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Saturday, May 5, 2012

Holding the Unfit Accountable vs. Murdoch’s Entitlement to Power


According to the New York Times, “A damning report [in late April 2012] on the hacking scandal at Rupert Murdoch’s British newspapers concluding that Mr. Murdoch is “not a fit person” to run a huge international company has convulsed Britain’s political and media worlds and threatened a core asset of Mr. Murdoch’s American-based News Corporation.” The report also “found that three senior Murdoch executives misled Parliament in testimony” and “alleges that the company sought to cover up widespread phone hacking.”

The significance of these findings goes beyond one CEO and one company. That someone can go decades at the top of a media empire, yet not be a fit person, and yet have been presumed fit by society indicates a lack of precision in the promotion of candidates to the office and a lack of accountability on their lack of fitness while holding the office.  That is, we as a people tend to project better qualities onto the people occupying high positions than is warranted.  We as a society are therefore quite vulnerable, given the amount of power that CEOs have.

For example, we typically take a CEO’s defense at face value (i.e., as valid). To be sure, a CEO’s account is rarely refuted by a countervailing authority that can force a lying CEO to bear the consequences.  The select committee did not buy Murdoch’s claim that “his executives kept him in the dark about the hacking, saying he ‘exhibited willful blindness to what was going on in his companies and publications.’” The question is whether Murdoch would be penalized in some way for lying about being kept in the dark—or for claiming that being ignorant of the hacking is a legitimate justification.  One indication of an answer came as members of the Labour Party “asked British regulators to move, on the basis of the report, toward reducing Mr. Murdoch’s 39.1 percent controlling interest in BSkyB, the satellite broadcaster that produces a hefty profit for the News Corporation.” It can be asked, however, whether this is a sufficient measure, given that Murdoch had been found not fit to head a major media company. A more fitting consequence would his removal as CEO or else no business by any entity in Murdoch’s “empire” could be done in Britain.

Even when it is made explicit that a CEO is not fit to run a major corporation, it somehow seems unreasonable or too drastic for that person to be removed, yet this is precisely what common sense demands. Even in damning the powerful, the countervailing authority begs off.  The projections we make onto those people who are in “high” positions are too strongly held even when a lack of fitness has been found by a credible authority. I suspect that the underlying dynamic involves an interaction between human nature and power that distorts the attributes of occupants of “high” positions. 

Source:

John F. Burns and Ravi Somaiya, “Panel in Hacking Case Finds Murdoch Unfit as News Titan,” The New York Times, May 1, 2012. http://www.nytimes.com/2012/05/02/world/europe/murdoch-hacking-scandal-to-be-examined-by-british-parliamentary-panel.html?_r=1&hp&pagewanted=print


Thursday, May 3, 2012

Subsidiarity: Federalism Over Catholic Social Ethics?

In the E.U., the principle of subsidiarity functions in theory like the Tenth Amendment does in the U.S.—again in theory. In both cases, public authority on a given domain or policy-area is preferentially to be exercised at the state rather than federal level. The principle, while not federalism per se, can be an element of it. Taking subsidiarity to be “really federalism” turns the latter into an alliance—giving the states potentially so much power that the government of the federation or union itself cannot act as a check on the state governments.

The complete essay is at "Is the E.U. a Federal System?"

