Is there an answer to gridlock in Washington?

18 03 2010

The Ethics of Compromise and Conflict

 We Americans have become accustomed to instant results. We want conflicts resolved and tied in a neat bow within a maximum of 57 minutes, less commercials.  We also tend to only focus on the immediate problem rather than looking at the long term results of our actions.  Such is the case with the situation in Washington concerning everything from healthcare, restructuring the financial industry, to immigration reform.

 On one level we citizens know that there are structural problems in our economy,  that if not fixed will have possible catastrophic results.  We have a debt that is growing out of control and a budget that is comprised of  Social Security, Medicare, Medicaid, interest on the national debt and the military and homeland security,  making up 80% of expenditures.  In addition to those items we’re in the process of passing a healthcare bill that will add an additional trillion dollars to the deficit over the next ten years.  These are areas that in the past we have been reluctant to even seriously talk about and there’s very little indication that we’re willing to address these areas holistically now.  So, we chip away at the edges talking about earmarks and pork to individual spending cuts without being willing to step up and say, “In order to get this thing under control we’re going to have prioritize what is most important to us and then decide what sacrifices we’re going to have to endure in order to bring about desired changes”.  Congress is quick to condemn the $2000. toilet seat by the military but not willing to confront the challenges of such things as Social Security and Medicare. 

 Fundamentally, there is the philosophical schism between the concept of individual freedom and responsibility and what is the greatest good for the most people.  If we assume that both concepts have a place in a 21st century society, how do we ensure that both are heard and that in some way they can accommodate the others presence.  Currently, that seems like an insurmountable obstacle.  In a NBC news/Wall Street Journal poll taken between March 11-14, only 17% of voters believed that congress was doing a good job.  On the issue of health care voters are pretty well split right down the middle.  Specifically on the report card for congress 38% of those polled believed that congress only wants to stay in office and not solve problems; 28% believed that congress was too close to special interest groups, 19% said that congress was too partisan, and 16% said that congress supports pork.  Not in my memory has congress been held in such low regard and whoever is elected in the fall will not have an easier go of it even if one party has more than 50% of the seats in congress.  If some sort of healthcare bill is passed I anticipate that things will settle down for a while but the day of reckoning is at hand sooner or later.  Everyone seems to know it but no one seems to have an answer.  But lets look at some scenarios.

 In order to change our current situation we will have to change our priorities and adopt painful austerity measures.  Currently, people make statements such as “we need to cut spending and lower taxes”.  Yes, we’ll have to cut spending but where.  Not the $2000. military toilet seat.  That’s a drop in the bucket.  With about 80% of the budget being used for Social Security, Medicare, Medicaid, interest on the national debt, and the military and homeland security amounting to nearly $3 trillion and a current debt of about $13 trillion.  If you sent all the government home and assuming you had enough revenue to pay down the debt after you did all these draconian measures, it would still take about 20 years to pay off the national debt and you’d still have the problem of  funding Social Security, Medicare and Medicaid. 

 Jeb Henserling (R.) from Texas has another answer—limit the national debt to 20% of annual GDP.  The only way it could be increased is by a 2/3rd vote in both houses or a declaration of war.  The current GDP was about $14.4t in 2008 which would limit the national debt to about $2.9t.   Let’s see, with a current debt of about $13t and growing, we would have to immediately pay off about $10t.   Humm, so how do we do that Jeb?   Details, details… 

 On another front we have to decide what our priorities are as a nation.  Do we want to continue to be a consumer oriented country that doesn’t save, doesn’t take care of the poor or provide a good education for all our children.  What would seem in order is an educational Marshal Plan that would teach children all the way from pre-k through college or trade school to be a productive member of society.  But presidents since Jimmy Carter have declared a war on ignorance with little results.  We hear a lot of blame being thrown around including union intransigence, ivory tower experts, parents, and lack of funding to name just a few.  We know that the best determinant of future success or failure of a child is the educational level that a child achieves.  It costs about $7000. per year to send a child to school.  It costs anywhere from $25,000. to $35,000. per year to keep a person in prison, not to mention the cost of policing and healthcare, resulting from drugs and violent behavior.  Then there’s the loss of the economic contributions of poorly educated low wage earners.   Until we effectively address the issue of education we will continue to fall behind other countries in technological training and innovation. 

 But here I am suggesting spending more money when we’re already in the red.  Whatever the answer to our current situation, it will take sacrifices by all of us.  And it will require that we move in a different direction with bold strategies for our future economic and political well being.  We’re in a war to save our political and economic system.  In WWII we were willing to work harder, go into the military, tax ourselves, buy war bonds that often were never redeemed and make sacrifices on the home front.  I think we’re there again and it will take more taxation, more saving on our part, foregoing consumer buying of things we don’t need and making hard choices on spending. 

