity concerning the nature of the E.U. itself at the time. Foremost among the changes being discussed was the idea of a form of centralized oversight of the budgets of the state governments, with “sanctions for the profligate.” The existing E.U., while more than the American Articles of Confederation, was at the time found to be insufficient in keeping the debt crisis from spreading from state to state and engulfing the union itself and its currency. “The survival of the euro zone is in play,” one senior European official said. “So far it’s been too little, too late.” In this respect, the pressure for “ever closer union” was like that facing the Americans in the mid-1780s. Because the nature of the union was itself an issue, a convention composed of delegates—not state officials—directly elected by the people for the purpose might seem best suited. However, I contend that while rethinking the E.U. was not without merit at the time, the specificity of the planned amendment argues against the idea.


Thursday, December 1, 2011

Decadent Management: Burger King Dethroned

When a major company like Borders or Pan American declares it is going out of business—bankruptcy being all too often just a way to force creditors and unions to renegotiate—the public is often stunned. Indeed even a week before such an announcement, managers can assure customers under the veneer of an expressionless face or even a comforting smile—that the company is focused on “driving strong expansion in its many markets around the world” and will “strongly position” its brand. Driving expansion? Strongly positioning? An astute person will instinctively detect the scripted, vacuous jargon as the patina of a rather strange, if conformist, mentality that presumes to invent or misuse words with impunity, as if from a superior position in society. The quoted expressions are from Miguel Piedra, a spokesperson of Burger King, reported in a Wall Street Journal piece on Wendy’s being “positioned” to replace “the King” as number two in sales. If Piedra’s bureaucratic response is not enough of a red-flag, a visit to a Burger King restaurant might give the impression of a company that—absent the cushions of name recognition and capital—is on the verge of going out of business.

The full essay is in The full essay is in Cases of Unethical Business: A Malignant Mentality of Mendacity, available at Amazon.com.

Tuesday, November 29, 2011

An American President Meets the E.U.: Corrective Exigencies of a Debt Crisis

Political protocol can take some time to catch up to changed political realities. For over two hundred years, it has been assumed that U.S. presidents have met with their counterparts in E.U. states such as Britain, France, and Germany. During the European debt crisis, the New York Times reported, “in numerous private conversations and increasingly forceful public statements, [American] policy makers are urging their European counterparts to take big steps and move fast to reassure markets.” It was undoubtedly assumed that the counterparts were at the state level in the E.U., rather than in E.U. governmental institutions. So how are we to situate Barak Obama’s meeting on November 27, 2011 with José Manuel Barroso, president of the European Commission; Herman Van Rompuy, president of the European Council; and Catherine Ashton, the European foreign policy chief? 

                                                                   Doug Mills/NYT


Monday, November 28, 2011

A Syrian Offensive: Taking on International “Enforcement” of Human Rights

In Geneva on November 28, 2011, the Independent International Commission of Inquiry on Syria presented its report, which had been requested by the UN Human Rights Council. According to the report’s summary, the “deteriorating situation in the Syrian Arab Republic prompted The Human Rights Council to establish an independent international commission of inquiry to investigate alleged violations of human rights since March 2011.” The Commission interviewed 223 victims and witnesses. The Commission was able to document “patterns of summary execution, arbitrary arrest, enforced disappearance, torture, including sexual violence, as well as violations of children’s rights.”One might suppose that the Syrian government would have been seeking to placate the international organization and other governments.

The full essay is at "Taking on International Enforcement."


Source:

Neil MacFarquhar and Nada Bakri, “Syria Calls Arab League Sanctions ‘Economic War.’” The New York Times, November 28, 2011. 



Monday, November 21, 2011

The African Customs Unions and the E.U.: On Currencies

The East African Community (EAC) is Africa’s “most advanced regional trade bloc,” according to the Wall Street Journal. As of the journal’s report in late 2011, the EAC was already a customs union that guaranteed the movement of goods and the right to work across Kenya, Uganda, Rwanda, Burundi and Tanzania. The parliaments were working at the time on synchronizing immigration and tariff laws. “We want to develop this corridor vigorously and collectively,” Mugo Kibati, director of a Kenyan government program, said. The journal notes, however, that the EAC and other trading blocs in Africa, such as the Southern African Development Community, were “backing away from one prominent aspect of Europe’s economic union: a common currency.” Aside from any vague similarities that the fiscal differences between Greece and Germany may have to those between Zimbabwe and South Africa, the currency question itself is out of place for a NAFTA-like trade agreement.


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

Should the E.U. Represent Its States at the UN?

In 2010, it was proposed that the E.U. have an increased role at the UN in order to boost Europe’s profile as major player at the international level. One proposal would have given the E.U. the powers enjoyed by fully-fledged UN members, such as the right to make proposals and submit amendments, the right of reply, the right to raise points of order and the right to circulate documents. While there is no demand in the draft for a more prominent seating position for the EU, it was possible that the E.U. could have been moved to the center of the UN’s assembly chamber. Wherever the E.U. would have been situated, additional seats alongside a new European UN ambassador would have been made available for High Representative Catherine Ashton, the E.U. Foreign Minister, and her staff. Experts believed at the time of the proposal that such a role for the E.U. in the General Assembly would not significantly enhance the E.U.’s ability to influence policy at a UN level; instead, the proposal would have provided an opportunity for the E.U. to portray itself as a unified power on the international stage.
 

The complete essay is at Essays on Two Federal Empires.

Saturday, November 19, 2011

On the Role of the European Central Bank in Ending the Debt Contagion

According to the Wall Street Journal, “That the [ECB] has been forced to step into the power vacuum left by a fractious political class underscores the increasing centrifugal forces unleashed by the debt crisis.” Yet that pressure was being applied to the central bank to issue Eurobonds and buy more state government bonds in spite of the objections of German officials suggests that there were also centripetal forces acting on the center at the expense of the state capitals, even Berlin. It is important to view the E.U.’s “management” of its debt crisis through the prism of the history of European integration since the Shuman Plan in 1951, which called for ever closer union so as to obviate war and give Europe a stronger economic and diplomatic power in the world. The history of the European project can be characterized as a series of fits and starts, punctuated by momentary crises—each proffering potential ruin to the union itself. For example, France’s veto of Britain’s accession as a state must surely have struck some people as portending the end of the EC—the forerunner to the E.U. Yet from the vantage point of 2011, the conduct of the accession seems a mere hiccup on a much longer road of hills and valleys. Regarding the extent of integration by 2011 (e.g., monetary union), the question is whether European efforts to come to grips with the contagion of over-burdened state debt signify merely another valley, or an inherent contradiction or fault-line in the E.U. itself. Whatever the answer, the outcome will no doubt come about incrementally, as one might expect from E.U. history.

