By Posted on Posted in Business Ethics, General Commentary, Media Ethics

If I’m a tad schizophrenic in my feelings toward search engine
giant Google, it’s because the company sometimes seems like a
many-headed hydra whose various heads have no clue what the others are
up to.

On the positive side: Google last October announced a wonderful plan
to donate one percent of its stock value–just a whisker under a cool
billion at the time of the announcement–to various change-the-world
charities–and to donate various other streams that push the total value well above that amazing $1 billion mark.

This
is wonderful! It makes sense both to advance founders Larry Page and
Sergey Brin’s vision of the kind of world they want to live in, and to
advance Google’s corporate goals of continued market dominance. (One of
the initiatives, for example, is to help MIT develop $100 computers.
Guess how they’ll link to the world?).

Also on the positive side
is Google’s ability to create a powerfully positive user experience.
How did I find the above article? I received a Google News alert by
e-mail for ethical business, that linked to a blog post by Joseph Newhard.
After reading the article, which was more commentary than news, I
wanted a more authoritative source to quote from, so I typed the
following string into Google

google “$1 billion” healthcare

About three seconds later, I had the San Francisco Chronicle article I referenced earlier.

Oh
yes, and I’m typing this on a Blogger blog, owned by Google. If you’re
reading it on my own site, I use Word Press for the mirror blog. And I
switched my site-specific search engines to Google a couple of years
ago, because it didn’t need me to tell it each time I added content.
Though I’d love to see them add the feature of searching a few sites at
once under common ownership that my old, clunky search engine offered.

And
I think it’s fabulous that Google now has a share value of $100 billion
and profits of $968 million–because those profits are built on doing a
lot of things right–first of all, creating a search engine that gives
the right results if you know what to ask for, and gives them
instantly. Second, not bothering with a revenue model until “usership”
had built up. And thirdly, introducing its primary revenue model–a
modification of the old failed model of web ads–as the brilliantly
successful low-key, non-intrusive contextual advertising, with millions
of partner websites who are benefiting from Google’ success. Obviously,
it works.

But then there are those other heads: Google
Book, for instance, *almost* works. The ability to search books’
complete text is great. The it’s-a-big-pie model that shares revenue
with publishers by directing purchasers to publisher websites to buy
the book is great. But what’s not great–and the Authors Guild is suing
over it–i that Google insists it has the right to take books into the
program without consent of the copyright holder.

If there is
any justice in the courts, Google will lose this case–and it will be a
big, expensive mess. Just as an example–I’m delighted to have the text
of my most recent book, Principled Profit: Marketing That Puts People
First, in the program; I think that can only help sales. But I have
deliberately refused to put in my older e-book, The Penny-Pinching
Hedonist: How to Live Like Royalty with a Peasant’s Pocketbook–because
with that book, appealing to a self-defined frugal audience, it’s much
more likely that a searcher would find the specific piece of
information wanted and feel no need to then spend $8.50 to own the
content. For authors of cookbooks, reference manuals, travel
guidebooks, etc., involuntary participation in the program could be a
disaster. Google could, I think, easily develop a form to submit to
publishers enabling them to quickly import their entire catalog and
check yes or no for the program. By saying “we have the right unless
you opt out,” they’re acting like spammers, violating copyrights
unnecessarily, and depriving publishers of the right to make decisions
about how their copyright-protected material is used.

And then there are some serious concerns about privacy. See for instance “Google as Big Brother” on the Google-watch site (scroll down to “Google’s immortal cookie”). If you want to find more, here’s Google’s own results page on a search for google privacy. Stories on Wired and elsewhere raise cause for alarm.

Of
course, Google isn’t the only company to be a bit erratic in its
ethics. I could have easily written a similar article about Microsoft,
or Ford, for instance.

But Google does so much that’s right–I
just have to wonder about their blinders on the copyright fronts, and
take a watch-and-wait attitude on the privacy front.

Shel Horowitz’s Business Ethics Pledge campaign
seeks to create a climate where future Enron/WorldCom scandals will be
impossible. He’s the author of the Apex Award winner, Principled
Profit: Marketing That Puts People First and five other books.

