The Ethical Barometer

Disney, NBCUniversal, and WarnerMedia announced that they either will no longer continue filming or be strongly affected in their decision process on filming in Georgia should that state carry out its highly restrictive abortion law.

Economist Milton Friedman wrote about the dangers to businesses that use social and political issues as a controlling factor in their decision processes. Professor Friedman urged particular caution when businesses become involved in hot-button issues. The Barometer calls them “loser issues.” Both labels apply to those social and political issues that find customers divided. No matter what position the business takes on an issue and the decision to boycott cities, states, and other businesses, it will lose customers. The issues themselves are important, but businesses will lose support (and revenue and possibly employees) no matter which position they take. Abortion and gun control are two such issues. They are critical social and political issues, but a business that vows a boycott because a city or state has taken a position its managers oppose will affect the business.

There is one position a business can take on such issues that is universal and easily explicable. That position, the Friedman position, is one made on the basis of the business’s costs and needs. Such a universal position makes the business an agnostic on social and political issues. The business allows the people of cities and states to make decisions on these issues without tantrums and boycotts from a land far, far away (Hollywood). A business should serve people of all views and allow them the freedom to decide for themselves what their laws and regulations will be. Should the residents of a state or city make decisions that infringe rights there is an active and engaged court system designed to handle those emotional issues on the basis of laws and rights, not whether “Black Panther” or “Captain America:Civil War” will be filmed in their state.

Uber permits banishment of passengers from the kingdom of ride-sharing. What gets passengers on the list of exiles? Leaving litter in the car. Rudeness. And asking the driver to exceed the speed limit. Manners and ethics — all you need to be a solid Uberite.

From McKinsey’s 57-page handbook entitled, “Bankruptcy 101,” we have the following:

“In representing a bankrupt company, we must avoid conflicts of interest and the appearance of conflicts of interest.”
. . .
Failure to adequately disclose material connections may result in severe penalties and fines.”

McKinsey did not disclose in any of its bankruptcy work that it has a $25 billion hedge fund, MIO, that manages retirement funds for McKinsey employees retirees, and former employees. And MIO had investments in the bankrupt companies, creditors, and a whole web of connections. Seems material enough and has all the appearances of a conflict.

McKinsey paid a $15 million fine to settle a case, without admitting guilt, brought by the Justice Department, for failure to disclose conflicts. McKinsey continues to resist, denying that there is a conflict and even expressing outrage that the proprietary company document, Bankruptcy 101, made its way to a reporter. (New York Times reporter, Mary Williams Walsh)

Someone please, take these folks aside and tell them how the cabbage is cut, conflicts-wise. We can’t take the denials any longer. And heed one more piece of advice in the handbook — you do not want your actions showing up “in the Wall Street Journal.” The Barometer is guessing that those who did not disclose will defend their actions as follows, “The book said Wall Street Journal.We only made it into the New York Times.” For the love of ethics, McKinsey, give it a rest. Things are just sounding silly now.

The Barometer’s grandmother, born 1890, always called it Decoration Day — the Monday in May when we traveled as a family to many cemeteries throughout Cambria County, Pennsylvania. We trimmed the grass, spiffed up the headstones, painted the Veterans’ stars of honor, and placed flowers on their graves. Our grandfathers, great grandfathers, uncles, and great uncles had all served. Our small acts of service were solemn and etched in our memories. Traditions bind generations, no matter where have scattered. Memorial Day is more than a three-day weekend, a time for travel and swimming, and the marking point for the mannerly wearing of white clothing. Memorial Day reminds us that our lives are free, on so many levels. With gratitude for those who made the ultimate sacrifice, those who served, and a family that respected and honored both. On “Decoration Day”each year, we experience vicariously courage and honor. RIP

The Wall Street Journal reports that cheating in order to use the HOV lane has reached epidemic proportions. Yes, folks are using “Carpool Kenny” in order to hop into the fast lane, make their commutes shorter, and all without the pesky chatter of a real person. “Carpool Kenny” was once sold an Amazon — an inflatable dummy torso in a gray suit and sunglasses. There are dolls propped in car seats and piles of wood graced by a hoodie. The human mind has no limitations when it comes to finding ways to game the system.