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

Tuesday, November 15, 2011

The Market Mechanism: Complicit in E.U. Debt Crisis

According to the New York Times, “How European sovereign debt became the new subprime is a story with many culprits, including governments that borrowed beyond their means, regulators who permitted banks to treat the bonds as risk-free and investors who for too long did not make much of a distinction between the bonds of troubled economies like Greece and Italy and those issued by the rock-solid Germany.” In going through these culprits and how they interrelated, it should not be lost that the market mechanism itself can be held as suspect, for at the very least it enabled the furtive games to be played for far too long. Indeed, the market itself did not do a good job for years in providing accurate risk-return relationships.

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


Monday, November 14, 2011

Monti and Papadernos in the E.U.: Leadership in Technical Expertise or Democratic Deficit?

“The moment of truth has come.” This was said by the head of state of the E.U.’s third largest state, Italy, in a televised address just after Berlusconi had resigned as the prime minister. Although the statement could be interpreted as referring to the need to reign in the Italian profligate system of public-sector patronage (which includes private contractors), Giorgio Napolitano could also have been referring to the credibility of his state at the E.U. level. “We need to restore confidence with investors and European institutions,” he continued before turning to the more tangible point that the state would need to refinance nearly 200 billion euros in government bonds before May, 2012.



                             Monti and Barroso                                    John Thys/Agence France-Presse/Getty

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

Thursday, November 10, 2011

Industry Self-Regulation: Too Idealistic for Futures

At the time of MF Global’s collapse amid hundreds of millions of dollars in lost customer funds, commodities and futures trading had for decades been “largely policed by the exchanges where they trade, setting up a potential conflict of interest,” according to the New York Times. The paper continues by pointing out that those exchanges, including profit-making companies such as CME Group, the parent company of the Chicago and New York Mercantile Exchanges and the clearing house used by MF Global, “oversee the very futures firms they rely on for business.” The Times refers to this conflict of interest as one centered on industry self-regulation. 
 
The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.

The Essence of Leadership

According to DePree (1989, p.19), the first responsibility of a leader is to define reality. This might seem metaphysically esoteric, but I believe DePree hit the nail on the head. Even though far less has been written in leadership research about the importance of viewing reality and interpreting it than about traits, styles and situational factors, defining reality is the fundamental task distinguishing leadership as a phenomenon (Caldwell, Bischoff & Karri, 2002, p. 153).

 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:

Caldwell, C, S.J. Bischoff, and R. Karri: 2002, “The Four Umpires: A Paradigm for Ethical Leadership,” Journal of Business Ethics 36, 153-163.
De Pree, M.: 1989, Leadership Is an Art (Doubleday: NY).

Tuesday, November 8, 2011

Greco-Roman Achilles’ Heel: Democracy or Leadership?

In assessing the abilities of the E.U. states of Greece and Italy to manage their respective debt-loads as expected by E.U. leaders, the impacts from the governance systems can be distinguished from the impact from compromised or failed leadership. In general terms, a forceful, visionary leader can leverage an existing governance system to “produce.” However, it is also true that a faulty system can make transformational leadership difficult if not nearly impossible.

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


Monday, November 7, 2011

Greece & Italy: Undercutting Market Confidence in the E.U.

As a federal system, the E.U. can be expected to contain a certain amount of economic disparity. The state bond yields in October 2011, for example, were—one could say—“diversified.” Investors relishing high risk-return could partake in Greek bonds while retired investors could safely stick to the German variety. A healthy federal system proffers something for nearly every taste, while constraining the outliers for the sake of unity.


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

Sunday, November 6, 2011

On the E.U. Debt Crisis: Lessons from the Early U.S.

In the March 2, 2010 issue of the New York Times, Roger Cohen illustrates how useful EU-US comparisons can be. He is careful to compare the E.U. of his time not to the contemporaneous U.S., but, rather, to it a few decades into its founding. In other words, he corrects for the impact of time on political development. This is not to say that the E.U. in 2010 was akin to the U.S. under its Articles of Confederation. The Articles treaty evinced far less integration politically and economically. For example, whereas the Articles sported only a common council of delegates from the states, the E.U. in 2010 had a presidency (the European Council, whose president was Van Rompuy), an executive branch (the E.U. Commission, whose chief executive was Barroso), a bicameral legislature (the E.U. Council (of Ministers) and the E.U. Parliament), and a supreme court (the European Court of Justice, or ECJ). In fact, whereas under the Articles the American republics held governmental sovereignty, the ECJ held in 1963 and again in 1964 that E.U. law is supreme over state law and state constitutions. In short, whereas the Articles did not split the atom of governmental sovereignty, the E.U. in 2010 was a federal system of dual sovereignty. Like that of the U.S., the E.U.'s federal system is itself on the empire level; its republics being commensurate with the early modern kingdoms.


The complete essay is at Essays on Two Federal Empires.

Friday, November 4, 2011

GlaxoSmithKline: Born Again Ethically?

GlaxoSmithKline, a drug company based in the E.U., agreed in 2011 to pay $3 billion to settle the U.S. Government’s civil and criminal investigations into the company’s Medicaid pricing practices and sales practices, including illegal marketing of Avandia, the diabetes drug linked to coronary problems. The settlement amount surpassed the previous record of $2.3 billion paid by Pfizer in 2009. Even so, it is doubtful that $3 billion proffered enough of a punch to motivate either Glaxo’s board or CEO to do what would be necessary to extirpate a corporate culture perhaps too comfortable with cutting corners.

