Finance

P.M. Ethics Dispatches, 1/11/2022

/ Jack Marshall / 15 Comments

We have to keep baseball ethics alive even if baseball itself is in a state of suspension: the owner and players are, for the first time in decades, arguing about how to divide up their billions, everything from roster size to minimum salaries are on the table, and as of now, the two sides aren’t even talking with the season just a couple of months away. One of the issues to be settled is whether the National League will finally capitulate and adopt the designated hitter rule, which was accepted in the American League on this date in 1973, a day which many traditionalist fans then and now regard as an unforgivable scar on the integrity of the game. Baseball has always been celebrated for its equity and balance: as it was envisioned, every player on the field had to both hit and play defense. The DH, which is a batter who never uses a glove, also allowed the pitcher to be a defense-only specialist, never picking up a bat which, advocates of the new rule argued, was a result much to be wished, since the vast majority of hurlers are only slightly better at hitting the ball than your fat old uncle Curt who played semi-pro ball in his twenties. All these decades years later, the National League and its fans have stubbornly maintained that the DH was a vile, utilitarian gimmick spurred by non-ethical considerations, mainly greed. When the rule was adopted, American League attendance lagged behind the NL, which also was winning most of the All Star games, in part because that league had embraced black stars far more rapidly than “the junior league.” The DH, the theory went, would make games more exciting, with more offense, while eliminating all the .168 batters in the ninth spot in every line-up.

I had a letter published in Sports Illustrated in 1973 explaining why I opposed the DH as a Boston Red Sox fan. Since then, I have grudgingly come to accept the benefits of the rule: it gave the Sox David Ortiz, allowed Carl Yastrzemski to play a few more years, and let American League fans see such all-time greats as Hank Aaron at the plate after they could no longer play the field. It was a breach of the game’s integrity, but it worked.

1. At least that’s fixed. The Supreme Court issued a corrected transcript of the oral arguments in the Biden vaccine mandate case, and it now accurately records Justice Gorsuch as saying he believes the seasonal flu kills “hundreds…thousands of people every year.” The original version wrongly quoted him as saying hundreds of thousands, which allowed those desperately trying to defend the outrageously wrong assertions by Justice Sotomayor regarding the Wuhan virus to point to Gorsuch and claim, “See? Conservatives are just as bad!” Prime among these was the steadily deteriorating Elie Mystal at “The Nation,” who, typically for him, refused to accept the correction. Sotomayor is one of the all-time worst Supreme Court justices, though she will be valuable as a constant reminder of the perils of affirmative action. Her jurisprudence makes the much maligned Clarence Thomas look like Louis Brandeis by comparison. Continue reading →

Week-Launching Ethics Warm-Up, 10/4/2021: A Happy Ending To A Pit Bull Saga, A Congressional Leader Makes My Head Explode, And More [Updated]

/ Jack Marshall / 34 Comments

launch

Singer Janis Joplin died of a heroin overdose on October 4, 1970. The anniversary prompts me to make an unkind observation that I was tempted to make after reading all of the tributes and expansive rhetoric praising “The Wire” actor Michael K. Williams after he died of an overdose of fentanyl and heroin on September 6. For at least a hundred years, anyone who takes heroin does so knowing that it is addictive and frequently fatal. My attitude toward Joplin, Williams, John Belushi, Phillip Seymour Hoffman, Billy Holliday, and many other artists who have killed themselves this way involves more anger than sympathy. The world was robbed of their gifts because they were reckless. In the case of black artists, they endanger their admirers by creating a romantic aura for what is, in the final analysis, stupid and irresponsible conduct. How hard can it be not to start using an addictive substance that you know might kill you? The fact that the drug is illegal should be a big clue.

1. And speaking of the joys of recreational drugs...In a new study published in Psychological Medicine, researchers in the University of Birmingham’s Institute for Mental Health and the Institute of Applied Health Research found a strong link between “general practice recorded cannabis use” and mental ill health. Senior author Dr. Clara Humpston said: “Cannabis is often considered to be one of the ‘safer’ drugs and has also shown promise in medical therapies, leading to calls for it be legalized globally. Although we are unable to establish a direct causal relationship, our findings suggest we should continue to exercise caution since the notion of cannabis being a safe drug may well be mistaken.”

