Unless, of course, you're a Wall Street banker. In which case there are all kinds of ways not to say, "I'm sorry".
I was thrilled to see this headline today at Yahoo!News: "Bankers apologize for actions that led to crisis." (story, by Jim Kuhnhenn and Daniel Wagner of the Associated Press, here)
But, in fact, there wasn't much real apology.
There was: "We regret the consequences..." from Lloyd Blankfein of Goldman Sachs (Mr. "We're doing God's work", as you no doubt recall).
The closest was, "We did make mistakes" from Jamie Dimon, CEO of JPMorgan Chase -- although he quickly softened that with "there were things we could have done better." Ya think?
And Bank of America CEO Brian Moynihan claimed to "understand the anger felt by many citizens."
But what they don't seem to understand is that we Main Street types are not looking for "nuanced regret -- admitting mistakes without accepting blame", as it was called by Andrew Martin and Micheline Maynard in an article in today's New York Times. We are looking for an admission of personal responsibility, a genuine apology, and a realistic attempt at restitution.
Just think about what was going on: Goldman Sachs, as an example, provided clients with "notes" from its fundamental strategies groups with investment ideas -- and "did not always disclose its own positions when it share its trading ideas," according to Andrew Ross Sorkin's piece, also in today's Times.
Sorkin reported that, in an e-mail to select clients, the head of the fundamental strategies group "acknowledged that his unit often provided investment ideas that the firm had already traded on. Sometimes Goldman has even take the opposite approach, betting against particular instruments that the group has recommended."
Can you say, "Complete conflict of interest"? Sure you can.
Wednesday, January 13, 2010
Friday, January 8, 2010
Doesn't "Full Disclosure" Mean, Well, FULL Disclosure?
Apparently not.
At least not according to Fidelity National Financial, the title insurance company.
Yesterday's New York Times carried an article by Diana Henriques, outlining a series of lawsuits stemming from a mortgage fraud scheme -- litigation which was not disclosed to shareholders until October 2009, three years after the first suits were filed, and two years after the primary wrongdoer had pleaded guilty.
Let's think about this for just a moment. If you were contemplating an investment in Fidelity National (the company is publicly traded), wouldn't you think outstanding suits against the company might be a fact that you would want to calculate into your investment decision? Yeah, me too. Especially as Fidelity's "chairman has said the settled claims [the last round of claims are going to trial shortly] exceed $83 million, before insurance -- a bit more than its latest quarter's profits -- and some of its insurers are balking at the legal bills and losses."
According to regulatory guidelines, companies must disclose "any material pending legal proceedings, other than ordinary routine litigation incidental to the business."
What's your definition of "ordinary routine litigation incidental to the business"?
Henriques quotes Mark Schiffman, Fidelity's senior vp and chief litigation counsel, as saying that the case "presented little risk of damages" and so did not warrant disclosure ... at least until the damages turned out to be pretty substantial.
I vote, instead, with Harvey Pitt, former SEC chairman, who said, "The first thing any corporate director should ask when someone raises credible allegations of wrongdoing against any company is not whether you can win a case, but what if it's true."
Fidelity dismissed the guilty employees more than a year ago, because of poor performance not because of "dishonest or fraudulent conduct," Schiffman said. The plaintiffs' lawyer in the upcoming suit argues that point, "noting that the company is trying to collect under insurance policies meant specifically to protect it from harm by dishonest employees."
Full disclosure -- that is to say really full disclosure -- when the fraud was first uncovered and the guilty party admitted guilt might have saved the company both some dollars and a lot of ugly publicity....
At least not according to Fidelity National Financial, the title insurance company.
Yesterday's New York Times carried an article by Diana Henriques, outlining a series of lawsuits stemming from a mortgage fraud scheme -- litigation which was not disclosed to shareholders until October 2009, three years after the first suits were filed, and two years after the primary wrongdoer had pleaded guilty.
Let's think about this for just a moment. If you were contemplating an investment in Fidelity National (the company is publicly traded), wouldn't you think outstanding suits against the company might be a fact that you would want to calculate into your investment decision? Yeah, me too. Especially as Fidelity's "chairman has said the settled claims [the last round of claims are going to trial shortly] exceed $83 million, before insurance -- a bit more than its latest quarter's profits -- and some of its insurers are balking at the legal bills and losses."
According to regulatory guidelines, companies must disclose "any material pending legal proceedings, other than ordinary routine litigation incidental to the business."
What's your definition of "ordinary routine litigation incidental to the business"?
