Posts tagged: greed
[…]in a way Wall Street’s self-centered, self-absorbed behavior has been kind of funny. But while this behavior may be funny, it is also deeply immoral.
Think about where we are right now, in the fifth year of a slump brought on by irresponsible bankers. The bankers themselves have been bailed out, but the rest of the nation continues to suffer terribly, with long-term unemployment still at levels not seen since the Great Depression, with a whole cohort of young Americans graduating into an abysmal job market.
And in the midst of this national nightmare, all too many members of the economic elite seem mainly concerned with the way the president apparently hurt their feelings. That isn’t funny. It’s shameful.
One would assume that in a rich, medically advanced, health-conscious nation like ours, dicey decisions about whether to allow a particular pharmaceutical product into our bodies would be among the most rational we make—as determined by (1) the best science available, (2) the strict moral duty of medical purveyors to “First, do no harm,” (3) good government regulation, and (4) the profession’s fear of public reproach and legal punishment. One would, however, be wrong on all counts:
- Science has been supplanted by rank hucksterism
- The strictest “moral duty” of corporate executives has been reduced to maximizing profits
- A “good” regulation is one that’s good for profit seekers
- Public reproach is just a momentary embarrassment to be covered over by corporate image makers
- Legal “punishment” never includes jail time, but only a fine that’s easily absorbed as a necessary cost of doing business by these immensely profitable entities.
In the past three decades, America’s healthcare system has radically metamorphosed from a public service network (largely run by independent physicians and nonprofit hospitals) into a corporate profit machine—one that Dr. Arnold Relman, the renowned former editor of the New England Journal of Medicine, calls the Medical-Industrial Complex. Drugmakers have been among the most ambitious, in-your-face pushers of this transmutation of medicine into just another commodity to be sold by hook or crook. In this system, the concept of “care” has been reduced to “caveat emptor,” with the shareholders’ interest in monetary gain overriding all other interests.
Hightower’s style is a bit over-the-top, but the facts are all there — big pharma is selling drugs, not curing people.
Republic Report has released figures documenting the fact that the average member of Congress gets a 1,452% salary hike when she or he leaves office and becomes a corporate lobbyist. They point out that politicians are allowed to negotiate these raises while they are in office, and don’t have to disclose this fact when they’re working on legislation that will benefit their future employers. One of the poster children for this is former Senator Judd Gregg (R-NH) who fought against financial reforms to the derivatives market, then joined the board of a derivatives-trading company and was given an advisory role at Goldman Sachs.
A few days ago, Scotts Miracle-Gro (whose brands include Ortho, Scotts, Miracle-Gro, Roundup, Earthgro, Black Magic, Hyponex, Osmocote, Morning Song, Whitney Farms, Supersoil, Bovung, and Country Pride) agreed to plead guilty and pay $4.5 million in fines, for not one but two product safety incidents.
The first incident involved selling wild birdseed that was coated with a pesticide that is toxic to birds. The company coated their birdseed so that it would not be eaten by insects while in storage, and continued to do so even after multiple warnings from their own employees that it was “extremely toxic”.
The second (and separate) incident involved falsifying EPA pesticide registrations for their lawn and garden products, even going so far as to tell the EPA that they must have lost their files.
And what steps is the company taking to recover from this? They just announced that they are increasing spending on advertising 28% to $141 million total (31 times the amount of the fine). This includes a deal with Major League Baseball to hang “Scotts is Used Here” banners in ballparks to “give homeowners the illusion that they can have Fenway Park in their back yard just by dumping on some Weed ‘N Feed”. Even worse, Scotts just announced a “partnership” with the National Wildlife Federation, which sounds like a blatant attempt to greenwash their bad reputation.
Meanwhile, Scotts is leading a battle in Florida to overturn bans on the use of nitrogen fertilizer on lawns during the summer. These fertilizers wash off during the rainy summer season and cause massive (and toxic) blooms of red-tide and green slime, hurting not just wildlife but also tourism, but the bans are bad for Scott’s profits.
