Right now I have sequestered myself at a cabin so I could finish some writing. I had to work on a lecture on ETHICS. As often happens in my research I get pulled down the rabbit hole. I get too deep and can get side tracked.
In our society there is a lack of REAL heroes. Why is it difficult for people to do the right thing AND when people make the right decision it is viewed as remarkable.
New Orleans Mayor Mitch Landrieu stood up last week and delivered a moving, bracingly honest speech to explain why he removed four Confederate monuments from his city.
“You elected me to do the right thing, and this is what it looks like,” Landrieu told the crowd gathered at New Orleans’ former city hall. “These monuments purposefully celebrate a fictional, sanitized Confederacy, ignoring the death, ignoring the enslavement and the terror that it actually stood for.”
While it was remarkable to see a Southern politician speaking boldly and clearly about race ― in the face of death threats and protests ― it was perhaps even more notable to see a leader publicly demonstrating the character of his convictions. Landrieu’s speech went viral.
As the country grows ever more cynical, divided and partisan, we’re not used to honesty and courage from our leaders. Seeing a politician stand up for what he or she believes is the right thing is increasingly rare.
Political discourse and civic life has so devolved in 2017 that a man charged with physical assault, Republican Greg Gianforte, was elected to Congress Thursday in Montana with the backing and full support of his party. Just the day before, Gianforte, a self-made tech millionaire, wrapped his hands around the neck of a reporter, threw him to the ground, and repeatedly punched him for asking a question.
Comparing a longtime politician in Louisiana (Landrieu comes from a political family and is a former lieutenant governor) to an upstart businessman-cum-politician may seem like a stretch. But these two men make a neat case study on the state of ethics and integrity in 2017.
These days the public no longer expects leaders to do what’s right. We’ve grown accustomed to name-calling and carefully crafted milquetoast middle-of-the-road statements. We’re used to lying, and we expect leaders to put party and their own careers before all else.
“Norms have shifted,” said Gautam Mukunda, the author of Indispensable: When Leaders Really Matter and a professor at Harvard Business School. “We expect leaders to be bad, and people live up to what you expect of them. We’ve created a self-fulfilling prophecy of bad behavior and it is profound.”
To many Americans, politics is either a massive conspiracy, a “House of Cards” dystopia, or a playground for craven buffoons, a la “Veep.” We are no longer surprised as we witness leaders live up to these expectations, lying about meeting with foreign agents, changing their stories, and blaming everyone but themselves when things go wrong.
You could see footprints of our lower standards all over the Gianforte incident. Instead of apologizing for his naked act of aggression, Gianforte initially released a statement blaming the reporter, Ben Jacobs of The Guardian. “It’s unfortunate that this aggressive behavior from a liberal journalist created this scene at our campaign volunteer BBQ,” the statement read.
Worse, the statement was false. It claimed Jacobs shoved the microphone in Gianforte’s face and refused to lower it after being asked, but audio and witness accounts from a Fox News crew refuted the claims.
Republican Speaker of the House Paul Ryan gamely admitted what Gianforte did was wrong, and called on him to apologize, but he also said would support his election if that’s what the people of Montana wanted.
Of course, we can’t actually know what the people in Montana thought of the assault. A majority of voters cast their ballots before the body-slam.
It’s easy to imagine a different politician simply stepping out of the race in the face of such an incident. Remember when Howard Dean appeared to scream in one speech and it doomed his entire bid for the presidential nomination?
Some conservative pundits tried to spin the assault this week as a good thing: “Gianforte, the manly and studly candidate, threw the 125-pound wet dishrag reporter from The Guardian to the ground,” Rush Limbaugh said of the incident, according to an online transcript of his show posted on his website. Laura Ingraham, while gamely allowing that politicians should stay cool in such situations, also tried to cast Jacobs as wimpy for not fighting back. What “would most Montana men do if ‘body slammed’ for no reason by another man?” she asked in a tweet.
As is too often the case in 2017, partisanship blinded us from even distinguishing right from wrong. The increasing divide between right and left and the intensely personal way each side attacks the other means that even ethics are now partisan. Republicans and Democrats call each other “bad” or “evil,” and there is often no higher playing field where everyone agrees to nonpartisan standards and values (don’t hit people, don’t lie, etc.).