Henriques quotes Mark Schiffman, Fidelity's senior vp and chief litigation counsel, as saying that the case "presented little risk of damages" and so did not warrant disclosure ... at least until the damages turned out to be pretty substantial.
I vote, instead, with Harvey Pitt, former SEC chairman, who said, "The first thing any corporate director should ask when someone raises credible allegations of wrongdoing against any company is not whether you can win a case, but what if it's true."
Fidelity dismissed the guilty employees more than a year ago, because of poor performance not because of "dishonest or fraudulent conduct," Schiffman said. The plaintiffs' lawyer in the upcoming suit argues that point, "noting that the company is trying to collect under insurance policies meant specifically to protect it from harm by dishonest employees."
Full disclosure -- that is to say really full disclosure -- when the fraud was first uncovered and the guilty party admitted guilt might have saved the company both some dollars and a lot of ugly publicity....
Monday, January 4, 2010
The Ethics of T-Shirts
I'm old enough to have seen ILGWU ads so many times that I can hum along with the workers.
But the battle to keep clothing manufacturing in the US was lost a long time ago. The International Ladies' Garment Workers Unions, which had been one of the most progressive and powerful unions of the '30s and '40s, collapsed in the '90s under the weight of international outsourcing and restrictive labor laws, and in 1995 merged into "Unite Here".
Periodically, reports have surfaced in the mainstream media regarding appalling conditions for workers in overseas (largely Asian) sweatshops that today produce most Americans' clothing. And sometimes, the good guys do win, as I posted back in November (click here for my post about Russell Athletics' agreement with its Honduran laborers and their union, thanks to the considerable efforts of United Students Against Sweatshops). But if you thought that significant progress had been made generally to improve conditions, well, sadly, you were mistaken.
The current issue of Harper's magazine has an excellent piece by Ken Silverstein on "Shopping for Sweat: the human cost of a two-dollar T-shirt" (the first paragraph is available for non-subscribers online here; the rest is behind a pay wall).
Silverstein writes that "apparel buyers, while quite happy to win accolades for doing business in [supposedly sweatshop-free] Cambodia, have remained unwilling to pay much for the privilege."
As a result, "pay for apparel workers in Cambodia has stagnated, according to a 2008 survey, at 33 cents an hour [I have added the emphasis] .... Labor unions are abundant, but most are funded and controlled by employers or by the government, and independent activists have been fired, suspended, sued, and otherwise targeted for repression."
There is some good news in all of this -- as Silverstein notes, "Until the mid-1990s, Western apparel companies didn't even acknowledge that labor rights or fair pay were legitimate issues for discussion." It took a while for that to happen, and the loud protests of many American consumers.
But where do we go from here? Monitoring apparently hasn't worked, especially as most of the monitors seem to be in the pay of the apparel companies rather than in that of the workers. Moreover, there's a regular round of articles from the neoliberal business types who say that a bad job is better than no job in countries like this (which sound to me an awful lot like the arguments at the turn of the last century that child labor wasn't really such a bad thing for the poor).
Silverstein's article ends with a suggestion from Richard Duncan, chief economist of Singapore-based Blackhorse Asset Management: Wages should rise in Asia to a $5-per-day minimum -- "slightly above starting pay in southern China and more than twice the current rate in Bangladesh. Then, Duncan says, the wage could be raised by $1 each year for ten years. Imposing such a scheme would be quite simple to implement, he points out. The United States and the European Union could slap steep tariffs on imports manufactured by workers earning less than the minimum."
"'If you sell a pair of tennis shoes for $101 instead of $100, no consumer in Chicago will notice the difference, but it will totally transform villages in Vietnam,' he said. 'This is not a moral argument.... We are going to have an international depression if we don't figure out a way to create new sources of global demand -- in which case, all those apparel companies are going to go out of business anyway.'"
Actually, Mr. Duncan, it is a moral argument. It just happens to be an economic one, too.
But the battle to keep clothing manufacturing in the US was lost a long time ago. The International Ladies' Garment Workers Unions, which had been one of the most progressive and powerful unions of the '30s and '40s, collapsed in the '90s under the weight of international outsourcing and restrictive labor laws, and in 1995 merged into "Unite Here".
Periodically, reports have surfaced in the mainstream media regarding appalling conditions for workers in overseas (largely Asian) sweatshops that today produce most Americans' clothing. And sometimes, the good guys do win, as I posted back in November (click here for my post about Russell Athletics' agreement with its Honduran laborers and their union, thanks to the considerable efforts of United Students Against Sweatshops). But if you thought that significant progress had been made generally to improve conditions, well, sadly, you were mistaken.
