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Saturday, July 14, 2012

Enabling Non-Empathetic Leaders: Paterno at Penn State

In January 2011, the illustrious football coach at Penn State University, Joe Paterno, learned that prosecutors were investigating his longstanding assistant coach, Jerry Sandusky, for sexually assaulting young boys in the football team’s locker room. Paterno even testified before a grand jury on the matter that month. He had been informed of the rapes back in 1998, yet he had kept the pedophile on even though additional boys would be at risk in doing so. 

That same month—January 2011—Paterno also began negotiating to amend his contract that would not expire until the end of 2012. By August 2011, Paterno and the president of Penn State reached an agreement in spite of the fact that both were by then embroiled in the Sandusky investigation. “Paterno was to be paid $3 million at the end of the 2011 season if he agreed it would be his last. Interest-free loans totaling $350,000 that the university had made to Mr. Paterno over the years would be forgiven as part of the retirement package. He would also have the use of the university’s private plane and a luxury box at Beaver Stadium for him and his family to use over the next 25 years.” 

The university’s board was kept in the dark. Directors who raised questions were “quickly shut down.” In the end, the board gave the family virtually everything it wanted. The board even threw in free use of specialized hydrotherapy message equipment at the university for Paterno’s wife. In other words, Paterno (and his surviving family, following his death in January 2012) got an even better deal as the scandal came to include Paterno himself.

 Joe Paterno, head football coach at Penn State, viewed by a student as "Pa" in PA        Matt Rourke/AP

The issue, according to the New York Times, is “the significant power” that Paterno “exerted on the state institution, its officials, its alumni and its purse strings.” A subsequent investigation funded by the university’s board of directors found that Paterno and other university officials had protected, in effect, a serial predator in order to “avoid the consequences of bad publicity” for the university, its football program, and even Paterno’s own reputation. Similarly, before Joe Ratzinger became the pope of the Roman Catholic Church, the archbishop of Munich had refused to defrock a pedophile priest because of the damage that scandal would wreck on the “universal church.” The priest was sent to a parish where he served as the youth minister. In both cases, the reputation of an organization—a collective—was given priority over the physical and emotional damage to individual human beings. The priority displayed here is troubling.

The question is perhaps how it is that such people get to the top as have no empathy for others yet fierce concern for themselves and their respective organizations. Merely that such people are retained is itself a red flag concerning organizational selection and retention of people for top positions. Skill as a coach (or as a church administrator) is apparently all that matters, even if the applicant or occupant is psychologically willing to look the other way concerning additional boys getting raped. The issue is that such a psychological profile is nonetheless handed significant power in an organization and can extract significant benefits for himself and his own even in the midst of being investigated or implicated indirectly given his position having presided over the abuse.

Moreover, we could be less enamored by leadership generally; it should be easier to deprive a sitting leader of power even if he or she has not lost favor in the organizational hierarchy.  In other words, boards of directors should not allow particular officials in the organization so much power and celebrity that they are no longer expendable, given how wrong an organization can be with respect to its leaders. Either human nature comes up short, or the artifice of organizational accountability is insufficient.  Too much value is put on organization position (i.e., upper echelon offices) and the associated power.  Too much is  virtue is projected onto organizational leaders. Furthermore, boards are too reductionistic concerning what justifies someone in gaining and retaining a post. Max Weber’s distinction between the person and his office can excuse some pretty bad behavior. Accordingly, the criteria for selecting and promoting organizational leaders could be widened.

In short, we do not object to the rise of unscrupulous people until it is too late.  We assume they are other than they are because of what we associate with high position and celebrity, then we act as if even an unscrupulous person has a lifetime right to his or her position.