The full essay is in Casesof Unethical Business: A Malignant Mentality of Mendacity, available in print and as an ebook at Amazon.

Thursday, November 3, 2011

Just the Facts: Empirical Social Science Overplayed

Tilburg University in the E.U. is known to have an emphasis on empirical studies in the social sciences (including business). With this bent, the university is typically considered to be closer to the American academic tradition than that of Europa. So when Dr. Diederik Stapel, a psychology professor at Tilburg, acknowledged to having committed academic fraud in several dozen published articles in academic journals, the academic status of empirical research itself was thrown into question. Experts point out that Stapel “took advantage of a system that allows researchers to operate in near secrecy and massage data to find what they want to find, without much fear of being challenged.” Indeed, it is rare even for peer-reviewers of potential articles to demand to see the raw empirical data supporting a given study’s conclusions. According to Dr. Jelte Wicherts, a psychology professor at the University of Amsterdam, the problem of data being misused by the scholars who collect and analyze it is widespread in the discipline of psychology.

In a survey of more than 2,000 American psychology professors, Leslie John of Harvard Business School found that 70 percent had acknowledged (anonymously) to cutting some corners in reporting data. Add to this the problem of unintended statistical errors and the problem of being able to rely on scientific results becomes acute. Dr. Joseph Simmons, a professor of psychology at the University of Pennsylvania’s Wharton School of Business says, “We know the general tendency of humans to draw the conclusions they want to draw.”

Indeed, the “academic” field of corporate social responsibility has been rife with “scholars” writing to impose or justify their critical ideology of the modern corporation. For example, at Amiti Etzioni’s conference at Harvard Business School on his theory (or movement?) on socio-economics, one professor demanded that the participants form a labor party. The Harvard professors in attendance pointed out that Etzioni was simply trashing the neo-classical economic paradigm (economic liberalism, or free-market competition) without proffering an alternative theory. This did not stop Dr. Etzioni from continuing to advance his agenda, which I submit was precisely to condemn the neo-classical economic theory. Similarly, “scholars” of CSR tend to presume that corporations have an obligation to share corporate governance with stakeholder groups and give more philanthropically. Never mind that the purported obligation is typically not justified beyond the “scholar’s” own ideology. I would be surprised if the empirical research was not highly skewed in the direction of that ideology.

Of course, the problem of empirical science is not limited to disciplines such as psychology and business & society, which are particularly subject to ideology. Once I sat in on a doctoral seminar on strategy. The professor, who would go on to get tenure at a major business school, advised the doctoral students to check with the managements of the companies they are surveying before publishing the results in case any of the managements do not like the conclusions. Otherwise, the “professor” observed, consulting opportunities might be diminished. That several of the students had been bankers and would be conducting empirical studies of the financial sector ought to concern anyone who has heard of “too big to fail” and the related over-reliance on models designed to manage risk.

So whether in dealing with human psychology or huge financial firms, skewed empirical research can be dangerous. Politically, the CSR agenda could result in too much power being amassed by stakeholder groups at the expense of property rights. Moreover, the discipline of psychology (and that of business ethics) suggests that the emphasis on empirical studies, particularly at American universities, is ahistoric. Before the twentieth century, psychology was part of philosophy. Perhaps the problems with empirical science might lead to a re-consideration of the value of philosophical psychology in terms of knowledge as well as practice. Similarly, the interlarding of business ethics (a subfield of ethics, which in turn is a field of philosophy) with empirical surveys—as if what is counts for what ought to be—can be questioned. Rarely does a business ethicist stop to wonder why philosophers do not send out surveys as part of doing philosophy. David Hume’s naturalistic fallacy provides a good explanation for why they do not.

My overall point is that the value of empirical studies in the social sciences (and applied philosophy) have been overstated, particularly at American universities, while theory development and the historic housing in philosophy have been relegated or dismissed outright. Along with the hypertrophy in empiricism has come a “cubby-hole” mentality wherein Frederick Taylor’s specialization of labor has somehow been applied to scholarship. One could excuse business schools for conflating what they are studying with what they are. The problem is when the academic enterprise itself comes to resemble enterprises that make widgets. It is no accident, I submit, that the twentieth century will not be known for many bright spots in the social sciences or philosophy. One could say that Plato and Nietzsche make good book-ends, with engineers and natural scientists taking over to produce a technological and information revolution. Yet who asks what the opportunity costs have been in reducing progress to the technological variety? What cost was there in the twentieth century in having technicians and ideologues for philosophers, rather than thinkers capable of seeing the big picture and proffering unique vistas? If the case of Dr. Stapel comes as a surprise, it might be because we have become too ensconced with “facts” at the expense of meaning.


Click to add a question or comment on Diederik Stapel’s fraud and on the excesses in empirical social science more generally.

Source: 
Benedict Carey, “Fraud Case Seen as a Red Flag for Psychology Research,” The New York Times, November 3, 2011. http://www.nytimes.com/2011/11/03/health/research/noted-dutch-psychologist-stapel-accused-of-research-fraud.html


Tuesday, November 1, 2011

Europe's Political Elite Takes on Popular Sovereignty in Greece

As October 2011 was coming to an end, George Papandreou, prime minister of Greece, “stunned Europe by announcing a referendum” on the latest bailout from the E.U. and set the vote for January 2012. Shocked E.U. leaders were doubtless shaking their heads with a mix of incredulity and frustration, as they had not even been consulted on the prime minister’s proposal. Meanwhile, the yields on Italy’s bonds continued to increase, as did the spread between German and Greek 10-year bonds. The world was left to whether the Greek voters would reject their government’s austerity plans and, relatedly, whether the E.U. would augment its bailout of the state as per the agreement reached only days before the prime minister’s announcement.


                                     Greek Prime Minister George Papandreou announcing the referendum    AP

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

Monday, October 31, 2011

7 Billion People: Humanae Vitae Compromising the Transmission of Human Life

According to the Huffington Post, “Amid the millions of births and deaths around the world each day, it is impossible to pinpoint the arrival of the globe's 7 billionth occupant. But the U.N. chose [October 31, 2011] to mark the day with a string of festivities worldwide, and a series of symbolic 7 billionth babies being born.” I contend that the milestone is nothing to celebrate; rather, it should serve as a wake-up call for us all, lest the species continue to maximize itself right out of existence. Both the slope and its relative abruptness in a historical perspective ought to give us all pause in our assumption that our species will go on without either self-regulation from us or a drastic correction from nature. 