The current issue of Harper's magazine has an excellent piece by Ken Silverstein on "Shopping for Sweat: the human cost of a two-dollar T-shirt" (the first paragraph is available for non-subscribers online here; the rest is behind a pay wall).
Silverstein writes that "apparel buyers, while quite happy to win accolades for doing business in [supposedly sweatshop-free] Cambodia, have remained unwilling to pay much for the privilege."
As a result, "pay for apparel workers in Cambodia has stagnated, according to a 2008 survey, at 33 cents an hour [I have added the emphasis] .... Labor unions are abundant, but most are funded and controlled by employers or by the government, and independent activists have been fired, suspended, sued, and otherwise targeted for repression."
There is some good news in all of this -- as Silverstein notes, "Until the mid-1990s, Western apparel companies didn't even acknowledge that labor rights or fair pay were legitimate issues for discussion." It took a while for that to happen, and the loud protests of many American consumers.
But where do we go from here? Monitoring apparently hasn't worked, especially as most of the monitors seem to be in the pay of the apparel companies rather than in that of the workers. Moreover, there's a regular round of articles from the neoliberal business types who say that a bad job is better than no job in countries like this (which sound to me an awful lot like the arguments at the turn of the last century that child labor wasn't really such a bad thing for the poor).
Silverstein's article ends with a suggestion from Richard Duncan, chief economist of Singapore-based Blackhorse Asset Management: Wages should rise in Asia to a $5-per-day minimum -- "slightly above starting pay in southern China and more than twice the current rate in Bangladesh. Then, Duncan says, the wage could be raised by $1 each year for ten years. Imposing such a scheme would be quite simple to implement, he points out. The United States and the European Union could slap steep tariffs on imports manufactured by workers earning less than the minimum."
"'If you sell a pair of tennis shoes for $101 instead of $100, no consumer in Chicago will notice the difference, but it will totally transform villages in Vietnam,' he said. 'This is not a moral argument.... We are going to have an international depression if we don't figure out a way to create new sources of global demand -- in which case, all those apparel companies are going to go out of business anyway.'"
Actually, Mr. Duncan, it is a moral argument. It just happens to be an economic one, too.
Monday, December 28, 2009
How Much Fakery is Too Much Fakery?
On the wall of the art studio at my high school was a quote from Pablo Picasso: "Art is the lie that tells the truth."
In fashion photography, it seems to have become the lie that tells a lie.
With the after-Christmas sales well under way, I've been thinking about restocking my closet a bit, which has had me paying more attention to catalogues and magazines.
Photographs have been manipulated since the technology was first invented, and fashion photographs have always traded in an induced sense of inadequacy -- or why hire preternaturally beautiful people to wear the clothes? True, it's been years since I was young enough, and foolish enough, to think, "If I wear that dress / sweater / coat / pair of pants / whatever, I'll look as good as she does." But every year, it seems, the standards of "pretty enough" -- and especially, "thin enough" -- get higher and more unobtainable.
The image above -- of former Ralph Lauren model Filippa Hamilton -- has been widely shared on the Internet, at sites like BoingBoing.net and Jezebel.com (where it was included in the site's 2009 "Photoshop of Horrors Hall of Shame"). Comments poured in, both about the absurdity of the image itself (how many women, even extraordinarily thin ones, have a head larger than their pelvis?), and about the decision by Ralph Lauren to terminate Hamilton's contract because, at 5'9" and 120 lbs., she is too fat.
With rates of eating disorders rising in the industrialized world (and now affecting young men as well as young women), there have been calls for legislative restrictions. In late September, for example, the UK's Telegraph reported on calls in France to require digitally-enhanced photographs to carry clear warnings that changes have been made to the image.
In a brief article, New York magazine reported on proposed French and British legislation, and noted that the "U.K.'s Committee of Advertising Practice, which is responsible for the country's code of advertising, just received a report authored by more than 40 academics recommending a ban on Photoshopped ads targeted at girls younger than 16."
I'm not sure that legislation is the best solution. I'm more heartened by the late December rally, reported by Jezebel and New York, protesting the use of images that have been altered to the point of unreality. Sponsored by the New York chapter of the National Organization for Women, the small demonstration was held in front of Ralph Lauren's flagship New York City store at 72nd Street and Madison Avenue, and deserved more coverage than it got.
Friday, December 11, 2009
If You Really Believe You're Right, You Shouldn't Have to Lie
If that's the case, then what does it say about what the health insurance companies are doing?