However, state troopers are onto the carpool lane cheaters. New York, California, and Florida now have carpool lane cheaters targeted. The task forces were created because police were alarmed at the number of non-moving “passengers” in baseball caps and sunglasses cruising the freeways during rush hour. Arizona State Police post photos online of their “gotchas.” The jokes, puns, and campaigns are great fun, “Don’t be a dummy!” “We check pulses.” “Pets, wood, ghosts, Santa, and dolls are not passengers.”

The cheaters’ thoughts? Rationalization, of course. They have seen police prop dummies into parked patrol cars to set up fake speed traps so that drivers slow down.

The fines are hefty — $500 is typical. But, legality is a fairly low bar for ethics. Beyond that, it is cheating. For all who play by the rules, whether in college admissions or gettin ahead in the morning commute, the shortcuts of the gamers punish the innocent and chip away at decency.

Walmart is often a punching bag for the social responsibility crowd, but the company’s latest annual report includes an Environmental, Social & Governance Report. That report takes an interesting turn as it highlights a company that deserves attention for its focus on the advancement of its employees. Just a quick glance at the data page provides some insights into a pathway for other companies on how to build a workforce that stays (sustainable, if you wish to use the popular term):

The average wage of Walmart full-time hourly employees is $14.26 (not the $7.95 per hour that the media tout). The average wage of Walmart full-time employees with compensation and benefits added in is $19.31.
More than 75% of Walmart store operation management teams started as hourly employees. The average earnings for a Walmart store manager? $175,000. From minimum wage to six figures, and all within the same company.

Walmart hires hourly and successfully grows those employees into managers. Walmart’s workforce is 44% minority and 55% female. While others have been busy mocking Walmart, it has been growing leaders, retaining employees, and incentivizing the kinds of behaviors most companies have yet to address. Employees with 100% attendance in any quarter get an extra 25% tacked onto their quarterly bonuses. The company has PTO for employees who are ill (hourly and waged). Walmart Academy provides educational, leadership, and training opportunities for 450,000 Walmart employees per year.

The quiet giant, abused for so long, deserves some credit for providing decent compensation, opportunities (educational and otherwise), and compassion for what is the largest workforce. Walmart’s CEO calls it investing in their associates. And he has put the money necessary to its programs to be sure that the next generation carries forward.

The SAT is computing an “adversity score” for college applicants. Using crime rates, property prices, poverty rates, and whether there is a “Checks Cashed for Less” in your neighborhood, the SAT will assign each applicant an adversity score. This new metric is a means for getting factors other than grades and test scores into the admissions process. With all the challenges to the use of race as an admissions factor, the SAT is turning to economic and geographic factors.

Congrats, SAT! Now you have made things a lot easier for the wealthy parents who were throwing down $15,000 to $1.6 million to get their fake-athlete kids admitted or their test scores raised. Now, with the adversity score, the wealthy parents can purchase a home in a blighted area and use that address. Their children will have South LA adversity, and will be in for the cost of a cheap home.

Wherever we have metrics, people game the system. Cheating on tests, faking athleticism. Those were tall orders. We will now have a system where the gaming comes easily, thank to the wizards of smart at the SAT.

Today, the New York Times has an article about a Cancun weekend for doctors that was sponsored by Evolus, the maker of Jeuveau, touted as “#Newtox,” a competitor for Botox. Over twelve doctors described the Cancun weekend and the new drug in promising, perhaps flattering terms, on their Instagram accounts. The docs shared photos of the flip-flops, water bottles, and beach towels they received, all with the Evolus etched on them. Since Kim Kardashian posted her gushes over an anti-nausea drug during one of her pregnancies, the Federal Trade Commission has required Instagram users to disclose any financial interests they have in or from the companies whose products are the subject of the gushes.

