The pathology of greed

Index of forum topics, talk to us.

Re: The pathology of greed

Postby admin » Wed May 15, 2013 8:18 am

This well written article reminded me of the behaviour of a typical politician or the fellow calling himself your financial "advisor". We should really be learning more about these traits:
Screen Shot 2013-05-15 at 9.13.15 AM.png
by harper business

Patterns of Psychopaths/Sociopaths; The "Psychopathic Bond"

By Rob Kall (about the author) Permalink (Page 1 of 1 pages)
OpEdNews Op Eds 5/15/2013 at 08:50:24

Related Topic(s): Health- Mental-Sociopath-Narcissism; Predator; Psychopath; Sexual Predators; Sociopathy, Add Tags Add to My Group(s)

This is part of an ongoing series on sociopaths.

There are millions of sociopaths and psychopaths in America, maybe a 250 million of them on the planet, 8.5 million in the US alone-- something I intend to do something about.

These people come in all demographic varieties, though there are a lot more males than females, there are still probably a million female sociopaths in the US.

These people are predators. They don't feel emotions like other people. They don't feel empathy or compassion. Researchers study callousness as a parameter of their emotional makeup.

Some psychiatrists and psychologist clump psychopaths and sociopaths together. Others differentiate. I will be using the terms interchangeably unless specified otherwise,

Psychopaths have a predatory pattern of interaction they use to take advantage of and use people-- to form "the psychopathic bond."

I'm summarizing what is described in the book, Snakes in Suits, by Paul Babiak and Robert D. Hare

1-First, the psychopath makes you feel like the person you present to the world is awesome-- that he likes the "you" who want the world to know of. People like to be "validated" and psychopaths latch on to this propensity to gain your favor.

2-Second, the psychopath figures out some of your issues and concerns and fabricates a persona that is similar to yours. Then, he makes you feel like he's just like you, has the same cares and concerns. this is designed to build your trust so you will lower your guard-- so you'll trust him because he really knows who you are.

3- Third, the psychopath gets you to feel that you can tell him your secrets, like you can tell a true friend.

4-Fourth, the psychopath makes you feel like he or she is "the perfect friend...lover...partner" or new hire for you. I'd add volunteer or fellow activist.

The authors of Snakes in Suits say, that once the psychopathic bond is accomplished, "your fate is sealed."

These relationships are built on lies and predatory decisions by the psychopath, on the one side, while on the other, the person believes the lies and fake emotions. But psychopaths are so good at these relationships that even after people discover the truth they still mourn the loss of what they never really had.

These relationships are dangerous. Snakes in Suits describes;
...the psychopath has an ulterior-- some would say "evil" --and at the very least, selfish motive. This victimization goes far beyond trying to take advantage of someone on a date or during a simple business transaction. The victimization is predatory in nature; it often leads to severe financial, physical, or emotional harm for the individual."

One of the kinds of intelligence in Gardner's Theory of multiple intelligences
is interpersonal intelligence. Psychopaths and sociopaths are BRILLIANT interpersonally. They're great at reading and pleasing and manipulating people.

Sociopaths ruin the world for us in many ways. This one-- where they use this four step approach to woo and win you-- is pernicious, but it is also sad, because it forces us to raise our guard when we encounter anyone who seems like they could be a new good friend.

And in general, the sociopaths in the world make it necessary for us to keep up our guard, to protect ourselves from their predations, from their abuse and the trouble and pain they can cause.

The way this feels is one minute you have a new friend, someone who's really appreciating you, perhaps working with you, teaming with you, sharing your enthusiasm for a new project or an issue. The next minute, you've been ripped off, or the "new friend" betrayed you or showed another side that is the opposite of what you believed you were buying into. Or, if the psychopath has been caught, or is done with you, he or she may brutally attack you and try to hurt or destroy you. People in intimate relationships with sociopaths are often physically assaulted and injured. People on line are bullied, harassed, threatened or stalked. Fortunately there are now some state and federal laws against cyber-stalking and harassment. Unfortunately they are not always enforced and can be difficult to get enforced.