Facebooktwitterpinterestlinkedinmail

By Posted on Posted in Media Ethics

Judith Trotsky wrote:

For examples, I would urge you to tune in on the PBS Newshour. They have top figures from all over the world giving facts, providing their own points of view. This is reporting BOTH sides of any controversial story: you might not like what you hear, it might contradict some emotional need you have to believe differently, but it will present the ENTIRE story, not just one side.

I was also trained as a journalist, and I’m sure there are many dedicated folks in the profession who see this as their mission. I have no doubt that Judith is one of them. In fact, I’ll point out that she was on the pub-forum list (where all three of the quotes originally appeared, along with a slightly different version of this response) for many months before I, at least–and I think of myself as pretty tuned in to clues on this–had any inkling of her politics, other than as a strong and forceful advocate for writers’ rights and an active NWU member.

But unfortunately…

  • I don’t think journalism training is what it was in the 70s when I was trained, and certainly not in the earlier period when Judith learned her trade; today, the emphasis seems to be on glitz instead of news, and the tendency to spent absurd amounts of time following nonstories involving celebs while the real news is quietly sitting there on bloggers’ desks is just shameful
  • This is in part because real news is expensive, and many news orgs are now owned by non-journo bean counters who see their only stakeholder as the stockholder, and not the public they’re supposed to serve
  • It’s also because the Internet has even shorter lead time than daily newspaper of old–instant stories are not always fully researched
  • The definition of what covering both sides means has become quicksand: far too many journalists think that if they give equal time to a Democrat and Republican who share a position (say, just for the sake of argument, the drive to go to war in Iraq)…or spokespeople from both the oil and coal industries, but not a knowledgeable advocate of solar
    Many stories have far more than two sides; the mainstream, well-funded, easy access sources of the large industries and government institutions get heard, because reporters (who are totally overworked and under immense pressure) already have them in their Rolodexes and databases, and know they won’t get in trouble for going with known quantity (especially on TV
  • You will notice that certain organizations, and many members of the current administration, clearly favor those journalists who promote their policies–look how seldom a Helen Thomas or a Don Gonyea gets called on at those rare White House press conferences (I’m sure the notorious planted Jeff Gannon didn’t have this problem for his softball questions)–it is well-known in Washington that those journos who “play nice” also have access in the form of 1:1 interviews that are denied to the critical voices
  • Quite a few journos have simply been forced out for speaking truth to power–even such respected figures as Bill Moyers and Phil Donahue, and many lesser known ones who happened to work for the likes of Clear Channel and Sinclair

Judy Sulik wrote:

Also, sometimes a story shouldn’t have ‘two’ sides. If one side is
correct and the other side is factually wrong, then giving balance to
both sides so some kind of objectivity can be claimed, doesn’t lead to
the truth.

I totally agree; there’s not enough skeptical analysis. Propaganda statements on all sides are far too often simply presented as fact. And most people would be shocked and horrified to learn how much of the news is planted rather than investigated

And Bob Goodman wrote,

[a journalist who was covering the Vietnam war] was given the boot because he kept asking why only deaths that occurred during actual combat were reported as casualties of war–why people killed by a rocket launched into their barracks, for example, didn’t count. That’s a reasonable question that deserves an answer instead of a plane ride home. I’ll give the army and the State Department credit, though. They let him come home.

Does anyone really believe the spin and propaganda? Now we learn that puff pieces are being planted at taxpayer expense and sycophants in the media are presenting them as news. That doesn’t do much for the already miniscule credibility of the news desk.

I do see some clear ethical differences between PR for companies (which I do) and PR for governments. First of all, when a company hires PR firms or in-house staff, it is funded out of the company’s profits. But for the government, the person paying is the taxpayer–the same person being hoodwinked by misleading, feel-good “news.” Also, one can at least hope that the private folks subscribe to the PRSA’s code of ethics, which very clearly spells out responsibilities to the truth. And finally, private PR flaks do not have the luxury of ostracizing media people who don’t toe the preferred line.