None of the doctors disclosed that the weekend was free thanks to Evolus. The doctors who returned phone calls from the reporter gave the usual doctor explanations when confronted with a conflict: the patient comes first, they study the drugs and issues carefully, they went to Cancun to learn about the drug, that it was a standard advisory board meeting, etc. One doctor had a classic stream of rationalizations, “I use my knowledge and experience to research and evaluate a product and determine whether it’s something I can use in my practice. This has nothing to do with whether the company takes me to dinner or Cancun or what-not.”

The Barometer gives the doctor that — he has more integrity than any doctor who has ever walked the face of the earth or the beaches of Cancun. He puts his patients first. He still has a conflict, and he needs to disclose the dinners, trips, and “what-nots.” This is not a “thorny ethical issue,” it is a very real one. And this ethical issue has been around for too long. For the love of patients, reputation, and the drug companies themselves, disclose, disclose, disclose.

Tim Conway, Ernest Borgnine’s nemesis in McHale’s Navy, foil for Harvey Korman’s straight man, and a bumbling charmer never had a hit series. He tried it twice, a decade apart, and was quickly canceled. He once got himself a vanity license plate, “13 WKS,” the length of a series that gets canceled for lack of ratings.

The license plate showed humility and its resulting gift of self-deprecation. He was also a testament to the nonlinear life. There are many who are never headliners, never CEOs, never politically powerful, but yet they make their marks. Bet you can’t name the man who invented Doritos, but where would the world be without him? Mr. Conway spread comedic joy, but he also gave many of us non-headliners a boost. We have learned “in whatever state [we are], therewith to be content.” (paraphrase credit to Paul, Philippians 4:11) Not a star of the shaw, but perhaps a recognized contributor. Mr. Conway was an invaluable one to Carol Burnett’s show.

In these days of parents bribing test administrators and coaches and going to jail to give their children a perfectly linear life through the well trodden path of elite schools, the nonlinear life is discounted, mocked, and even dreaded. Understanding that happy and successful lives come in many different ways and through paths that twist and wind is one of life’s critical lessons Oh, but what the journey brings in character development. Just the ability to make fun of ourselves means that our measures involve something more than top of the heap.

To Mr. Conway: Thanks for the memories and for a life that was an example of success earned by taking the road less traveled. RIP

Someone leaked some NRA internal documents that explain Oliver North’s concerns about Wayne LaPierre’s spending as CEO at the NRA. The following expenses were billed to the NRA’s ad agency, Ackerman McQueen, Inc.

–$39,000 for one day of shopping at a Beverly Hills boutique
–$18,300 for a car and driver in Europe
–$13,800 rent for a summer intern
–$200,000 for air transportation for one month
–$40,000 for transportation from Washington, D.C. to the Bahamas on December 17, 2012
–$29,000 for transportation from the Bahamas to Dallas on January 3, 2013
–$6,000 for Four Seasons hotel lodging for a 2014 trip to Italy and Budapest (hotbeds for gun discussions)

The NRA has said that the expenses were necessary for “donor outreach” and were approved.

The approval is not the issue. The wisdom of the expenses is. When, oh when, will CEOs resist the temptation to spend other people’s money. From Nissan’s Ghosn to GE’s Immelt and way back to Kozlowski at Tyco, Thain at Merrill,and cabinet secretaries, here’s some advice: Spend your own money like those of us who have to buy our own clothes out of our own budgets and still manage to be dressed appropriately. Buy your own furniture. And find some way to stay in touch with those who must live on a budget and yet still manage to give generously to others. In short, staying out of private jets, private limos, and the Four Seasons will give you a taste of how donors, employees, and many shareholders live. Prick your consciences with reality.

An article in the New York Times on May 9, 2019 indicates the Boeing is aware that it needs to rebuild trust because its communications following the two crashes of the 737 Max 8 planes was poor. Boeing’s CEO, Dennis A Muilenberg, said, “We own it,” when referring to the crash. However, there has been no admission about the design issues. In other words, we own it, but it is someone else’s faults. The problem is the answer to the question: Why didn’t you warn the pilots? The explanation given is that pilots are expected to be able to handle the conditions.

Trust comes from transparency. And the transparency is just not there.