There is much research developing on psychopaths. There should be a lot more. We have laws to protect the public from sexual predators. We should have laws to protect us from psychopathic and sociopathic predators. Those laws should include ways to identify who they are. I realize this is a slipper slope. But it is not about picking out a minority group. Psychopaths exist in all races and cultures. We also have laws that allow people with deadly communicable diseases to be quarantined.

I'm not saying we should jail all psychopaths, but, so far, there's no known cure for psychopathy. These people should be identified so the public can at least know they are considering voting for a person who is a psychopath, so managers and investors and school principals can know that a job candidate is a psychopath.

If I have a psychopath living next door, I want to know about it, or better, I want to know about it before I buy my house or rent that apartment.

Some might argue that this is discrimination. I would agree. This is the kind of discrimination we need.

I'll go even further. I believe that psychopaths and sociopaths are a major reason for the problems we face in this world. I wouldn't mind seeing psychopaths made unable to have children. The studies show that there is a major genetic factor.

Bottom line, psychopaths may deserve some compassion. They didn't ask to be born or raised as psychopaths (usually a combination of the two,) but they do not have compassion and they are dangerous predators. Humanity needs to take action and set stronger policies to protect itself agains these rogue creatures.

We need legislation to fund massively more research-- a "Manhattan project" to identify sociopaths and protect the public from them.

other writings in my series on sociopaths and psychopaths:

Tamerlane-- Namesake for a Sociopathic Narcissist Mass Murderer?

Podcast:Sociopaths, Anti-Social Disorder-- Interview with The Guy Who Wrote the Book On It

Podcast: Mikhail Lyubansky Varieties of Evil, Varieties of Justice

and check out these tags in the Opednews directory:

Sociopath-Narcissism; Psychopath; Sociopathy , ... 5-574.html

Rob Kall is executive editor, publisher and website architect of, Host of the Rob Kall Bottom Up Radio Show (WNJC 1360 AM), and publisher of, President of Futurehealth, Inc, and an inventor . He is also published regularly on the

Listen to over 150 of Rob's Podcast interviews here.

Mediate ranks Rob Kall among the top 180 print/online columnists, often ahead of NY Times, Wall Street Journal and Washington Post columnists.
Site Admin
Posts: 3068
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: The pathology of greed

Postby admin » Mon Jan 28, 2013 3:00 pm

The modern office rewards narcissists and psychopaths, say scientists
Psychologist Oliver James reveals the darker side of office politics
Those who display the most selfishness and deviousness rise to the top
Narcissistic and Machiavellian tendencies thrive in the workplace
PUBLISHED: 19:07 GMT, 27 January 2013 | UPDATED: 02:00 GMT, 28 January 2013
Comments (207)

Look around your office. Can you spot the psychopath? The Machiaveliian? Or even the narcissist?
Oliver James, a psychologist and broadcaster, has identified these three types of dysfunctional personalities among professional workers.
The first, quite often bosses, compete for domination and attention and have no worries about trampling over others.

Top dog: Ricky Gervais as the delusional boss David Brent in the award-winning satire on the modern workplace, The Office

Gordon Gekko, Michael Douglas's iconic character from the film Wall Street, is just the sort of Machiavellian personality that thrives in a modern work environment
The second like nothing more than to plot and scheme while the third drone on endlessly about themselves.
Alarmingly, he believes there is a fourth dysfunctional type or ‘triadic person’ who is a combination of all three characteristics.
Such staff, Mr James warns, have a dangerous, yet effective mix of self-centredness, deviousness, self-regard and a lack of empathy which can propel them to the top of the organisations.
Among the examples he gives of these 'triadics' are Gordon Gecko, the fictional trader played by Michael Douglas in the film Wall Street, whose mantra is 'greed is good'.
Screen Shot 2013-01-28 at 2.58.33 PM.png

Woman who fears husband is poisoning her writes to Elle magazine asking for advice
Two top BA pilots die within days of each other after complaining of long-term health effects of breathing in toxic oil fumes while flying
Police pull body from marina in search for missing office worker, 38, who disappeared after staff Christmas party at riverside hotel
The television series Mafia boss Tony Soprano and Russian dictator Josef Stalin are also identified in this group.
Other fictional managers such as David Brent, played by Ricky Gervais in The Office, would score highly on the scale, while Lord Mandelson, the former Labour minister, is described as having Machiavellian tendencies.
Research has suggested that there has been an increase in the 'triadic' conditions over the past 30 years because there are no objective criteria for success or failure in workplaces.
In his book, Office Politics, Mr James warns how people who do not suffer from the disorders can lose out in the world of work and damage their emotional health unless they learn how to survive among such personalities.