Continue to exercise caution? Who’s exercising caution? Popular culture and upper-middle class whites have been issuing pro-pot propaganda for half a century, while mocking government efforts to discourage widespread use and acceptance of another destructive recreational drug. Now nearly every state is on a path to legalize it, especially because they smell tax revenue.

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Now THIS Is The Appearance Of Impropriety…

/ Jack Marshall / 17 Comments

impropriety

The big legal ethics story of the day is a Wall Street Journal report showing that 131 federal judges, appointed by nearly every President from Lyndon Johnson to Donald Trump, have violated federal law by failing to recuse themselves in cases where either they or family members held a financial interest in one of the parties, meaning that the judge’s decision could have resulted in a direct or indirect benefit. This is, of course, a conflict of interest. Even if the judge was as trustworthy as a saint and would never dream of allowing such a conflict to interfere with his or her judgment, allowing these cases to appear before them violates the judicial ethics canon requiring judges to avoid even the appearance of impropriety.

The Wall Street Journal report found that the judges failed to recuse themselves from 685 court cases since 2010. About two-thirds of all federal district judges had holdings of individual stocks, about one of every five of these heard at least one case involving those stocks without withdrawing. When these judges participated in such cases, about two-thirds of their rulings on motions favored the party that their or their family’s financial interests would benefit from prevailing.

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Of COURSE The United States Has To Spend Trillions On Infrastructure Renewal, And Of Course Ignorance, Incompetence And Dishonesty Will Screw It Up. Again.

/ Jack Marshall / 15 Comments

Welcome to the first Russian doll Ethics Alarms post, in which a series of essentially identical essays are nested to shout out a truth that hasn’t changed in decades. That truth is that the infrastructure of the United States is getting progressively worse.

Sub-truths nested in that one include these:

  • This was an urgent crisis 40 years ago, and has only been getting worse since.
  • Both parties and all Presidents since—Nixon? Johnson?—are equally responsible, because they all  participated in “kicking the can” down the rotting road for political gain. This was and is political cowardice. Maintaining the infrastructure is one basic function of government, like national defense and law enforcement, that both Big Government and limited government advocates can agree on. However, since infrastructure rot is only a headline matter when bridges collapse, airliners crash or sewer pipes burst spreading disease and death, it’s a long term expense with benefits that the public won’t see immediately, if at all. Their grandchildren, however, will have better lives.
  • Politicians prefer short-term benefits, like sending checks directly to potential voters (and favored interest groups) under the fantasy of “economic stimulus.” This is a bi-partisan breach of duty and ethics.
  • As with everything else, the news media is stunningly incompetent in explaining the facts. I just heard two Fox News talking empty-heads arguing about whether sewer and water pipes were “infrastructure.” This is because much of the partisan attacks on Biden’s proposal has focused on the relatively small proportion of the financial requirements that will pay for  “roads and bridges.'” Of course sewer and water pipes are infrastructure, and indeed among the most dangerous parts of a nation’s infrastructure to let deteriorate, as ours have in too many major cities to count. You people (Dana Perino and Bill Hemmer in this case) are incompetent idiots, and should be working at a 7-11. Also included in the “infrastructure,” in case you care: canals, airports, railways, public transportation, barges, ferries, waterways, traffic signals, the power grid, and more. You are making the public even more ignorant than they already are. You’re a disgrace. I hate you.
  • Jobs are not infrastructure, but to listen to the advocates of renewal,  you would think that creating jobs is the main reason to undertake the effort. This is disinformation, and also unforgivable.
  • A rotting infrastructure hurts the economy in thousands of incremental, sinister, unavoidable ways, making goods more expensive, people poorer, limiting economic growth, and yes, costing jobs, with all of these effects getting worse over time.
  • No, the nation can’t afford to do what needs to be done–which is what will lead to national disaster if it is not done. That is because we have allowed the national debt to reach the red zone, and again, both parties are to blame, Republicans for irresponsible tax cuts, and Democrats for creating out-of-control social programs. However, whether we can afford it or not, we have to do it, spend the money, raise the taxes, be responsible…or we are dooming the nation. That is the situation cowardly, incompetent, venal and dishonest leadership has created.
  • I see little hope that President Biden’s efforts are any more serious or that they will be any more successful than the proposals that have gone before. It is true that even some infrastructure repair is better than none, but Democrats and progressives have painted themselves, and the nation, into a corner.