A friend of mine brought my attention to this post at Business Insider. Basically, health insurance companies are using Facebook virtual currency to get game players to email Congress about their supposed opposition to the health-care reform bill.
As article author Nicholas Carlson points out, the companies are exploiting Facebook gamers' desire to obtain more virtual currency (to help them move up the ranks in games like Farmville), by offering currency in exchange for "trying" a new product or service.
But in this case, "Instead of asking the gamers to try a [specific] product..., "Get Health Reform Right" requires gamers to take a survey, which, upon completion, automatically sends the following email to their Congressional Rep: 'I am concerned a new government plan could cause me to lose the employer coverage I have today. More government bureaucracy will only create more problems, not solve the ones we have.'"
"Astroturfing" like this (i.e. fake grass-roots movements) isn't new, and it's not illegal. But it is completely unethical.
This particular instance is the product of an innocuous-sounding (ain't it always the way?!) organization: "Get Health Reform Right", which describes itself as a "project of organizations whose shared mission is to ensure consumers continue to have access to employer-sponsored healthcare plans." (Full disclosure here: My personal definition of "Getting Health Reform Right" would be 100% single-payer.)
Who is/are "Get Health Reform Right"? Carlson did a little research, and came up with the following organizations:
My own skeptical inclination is to think that if the established health-care players are so concerned by even the not-even-close-to-what-I-would-have-hoped-for legislation working its way through Congress, it must be pretty damn good.
Or they wouldn't have to lie like this to get their messages sent.
A friend of mine brought my attention to this post at Business Insider. Basically, health insurance companies are using Facebook virtual currency to get game players to email Congress about their supposed opposition to the health-care reform bill.
As article author Nicholas Carlson points out, the companies are exploiting Facebook gamers' desire to obtain more virtual currency (to help them move up the ranks in games like Farmville), by offering currency in exchange for "trying" a new product or service.
But in this case, "Instead of asking the gamers to try a [specific] product..., "Get Health Reform Right" requires gamers to take a survey, which, upon completion, automatically sends the following email to their Congressional Rep: 'I am concerned a new government plan could cause me to lose the employer coverage I have today. More government bureaucracy will only create more problems, not solve the ones we have.'"
"Astroturfing" like this (i.e. fake grass-roots movements) isn't new, and it's not illegal. But it is completely unethical.
This particular instance is the product of an innocuous-sounding (ain't it always the way?!) organization: "Get Health Reform Right", which describes itself as a "project of organizations whose shared mission is to ensure consumers continue to have access to employer-sponsored healthcare plans." (Full disclosure here: My personal definition of "Getting Health Reform Right" would be 100% single-payer.)
Who is/are "Get Health Reform Right"? Carlson did a little research, and came up with the following organizations:
- Association of Health Insurance Advisors
- America’s Health Insurance Plans
- American Benefits Council
- BlueCross BlueShield Association
- Council of Insurance Agents & Brokers
- Healthcare Leadership Council
- Independent Insurance Agents & Brokers
- National Association of Health Underwriters
- National Association of Insurance and Financial Advisors
- National Retail Association
My own skeptical inclination is to think that if the established health-care players are so concerned by even the not-even-close-to-what-I-would-have-hoped-for legislation working its way through Congress, it must be pretty damn good.
Or they wouldn't have to lie like this to get their messages sent.
Monday, December 7, 2009
Cellphone Ethics, not Etiquette
I could write a very long rant about cellphone etiquette, as I'm sure you could too. Who hasn't be subjected to VERY LOUD "conversations" along the lines of "so, he's like, I totally didn't mean that, and I'm like, You are so busted, and she goes (yadda yadda yadda)"? Not to mention the phones that ring (and are answered) during theater performances, concerts, and movies. Not to mention... But you get the idea.
Instead, I'd like to think about this quote, which I found in Matt Richtel's article in today's New York Times on "Promoting the Car Phone, Despite Risks":
"If you’re an engineer, you don’t want to outlaw the great technology you’ve been working on... If you’re a marketing person, you don’t want to outlaw the thing you’ve been trying to sell. If you’re a C.E.O., you don’t want to outlaw the thing that’s been making a lot of money."
Richtel identifies the speaker as Bob Lucky, a now-retired former director at Bell Labs.
It's a great insight into a key problem in corporate ethics: When you have a great new product, how carefully do you want to look at its potential problems?
Lucky and other early developers were aware of the potential for "distracted driving". A former Motorola engineer admits that "I’d pass by the exit I was supposed to take because I was talking on the phone."
"Thinking back, he said he was 'absolutely' aware of potential dangers but did not think roads would become filled with distracted drivers."
