Centuries of Excluding Insiders at Yale

Jonathan Edwards fell out of favor with Yale’s president Clapp, who opposed George Whitefield’s Christian revivals as being too “enthusiastic.” So, Clapp had two pamphlets published to criticize Edwards, who had studied and then taught at Yale. In fact, one of Yale College’s residential colleges has been named after Edwards at least since the late twentieth century. I would imagine that few if any current or former JE students have been informed that Edwards ceased attending Yale Commencement exercises and even visiting campus once he had known of Clapp’s vitriolic pamphlets. It is ironic that in Edwards’s time, Yale’s faculty minimized the impact of original sin in what became known as the New Haven theology. It seems that compassion for people who hold a different theological (or political) view, as in “Love thy enemy,” was nonetheless above the grasp of Yale’s administration. Fast-forward from the first half of the eighteenth century to roughly three hundred years later and incredibly the same hostile, highly dysfunctional organizational culture was still well ensconced at Yale.

The full essay is at "Centuries of Excluding Insiders at Yale."

Integrity in Ethical Leadership

In the late twentieth century, many leadership scholars explored the link between ethics and leadership. The ethical component was portrayed not only as adherence to particular principles, but also as character giving rise to virtue ethics and integrity. Unfortunately, neither character nor integrity are leadership skills; hence our topic goes beyond the apparently easy fix of training. This puts the emphasis on the hiring process, which can be dominated by positional experience and a candidate’s vision for the organization. Upper-echelon leadership, such as of a business, government, religious organization, or university, involves the articulation of a broad vision that can include even societal norms and values.  Steve Jobs’ vision, for instance, was of a society in which communications would be done entirely differently. Although ethical principles and virtues were not salient in his vision, any head of an organization can highlight ethical principles in his or her vision.[1] Having such an emphasis and a societal-transformational vision can both resonate with people whose interests go beyond organizational effectiveness. Such visions are fun. My focus here is on integrity in ethical leadership, whether virtues or ethical principles are salient in the vision. Of particular difficulty is determining whether integrity has ethical content or is merely consistency between word and action. I contend that if integrity is interpreted as only the consistency, the ethical leadership may not really be ethical.

The full essay is at "Integrity in Ethical Leadership."

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1. P. Madsen, “Managing Ethics,” Executive Excellence 7, no. 12 (1990): 11-12.

Ideological Word Games: The Modern Weapon of Choice?

When I was young, my dad would sometimes criticize me for engaging in “word games.” Perhaps I was already parsing words; my parents and maternal grandfather were all lawyers. My last name is Worden, after all. I was raised to pronounce the name, war-den, and only after decades did it occur to me that people might spell the name as Worden rather than Warden if I pronounced it as word-n. I was the first even in the extended family to use the alternative; as Nietzsche wrote, no philosopher is a man of his time. We tend to think outside the proverbial constrained “box” because we critique assumptions and arguments (i.e., critical thinking), including those of the “boxes” that society leaves unquestionably standing as part of the status quo—the tyranny of which has repelled philosophers wetted to the idea that no stone should be left unturned, even if a society deems some stones as sacrosanct. It can be dangerous even to question the solidity of those stones, especially if they formed out of ideological controversies wherein tussling instinctual urges contesting for societal dominance. In this too, I am drawing on Nietzsche, who even viewed the content of ideas as being instinctual urges. In being willing to subject societally cherished ideas to fundamentally unique and deep scrutiny, Friedrich Nietzsche is the last, at least as of my time living in an American desert, both academically and geographically, where plenty of Nietzsche’s “herd animals” freely roamed. They were particularly vulnerable to ideological word-games in unquestioningly accepting the words from the insurgent ideologies as valid.

The full essay is at "Ideological Word Games."

