Mistrust in Business: A Nietzschean Critique

In his commentary on the loss of trust in business, government and society, Michael Wolff laments to decline of trust through what he calls “consumer history.” As trust can be maintained with little or no further cost once established, Wolff is perplexed as to why more business practitioners, politicians and even religious functionaries do not rush to fill the gap.

The full essay has been incorporated into (or swallowed up by) On the Arrogance of False Entitlement: A Nietzschean Critique of Business Ethics and Management, available in print and as an ebook at Amazon.

On the Political Power of Nuclear Power: Japan's Radioactive Plutocracy

Reversing his campaign pledge to reduce Japan’s reliance on nuclear power even as he had just been elected as prime minister of Japan in 2012 (Tepco’s nuclear power-plant meltdown having occurred in 2011), Shinzo Abe announced that he would have more nuclear reactors built in Japan. “They will be completely different from those at the Fukushima Daiichi nuclear power plant,” he said in a television interview.[1] Adding a silver lining on to a rather gray, radioactive cloud, he said, “With public understanding, we will be building anew.”[2] This change in policy is dramatic, for the previous administration--that of Yoshihiko Noda—had sought to phase out nuclear power in Japan by 2040. In fact, Abe’s own party, the Liberal Democratic Party (LDP), had in its platform the goal “to establish an economy and society that does not need to rely on nuclear power.”[3] That the shift took place within the LDP suggests a shift in its power-dynamics, with the pro-nuclear sub-faction astonishingly having gained the upper hand over its rival while memories of the tsunami-triggered meltdown were undoubtedly still fresh.

The full essay is at "On the Political Power of Nuclear Power"

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1. Hiroko Tabuchi, “Japan’s New Leader Endorses Nuclear Plants,” The New York Times, December 30, 2012.

2. Ibid.

3. Ibid.

Mario Monti: Succumbing to Power?

He was supposed to have been reluctantly pushed into briefly stepping in as prime minister in Italy to push austerity measures through the state legislature.  According to Deutche Welle, “The 69-year-old former European Commissioner was appointed to lead Italy’s government . . . to restore Italy’s finances following Berlusconi’s departure.” The technocrat was not supposed to so interested in power that he would want to stay on. At the end of December 2012, Mario Monti announced that he would lead a centrist group of politicians against the Democratic Party and Berlusconi’s People of Freedom party in the upcoming election.  Had the former bureaucrat “found religion” in some political cause, or had he developed a taste for power? If the latter, we might ascribe the motive to the human propensity to resist giving up power willingly.

  Mario Monti at the European Commission. A launching point for Italian politics?    (source: nytimes.com)

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

Averting the "Fiscal Cliff": A Solution Overlooked

With just days to avert the beginning of automatic, across-the-board cuts in the U.S. federal budget and the end of the Bush tax cuts and payroll tax reductions, President Obama met with Congressional leaders at the White House following a brief respite over Christmas. The discussion was doubtless on what could pass Congress in time. The U.S. Secretary of the Treasury was also attending, so the upcoming debt-limit could also have been part of the discussion. It could be argued that the perspective itself at the meeting must have been too narrow—too small—even though the crisis demanded leadership.

The complete essay is at Essays on Two Federal Empires, which is available at Amazon. 

José Manuel Barroso: Picking Romania’s Government?

On December 9, 2012, Romanian voters approved of the coalition of the then-current Prime Minister Victor Ponta, by a two-thirds majority. However, because Ponta had been in a bitter political feud with President Traian Basescu—Ponta’s coalition tried and failed to impeach the president—it was not clear that the president would nominate Ponta for prime minister even though that post must be approved by the parliament. Basescu did wind up nominating Ponta. The interesting point here is that President Barroso of the European Commission publicly waded into the choice on behalf of Ponta. 

 Prime Minister Ponta of Romania: Propped up by Barroso?           exclusivnews.ro

The full essay is at Essays on the E.U. Political Economy, which is available at Amazon in print and as an ebook.

Pot in Colorado: Getting High on American Federalism

On November 6, 2012, Colorado’s citizens approved with a 55% majority a marijuana-legalization measure that allows residents over the age of 21 to possess up to an ounce. The measure also allows for the commercial growing and selling of pot. More than a month later, the government of Douglas county in Colorado passed a law prohibiting companies from growing or selling cannabis. Meanwhile, the U.S. law continued to make the growth, sale, possession or use of pot illegal. Over all, it would seem to be a case of federalism as a pretzel of sorts, all twisted up into itself. This case study can be used to point to a more perfect union in terms of federalism.

The complete essay is at Essays on Two Federal Empires, available at Amazon.

Is a Stronger E.U. in America’s Interest?

Is a stronger E.U. necessarily in the interest of the U.S.? According to Ed West of the Telegraph, “it’s not clear whether a united Europe would necessarily be more pro-American, automatically siding with the US against the rest. European countries have their own interests with regards the Middle East, Africa and China, which often don’t coincide with America’s, and on a range of world issues European public opinion is fairly hostile to America, decades of American military protection having inspired not gratitude, but resentment. Britain is something of an anomaly in Europe, popular opinion being unusually hostile to the EU and warm to America.” This passage can be taken to task on at least two points.

The complete essay is at Essays on Two Federal Empires, which is available at Amazon.

A British Referendum on the E.U.

Legislators can make the task of getting instructions from the popular sovereign, the people, unduly difficult. In November 2012, the Florida legislature confronted its people with several proposed constitutional amendments written in legalese that even some lawyers found difficult to navigate through. The next month, Boris Johnson and Liam Fox of Britain pressured their state’s legislature to put forth a referendum that, unlike that of Florida, would present the people with a clear choice.