                                            Source: UN Population Division

It may simply be human nature to focus on putting out individual brush fires without pausing to ask whether one person set them all and to look at the fires in a larger, historical perspective. It could be that the fires are fueled in large part by decades of built-up deadwood from "no fire" policies. In other words, it could be that we are more complicit than we know. Our presumption that absolves us of any role and our assumption that we can't be wrong may be the death of our species. Before getting to the role of religion as illustrative of this presumption and assumption as applied to over-population, I want to briefly discuss the relevance of global population to several problems facing the world so the gravity of the problem can be better grasped.

Other things equal, more people on Earth means more consumption and thus more pollution. In other words, a species that does not self-regulate its size may alter the ecosystem (i.e., climate) beyond the range of that specie’s own habitat. In academic terms, a schizogenic (maximizing) variable can breach the “ecologizing” constraint that is an ecosystem. Still less understandable, a schizogenic variable within a system can destroy that system’s homeostatic nature. In short, the 7 billion milestone (and still counting) portends baleful consequences for our species.

In addition to climate change, one could point to commodity supply, such as foodstuff and energy. The increase in the price of corn, for example, could be attributed to the increasing use of ethanol (made out of corn). Going further, an increasing population means increasing demand of both, so the explanation should not rest with “alternative energy sources” as an issue. Both food and energy can be expected to be stretched as the global population increases. Oil companies going to more high-risk extractions of oil (e.g., deep-water wells in the Gulf of Mexico) can be viewed as still another manifestation of what happens when energy supplies are relatively fixed. Fundamentally, increasing global population magnifies the disconnect between the maximizing variable and finite resource supplies. If we as a species refuse to regulate ourselves as a species, we do so at the peril of our progeny. Indeed, the transmission of human life may hang in the balance ironically as people and certain organizations enable the maximizing tendency in order to transmit human life.

As the world’s population was thought to surpass 7 billion, Eric Tayag of the Philippines’ Department of Health warned, “Seven billion is a number we should think about deeply. We should really focus on the question of whether there will be food, clean water, shelter, education and a decent life for every child," he said. "If the answer is 'no,' it would be better for people to look at easing this population explosion." I contend that Tayag was understating the problem and thus the need for corrective action at the global level. Problematically, however, some influential international organizations have priorities that exacerbate rather than solve the problem.

The Huffington Post reports that in the Philippines, “much of the population question revolves around birth control. The government backs a program that includes artificial birth control. The powerful Roman Catholic church, though, vehemently opposes contraception.” The vehemence itself may be a problem for the Vatican. The teaching itself may evince an overreach from the vantage point of a religion. As such, the foray may unnecessarily compromise the Vatican’s credibility even to the Catholic laity.

According to the Huffington Post, “The Catholic clergy opposes abortion even in cases of rape and incest, stem cell research and all artificial contraception and sterilization methods, including birth control pills and condoms. But according the 2008 National Survey of Family Growth, 98 percent of sexually active Catholic women over the age of 18 have used some form of contraception banned by the Vatican. Even among more religious Catholic women, who attend Mass on a weekly basis, 83 percent use some form of contraception. In 2009, 63 percent of Catholic voters said they support health insurance coverage for contraception, including birth control pills, according to a Belden Russonello Strategists poll.” Essentially, the laity have been saying that the hierarchy has been overstepping its proper domain, given the Catholic Church is a religious organization and morality is not theology. Ironically, the overreach has diminished rather than extended the clergy’s influence. The root of the clergy’s error may be their conflation of morality and religion.

The “transmission of human life,” and, moreover, “the happiness of human beings” referred to as the basis of the humanae vitae encyclical have at best an indirect relation to religion or theology, which, being about God’s nature, transcends the human domain. In other words, the encyclical has a rather secular basis. It is at best peripheral to worshipping God. To claim the transmission of human life is somehow like God being the Creator obfuscates the human and the divine. It is thus to make a category mistake.

Even in terms of humanae vitae as an ideal, acting only when one can act in the ideal can be criticized. Indeed, this dictum is inconsistent with the very notion of ideal. For example, to say that one should ideally eat fruits and vegetables is not to say that one must never eat a cookie. Likewise, to say that a man and woman being in love and actively involved in the transmission of human life is an ideal in married life is not to say that one should limit oneself to it. Rather, it is to say that making love with the possibility of transmitting human life is better than making love in marriage without transmitting human life. It is a fallacy to go from this to claim concerning an ideal that “therefore” one should never act other than in the ideal.

It would be unfortunate if the transmission of the human species were compromised rather than sanctified by a religious organization whose clerics mistake the very notion of ideal and apply it in a domain that is only indirectly related to religion. In other words, even well-meaning maximizing (i.e., over-reaching) can function as a catalyst in the downfall of the human species. The underlying culprit may be individual self-interest, whether by individuals or organizations, that is inherently partial and thus puts the part ahead at the possible expense of the whole. Beyond the self-interest may be the intractable assumption that one cannot be wrong, for this assumption alone can blind one to the harm of which one is unknowingly complicit. The end of the transmission of human life may come down to human stubbornness and presumptousness--that is, human pride, ironically perhaps most strident in religious garb.


Sources:

Encyclical Letter Humanae Vitae, Paul IV.

Jim Gomez and Tim Sullivan, “World Population Hits 7 Billion: Babies Celebrated Worldwide,” The Huffington Post, October 31, 2011. http://www.huffingtonpost.com/2011/10/30/world-population-7-billion_n_1066475.html

Laura Bassett, “The Men Behind the War on Women,” The Huffington Post, November 1, 2011. http://www.huffingtonpost.com/2011/11/01/the-men-behind-the-war-on_n_1069406.html


Saturday, October 29, 2011

European Banks’ 50% Write-Down: Discounting Debt Insurance (CDS)?

