Wall Street Writing Its Own Laws on Risky Derivative Trading

In just four years, Wall Street got away with weakening a part of the Dodd-Frank financial reform law, which became law in 2010 to protect the financial system from the excesses that led to the financial crisis in 2008. Wall Street bankers and their lobbyists accomplished their feat by luring members of Congress into a formidable conflict of interest, which I submit could have been obviated.

The full essay is in Essays on the Financial Crisis, available at Amazon.

Hometown Medical-Office Employees: Human Nature Warping Rational Nature

Plato claims that a psyche well-ordered by reason is just. To the extent that the passions, such as anger and the urge to dominate, are infused in human reasoning, a just order is not possible for members of our species. In dealing with healthcare workers in my hometown, I found what Plato would label as injustice. In fact, reasoning from that case led me to wonder whether justice is even possible.

The full essay is at "Human Nature Warping Rational Nature."

Private Interests Over the Public Good: Energy Companies Capture an Attorney General

In Wealth of Nations, Adam Smith argues that the aggregation of the preferences of consumers and producers for a given good is in the public interest for the product or service. Often overlooked is Smith’s Theory of Moral Sentiments, in which the famous economist wraps a moral sentiment around the individual preferences, hence hopefully constraining them, albeit voluntarily. Herein lies the rub, for it is shaky to assume that a preference that seeks to maximize itself will voluntarily restrain itself when it rubs up against an ethical limit that is felt. Such a moral constraint is like a semi-permeable membrane in that the sentiment naturally triggered when a person comes on an unethical situation or person can be ignored or acted on.

The full essay is at “Private Interests Over the Public Good.” 

Beyond the Reach of Any Greenhouse-Gas Agreement: Nature’s Contribution

With China and the U.S. coming to an agreement in 2014 on limiting their respective greenhouse-gas emissions, the Peru talks suddenly gained new momentum toward a deal on a global scale. To be sure, even the U.S.-China agreement would not kick in for years, if not decades, and a global agreement would not even take effect until 2020 at the earliest. This drawback may pale in comparison to one of nature’s own contributions to greenhouse-gas emissions, and nature itself cannot agree to voluntarily restrict its own output. Accordingly, we should not assume that a global agreement will save the day, rendering the planet still inhabitable for humans in the next century.

The full essay is at "Beyond the Reach of Any Greenhouse-Gas Agreement."

Cheaper Driving on an Uninhabitable Planet

By the end of November 2014, the price of oil had declined about 40 percent since its peak back in the previous June.[1] Expanding American fracking, a steady supply of oil from OPEC, and a weak global economy are the major factors behind the trend. Saving $630 million on gas as compared with what they had been paying in June, American drivers found themselves with more disposable income.[2]  Besides uses such as Christmas presents, groceries, and clothing, more consumers were buying SUVs and Hummers in spite of their low gas mileages. William Dudley, president of the Federal Reserve Bank of New York, pointed to the benefits, saying “falling energy prices are beneficial for our economy and should be a strong spur to consumer spending.”[3] With OPEC countries and Russia hit disproportionately, the U.S. Government had a geo-strategic interest in a further drop in the price of oil. It is no wonder that a major disconnect existed between these benefits and a startling, albeit largely hidden downside.

The full essay is at “Uninhabitable”

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[1] Steven Mufson, “As Oil Prices Plunge, Wide-Ranging Effects for Consumers and the Global Economy,” The Washington Post,  December 1. 2014.

[2] Ibid.

[3] Ibid.

Hardness of Heart vs.Unethical Conduct: Which Is Less Christian?

Monsignor, a film made in 1982—in the midst of a very pro-business administration in Washington, D.C.—depicts a Vatican steeped in matters of finance centering around a priest whose degree in finance makes him a prime candidate to be groomed for the Curia. That cleric, Father John Flaherty, helps the Vatican operating budget during World War II by involving the Holy See in the black market through a mafia. In the meantime, he sleeps with a woman who is preparing to be a nun and subsequently keeps from her the matter of his religious vocation. The twist is not that Flaherty is a deeply flawed priest, or that the Vatican he serves is vulnerable to corruption inside, but that those clerics who mercilessly go after him are devoid of the sort of compassion that their savior preaches.

The full essay is at "Monsignor" 

Wales Compromising Scotland: Should Britain Keep Its Promise?

A few months after residents in the Scottish region of the E.U. state of Britain voted not to secede from the state by a margin of 55 to 45 percent, a state commission announced proposals for the regional assembly to have more authority. David Cameron had promised on behalf of the state government that the Scottish region would be given more power provided the residents reject secession. To be sure, replying on such a promise in political matters is hazardous at best, as changing political winds can easily erode such sand castles. At the very least, political players with their own agendas can succeed in obfuscating the understood validity of such a promise.

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

Political Theater Undermining American Democracy

To be viable, a representative democracy needs a virtuous and educated citizenry. Thomas Jefferson and John Adams agreed on this point in their exchange of letters in retirement. Their assumption was that an electorate would be able to apply judgment informed by virtue and a broad knowledge to not only matters of public policy, but also the candidates and incumbent office-holders themselves. To the extent that the people in power use it to present a false image, the judgment by the popular sovereign is unavoidably marred. The democratic system itself falters even if it is being portrayed as strong by those at its helm. I contend that the extent of political theater being orchestrated by U.S. office-holders compromises the democratic legitimacy of public power at the federal level.