Goodwill Dismisses a Solid Societal Norm: A Mentality beyond Unethical Conduct

When managers of a business or non-profit interact with a societal norm by openly rejecting any obligation to act in accord with the norm, the reaction from stakeholders can be utter disbelief. The refusal to act in accordance with the norm as it impacts the organization can be beyond bad management and even unethical conduct. The refusal to acknowledge a societal norm even as its impact on the business and stakeholders has been arranged by the business is beyond, though it can include, unethical conduct. Norms are not in themselves ethical, for as David Hume wrote, you can’t get an ought from an is; rational justification by ethical principles must be added before we can get to, “You ought to do X” from “X is the practice.” Yet ethical principles can be in norms, in which case we can say, “You ought to act in accordance with the norm because it is ethical.” In some cases, the norm-business relationship (i.e., Business and Society) can be more salient than an ethical principle in the norm itself. A managerial practice at Goodwill, a non-profit retailer based on donations for the poor, serves as a case in point.

The full essay is at "Goodwill Dismisses a Solid Societal Norm."

It’s Only Fair

Astonishingly, organizations can violate their own mission statement without any manager or non-supervisory employee being aware of the violation. This can happen even when the people in an organization really do take their mission seriously. At Goodwill, the mission is to end poverty, a laudable goal. It follows explicitly (i.e., according to a sign in the stores) that “every customer has an equal opportunity to purchase any item for sale.” Although the sign bases this point on the fact that the goods “come from public donation,” I submit that ending poverty by giving the poor access to relatively low-priced merchandise is hampered if some customers are permitted to fill their carts with on-sale (i.e., color of week) items when the doors open. Certainly allowing those resale-minded customers to deprive other customers of a selection of items on sale (especially clothing, which even homeless people need) is not fair.

The full essay is at "Unfairness at Goodwill."

As U.S. President, Was Obama Really Anti-Israel?

In a poll in 2011, only 22% of Jewish voters in the U.S. said they approved of President Obama’s handling of Israel. Dan Senor pointed to the erosion of Obama’s Jewish fund-raising as another sign that the president was losing Jewish support in the United States. A poll by McLaughlin & Associates found that of Jewish donors who donated to Obama in 2008, only 64% had already donated or planned to donate to his re-election campaign of 2012. While a politician would undoubtedly try to placate and mollify the unsatisfied electorate, a statesman acting in the American interest might conclude that those voters were wrong in their assessment that the president’s policy was “anti-Israel.”

The full essay is at "Was Obama Anti-Israel?"

Increasing Income Inequality in the U.S.: Deregulation to Blame?

Most Americans have no idea how unequal wealth as well as income is in the United States. This is the thesis of Les Leopold, who wrote How to Make a Million Dollars an Hour. In an essay, he points out that the inequality had increased through the twentieth century. His explanation hinges on financial deregulation. I submit that reducing the answer to deregulation does not go far enough.

The full essay is at "Increasing Income Inequality."

Les Leopold, “Inequality Is Much Worse Than You Think,” The Huffington Post, February 7, 2013.

Burn Baby Burn: Moral Hazard & Fairness

On a call with another of the company’s traders when a wildfire in California was putting some electric wires at risk, an energy-desk trader at Enron quipped, “Burn Baby Burn!”  The loss of the electricity wires would have decreased supply, thus jacking up the price of electricity, which Enron was only too glad to provide.  Similarly, “Burn Baby Burn!” can be put in the mouth of any one of the firefighters of the South Fulton fire department in Tennessee who watched Gene Cranick’s home burn to the ground because he had not paid the $75 annual fee that residents outside of city limits had to pay in order to receive the “service.”  When Cranick called 911 as his house was on fire, he was essentially told, “I’m sorry, sir, but you are not on the list for that service. Have a nice day.” 

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

CEO Compensation: How Much Is Too Much?

From the previous year, the medium value of salaries, bonuses and long-term-incentive awards for the CEOs of 350 major American companies increased by 11% in 2010 to $9.3 million, according to the Hay Group.  Corporate net income increased by a medium of 17% and shareholders medium returns, including dividends, increased by 18 percent. Share prices also increased more than the CEO compensation. However, bonuses increased 19.7%, which is just barely more than the percentage increases in corporate profit and shareholder returns.

The full essay is at "CEO Compensation."

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

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

The full essay is at Advertisers and YouTube.

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

[2] Ibid.