For example, the Biden administration has blocked a major highway expansion in Houston, Texas, claiming that the project is racially discriminatory and harmful to the environment. The state was about to begin a proposed widening of certain sections of Interstate 45 that has been years in planning when the Department of Transportation invoked the Civil Rights Act of 1964 to temporarily shut it down pending further review, Politico reported.

The department’s intervention is supposedly  a “test case” for Transportation Secretary Pete Buttigieg, has claimed  “racial injustice” in highway construction and vowed to make “righting these wrongs an imperative” under his leadership. Local activists say that the highway expansion would disproportionately harm black and Hispanic communities by displacing more than 1,000 homes, hundreds of businesses, five houses of worship, and two schools along the stretch of highway.

If race, class and the environment are going to be the priorities, then essential infrastructure maintenance is impossible. It is that simple.

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Our Financial System And Trust

/ Jack Marshall / 8 Comments

fix

Guest Post by Michael R

The recent House hearing on Wall Street did not actually dig into the scandals that are threatening our financial systems. The blatant manipulation of the stock market by market players has been made clear and people are just ignoring it. The same is true with precious metals trading, with JP Morgan being fined almost $1 billion for manipulating metals the same way the hedge funds manipulated GameStop above. This is after being fined $550 million in 2015 for rigging currency prices. In 2013, they were fined $410 million for price fixing energy In 2019, they were fined for manipulating the currency market. In one 3-year period, they were fined $35 billion for financial wrongdoing. Why is such a company still allowed to dominate key financial sectors? Why is it even allowed to be in business?

Is our entire system ‘rigged’? Look at the feedback loop the Fed is currently in:

A. “We don’t have inflation because inflation would cause the government to collapse under the interest of $30 trillion in debt.”
B. “We have inflation due to unrestrained printing of money, so foreign government dump Treasury bonds that pay little interest and are being devalued by inflation.”
C. Interest on the Treasury bonds increase to attract customers.
D. This can’t happen, so the Fed declares there is no inflation, prints a lot of new money to buy the bonds off the market to make the bond more valuable (because there are fewer of them).
E, This still isn’t enough and only half the bonds are purchased.
F. The fed prints more money to buy the bonds that didn’t sell to keep interest rates from increasing due to inflation from printing…

Return to A...
Certainly looks rigged. Cue hyperinflation!

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GameStop Ethics

/ Jack Marshall / 46 Comments

Guest Post by Andrew Nelson and Rich in Ct, with a note by Humble Talent

GameStop

[I would say that finance is among my worst topics along with soccer and calculus. My request for clarification on the current GameStop controversy and its ethics implications attracted helpful responses, and I am combining them into one collaborative post. First, Andrew:]

Gamestop, a publicly traded company, was seen as undervalued by some users of an internet forum, in this case, a reddit forum called r/wallstreetbets. That same stock was seen as on the brink of collapse by a hedge fund management group, Melvin Capital, who decided to short sell….

_______________________

Here Humble Talent clarifies:

A short sell is when someone, usually a broker, is holding stock in a company they think is overvalued. They owe their client X number of shares, regardless of the price. So if you have 100 shares of Game Stop stock at $4, and you think it’s going to $2, you sell at $4 and then rebuy the stock at $2, pocketing the difference and letting your client swallow the loss. It’s a loss they would have swallowed one way or the other, so they’re not really hurt, per se. Basically, you’re betting that a stock will go down in value. If the stock instead increases in value, you lose the difference. I think it breaks a fundamental fiduciary duty and should be illegal, but it’s where we are.