Donald Sutherland (left), Colin Farrell (centre) and Jason Sudeikis (right) star in the Hollywood comedy about pathological managers, Horrible Bosses
There are more than eight million people who work in offices, as well as those based in schools, hospitals and particularly television studios could also be affected.
Describing psychopathic tendencies, Machiavellian cunning and narcissistic selfishness a 'dark triad', James told The Sunday Telegraph: 'This dark triad of characteristics is very likely to be present in that person in your office who causes you so much trouble.
'Whether you work in the corporate sector, a small business or a public sector job, the system you are in is liable to reward ruthless, selfish manipulation.
'The likelihood of your daily working life being sacrificed by a person who is some mixture of psychopathic, Machiavellian and narcissistic is high. If you do not develop the skills to deal with them, they will eat you for breakfast.'
Mr James researched various offices to study various traits.
In his book, he cites an advertising and film executive whom he nicknames 'Rat', who introduced a female colleague to another man saying, 'The last time I saw Suzy she was stark naked'
The author says that partners in one elite law firm were in many cases humourless, charmless and had social skills akin to someone with Asperger's syndrome, so unaware were they of the thoughts and feelings of others.
He also discloses how an investment banker got his job by fooling the interview panel at a leading American institution into believing that he was an expert in a product he knew nothing about. He then conned his socially insecure boss into believing that he was from an 'old money' background by lying about 'decadent weekends at grand and historic country houses'.
James reserves some of his most scathing views for the television industry in which he has himself worked for both BBC and independent broadcasters.
He said: 'Television is jam-packed with untalented people who have managed to associated themselves with successful programmes and disassociate themselves from failures.'

Read more: ... z2JJHdYl3K
Follow us: @MailOnline on Twitter | DailyMail on Facebook
Site Admin
Posts: 3068
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: The pathology of greed

Postby admin » Fri Jul 06, 2012 4:06 pm

Psychopathy and the CEO: Top executives have four times the incidence of psychopathy as the rest of us
Published on Thursday July 05, 2012

Your child could grow up to be a psychopath and that may not be a bad thing.

He or she just might wind up a CEO.

The hallowed halls of business have more than a fair share of successful psychopaths, many of them CEOs and top executives, research shows.

A recent wave of interest in testing children for psychopathy is shining a light on the biology and psychology of psychopaths. University of Pennsylvania criminologist and psychopathy expert Adrian Raine believes medical tests might help determine whether a child will be a psychopath when he or she grows up.

MORE: Traders outperform psychopaths in egocentrism and lying – but not in making money

But that doesn’t mean he or she will end up a serial killer or in prison. It could be the corner office for them instead — the incidence of psychopathy in the business world is four times that of the general population, according to a recent report.

Psychopathy is a grouping of personality characteristics including glibness, manipulation, callousness, lack of emotion, irresponsibility, impulsivity and aggression.

Earlier this year an article in CFA Magazine by Sherree DeCovny stated an estimated 10 per cent of people in the financial services industry are psychopaths.


MORE: Mallick: How to spot a psychopath

Robert Hare, the University of British Columbia expert on psychopathy she quoted, posted a statement on his website following the furor that resulted from DeCovny’s piece.

“As things stand, we do not know the prevalence of psychopathy among those who work on Wall Street,” he wrote. “It may be even higher than ten per cent, on the assumption that psychopathic entrepreneurs and risk-takers tend to gravitate toward financial watering-holes, particularly those that are enormously lucrative and poorly regulated. But, until the research has been conducted, we are left with anecdotal evidence and widespread speculation.”

A 2010 study by Hare and colleagues found that four per cent of a sample of 203 corporate professionals met a clinical threshold for being described as psychopaths.

MORE: Psychopaths' brains biologically different

The prevalence in the general population is about one per cent.