Jo Becker, “Paterno Won Sweeter Deal Even as Scandal Played Out,” The New York Times, July 14, 2012. http://www.nytimes.com/2012/07/14/sports/ncaafootball/joe-paterno-got-richer-contract-amid-jerry-sandusky-inquiry.html?_r=1&hp

Thursday, July 12, 2012

Goldman’s PR Men: From Treasury

A former spokesman for U.S. Treasury Secretary Timothy Geithner announced in July 2012 that he would head to Goldman Sachs at the end of that month. Andrew Williams is the second of the Secretary’s spokesmen to head to the bank. These moves, and the related speculation that Geithner himself would decamp to Goldman, only reaffirm the sense that part of Goldman’s strategy is to have a revolving door between the bank and the federal government. The previous boss at Teasury, Henry Paulson, had been a CEO at the bank.

At the very least, the prospect alone of becoming wealthy at Goldman can be expected to weigh on a government official as he or she considers policies in which the bank has a financial stake. Additionally, the presence of ex-government folks inside Goldman can be expected to put the bank in a good position from which to lobby current government officials, using the “connections.” Mired in scandal following the financial crisis of 2008, Goldman’s leadership no doubt understood the value in hiring good PR men. Such hires could even put a good face on the cozy relationship between the bank and people still in government.

This “revolving door” dynamic contributes toward the capture of regulators by the regulated. Hence SEC, for example, can be soft on Wall Street by citing insufficient staffing while the reality is far more sordid in terms of the relationship between business and government. Lest it be thought that this problem is easily solved, I would simply point out that businesses have sought to influence governments that would regulate them since “way back.”

Legislated restrictions on former government officials can be circumvented (and can reduce the quality of people interested in public service), though prohibiting employment (or financial enrichment) by the industries related to the officials’ respective purviews for many years seems reasonable. At the very least, without such a restriction the specter of a conflict of interest hurts the legitimacy of democratic institutions and offices. Additionally, elected officials can demand that their appointees have a strong public-service ethic, even if it does not keep the government policy-makers and regulators from thinking of their own post-government-service enrichment. In other words, it was much too easy for the officials at Treasury (even in a Democratic administration!) to find their way to the regulated. It is as if the American public were blind to the conflict of interest in such an easy revolving door. Perhaps sustaining this blind spot would be part of Williams’ job at Goldman.


Bonnie Kavoussi, “Andrew Williams, Ex-Treasury Spokesman, Headed to Goldman Sachs,” The Huffington Post, July 12, 2012. http://www.huffingtonpost.com/2012/07/12/andrew-williams-goldman-sachs_n_1669021.html?utm_hp_ref=business

Wednesday, July 11, 2012

American Newscasters Blindly Floundering

In mid-2012, just 21% of adults in the U.S. told Gallop they had a “great deal” or “quite a lot” of confidence in TV news. In 1993, the percentage had been at forty-six. Ideological differences do not seem to matter (ranging only between 19-22%). Interestingly, the 18- to 29-year-old group had the most confidence. In terms of education, the more educated one was, the less likely one was to have a great deal of confidence. Newspapers did not fare much better, coming in at 25 percent. 

 By chance, on the very day I read about the Gallop poll, I came to the conclusion that the Huffington Post must be utterly addicted to the U.S. Presidential campaign—then already at least a year old and with just less than half a year left. Nearly every headline seemed to be about something that Mit Romney had said (or not said). Every little thing was blown up into a major crisis—to the point that I had come to skip the headlines completely. It occurred to me that the Huffington Post had lost credibility, at least to me, because of its lack of perspective. The dramatics alone reaffirmed my decision to get my news from Europe, even concerning what is going on in the United States! Tellingly, very little indeed was being reported concerning the "important" presidential campaigns (Gott sei dank)

Accordingly, I had given up watching any American news channels or shows in April 2012. I had come to realize that all too often opinion was being sold as news. All too often, journalists were interviewing other journalists as experts (other than on journalism). Such interviews I would call journalistic masturbation—fit only for other journalists to watch. Just a week before the Gallop poll came out, someone casually remarked to me that if Americans would just watch the news on a European station, they would quickly realize how far off the reservation the American newscasts and news networks had wandered in terms of reporting the news.