So what happened here was that a lot of people thought Game Stop was overvalued, it was listed at approximately what I said it was, between $3 and $4 per share. Short sellers were banking on it decreasing in value, so they sold all their client’s shares. Now that there’s been a ridiculous noise buy on these stocks, and they’ve *increased* in value 1000% (real number) instead of decreasing 50% (expectation) the firms that short sold the stock are going to have to find stock to buy to make their client’s portfolios whole. Which means that they will have to buy thousands of shares back at $400 when they sold them at $4, instead of $2, which they expected to. That 2000% difference over all those shares represents tens of millions of dollars, just on the Game Stop shares.

Basically, a bunch of unethical portfolio managers got their paws slammed hard in the cookie jars of their client’s portfolios, and it’s magnificent.

_______________________

….Whether through intent or accident, these two groups converged on Gamestop at roughly the same time.Regardless of original intent, the users of the reddit forum got more and more people to buy into that stock, causing the price per share to inflate drastically. It’s sitting at over $400 per share when I last checked. A similar situation is happening with AMC stock, though with less drastic inflation.

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China. The Emergent Competitor

/ Jack Marshall / 5 Comments

China

Guest post by Michael West.

[I realized…I’m a little slow sometimes…that it was silly to call outstanding posts on Ethics Alarms Open Forums “comments” when they are, in fact, stand alone essays. With this example by Michael West, Ethics Alarms will, when appropriate, designate such commentary as guest posts. That will not mean that my answer to all of the people who tell me they love Ethics Alarms and want to contribute with product promotions or articles on haberdashery, insect larvae or cosmetics will be changing. It’s still NO. JM]

This will be a tough nut to crack. We’re heavily “interdependent” with them economically (but we don’t have to be). We’re becoming direct competitors in the eastern Pacific.

From an “all nations are equal” point of view America has the distinct positional advantage. We have allies ringing the Chinese periphery on one side. As frontiers are described, nations prefer a “peripheral zone” around their “cultural core” before the nation even reaches the “fringe” or the “frontier”.

For the vast majority of American history, the core was the “Boston-Washington corridor”, with the periphery being the “North” +West Coast and the “fringe” being “the South and the West Coast” and the frontier being “the Southwest” and Alaska + Hawaii, with outposts in the wide ranging Pacific. America has been “comfortable”.

China…with landmasses in it’s ideal “peripheral zone” being oriented towards the United States: Japan and Taiwan, and several being neutral but more inclined to the USA, such as Vietnam….and with landmasses in it’s “fringe and frontier”, such as Indonesia and Singapore, being oriented towards the United States, has never enjoyed the “comfort” that the USA has felt.

But that’s okay…because all things are not “being equal”. I don’t care that a Communist country that inflicts as much pain on it’s landed periphery and fringe- Tibet and Western China- that it would love to inflict on its Pacific periphery. They are the Bad Guys.

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Once Again, Foes Of A Looming Progressive Dictatorship Are Depending On An Unethical Pol To Save Them

/ Jack Marshall / 25 Comments

insider_trading_ban

It would be nice if Senator David Perdue, one of two Republicans in Georgia Senate run-offs that will determine whether the Democrats’ last four years of sabotaging President Trump’s Presidency is considered a success or a failure, was an ethical, trustworthy official. But as if Perdue already didn’t have enough obstacles to winning re-election, like the ridiculous attempted boycott of the run-offs some Republican wackos are pushing (the boycott plan narrowly beating out holding their breath and setting their heads on fire as alternatives to voting), there is also this: he appears to be among the worst of Congress’s inside traders.

I’ve written a lot about this ongoing scandal. (The chart above is from one of the earliest posts.) The practice continues because both parties’ members make so much money from it that they refuse to police themselves adequately. Perdue is just the latest offender to come under public scrutiny. This time, the motivation for the exposure is the critical nature of the Georgia races, prompting the now open and obvious committed ally of the Democratic Party, the New York Times, to do a front page hit job on the Senator their Dark Masters have to destroy. But just as being paranoid doesn’t mean they aren’t out to get you, being biased doesn’t mean you can’t be right. The Times article about Perdue is damning, and not especially surprising, since I would believe the same of most members of Congress. This is literally sanctioned corruption, and has been for a long, long time.