It’s long been known that a segment of top executives and CEOs in the mainstream workforce can have psychopathic personality traits. A 2009 article by Joseph P Cangemi and William Pfohl called “Sociopaths in High Places” featured seven individuals with psychopathic personalities in leadership roles, among them a Fortune 500 executive, a university professor and a venture capitalist.

Gao and Raine caution that limited literature on non-incarcerated psychopaths have produced mixed feelings among researchers. ... 4.facebook
Screen shot 2012-07-06 at 5.05.29 PM.png
Site Admin
Posts: 3068
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: The pathology of greed

Postby admin » Wed Jun 13, 2012 4:47 pm

Screen shot 2012-06-13 at 5.47.06 PM.png

click to enlarge, click again to zoom in
“There was always a big financial incentive to make a subprime loan wherever one could.”

-affadavit of Wells Fargo Loan officer

Wells Fargo’s top-producing loan officer testified in court some of the more unsavory and nefarious lending practices WFC engaged in.

Her sworn testimony involved how the bank targeted heavily African American areas for shoddy mortgages and subprime loans, even for people with “sterling credit ratings.” This arose due to Justice Department investigations into Wells Fargo’s alleged fair-lending violations.

Structurally, Wells Fargo provided the sort of misaligned financial incentives that helped to create so much of the crisis. ... Picture%29

I posted the info above simply to "preserve" it for history. It is sooooo amazing to live in a time where it is considered profitable and normal to "make bad loans" in order to make one's bonus, or to cook the books, or even to bankrupt the entire company just to make false numbers appear real and thus to make one's bonus................and at the same time, I am witness to this "winner steal all" mentality creeping into all levels of politics. The one-two combination punch of this stuff has caused what I am calling (June 13th, 2012) the second "great" depression, almost worldwide, certainly North American wide. What a thing to witness. It is like watching insanity come to life (and run the country:)
Site Admin
Posts: 3068
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: The pathology of greed

Postby admin » Wed Feb 29, 2012 10:51 am

Screen shot 2012-02-29 at 10.50.17 AM.png

Cheat, lie, break the law? Chances are, you’re rich
From Tuesday's Globe and Mail
Published Monday, Feb. 27, 2012 4:32PM EST

The wealthy really are different from everyone else: They’re more likely to cheat, lie, and break the law.

At least that’s the unflattering conclusion of a team of professors from the University of Toronto’s Rotman School of Management and the University of California, Berkeley, who ran a battery of tests involving more than 1,000 people, seeking to answer the question of whether being rich or poor influenced ethical behaviour.

In results from seven separate studies, they found a consistent tendency among those they termed “upper-class” to be more likely to break the law while driving, take valued goods from others, lie in negotiations, cheat to increase their chances of winning a prize and endorse unethical behaviour at work.

The reason for the ethical difference was simple, according to the paper being published this week in the Proceedings of the National Academy of Sciences, a leading U.S. science journal. Wealthier people are more likely to have an attitude that greed is good.

The question of social class and ethics has long intrigued researchers and has created a lively, if obscure, field of academic research.

At first glance, it might seem more likely that poorer people would be more tempted to cheat or break the law, in order to improve their lot in life. But a growing body of research is coming to the opposite conclusion – that it’s people at the top of the income scale for whom honesty, integrity, and generosity seem to be a challenge.

In the United States, for instance, despite the perception that the rich are great philanthropists, data show that upper-class households donate a smaller proportion of their incomes to charity than do lower-class families. Other research has found that those who are well off have a reduced concern for others.

But one of the paper’s authors, Stéphane Côté, professor of organizational behaviour and psychology at the Rotman School, cautioned against making blanket assumptions about people based on class alone.

“We’re definitely not suggesting that any upper-class person … is going to be less ethical than every lower-class person. You need to be cautious in terms of applying these findings to predict the behaviour of a single individual,” he said.

Testing people for ethics based on class might seem like a challenge, but the researchers for the science journal paper devised a series of ingenious tests to investigate behaviours.

In one case, they monitored a busy San Francisco four-way stop, and had observers hidden from sight check which drivers obeyed the law stipulating that vehicles approaching the intersection yield to a car already making the crossing. The observers tracked the make, age, and conditions of cars, using them as a proxy for class. High-status vehicles such as Mercedes were considered the provenance of the rich, and those driving them were about three times more likely to cut in than those in less flashy cars.