In addition to the journalists interviewing other journalists and the “talking heads” commentators dominating the “news,” the obsessiveness on one particular story within any given 24 hours news-cycle (and limiting “international news” to two or three countries in the world where the U.S. has a particular interest) can easily give the viewer the sense that the world is much smaller than it actually is. It is a fallacy to suppose that the narrowness of coverage means it is more in depth rather than merely repetitive. Furthermore, one should not assume that the narrowness is for want of enough time in a given broadcast; typically after ten minutes in the evening newscasts of the major non-news networks (i.e, ABC, NBC, and CBS), a magazine format takes over, with "human interest" stories replacing news reports.

In short, television news is broken in the United States, and the journalists are blind to it even as they portray themselves (ironically) as self-appointed experts (i.e., talking heads) on policy. Because the correction needed is not merely by degree, it is doubtful that the situation could be rectified without a new infusion of people in the business. In the meantime, I recommend Deutsche Welle (German and English versions—webpages and television channels) and TV5 Monde (en francais), as well as the BBC.  Hopefully these European newscasts won’t follow their American cousins.


Gallup Politics, “Americans’ Confidence in Television News Drops to New Low,” July 10, 2012. http://www.gallup.com/poll/155585/Americans-Confidence-Television-News-Drops-New-Low.aspx

Tuesday, July 10, 2012

Maryland and Kansas: Distinct Taxing and Spending Policy Ideologies

Coming out of the recession that followed the financial crisis of 2008, Maryland “raised income taxes on its top earners . . . to preserve services and spending on its well-regarded schools — leading some business groups to warn that the state might become less competitive. Kansas, controlled by Republicans, decided to try to spur its economy with an income tax cut — which Moody’s Investors Service, the ratings agency, recently warned would lead to “dramatic revenue loss” and deficits that will likely require more spending cuts in the coming years.” Note the consequentialism implied in how both sets of policies are evaluated. Maximizing economic competitiveness and balancing the budget are the respective criteria. While laudable goals (or means to further goals, such as happiness), they relegate the ideological aspect of a given revenue/spending set of policies.

One problem with trying to link particular revenue/spending combinations to a goal is that the relationships typically assumed may not hold. For example, it is typically assumed that other things equal, lowering taxes increases economic growth. However, the Institute on Taxation and Economic Policy, a nonprofit research organization in Washington associated with Citizens for Tax Justice, which advocates a more progressive tax code, issued a report in 2012 that “found that the states with high income tax rates had outperformed those with no income tax over the past decade when it came to economic growth per capita and median family income.” To be sure, the Institute had an ax to grind in terms of discounting tax-cut policies. Yet even so, the fact that the criteria desired can differ (e.g., balancing the budget or maximizing economic growth) suggests or implies that there is no one definitive level of taxation (and spending) that is optimal.

 The New York Times implies that an optimal level of taxing as well as spending exists. Specifically, the paper claims that the “choices made by Kansas and Maryland could provide something of a real-time test of the prevailing political theories of taxing and spending — though it could be years before the results are in.” The implication is that there is a definitive political theory with an optimal level of taxation and spending. In contrast, I contend that the political theories reflect different political ideologies, not of which are inherently supreme over the others. Moreover, one can expect republics, whether in the U.S. or the E.U., to have different preferences.

Kansas, for example, prefers a tax cut not just for the utilitarian reason that more business (and citizens) might be attracted, but also because the policy fits with the ideology that values small government. Meanwhile, Maryland might prefer raising taxes on the wealthy not only as a means of sustaining social programs (which implies a more activist government ideology), but also because of a value on relative equality economically. It is not as though economic consequences could somehow render one value or ideology supreme over the others.

Therefore, because in an empire the republics can be expected to differ in terms of political and economic ideology, even if by degree, we can expect that Kansas and Maryland will continue to take different routes on taxation and government spending without “reconciling” to an optimal “balance.” The difference itself is an innate attribute of empire-scale unions such as the U.S. and E.U.