Wednesday, May 2, 2012

Wealth: Benefitting and Distorting Society


According to the New York Times, “One of the great political and economic challenges of our time is figuring out the balance between wealth that benefits society and wealth that distorts.” In terms of benefitting society, invested (as distinct from donated) wealth can benefit consumers by enabling better and cheaper products. Economists estimate that for every dollar invested in productive enterprise, there is $5 of benefit to consumers.  Interestingly, this does not apply to money that is donated (rather than invested) to feed the poor (i.e., consumption rather than production).
In terms of distorting society, “the study of “rent seeking” describes how “people or companies get rich because of their power, not because of their ideas.” That is, “wealthy individuals and corporations are able to influence politicians and regulators to make seemingly insignificant changes to regulations that benefit themselves. In other words, to rig the game.” Wealth can have a distorting effect not only on society, but also on the political and economic systems.  Contributing to the financial crisis, for example, “some of the [U.S.’s] largest banks actively manipulated customers and regulators and, sometimes, their own stockholders to profit from dangerous risk.” Moreover, for “many economists, rising inequality can create exactly the wrong outcomes for society over all. Rather than simply serving as an invitation for everybody to engage in potentially beneficial risk-taking, inequality can allow those with wealth to crush new ideas.”
It is said that there will always be the rich and always be the poor. To some extent, economic inequality simply reflects the decisions people make—choices that reflect character, will-power, talent and aptitude. To reduce all of these to a uniformity would take a rather astonishing re-working of the human genome. Even so, it is also the case that the rich are able to exchange or use their economic power for political power and thus “rig the system” in their own favor—such that they can become even richer.
It seems to me that a society must recognize some economic inequality, given human nature and free-will. To take a simple example, some students will force themselves to study more while others will make the easier choice of going out for a beer. Most people would agree that the students who studied and got A’s should be wealthier. The economic inequality is justified by their greater sacrifice. Furthermore, if wealthy people are necessary for investment in productive enterprise to be possible or sufficient, then some economic inequality is justified because it serves society by benefitting consumers as well as the wealthy.
At the same time, society also has an interest in protecting the viability of itself, including its political and economic systems, from being distorted by the rich into serving them disproportionately. An upper limit on wealth is thus justified. The difficulty lies in determining where to draw the line. Just because there is no mathematical equation that will give “the” answer does not justify refusing to draw the line—treating economic liberty as having no upper limit. I suspect that this lapse is a salient part of American culture.

Source:
Adam Davidson, “The Purpose of Spectacular Wealth, According to a Spectacularly Wealthy Guy,” The New York Times, May 1, 2012. http://www.nytimes.com/2012/05/06/magazine/romneys-former-bain-partner-makes-a-case-for-inequality.html?pagewanted=1&_r=1

Quitting Money: Crazy in Christian Terms?

In 12 years, Daniel Suelo has not made a penny; neither has he spent one. In 2000, he left his remaining $30 in a phone booth (remember those?) and never looked back. He went on to live on public lands, foraging for food and accepting alms from others.  Mark Sundeen, who wrote The Man Who Quit Money about his friend, told an interviewer, “I assumed he had gone crazy or had some kind of mental breakdown. But that is not the case.” The key to unpacking Suelo’s life-choice is to view it as a spiritual journey.

Throughout the history of Christianity, theologians have expressed various views on the relationship between greed and profit-seeking (wealth). Suelo’s path is in line with the strict anti-wealth school expressed in the writings of Tertullian, Ambrose, Jerome, and Justin, and demonstrated in the lives of Paulinus of Nola and Godric of Finchale. Godric was a merchant-trader during the first century of the Commercial Revolution of the High Middle Age. He believed that any profit or wealth were utterly incompatible with salvation, so he gave his buried fortune to the poor and lived for fifty years as a hermit. By modern standards, Godric’s choice looks bizarre—even crazy. The key to understanding Godric’s choice is to view it as part of a spiritual journey.

One question for us moderns is whether an established though by now rare religious take on whether profit-seeking and accumulated wealth evince underlying greed is nonetheless a sign of mental illness. Even within Christianity, the strict anti-wealth stand has been moderated (Augustine and Luther). More broadly, moderated and full pro-wealth positions have been expressed by the likes of Clement of Alexandria (a hybrid stance), Aquinas, Calvin, and the Christian humanists of the late Renaissance. In fact, Ficino, a priest in Naples during the fifteenth century, wrote that love of gain is justified because humans are gods on earth by virtue of the control we have over natural resources. In modern times, the prosperity gospel has preached material wealth for the true Christians. Clearly, Christian thought has spanned a wide spectrum on whether profit-seeking and wealth intimate the presence of greed.

