The Ethical Barometer

On July 27, 2020, Kodak executives were awarded stock options. Since Kodak shares were trading at $2.62 per share, the grants seemed like chump change. On July 28, 2020, Kodak announced that it would receive a $765 million loan from the federal government to produce drugs at its U.S. facilities. Kodak’s stock went off the charts to a $60 high.

However, before that official announcement there were some leaks to the media about the potential loan. The Rochester, NY hometown paper had a nice quote from a Kodak spokesperson in its July 27th edition about the drug initiative saying that it “could change the course of history for Rochester and the American people.” The Wall Street Journal was all over the rumblings, not realizing how close the deal was. Now the SEC is all over the rumblings and the leakers. The Barometer bets there night also have been quite a few stock purchases at $2.62 per share in the days preceding July 28. Dave Michaels and Theo Francis, “Kodak’s Big Loan Disclosure Triggers SEC Probe,” Wall Street Journal, August 5, 2020, p. A1.

C.S. Lewis

Nancy K., a grandmother from Irvine, California, wrote into “The Ethicist” at the New York Times. She explained that she lived with her daughter and that her 15-year-old grandson confides in her more so than with his mother. The lad told grandma that he has a 16-year-old friend who gives him rides to various places despite the 16-year-old’s parents’ wishes that their son not shuttle passengers. Grandma did not want to say anything for fear of losing her grandson’s trust. But, she was worried that there could be an accident and how could she live with herself.

If there is a 16-year-old with a car, there will be an accident, the only question is how much of one. They may back into something, or they could be caught doing 75 mph in a 35-mph zone. Good judgment is years away.

Grandma made the mistake of presenting her issue as an either/or conundrum: “If I tell my daughter or the parents of the young driver, my grandson will never tell me anything. If I don’t tell, what if there is an accident? I could never forgive myself.” The Ethicist gave the advice of someone who may not have raised teens, “”I’d tell him that he shouldn’t be accepting these rides and that you’re keeping his confidence on the assumption that he’ll stop.” That oughta do it right there. Especially using the words, “keeping his confidence.”

Did it ever occur to anyone to use the bond that grandma has formed with her grandson as a tool of persuasion? Did it ever occur to anyone to to discuss the risk issues? There are some awfully scary YouTube videos that could so the trick. In fairness to The Ethicist, there was this preface to the response, “Putting Covid-19 issues aside. . . ” Right– the gravest danger of a 16-year-old and a 15-year-old riding around in a car is a virus? Did it ever occur to grandma to express her love and concern by offering to ferry the young ‘un wherever he needs to go? Did it ever occur to grandma that the parents of the driver may have insurance rates based on the fact that their son will not have passengers unless an adult is with him? Did it ever occur to grandma that the laws in many states prohibit or limit drivers under age 18 on their passenger quotas? Did it ever occur to anyone that the grandma may be overestimating her access to inside information from the teen?

In the simplest of questions, there are so many issues and alternatives that seeking a promise from a teen by employing the “I’ll tell” sword of Damocles may not be the best tool for preserving the relationship anyway. It is certainly not the best tool for shaping a young life. Perhaps, most importantly, it is not a resolution to the issue of grandma’s concern for her grandson’s safety. A teen’s promise not to do something the teen wants to do is about as valid as a teen’s promise to do something the teen does not want to do. I’d like to see the young man’s room. Ah, their promises to clean that up. Frequent, but never kept.

The Barometer offers anecdotal evidence (despite how it is much maligned in these days of COVID-19 and science). A parent told his 16-year-old son, “No passengers.” His son agreed to the bargain. Experienced parent that he was, the father surreptitiously put tiny cameras on the car. The camera picked up something interesting. Here’s how the conversation went when the son was confronted with one of the camera videos, “Dad, the only reason I had someone in my trunk . . . ” Dear reader, you figure it out from there. Trust, but verify has a role in the teen-drivers-and-passenger thing.

Wilford Brimley died at age 85. He was in “Cocoon” and other movies. He pitched oatmeal, and, let’s face it, if you are going to endorse a product, why not go with a staple? And he said of his acting career, “I never get the girl. And I never get to take my shirt off.” We are all perhaps grateful for the latter. But his non-star status is praise for his talent. In a scene Ain Absence of Malice, playing s a Justice Department official sent down to Miami to clean up a prosecutorial mess, he gave us seven of cinema’s finest moments. And he gifted us quite a model for how to phrase the importance of honesty in law enforcement and sack those who fall short of that standard. He stole the scene, and Paul Newman and Sally Field were in it. He gave us what our imaginations tell us should be the way Washington bureaucrats handle misconduct in their ranks.