Of course government, business, and even Pub-forum wonks give you the information they want you to know. So do reporters. The difference is that reporters have to dig while government only dispenses. The more sophisticated we get technologically, the easier it is for people who are already secretive to pull “facts” that only they could know out of blackboxes that only they have access to and say that this is all theinformation we need and all we are going to get. Didn’t the USSR and Pravda do that?

This battle comes up every now and then. I highly recommend the new movie, “Good Night and Good Luck,” which chronicles legendary TV reporter Edward R. Murrow’s and producer Fred Friendly’s battle against the repressive Senator Joe McCarthy. We desperately need more Ed Murrows in the journalism biz, especially the TV side of things–and they need to be given the resources to do their job, as Bob Woodward and Carl Bernstein were during Watergate.

(My thanks to Judith, Judy, and Bob for their gracious permission to quote them, and to Pub-Forum for its usual stimulating discussion.)

Shel Horowitz is the creator of the Business Ethics Pledge, which you can sign by clicking here, He writes frequently on media, ethics, and government. His most recent book is the Apex Award winner, Principled Profit: Marketing That Puts People First

Facebooktwitterpinterestlinkedinmail

By Posted on Posted in Energy & Sustainability, Other, Shel's Personal Life

Nuclear power plants cause great risk, and the industry actually uses more power than it produces. Read on:

My first exposure to the nuclear industry was in 1972 when Con Edison proposed to build a nuke 2 miles north of New York City’s northern border and 3 miles north of where I was living at the time. We raised the issue of thermal pollution (yes, a contributor to global warming), and they caved almost instantly. Two years later, I found out why. I did a college research project on whether nuclear energy was safe and what I found scared me deeply. And five years after that, I wrote my first book (co-authored with Richard Curtis and Elizabeth Hogan, who had written one of the books I read for my college project)–on why nuclear makes absolutely no sense as an energy alternative.

Before I tell you what I found out, I want to say again that no environmentalist I am aware of recommends switching to coal. There are far safer and cleaner alternatives, including the sun–which could meet all our energy needs just by itself–as well as wind, conservation, and many other options. Just like nuclear, coal is a devil’s bargain–but fortunately, it is not necessary.

On to a few of the many arguments against nuclear power (there are a number of others, but these are the ones I find most perturbing).

1. The need to completely isolate the stew of various toxic and radioactive wastes, all with different half-lives and corrosion factors–for between 100,000 and 250,000 years. To put that in perspective, the earliest known artifacts of human industry date back only about 25,000 or 30,000 years. The first cities were only 10,000 years ago. Yet we have the hubris to think we can not only build containers that will last ten times as long as recorded human ingenuity (and be immune to terrorism even though they’re a much easier target than the power plants themselves) but that the warning signs will not only be legible but still be understood. I am highly skeptical of that ability, and it’s an absolute necessity.

2. The nuclear industry’s lack of confidence in its own safety record, in that it relies on an insurance program, subsidized by our tax dollars, and with sharply limited liability in the event of an accident. Those who support free-market capitalism should be appalled and terrified at the incredible threat to private property rights that this represents. Even the US government’s threat in the 50s to nationalize the power industry and produce its own nukes if the private sector didn’t step up was not enough to create the nuclear power industry. It took this law that takes both the power companies and insurance companies largely off the hook in case of an accident or terrorist attack. I do see that the most recent (2002) renewal of this barbaric 1957 law finally pushed the cap from the $560 million that was totally unrealistic the day it was written to some $9 billion per accident–still a tiny fraction of what could be ruined in a Chernobyl-like accident, and you can bet the power companies will be first in line to collect the few dollars available, leaving little or nothing for ordinary folks. The plants themselves typically cost about $2 billion apiece back in the 70s when most of them were built, and the replacement cost in today’s dollars would be much higher.