In “Europe’s Rescue Plan,” The Economist (October 29, 2011) opines on the “fixes” that had been announced just days before by E.U. leaders on the public debt crisis. I find three points of note that are particularly worth elaboration. "Bond markets may be suspicious of guarantees made by countries that would themselves be vulnerable if their over-indebted neighbours suffered turmoil." This downside is that of systemic risk. When Wall Street banks began to tank as the value of their CDOs declined, so too did AIG, which was to fund the insurance policies (CDSs) on those CDOs. In other words, we tend to discount the possibility that the entire ship could tank.

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

Thursday, October 27, 2011

Hedge Fund Lobby: Breaching Ethics

In a rule adopted by the SEC on October 26, 2011, hedge funds over a certain size must report information—the amounts required depending on the fund’s size. The devil, as it were, is in the details. In this case, they reflect the intense lobbying of hedge funds and their advocates. As a result of the lobbying, according to The New York Times, the “changes call for only the largest funds to report the most detailed information, eliminate any penalty of perjury for misleading reports and delay for six months the initial reports for all but the largest funds.” Whereas the matter of the amount (and type) of information required involves or potentially puts at risk the funds’ secret strategic competitive advantages and the matter of a start date involves technical points such as how much effort is needed to cull the required information, the elimination of any penalty for perjury does not correspond to any legitimate business concern. Indeed, it makes on sense to require information if it can be misleading with impunity. It is as if the SEC regulators had told the hedge funds, You will have to submit information to us but it can be misleading. The fund managers would be apt to reply, Oh, ok.

The full essay is in Cases of Unethical Business, available in print and as an ebook at Amazon.com.  


Tuesday, October 25, 2011

Britain at a Crossroads?

The prime minister of the state of Britain faced a “rebellion” in his own party on October 24, 2011 as eighty conservatives backed a nonbinding referendum on whether the state should secede from the union. “I don’t vote against the government lightly, but I think when there is a matter of principle then that must come first,” Nick de Bois said. “We have a considerably changing dynamic [in the E.U.] and given that . . . and the fact that anybody under 54 has not had a chance to vote on [whether Britain should secede from the E.U.], it is appropriate to set in motion that opportunity,” he said. De Bois’ sentiment mirrors that of Thomas Jefferson, who argued that each generation should have the opportunity to affirm or cancel the social contract of the generation before.

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

Sunday, October 23, 2011

Volcker on the Market and Regulation

Paul Volcker, former Chairman of the Federal Reserve, may strike the conventional "wisdom" as an oxymoron regarding the market mechanism and government regulation. I contend that he could teach that "wisdom" a lesson or two.

Regarding systemic risk, Volcker has called the perils of institutions that are too large or interconnected to be allowed to fail the greatest structural challenge facing the financial system. He said we must shrink the risks these companies pose, “whether by reducing their size, curtailing their interconnections or limiting their activities.” This goes beyond what The New York Times refers to as his “addressing capital requirements (make them tough and enforceable), derivatives (make them more standardized and transparent) and auditors (ensure that they are truly independent by rotating them periodically).” To reduce a large corporation’s size, interconnections, or business activities is essentially to say that a company that is too big to fail should not be permitted to continue to exist unless it is downsized. So it is not enough to increase the capital requirements of a large, $1 trillion plus bank that is too big to fail; the bank itself must shrink. Even though market pressure could lead a bank such as Bank of America to downsize, that mechanism is not enough; government should step in to make sure the downsizing is adequate even if the market is ok with the status quo. Essentially, the message is that the market mechanism itself is insufficient to obviate systemic risk. At the same time, Volcker wants to bolster that mechanism by riding of it of the effects of large players that are guaranteed by government even as they are not controlled by it. 

Regarding Fannie and Freddie, Volcker, who was once a presidential appointee to Fannie’s board said, “A public agency intervening in the mortgage market in a limited way doesn’t bother me. But if you want to subsidize the mortgage market, do it more directly than hiding it in a quasi-private institution.” The very nature of a “quasi-private institution” is abhorrent to him because the profit motive does not go well with being protected on the downside by a government. “You ought to be either public or private; don’t mix up private profit-making opportunities with an institution that is going to be protected by the government but not controlled by it.” Such a mix can be expected to result in distorted incentives, such as unduly risky behavior. Furthermore, the mix enables government officials to hide the government’s potential liability from the guarantee. Referring presumably to Treasury officials, Volcker said, “They didn’t want the mortgage to be a government expenditure. It was a volatile thing to put on the budget. They made the wrong choice.” The choice can be explained by the fact that it followed the path of most convenience from the standpoint of democratic accountability. Therefore, from both the standpoint of economics and political theory, private should be clearly distinguished from public as regards institutions. Volcker was not saying, however, that government ought to stay out of the housing market—only that such involvement should not be mixed with the profit motive.

To be sure, Fannie and Freddie have powerful defenders on Capitol Hill and at the White House. Extracting the two mortgage guarantors from the housing market would be an up-hill battle. Vested power in the U.S. can make use of the government’s many access-points, moreover, to stave off change. This is also true regarding proposals to regulate mutual funds. “Because they are not subject to reserve requirements and capital requirements,” Volcker observed, “they are a point of vulnerability in the system.” Yet in a letter to the Financial Stability Board, an international organization charged with developing strong regulatory and supervisory policies for financial institutions, the Investment Company Institute said: “We do not believe banklike regulation is appropriate, necessary or workable for funds registered under the Investment Company Act of 1940.” Strangely, Americans tend to take the rather-obvious positions of such vested interests at face value and accord them validity. Well ok, the conventional wisdom might conclude, then I guess we shouldn’t regulate mutual funds then. The conflict of interest in the mutual fund industry’s own position regarding regulation ought to have the immediate effect of relegating that position in the public debate and in Congressional offices.