Directors say he was stubborn, but he knew how to nail a character. He was in “The Natural,” but he was himself a natural actor. There was no Wilford Brimley on the scree; there was only the character: defined, compelling, and mesmerizing. RIP.

There’s a line you don’t want to see in an 8-K filing with the SEC, especially when it is followed by another line about a subpoena from the SEC. Mohawk Industries stands accused of some new twists and turns in accounting chicanery. Going well beyond the old channel-stuffing trick of Sunbeam, Under Armour, and many more who never learn. Send the inventory to customers no longer in business, followed by a “Who knew?” in the next quarter, or the one after that, or the one after that. . . Or just ship out defective product, knowing that customers would exercise their UCC rights of rejection, but that’s a story for the next quarter, or the one after that, or … .

No worries though. Mohawk assures that it will fight the suit vigorously. Stunning that the realization of “Once you start this stuff, as it were, you can’t stop.” Hope springs eternal when companies fall behind on earnings goals. “We can make it up later.” They never do.

Translation: Insiders helped the process along. The employees were targeted by the hackers who requested password resets. Whether done intentionally or through lack of training, the hackers found the weak link in employees. The vulnerability of companies, tech and otherwise, is at the front lines. Do leaders ever think about what can happen when front-line employees do not do their jobs, engage in a security breach, or make exceptions to policies without disclosure?

Twitter has been warned three times previously by the FTC about its vulnerability with employees resetting passwords. Perhaps some security questions would help — the kind of questions that those of us who own the account cannot remember. “What as the name of your third-grade teacher?” Some of us cannot even remember the name of our third-grade school. Some of us cannot even remember if we passed the third grade. Some of us are not sure if all of our children finished third grade. Yet, we are sent packing when we request a reset. And seemingly charming and persuasive hackers are able to work the front-line employees. Twitter is not sure if perhaps some of the employees were in on the great hack.

The Barometer always gets the warning, “Calls are recorded for monitoring and training purposes.” They must be making that up. Or they are not listening to the hackers or my calls. I get shown the exit. The hackers sail through. I cannot get into my own accounts. The hackers got into those of Joe Biden and Elon Musk. Given the name of Mr. Musk’s child, it is stunning that he did not have a better password. Manipulation of employees is not a good thing. In fact, it is a dangerous thing. this time, only tweets were at stake. Financial companies should heed the lessons.

When it seems to be too good to be true, it is too good to be true. The phenomenal growth of Under Armour now has an explanation. To meet numbers, executives scrambled by forcing retailers to take more inventory than they ordered. The old channel-stuffing trick. The company also redirected merchandise that was headed for its factory outlets to off-pice chains in order to book those as sales. In short, the company was borrowing against future quarters in order to meet the numbers for the present quarter. Once you start, you can’t stop because the goals of 20% is elusive and the sales were not real. Under Armour could not and did not stop. Insert tangled web and deception saying here. The SEC is on it, but, no worries, Under Armour assures that it has been cooperating with the SEC since 2017. Also, they assure that everyone in the retail industry pulls the same sleights of hand. We can all sleep better tonight with those confidence-inspiring assurances.

Canadian Prime Minister Justin Trudeau is dealing with a political scandal. It seems that the We Charity paid nearly $300,000 (Canadian) to the prime minister’s mother, brother, and wife in speaking fees (and another $187,000 in expenses (Canadian)).

The WE Charity was awarded a $43 million (Canadian) contract to manage a $900 million (Canadian) contract for helping students struggling to find summer jobs. Mr, Trudeau insists that he did not instruct officials to award the contract to WE Charity. However, the Prime Minister did sit in on the discussions among cabinet members on awarding the contract. The contract was not put out for bids.

Mr. Trudeau said that he did not know how much his mother and brother were paid. He did, however, perhaps know about his wife. The Canadians do file income tax returns and pay taxes. (Canadian dollars, of course). Hmmm.

