Where is Dickens When We Need Him?

Dickens' novels all seem to turn around the questions of the "deserving poor" versus the "undeserving poor". While the theory of Social Darwinism -- which Dickens argued against -- has been widely discredited in academia, it keeps popping up in business circles. And today's New York Times has a particularly depressing example.

According to an article by Catherine Rampell, "A recent review of job vacancy postings on popular sites like Monster.com, CareerBuilder and Craigslist revealed hundreds that said employers would consider (or at least "strongly prefer") only people currently employed or just recently laid off."

In other words, if you're looking for a job, you need to have a job. This, despite an unemployment rate of 9.2%, according to the government's Bureau of Labor Statistics.

Refusing to consider someone who's currently unemployed for a job "probably does not violate discrimination laws because unemployment is not a protected status, like age or race," Rampell writes. New Jersey has recently passed a law outlawing the practice, and other states (and Congress) are considering similar action.

But such legislation may not help much: if proving age- or race-discrimination is hard, proving that you didn't get hired because you were unemployed at the time is going to be that much more difficult. Moreover, in a few occupations -- like technology -- it may be legitimately important to stay on top of the ever-changing field. This does not explain the ads that the Times found for concierges, orthopedics device salesmen, air-conditioning technicians, and others that required current employment.

A related, and equally distasteful, practice is that of companies using job-applicants' credit scores to decide whether to hire them. While there may be a handful of cases where such scrutiny is valid (where there is clear opportunity for embezzlement, say), in most cases it is just another obstacle for people who have been laid off and have fallen behind on their bills. And how are they supposed to raise their scores back to prior levels if they don't have a paycheck to cover those bills?

Both techniques are easy shortcuts for companies inundated with hundreds of resumes for every posted position. I understand the problem. I understand the frustration of dealing with resumes that are completely wrong for the position. I understand that even HR departments are short-staffed these days. But short cuts are rarely the ethical choice, and they certainly aren't in this case.

In fact, they may be exacerbating this country's racial divide. In another article in today's Times, Sabrina Tavernise reports that "Hispanic families accounted for the largest single decline in wealth of any ethnic and racial group in the country during the recession, according to a study published Tuesday by the Pew Foundation." In the period from 2005 to 2009, median wealth for white households declined by 16 percent, for African-American households, by 53 percent; for Asians, by 54 percent; and for Hispanics, by 66 percent, meaning that the wealth gap between white households and others is "the largest since since the government began publishing such data a quarter century ago". (The full Pew Foundation report is available on the Times website, here, or on the Pew site, here)

So maybe it isn't Dickens we need, but Joseph Heller. How else can you describe this but Catch-22?

News Corp Dodges Taxes, Too

Shortly before Tax Day, I wrote a post about how General Electric was managing to rack up ginormous profits and a teeny-tiny tax bill. Lots of people, from the left and the right, complained about the unfairness of this. There was relatively calm reporting about it (e.g., The New York Times, here), and there was shrill reporting about it ("scandalous tax breaks", according to CBS's interactive business network, BNET, here; and from Fox News' Bill O'Reilly, here).

Why am I bringing this up now? Because there's a lovely new twist on the News Corp scandal.

Reuters columnist David Cay Johnston did a little extra digging, and discovered that Fox News' parent (News Corp) has not only not paid U.S. taxes in the last four years, it has made money from taxes. According to Johnston (full story, here, and at Salon, here):

Over the past four years Murdoch's U.S.-based News Corp. has made money on income taxes. Having earned $10.4 billion in profits, News Corp. would have been expected to pay $3.6 billion at the 35 percent corporate tax rate. Instead, it actually collected $4.8 billion in income tax refunds, all or nearly all from the U.S. government.

There's even a really lovely little chart, here.

OK, so Johnston might have been exaggerating a bit -- I wouldn't have "expected" News Corp to pay $3.6 billion, because virtually no company actually pays the 35% rate. But collecting $4.8 billion? Really?

Do you think that Bill O'Reilly will be as shrill in castigating his uber-boss as he was in castigating GE?

No, I don't think so either.

By the way, News Corp has now dropped its plans to buy the rest of satellite company BSkyB. Explained News Corp COO Chase Carey, the deal was simply "too difficult to progress in this climate" (full Guardian story, here). By "this climate", I think he means "this disastrous scandal", don't you?

The "News of the World" May be Gone, but the Story isn't Going Away

I wasn't going to add anything to my previous post, and then I got forwarded this story by Sam Gustin at PaidContent: a suit filed by Amalgamated Bank and other funds against News Corp in March alleging nepotism (in the purchase of a company run by one of Rupert Murdoch's daughters) has been amended to reflect the phone-hacking and police-payoff scandal. The revised suit states that the scandal indicates "a culture run amuck" and that the current board of directors "provides no effective review or oversight."

PaidContent also reports that a non-profit group, Citizens for Responsibility and Ethics in Washington (CREW) has called for a Congressional investigation (press release here) into whether News Corp journalists have hacked American voicemail accounts.