 This sounds like socialism.  And admittedly there are elements of planned economies and national direction.  And that’s risky and my sense is that we’re not ready to embrace the kind of austerity necessary to turn things around.  But the longer we wait the harder it will be. 

 But there’s another alternative to Washington gridlock and economic disaster.  Remember Ross Perot?  During the presidential debates of 1992 the feisty third party candidate Perot was asked what he would do to change the flagging economy.  His answer in retrospect was both on target but also quite chilling.  He stated that among other things he would bring all the leaders from both parties into his office and lay out his plan which included raising the gasoline tax, cutting spending, social security and other programs, and scrap NAFTA.  After discussing the program with them, if they wouldn’t go along with his proposals  HE WOULD SEND THEM ALL HOME.  At one point he led the polls with 39% of voters and even though he dropped out of the race for a brief time, for personal reasons, still garnered over 19% of the popular vote;   And this with an economy and social environment a lot less problematic than today. 

In the January 28, 2010 issue of the New York Times, David Brooks wrote an op ed entitled The Perot Option stating that Ross Perot or his clone is lurking out there in the weeds and concludes that if President Obama doesn’t become more of a leader and take on both sides of the aisle a new Ross Perot will emerge. And that scares the hell out of me.


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Okay! I’m a Homer on Natural Gas

13 03 2010

 

I’ve been around long enough to know that pretty much everything has political implications.  But PLEASE, someone explain to me why coal is getting preferential treatment as a fuel over natural gas.  And why all the talk about alternative fuels being the wave of the future when there’s little developmental funding available, in particular for the small inventor.  Only large companies can afford to spend the kind of money necessary to do research and to bring alternative fuels to the market.  And most of them, due to the length of the time horizon to bringing them online would rather invest in areas that will bring energy online quicker. 

 My sons have a small company called www.swellfuel.com that for the last three years has been developing a system to make electricity from ocean waves.  In order to test his units he’s had to go outside the United States because the regulations on obtaining test sites take too long to obtain and cost too much to get.  Investors are reluctant to fund projects where they can’t see results in a short time.

 And then there’s the companies that talk the talk but don’t really walk the walk.  They talk about being Green and what they’re doing for the environment, but when you drill down deeper you see that it’s not much of a commitment, but more of a public relations effort.  That in of itself doesn’t seem ethical.

 Growing up in Houston, we had a gas stove in the kitchen and we used gas heating.  It got the job done without a lot of pollution.  So, to all my good friend out there who are engineers and scientists, please, please explain how it can be ethical not to utilize a source of energy, natural gas, that our country has that could make our country fuel sufficient for a long tome to come.


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Is My Bonus too Big?

2 03 2010

Over the past year we’ve all been inundated with articles about large executive compensation packages and in particular about compensation packages to executives in companies that received bail out money from the government.  And this at a time when those same companies were laying off thousands of lower level employees to cut expenses.  Of the eight banks bailed out, Citigroup, Inc.  seems to be the most beleaguered and along with Goldman Sachs and AIG has received the most criticism for their high executive compensation packages.  One of the major arguments in favor of these high salaries and bonuses is that in order to keep good talent you have to pay high salaries.  Some might say and have said that if these are the best minds to run the business, that American business and in particular banking is in big trouble.  The disparity between the top and lower level Citi employees is huge and the anger among the rank and file is well documented.  A blog run by Indeed, Inc., an executive employment website documents numerous postings about Citigroup’s wage levels.  Here’s just one:

 “A Citigroup recruiter called me for a  SENIOR Accountant position @ Citigroup. I was told that the position maxed out @ $35k. For a SENIOR level position. I would hate to see what they pay their entry level people.”   

 From Zacks investment research           “Citigroup Inc.  may cap cash bonuses for 2009 at below $100,000. The 2009 bonus pool at the company is expected to be similar to the 2008 level, which was low compared to the other years. Citi may pay a large part of the bankers’ and traders’ bonuses in stock that cannot be sold for a number of years.

Citi may pay up to 40% of bonuses in the form of deferred cash and stock and the balance in the form of non-deferred cash and IOUs, which will turn to common stock in April.

Currently, Citi is working out the details of its bonus plan. Recently, New York Attorney General Andrew Cuomo asked Citi and 7 other of the largest banks in the nation that received significant federal aid under the Troubled Asset Relief Program (TARP) to provide information on the amount of 2009 bonus packages and their structure. Cuomo also asked the banks to explain the effect the bonus pools would have had if the banks had not received the TARP funds.

 According to Cuomo, the full disclosure and transparency of the bonus information are essential as recent government actions have given rise to public accountability issues, and TARP banks are struggling with these actions.