3. The abysmal safety record of the US and Russian nuclear industry (France, as far as I know, has done a better job). There have been hundreds of minor but potentially serious accidents, touching, I believe, every nuke in this country. And there have been four major accidents that I’m aware of, within 20 years, one of which was catastrophic (Chernobyl, which removed much of the Ukraine from productive use and polluted the entire world–thank goodness it was not in a heavily populated area! Had that accident happened at, say, the Enrico Fermi or Indian Point site, or that nuke I helped to block in New Rochelle, NY, or the nuke that sits on the river just outside St. Petersburg–Russia’s second-most important city–tens of thousands would have died)

  • Enrico Fermi, near Detroit, Michigan, 1966
  • Browns Ferry, Alabama, 1975
  • Three Mile Island, Pennsylvania, 1979
  • Chernobyl, Ukraine, 1986

Oh, and there have been a number of other fatalities. See, for instance, https://www.lutins.org/nukes.html

4. We undergo all this risk *for zero benefit.*

There is energy usage in fabricating and building and maintaining the power plant itself. There are energy costs in mining and refining and preparing the unranium and the fuel rods, and in recovering and reprocessing spent uranuim. There are energy costs in running the plant, and there are regular, heavy refurbishments necessary.

What is usually ignored is that there are very substantial energy costs in dismantling and storing the used power plant (virtually the whole of the generation area and the cooling waters and all suitings etc) and the spent fuel which has to be monitored, kept cool and guarded from theft by – in particular – terrorists or Governments keen to join the nuclear weapon club.

What he doesn’t say is that according to my research, counting the entire fuel cycle–mining, milling, processing, transporting the uranium, and then reprocessing the spent fuel rods–and not even counting the vast energy costs of decommissioning the plants at the end of their lives, the nuclear industry is a net consumer of power. Counting decommissioning and storage, it’s even worse. In other words, the nuclear industry consumes more energy than it produces! All risk, no benefit.

In short: a whole lot of risk, no benefit.

This is a stupid answer to the energy crisis, and don’t let anyone try to build a nuke near you!

Note: for many provocative and mostly solution-oriented articles on energy, please visit the sustainability section of Down to Business magazine. There are a whle lot of ways to do energy that are nonpolluting, renewable, and thoroughly achievable.

Shel Horowitz, editor of Down to Business and Peace & Politics, has been writing about sustainability and social change for over 25 years. Click here to learn about his award-winning book, Principled Profit: Marketing That Puts People First, and his campaign to change the world of business with an ethics pledge campaign.

Facebooktwitterpinterestlinkedinmail

By Posted on Posted in Ethics in Government

Some good news: The Wall Street Journal reports, in its December 1, 2005 issue,* that the Norwegian Petroleum Fund, in charge of managing the income from Norway’s rapidly increasing oil revenues, has hired Henrik Syse, a professor of ethics and philosophy, to be its “moral compass.”

Syse cheerfully admits he hadn’t even known the difference between a stock and a bond. And he’s totally happy to go to work on the tram, no fancy limousine for him.

Norway has adopted the corporate governance standards of the Organization for Economic Cooperation and Development. It’s Syse’s job to implement new ethical rules that prohibit investments that might put the fund in the position where it “may contribute to unethical acts or omissions.”

I find this refreshing and delightful. And I’d love to see more companies and government organizations embracing the idea that they need a moral compass. In my own small way, with the Ethical Business Pledge campaign, I’ve tried to provide a tool for finding that compass.

* The article, “Oil-Rich Norway Hires Philosopher As Moral Compass: State Seeks Ethics Lesson On Investing Its Bonanza,” by staff reporter Andrew Higgins, is available to non-subscribers for $4.95–or ask your local librarian to locate it for you.

Facebooktwitterpinterestlinkedinmail

By Posted on Posted in General Commentary

According to the NY Daily News, military contractor David H. Brooks just spent–are you sitting down–ten million dollars on his daughter’s Bat Mitzvah! Brooks says the figures are exaggerated, but he doesn’t deny that it involved private jets, multiple performances by rock superstars, and a very expensive swanky New York venue.

A Bat Mitzvah is a religious coming-of-age ceremony. A teenager (usually–I’ve been to the Bat Mitzvah of a woman in her 70s) leads a section of the prayer service, reads from the Torah (the five original books of the Bible) and chants a Haftorah (a section from one of the later Old Testament books such as the Prophets). Usually there’s a party afterward. It should not be about ostentatious displays of wealth and one-upping your neighbors.