“I don’t think Obama was perfect, but it’s hard to imagine more of a straight-arrow person. Not a hint of scandal,” Mukunda said. Yet somehow half of America just didn’t it see it that way. People who disagree with his politics won’t typically acknowledge that he acted with respect for the office. “You don’t hear a lot of that,” Mukunda said.
Yet at the same time, people are hungry for heroes ― men and women with humility who will stand up for what’s right. When former acting Attorney General Sally Yates refused to enforce President Donald Trump’s travel ban because she believed it was unconstitutional, many people found it thrilling. When Sen. John McCain (R-Ariz.) criticizes the Trump administration for its failings, he’s lauded.
Indeed, we need people like this to set examples, Mukunda says. “The extent that we have culturally deprived people of that is troubling.”
It’s also highly dysfunctional. Integrity is the bedrock of a properly functioning organization, Joseph Badaracco told HuffPost recently. Badaracco has been teaching an introductory course in ethics, leadership and accountability to Harvard Business School students for the past decade. He defines integrity as a consistency between what you believe, say and do. “It all hangs together,” he said.
“There’s a way in which integrity shouldn’t be newsworthy ― we assume it, rely on it and count on it,” Badaracco said. “It’s not exactly like obeying the laws of gravity, but we ought to be able to assume it’s there.”
The ability to know what’s right and follow through on it with conviction isn’t something Badaracco believes can really be taught to people by the time they reach Harvard Business School.
“We don’t teach people how to have integrity. Or even teach the importance of it,” he says. “If someone doesn’t understand that, they have a deficiency in their education or development and we can’t remedy that.”
Badaracco says his focus is on making hard decisions. The grey areas. “Not right versus wrong where a person with integrity will know what’s right,” he explains. “But right versus right where it’s not really clear.”
But civil discourse has devolved from this graduate-school-level thinking. Americans elected Trump, a man whose most original thinking seems to come through in his creative penchant for name-calling. Many mistook Trump’s plainspoken manner for authenticity, and perhaps conflated this with honesty and integrity.
These are not the same things.
5 Reasons Glass-Steagall Matters
The Glass-Steagall Act came up as a major point of disagreement between Bernie Sanders and Hillary Clinton during Saturday’s Democratic presidential debate. The Act, which was originally enacted in 1933, separated risky trading and investment from traditional banking activities like business lending and consumer finance.
1933. “Anthony Adverse” and “Magnificent Obsession” were topping the bestseller lists. “King Kong” and the Marx Brothers were big at the box office. What does a law passed back then have to do with the 21st century economy?
As it turns out, a lot.
Bernie Sanders wants to implement a new version of the Act, which was repealed in 1999 after having been in effect for more than 75 years. Hillary Clinton, on the other hand, is not calling for its reinstatement.
Sen. Sanders is right. Here are five reasons why it is important to reinstate the Glass-Steagall Act.
1. Too-big-to-fail banks are bigger, riskier, and more ungovernable than ever
America’s largest banking institutions are even larger now than they were before the 2008 financial crisis. The nation’s six largest banks issue more than two thirds of all credit cards and more than a third of all mortgages. They control 95 percent of all derivatives and hold more than 40 percent of all US bank deposits.
Simon Johnson, former chief economist for the International Monetary Fund, points out that Glass-Steagall is needed as part of a broad effort to make these banks “simpler and more transparent.” Johnson also observes that
“In the run-up to the 2008 crisis, the largest US banks had around 4% equity relative to their assets. This was not enough to withstand the storm … Now, under the most generous possible calculation, the surviving megabanks have on average about 5% equity … that is, they are 95% financed with debt.”
As Johnson makes clear, these banks continue to pose a grave risk to the economy. He also notes that they have continued to engage in sanctions violations and money laundering – behavior which suggests that they are still out of control.
2. The argument that Glass-Steagall didn’t cause the 2008 financial crisis is wrong.
Hillary Clinton told the Des Moines Register that “a lot of what caused the risk that led to the collapse came from institutions that were not big banks.” This is part of a longstanding pattern, in which she largely absolves the big banks from culpability for the 2008 crisis while emphasizing “shadow banking” in her own Wall Street plan.