Interestingly, Paul Volcker simultaneously disavows relying exclusively on the market mechanism (e.g., regulating to minimize systemic risk) and advocates keeping any government involvement in the market from mixing with the profit motive. In other words, he opposes distortions on that motive even as he is not laissez-faire. Because he is fine with a role for the government in the housing market as long as the public sector involvement does not work through an institution’s profit motive, I view him as being closer to the "government regulation" position than the "free market" position. Even so, he should not be pigeon-holed as “free market” or as “big government” because he does not line up with the "purists" on either "side." Even as he is for financial regulation such as the Volcker Rule, he wants to stress the importance of an "arm’s length distance" between business and government in a market. Government can act in its unique way to protect the market itself (i.e., minimize systemic risk by breaking up firms too big to fail and regulating shadow banking) even as the profit motive is protected from government-backed distortion. The rest of us can take a lesson from Volcker’s wisdom. Accordingly, we might want to avoid easy slogans being bandied about on either “side” of the ideological aisle.

Source:

Gretchen Morgenson, “How Mr. Volcker Would Fix It,” The New York Times, October 22, 2011. http://www.nytimes.com/2011/10/23/business/volckers-advice-for-more-financial-reform.html

Friday, October 21, 2011

Conflicts of Interest at the Federal Reserve

The Huffington Post reports that “(m)ore than a dozen members of the regional Federal Reserve boards have had ties to banks or companies that received emergency funds during the [2008 financial] crisis, according to [a GAO report]. The report highlights a close relationship between the Fed's regional banks and many of the institutions they were lending to, adding credence to concerns that the financial sector enjoyed a largely consequence-free rescue in the wake of the crisis, thanks to its connections with the federal government.” Meanwhile, mortgage borrowers with houses “under water” got hammered. From the crisis to the release of the GAO report in October 2011, there were millions foreclosures in the United States, with very little in the way of mortgage modifications or refinancing for those homeowners who needed relief. In other words, the bankers had connections in the banking regulatory agency while Congress left the troubled homeowners—constituents—at the mercy of the bankers. Their agency having their backs, the bankers could afford to take a hard line on the mortgages. The playing field, in other words, is not at all level. 


The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.  

Thursday, October 20, 2011

E.U. Agenda: Taming Bloated Greek Patronage

As E.U. leaders wrestled in the fall of 2011 with how to bail out those state governments that had been amassing relatively large semi-sovereign debt loads, residents in relatively solvent states such as Germany were frustrated with what they perceived as profligate over-spending in Greece. It is possible that even the Germans did not realize how engrained the excessive politically-based Greek bureaucracy had become. I suspect that for many Greeks, news of their living beyond their means was met more with denial and utter disbelief than an attitude-adjustment. In other words, a vast disparity in perspective exists on the ground as the E.U. struggled to come to grips with the debt crisis. The “ever closer union” necessary for the E.U. to rise to the occasion has as its foremost obstacle the disparate perceptions existing within the union (and enforceable by state governments).

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

Limited Tenure For CPA Firms?

Arthur Levitt, who headed the Securities and Exchange Commission from 1993 to 2001, “sought to root out conflicts of interest at audit firms in 2000, and urged Congress to adopt auditor term limits in 2002 after the Enron and WorldCom scandals.”  The Wall Street Journal also reports that Levitt did not buy the argument made by companies that it would cost them a lot of money to change audit firms. To be sure, he acknowledged that some added cost would be entailed in a system of mandatory auditor “term limits,” but a long auditor relationship “raises the perception,” he maintained, “that the auditor is very much beholden to the company and not totally independent. An environment of skepticism should trump the fraternal environment that tends to occur after a relationship has developed over a period of years.” Indeed, Arthur Andersen’s people were well ensconced at Enron by the time the energy giant went bust. In fact, the auditors even approved the questionable “partnership” accounting (used to hide debt).  Nor did the auditors communicate any misgivings to the audit committee of the company’s board of directors. The auditors were “in” with a rancid management. 


The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.  

The Franchise: A Flawed Arrangement

The franchise arrangement combines the reach (and efficiency) of central advertising with the ability to respond to local differences. I suspect that the benefit from local flexibility is typically overdrawn, such that the value of the franchise arrangement itself is overstated. Meanwhile, the downside in local autonomy is, I suspect, understated. That downside includes the propensity to engage unethically based in part on lack of character-virtues and on the accurate perception of weak accountability within the franchise arrangement. The downside also comes into greater play than perhaps is realized because management on the local level can be rather bad in quality (from a managerial standpoint). In other words, slim pickings with regard to managerial talent can be a factor at the local level. Without mechanisms of accountability from “higher up,” front-line managers can get away with an astonishing amount of bad (and unethical) managing.

For example, I stopped into a Papa John’s franchise on a weekday at 2:30p.m. to buy a slice of pizza. The employee told me that during mid-afternoons, he offers two for one slice at the regular price. So I bought two-for-one. The slices were terrible—the cheese almost non-existent. The next day, I happened to be passing the same establishment and thought I would see if the pizza was any better. I told the same employee that I wanted the same two-for-one. “I’m not doing that today,” he replied. “The pizza is fresher.” So apparently the two-for-one at the regular price is a matter of employee discretion, rather than being something a customer can count on. I was astonished because his manager was standing next to him as the employee spoke. As I was saying that I would pass on ordering anything, the manager suggested I order cheese-sticks instead. I just looked at him. He was utterly indifferent as to whether his employee had misled me, and yet that manager was in a position of authority sans accountability. There is probably nothing worse to a customer than an employee or manager going back on his or her word with the sense of impunity. I suspect that this is a common pattern in franchise businesses.


I have experienced local managers of Best Western, Motel 6, and Days Inns hotels/motels going back on their word, only for the corporations’ respective “customer service” employees to tell me that the managers at franchise properties can do whatever they want. In one such case, I later learned that the local police department had had so many complaints from customers about the local hotel’s manager that the chief had called the corporation only to be told that the buck stops with the local manager! The corporation could do nothing (apparently). At the very least, a conflict of interest exists in turning over a complaint against a manager to the manager himself, yet this ethical issue is apparently a casualty of the franchise arrangement; accountability regarding unethical local managers simply does not exist where the franchisee owner looks the other way. I suspect that the squalid managers know when they can get away with cheating customers for short-term financial gain. Such managers can thus easily exploit one of the downsides of the franchise arrangement itself, with the customers having little recourse.