Citi received $45 billion in bailout money from the TARP at the height of the credit crisis. Later, around $25 billion of that was converted into common stock, representing nearly 34% of its stake held by taxpayers. The company repaid the remaining $20 billion in bailout money in December 2009, freeing the obligatory pay restrictions on its key executives.

  Citi’s plan to cap cash bonuses is to save the bank from people’s fury over the TARP banks’ 2009 bonus plans. However, the bank says may still find it difficult to keep its top employees.”

 From Reuters      “Regulators, lawmakers, and others are trying to determine how changing compensation packages might reduce the chances of future financial meltdowns. The Federal Deposit Insurance Corp is considering charging lower rates for deposit insurance to banks with pay practices that it deems superior.

According to a July report from New York Attorney General Andrew Cuomo, Citigroup as a whole paid $5.3 billion of bonuses for 2008.

 Officials at rival companies told Reuters that Citigroup employees will essentially receive at least 60 percent of their bonuses in cash or stock that can quickly be sold. That level is high compared to some rivals, which could help the bank retain employees.  But some Citigroup employees groused at the relatively low portion of the bonus that will come in cash.

 Loren Steffy in the February 26 Houston Chronicle reports on executive pay for the General Motors Ceo, Ed Whitacre and past interim CEO Fritz Henderson.  Whitacre’s package includes $1.7million a year plus $7million in stock.  Fritz Henderson who for all practical purposes was fired is being given a $60,000. per month consulting agreement plus an expense account.  He is required to work at least 20 hours a month on the job.  Steffy suggests that Whitacre take the job for $1. per year since he received $158million from AT&T when he retired.  The interest on the $158million is about four times the $1.7million he’s receiving now.  By contrast Ford CEO Alan Mulally agreed to accept a $1. salary if Ford needed a federal bailout.  That was not necessary and Ford has gained market share and is expected to soon be in the black.  Mulally’s salary is slightly more than Whitacre’s at $2 million.  Last year GM received about $50 billion in bailout.  And as a result of that bailout you and I are now Whitacre’s employer. 

The media, the public, government regulators and congress are going through their hand wringing dance asking what should we be doing with all the bad guys.  Much of what has happened in the past few years was a long time in coming.  Questions of whether employment contracts should be honored in companies that are either bankrupt or being kept afloat to keep from going bankrupt are being used as a defense of big severance packages.  Arguments about high paid executives going elsewhere if they aren’t paid huge pay packages seems a bit contrived.  Where will they go?  Hedge funds which have shut down over 200 shops in the last two years?  Or, Europe which hasn’t had the bottom fall out yet?  Probably the best place for many of them to get employment would be with lobbyists who deal with the Washington bureaucrats, regulators and politicians who will probably not make any substantive punitive changes except as it may affect those companies and executives who played the game ethically and by the rules. 

My observation is that most relational issues such as this begin as ethical issues and because a minority acts unethically, new laws and regulations are passed in order to close loopholes or deal with unintended consequences.  But the sad truth is that those that want to circumvent the law will find ways to do so, and in so doing will effect the ability of the rest of us to carry on ethical business dealings.


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Texas Has the Best Textbooks in the Country. Or do we?

27 02 2010

My good friend Nancy W from Little Rock Ark wrote me the other day with a concern she has with State Board of Education of Texas.  You might ask why does someone in Arkansas care about the SBOE?  The reason is that the SBOE of Texas is the state that about 46 or 47 states in the US follow when it comes to deciding on school books for their schools.  So, don’t we make good book choices?  Not according to many citizens and school officials.  Texas has become the battlefield for issues revolving around science and creationism and more recently over what is being included in history and government books as it pertains to references to the founding fathers creating a Christian nation.  According to many, this is first of all not true and trying create the impression that that this misrepresentation is a clear breach of the “wall of separation between Church and state” that Thomas Jefferson spoke about.  The current issue is whether the United States was conceived as a Christian nation.  Conservatives argue that it was.   Others would say that the founding fathers even though religious espoused the idea that God was not necessarily a Christian God.  Consider the words of the Declaration of Independence that states, “When in the course of human events it becomes necessary for one people to dissolve the political bonds which have connected them with another, and to assume among the powers of the earth the separate and equal station to which the Laws of Nature and Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation…..that all men are endowed by their Creator….  This asserts that God has a hand in the affairs of men but that is more a deist conception of God, rather than a Trinitarian God.

 A good book to give a balanced assessment of religion in the creation of the United States is Jon Mecham’s book American Gospel.  Here are several quotes attributed to the founders. (2006)

 “Writing to a Hebrew Congregation in Newport, R.I., in 1790, President Washington assured his Jewish countrymen that America “gives…bigotry no sanction.”  In a treaty with the Muslim nation of Tripoli initiated by Washington, completed by John Adams, and ratified by the senate in 1797, the Founders declared that, “ the government of the United States is not in any sense founded on the Christian Religion…” p. 19

 Benjamin Franklin wrote in 1790:“ I believe in one God, creator of the universe.  That he governs it by his Providence.  That he ought to be worshiped.  That the most acceptable service we can render to him is doing good to his other children.  That the soul of man is immortal, and will be treated with justice in another life respecting its conduct in this.  These I take to be the fundamental principles of all sound religion, and I regard them as you do, in whatever sect I meet with them.