Toward a Definition for Ethical Leadership: Disabusing the Pessimists

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

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

Inequality in Corporate Capitalism: Beyond Redistribution

I contend that a concern that too much income or wealth is concentrated “at the top” in the U.S. does not necessarily translate into a demand for redistribution; rather, the inequality itself may be thought dangerous to the viability of a representative democracy (i.e., a republic form of government) and inherently unfair. Even though redistribution may be entailed as large banks and business corporations are dismembered, ridding the system of the concentrations of wealth does not in itself mean that those “at the bottom” should or would necessarily become richer. For example, to say that CEOs should not be allowed to make millions of dollars, especially when their companies or banks lose money, does not imply redistribution because there is no claim that the compensation be directed to others for their benefit. The point is that the compensation itself is unfair. Indeed, saying that corporate capitalism is itself unfair because some people benefit beyond what they deserve is not to say that their benefits should be redistributed; rather, the point is simply that such benefits should not be allowed.

The full essay is at "Inequality in Corporate Capitalism."

A U.S. Visa Fast-Track For Rich Investors

The New York Times reported in December 2011 that affluent foreigners had been rushing to take advantage of a U.S. immigration program. The foreign applicants must invest at least $500,000 in construction projects within the United States. The number of applicants had nearly doubled since the end of 2008 to more than 3,800 in the 2011 fiscal year. The intent of the program is to spur economic development at a time of high unemployment. Yet the program has also been characterized as a cash-for-visas scheme. Besides the question of whether the program’s rules have been stretched in New York City to qualify projects in prosperous areas for special concessions, an ethical question can be raised concerning who should get a visa.

The full essay is at "Visa Fast-Track for the Rich."

Judicial Ethics: Friendship and Philanthropy

Harlan Crow was a Dallas real estate magnate and a major contributor to conservative causes. He did many favors for his friend, Clarence Thomas, “helping finance a Savannah library project dedicated to Justice Thomas, presenting him with a Bible that belonged to Frederick Douglass and reportedly providing $500,000 for [Virginia] Thomas to start a Tea Party-related group.” The two friends spent time together at “gatherings of prominent Republicans and businesspeople at Crow’s Adirondacks estate and his camp in East Texas.” Crow also “stepped in at Thomas’ urging” to finance the multimillion-dollar purchase and restoration of the cannery that had employed the justice’s mother. Crow’s restoration “featured a museum about the culture and history of Pin Point that has become a pet project of Justice Thomas’s. . . . While the nonprofit Pin Point museum is not intended to honor Justice Thomas, people involved in the project said his role in the community’s history would inevitably be part of it, and he participated in a documentary film that is to accompany the exhibits.”

News “of Mr. Crow’s largess provoked controversy and questions, adding fuel to a rising debate about Supreme Court ethics. But Mr. Crow’s financing of the museum, his largest such act of generosity, previously unreported, raises the sharpest questions yet — both about Justice Thomas’s extrajudicial activities and about the extent to which the justices should remain exempt from the code of conduct for federal judges. Although the Supreme Court is not bound by the code, justices have said they adhere to it. Legal ethicists differed on whether Justice Thomas’s dealings with Mr. Crow pose a problem under the code.”

The code says judges “should not personally participate” in raising money for charitable endeavors, out of concern that donors might feel pressured to give or entitled to favorable treatment from the judge. In addition, judges are not even supposed to know who donates to projects honoring them. . . . (T)he restriction on fund-raising is primarily meant to deter judges from using their position to pressure donors, as opposed to relying on ‘a rich friend’ like Mr. Crow, said Ronald D. Rotunda, who teaches legal ethics at Chapman University in California.” On the other side of the argument, Deborah L. Rhode, a Stanford University law instructor who has called for stricter ethics rules for Supreme Court justices, said Justice Thomas “should not be directly involved in fund-raising activities, no matter how worthy they are or whether he’s being centrally honored by the museum.”

The ethical analysis is at "Judicial Ethics."

Source:

Mike McIntire, “Friendship of Justice and Magnate Puts Focus on Ethics,” The New York Times, June 18, 2011.