Oh, and Jim Hagedorn, the CEO who was ultimately responsible for all this? Still at the helm of the company, despite comments like this:
Hagedorn is the sole reason for this issue. He has created a toxic culture (literally) based purely on profit and greed and his warped business sense. I know quite a few former Scotts employees that are highly talented and very ethical people that were pushed out by Hagedorn in his effort to create high turnover in order to “keep ideas fresh”.
Hagedorn makes Mr. Burns look angelic. He is the poster child for what’s wrong with corporate america.
You know, some politicians say that we don’t need regulations, that consumers should just stop buying products from companies they don’t like. As for the former, we would never have known about this company selling deadly birdseed if not for the federal government. But as for the latter, it sounds like a consumer boycott would be a very good idea.
For decades, America’s economic policies have been based on the notion that catering to corporations and the wealthy is the way to stimulate the economy. Republicans routinely insist that we need to bail them out, lower their taxes, allow them to repatriate hundreds of billions in overseas profits, and free them from annoying government meddling. If we don’t, the “job creators” will stay in a funk, and the economy will stay in a rut.
But here’s a pesky fact neither corporate America nor the GOP establishment is trumpeting: After-tax corporate profits are currently at an all-time high. The problem businesses face isn’t lack of cash but rather a lack of confidence that consumer demand will pick up in the future. So they’re not expanding or hiring at the rate they should be.
Rich people don’t create jobs when we hand them big windfalls. They create jobs when the economy is growing and they have customers for their businesses.
Fascinating, bracing article by Steve Denning in Forbes based on Roger L. Martin’s new book, Fixing the Game:
Martin says that the trouble began in 1976 when finance professor Michael Jensen and Dean William Meckling of the Simon School of Business at the University of Rochester published a seemingly innocuous paper in the Journal of Financial Economics entitled “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure.” […]
The principal-agent problem occurs, the article argued, because agents have an inherent incentive to optimize activities and resources for themselves rather than for their principals. Ignoring Peter Drucker’s foundational insight of 1973 that the only valid purpose of a firm is to create acustomer, Jensen and Meckling argued that the singular goal of a company should be to maximize the return to shareholders.
Eye-opening, common-sense argument.
People like Dimon, and Schwarzman, and John Paulson, and all of the rest of them who think the “imbeciles” on the streets are simply full of reasonless class anger, they don’t get it. Nobody hates them for being successful. And not that this needs repeating, but nobody even minds that they are rich.
What makes people furious is that they have stopped being citizens.
Most of us 99-percenters couldn’t even let our dogs leave a dump on the sidewalk without feeling ashamed before our neighbors. It’s called having a conscience: even though there are plenty of things most of us could get away with doing, we just don’t do them, because, well, we live here. Most of us wouldn’t take a million dollars to swindle the local school system, or put our next door neighbors out on the street with a robosigned foreclosure, or steal the life’s savings of some old pensioner down the block by selling him a bunch of worthless securities.
But our Too-Big-To-Fail banks unhesitatingly take billions in bailout money and then turn right around and finance the export of jobs to new locations in China and India. They defraud the pension funds of state workers into buying billions of their crap mortgage assets. They take zero-interest loans from the state and then lend that same money back to us at interest. Or, like Chase, they bribe the politicians serving countries and states and cities and even school boards to take on crippling debt deals.
Chief executive pay has roared back after two years of stagnation and decline. America’s top bosses enjoyed pay hikes of between 27 and 40% last year, according to the largest survey of US CEO pay. The dramatic bounceback comes as the latest government figures show wages for the majority of Americans are failing to keep up with inflation.
"Wages for everybody else have either been in decline or stagnated in this period, and that’s for those who are in work," said Hodgson. "I had a feeling that we would see some significant increases this year. But 30-40% was something of a surprise." Bosses won in every area, with dramatic increases in pensions, payoffs and perks – as well as salary.
Hey, look! Congressional staffers turn out to be really good at predicting the behavior of stocks that their bosses legislate. Outside Capitol Hill, we might call that “insider trading.” Except US insider trading laws don’t apply to Congress.
In this week’s issue of Newsweek: Congress is getting rich off Wall Street.
Charts to go with the previous video.