When the Campaign Eclipses Governing: A Matter of Values

In the mix of politics and government in any republic, stretches of governance are marked off by much shorter electoral seasons.  As decision-points, election campaigns are not designed to be of a considerable duration, particularly relative to that of governing.  In other words, the point of elections is governance, whereas the objective of governance is not (and thus should not be) elections. The reason is that the function of elected representatives is to govern rather than to run yet again. When the interstices become the long lines, and the long lines are reduced to interstices, one can expect popular fatigue from incessant fighting and frustration from a lack of attention on governing.

The full essay is at "Campaigning and Governing, American Style."

Osama Killed by Obama: What Does American Patriotism Stand For?

On the day after Osama was killed by Obama, people in the American states were united in a feeling of pride for their union. Midway through a run at sunset, I paused beneath an American flag. I was caught not out of breath but by the distinct snapping sound of lazy flapping noises as the flag rolled in the light breeze. I looked up and stared at the red, white and blue performing its series of rolls. The fabric was much more alive than that stiff, wired flag still on the surface of the moon. A flag is meant to be alive—literally carried along as troops advance on a battlefield. Today’s flags hanging off still poles next to restaurants and car dealerships can hardly capture the dynamic energy of victory. To be sure, such victory was hinted at the night before as people ran hither and dither carrying flags in celebration outside the White House. It had struck me in watching the joyous scene how rare such clear-cut victories are.  It is a pity that some enemy must die for such clarity to be celebrated in a spirit of unity.

The full essay is at "American Patriotrism."

See the related essay on the impact of killing Osama on Obama's ability to preside.

Leadership at Lehman: On the Failure of Richard Fuld

The failure of Lehman Brother suggests that too much power may go with formal position while non-positional leadership in organizations is not given enough of a chance to check the excesses of office. Richard Fuld could take advantage of much having to do with his formal position so he would not have to lead. In contrast, a competent subordinate, Mike Gelband, faced a considerable headwind in trying to lead through persuasion without the benefit of a position trumping Fuld’s own.

The full essay is in Essays on the Financial Crisis, which is available in print and as an ebook at Amazon.

Related Essays:

 "Fuld's Arrogance at Lehmen: Systemic Risk"

"Lehman's Dick Fuld as the Antagonist in the film, 'Too Big to Fail'"

"Fraud as Fair: Lehman as Beneficiary of Society's Pro-Business Cultural Values"

"Executive Stature: Glimpses of the Man Behind the Curtain"

"Lehman Bros: Insufficient Accountability in Corporate Governance"

Paper Tigers: Firewalls Forestalling Institutional Conflicts of Interest

Structural, or institutional, conflicts of interest are of great significance in applied ethics, even though they often play second fiddle to the conflicts centered on a person’s particular interests. An organizational or institutional conflict of interest, whether within one organization or in the arrangements between organizations, is not any less unethical than a personal conflict of interest.  Therefore, when we take the claims of vested organizational interests that their internal firewalls are more than just paper tigers at face value, our foolhardiness can really be at our detriment. I present a few cases to suggest that “firewalls” in an organization to prevent it from a conflict of interest are, in general, insufficient and thus ought not be relied on. Instead, the public (or government regulatory agencies) should insist that one of the two interests in an institutional conflict of interest be given up.

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

Goldman's Ethical Conflict of Interest: Obviated or Enabled?

According to U.S. Senator Carl Levin, Goldman Sachs “profited by taking advantage of its clients’ reasonable expection[s] that it would not sell products that it did not want to succeed and that there was no conflict of economic interest between the firm and the customers that it had pledged to serve.”[1] Not only was the bank secretly betting against housing-related securities while selling them to clients, in at least one case a client shorting such a security was allowed to have a hand in picking the bonds. What is perhaps most striking, however, is how little Goldman Sachs has had to pay for acting at the expense of some of its clients. One might predict on this basis that the unethical culture at the bank is ongoing.


