Personal vs. business morality

[edwest2]

Your mixing things up. we are not talking about Enron, etc. we are talking about individuals walking into a bank and getting a loan and prommising to agree to the terms of the contract they signed. By the way I don’t consider cartoons to be a legitimate source of information.

A political cartoon is often an excellent and instructive snapshot that distills the situation down to its most elemental form: greed. When Wall Street, AIG, and whoever can fail in their obligations, spectacularly, then it might cause some people to feel less obligated to meet their commitments regarding keeping up their home payments. I’m not saying it’s right, I’m only making an observation about motivation.

After the big collapse of 2008, people on Wall Street only got half of their usual Christmas bonus. This year, people with what we are told are unique skills are getting bonuses. What would happen if they got nothing? They’d quit and go where? China? Who is currently holding the bulk of our debt? Did anyone on Wall Street get punished for being so exposed? Where is their accountability? After all, it was the average person who was injured, not Wall Street. We bailed them out.

Once again. People should meet their obligations and pay what they owe, I’m only pointing out a motivating factor that saw no bailout for the average person. I’m not trying to encourage anyone to avoid paying what they owe.

Peace,
Ed

 

[ahollars]

Your mixing things up. we are not talking about Enron, etc. we are talking about individuals walking into a bank and getting a loan and prommising to agree to the terms of the contract they signed. By the way I don’t consider cartoons to be a legitimate source of information.

Also, remember that the reason the standards were lowered in the first place for qualifying was against the advice and will of the lending businesses. This was forced upon them via the legal system in the name of diversity and equality. Now those same politicians who caused the mess are claiming to have the remedy! Unbelievable.

But at the same time, lenders cannot claim that every case of low credit approval was against their will. For most of the decade, they profited from rising home prices, and realtors were more than willing to collect their cut all the while. No one bothered to put the brakes on the system, until people actually began to default. Reality should have set in long before then. I was offered 3 adjustable rate mortgages that I walked away from before I finally got the 30-year fixed that I wanted.

 

[royal_archer]

A political cartoon is often an excellent and instructive snapshot that distills the situation down to its most elemental form: greed. When Wall Street, AIG, and whoever can fail in their obligations, spectacularly, then it might cause some people to feel less obligated to meet their commitments regarding keeping up their home payments. I’m not saying it’s right, I’m only making an observation about motivation.

After the big collapse of 2008, people on Wall Street only got half of their usual Christmas bonus. This year, people with what we are told are unique skills are getting bonuses. What would happen if they got nothing? They’d quit and go where? China? Who is currently holding the bulk of our debt? Did anyone on Wall Street get punished for being so exposed? Where is their accountability? After all, it was the average person who was injured, not Wall Street. We bailed them out.

Once again. People should meet their obligations and pay what they owe, I’m only pointing out a motivating factor that saw no bailout for the average person. I’m not trying to encourage anyone to avoid paying what they owe.

Peace,
Ed

What you are talking about is an example of misdirected anger. The ones who should be held to blame are the federal representatives who set up a system where employees are encouraged to put their pre tax dollars into 401Ks and not have any direct control over that money. People are so insulated from how their money is used that they can not pull it out of institutions that act in a way they feel is irresponsible. All they know is one fund out performs another.

 

[royal_archer]

But at the same time, lenders cannot claim that every case of low credit approval was against their will. For most of the decade, they profited from rising home prices, and realtors were more than willing to collect their cut all the while. No one bothered to put the brakes on the system, until people actually began to default. Reality should have set in long before then. I was offered 3 adjustable rate mortgages that I walked away from before I finally got the 30-year fixed that I wanted.

Your right, I took much less of a loan than what they were willing to offer and was otherwise very conservative with the loans I have taken. That is what rational people do. The problem is some are asserting that there are a large number of people who made irrationale decisions. I just don’t see how someone can be rationale 364 days a year and then walk into a bank and somehow not realize that a variable rate loan will vary. I can accept that some people do not have the capacity to make such decisions but such people need more help than just giving them a free pass on their mortgage debt.

 

[edwest2]

What you are talking about is an example of misdirected anger. The ones who should be held to blame are the federal representatives who set up a system where employees are encouraged to put their pre tax dollars into 401Ks and not have any direct control over that money. People are so insulated from how their money is used that they can not pull it out of institutions that act in a way they feel is irresponsible. All they know is one fund out performs another.

