Category Archives: Finance

Unethical Quote Of The Month—But Awfully Revelatory, If You Have The Integrity To Accept What It Means—California Gov. Jerry Brown

0404_NWS_LDN-L-BROWN-DC

“Economically, minimum wages may not make sense. But morally, socially, and politically they make every sense because it binds the community together to make sure parents can take care of their kids.”

—–Governor Jerry Brown on April 4, as he signed into law a phased state-wide increase in the minimum wage to $15 dollars an hour.

As Commentary wrote in reaction to this jaw-dropping admission following an irresponsible act, “Good intentions have always inoculated the left against criticisms of the consequences of their policy preferences.” This has become a culture-wide, self-destructive malady during the Obama administration, led by the President. Lately, Obama has become increasingly open about it, as when the President killed the Keystone pipeline citing climate change concerns while admitting that doing so would have no likely effect on climate change, but most of his “signature policies” are similar. The Iran deal bids fair to leave Israel as a smoldering wasteland, and the Iranian government has gone out of its way to demonstrate that it cannot be trusted while already violating, as even Obama admits, the “spirit” of the deal, but God Bless Obama for trying to restrain its nuclear ambitions.

The Affordable Care Act is failing in virtually every respect, fulfilling most of the dire predictions of its opponents, but this is still an “achievement” because, and it’s true, more Americans are insured than before. Obama’s Education Department’s sincere—I’ve no doubt about it—effort to make women feel supported and safe on college campuses seeded extensive due process abuse and discrimination against male students, and the most-gender divided campus community since the Seventies. His civil rights policies and rhetoric have created the worst racial divide since the early 1960’s. The intentions in all of these cases were, at least arguably, impeccable and admirable, and apparently for committed progressives, it is that, and not that the policies in pursuit of Panglossian goals have been societally disastrous, that matters.

The mass insanity of raising the minimum wage is the apotheosis of this mania. Note that I am trying to attribute the best possible motives with this: I have read many conservative writers who believe that the left knows the policy will be catastrophic economically, but because it will be politically useful in the short-term, they don’t care about the long-range consequences. Admittedly, statements like Brown’s makes this difficult for me not to agree with them, except that it is usually considered stupid to tell voters that what you are doing makes no sense.

To state what should be obvious, if  large minimum wage increases don’t make sense economically, that means they are bad policy, incompetent, and thus unethical. And we know–know—that they do not make sense economically.

Here’s economist Robert Samuelson: Continue reading

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Barbra Gives An Ethics And Intelligence Test!

Streisand tweet

Quick, now: what is Babs missing, other than the basic ethics principle that “Everybody does it” is not a justification or an excuse for unethical conduct?

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Unethical Tweet Of The Month: Hillary Clinton

hedge funds

Among her almost infinite flaws, Hillary Clinton is stunningly lacking in self awareness, and her statements often—astoundingly often—point to her own misconduct and ethical bankruptcy without her comprehending the self-indictment. She has tweeted, more than once, this sentiment, for example:

“To every survivor of sexual assault…You have the right to be heard. You have the right to be believed. We’re with you.”

…though Hillary was emphatically not “with” the women who credibly accused her husband of sexual assault, and still do. She will make statements to one group that are the exact opposite of what she recently said to another group, without batting an eye. Hillary actually committed the meta-lie of saying she never has lied, which is manifestly unbelievable. Then there was this Titanic-style gaffe…

“There should be no bank too big to fail and no individual too big to jail.”

…coming from someone who is, many legal experts believe, not already under indictment purely because she is “too big to jail.” (and then there is hubby Bill, who engaged in flat-out illegal election conduct in Massachusetts that you or I would have been arrested for, and didn’t even get a rap on the wrists.) Neither Clinton has any integrity at all, or shame either. It’s really quite stunning.

Last week, Hillary tweeted this howler:

Hillary Tweet 1

This is an example of a politician intentionally playing to class divisions, ignorance and bias, and worse, encouraging them. It is exactly like saying that it is “unacceptable” that Jimmy Fallon, who only hosts a silly late night show, makes more money than any cancer surgeon, special needs teacher or EMT alive. In some ways it is worse, because most people understand what those jobs are, and may  sort of comprehend the economic principles at work: if Jimmy Fallon drops dead, there is no replacement who will bring to the job exactly what Jimmy Fallon did. He is a unique commodity, and EMT’s are not. The statement is just an emotional attack on the fact that people value laughing over things that are objectively more practical, and entertainment salaries reflect that. Continue reading

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Blame Tom Toles For This Post: NO, Obama Can NOT Honestly Claim That He Cut The Deficit

Toles deficit

While we’re on the topic of misleading statements, as in lies, foisted on the American public by the President of the United States, I now have to bring up his boast in his State of the Union speech that “We’ve done all this while cutting our deficits by almost three-quarters.” [Don’t get me started with “all this.”]

I was going to leave this infuriating line alone, I really was, because when you get on the topic of deficits, the numbers-spinners have a field day. Then I saw Tom Toles’ cartoon, above, for the Washington Post.

Toles, if I haven’t made it clear before, is the worst of a breed that is itself a disgrace to journalism, a form of editorial content that is immune from the ethical restrictions that are supposed to govern journalism. It is the ultimate “clown nose on/ clown nose off” scam, and Toles exploits its license beyond the nauseating limits set by his over-rated predecessor, the equally biased but not quite as shameless Herb Block….you remember, the guy who drew all businessmen as obese, cigar-chomping robber barons out of the 1890s, and conservative Congress members as cavemen. Yeah, he was subtle and fair all right. Toles is much worse.