Michael Cooper, “To Cut Taxes or Keep Services: 2 States Act as Test Cases,” The New York Times, July 10. 2012. http://www.nytimes.com/2012/07/11/us/as-state-revenues-begin-to-comeback-maryland-and-kansas-choose-different-paths.html?_r=1&hp

Sunday, July 8, 2012

Libya (and the E.U.): Writing a Constitution

Should writing a constitution, or “basic law,” be done piecemeal by successive amendments (e.g., the E.U.), or all at once (e.g., the U.S.)? In terms of unions of states, the answer might depend on how comfortable the state leaders are with transferring governmental sovereignty to the union. Whether at the state or union level, if “all at once” is the desired way, it is worth pondering whether a committee of a legislature should be assigned the task, or alternatively whether delegates to a dedicated convention should be selected—either by popular election or appointment by a legislature. These questions may seem antiquated where a constitution has stood for some time. Even so, in July 2012 in the midst of a legislative election, Libyans had a vested interest in the rather pressing questions.

According to the New York Times, the election in Libya selected a 200-member legislature that was initially expected to draft a constitution while it governed the state for 18 months. However, the interim Transitional National Council stripped the legislature of that authority just two days before the vote in an attempt to placate Libyans in the eastern part of the state who protested that the legislature would be stacked in favor of the more populous northwestern region around Tripoli. (One hundred members are from the west, 60 from the east, and 40 from the desert south.) “The council instead decreed a new election to choose a smaller panel to draft the constitution that would be composed of equal numbers from each region.” While sufficient and fair representation is a legitimate concern, an additional benefit of a convention is that pressing issues of governance, which are necessarily salient to legislators, can be bracketed to some extent. That is to say, a convention can have more room to look at the big picture with a more long-term perspective. Ideally, the delegates would be sequestered such that they are immune from pressing external pressures, though this is admittedly not possible at the union level, wherein the delegates represent sovereign or even semi-sovereign legislatures.

Whereas a convention at the union level must contend with the strictures placed on delegates by their respective states, delegates at the state level must deal only with local elites, rather than with entire legislatures (this is yet another reason not to conflate a state with a union thereof). Whereas a sovereign (or semi-sovereign) legislature has a legitimate right to tightly instruct its delegate, a delegate elected by the people of a locality of a state can legitimately not receive any instructions. Sequestering such delegates, who are dedicated to the sole task of writing a constitution, can effectively bracket momentary and partisan political pressures.

As the ballots were being counted in Libya, the New York Times surmised that the interim council’s last-minute change would probably be overturned by the new legislature. To be sure, the candidates for the legislature campaigned to be part of a constitutional assembly. Even so, it would be sad were the advantages of a dedicated convention beyond questions of local representation relegated or ignored, particularly given the conflict-ridden relations between the tribes and regions of Libya at the time. Getting delegates from all the tribes and regions together in a room and bracketing them from the outside such that they could sit down and take some real time to focus on basic questions of governance would be particularly worthwhile.

Concerning the value of getting a group alone to focus for a few months or so on a system of basic law, or constitution, would not be a bad idea for the E.U., particularly given its common currency and the existence of some anti-federalist states not using it. Although the states, being semi-sovereign, would have the right to appoint the delegates, the conflict-of-interest facing the states on whether to give up additional sovereignty suggests that it might be better were the citizens of the E.U. elect the delegates, perhaps in the districts used for the E.U. Parliament.

In conclusion, Libya (and Egypt) as well as the E.U. in 2012 amid a chaotic change of government and a serious debt crisis, respectively, reminded the world that basic or constitutional questions had not suddenly become passé by the twenty-first century. Setting up or establishing a new system of government, whether for a simple republic or a union of such republics, is difficult in itself, even without the inevitably pressing political pressures. Isolating some reflection dedicated to the task by people with power to propose a system of government is very important, yet strangely this point is typically discounted or disregarded altogether by people in power.


David D. Kirkpatrick, “Braving Areas of Violence, Voters Try to Reshape Libya,” The New York Times, July 7, 2012. http://www.nytimes.com/2012/07/08/world/africa/libyans-vote-in-first-election-in-more-than-40-years.html?pagewanted=1&_r=1&ref=world