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

1. William D. Cohan, Money and Power: How Goldman Sachs Came to Rule the World (NY: Doubleday, 2011), p. 19.

Prudent & Measured Calculation Over Principled Leadership: U.S. President Obama on Democracy Protesters in the Middle East

Despite several days of overwhelming popular grass-roots protest in Egypt, on January 30, 2011, the U.S. Secretary of State, Hillary Clinton, stopped short of urging the Egyptian president, Hosni Mubarak, to resign.  According to The New York Times, she spoke of "a process that must include a government dialogue with the protesters and “free, fair, and credible” elections, scheduled for September." In the face of overwhelming protests going on in Egypt, the top U.S. diplomat was urging a dialogue in January through the following September. Specifically, she declared, “We have been very clear that we want to see a transition to democracy. . . . And we want to see the kind of steps taken to bring that about. We want to see an orderly transition.” 

The full essay is at "Calculation Over Principled Leadership."

Computer Technology Revolutionizing Industries: Books and Films

Crude oil was first drilled in 1859 in northwestern Pennsylvania (not in the desert of the Middle East). It was not long before oil lamps became ubiquitous, lengthening the productive day for millions beyond daylight hours. Just fifty or sixty years later, as electricity was beginning to replace the lamps, Ford’s mass-produced automobile was taking off, providing an alternative use of crude oil. For those of us alive in the early decades of the twenty-first century, electric lighting indoors and cars on paved roads have been around as long as we can remember. As a result, we tend to assume that things will go on pretty much as they “always” have. Other than for computer technology, the end of the first decade of the twenty-first century looks nearly indistinguishable from the last thirty or forty years of the last century. As the second decade of the 21st century began, applications based on computer technology were reaching a critical mass in terms of triggering shifts in some industries that had seemingly “always” been there.  Books, music and movies were certainly among the fastest moving,  perhaps like the dramatic change in lighting and cars beginning a century and a half before with the discovery of crude oil.

The full essay is at "Computer Technology Revolutionizing Industries." 

Organizational Bureaucracy at Odds with Creativity in Film

Art through corporate bureaucracy can be likened to oil and water. The rise of the studio system to produce film as an art form thus evinces a necessary evil. To be sure, organization is necessary to literally organize the various facets involved in the production of a film. However, needless managerial levels have gone beyond what is needed for coordination, particularly in television, and have stifled good narrative in the process.

The full essay is at "Organizational Bureaucracy and Film."

Going to Work: Is Money the Exclusive Motive?

In the month before the Oscars, Turner Classic Movies runs films under the promo, "Thirty One Days of Oscar."  Interestingly, in promoting this series, the network reminds viewers to watch the Oscars on another network.  Although the strategy could be that if people watch the Oscars, they will be more likely to watch TCM, it could also be that the people who operate TCM really do love movies and they are not bothered at all by viewers going to another network to view the gold standard of cinema: the Oscars. In other words, it could be that a passion for film trumps the incessant drive for more profit (i.e., greed) that typically occupies the attention of business managers. I submit that this is rare in business. 

The full essay is at "Going to Work."

A Structural Conflict of Interest in Feinberg's BP-Claims Disbursement Office

A year after the BP oil rig explosion in the Gulf of Mexico, only $4 billion of the $20 billion fund alloted by BP had been paid to claimants. Out of 800,000 claims submitted, two-thirds had been processed.  That is to say, two-thirds of the claims translates into 20% of the available funds. It appears that Ken Feinberg, the lawyer tasked with administering the funds, was being too stingy.

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

Business Ethics in the Business World: A Glimpse from Goldman Sachs

Goldman Sachs’ ethics code reads in part, “[We] expect our people to maintain high ethical standards in everything they do. . . . From time to time, the firm may waive certain provisions of this Code.”[1] The explicit conditionality is notable and significant. I contend that among other reasons, a negative impact on the bank’s financial position and/or profits is apt to trigger such a waiver not only at Goldman Sachs, but from the business standpoint more generally.


The full essay is in Cases of Unethical Business, available at Amazon.com.

1. William D. Cohan, Money and Power: How Goldman Sachs Came toRule the World (NY: Doubleday, 2011).

Conflicts of Interest for Public Officials: How Broad?

