Finance

LaBron, Steinbrenner, and Warped Sports Ethics

/ Jack Marshall / 9 Comments

Sports ennoble us through the  symbolic exploits of latter-day mythic heroes, who use their amazing skills and talents to exemplify courage, grace under adversity, loyalty, accountability, sacrifice, and, of course, sportsmanship.

Or so they say.

Sometimes it works out that way, but just as often an extraordinary athlete like LeBron James will choose to use his prominence to promote less attractive character traits, like greed, vanity, disloyalty, cruelty and boorishness. For some reason, the mega-millions LeBron was going to receive for fleeing Cleveland as an NBA free agent was not sufficient booty: the basketball star felt that “branding” required that he tease as many cities and franchises as possible, rub Cleveland’s loss in the faces of his previously worshipful fans in that city, and then announce his final choice of new employers in an ESPN TV special that embarrassed his sport and his species. James is not alone, of course; he has lots of company among college and professional athletes whose preening and selfishness make it impossible to use their names and “role model” in the same sentence.

But for the use of sport to warp ethical priorities, nothing quite matches the nauseating accolades being heaped on the late George Steinbrenner, whose ownership of  the New York Yankees was a decades-long advertisement for the principle that the end justifies the means, and as long as you win, nothing else really matters. Continue reading →

The Senate Closes an Unethical Tax Loophole

/ Jack Marshall / 5 Comments

When a defendant corporation is hit with punitive damages in a jury verdict, that means that in addition to causing the plaintiff’s injuries or damages, the corporation also was guilty of wrongdoing. Punitive damages are large amounts of money that the losing defendant must pay over and above compensatory damages, in order to make it too expensive for the company to keep doing what caused the original problem. This is one of the virtues of the civil justice system. Thanks to punitive damages, a lawsuit by a single injured party can result in a sufficiently painful financial penalty that the corporation has a significant incentive to reform.

So why do the tax laws allow companies to use punitive damages as tax deductions, since it 1) lowers tax revenues and 2) makes the damages less expensive, less painful, and less of an incentive to correct unsafe, dangerous or dishonest practices? Continue reading →

The Incredibly Unethical BP Boycott

/ Jack Marshall / 22 Comments

Readers of Ethics Alarms know that I think boycotting is at best economic bullying, at worst a non-violent form of terrorism, and generally unethical except in cases so rare that they are difficult to imagine. The current BP boycott is close to the worst variety, blunt and destructive mob anger akin to the reaction of the excitable citizens of Homer Simpson’s Springfield, whose solution to every crisis seems to be a riot.

BP was outrageously and perhaps criminally negligent in creating the conditions that led to the Gulf oil spill, and it is right and just that the burden of accountability and responsibility has fallen on them. And it certainly has fallen on them: as much as every citizen of the United States may want to personally kick the company while it is prone, the fact is that the dire consequences of its misconduct are already overwhelming, both long and short-term. Right now, the Gulf states are still dependent on the diligence and expertise of the company to try to limit the damage it has caused, and the company is, if only for its own survival, doing the best it can to succeed. This fact alone would make a public boycott of BP at this time senseless and counter-productive.

The boycott is also unfair. Continue reading →

The Amazing, Versatile and Unethical Goldman Sachs Code of Ethics

/ Jack Marshall / 6 Comments

Perhaps we all owe Goldman Sachs an apology. Everyone heaped outrage and ridicule the April spectacle of its executives going before the U.S. Senate and asserting under oath that they saw nothing at all unethical about intentionally selling “crappy” investment products to their trusting customers, then making money for their own firm by betting that the products would fail. Many were reminded of the tobacco executives, in the famous AP photo, all raising their hands to swear that they did not believe nicotine was addictive. After all, Goldman Sachs’s own website pledged openness, honesty, trustworthiness and integrity, saying,

“A critical part of running the marathon is acting consistently and playing a fair and honest game. ‘There’s only one thing we sell, and that’s trust.’ This applies to anything, but nowhere more than Investment Management. Clients trust us to do the right thing, and particularly when you’re in investment management and you’re appointed to manage clients’ money, they trust that you’re going to do it in a prudent manner. The worst thing you could do is breach that trust. We look for people who want to run the marathon, and who understand that trust fuels it.”