Two Baffert-trained horses tested positive for lidocaine. One had won the Arkansas Derby on May 2 ($300,000 prize). The other had won the Acorn Stakes at Belmont by 19 lengths in record time. Baffert, a trainer’s trainer has trained two Triple-Crown winners. Justify, the 2018 Triple-Crown winner, had tested positive to scopolamine following his win in the Santa Anita Derby. But, the closed hearing of the California Horse Racing Board concluded (after the Triple Crown results and after Justify was sold for breeding rights for $60 million) that environmental conditions, not intentional doping, caused the presence of scopolamine. There is a suit pending by the second-place winner in the Santa Anita Derby over the findings in the hearing on Justify. The suit contends the amount of scopolamine in Justify was too high to have come from feed or bedding.

At the hearing on Carlatan and Gamine, the two lidocaine-positive horses, Baffert and others argued that the horses were accidentally exposed to lidocaine by an assistant trainer had applied a medicinal patch to his own back, i.e., he used Salonpas, which transferred small amounts to the horses through the application of a tongue tie (keeps horses from getting their tongues over the bit — it is elastic wrapped around a horse’s tongue and then tied along the lower jaw). Following the hearing Baffert was suspended for 15 days and the first-place wins for the horses were taken back, along with the cash.

No wonder the horses want lidocaine — try tying your tongue down to your lower jaw. The explanations for the positive tests have begun to look like “dog ate my homework” stuff.

Steve Jobs’s e-mails played an integral role in the Apple/book-publisher antitrust suit. Mr. Jobs had passed away two years earlier, but those e-mails were the damning evidence for the government’s antitrust case. Jeff Bezos, Tim Cook, and Mark Zuckerberg all appeared saintly in their testimony before a House committee. “What? Me engage in anticompetitive behavior? Nay, nay!” But, the e-mails the House staff uncovered and used during the testimony of the tech titans paint a different picture. Mark Zuckerberg was surely putting the pressure on Instagram for an acquisition. Here is an excerpt used by the House staff to make the case that sure look like the words of a monopolist:

“One way of looking at this is that what we’re really buying is time. Even if some new competitors springs up, buying Instagram, Path, Foursquare, etc now will give us a year or more to integrate their dynamics before anyone can get close to their scale again. Within that time, if we incorporate the social mechanics they were using, those new products won’t get much traction since we’ll already have their mechanics deployed at scale.”

Forty-five minutes later, a repentent Zuckerberg sent a sort of retraction:

“I didn’t mean to imply that we’d be buying them to prevent them from competing with us in any way.”

Those who were his targets referred to Zuckerberg’s acquisition strategy as “Copy, acquire, and kill.” The giants threaten the startups with a plan to mimic them unless they agree to be acquired. Instagram gave it up for a billion bucks. Mr. Zuckerberg said that he was really “buying time.” He would get “a year or more to integrate their dynamics before anyone can get close to their scale again.” Hmmm — those on not the words of a formidable competitor. Those are the words of a giant whose day has passed. Devoid of ideas, and rich in cash, you take them before they come up with anything else that is clever. The old question in antitrust was once, ‘Did you get ahead because you built a better mousetrap or did you just squelch the little guys who were in the process of doing so? The e-mails always tell the truth. The hearings are feigned humility under oath.

This was an AOL headline that pops up as one skulks through the click-bait to the real goal: e-mail. The headline itself was stunning because:
1. It was a positive statement about a famous person.
2. There was no ridicule of the relative of a famous person.
3. It did not say, “Despite her politics . . . ”
4. It was not COVID-19 data.
5. It did not label anyone a racist.
6. It did not say, “Despite having to live in this country . . .”
7. She was not wearing a mask.

In short, here was a story that was not negative or an attack. A story that brought back memories of the talent of Lucille Ball and her incredible comedic timing. It was a reminder that despite the problems and challenges we face, that there is still the standby comfort of family. And while we all have limited time here, we do leave behind those who carry memories of us and some of our characteristics.

In short, Lucille Ball and her granddaughter brought hope — hope that there are still good things and good people in the world. Hope that our lives go on even when we lose our loved ones. Hope that we see those loved ones in those they left behind. Hope that kindness and compliments remain in our fiber. Hope that we need not always be finding flaws. That’s not a bad haul on the way into the e-mail.

Hope is the thing with feathers
That perches in the soul
And sings the tune without the words
And never stops–at all–
And sweetest–in the Gale– is heard–
And sore must be the storm
That could abash the little Bird
That kept so many warm ….