The flags of Florida and the United Kingdom. 

   

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

How to Beat the Rap, HSBC Style

In HSBC’s settlement with the U.S. Government, the bank has to pay $1.9 billion—about half a quarter’s profit—but avoids criminal charges. The New York Times quotes government officials who said they were hesitant to indict the bank because formal charges could mean bankruptcy, which in turn could roil the financial system itself owing to the bank being too big to fail. That is to say, one of the advantages of being TBTF is apparently that of effective immunity from criminal charges.

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

SEC Goes After Chinese CPA Firms: Beyond Diplomacy

The Securities and Exchange Commission brought an administrative proceeding against the Chinese affiliates of five major CPA firms, including the “Big Four,” in 2012. Chinese companies had raised billions of dollars on American (and Canadian) exchanges only for the share prices of the companies to plummet due to questions about bookkeeping and disclosures. The SEC alleged that the CPA firms in China refused to hand over documents in connection with the investigation of alleged accounting frauds at nine Chinese companies. The SEC maintained that firms that audit U.S.-traded companies must follow U.S. law, and the Sarbanes-Oxley Act requires foreign audit firms to hand over documents about U.S.-listed clients at the SEC’s request. SEC Commissioner Luis Aguilar said that the investigations “have been hampered by the lack of access to relevant documents.” For their part, the CPA firms in China (affiliates of American-based CPA firms) pointed out that their audit papers are treated like state secrets in mercantilist China, and that the auditors could therefore be imprisoned for handing the material over a foreign government without permission from the Chinese state. 

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

Bailouts Without Stimulus: E.U. Policy on Spanish Banks

Directly and indirectly, the housing bust that began in 2007 put “the bailout” on the map in the lexicon of industrial policy both in Europe and North America. Whereas in the U.S., few restrictions were placed on the recipients, the E.U.’s first €37 billion ($47.9 billion) for Spain’s banking sector required the four major state banks “to make sharp cuts in their balance sheets and payrolls,” according to the Wall Street Journal. Bankia, the largest of the banks to be bailed out, planned to cut its number of employees by more than 6,000, close more than 1,000 branches, pass on any further real-estate lending, and reduce its assets by €50 billion as the bank focuses on retail banking—getting back to the knitting, as it were. Presumably the bankers were not allowed to grant themselves bonuses as a condition of the bailout. If so, it would differ appreciably from the U.S. bailout of Wall Street banks.

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

Bad PR and Bad Banking: BOA

How to do bad PR: Announce plans to raise fees effecting low-income customers, then pull back, wait a year, then announce such plans again, then pull back yet again. This sort of PR strategy gives rise to headlines such as, “Bank of America Backs Down on New Fees.” The Wall Street Journal could have added, “yet again.” Besides the obvious PR downside to announcing unpopular fees—and on one’s least well-off customers—is the implication of weakness or vulnerability in repeatedly backing down. In the animal kingdom, Bank of America would not exactly be the alpha male lion. Rather, the bank would be one of the other males, which may or may not get to reproduce.

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

The Filibuster: States' Rights or a Partisan Ploy?

Before 1917, senators could filibuster only by talking continuously on the U.S. Senate floor. There was no mechanism to stop them. Such filibusters were rare until entering World War I was debated. In 1917, the Senate passed its first “cloture” rule, whereby two-thirds of the Senate could cut off debate and force a final vote. Between that year and 1971, no two-year session of Congress had more than 10 such votes. Even so, in 1971 the rules were changed to allow other legislation to be taken up during a filibuster—relieving a senator of having to continuously talk to maintain one. Making it easier to filibuster quickly led to the predictable result of more filibusters. In the 93^rd Congress (1973-74), the number of cloture motions jumped to 31, from an average in the 1917-1971 period of two per Congressional session. In 1975, the number of votes needed to stop a filibuster was lowered from 67 to 60. However, this change did not curtail the use of the device, as it is rare for a party to control 60 votes out of 100 in the U.S. Senate. By 2010, the average number of cloture motions per two-year session had risen to 129, which suggests that the filibuster had become more typical in how senate business was to be conducted. In effect, legislation and even executive business, such as confirming presidential nominations, needed a supermajority (60 out of 100) in the upper chamber of Congress.


The complete essay is at Essays on Two Federal Empires, available at Amazon.

Non-Tariff Barriers to Trans-Atlantic Trade

Karel De Gucht, the E.U. trade commissioner, said in late November 2012, “There is now, for the first time in years, a serious drive towards an E.U.-U.S. free-trade agreement.” The office of his counterpart, Ron Kirk, the U.S. trade representative, indicated that a high-level working-group consisting of Europeans and Americans was working on “how best to increase U.S.-E.U. trade and investment.” The sticking point concerned non-tariff barriers, such as different regulatory standards.

The complete essay is at Essays on Two Federal Empires, available at Amazon.

Karel De Gucht, the E.U. Trade Commissioner, advocating a free-trade pact with the U.S.  (Reuters).

Steve Jobs: The Sad Truth about Visionary Leadership

According to Joe Nocera, Steve Jobs was not a consensus-builder but a dictator. Lest it be objected that this disqualifies him from being admitted to the “true leader” hall of fame, Nocera hints at an explanation for why visionary leaders may not be all that touchy-feely after all. Nocera suggests that Jobs was a dictator because he “listened mainly to his own intuition.” He “never stopped relying on his singular instincts in making decisions” on Apple products. This makes complete sense, as his sense was singular. 

Steve Jobs at Apple. Is it the vision or charisma that accounts for the focus on such pictures?   Getty

The full essay is in On the Arrogance of False Entitlement: A Nietzschean Critique of Business Ethics and Management, which is available at Amazon.