Now it seems that we were lacking a crucial document: the firm’s internal Code of Ethics, which Goldman Sachs recently made public. Under the provisions of this remarkable Code, what Goldman Sachs did to its clients wasn’t unethical at all; deceptive, conflicted, and unfair, yes…but not unethical, in the sense that it didn’t violate the Ethics Code itself. “Impossible!” you say? Ah, you underestimate the firm’s cleverness. Continue reading →

Abuse of Power in the Schools, Part 1: Pimping the Kids

/ Jack Marshall / 4 Comments

Blogger-mom Laura Wellington is making the talk show rounds after a post last month on her blog aroused interest and commentary from various newspapers. In the post, she indignantly described a fundraising drive by her child’s school that understandably raised her ire:

“…the letter [my daughter] handed me stated my daughter was to accomplish chores around the house with the goal of being paid by me for those chores the sum of $20.  She would then have to hand the full $20 over to the school to make up for the shortfall in their overall budget which, ultimately, disallowed the kids to go on yet another class trip.  Participation was mandatory according to what my daughter told me and the letter seemingly conveyed (however, on a later phone call, my daughter’s teacher altered the word “mandatory” to be “suggested” despite all evidence to the contrary)…”

Wellington’s complaint is that schools need to exercise fiscal responsibility, and she is joining a rising chorus of protest among parents across the country who feel that their tax dollars should not have to be supplemented with constant arm-twisting from schools urging them  to buy and sell over-priced cookies or provide additional contributions. This is a fiscal policy issue; the ethical issue should be less controversial. When did schools get the authority to dictate what children do outside school? How do they justify requiring unpaid labor for the school’s benefit? Continue reading →

Ethics Pop Quiz: “What’s Unethical About Auctioning Intern Positions?”

/ Jack Marshall / 6 Comments

Are you ready to exercise those ethics brain cells?

The News Alert blog is reporting that the Huffington Post auctioned off an intern position for $9000, and another  internship —three weeks of it with Richard Branson, founder of Virgin Atlantic Airways, and three weeks with hip-hop entrepreneur Russell Simmons — was auctioned off for $85,000, to benefit Simmons’s charity, Rush Philanthropic.

Question: Is there anything unethical about this, and if so, what?

[Play the “Final Jeopardy Theme” while you think this over…] Continue reading →

Ethics Quilt: Ghosts, Teachers, Facebook, and More

/ Jack Marshall / Leave a comment
  • Is It Ethical to Censor Someone’s Question You Think Is Unethical?:  Here is a post questioning whether a question can be so offensive that it is unethical to even ask it. The obvious answer: if you refuse to ask it, nobody will have the chance to explain what’s wrong with it.
  • “Yeah, Well, he Probably Deserved it…”:  As mind-blowing as the video of the Texas teacher assaulting and savagely beating a male student are the many, many on-line comments expressing sympathy and even support for her actions. What on earth is going on out there? Yes, teachers are placed in a nearly impossible position by restrictions on class discipline. Yes, there are students whose conduct is outrageous. Yes, I’m sure many teachers have wanted to lash out. Yes, the kid was probably no angel. Neither these or any other factors can possibly justify an adult authority figure resorting to violence against a student, a child, and someone placed in her care by the family and the state. “Where can I contribute to her defense fund?” writes one commenter. Another’s response is that if it were her son, she would come down to the school and beat up the teacher. And people keep asking me why I bother to write about ethics… Continue reading →

Goldman Sachs Ethics: An Easy Call

/ Jack Marshall / 5 Comments

Sometimes the biggest ethics stories are the easiest. I haven’t written much about Enron, for example. When a company uses deceptive, shell corporations to hide its liabilities so profit reports look artificially rosy and investors keep buying company stock, it is obviously unethical. Even the ethics-challenged management of Enron could figure that out. The Goldman Sachs scandal, once one clears away the static and spin, is almost as straight-forward.