Secretary Clinton returned to that theme during Saturday’s debate, pointing an accusing finger at non-bank entities like AIG and Lehman Brothers while giving a pass to Wall Street’s biggest banks for their role in the crisis.
Robert Reich, Bill Clinton’s former Labor Secretary, summarized the anti-Glass-Steagall argument as follows (without naming Hillary Clinton specifically):
“To this day some Wall Street apologists argue Glass-Steagall wouldn’t have prevented the 2008 crisis because the real culprits were nonbanks like Lehman Brothers and Bear Stearns.”
He follows that with a one-word response: “Baloney.”
Reich makes an important point: “Shadow banks” like AIG and Lehman, which largely function outside the normal bank regulatory system, are a major problem. But the 2008 financial crisis became a systemic threat specifically because too-big-to-fail banks were underwriting the risky bets these companies made. And why were the big banks able to do that?
Because Glass-Steagall had been repealed.
3. Repeal of the Act has not worked as promised.
Given the risks associated with the repeal of Glass-Steagall, what about the benefits? Turns out there aren’t many.
We were told that repealing Glass-Steagall would lead to more efficiency and lower costs, but neither of these promises has come true. No less an expert than John Reed, former CEO of Citigroup, now says those claims were wrong. Reed wrote in a recent op-ed (behind a firewall) that “there are very few cost efficiencies that come from the merger of functions – indeed, there may be none at all.”
In fact, says Reed, it is possible that this combination of functions actually makes banking services more expensive.
4. The repeal of Glass-Steagall is further corrupting the culture of banking – if such a thing is possible.
Sanders was right when he said on Saturday night that “the business model of Wall Street is fraud.” The traditional practice of what Sen. Elizabeth Warren calls “boring” banking – opening savings accounts, reviewing loans, and providing other customer services – has largely been supplanted by high-risk gambling and the aggressive hustling of dubious investments to unwary clients.
The level of fraud unearthed since the 2008 crisis is nothing short of breathtaking. (The fact that no senior banking executive has gone to prison for that fraud is, if anything, even more breathtaking.) How did that happen?
Citigroup’s Reed wrote that the repeal of Glass-Steagall led to the “very serious” problem of “mixing incompatible cultures” – which, he said, “makes the entire banking industry more fragile.” He discussed the relationship-based, sociable culture of traditional banking, emphasizing its incompatibility with the risk-seeking, “short termist” mentality of investment bankers who seek “immediate rewards.”
Reed makes a very important point – although he’s being overly kind about it. Yes, traditional bankers tend to be risk-averse and customer-focused. That’s very different from the high-stakes gambling mentality of investment banking.
But what Reed fails to note – or is too polite to mention – is the extent to which today’s culture of investment banking is predicated on outright fraud. That’s reflected in polling of the banking community itself, as well as in the industry’s appalling record of documented illegality. It is this mentality, which is present in banks from the “C” suite on down, which has given rise to Wall Street’s tsunami of misdeeds.
This greed-driven fraud mentality is like a virus, consuming too-big-to-fail banks even as they exert ever-greater control over our economy – and our political system.
5. Too-big-to-fail banks are a threat to our democracy.
These megabanks aren’t just a “systemic threat” to our economy. Through their enormous wealth, and because of the ruthlessness with which they’re willing to wield their influence, they are also a systemic threat to democracy itself.
That threat can be seen in the workings of last year’s Congress, which saw the successful insertion of a lobbyist-drafted “Citigroup amendment” into a last-minute budget bill.
It can be seen in a political climate where the Republican head of a Congressional Committee can say that “Washington and the regulators are here to serve the banks.”
It can be seen in Wall Street political contributions which flow to powerful and familiar names, Republican or Democratic.
Banks have acquired too much power. They must be broken up vertically (by line of business) and horizontally (by size), even as their corrupting influence over our government is ended through a system of fundamental election reform.
In today’s environment, reinstating Glass-Steagall is not just the right policy – although it is certainly that. It’s also an excellent litmus test for politicians who say they’re willing to take on Wall Street.