Given the span of perspectives just in historical Christianity alone, Suelo’s choice can seem extreme and therefore as bizarre and at the very least unnecessary.  However, it could also be the case that what had been an ideal in early Christianity preached by Jesus has been gradually undermined by greed whose gravity tends in the direction of wealth. If so, what is seems normal today may in Christian terms be rather decadent—even sinful—and what seems bizarre might be truer to form. My point is that it would be rather unwise of us to rely on the societal norms of our day—as if deviance from them automatically means someone is crazy. Just as a religion can falter, so too can a society. In such a context, it is only natural to suppose that false criteria are true—as authentic and valid—and therefore to look at people like Suelo through lenses that we presume are clear yet are like a dark, smoky glass.

See related essay: “A Preface to Godliness and Greed

Source:

“He ‘Quit Money’ and Is Still Living a Happy Life,” MSNBC, May 2, 2012. http://lifeinc.today.msnbc.msn.com/_news/2012/05/02/11502651-he-quit-money-and-is-still-living-a-happy-life?lite








Monday, April 30, 2012

Wal-Mart: Political Contributions as Bribery

In September 2005, according to the New York Times, “a senior Wal-Mart lawyer received an alarming e-mail from a former executive at the company’s largest foreign subsidiary, Wal-Mart de Mexico. In the e-mail and follow-up conversations, the former executive described how Wal-Mart de Mexico had orchestrated a campaign of bribery to win market dominance. In its rush to build stores, he said, the company had paid bribes to obtain permits in virtually every corner of the country. . . . Wal-Mart dispatched investigators to Mexico City, and within days they unearthed evidence of widespread bribery. They found a paper trail of hundreds of suspect payments totaling more than $24 million. They also found documents showing that Wal-Mart de Mexico’s top executives not only knew about the payments, but had taken steps to conceal them from Wal-Mart’s headquarters in Bentonville, Ark. In a confidential report to his superiors, Wal-Mart’s lead investigator, a former F.B.I. special agent, summed up their initial findings this way: ‘There is reasonable suspicion to believe that Mexican and USA laws have been violated.’”

                   Critics protesting a new Wal-Mart store after the bribery scandal    John Moore/Getty

Sunday, April 29, 2012

Internet Escapes Grasp of China

According to the Huffington Post, the “surprising escape” of Chen Guangcheng, a blind legal activist, from house arrest to the presumed custody of U.S. diplomats was “buoying China's embattled dissident community” even as the government lashed out, “detaining those who helped him and squelching mention of his name on the Internet.” Two points bear further scrutiny.

                                   Chen Guangcheng, after his escape, with Hu Jia.   

First, that Chinese security officials “reacted angrily” strikes me as strange. It is as if institutional interests naturally prompt strong human emotions as though an insult were taken personally. In other words, unless the dissident had insulted or otherwise directly harmed the particular officials, it does not make sense that they would angrily inflict pain on the dissident’s supporters who were taken into custody after the escape. An institutional loss is not a personal affront. To treat the former as if it were the latter is essentially to anthropomorphize a given organization.

Second, the “squelching mention” of Chen Guangcheng’s name on the internet must have been a mission of futility in 2012. “Anything vaguely related to Chen [was] blocked on Chinese social media sites, such as posts including or key word searches for Chen, Guangcheng, GC, or even the words ‘blind person’.” The inclusion of the latter term is almost funny in its overkill; it certainly points to the futility of tracing millions of blog posts and emails on the incident. After savvy internet users used “Shawshank Redemption” to refer indirectly to Chen, that movie title became a banned search term. The Chinese government was definitely playing defensive ball at that point. My point is that the game of snuffing out communication on the internet had already been lost—assuming the Chinese government does not prohibit the internet itself in China.

The government officials’ antiquated responses—both in terms of emotion and technology—suggest that the Chinese regime was still holding onto the ways of another century. This could be an indication that that regime will not survive the twenty-first. As technology continues to widen and deepen, antiquated means of control will become less and less efficacious through the century. Given the habit of officials reacting in “anger,” we can expect the increased difficulty with control to lead to more pain being inflicted on citizens. This in turn should lead to more popular resentment. In other words, the antiquated responses of government officials could be the seed of the regime’s destruction.

Source:

Alexa Olesen, “Chen Guangcheng Escape: China Activists Inspired by Blind Dissident Lawyer,” The Huffington Post, April 29, 2012. http://www.huffingtonpost.com/2012/04/29/chen-guangcheng-escape-ch_n_1462635.html