The full essay is at “Political Theater”

Banks Too Big To Jail: A Systemic Conflict of Interest

When a blatant conflict of interest is ensconced in a regulatory system, the public can expect to be insufficiently protected from being harmed. Such a people is probably too tolerant of such conflicts, or else too weak to effectively counter the concentrated power of the vested interests benefitting from the sordid design. I submit that the relationship between U.S. banks and the Federal Reserve is plagued by a clear conflict of interest, and furthermore that the refusal of the Fed and the U.S. Justice Department to go after fraud committed at the big banks is a direct result.

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

Heaven Is For Real: Applying Kierkegaard to a Film

In Heaven Is For Real (2014), a film based on Todd Burpo’s best-selling non-fiction book of the same title, the evangelical Christian minister becomes convinced that his son, Colton, actually visited heaven while in surgery. Todd cannot make his faith-held belief intelligible to even his wife, Sonja. She misunderstands her husband and questions his obsession and even his sanity until Colton tells her something about heaven that applies to her uniquely. Then both parents are uniquely related in an absolute way through faith to the absolute—to the absurd, in Kierkegaard’s parlance. How Todd deals with his realization can be unpacked by applying the work of the nineteenth-century European philosopher, Soren Kierkegaard.

The full essay is at “Heaven Is For Real”

Wall Street Banks in Commodities Businesses: An Inherently Unethical Conflict of Interest

Writing to the bank’s board of directors, an executive at Goldman Sachs wrote that the bank’s commodities division would achieve higher value “if the business was able to grow physical activities, unconstrained by regulation and integrated with the financial activities.”[1] According to Sen. Carl Levin, Goldman’s goal here is “to profit in its financial activities using the information it gains in the physical commodities business.”[2] The integration could be achieved in part by using the bank’s access to nonpublic information from the banking or trading operations to manipulate the price of a commodity by artificially restricting or adding to supplies through ownership at the production or storage stages. This structure contains a conflict of interest. Because resisting the temptation to exploit the conflict would put the Goldman bankers at odds with the bank’s financial interest, I contend that reliance by the public on intra-bank firewalls (i.e., policies) separating the commodity businesses from the bank’s trading operations is too weak to protect the public, including buyers of the commodity.

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

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1, Sen. Carl Levin, “Opening Statement,” Wall Street Bank Involvement in Physical Commodities Hearing, Permanent Subcommittee on Investigations, U.S. Senate, November 20, 2014 (accessed November 21, 2014)

2. Ibid.

Ethical Theory in Business Ethics Courses

It may seem like an oxymoron, but faculty administrators at even research universities can be hopelessly narrow-minded regarding knowledge and how it is to be conveyed. For example, how often are faculty members encouraged to give a lecture or two re-teaching material largely missed on exams (followed by another, shorter examination on that material)? Do faculty administrators work with faculty members in professional schools to see to it that the applied courses are not severed from their basic (i.e., more theoretical substratum) discipline? One of the secrets in the “sauce” at Yale’s professional schools (e.g., Law, Divinity, etc.) is this salience of the respective basic disciplines (e.g., political theory and theology, respectively). Synergy comes gushing through once the false dichotomy is recognized. Before I went to Yale, I was a masters and doctoral student at the University of Pittsburgh, where the dichotomy was alive and well in the university’s social reality; I had to “walk back” the dichotomy myself as I discovered philosophy (and religious studies) while I was still studying business.

The full essay is at “Ethical Theory in Business Ethics” 

Missing Out on Reducing the Carbon Footprint: Human Reason Lapsing on Opportunities

Wind farms and solar panels—these alternatives to coal and natural gas could play a larger role in reducing the human impact on climate change were it not for missed opportunities. That any would be passed by when the species itself may hang in the balance points to a certain recklessness in the reasoning process akin to ill-afforded complacency.

The full essay is at “The Carbon Footprint”

Faith Leadership and Ethical Leadership

Leadership under religious auspices can be distinguished from ethical leadership. The shift from ethical to religious principles is more involved than merely swapping one kind for another. The dynamics pertaining to faith are distinct. Kierkegaard makes this point very well in his text, Fear and Trembling. In short, an individual of faith must go it alone when the paradox of faith violates ethical principles.

Material from this essay has been incorporated into The Essence of Leadership: A Cross-Cultural Foundation, which is available in print and as an ebook at Amazon. 

Homelessness in the U.S.: A Reflection of American Values

According to a report by the National Center on Family Homelessness in 2014, nearly 2.5 million American children were homeless at some point in 2013.[1] The U.S. Department of Education had reported that 1.3 million homeless children were going to school. California, which accounted for one-eighth of the U.S. population at the time, had one-fifth of the 2.5 million, which comes out to nearly 527,000. The relatively high cost of living and shortage of low-income housing, along with a largely stagnant minimum wage, are the more visible factors behind the gap.

The full essay is at "Homelessness in the U.S."

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1. David Crary and Lisa Leff, “Number of Homeless Children in America Surges to All-Time High: Report,” The Associated Press, November 17, 2014.