Murdoch closed the 168-year-old News of the World last week, essentially claiming that this would take care of the rotten apples. But it appears the other News Corp papers, including the Sun and the Sunday Times have engaged in similarly questionable behavior (click here for a Financial Times update; note that free registration is required to access the FT site).

CREW executive director Melanie Sloan said, "It is becoming increasingly clear this scandal was not perpetrated by a few rogue reporters, but was systematically orchestrated at the highest levels of News Corp.... If Mr. Murdoch's employees can be so brazen as to target the British prime minister, then it is not unreasonable to believe they also might hack into the voicemails of American politicians and citizens."

The Wall Street Journal, the New York Post, and Fox News are among News Corp's American properties.

While the News Corp scandal may represent a new low, let's not forget that American journalists have been guilty of questionable ethical behavior themselves, including phone-hacking. As Howard Kurtz wrote in Sunday's Washington Post, "Back in 1998, the Cincinnati Enquirer paid $10 million and apologized to Chiquita Brands after a reporter obtained voice-mail messages from a company executive 'in violation of the law,' the paper acknowledged."

Murdoch Throws 200+ Under the Bus -- But Not the Right One(s)

If you've read, watched, or listened to the news at all in the last day or two, you've heard about the shutdown of the 168-year-old British weekly, News of the World, as a result of a phone hacking scandal (you've heard so much about it because there's nothing that journalists think is more interesting than other journalists).

Every hour seems to bring some new "juicy" tidbit, which is why the Guardian is live-blogging the unfolding scandal (here). Indeed, there has apparently been so much bad behavior, it's hard to know where to start.

The scandal has old roots.

In 2005, according to the Guardian's interactive timeline, Buckingham Palace began to suspect that the voicemail of Prince William and other royals had been hacked, and called in Scotland Yard. News of the World royals editor Clive Goodman, and a private investigator the weekly had hired, were arrested in August 2006, and were jailed in January 2007. Editor Andy Coulson resigned, claiming he knew nothing, and in August became a senior media adviser to now-Prime Minister David Cameron (Coulson resigned from Cameron's staff in January of this year, and was arrested today).

More victims were uncovered in 2009 and 2010, as well as payments to drop legal action to several of the victims. But the uproar was relatively muted as long as the victims were royals and celebrities who live much of their lives in the public eye.

What made the scandal roar were the revelations this month that the tabloid, Britain's largest-circulation paper (2.7 million), had hacked into (a) the voicemail of a murdered schoolgirl in 2002, even deleting messages to make room in the box, thereby giving the girl's parents false hope that she was still alive, and (b) the phones of families of the victims of the July 2005 London subway bombings. In addition, there are now police investigations into alleged bribery of police officers for information (not just for news tips -- illegal but apparently commonplace -- but also, according to a story by Sarah Lyall and Alan Cowell at the New York Times, "for substantial information, including confidential documents held by the police.")

After all this, drastic action was needed, and News Corp. has taken drastic action, shutting down the paper after this Sunday's issue, devoting all advertising space in the final issue to charities (most major advertisers had already fled), and donating all final issue revenues to "good causes", specified as "organisations ... that improve life in Britain and are devoted to treating others with dignity." (I found the full statement from James Murdoch, chairman of News International, and son of News Corp. CEO Rupert Murdoch at the Poynter Institute site here; scroll down).

But is shuttering the tabloid enough? Is it right?

Murdoch acknowledges that many, if not most, of the 200+ writers, editors, and staff were "either new to the Company or ... had no connection to the News of the World during the years when egregious behaviour occurred."

He did not, however, apologize to that staff, saying only that "I can understand how unfair these decisions may feel." "May feel"? How about, "are"? This is, after all, guilt by association.

Who hasn't been fired? Rebekah Brooks, editor of News of the World when much of the hacking took place, and now chief executive of News International (of which James Murdoch is chairman; the company is the British newspaper subsidiary of News Corp.). Rupert Murdoch is reported, according to Sarah Lyall and Jo Becker's article in today's New York Times, to "regard her as a kind of favorite daughter (although he has four actual daughters)."

The article goes on to quote a "person who knows them both socially":

Rupert Murdoch adores her -- he's just very, very attached to her.... To be frank, the most sensible thing that News Corp. could do would be to dump Rebekah Brooks, but he won't.

Actually, it's more than "the most sensible thing", it would be the right thing, as this happened on her watch and was therefore ultimately her responsibility. Of course, on the "buck stops here" principle, one could argue that Rupert should dump his son James, but the younger Murdoch actually has far more "plausible deniability" than does Ms. Brooks.

Why did the Murdochs move so quickly to close the paper down? You might think it was to silence the chorus of outrage.

But it seems to have done little more than raise suspicions.

Slate's Jack Shafer calls the action "the ultimate 'reverse-ferret'" (read the whole story; it's scandalously funny and deeply depressing). He terms the closing of the paper as an action "designed to scatter and confuse the audience." Shafer continues,

It looks like the sacrifice of something very special to him, seeing as it was his first U.K. newspaper acquisition in 1968. But it's not. It looks like atonement, but it's not. It's supposed to change the subject, but it's too late for that....

