Pilant’s Business Ethics CBS NewsCan academics (professors) be co-opted by the corporate grants and consultancies? Academia is for most professors not a lucrative field. Beginning salaries of less than thirty thousand dollars are not unknown. My understanding is that the field of economics is considered by some authorities to be the most corrupted.
This posting offers insight into academic corruption as reported in the documentary, Inside Job. I liked what he has to say.
James Pilant
In an earlier article I reported that a writer had said that the Chinese used threats to force companies to move to China. At that time, I said I would look into the charge.
I have looked into the charge. This is what I found out.
China will not let some companies do business in their market without moving operations to their country.
Companies that move there are subject to unexpected laws and at least in one case, the arrest of its agents until they signed over their Chinese assets to the Chinese partner.
They are forcing companies to register thier patents in China giving that country a great deal of technology that is patented in other countries, particularly the U.S.
They are forcing auto companies operating in China to consolidate with other companies to form new companies up to a certain size or lose the right to do business in China.
Corruption in China may be as much as ten percent of the gross national product with bribes and shake downs a normal part of doing business.
China has used threats in its foreign policy to gain access to markets, to force countries to accept its goods and it make sure its dissidents are not supported.
China has been doing industrial espionage on a large-scale for years.
China has developed an enormous cyber warfare apparatus and has used it against other countries, essentially an act of war.
Based on what I have found, there is no direct evidence of China telling a company, “move here or else.”
James Pilant
From a Salon article called
The NFL: An indictment of America
by Ethan Sherwood Strauss -
True fans possess an enormous capacity to live through their football heroes, but they retain an even greater capacity to do so without empathy. Just last week, Bears quarterback Jay Culter was all but put in stocks for leaving a game due to a torn MCL. Fans burned his jersey as though Cutler “quit” out of feminine frailty, as though this professional QB had concocted some elaborate, cowardly, fan-jobbing conspiracy. The public violently, irrationally demands that a player play, even with knee ligaments dangling. No wonder so many of these athletes gobble painkillers in a manner that would trump a toilet-bound Elvis.
I’ve spent my life wondering what people saw in football. NFL football, I get that. That’s entertainment. What I don’t get is college or high school football. There’s this strange story line that football builds character and teamwork. I imagine there is some development there – “playing fields of Eton” and the other charming and nonsensical tales of our culture. But for almost all colleges, football loses money all the time every year. In high school it is at best a distraction from the real purpose of school and worse, a money drain diverting resources from other programs.
But the author here is right. It is the pain. It is the harm the sport does to the players. And the fans. There is some strangeness there. Many years ago I was in high school and the NFL players went on strike. My fellow students deprived of their television pacifier were outraged. My father subscribed to Sports Illustrated and I read about the strike. I discovered that the average life span of an NFL player was 58 years and the injury rate was 100%. That’s a lot to give up so that people can be entertained.
The author continues -
At a certain point, we are — in part — defined by this tendency. That America endorses the NFL’s pain party starts to say something about the country. Such as: American culture is replete with couch-jockeys who feel more masculine for having watched other people destroy themseves. Or: American culture is fine with perpetuating a system of destruction, so long as a few, mostly poor people are involved. In many ways, our attitudes towards fetishized athletes mirror our attitudes towards those glorious troops whom we only support with platitudes. This is not good.
I agree.
James Pilant
Students now leave college with a debt of around $25,000 dollars a piece. When you choose a job after assuming that kind of debt, do you stay in places with generally low salaries like Oklahoma, Arkansas, Kansas, Missouri, or do you get out and head for the coast where the salaries often run double for the same job? What effect does this brain drain have on the economic development of these states, the viability of their communities and the kind of people elected to public office?
James Pilant
According to their data (Chronicle of Higher Education), of the student loans that entered repayment in 1995, one of every five has since gone into default. That’s correct, fully 20% of those who borrowed could not meet the expectations set forth in their repayment schedule.
Fast Forward to 2010
While one in five is truly scary, one needs to understand that the average student loan debt from that period was roughly $13,000. Today it is nearly double that figure, $23,000 plus.
One might suggest, using simple math, that fifteen years from now we might expect a doubling of the rate of default.
So no, the crisis isn’t hyperbole. According to the Wall Street Journal, “consumers now owe more on their student loans than their credit cards.” According to the June 2010 figures from the Federal Reserve, Americans owe some $826.5 billion in revolving credit. The total owed on student loans comes to $829.8 billion, according to Mark Kantrowitz, publisher of FinAid.org and FastWeb.com.
Over at the Huffington Post, op ed writer Zac Bissonnette noted the Chronicle data and went on to note that defaults are only the tip of the iceberg when it comes to the impact of student loans. Many students who were not in default likely managed to stay in good standing only by accepting career options based on pay instead of goals and lifestyle choices based on debt as opposed to following their heart.
… Read More …
When will student loans reach such a size and ferocity in collection that a majority of American students no longer believe it is financially worthwhile to go to college?