Yes. I heard it on the radio. Then they tried to fix blame on one of the two football teams that run the country. I’m thinking of putting my money in a container in the back yard.

People are insulated because banks now try to convince people they sell “products” not agreements.

This is not brain surgery: give people a few inches of rope, take away what holds them back, and the greed/credit bonanza runs wild again. I actually heard someone try to give Wall Street credit for “creativity.” The system is designed to put a dollar through as many hands as possible until someone is left holding almost nothing but IOU’s. All seriousness aside: Would you like to make money on the ‘float’ your check goes through in the system between the time you deposit it and the time it clears?

Sheesh! What a mess!

Peace,
Ed

 

[royal_archer]

Yes. I heard it on the radio. Then they tried to fix blame on one of the two football teams that run the country. I’m thinking of putting my money in a container in the back yard.

People are insulated because banks now try to convince people they sell “products” not agreements.

This is not brain surgery: give people a few inches of rope, take away what holds them back, and the greed/credit bonanza runs wild again. I actually heard someone try to give Wall Street credit for “creativity.” The system is designed to put a dollar through as many hands as possible until someone is left holding almost nothing but IOU’s. All seriousness aside: Would you like to make money on the ‘float’ your check goes through in the system between the time you deposit it and the time it clears?

Sheesh! What a mess!

Peace,
Ed

I’ve made my money through wages and salaries and do not have much respect for people who make money by exploiting the transactions of others through day trading and other non value added activity. However, even that activity is better than outright theft which is what is happening when people default on mortgages.

 

[Captain_America]

Folks, this is a good topic and people have made good points. It’s a shame we dont’ take them to our congressmen and senators.

In MY book, corporations should legally be held to HIGHER standards than average citizens.

This is because corporations have ETERNAL LIFE; this blessing came from the Supreme Court’s interpretation of the 14th amendment. This factor means corporate power is much longer-llived, hence potentially more powerful than the average person or non-corporate business. It can accumulate power and money.

I’m no conspiracy theorist, but the effect of corporations is so substantial and so pervasive—as economic actors, as employers, as producers and consumers—we need to expect higher standards from them. They are the leading entities in our lives.

 

[AnotherVoice]

I’ve made my money through wages and salaries and do not have much respect for people who make money by exploiting the transactions of others through day trading and other non value added activity. However, even that activity is better than outright theft which is what is happening when people default on mortgages.

We are in economic times where job losses are at record levels and the time span to locate a replacement job is longer than experiences from prior recessions. People who had been paying their mortgage regularly prior to loosing their job are not guilty of theft because they can not make those payments without the benefit of a job.

 

[royal_archer]

Folks, this is a good topic and people have made good points. It’s a shame we dont’ take them to our congressmen and senators.

In MY book, corporations should legally be held to HIGHER standards than average citizens.

This is because corporations have ETERNAL LIFE; this blessing came from the Supreme Court’s interpretation of the 14th amendment. This factor means corporate power is much longer-llived, hence potentially more powerful than the average person or non-corporate business. It can accumulate power and money.

I’m no conspiracy theorist, but the effect of corporations is so substantial and so pervasive—as economic actors, as employers, as producers and consumers—we need to expect higher standards from them. They are the leading entities in our lives.

Just look at the immorality of our two largest, oldest, and most corrupt corporations: The Republican and Democratic parties.

 

[royal_archer]

We are in economic times where job losses are at record levels and the time span to locate a replacement job is longer than experiences from prior recessions. People who had been paying their mortgage regularly prior to loosing their job are not guilty of theft because they can not make those payments without the benefit of a job.

There is unemployment for those who are between jobs. Also, I would not consider it theft if someone was not able to pay and way trying to work with the bank for extensions and other accomodations. However there are people who have the ability to pay who are making a concious decision to walk away from homes and stick the bank with the loss.

 

[Bluegoat]

Back to the original question-

Did anyone see that documentary"diagnosed" the personality of a corporation? (It was called The Corporation).Not an entirely serious thing, but what was interesting was that it found that corporations were psychopaths. Here is a brief synopsis of the film, which I haven’t seen - but I think some of ideas/problems it points out are compelling.

Morality is part of human nature at the level of the individual. That is where ultimate responsibility lies, because the individual has the ability to understand, and to will, the good. (Of course in real examples there are limits to what an individual can know and do, and what they are can be influenced by the larger society.)