Emily Dickinson

Lisa Gilbert, Public Citizen (a Washington,D.C. advocacy group). Ms. Gilbert was referring to the ethical downfalls of so many public officials, a downfall that begins with high-ranking officials asking members of their security detail or staff to pick up their dry cleaning. The act of having someone else pick up your clothes at the dry cleaners seems to be the gateway drug to misuse of pulic resources and funds.

The assignment of errands seems like such a small thing, but it constitutes, in the words of Robin Thicke (or New York Times, May 20, 2020, p.A22.

The critical lesson of blurred lines goes beyond just that dangerous first step. The dry-cleaning assignments are evidence of a character flaw. These officials are asking professionals to be flunkies. The ease with which an official can assign tasks well below the experience, education, and training of a staff member shows an insensitivity to human dignity. They are asking staff members to do things those staff members would be fired for doing.

How we treat those who wield no power over us is a measure of character. Ironically, staff members actually wield the ultimate power; they have information that public officials do not want public. So, the moral of the story is to use caution in how we treat those who we perceive cannot harm us. They hold the trump card.

The Digital Millennium Copyright Act (DMCA) was well intentioned legislation designed to protect websites from copyright infringement claims when the site owners are not the ones doing the infringing. For example, colleges and universities have entire student bodies pirating copyrighted music and films. They are not held liable for infringement if they take good-faith steps to stop the little darlings. So, warnings, monitoring, and the banishment from using the universities’ servers do the trick.

Likewise, Google and its YouTube and other sites have to follow a process when someone copyrighted material shows up on their sites. The process is the copyright owner or representative contacts Google and says, “Take it down. It’s infringement.” Google then takes it down.

The loophole in the process was that Google is not required to verify the authenticity of the party requesting the take-down. As a result, the diabolical among us have figured out that the way to get rid of negative stories, information, and opposing political views is to pose as their authors and request the take-down. So, those irritated with a Wall Street Journal editorial pose as the WSJ and write to the site linking or posting the editorial. They demand a take-down. Not wishing to lose the DMCA protection, the site asks no questions — it goes right for removal.

There are even fake law firms sending letters requesting take-downs. If the stationery is good enough, well, you get your wish. The WSJ did a story on this diabolical activity, using its own experience. Working with Google, the Journal restored 52,000 links that Google had removed pursuant to official requests.

Bad actors are a creative lot. The moral of the story is follow your links — see if they are still there. Until the U.S. Copyright Office finds a solution, we are responsible for policing the rogues.

Elon Musk is a visionary who makes a status car whilst running a company with a net worth greater than Ford and General Motors. He also has a child named X AE A-12. No word on pronunciation for that one. And his Tweets bring on the wrath of the SEC and frustration among the company’s lawyers.

Mr. Musk tweeted to his 34 million followers that they should take the red pill when it comes to the corona virus. The red pill advice, the red pill online groups, and the Silicon Valley red-pill movement come from the film, “The Matrix.” The Barometer knows nothing of the films or Neo, but research reveals that Neo (Keanu Reeves) is given the option of taking a red pill so that he can see society as it really is. Seems to be borrowed from Lewis Carroll’s “Through the Looking Glass,” and Alice’s trip to wonderland.You can see a different world with pills. Alice saw a hookah-smoking caterpillar and the druggies of the sixties thought they could fly. Even Advil takes away a headache, but it cannot address the underlying cause of those headaches.

Seeking, finding, and then seeing truth is a tall order. Sometimes we do not know the truth. Analytics and models give information, but until events unfold, they are not truth. Predicting the future is not the stuff of truth. We know from politics that what is said on television is not the same as what is said when the same folks are under oath. Truth comes through vigilant study, healthy skepticism, and an open mind. You can spot a truth-seeker among those who challenge conventional wisdom. Views and opinions are not truth, even when Elon Musk is the one opining. Mr. Musk may be correct; he may be wrong. A truth-seeker does not attack Mr. Musk for his views but explores the source, foundation, and basis of those views.

‘Tis an odd position to be defending Elon Musk. The Barometer is still trying to figure out how Tesla can be worth billions and still be so cash-poor.

However, truth is vital despite the ongoing slog to find it. So, sally forth, drug-free, and pump those neurons in seeking the truth. No pill can do the work.