We can perhaps generalize to say that the managerial skill (and ethical conduct) at the local-franchise level is insufficient to justify the looseness in the franchise-arrangement’s mechanism of accountability on managers and employees (and even franchise owners). That is to say, the franchise arrangement itself is flawed because it does not permit mechanisms that are sufficient to correct bad and unethical local managers—or at the very least to give those winners the sense that there could be such accountability exerted on them. 

In fact, the franchise arrangement is flawed even apart from local managerial decadence and incompetence. For example, particular Subway franchises do not honor the specials advertised by Subway. In fact, next to the Papa John’s franchise location that I walked away from, a Subway franchise was selling subs, only without the month’s specials. Here, the problem is not managerial ineptitude or unethical conduct; rather, the fault lies in the franchise agreement itself, wherein individual franchisees can opt-out of particular advertised-specials. This loophole enables the possibility wherein a customer drives to a subway expecting to be able to purchase a special only to 1) be informed that there is no special there and 2) go home empty-handed. A potential customer in that situation would not be wrong in feeling misled even if it is not technically false-advertising (given the ads’ fine print). Franchisees should be required to honor and fulfill anything promised in the corporation’s advertisements. Otherwise, the arrangement itself is inherently unfair to customers. Again, the structure of the arrangement is found wanting and should be tightened, both for reasons of effectiveness and ethics. 

The weakness inherent in the franchise arrangement can be grasped by situating it along a spectrum running from a confederal alliance to (modern) federal government. I contend that the franchise arrangement is too close to the confederal arrangement in the case of managerial and employee accountability. Whereas the polity members of a confederation hold all of the sovereignty in the confederal system, both the members and the government at the federal level are semi-sovereign in modern federalism. Also, whereas the confederal level can only reach its member polities, a federal government can reach the individuals inside the member polities. A federal government thus has more authority to hold citizens accountable even within their respective states (state governments do too). Where a state government looks the other way on racial violence, the FBI can step in and arrest the KKK individuals. In a confederation, this would not be possible; the state government alone reaches the citizens, and the authority at the confederal level is typically very limited and subject to support from all or a supermajority of the polities in the confederation. 

The franchise arrangement evinces “dual-sovereignty” by analogy because the contract gives the franchisees autonomy to run their businesses as they see fit while subjecting them to specific requirements (e.g., products, signage, furnishings) that represent the “unity.” However, even though it is technically “modern federalism,” the arrangement resembles a confederation as regards managerial and employee accountability. That is, they requirements do not typically include managerial standards and accountability mechanisms; these are left to the “state governments.” As long as they adhere to the specific requirements, franchisee owners are largely autonomous in terms of how they have their businesses managed internally, or “domestically.” If there is a violation of one of the specific requirements in the franchise agreement, the corporation treats the franchisee business as a unit and holds the franchisee-owner to account. In this sense, the arrangement functions like a confederation. I submit that local management (and staffing) is typically not sufficiently capable (and forthright) to justify this. Therefore, to remedy the problem, an additional transfer of “sovereignty” to the corporation should be made such that a “check” or accountability mechanism can exist at the corporate level and reach directly to the franchisee’s managers and employees, even without respect to the franchisee-owner. By analogy, the FBI can arrest individuals at a KKK rally without checking with the governor of the particular state. Otherwise, inept or unethical franchisee owners will be able to cover for their hires. Indeed, “bad” employees may simply be doing an owner’s dirty work.

In conclusion, effective and ethical management does not extend as far locally as we, the general public, tend to assume (particularly in the food and hotel/motel industries). Corporations utilizing the franchise legal arrangement should strengthen their ability, in the legal documents, to hold local managers (and their employees) accountable. Customers would appreciate an employee in customer service actually going to bat for us, rather than giving us the quotidian “apology” only to say they can’t actually do anything about the problem because the buck stops with the local managers on X. We should not have to accept bad or dishonest business practitioners simply because they are numerous and the franchise arrangement itself is inadequate. Furthermore, just because certain customers can indeed be quite rude does not mean that holding managers and employees accountable for going back on their word is somehow excessive because serving the public is difficult. I suspect that American consumers in particular put up with much more crap at the retail level than necessary. In other words, the business of America could be done a lot better, yet for some reason we tend to assume that the status quo is unavoidable. We may even have convinced ourselves that efficiency justifies “a few bad apples.” Business itself would benefit were accountability mechanisms strengthened, and you and I would not suffer so many fools holding leverage over us on account of their positions. We need not be utterly frustrated with a dishonest, “my way or the highway” rigid and self-centered manager or employee. Life is too. So we do not have to accept the franchise arrangement in our business system and society simply because franchising is convenient to corporations. I contend that the arrangement only seems to be in their financial and strategic interests. The corporate executives are overstating the quality and honesty of their franchisee-owners and their hires. Sadly, uprooting even a putrid tree can be an exercise in futility if the sordid roots are deep and entrenched with vested interests. 

Click to add a question or comment on managerial (and employee) accountability in the modern franchise arrangement.

Tuesday, October 18, 2011

Deloitte: A Culture of Least Resistance

On October 17, 2011, the Public Company Accounting Oversight Board issued a statement saying audits should protect investors. “The board therefore takes very seriously the importance of firms making sufficient progress on quality control issues identified in an inspection report in the 12 months following the report,” the statement said. Not having seen such progress at Deloitte, the board made its 2008 report on the firm public. The report “cited problems in 27 of the 61 Deloitte audits it reviewed, including three where the issuing company was forced to restate its financial statements.” This was “an unprecedented rebuke to a major accounting firm,” according to The New York Times. “In too many instances,” the report stated, inspectors from the board “observed that the engagements team’s support for significant areas of the audit consisted of management’s views or the results of inquiries of management.” In some cases, according to the Times, “Deloitte auditors did not bother to even consider whether accounting decisions made by companies were consistent with accounting rules. Instead, auditors accepted management assertions that the accounting was proper, the board’s report said.”

The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.

Sunday, October 16, 2011

Police Against Protesters: Sadism or Politics?