In a business, one of the most basic motivators is profit - without it the business fails. But in a small business, the moral scope of the individual is pretty easily engaged as well. It is probably one or two people making decisions, and they cannot avoid personal responsibility for them. Both at the level of really seeing and understanding that theeir own decisions and actions are what are driving things, but also legally. And they are more likely to know or be personally connected to their employees, customers, and suppliers, and that kind of connection seems to be very powerful in the way we deal morally with other people. We connect with individuals, not target populations.

But when a business gets really big, things change. It can actually be very difficult for individual morality to manifest itself in the structure or actions of the business. For one thing, soon no individual decision seems to have the same level of responsibility for what happens. And individual legal responsibility changes considerably. And personal connections become more tenuous - a boss may not really know the employees, meet the customers, or whatever.

So in these cases, profit becomes the only real motivator. In an individual, such a way of making decisions would be considered pathological and inhuman. But we actually are in a place where we sometimes think that it is not only normal, but moral for business to work that way. *That it would be immoral for a business to make a decision that could compromise profits, because then they are not doing their duty towards shareholders. *

But that is clearly totally backwards from a Christian ethical point of view. Profit cannot be the sole indicator - individual morality must have a way of being made manifest in the institutions of society if society is to be moral. As it is now, regulation of some kind seems to be the only way to accomplish this in business, bu I am not sure that it is really enough.

Perhaps we need to reconsider the structure of corporations somehow? But how to do this is unclear to me.

 

[royal_archer]

Back to the original question-

Did anyone see that documentary"diagnosed" the personality of a corporation? (It was called The Corporation).Not an entirely serious thing, but what was interesting was that it found that corporations were psychopaths. Here is a brief synopsis of the film, which I haven’t seen - but I think some of ideas/problems it points out are compelling.

Morality is part of human nature at the level of the individual. That is where ultimate responsibility lies, because the individual has the ability to understand, and to will, the good. (Of course in real examples there are limits to what an individual can know and do, and what they are can be influenced by the larger society.)

In a business, one of the most basic motivators is profit - without it the business fails. But in a small business, the moral scope of the individual is pretty easily engaged as well. It is probably one or two people making decisions, and they cannot avoid personal responsibility for them. Both at the level of really seeing and understanding that theeir own decisions and actions are what are driving things, but also legally. And they are more likely to know or be personally connected to their employees, customers, and suppliers, and that kind of connection seems to be very powerful in the way we deal morally with other people. We connect with individuals, not target populations.

But when a business gets really big, things change. It can actually be very difficult for individual morality to manifest itself in the structure or actions of the business. For one thing, soon no individual decision seems to have the same level of responsibility for what happens. And individual legal responsibility changes considerably. And personal connections become more tenuous - a boss may not really know the employees, meet the customers, or whatever.

So in these cases, profit becomes the only real motivator. In an individual, such a way of making decisions would be considered pathological and inhuman. But we actually are in a place where we sometimes think that it is not only normal, but moral for business to work that way. *That it would be immoral for a business to make a decision that could compromise profits, because then they are not doing their duty towards shareholders. *

But that is clearly totally backwards from a Christian ethical point of view. Profit cannot be the sole indicator - individual morality must have a way of being made manifest in the institutions of society if society is to be moral. As it is now, regulation of some kind seems to be the only way to accomplish this in business, bu I am not sure that it is really enough.

Perhaps we need to reconsider the structure of corporations somehow? But how to do this is unclear to me.

What you are accusing buisness corporations of also applies to political corporations such as the two large parties.

Another factor of individual morality is the fear of reprocusions. With the mob mentality the impact of reprocusions is numbed. When some get into government possitions they start to feel immune from accountability for their crimes. When was the last time a politician was thrown in jail for voting for an unconstitutional law?

 

[Bluegoat]

What you are accusing business corporations of also applies to political corporations such as the two large parties.

Another factor of individual morality is the fear of repercussions. With the mob mentality the impact of repercussions is numbed. When some get into government positions they start to feel immune from accountability for their crimes. When was the last time a politician was thrown in jail for voting for an unconstitutional law?

Guess what - we aren’t all American here. I don’t really care much about American politics or parties, and the American situation does not define Catholic or Christian morality in any way. However, I don’t think the parallels are actually entirely the same, though there are some similarities.