One distracted driver, of course, is all it really takes, especially at high speeds and on a congested roadway.
The tough question is how to encourage corporations to build in a "devil's advocate" position into their operations: someone whose job it is to think about potential negative ramifications of a new product or technology and not just its upside marketing potential. Where such a role is played, it's usually taken on by legal (which is why we have all those great little warnings on not misusing the products we buy).
In this case, I'd like to see one cellphone manufacturer or service provider take the high road and stake out a safety zone -- be the Volvo of cellphones if you like -- perhaps by engineering a phone that won't work if it passes through x number of cell transmitters in y minutes (although this would prevent passengers from using their phones too).
Instead, I'd like to think about this quote, which I found in Matt Richtel's article in today's New York Times on "Promoting the Car Phone, Despite Risks":
"If you’re an engineer, you don’t want to outlaw the great technology you’ve been working on... If you’re a marketing person, you don’t want to outlaw the thing you’ve been trying to sell. If you’re a C.E.O., you don’t want to outlaw the thing that’s been making a lot of money."
Richtel identifies the speaker as Bob Lucky, a now-retired former director at Bell Labs.
It's a great insight into a key problem in corporate ethics: When you have a great new product, how carefully do you want to look at its potential problems?
Lucky and other early developers were aware of the potential for "distracted driving". A former Motorola engineer admits that "I’d pass by the exit I was supposed to take because I was talking on the phone."
"Thinking back, he said he was 'absolutely' aware of potential dangers but did not think roads would become filled with distracted drivers."
One distracted driver, of course, is all it really takes, especially at high speeds and on a congested roadway.
The tough question is how to encourage corporations to build in a "devil's advocate" position into their operations: someone whose job it is to think about potential negative ramifications of a new product or technology and not just its upside marketing potential. Where such a role is played, it's usually taken on by legal (which is why we have all those great little warnings on not misusing the products we buy).
In this case, I'd like to see one cellphone manufacturer or service provider take the high road and stake out a safety zone -- be the Volvo of cellphones if you like -- perhaps by engineering a phone that won't work if it passes through x number of cell transmitters in y minutes (although this would prevent passengers from using their phones too).
Thursday, December 3, 2009
Sins of Omission Are Still Sins
I really hadn't wanted to write anything about the Salahis, the couple who apparently gate-crashed last week's White House dinner, because who would want to give such camera hogs even more attention? But alas here I am, writing about them.
Or more precisely, about NBC "News".
Michaele Salahi apparently harbors aspirations of "starring" on the Bravo cable channel's reality show, Real Housewives of D.C., and while she and her husband were entering the White House, they were followed by a Bravo camera crew.
Monday morning, the Today show, which, while generally fluffy infotainment, is a part of the news division, had the Salahis as guests. At no point in the interview -- or in the next day's followup -- did Matt Lauer mention that Bravo and NBC are corporate siblings, both part of NBC Universal. In fact, both are based in New York's Rockefeller Center.
As reported by Brian Stelter in today's New York Times, "Both NBC and the couple say that they received no money for appearing on the 'Today Show.' An NBC staff member suggested Wednesday that the couple selected Mr. Lauer in a good-will gesture to NBC and, by extension, Bravo."
According to Stelter, NBC's Nightly News, when reporting on the issue Tuesday, "did note the corporate connection".
Did the corporate connection affect the questions that Mr. Lauer posed? Probably not. But wouldn't you feel more confident about it if you had known the connection ahead of time rather than after the fact?
Or more precisely, about NBC "News".
Michaele Salahi apparently harbors aspirations of "starring" on the Bravo cable channel's reality show, Real Housewives of D.C., and while she and her husband were entering the White House, they were followed by a Bravo camera crew.
Monday morning, the Today show, which, while generally fluffy infotainment, is a part of the news division, had the Salahis as guests. At no point in the interview -- or in the next day's followup -- did Matt Lauer mention that Bravo and NBC are corporate siblings, both part of NBC Universal. In fact, both are based in New York's Rockefeller Center.
As reported by Brian Stelter in today's New York Times, "Both NBC and the couple say that they received no money for appearing on the 'Today Show.' An NBC staff member suggested Wednesday that the couple selected Mr. Lauer in a good-will gesture to NBC and, by extension, Bravo."
According to Stelter, NBC's Nightly News, when reporting on the issue Tuesday, "did note the corporate connection".
Did the corporate connection affect the questions that Mr. Lauer posed? Probably not. But wouldn't you feel more confident about it if you had known the connection ahead of time rather than after the fact?
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