With several hundred people attending, renting one venue for the ceremony/reception and another to prepare the food (an elaborate full luncheon), hiring a couple of workers, my daughter and two friends became Bat Mitzvah a couple of years ago. If memory serves me correctly, this whole event cost around $1800, or $600 for each participating family. And it was a great event–I daresay probably a good deal more spiritually meaningful than this obscene $10 million blowout. I can only imagine what her wedding will be like. Maybe Dennis Kozlowski, disgraced CEO of Tyco known for his lavish parties, will do the catering.

Facebooktwitterpinterestlinkedinmail

By Posted on Posted in Ethics in Government

That’s what 8-term Republican Congressman Randy Cunningham said in his resignation speech, after pleading guilty to taking $2.4 million in bribes. Oh yes, and then talk about chutzpah, listen to this:

The
tax evasion charge came after Cunningham reported joint income with his
wife of $121,079 for 2004 and claimed he was due a refund of $8,504.
Prosecutors said his income was $1,215,458 and he owed $385,077 in
taxes.

(You won’t find that in the above link, but it’s in the copy of the AP story a friend sent me.)

Hmmm, yet another GOP Congressional scandal–this makes the fourth one
(DeLay, Frist, Bob Ney), not counting Plamegate and other White House
scandals. One Democrat, William Jefferson of Louisiana, is also under
investigation.

The Washington Post reports,

Democrats
have vowed to make what they have called the GOP’s “culture of
corruption” a major theme of a 2006 congressional election campaign
already unfolding under the twin clouds of the Iraq war and high energy
prices.

The Post kept a sense of humor in its report:

For
a gruff war veteran, Cunningham emerges from the court documents as a
man with surprisingly delicate tastes. Among the gifts he accepted were
a $7,200 Louis-Philippe commode, circa 1850; three antique nightstands;
a leaded-glass cabinet; a washstand; a buffet; and four armoires. After
paying $13,500 toward a Rolls-Royce in April 2002, one of Cunningham’s
benefactors tossed in $17,889.96 toward the car’s repairs less than a
month later.

Rep. Randy

Rep. Randy “Duke” Cunningham (R-Calif.) talks to reporters in San Diego after pleading guilty to conspiracy and tax evasion. (By Lenny Ignelzi — Associated Press)

Now
he’s forced out of not only the House but his ill-gotten house, and
will probably go to jail. You’d think these people would figure out by
now that crime doesn’t pay–unless, perhaps, the President calls you
“Kenny-boy.” Lay’s trial was supposed to start over a year ago, and
even that was years late. Why are they waiting?

And whatever
happened to the days when public office was a public trust, and CEOs
saw their mission as stewardship of shared resources rather than
feathering their own nests? It’s important to note that those who paid
the bribes, and received vast return on their investment, are just as
tarnished as the fallen Cunningham.

Facebooktwitterpinterestlinkedinmail

By Posted on Posted in Marketing Trends/News

3. New Business Ideas are Everywhere
It
seems there’s no shortage of unfilled needs that could become the core
of wildly successful businesses. Here are a few I noticed:

Ralph Stevens turns 100 (See #4, below).
(Photo by Alana Horowitz Friedman)

A. Mail-back kiosks and/or check-this-as-luggage containers at airport security checkpoints:
My 13-year-old son brought his oboe on the trip, including a set of
four tiny screwdrivers, like the sort for tightening eyeglass frames.
TSA confiscated three of the screwdrivers. (I offered to let each of
the four of us take one screwdriver, but this was not acceptable.)
Apparently there was some rather inconvenient way we could have mailed
it to ourselves for $10, but it would cost less to replace them. We
could have also sent the whole bag through checked baggage, but the
risk of damaging or losing the instrument far outweighed the
convenience of keeping the screwdrivers.

There must be thousands
of items per day that are confiscated, causing great inconvenience to
the owners of the objects, and also a substantial disposal problem for
TSA. Someone should come along and contract with the postal service and
TSA to set up a self-service mail kiosk at each security checkpoint,
with a selection of small padded envelopes and the ability to type an
address label and take credit cards. Charge actual postage plus maybe a
$3.00 or $4.00 service charge, of which two-thirds would be profit.
Someone would need to refill the envelopes and be available for
maintenance problems, but the post office would collect the packages
for free.