But what is the point of what you are saying - I don’t see how it moves forward the discussion of business and morality. Are you trying to say that since American politics involves the same kind of lack of accountability, we shouldn’t try to reform or make business more morally responsible? That seems a rather fallacious argument to me.

 

[royal_archer]

Guess what - we aren’t all American here. I don’t really care much about American politics or parties, and the American situation does not define Catholic or Christian morality in any way. However, I don’t think the parallels are actually entirely the same, though there are some similarities.

But what is the point of what you are saying - I don’t see how it moves forward the discussion of business and morality. Are you trying to say that since American politics involves the same kind of lack of accountability, we shouldn’t try to reform or make business more morally responsible? That seems a rather fallacious argument to me.

The point is we should not turn to a larger more powerful corrupt organization to address the issues with semi corrupt smaller organizations. Unfortunately we all tend to give large powerful corrupt organizations more and more power in hope they will correct the smaller corupt organizations instead of just refusing to deal with the smaller corupt organiztions.

 

[Bluegoat]

The point is we should not turn to a larger more powerful corrupt organization to address the issues with semi corrupt smaller organizations. Unfortunately we all tend to give large powerful corrupt organizations more and more power in hope they will correct the smaller corupt organizations instead of just refusing to deal with the smaller corupt organiztions.

I hadn’t noticed anyone suggesting that government regulation was the answer, thoiugh I think most people would say that it is part of the answer. But Americans seem to be particularly afeared of their own government, much more so than most of the West, which is part of my point. You can’t apply that particular situation to the problem in general, because lots of places don’t really have that problem to the same degree (assuming it actually exists in the US to the degree some seem to think.)

Unfortunately, totally cutting out corporate involvement is very difficult. It is usually possible as a retail consumer, if you are really diligent. In other aspects it can be more difficult - banking, insurance, energy, etc.

But additionally, if it is the very structure of big business that is causing it to be an immoral, or amoral, force, it seems to me the answer would be to look at changing that structure, which is after all only a man-made thing.

 

[royal_archer]

I hadn’t noticed anyone suggesting that government regulation was the answer, thoiugh I think most people would say that it is part of the answer. But Americans seem to be particularly afeared of their own government, much more so than most of the West, which is part of my point. You can’t apply that particular situation to the problem in general, because lots of places don’t really have that problem to the same degree (assuming it actually exists in the US to the degree some seem to think.)

Unfortunately, totally cutting out corporate involvement is very difficult. It is usually possible as a retail consumer, if you are really diligent. In other aspects it can be more difficult - banking, insurance, energy, etc.

But additionally, if it is the very structure of big business that is causing it to be an immoral, or amoral, force, it seems to me the answer would be to look at changing that structure, which is after all only a man-made thing.

In America’s early years we were a magnet for those who saught freedom over safety. Those who came here left the relative safety of their former homes for the freedom offered. those who tended to be adverse to risk and tollerant of tyrany tended to stay in their home countries. This may be why you see such a tollerance for tyrany in other contries while there is such an aversion in this country. Although that has been changing since the "new deal"when more and more people started coming here to leach off the government.

As for corportations, individuals can choose the least corrupt and make integrity a market driver. unfortunately many individuals don’t care to much about the corruption in an organization they deal with as long as they get what they want. This is highlighted by the numerous freeloaders who voted for Obama simply because they thought it would profit them personally.

 

[CPA2]

Fraud is simple. It is the intent to deceive. I do not think that rules-based ethics is going to lead us ethical behavior. Excessively detailed rules not only constitute a guideline to fraud, but a ready-made set of defenses. Unethical people can claim that they followed the rules, even while they may have intended to mislead. Criminals can follow the letter of the law without following the spirit of the law. My opinion is that the spirit of the law leads to the correct objective, ethical behavior not more rules and laws. In other words, laws on ethics and fraud lead to more fraud, the opposite of their intended effect!

 

[royal_archer]

Fraud is simple. It is the intent to deceive. I do not think that rules-based ethics is going to lead us ethical behavior. Excessively detailed rules not only constitute a guideline to fraud, but a ready-made set of defenses. Unethical people can claim that they followed the rules, even while they may have intended to mislead. Criminals can follow the letter of the law without following the spirit of the law. My opinion is that the spirit of the law leads to the correct objective, ethical behavior not more rules and laws. In other words, laws on ethics and fraud lead to more fraud, the opposite of their intended effect!