 As to Jesus of Nazareth…I think the system of morals and his religion as he left them to us, the best the world ever saw, or is likely to see; but I apprehend it has received various corrupting changes, an I have…some doubts as to his divinity; though it is a question I do not dogmatize upon, having never studied it, and think it needless to busy myself with it now, when I expect soon an opportunity of knowing the truth with less trouble.” P.2

 “On the dogmas of religion, as distinguished from moral principles,” he [Jefferson] said, “ all mankind, from the beginning of the world to this day, have been quarreling, fighting, burning, and torturing one another, for abstractions unintelligible to themselves and to all others, and absolutely beyond the comprehension of the human mind.”  P. 29

 “I never told my religion nor scrutinized that of another,” Jefferson wrote. “I never attempted to make a convert, nor wish to changer another’s creed.  I have ever judged of the religion of others by their lives…” “ For it is in our lives, and not from our words, that our religion must be read,” Jefferson said.  “By the same test the world must judge me.” P.35

 The most controversial appointee running for re-election Don McLeroy and his opponent Thomas Ratliff are so far down the Republican primary ballot they’re lost in the myriad of judges, representative and straw votes that it’ll be difficult to find them, much less know the issues involved.

 I’m sorry Nancy, but anyway, here’s your comment it its entirety.

 I believe it is unethical to use one’s narrow religious beliefs to determine laws and regulations that apply to public schools. Of course, a public servant makes decisions based on his/her belief and faith, but not when it goes against scientific data and affects the common good. The enrollment of children in public education is very diverse and different from a private academy which may teach values that reflect their faith.  For instance, I would not vote for something that proposed a prayer which could not be accepted by all children in the school classroom (ie, Jewish, Muslim, Catholics, etc) and I would not propose teaching a particular view of the universe that opposed the best knowledge of science. Even though I had retired from teaching when I served on the State Board of Education in my state, I learned that curriculum issues should be driven by the professional staff.  I believe it is unethical to use one’s narrow religious beliefs to determine laws and regulations that apply to public schools. Of course, a public servant makes decisions based on his/her belief and faith, but not when it goes against scientific data and affects the common good. The enrollment of children in public education is very diverse and different from a private academy which may teach values that reflect their faith.  For instance, I would not vote for something that proposed a prayer which could not be accepted by all children in the school classroom (ie, Jewish, Muslim, Catholics, etc) and I would not propose teaching a particular view of the universe that opposed the best knowledge of science. Even though I had retired from teaching when I served on the State Board of Education in my state, I learned that curriculum issues should be driven by the professional staff.


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Undercover Boss

14 02 2010

Undercover Boss After the Super Bowl game last week, I watched the new show, Undercover Boss. The COO of Waste Management was that week’s undercover boss and he spent the week working in the field doing what his line employees did. He picked up trash at the dump, he went on a garbage run, and he sucked out port-a-potties. As a result of this experience he had an epiphany about his company’s operations. The employees did not know that he was the COO of the company. He was just a prospective new hire that the company was trying out. Among the things he learned was that for every minute an employee was late they were docked two minutes. Women drivers had to urinate in a can just like the male truck drivers and employees were reprimanded if they did not finish their runs on time. As a result of this experience he called in his staff and told them of his findings and told them that there were changes that needed to be made. Many of those changes were the result of unilateral policies that he had enacted to get better production. In the TV presentation we didn’t see much interaction between him and his staff. It was pretty much another form of unilateral action. Most of the staff seemed uneasy being in the meeting and I wondered what they were thinking being put on the spot for TV. Work place policies can involve ethics. There’s been a lot of progress on accommodation of persons with disabilities in the work place. But what of the female driver as well as the male drivers who had to urinate in a can? When a person works for a company, they usually are an employee at will. They don’t have much to say about working conditions. That’s pretty well spelled out by the employer. The goal of the COO of Waste Management was to maintain and/or increase productivity. We don’t know how those work rules were developed but we saw from the show that it appeared that it was determined from above without a lot of input from the rank and file. Many companies have found that listening to other voices can improve productivity because employees have a say in what happens. Dr. Edward Deming developed the idea of quality circles that used employees to identify problems in the production cycle and to come up with solutions to those problems. This methodology was first used in 1962 by Nippon Wireless and Telegraph and later became a mainstay of Japanese industry. Deming’s methodology revolutionized industry in Japan. It was much later that American companies began to use the system; however not with some resistance. Many American managers felt that it would not work with American workers because it was believed that American workers did not share the same loyalty to authority and enterprise that Japanese workers exhibited. But over time, many American companies have decided that giving workers the opportunity to buy into changing the system and being able to see financial benefits not only to the company but to them, has had positive results. But is this really about ethics? In many cases it is. Ethical behavior is seldom unilateral. The ethics that we abide by are most often covenantal and are seen by all parties involved as important to the well being and fairness of the system. Over time, ethics tend to seek a level of workability and if not, the system becomes dysfunctional and may even cease to exist. If people don’t believe in the ethical standards that are set out as being the accepted norm and that are important for the viability of the organization, they will find ways to circumvent those standards. And that circumvention can be from top to bottom in the organization. So, the question that I pose to you is what has been your experience of ethical standards in organizations that you have been a part? Have they been unilaterally decreed and if so what was the effect on how well they worked? Was there any effort to create a situation where there was buy in and input from the parties involved? If you were in a position to develop ethical standards for an organization that you were a part, how would you go about doing it? Please make comments below, so others may see your ideas expressed. What you have to say is important to the conversation.