As Jennifer Preston and Jeremy Peters wrote in today's New York Times, some immediately saw it "as a ploy to salvage government approval of the News Corporation's potentially lucrative controlling stake in the satellite company British Sky Broadcasting, or BSkyB. Others saw it merely as a rebranding."

Allison Frankel, on her Reuters blog, wrote that -- according to a British media lawyer -- by closing the tabloid down, the company "may not be obliged to retain documents that could be relevant to civil and criminal claims against the newspaper -- even in cases that were already underway."

Moreover, the scandal has made one thing very clear: the relationship between the British press, in the person of Mr. Murdoch (senior), and British politicians (on both sides of the aisle) has been ickily close.

In today's New York Times, John Burns and Jo Becker report that

Some of Mr. Cameron's political opponents have cast the embrace of Mr. Murdoch as a mistake that could combine with other recent miscues by the Cameron government to seriously weaken the prime minister's party, the Conservatives. But those critics ... have to cope with the awkward fact that the Labour Party was just as closely linked to Mr. Murdoch, if not more so, during the 13 years that Britain was led by Mr. Cameron's predecessors as prime minister, Tony Blair and Gordon Brown.

But there's another group I'd like to hear from: News Corp.'s board of directors. They are ultimately responsible. What are they going to do? I'm waiting to read that story. (Curious as to who they are? Try here.)

Time for Ethics 101

It's one thing to create incentives; it's another to figure out exactly what behavior you're incentivizing.

Think of it this way: Your company makes widgets; they're OK widgets but senior management wants them to be the best widgets. A manufacturing consultant tells the CEO to provide big bonuses to the workers who make the best widgets and their supervisors, and the program is implemented. Now, you're a supervisor for a dozen people on the widget-production line. At the end of the shift, when they've gone home, you notice that a few of the widgets aren't quite right. With the new bonus program, your salary, your very job in fact, depends on the percentage of perfect widgets produced. If you could fix those wacky widgets quickly, without anyone noticing, would you?

That was pretty simple, but let's turn to a more complicated question: public education. More and more schools, locally and nationally, have instituted testing programs to determine how much children have learned. Teachers, principals, and superintendents are frequently praised or punished, depending on the test results. Not only are bonuses tied to test scores, but jobs are too. Teachers whose students don't improve enough risk being let go. In a tough economic climate, that incentive might easily incline someone to fudge the data a little bit.

And so it has. Only more than a little bit.

According to an article by Kim Severson in today's New York Times (and widely reported elsewhere), a Georgia state investigation has shown "rampant, systematic cheating on test scores" in Atlanta's public schools (the full report, divided into three volumes, is available here, here, and here).

Cheating "occurred at 44 schools and involved at least 178 teachers and principals, almost half of whom have confessed..."

The investigation has centered on former Atlanta school superintendent Beverly Hall, "who was named the 2009 National Superintendent of the Year and has been considered one of the nation's best at running large, urban districts."

Hall was superintendent from 1999 until June of this year. She had announced last November that she would be leaving at the end of the 2010-2011 academic year. According to Severson's story, she left Tuesday for a vacation and was apparently unavailable for comment.

However, according to an article in today's Atlanta Journal-Constitution by Heather Vogell, Hall has issued a statement through her lawyer, "denying that she, her staff or the 'vast majority' of Atlanta educators knew or should have known of 'allegedly widespread' cheating. 'She further denies any other allegations of knowing and deliberate wrongdoing on her part or on the part of her senior staff,' the statement said, 'whether during the course of the investigation or before.'"

Questions have been raised about Atlanta schools' performance -- and that of Dr. Hall -- for many years. Last August, the Times ran a story by Shaila Dewan about a 2009 investigation that "centered on suspicions that answer forms on the state achievement test used to measure progress under the federal No Child Left Behind law had been tampered with by educators."

Dewan reported that during Dr. Hall's tenure,

...[The] graduation rate has increased by 30 percentage points. In the last three years, the college scholarship money offered to Atlanta graduates has doubled. And in the urban district tracking program, where progress is measured by a gold-standard test called the National Assessment of Educational Progress, or NAEP, scores have continued to climb.

Now it appears that it was all -- or largely -- a mirage. Instead, there was, as the report states, a "culture of fear, intimidation and retaliation." Those teachers and principals who were willing to report cheating or other misconduct often found themselves "the subject of an investigation and were disciplined."

After reading the stories, what saddened me most was that I wasn't surprised. Assuming that what the state's investigation indicates is true, it's shameful. But I doubt that it sprang into being full-blown. Most likely it started with one or two schools, one or two teachers, one or two principals. And one superintendent for whom winning was apparently not everything, but the only thing.

Sound familiar?

Instead of focusing only on testing math and reading skills, maybe we need to send everyone back to school for a quick brush-up on ethics skills.