I have had a similar complaint about the codification of ethics and calling it ethics. in my mind there are three tiers 1. Rules and laws which are codified and enforced interactions for the protection of other members of society. 2. Ethics with deal with all other interactions that are directly or indirecty harmful to other members of society but can not be codified in an enforceable way. 3. Morals which deal with issues of right an wrong that do not impact other members of society. Of course the three overlap and morality is the largest set with some of it being covered by issues of ethics, and ethics is covered by issues of rules and laws. But for ethics we need to address the realm that is above rules and laws, not with codification but with public recognition that some things people (and organizations of people) do are unethical even though we are not going to punish them.

 

[CPA2]

I have a difficult time getting a handle on the concept of ethics. I have an even more difficult time trying to understand how to effectively and efficiently enforce the concept. Let me give an example.

A balance sheet is a financial picture. It is a photo of your stuff and claims on your stuff. Business will do everything they can to make their financial photograph (balance sheet) look as good as possible. This is not how the business looks at all. Is business acting ethically? How are you going to force business to act “ethically?”

 

[CPA2]

Enhanced Enforcement

“The first proposal establishes a new ethics enforcement policy that would allow the PEEC to ‘automatically’ sanction an AICPA member without an investigation if the member has been disciplined by governmental agencies or other organizations that have been granted the authority to regulate accountants, such as the Securities and Exchange Commission (‘SEC’)…”

I have a problem with the SEC determining guilt. I do wonder about false accusations discrediting a good name in a misunderstanding without an proper investigation or sloppy one done by another agency and accepted by the AICPA. I am concerned that an accusation by the SEC will in fact become a sentence. Will the AICPA sanction an individual that is “under investigation” by the SEC? I am willing to bet that the AICPA would impose sanctions.

Additionally, I am totally lacking in faith about the government’s ability to do any good… I think that many government agencies have the same attitude of King John when he said that his mouth was the law. Let me give an example.

BABBIT v. SWEET HOME CHAPTER OF COMMUNITIES FOR A GREATER OREGON, 515 U.S. 687 (1995)

I studied this case in a law class. The Endangered Species Act of 1973 gives the Secretary of the Interior the power to designate species that he considers threatened or endangered. The Secretary of the Interior, Babbit, interpreted the word “harm” to include “indirectly injuring endangered animals through habitat modification and degradation.” The plaintiff alleged that the Secretary harmed them economically by improperly defining the word “harm” in the Endangered Species Act.

The Secretary’s regulation prohibited the habitat modification and degradation of the red-cockaded woodpecker and the northern spotted owl. The landowners, companies, and families of employees in the Pacific Northwest and Southeast rely on the forest for their livelihood. These people could not harvest the forest to earn a living. The Secretary’s regulation prevented the cutting of a tree, or the draining of a pond.

The Secretary of the Interior, Babbit, won the case. The court’s reasoning was:

         1. An ordinary understanding of the word “harm” supports Babbit’s interpretation as reasonable.
2. The Act contained sweeping changes against the taking of endangered species that supported the Secretary’s decision to extend protection against activities that cause harm.
3. Congress authorized the Secretary to prohibit indirect as well as indirect takings.

Correct me if I am wrong. Congress gave Babbit the power to broadly define the word, “harm.” Congress also gave Babbit the power to prosecute the landowners for breaking the law. Is there something wrong with this line of reasoning? Judge Thomas Wiseman said, “Congress is not yet an infallible body incapable of passing tyrannical laws (Conrad, 1999).” Adam Smith and Thomas Jefferson believed that the role of government is an umpire, not a participant (Friedman, 1990).

Those who seek salvation by law from a strong government may not be aware of the law of unintended consequences. Milton Friedman (1990), winner of the Nobel Prize in economics, said it best. “An individual who intends only to serve the public interest by fostering government intervention is ‘led by an invisible hand to promote’ private interests, ‘which was no part of his intention.’”

The accused should have some rights, especially if the AICPA adopts this proposal. If the SEC charges a citizen with a crime, I think that a citizen should have the right to request a trail by jury. Trial by jury may have a sobering effect on SEC tactics. I also support a constitutional amendment to inform all jurors of their Constitutional right to nullify laws, especially government agency laws.

References

Conrad, C. S. (1999, November). Jury nullification: Jurors flex their muscles. USA Today.
Friedman, M., & Friedman, R. D. (1990). Free to Choose. New York: Harcourt, Inc.