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Tit for Tat Ethics

11 02 2010

 

In past posts, we have considered factors influencing ethics without much consideration of the structures that effect person’s responses to those behaviors.  This post deals with one way of responding to another person or institutions behavior.  Game theorist Robert Axelrod set up a competition to see what strategy would be most successful in an iterated prisoner’s dilemma game (remember the prisoner’s dilemma).  Solutions were submitted by a large number of competitors with the object being to see who would be most successful.  Two hundred rounds of the game were played with the winning strategy and surprisingly simple solution being Tit for Tat.  The strategy was as follows:

In the first round, one player cooperated and after that did whatever the other player did the previous round.  In other words, if the other player cooperated, player one cooperated.  If player two defected, then player one responded in a like manner.  What’s fascinating is that Tit for Tat never won a round.  The best it ever did was a tie, but over two hundred iterations, it had the best score. 

The features that make the game work is that it is “nice because the player using it never betrays first.  It is provokable in that it quickly and reliably punishes the other player’s betrayal.  It is forgivable because it can quickly return to cooperation even after defection and it is straightforward because it is simple enough that other players see that cooperation is the best choice.”  ( Games People Play, The Teaching Company, 2008)

Whether this system is workable in all situations in real life is debatable but I think there are situations that it applies.  Remember our discussion about putting children in timeout and parents saying that it didn’t work.  The fact was that in most of those situations parents were inconsistent in carrying out of consequences and threats.  In foreign relations we see that with dictators and demagogues it is difficult to deal with them if they see that when they push against other nations and those nations acquiesce to their pushing the belligerent nation pushes even more until either they get what they want or someone places serious sanctions against them.  North Korea and Iran are current examples of this.  And we saw this same response with Hitler in WWII.  On the other hand, we have seen that Israel has taken a very aggressive posture towards aggression towards it and have used the Tit for Tat strategy very effectively.  You attack us and we will immediately retaliate.  On the other hand they have not always done a very good job with their own citizens as it pertains to illegal building of settlements on the West Bank. 

For individual Christians who believe in forgiveness Tit for Tat may seem severe.  We believe that everyone should be given another chance and that is as it should be.  But we also know that in both the old and new testament there was the concept of consequences and even though forgiveness may flow out of a broken relationship, consequences still occur.  So the question that I ask you, the reader, to consider and comment on are:

  1. How do you see Tit for Tat working or not working?
  2. What situations might you use Tit for Tat in your own relationships?
  3. What better ways might you engage persons that you feel have broken ethical covenant?

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Ethical Tipping Points

7 02 2010

                                     

Early in my business career my brother and I were commercial real estate developers.  As in all phases of life, there were lessons that we learned.  When you build a project such as an apartment project you go through a procedure to get it up and running.  You have the plans drawn, you find financing, make a cost estimate and then buy out the project.  In the years that we were building, Houston was in a tremendous building boom that often created a shortage of both materials and labor.  This latter shortage was the one that was most problematic.  The number of sub contractors available to bid on projects was limited even as we worked to bring the project in at the projected cost.  And therein lay the problem.  We often had to employ subs that we had never worked with and knew little about.  In many cases, subs were somewhat itinerate in nature so we couldn’t do much of a check on them.  At any rate, we would contract with them on an agreed price and proceed with the construction.  But then the next shoe would drop.  A few days into the subs work he would come back in and state that he was losing his “ass” on the job and needed to have more money.  Our position was that he had made a deal and that we were going to stick with the agreement.  After grumbling some, he would go off with us thinking that was the end of the issue.  However, within a few days he and his crew would not show up.  This created a problem with everyone else who depended on him to be at a certain point in the project.  This made them angry and the whole project would slow, sometimes to a snails pace.  Because we were financing the construction, it meant that every extra day that it took to complete the job cost us interest, not to mention pushing back the opening date of the project.  Then we would send out compliance letters stating that if the sub did not staff the job adequately, that we would cancel the contract and withhold his retainage.  After all, we had our ten page contract with him that gave us all sorts of power.  We generally did not have to do this, in as much as that would delay the project more, while we went to court and looked for a replacement sub.  So, we muddled through until completion.  Unfortunately this scenario was not that uncommon, not just with us but with other contractors. 