Michael Carrigan, a member of the City Council in Sparks, Nevada, “says he was trying to make sure his vote on a proposed casino, one that his campaign manager helped develop, did not pose an ethics problem.”[1] Carrigan backed the Lazy 8 casino project proposed by Red Hawk Land Co. Carrigan’s friend and campaign manager, Carlos Vasquez, worked as a consultant on the project. The question is whether the elected official’s relationship to his campaign manager who was a consultant on a project to be voted on constitutes a conflict of interest sufficient for the official to have not voted. The Sparks city attorney told Carrigan that he could vote on the project as long as he publicly disclosed his relationship with the project consultant. The attorney was obviously thinking in terms of transparency. Carrigan made the recommended disclosure. The Nevada Ethics Commission, however, claimed after the vote that Carrigan had a conflict of interest and should have abstained even with the transparency. In its reprimand, the commission cited ethics law that says public officials must not vote when their judgment could be affected by a commitment or relationship to someone in their household, a relative, business partner, or a person “substantially similar” to those specified. The commission classifies the campaign manager in the “substantially similar” category because Carrigan’s loyalties to his campaign manager would have affected his judgment. Caren Jenkins, executive director of the Nevada Ethics Commission, explains, “Here was a friend, a buddy, a close confidant. If Mr. Carrigan ever thought it was in his best interest to vote against the project, would he have?”[2] Carrigan sued the commission for its reprimand, claiming it violated his free speech rights. The Nevada Supreme Court sided with Carrigan, who pointed to the fact that he was not in business with his campaign manager. The Nevada Supreme Court said the catch-all category the commission cited failed to “limit the statute’s potential reach (or) guide public officers as to what relationships require recusal.”[3] The state court said the law “thus chilled speech.” In its appeal to the U.S. Supreme Court, the lawyer representing the commission argues, “State and local legislators have no personal ‘free speech’ right to cast votes on particular matters, much less ones in which they have a personal interest.”[4] The Reporters Committee for Freedom of the Press similarly claims that rules such as Nevada’s are important to ensure politicians don’t vote based on personal interests.

The full essay is at "Conflicts of Interest for Public Officials."

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1 Joan Biskupic, “Nev. Official’s Vote Turns Free-Speech Case,” USA Today, April 18, 2011, p. 6A.
2. Ibid.
3. Ibid.
4. Ibid.

 

Contending Healthcare Social Contracts: A False Choice?

On March 21, 2010, the U.S. House of Representatives approved “a far-reaching overhaul of the nation’s health system . . . , voting over unanimous Republican opposition to provide medical coverage to tens of millions of uninsured Americans after an epic political battle that,” according to The New York Times, “could define the differences between the parties for years.”[1] The vote was 219 to 212. “This isn’t radical reform,” the U.S. president said, “but it is major reform.”[2] Whether that was real change is an open question. House Speaker Pelosi said, “Today we have the opportunity to complete the great unfinished business of our society and pass health insurance reform for all Americans that is a right and not a privilege.”[3] While Obama was referring to the bill’s reliance on extant private insurance companies, absent even a public option, Pelosi made explicit the change to the American social contract—access to health-care would henceforth be a right for all citizens rather than a benefit to be conferred to those able to pay from their own wherewithal and insurance. The basis of this new right was undoubtedly the human right to life, as in the right to life, liberty and the pursuit of happiness. The closeness of the House vote suggests that the people were divided on whether the new right ought to be conferred (and/or whether it should be conferred by the U.S. Government rather than decided on a State by Stat basis). Sure enough, the pendulum did indeed shift.  

The full essay is at "Contending Healthcare Social Contracts."

1. Robert Pear and David M. Herszenhorn, “Obama Hails Vote on Health Care as Answering ‘the Call of History,” The New York Times, March 22, 2010, p. A1.

2. Ibid.

3. Ibid.

Achieving Balance in American Federalism: On the Crusade of Texas’ Rick Perry

As the governor, or head of state, of Texas, Rick Perry has been on a crusade to reinvigorate American federalism. Referring to the efforts of officials in the U.S. Government to secure the Mexican border, Perry said, “It is part of that frustrating paradox where Washington neglects their responsibility for areas clearly within their purview, while interfering in other areas in which they’re neither welcome nor authorized.”  The chief executive was pointing to a little-noticed point concerning the expansion of the domains in which the federal government is active.

The complete essay is at Essays on Two Federal Empires.

See Rick Perry, Fed Up! and the critique of Perry's book, Skip Worden, American and European Federalism: A Critique of Rick Perry's 'Fed Up!