Are the Democrats seizing upon Goldman Sachs as a scapegoat for the financial meltdown they, like the Republicans, were complicit in as well? Obviously. That doesn’t mean that the firm doesn’t deserve all the abuse that is being heaped on it. Did the S.E.C., supposedly an apolitical and independent agency, time the announcement of its suit against Goldman Sachs to help rally public opinion behind the Obama Administration’s proposed Wall Street reforms? It wouldn’t surprise me. We have seen previous Justice Departments, the C.I.A., the F.B.I. and other supposedly “non-political” entities act blatantly partisan over and over again. The S.E.C. trying to give Obama’s reforms a boost would be one of the least dastardly of these breaches, especially since the public should be informed about the kind of conduct the culture of Wall Street permits. G.O.P. complaints about the timing of the announcement are, to say the least, strange. Would it be better to hide this story from the public? What matters is whether the S.E.C. has a legitimate case. It is clear that it has. It may not turn out to be a winning case, but it is legitimate. [Note: Personally, I think it is  more likely that the S.E.C. announced the law suit to counter the embarrassing revelation that so many of its regulators spent endless hours on the job surfing and downloading pornography off the internet.]

The legal issues will probably be settled in court; the topic now is ethics. After watching the testimony of various Goldman Sachs officials before the Senate, I find it hard to see a credible argument that what the firm did—selling what its own employees referred to as “crappy” investment products to firm clients, and then betting its own funds that those products would end up losers—could be called anything but unethical. Continue reading →

When Blind Justice Blinds Love: the Saga of the Gambling Grannies

/ Jack Marshall / 1 Comment

I’m sure you, like me, are eagerly anticipating the resolution of the case in New Britain Connecticut, in which one elderly sister is suing the other for a share of a 2005 Powerball jackpot of a half million dollars. The result, however, will be determined by technical legal issues, such as whether thee was there a valid contract between the sisters to split all gambling winnings, as the suing sis insists. There has already been one interesting wrinkle: gambling contracts are typically unenforceable, and so was this one until it applied to Powerball, which is state lottery and therefore, unlike other gambling in Connecticut, legal…just one more little bonus from of state governments taking over the numbers racket.

Yet the more important question, for those of us other than the sisters, Rose Bakaysa and her younger sister Theresa Sokaitis, is why some application of ethical values didn’t stop the lawsuit from getting to court. The situation is this: Rose and Theresa were always close,  and in their retirement, the two began gambling regularly, taking trips to casinos and playing the lottery. They made a deal, years ago (Rose is 87 and Theresa is 84) that if either of them won anything, they would split it 50-50.

In 2004, right before Rose hit the jackpot, the sisters had an argument over–what else?—some money, and stopped speaking to each other. Rose tore up the notorized contract, but Theresa kept it safe, just in case. This is why they are in court. Continue reading →

The Ethics of Unethical Ethics Teachers

/ Jack Marshall / 5 Comments

An essay by lawyers Joel Cohen and Katherine A. Helm begins with this story:

“Noted ethics philosopher and Nobel Laureate Bertrand Russell once was questioned by the Harvard Board of Governors about having an extramarital affair with a student. When faced with the hypocrisy of being an ethics professor engaged in immoral conduct, Russell argued his private affairs had nothing to do with his professional duties. “But you are a Professor of Ethics!” maintained one of the board members. “I was [also] a Professor of Geometry at Cambridge,” Russell rejoined, but “they never asked me why I was not a triangle.”‘

The authors use the anecdote to explore the issue of whether proven ethics miscreants like Eliot Spitzer, Rod Blagojevich and disbarred class action lawyer William Lerach ought to be lecturing, speaking, or otherwise being listened to in regard to their opinions and advice on ethics. After all, acting teachers are often indifferent actors, and the best baseball managers weren’t much as players. Why should ethics be any different?  Continue reading →