            One day, I was having lunch with a friend of mine who was one of the largest and most successful apartment builders in Houston.  He had built and owned over 5000 units in the Houston area.  He was noted for being able to begin moving tenants into one of his large new projects within ninety days.  This was almost unheard of and I asked him how he was able to get that kind of production.  He allowed that he had good subs.  So, how do you get and keep good subs I asked?  His answer was simple.  He said that he did a lot of work, but more importantly he paid them well and expected them to be on the job and to do good work.  He stated that the time saved by being able to start moving tenants in quickly and being able to start getting cash flow and stopping the interest clock more than made up for the extra cost of labor.  

            As I reflect on this now, I realize that in addition to paying more, he also had a long standing relationship with these subs.  He had worked with them for a number of years and not only did they work well with him but they also had a relationship with one another.  There was a mutual trust between them.  I’m sure they had a written contract and did the paper work required by the lenders and the legal statutes.  But having iron clad contracts doesn’t always get the job done.  My friend and his subs had made a covenant that went beyond the written documents. 

It’s also about ethics and trust.  In my case the ethical questions were two sided.  From my side, the ethics question was, is it ethical to squeeze the sub to where he couldn’t make a profit?  And from his standpoint, was it ethical for him to come back and try and play the “poor me” game.  Looking back on those incidents, I’m not sure what I would do today.  But I do know that sometimes ethics are two sided and that parties play destructive games that impede the resolution of problems.  Additionally, there are tipping points to ethical situations.  There are degrees of ethics and we don’t always know the boundaries associated with decisions.  Even if one party has the power to dictate to another party is it ethical and does it make sense?  I’ve been on both sides of these kinds of contractual issues and I know that at times it’s important to change the rules a bit in order to move forward. 

Currently, our country is faced with the sub-prime mortgage crisis.  Homeowners are defaulting and giving back their homes by the hundreds of thousands.  And our politicians and pundits play the blame game.  Congress is at fault, the lenders are at fault, or the homebuyer is at fault.    But, some loans are being renegotiated in order to help the home buyer but to me even more importantly to keep someone in the home to keep it from deteriorating and losing more value and effecting the surrounding neighborhood.  That’s a pay off for the lender.  The point being in these two scenarios is that ethics are not always black and white.  Situations change and rigid ethics don’t get the job done.  Ethics are also about the self interest of the parties.  Just because one party has the power over the other does it make it right to wield that power or does it make more sense to find an answer that creates a win-win situation?


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Ethical Conflict

22 12 2009

Ex. 8:12-15

“After Moses and Aaron left Pharaoh, Moses cried out to the Lord about the frogs he had brought on Pharaoh.  And the Lord did what Moses asked. The frogs died in the houses, in the courtyards and in the fields.  They were piled into heaps, and the land reeked of them.  But when Pharaoh saw that there was relief, he hardened his heart and would not listen to Moses and Aaron, just as the Lord had said.”

In part two of Relational Ethics, Politics and Conflict we explored the idea of covenant as a means of dealing with conflict and the basis for establishing reciprocal ethical standards.  But this may be putting the cart before the horse.  Theologian, Reinhold Niebuhr in his book Moral Man and Immoral Society takes a more radical position on conflict than many sociologist and academics.  He states, “the relations between groups must therefore always be predominately political rather than ethical, that is, they will be determined by the proportion of power which each group possesses….  The coercive factors, in distinction to the more purely moral and rational factors, in political relations can never be sharply differentiated and defined.  It is not possible to estimate exactly how much a party to a social conflict is influenced by a  rational argument or by the threat of force….Whatever increase in social intelligence and moral goodwill may be achieved in human history, may serve to mitigate the brutalities of social conflict, but they cannot abolish the conflict itself.”  Theologian Bernard Loomer also addresses the issue in terms of power inequalities and states that “we seldom relinquish our power voluntarily.  We loosen our grip and make our concessions only when we are forced to do so by some competing group that has acquired sufficient power to bring us to the negotiating table, as the history of the labor-management conflict and the modern women’s movement illustrate….We tend to trample on or remain indifferent to those people whom we feel we can safely ignore.”  Throughout history we see this phenomenon occurring over and over.  In the Exodus scripture we note that Pharaoh agrees to let the Israelites go to keep from having frogs throughout the kingdom.  But when Moses and Aaron leave the court he changes his mind and decides not to let them go.  That’s why it took seven plagues to get Pharaoh to let them go.  Even then he reneges on his promise and goes after them with his army, only to have his army destroyed.  Power is difficult for despot to relinquish.