The researchers also conducted laboratory experiments on people who had been asked to classify themselves as to their class status, to test lying and cheating.

In one test involving throws of an electronic dice, the researchers rigged computers to allow only low scores. Participants were told that those getting higher scores would have more chances to win $50 cash. They then tracked who lied about the results, and found that people in a higher social class displayed higher levels of cheating and more positive attitudes toward greed.

The researchers zeroed in on greed as the operative factor through another experiment that assessed the willingness of people to engage in unethical behaviour at work, such as stealing cash, receiving bribes, or overcharging customers. ... le2351690/
Site Admin
Posts: 3068
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: The pathology of greed

Postby admin » Wed Feb 29, 2012 10:49 am

Screen shot 2012-02-29 at 10.48.07 AM.png

Pictured: Christian Bale as Patrick Bateman, a Wall Street investment banker and psychopath. Researchers believe as many as 10 percent of people in the financial industry may exhibit the traits of clinical psychopathy.
Maybe Patrick Bateman wasn't such an outlier.

One Out Of Every Ten Wall Street Employees Is A Psychopath, Say Researchers
The Huffington Post | By Alexander Eichler
Posted: 02/28/12 04:22 PM ET | Updated: 02/28/12 04:22 PM ET

One out of every 10 Wall Street employees is likely a clinical psychopath, writes journalist Sherree DeCovny in an upcoming issue of trade magazine CFA Magazine (subscription required). In the general population the rate is closer to one percent.

"A financial psychopath can present as a perfect well-rounded job candidate, CEO, manager, co-worker, and team member because their destructive characteristics are practically invisible," writes DeCovny, who pulls together research from several psychologists for her story, which helpfully suggests that financial firms carefully screen out extreme psychopaths in hiring.

To be sure, typical psychopathic behavior runs the gamut. At the extreme end is Bateman, portrayed by Christian Bale, in the 2000 movie "American Psycho," as an investment banker who actually kills people and exhibits no remorse. When health professionals talk about "psychopaths," they have a broader range of behavior in mind.

A clinical psychopath is bright, gregarious and charming, writes DeCovny. He lies easily and often, and may have trouble feeling empathy for other people. He's probably also more willing to take dangerous risks -- either because he doesn't understand the consequences, or because he simply doesn't care.

An appetite for risk can seem like a positive business trait on Wall Street, where big gambles sometimes lead to big rewards. But for the people DeCovny is talking about, the outcomes matter less than the gambles themselves -- and the chemical rush of serotonin and endorphins that accompanies them.

This is hardly the first time that mental illness has been equated with a certain capacity for professional success -- especially in the financial sector, where some stock traders have actually scored higher than diagnosed psychopaths on tests that measure competitiveness and attraction to risk.

Some psychologists have long claimed that the qualities that make for a high-achieving politician or stockbroker are also the same traits that psychopaths have in abundance.

Other researchers generalize it to bosses as a species, saying that about 4 percent of all executives are psychopaths -- and that their relative lack of scruples is what helps them excel in business.

At the same time, the fast-moving, high-pressure environment of Wall Street probably compromises the mental health of some of its employees. A recent study found that many young bankers develop alcoholism, insomnia, eating disorders and other stress-related ailments within just a few years on the job.

Stockbrokers have also been shown to experience clinical depression at a rate more than three times as high as the general population.

DeCovny writes that for someone with a "latent" compulsive gambling problem, a job trading stocks can trigger pathological responses that send the person into an escalating pattern of lies, debts and even embezzlement and fraud.

A person with this problem would feel gratified by an enormous loss, because of the way their brain's reward system works -- which DeCovny says may explain the activities of such notorious rogue traders as Kweku Adoboli, Jerome Kerviel and Nick Leeson, three men who gambled and lost the combined equivalent of $10.3 billion for their respective institutions over the past 17 years. ... f=business
Site Admin
Posts: 3068
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: The pathology of greed

Postby admin » Sat Jun 25, 2011 10:03 am

"On Friday, