Not Part Of The Program
In their business section the Australian Broadcasting site has a long article, Financial crisis not just about greed, says ethicist
Simon Longstaff, the executive director of St James Ethics Centre, has written extensively on corporate greed.
He believes the genesis of the global financial crisis did not simply come down to greed and excess, but to a failure of ethics.
“I think the bigger story in this is although some people would attempt at the beginning of their analysis of these events to say that what was to blame was the failure of regulation, in fact the better interpretation, I think, is to say there was a failure of ethics, full stop,” he said.
While I understand Mr. Longstaff’s point of view, he is an ethicist after all, I think he misses the most salient point about the large Wall Street financial corporations – they don’t have any ethics to fail.
Even Alan Greenspan, loyal Randian to the bitter end, finally realized that there was no “enlightened self-interest” that would rein in the worse of the abuses, and they really did become so fixated on profit that they brought the global markets down around them. The only “metric” that mattered was the amount of money they could make, with no consideration to the real risks involved.
The “elite” business schools have been churning out greedy, self-adsorbed, cretins with MBAs for years, and the system could no longer contain their gambling. There were no ethics instilled in these people, as is evinced in the self-serving whining by people like Jake DeSantis [eviscerated by Matt Taibbi]. DeSantis says that he was working for a dollar a year, but thinks no one will notice the million dollar bonus he was promised [in a contract] at the end of the year.
4 comments
I think that your point Bryan is also Simon’s point. 🙂 You are simply coming at and articulating it in different ways. I’m sure he would probably agree with you.
I know many of us do.
A reason why the crisis hasn’t affected Australian financial institutions (an apt descriptor that last), is that executive salaries and bonuses are reviewed by the shareholders before they can be enacted, and there is a shareholder review board that are very strict about bonuses especially. Since Rudd became PM< they Gov has limited the max bonus allowed to their annual salary. Of course, it’s not perfect, and we did have a big disaster with one company, but it limits the damage significantly.
Our free-to-air TV Network, SBS, have very informative program called Insight. Last weekend they did a special on Executive Salaries that might be worth some or your time. 🙂
There is one honest CEO (and the ONLY One I’ve heard of anywhere!)
He get’s paid $millions on his shareholding dividends. So basically, he has a definite vested self-interest in ensuring good performance, or he doesn’t get paid anything. What a novel concept! 😉 Most CEO’s in the USA taking in over $100million a year couldn’t care less if the company performs well, they get paid anyway.
[Had to take a break for thunderstorms and tornadoes and other annoyances in the area.]
My argument is that these people aren’t anti-ethical, they are a-ethical, they had no ethics to begin with, so they have no concept of what Mr. Longstaff is discussing. The business schools are producing people who believe that they are entitled to obscene amounts of money because they have figured out how to cheat people.
I’m being cat blocked.
[We had that weather here yesterday. The tornadoes missed us, thank Dog.]
An ethicist says the problem is a lack of ethics… what a surprise. And if you have only a hammer, a lot of your problems look like nails. What’s wrong with saying outright that many of these people are greedy, amoral bastards? I’ve never been ashamed to turn a profit in my business, but I’d certainly hang my head in shame if I’d done what they have. Call a greedy bastard a greedy bastard.
Meanwhile, there are worse things than being cat-blocked. With Tabitha and Samantha, you may call a spayed a spayed, but don’t expect not to be sprayed. This morning I saw the neighbor hosing down an area rug in the back yard; as they are the owners of the aggressive indoor/outdoor cat, I think I know what happened. Indeed, I could smell what happened. Among neighborhood cats, this may be the Battle of all Mothers…
Steve Bates´s last blog post..Obama Justice Attacks Habeas
As many others have noticed, the financial sector doesn’t actually produce anything. They are the consummate middle men, taking money for moving money around. They risk other people’s money to make their money. They are not part of the capitalistic system, they are a parasite on that system. They can be useful when they act as an honest broker, but when they are concerned only with profits they prevent the system from operating.
Regulation in capitalism is dependent on risk. When actual risk is distorted by limiting it through the corporation, or increasing it with the derivatives, the “free” market can’t work.
You and I, Steve, are selling a product. We actually produce something of value that is bought by someone. Banks are moving other people’s money, and insurance companies are gambling syndicates, they produce nothing.
The stock market does not finance businesses. By the time an enterprise is ready for an initial public offering [IPO] it is already a viable business. The companies whose stock is listed on the major markets are not really benefiting from changes in the price of that stock, until, or unless, they offer more stock. Most of the transactions involve entities with no connection to the companies that have issued the shares being traded. The people doing the trading aren’t investing in the companies, they are betting on the price of the stock. Often the two have little in common.
While stock prices have gone up, the value of the companies has been decreasing: they lease instead of buying land; they maintain minimal inventories; they have increasing debt loads; they outsource critical functions. The corporations are becoming shells populated by a few managers, with the core of their business actually owned by someone else. As the salaries of executives have soared, their real responsibilities have been diminishing.
Most of the “unfortunate business decisions” reported on today would have properly been classified as fraud and perjury not long ago.