            In order to understand this inequality of power we not only need to address the issues of economic and social power but also in-group, out-group relationships.  In-groups are those persons who form a power relationship that is dominant in the particular culture that it exists.  Out-groups are those who lack the power of influence of the in-group and are considered in some sense to be inferior to the in-group.  In the Pharaoh, Moses scriptures Pharaoh was the in-group and Moses was the out-group.  These differentiations exist in multitudinous ways where an in-group may be an out-group as it relates to another more powerful group and vice versa.  Even though Moses was perceived as being the weaker, because of his relationship with God, he was really the stronger. 

Because an in-group sees itself as being better and having more self-esteem and power over the other, ethical treatment of the out-group may suffer.  Ethical behavior of the out-group may also be affected.  In the arena of race relations a white in-group may feel itself superior to a black out-group and therefore snub or treat them with less respect and take advantage of them including doing bodily harm to out-group members.  The out-group may view this treatment as unjust and justify stealing, burning or otherwise breaking existing laws as punishment and “pay-back” for past grievances.

            In the instance the O.J. Simpson murder trial that ended in acquittal, most whites who saw the trial believed that Simpson was guilty while the majority black jurors and the African American public tended to believe he was innocent.  There were many in the black community who may have believed that he was guilty but that the acquittal was pay back for past injustices to blacks. 

            If there is an inequality of power in societies that effect ethics how then is it that some cultures and situations are able to make covenants that bolster relational structures?  Where then, does the concept of covenant in ethical conflict fit?  I suggest that there are steps that precede many conflicted power struggles before covenantal relationships can exist.  Some of the possible steps are as follows:

  1. Out-group seeks to gain redress for injustices
  2. In-group will not meet or recognize validity of out-group
  3. Out-group continues to seek redress and to meet.
  4. In-group uses force and physical or economic intimidation to suppress out-group
  5. Out-group enlist secondary support from both inside and outside their group
  6. Out-group uses demonstrations and economic sanctions against in-group
  7. A breech occurs in the wall of support with moderates breaking ranks with in- group.  Moderates seek change to ameliorate and pacify out-group. 
  8. The beginning of relational power sharing
  9. Forming a permanent covenant

All during the process the out-group attempts to have a dialogue with the in-group or to forcibly displace the in-group.  In the earlier stages this does not happen and may take years for negotiations to begin in earnest.  At some point with or without a plan developed, the two groups form the semblance of covenant.  The covenant may begin with the in-group acknowledging that the out-group has a right to exist and to bring grievances.  Conversations may start and stop at every point of the negotiations.  And from the outside, constituents from both the in-group and out-group may do whatever they can to maintain the status quo, even when bloodshed occurs. 

The situation may be complicated when one or both sides engage in violence against the other side or when there exists a myth of entitlement such as the violence in Northern Ireland and in the Palestinian, Israeli conflict that has been fueled by both reality and myth that justifies further violence. (Def. myth—Attempt to state humanity’s faith or belief in the reality of experience and the meaning and value of that reality for life on the historical level.[Christian Word Book]) In both of these instances each side to the conflict are bound together by an ingrained historical myth that must be dealt with before change can occur.  Often the full impact of the myth cannot even be discussed either with the other group or with outsiders.  Much of the groups self is bound up in the myth.  In these instances there is little incentive to listen to the others point of view, their history, their myth or for them to treat the other ethically.  Their anger, prejudice and mythology are the glue that binds them together. And in a perverse way it binds both adversarial groups together in a seemingly endless Gordian knot.

In order to bring about change there needs to be a new story, a new created mythology that embraces the possibilities for living together in the future.  This has to come out of dialogue and will not have come about as the initial goal of that dialogue.  It comes about as a result of a continuing dialogue through each side telling their story and in the process, creating a newly constructed story.  

Coming soon—a process of creating a new story.


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Categories : ethics

Relational ethics, politics, and conflict (part 2)–Constitutional Covenant

14 12 2009

In earlier blog articles we discussed the problem of passage of laws requiring more and more disclosure and accountability.  The more complex the issue and the law, the more ways some people and organizations found to circumvent those laws.  Normal unintended consequences due to the complexity of issues were exacerbated by passage of more laws, restrictions and often with resulting law suits and other impediments to free movement and actions.  Then there are those who are responsible for enforcement of laws and regulations.  In our current crisis we observe finger pointing at agencies such as the Federal Reserve, the SEC, the treasury, and other agencies who were given the responsibility of enforcing and overseeing the appropriate regulations.  The more laws that are enacted and the more regulations that are promulgated the more chaos seems to occur. 