From the Times article:

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Theoretically Tuesday Ethics Nightcap, 10/6/2020 (All Right, Both Of These Should Be Individual Posts): The Impending Wauwatosa Riots And Reflections On The Distinction Between Racism And Being Treated As A Minority

/ Jack Marshall / 54 Comments

Back to the Future

Why “theoretically”? This post was almost finished at about 6:15 pm yesterday. Then I heard a scream from my wife: Spuds, our delightful rescue dog of a month’s duration as a Marshall had somehow shed his lead and dashed off in the direction of the field behind the school near our house. I had to fumble for my shoes (I’m barefoot most of the day—keeps the gout away!) and a sweater, pause for a brief, clearly unfair “how could you let this happen?” exchange with Grace (that I paid for later,) and went running in the direction of my wife’s “He went thataway!” finger. The odds were high where Spuds would be. Of late he has frequently joined a small group of delightful dogs (there’s Snow, Star, Minnie, Hunter, and other occasional drop-ins) and their owners for a sundown romp. He was not scheduled for a playdate, but had decided, I assumed, to schedule one himself. Sure enough, there he was, wrestling with Snow the Samoyed. It only took me about twenty minutes to collar him: he knew he was in trouble.

After that adventure, I was beset by one vicissitude of life (my Dad’s phrase) after another, and never got back to the office….until now, at around 4:30 am Wednesday morning. Spuds woke me by rolling over onto my face, and I decided to finally get this post up.

1. Oh great: here comes another one. Wauwatosa, Wisconsin police reported that a 17-year-old fired a gun before he was fatally shot by a police officer in a Mall parking lot in February. There is no question that the shooting victim, Alvin Cole, had a 9 mm semiautomatic handgun and ammunition on his person when he was shot; they were recovered at the scene. The gun had been stolen. Police were summoned after a disturbance was reported inside the mall; Cole ran from police and according to the police report, fired first. Officer Joseph Mensah fired five shots at Cole, police said, killing him.

Tomorrow, that is, on the October seventh, the DA is  supposed to hand down the decision of whether to indict Mensah. Fortunately, Mensah is black, so the racist cop trope is a bit harder to maintain that in other recent incidents. But now, thanks to so much of the culture swallowing whole the false litany of Black Lives Matter,  the assumption is that any time a black man, and especially a teen, is shot in a confrontation with police, it’s an example police brutality. If Mensah was white, I assume the riots would have started already. The city is preemptively closing the schools and City Hall among other pre-riot measures. Once again, Facts Don’t Matter.

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Observations On The Trump Tax Returns Dud

/ Jack Marshall / 37 Comments

Someone at the IRS finally leaked the President’s taxe returns to the Times. That’s a crime, just as it would be if someone leaked my taxes or yours. Of course, this was inevitable, filled as the government bureacracy is with unethical employees who feel it is their duty to try to undermine their ultimate supervisor. Those who cheer on this per se wrongful conduct are enabers and rationalizers.

Other points:

1. In “An Editor’s Note on the Trump Tax Investigation,” the Times felt it necessary to remind readers, “Some will raise questions about publishing the president’s personal tax information. But the Supreme Court has repeatedly ruled that the First Amendment allows the press to publish newsworthy information that was legally obtained by reporters even when those in power fight to keep it hidden. That powerful principle of the First Amendment applies here.” That’s right, the news media has a right to encourage others to break the law and to publish the results. It’s still unethical, except in the rare circumstances where the public interest is indisputably served by furthering an illegal act, as with (arguably) the Pentagon Papers. Publishing documents protected by law that show no wrongdoing only to encourage partisan attacks in an election year is not such a situation.

The Times can’t be punished, but whoever leaked the documents can, and should.

2. I guess this is the time to post this tweet by CNN’s Brain Stelter, which proves his stunning ethical deficits as well as anything he has ever said on CNN. He was responding to another tweet pointing out that leaking tax returns is a crime, as I just did.

Oh! So if Stelter knows he has received embezzled funds from a bank employee, Stelter can spend the cash on a hairpiece because the thieving employee had legal access to the cash!

Has any news network simultaneously employed three dolts as mentally deficient as Stelter, Don Lemon, and Chris Cuomo? Continue reading →