Another possibility: rent small suitcases big enough
to go through baggage without being lost or crushed, with drop-off at
any airport in the U.S.

B. Travel planning website for fixed dates, open destination:

We’ve been trying to plan a trip for our next vacation, over Christmas
week. But we have to try one destination at a time. The truth is, we’re
not so fussy about where we go. I’d like to be able to select a date
range of two or three days on each end and see destinations ranked by
fare within broad categories of U.S., Europe, Asia, Africa, Pacific.
Then we could quickly narrow it down and click for more
information/booking. I checked with two prominent travel experts;
neither knew of such a site.

C. Urban compost centers:
In my brother-in-law’s food-co-oping, Prius-driving, recycling
Minneapolis neighborhood, a lot of food scraps end up in the municipal
garbage system. If someone could figure out a way to create a business
model around composting, while still keeping the disposal a free
community service, it wouldn’t be hard to generate a significant
quantity of waste. I live on farm and my neighbors sell composted cow
manure for $5 a bag, but my guess is they sell only a few bags per
week. Still, there surely must be people who would pay for high quality
compost; it’s just a matter of figuring out who has the need, wants to
pay, and can generate enough orders to be worthwhile. Garden centers,
perhaps? They’re already selling fertilizer. Or maybe the garden
centers should operate the compost operation.

4. Aging Populations Have Different Needs
My
sister-in-law’s grandfather, Ralph Stevens, turned 100 while we were
out there, and we went to the party along with about 40 of his
relatives. I’d never been to a 100th birthday party before, although I
did go to my neighbors’ 70th wedding anniversary.

When I was a
kid in the 1960s and 70s, many people born around the beginning of the
20th century were dying off; if you lived past 70, you were considered
old. Yet 76,000 Americans have reached that amazing 100-year milestone–and
these are the same generation that appeared to be dying off thirty and
forty years ago. What marketing opportunities are presented by people
living to be 100? By having four or five generations of the same family
alive at once? What does Ralph Stevens, a wheelchair-using blind
centenarian who loves to sing and lives in close proximity to a large
family, want and need in his life? How would you market to him in his
nursing home or through his family?

Facebooktwitterpinterestlinkedinmail

By Posted on Posted in Business Ethics, General Commentary, Marketing Trends/News

Just back from several days in Minneapolis, and I had my trend-spotting radar up. Some observations:

1. The airline industry continues to shift.

We flew ATA and Southwest, and it was illuminating to contrast them. Southwest still very much encourages the nonconformists and humorists among its staff, and continues to do very well with on-time performance, full or nearly-full planes, and other metrics. And they continue to make things nicer for their customers. For instance, online check-in is a big improvement over the cattle-herd system of the old days, and printing your boarding group right on the boarding card is much better than the old plastic passes. Maybe it was my imagination, but it seemed to me there’s a bit more leg room than there used to be. And on today’s flight home, they even gave us each a square of chocolate!

Lessons for other companies: give your people room to shine and they will. Fill a market niche, and you’ll be profitable. Be nice to your customers, and they will return. Do all three things right and you’re a rare success in a troubled industry.

ATA, by comparison, was not a pleasant experience. The seats are jammed together to the point where, even at only 5’7″, I was extremely grateful to have an aisle seat so I had someplace to put my feet. (My wife flew Northwest recently, and said the legroom is even worse there.) On the way there, we discovered that the airline had never entered a change in our itinerary and had us flying the previous day. Luckily, we had a paper trail and there were still enough seats. Yet, even though I watched the ticket agent enter the correct information for our return trip, it seemed the check-in agent on the flight home had some difficulty getting the reservation to show up appropriately. And other little things–no sparkling mineral water or seltzer, only club soda (which has salt, on top of all the salt in the pretzels). And big things: ATA had over two hours to get our luggage to Southwest during our Chicago transfer; not one of our four bags made it on the plane, and neither did the bag of another passenger with the same itinerary. None of this was life-threatening, and most of it is a pretty small inconvenience–but it added up to somewhat negative experience that is likely to influence future purchase decisions. Oh yes, and the reason we were on Southwest in the first place is that ATA suddenly pulled out of our market long after we’d booked our flight. (Southwest doesn’t fly to Minneapolis.)