The founder and four former executives of Insys Therapeutics were convicted of racketeering for their sales methodologies of the company’s fentanyl painkiller, Subsys. The evidence at the 10-week trial revealed that sales representatives bribed doctors to choose the more expensive drug, Subsys, for their patients by paying the doctors for lectures that were part of boondoggles that included lap dances. The conspiracy part of the case resulted from the recorded conversations of employees at the Insys Reimbursement Center. The employees posed as doctors’ assistants offering false information about patients’ needs and health to obtain insurance reimbursement for them.

Evidence at the trial also included a rap video performance by someone in a Subsys dispenser costume, e-mails targeting patients with high doses of pain medication because they will “refill their monthly prescriptions indefinitely,” the tying of sales reps’ compensation to the number of prescriptions of Subsys, and mantras such as “Pill mills mean dollar signs. (i.e., target doctors with large numbers of opioid prescriptions). Subsys is 100 times more powerful than morphine.

The amazing part of the story is that it took the jury 15 days to reach a verdict.

The Barometer lived through the silicone and saline implants suits, depositions, illnesses, and tragedies. The lessons were not taken to heart by women, physicians, and manufacturers. Things just kept going, and now even silicone implants are back, with the same issues of cancer, joint and muscle pain, and fatigue arising among women with the implants. The FDA has decided not to ban the implants. Onward toward the illnesses, pain, and litigation.

Here’s a thought. Perhaps we could just conclude that the implantation of a medical form of a Ziploc bag filled with fluid foreign to the body may not be the best thing for our health.

The debate rages on — a 65 to1 horse was declared the winner after the physical winner was disqualified. Here’s the rule:

“A leading horse when clear is entitled to any part of the track,” the rule states. “Except in a straight-away racing, every horse must maintain position as nearly as possible in the lane in which it starts. If a leading horse, or any other horse in a race, swerves or is ridden to either side so as to interfere with or intimidate or impede any other horse or jockey, or to cause same, it is a foul; if a jockey strikes another horse or jockey, it is a foul. If in the opinion of the stewards, a foul alters the finish of a race, any offending horses may be disqualified by the stewards.”

The rule exists to prevent jockeys, as they did in the movie, “Seabiscuit,” from riding so as to deliberately impede their competitors. Rather than take a tumble, their competitors slow down, back off, and save themselves and their horses.

The rule, as being interpreted by media commentators and Derby competitors, is that Maximum Security drifted, and the story ends. But, the rule also reads “so as to interfere with intimidate or impede.” Thus, there is some intent implied in the rule.

The stewards, in announcing a 3-0 decision, offered this explanation:

“We determined that the 7 horse [Maximum Security] drifted out and impacted the progress of No. 1 [War of Will], in turn interfering with the 18 [Long Range Toddy] and 21 [Bodexpress].Those horses were all affected, we thought, by the interference.”

True enough, but impediment is only part of the rule. There remains “alters the finish,” and that pesky language of “swerves or is ridden to either side so as to interfere….etc”. Alters the finish? Country House was not impeded, and the other horses were not going to beat either Country House or Maximum Security. And Maxiumum Security’s jockey, Luis Saez, explained what happened on that muddy track on that rainy Saturday that his horse is a “baby” and the cheering crowd startled him into veering. The horse and the muck seemed to make it difficult for Saez to control the horse. Devious jockey swerving his way to a victory did not fit as a narrative.

No matter how you look at it: (1)The stewards were right to disqualify Maximum Security, because rules are rules. Or, (2) Maximum Security was robbed, because it was a matter of coping on a messy track, Kentucky we have a problem. The race gets an asterisk, Country House gets an asterisk, and we all have to wait for the Preakness and Belmont to see which horse has it. But, those outcomes will be followed by more asterisks, particularly if Maximum Security or Country House wins those two. A triple Crown with asterisks for one, and two victories followed by commentary on being robbed of the Triple Crown for the other. Like the track that historical day at the Derby, we have a mess.

UPDATE: Maximum Security’s owner has appealed the Derby decision and withdrawn from the Preakness. The asterisks will still remain.
UPDATE DOS: Country House also scratched from the Preakness. Appeal denied. Lawsuit pending.