The day after several marches and rallies by the “Occupy Wall Street” movement in New York City, The New York Times reported that “two dozen people were arrested at a Citibank branch on LaGuardia Place on trespassing charges. Some witnesses said that the protesters had tried to leave but were locked inside by bank employees. ‘They were trying to leave, but they wouldn’t let them,’ said Meaghan Linick, 23, of Greenpoint, Brooklyn. She said one woman who had been inside and left was forced back inside by police officers. Citibank, in a statement, said the protesters ‘were very disruptive and refused to leave after being repeatedly asked, causing our staff to call 911.’ The statement continued, ‘The police asked the branch staff to close the branch until the protesters could be removed.’” The Times report does not mention whether the protesters were existing Citibank customers trying to close their accounts. The report does refer to this at a Chase bank. “Earlier, about a dozen protesters entered a Chase branch in Lower Manhattan and withdrew their money from the bank while 300 other people circled the block, some shouting chants and beating on drums. The former Chase customers, who declined to reveal how much they had in their accounts — though a few acknowledged it was not much — said they planned to put their money into smaller banks or credit unions.’ The more resources we give to small institutions, the more they’ll be able to provide conveniences like free A.T.M.’s and streamlined online banking so they can compete with the larger banks,’ said Hannah Appel, 33, a postdoctoral fellow at Columbia University.” The report does not indicate whether the former customers were arrested.
From the report, it does not appear that anyone was arrested for closing a bank account; the protesters at Chase closed their accounts but were not arrested, while the protesters at Citi did not close their accounts but were arrested (for trespassing). Of course, the newspaper’s information could be mistaken. Were any customers arrested simply for closing a bank account, both the bank branch’s manager and the police involved should be terminated from their respective employments and prosecuted. The report does indicate that Citi employees locked protesters inside the bank. This act constitutes false imprisonment, which is illegal. I would think that the subsequent arrests would be thrown out by a judge.
I suspect that psychologically abusive persons are a sizable presence on many police forces. From casual observation, I have been surprised at how quickly and easily a significant number of police employees cross the line simply because they can—meaning that they assume without reservation that they can get away with trespassing the rights of others with impunity. The pattern is no accident.
Beyond orchestrated political uses of police forces (e.g., to teach those kids a lesson), present police recruitment procedures across the United States are inadequate in ferretting out mentally disturbed, abusive personalities. Furthermore, mechanisms to impose accountability on individual employees of police departments are woefully impotent, given the lack of self-restraint or even apparent self-questioning by police employees who are going to do what they are going to do, period. So, besides investigating particular cases of how the political or business elite uses police departments against the rights of protesters, elected officials in towns and cities (at the urging of state- or federal-level officials if necessary) could do more in seeing to it that the citizens are not abused by individual police employees by 1) ordering police chiefs to expand the role of psychological tests and interviews in the recruitment process and 2) instituting an external, independent committee or board with the power to fire police employees for abusing (or threatening to abuse) their authority.
Concerning recruitment, it is important to keep in mind that no one has a right to be on a police force. It is especially the case that bad attitudes need not apply, yet it does appear that they are extant on police forces. The NYPD, for example, has a long history of police brutality and cover-ups, which suggests that the recruitment process is woefully inadequate in screening out psychologically troubled candidates.



                           Anthony Bologna of NYPD pepper-spraying protesters following his orders


Concerning accountability, enforcement of the law against police who go beyond their authority at the expense of other people should be strengthened and harsher sentences should be enacted. In some jurisdictions, even the laws by which police can make arrests should be tightened. In New York City, for example, police can arrest people for deemed “safety issues” even if no law had been broken. Outside an event run by the Huffington Post, the police lied to author Naomi Wolf when they stated that the Post’s permit barred protests on the sidewalk. Even though Wolf verified with the event organizer that the police claim was false, the police arrested her after she joined some protesters walking up and down the sidewalk (i.e., not obstructing foot traffic). At the police station, a sergeant told her she was arrested for a “safety issue.” According to the Huffington Post, “The cop didn’t dispute her claim that she wasn’t breaking the law. But she said he explained that whenever police deem it a safety issue, they can make an arrest.” Given the propensity of the police to arrest unlawfully, this loophole should be tightened or replaced with procedures triggered in the event of a disaster (not just safety) that can be independently documented (e.g., an explosion in a subway station).  
I suspect that the lack of accountability on police employees who take it on themselves to extend their force beyond the law stems from the fact that enforcement mechanisms are not typically sufficiently independent of the police and local governments. Even “internal affairs” is evidently not sufficient. Police on the beat not sensing any viable external restraint in abusing others is itself indicative of too little accountability on the books as well as in practice. In other words, the attitude itself bespeaks a lapse in the system, which the offending persons undoubtedly know exists and can be counted on as they impose themselves even on people they know to be innocent. A police employee who uses his or her position to intervene in a civil matter, for example, should be fired because it can be assumed that the encroachment was intentional. Also, a police employee who pushes or hits a non-violent citizen without the latter having resisted arrest should be fired. Additionally, the offending officer should be prosecuted. In fact, state legislatures should stiffen the penalties as a deterrent. The penalties for police employees should be stiffer than for other citizens because the right to legitimate force carries with it a special obligation. Breaking a special duty warrants a longer sentence.
Whereas some of the “Occupy Wall Street” protesters referred to “police terrorism,” such hyperbole should be replaced by sadism, the deriving of pleasure by inflicting pain on others. This diagnosis would doubtless apply to Anthony Bologna, who sprayed innocent people with pepper-spray. Beyond politics, the deeper problem is that of sickness. What would happen, je me demande, if the protesters simply chanted, “Sicko! Sicko! Sicko!” or “You’re sick!” at an offending officer as he violently lashes out without provocation?  I suspect that the truth would hurt. Moreover, the protesters could pressure elected officials to stiffen the enforcement mechanisms and sentences.

Sources:

Cara Buckley and Rachel Donadio, “Buoyed by Wall St. Protests, Rallies Sweep the Globe,” The New York Times, October 16, 2011. 


Jason Cherkis, “Author Naomi Wolf Speaks Out About Her Arrest at Occupy Wall Street,” Huffington Post, October 19, 2011.