By what version of English and logic can anyone say that Obama reduced the deficit at all, much less by “almost three-quarters? Here is the chart of the deficits since 2005 in dollars: Continue reading

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Signature Significance: Bernie Sanders’ Ignorant Tweet

Bernie tweet

Yesterday, the Democratic candidate for President of the United States, a long-time member of the United States Senate, tweeted this message to his “followers,” and also, given the nature of Twitter, the nation:

“You have families out there paying 6, 8, 10 percent on student debt but you can refinance your homes at 3 percent. What sense is that?”

Now, if you don’t instantly recognize why this is an astoundingly ignorant statement, especially for a Presidential candidate running on a platform of economic restructuring, that’s okay. Don’t feel badly. It’s a weekend, you’re probably groggy from all the holiday cheer, and most important of all, you aren’t presuming to hold yourself out as qualified to be President, or constantly lecturing about the evils of capitalism. Sanders is, however, and this cretinous statement is signature significance. Nobody who understands loans, interest, collateral, banking, or economics would say, write or publish such a fatuous statement, even once. This is signature significance: an informed, logical, attentive, competent individual will not make such a bone-headed mistake…never. Sanders, however, has said this at least twice; in October, he tweeted a variation on the same economically ignorant theme:

“It makes no sense that students and their parents pay higher interest rates for college than they pay for car loans or housing mortgages.”

Actually, it does, Senator; it makes perfect sense, unless you are twelve. The concept is called “collateral.” That is something of value that  a lender can take if a borrower defaults on the loan. The deal is interest, plus security, the collateral. A house or a car are tangible collateral, so the interest rate can be lower. When the loan is for college tuition, however, there is no collateral. If the borrower defaults on the loan, the bank can’t take the student’s diploma, or education, or download all of the alleged knowledge the loan paid for from brain to laptop. Of course the interest rate is higher. That is, “of course” if you know anything at all about finance.

The unavoidable and shocking conclusion: Sanders is holding himself out as the leader to revolutionize how the U.S. economy works, stimulate growth and jobs, and show the way to a fairer and more just financial system, yet he is stunningly uninformed about the basics of finance, hasn’t learned a thing in all his years in the Senate, and worse, lacks the diligence to learn what he has an obligation to understand in order to justify having a vote on economic matters in the U.S. Senate, never mind setting policy as President.

This is bad.

Is there any excuse or defense for that tweet? No. Should anyone trust an elected official this ignorant and so lazy and arrogant that he makes no effort to disabuse himself of financial illiteracy? No. Does such a bone-brained misunderstanding mean that no intelligent person should listen to or take seriously any of his pronouncements about the economy? Yes.

To be fair to the Senator, let’s try to find some explanation for this that doesn’t prove that he couldn’t pass Economics 101 at a community college: Continue reading

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Robert Samuelson And Social Security’s Pro-Rich Bias

A typical nuanced view of the problem...

                                    A typical nuanced view of the problem…

My father was in the private pension business before he died, and the idiocy of how Social Security was set up drove him to distraction. I’m pretty sure he voted for Ross Perot in 1992 because Perot argued that it made no sense not to means test the program. I’m tempted to take a copy of Robert J. Samuelson’s op-ed last week to Arlington National Cemetery and leave it on his gravestone.

Samuelson is reliably one of the most rational, thoughtful and probing of all the op-ed columnists. Last week he wrote about how the life-expectancy gap between the wealthier segments of U.S. society and the poorer ones made Social Security as it is currently constituted a significant contributor to the income gap that progressives desperately want to make a key issue in the 2016 election, because dividing the nation by class (and race, ethnicity, religion and gender) is a big part of their playbook.

He wrote…

“The figures come from a new report by the National Academies of Sciences, Engineering and Medicine, which estimated life expectancies for workers born in 1930 (now 85) and 1960 (now 55) at age 50. The findings are stark. For the richest fifth of men, there was a 7.1-year increase in life expectancy, from 81.7 for those born in 1930 to 88.8 years for those born in 1960. Meanwhile, for the poorest fifth of men, life expectancy fell slightly, from 76.6 years for those born in 1930 to 76.1 for those born in 1960. The changes for the remaining men also parallel income: For the second richest fifth, the increase was 8 years to 87.8 years; for the third richest, 5.3 years to 83.4 years; and for the fourth richest, 1.1 years to 78.3 years.”

Nobody should be surprised that wealth equals health. It is difficult to pinpoint why the gap is so large, but should we have to? It seems intuitively obvious. Many  disadvantages–race, upbringing, family stability, good roles models, education, character, intelligence, opportunities, culture, neighborhoods—that undermine quality of life simultaneously or in combination with each other handicap earning ability  and health before we even get to the question of medical care.

Samuelson goes on… Continue reading

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Law vs. Ethics: A Snatched Bar Mitzvah Gift, A Leaky AG, An Embarrassing Scoreboard, and”OINK”

Oink

I try to keep my legal ethics seminars up-to-the-minute, so while preparing for yesterday’s session with the Appellate Section of the Indiana Bar, I came across a bunch of entertaining stories in which the ethics were a lot clearer than the law, or vice-versa. All of them could and perhaps should sustain separate posts; indeed, I could probably devote the blog entirely to such cases.

Here are my four favorites from the past week’s legal news, involving a mother-son lawsuit, a brazenly unethical attorney general, a college scoreboard named after a crook, and police officer’s sense of humor: Continue reading

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