Has the American dream simply disappeared for millions of Americans to whom a college education was the gateway to some form of economic security?
James Pilant
The cost of a college education is rising faster than the cost of medical care and as much as three times as fast as consumer prices in general. But that’s just the beginning of the price of admission.
This is the story of a debt crisis few are talking about.
Americans now owe more on their student loans than they do on their credit cards — a debt fast approaching $1 trillion with no end in sight.
Students borrow because they see little choice. A college education, after all, is a key to success. That, it seems, is an article of faith.
For many student loans are a continuing crisis in their lives. Is this kind of debt for millions of Americans sustainable? What are the social effects?
Does the student loan burden keep students away from running for public office, pursuing jobs valuable to society like police, fire and military?
Is this the way, we as a nation should finance our children’s education when that education is so critical to national success and competition?
Read this article and see what you think.
James Pilant
Like home ownership, a college degree used to be perceived as one of the keys to success. Unfortunately, these days it’s starting to look like a gateway to financial ruin.
The Federal Reserve has confirmed that as of June 2010, consumers now owe more on their student loans than on their credit cards.
A separate report reveals that one in five people can’t make their monthly payments.
As a result, Sallie Mae and Citibank have become the arch nemesis of millions, and the country as a whole faces what some warn is America’s next “mortgage meltdown.”
..Read More …
This is a fascinating post about how we treat internet posts differently than traditional writing. I enjoyed it. I hope you do too.
James Pilant
This is an ethical weighing of PGE’s (Pacific Gas and Electric) actions in regard to its pipelines.
If you are interested in business ethics in connection with real events not just theory, this is a great article.
James Pilant
via talklawblog
The IMF played an important role in the Tunisian Revolution
This is from the International Monetary Funds Survey Magazine, an article entitled -
(September 10th, 2010)
Maintaining a stable macroeconomic environment that promotes employment and growth also requires determined expenditure control, the IMF assessment said. Key for success in this area is the reform of the social security system. To this end, the authorities are in discussion with social partners on pension reforms to buttress the pension system’s financial sustainability. The government should also explore ways to contain subsidies of food and fuel products, the report noted.
The authorities are also undertaking reforms to make the tax regime more business friendly. International comparisons with other emerging market economies show that the tax burden on businesses is relatively high in Tunisia and that there is scope to increase the yield from consumption taxes. To promote private investment and employment, the authorities intend to reduce tax rates on businesses and to offset those reductions by increasing the standard VAT rate and expanding the tax base through the elimination of exemptions, the report noted.
Tunisia’s growth-enhancing strategy also includes a package of measures to strengthen the financial sector through consolidating the financial strength of banks, enhancing the role of banks in the economy, restructuring the public banking system, and bolstering the presence of Tunisian banks abroad. The aim, ultimately, is to transform Tunisia into a banking services hub and a regional financial market.
To strengthen the country’s ability to adapt to changes in the global economic environment, the authorities also intend to modernize the monetary policy framework by introducing inflation targeting and to implement convertibility of the dinar and capital account liberalization by 2014. The IMF assessment said that this strategy would require significant preparatory work, particularly further strengthening of the banking system and deepening of the foreign exchange, money, and capital markets. The report also noted that the authorities would need to take additional steps to ensure increased reliance on interest rates as the operational target of monetary policy.
The IMF had been recommending an austerity regime for Tunisia for many years. Being an exceptionally corrupt and kleptocratically ruled nation, the pain of these kinds of “austerity” measures fell on the poor. In Tunisia, the poor is virtually everybody.
The IMF was pushing for a decline in government spending particularly in the areas of food and fuel in a poor population that could rarely afford either. Per capita income is a little over $6,000 but the population is divided into a very small oligarchy of immense wealth and a very large population of the poor. So, I would suspect that income among the average Tunisian was probably far less than half. So, they were recommending cuts in food and fuel in a population just hanging on to the edge, hardly able to make it from day to day.
It could be said that the IMF at all times stands for cuts in social welfare spending, business tax cuts, consumption tax increases (a form of sales tax), bank consolidation, and declines in government spending. But there is no issue upon which the IMF is more devoted than inflation control. It crops up again and again in report after report. Inflation damages capital because it makes debts less valuable to creditors. Since while inflation can exist by itself, it is also a characteristic of growing and prosperous economies, that kind of economic growth must be avoided. What is wanted instead is stable economic growth with little or no wage pressure. This removes inflationary pressure and assures those loaning money of a full return on their investment.
There is another thread you pick up when you read IMF reports, a fascination with data. They always want more data. Better reporting they call it.
The numbers are everything. People are not.
James Pilant
These events are hardcore business ethics matters. It is the economic theories of the Chicago School of Economics that propels the austerity measures all over the world. It is the intense privatization movements again pushed by American philosophies and business interests that is a factor in these conflicts. I will cover the IMF and its part in these uprisings in more detail in my next posting.
There are few commentators I trust as much as J. N. Nielsen. Certainly very few are as well read.
I strongly recommend his writings.
James Pilant