Lesson: No matter how good your advertising, your brand is built on positive and negative customer experiences.

(Disclosure: I was a fan of Southwest long before this happened, but I should point out that the company bought 1000 copies of Principled Profit: Marketing That Puts People First, prepublication. If that colors your view of my comments, so be it.)

2. A Discounter Goes Upscale

Southwest again. The airline’s Unique Selling Proposition has always been the combination of low prices, reliability, and superior service. Perhaps it’s the service aspect that’s helping Southwest Spirit, the inflight mag, to go after a very upscale advertiser profile. The pages are filled with ads for expensive high-rise housing, Las Vegas casinos, glitzy restaurants, expensive gizmos…and there are a lot of ads!

This could mean several things:

  • High-end consumers are putting greater value on low prices
  • Southwest’s superior experience means non-price-conscious consumers are seeking them out because they want to get there on time and be entertained
  • The airline may be experimenting with moving away from that USP, and higher prices may be on the way (though I suspect they wouldn’t be quick to throw away 30 years of loyalty built in large measure by affordability)

I’ll try to do Part II tomorrow

Facebooktwitterpinterestlinkedinmail

By Posted on Posted in Ethics in Government

This week, I received a fund appeal on behalf of none other than Katherine Harris. Remember Harris? She was the highly partisan Florida Secretary of State whose conduct of the 2000 election and counting cast a cloud of illegitimacy over the entire Bush II administration (a cloud that only gets thicker with time).

This would be funny if she weren’t serious. Ms. I-Have-No-Integrity-To-Start-With has the chutzpah to write,

I can no longer take the high road, turn the other cheek, or consider the source when faced with character assassinations, half-truths, and outright lies, I must fight back.

Protecting my integrity takes money.

Well, I don’t know how much father she can fall off the integrity wagon! Her conduct as Secretary of State was shameful. In an normal era, it might have been labeled criminal.

When Harris says she will no longer take the high road, I don’t even want to speculate on how low she will stoop.

Facebooktwitterpinterestlinkedinmail

By Posted on Posted in Business Ethics, General Commentary

Something most of the corporate scandals have in common over the past few years: those with their hands in the cookie jar already were receiving compensation that most of us would consider wildly excessive.

For a number of years, some companies have established maximum earnings for top execs as a multiple of the earnings of the company’s lowest- paid employees. So if the multiple were, say, 50 times, and the lowest paid worker made $15,000, CEO pay would be capped at $750,000. If the CEO wanted higher pay, that $15,000 a year worker would get an increase as well.

But we see CEOs with compensation in the hundreds of millions. Often the crooked ones. The Wall Street Journal reported that Enron Chairman and Chief Executive Kenneth Lay was paid $67.4 million in the year immediately prior to the company’s bankruptcy filing. That same year, according to the American Institute of Certified Public Accountants, Tyco’s Dennis Kozlowski received $125.3 million in total compensation. And you can bet that the lowest paid workers at Tyco got nowhere near 1/50th of that.

Yet these outrageous figures weren’t enough to keep them from stealing? How much money does any single person really need to live on?

A very interesting solution was proposed in this report of the Center for Corporate Policy; I like it because it relies on tax law, rather than coercion, to enforce the cap:

Cap CEO pay through a maximum wage. This can be done by eliminating tax deductions for executive compensation above a certain amount — e.g. above 25 times that of the lowest-paid employee, a standard originally proposed by management guru Peter Drucker. Rep. Martin Sabo (D-Minn.) has included this proposed standard in “The Income Equity Act of 2003” which would eliminate all tax deductions for compensation above 25 times that received by the lowest paid worker in the corporation.

Another law, proposed by Rep. Barney Frank of Massachusetts, would initiate strict disclosure rules for CEO compensation, making the packages subject to investor scrutiny for the first time.

These are both positive steps. And long overdue.

There will be a consumer rebellion if steps are not taken to curb these excesses.

Facebooktwitterpinterestlinkedinmail