 So, what is it that binds us together?  We contend that it is covenant.  What exactly is covenant and how does it differ from a contract?

 “It is important to recognize that a covenant is far more than a contract. In contracts, parties give legal undertakings to effect transactions for reciprocal benefit. In covenants, people bind themselves together, in pledges of faithfulness and loyalty, to promote mutual well-being. The Chief Rabbi of Great Britain spoke about Covenants to the international gathering of Anglican Bishops, the Lambeth Conference, earlier this year. He summed up the differences between covenant and contract in four succinct points. · Contracts concern our interests, while covenants concern our identities. · Contracts deal in transactions, while covenants deal in relationships. · Contracts benefit, while covenants transform. · Contracts are about competition – if I win, you lose; while covenants are about cooperation – if I win, you also win.”

Most Revd Thabo Makgoba

 It makes little difference what laws are passed or what restrictions are placed on those who are governed, if persons do not covenant with one another to be governed or to act ethically, then it will not happen.  Our constitution is such a covenant.  In its inception the framers of the Declaration of Independence and the Constitution covenanted that they would abide by such an agreement, because “we hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness…. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed even when all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed.”  Over our history there have been many disputes and debates over the meaning of different parts of the constitution.  But in the end we have held onto those principles even when we suffered thorough the civil war to maintain the union and what it stands for.  Only in debate, examination and litigation have we continued to view the evolution of this wondrous document.  Democracy is not easy.  It requires participation, conversation and consensus and ultimately acquiescence to the rule of law and the will of the people.

 These policies inform our ethical behavior.  Can we covenant with one another to abide by certain ethical standards in dealing with one another?  Some would say not; that over the years we have lost something in our dealings with one another.  To some extent this may be true.  But I believe that we may be looking backwards with a dimly lit candle.  We fantasize about the way things used to be when we remember that a man’s word was his bond and you could depend on a handshake. 

 This characterization may be true in some cases but we only have to look at our own history of robber barons, carpet baggers, and snake oil salesmen who bilked the poor and unsuspecting and oppressed the working class. 

 The Most Revd Thabo Makgoba the Anglican Archbishop of Cape Town and Metropolitan of the Anglican Church of Southern Africa in the Harold Wolpe Memorial lecture discussed the concept of Constitutional Covenant. Some of his points included:                                                                                                 

What's good for me is good for America

  1. Constitutional Identity                        
  2. Constitutional Transformation
  3. Constitutional Relationship
  4. Constitutional Cooperation
  5. Democracy, Participation, Accountability
  6. Constitutional Diversity
  7. Democracy and Ubuntu
  8. Constitutional Economic

A full copy of his speech may be seen at the following website.  Even though it addresses the South African constitutional situation it has relevance to our own constitutional principles.

http://archbishop.anglicanchurchsa.org/2008/11/harold-wolpe-memorial-lecture.html

 Even though we live in a secular world, both our constitution and Archbishop Makgoba’s speech point us towards a higher calling as we struggle to live together morally, ethically, legally and responsibly. 

 “More than half of recent MBA graduates say their programs should have focused more on ethics, corporate governance, and sustainability, according to a survey from the Association of MBAs’ Research and Consultancy Center. According to a summary of the survey in the Raleigh (North Carolina) Triangle Business Journal, 59 percent of the 544 graduates surveyed agreed that business education programs should focus on all of the stakeholders affected by a business, not simply the shareholders.”

“ Another item from the report: While recent graduates reported that about half of their programs examined ethics “to a large extent,” only 10 percent of MBA graduates from the 1980s made the same estimation. “

http://www.globalethics.org/newsline/2009/12/07/education-ethics-6/

 It’s encouraging that more MBA students see the need for ethics training and a broadening of the curriculum.  And the fact that about 50% of student programs examined ethics while only 10% of MBA graduates from the 1980’s felt that ethics was covered with adequacy shows that there is a growing recognition for the need for ethics training in business as well as other organizations.

 The question that we have is, can we shift the primary emphasis of ethics from a purely behavioral and cognitive mindset to a paradigm that includes the covenantal aspects of ethics?  Doing this would make ethics a much more human function that would recognize that organizations are not cold bottom line entities that rely on computer modeling and other hard science justifications for decision making. 

 The complexities of the twenty first century demand that we reinvigorate and scrutinize the constitution and how it impacts our ethical dealings with one another.  It is a living breathing document, subject to multiple interpretations.  Can we formulate the same scrutiny to ethics in the same way that we have done with the constitution?


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