Problems in American Executive Compensation: The Ethical Dimension

According to The New York Post, 66% of the income growth in the United States between 2001 and 2007 went to the top 1% of all Americans. In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1. By the year 2000, that ratio had exploded to between 300 to 500 to one. Because American executives tend to be paid more in total compensation than do their European colleagues, the ratios are lower in in the E.U. Hence one might ask what is behind the trajectory in the United States. 

The full essay is at "Ethics of American Executive Compensation."

The Banking Lobby: Writing Its Own Ticket in Washington

The Huffington Post observed in 2012: “Wall Street's campaign spending and lobbying power is so intimidating that banks have repeatedly stuck the public with the tab for their losses and no one in Washington stops them.” This was a significant change to be sure from President Jackson depriving the Second National Bank of the U.S. of funding in 1832.

The full essay is at "The Banking Lobby."

Source:

Loren Berlin and D. Levine, “Robo-Signing Settlement Might Not Provide Homeowners With Needed Help,” The Huffington Post, February 2, 2012.

The U.S. Pulls Out of the Paris Climate Accord: North-South Redistribution as Unfair

The Paris Climate Accord, President Trump announced on June 1, 2017, “is very unfair at the highest level to the United States.” This goes well beyond the deal’s anticipated toll on the U.S. economy. The deal, the president, argued is fundamentally unfair. Indeed, the agreement may reflect more the old North-South differential in economic development than even the climate. In this regard, the president characterized the U.S. assent to the deal as a “self-inflicted wound” made out of weakness—perhaps even guilt foisted by the developing world.  “This agreement is less about the climate and more about other countries gaining a financial advantage over the United States,” the president said. More to the point—the financial bottom-line, “The agreement is a massive redistribution of United States wealth to other countries.”

The full essay is at "U.S. Pulls Out of the Paris Climate Accord."

Analysis of Italy’s 2016 Referendum: Beyond the Euro and the E.U.

The predominate axis of analysis in the wake of the Italian referendum in early December, 2016 centered on the euro, the federal currency of the European Union. For example, an article in The Wall Street Journal begins with the following: “Sunday’s referendum vote in Italy reinforced a widening split between the economics needed to sustain Europe’s common currency and the continent’s rising tide of populism.”

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

Fraud in Selling Sub-Prime Mortgage-Based Bonds: Beyond Accountability

“In December 2011, the S.E.C. publicized its civil securities fraud charges against top executives from Fannie Mae and Freddie Mac for understating their exposure to subprime mortgages, which resulted in the government taking them over.”[1] Robert Khuzami, then the head of the S.E.C.’s enforcement division, said at the time that “all individuals, regardless of their rank or position, will be held accountable for perpetuating half-truths or misrepresentations about matters materially important to the interest of our country’s investors.”[2] Pursuing even senior ranks has the air of fairness economically as well as in terms of the dictum, no one is above the law. So much for words; how about the accompanying deeds?

The full essay is at "Fraud in Selling Sub-Prime Bonds."

1. Peter Henning, “Prosecution of Financial Crisis Fraud Ends With a Whimper,” The New York Times, August 29, 2016.

2. Ibid.

Apple Owes Back-Taxes in the E.U.: Blame Ireland or Apple?

The European Commission issued a formal decision on August 30, 2016 that the state of Ireland “recoup roughly €13 billion ($14.5 billion) of unpaid taxes accumulated over more than a decade by Apple, Inc.”[1] The decision “shows companies could be on the hook for past behavior and potentially be handed big bills for allegedly unpaid back taxes.”[2] E.U. law “forbid companies from gaining advantages over competitors because of government help.”[3] This applies both the federal government and the state governments, so the law could be better stated as, “No state government shall help companies gain advantages over their competitors.” Presumably Ireland’s government made the offer of help, rather than Apple getting that government to comply with the company’s wishes. If so, the state government rather than the company should be held responsible. Put another way, if Apple’s board and management considered the Irish offer to be legitimate at the time, Apple should not be held to pay the back taxes; rather, the state government should pay a penalty to the Commission.

The full essay is at "Ireland or Apple?"

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[1] Natalia Drozdiak and Sam Schechner, “$14.5 Billion Irish Tax Bill,” The Wall Street Journal, August 31, 2016.

[2] Ibid.

[3] Ibid.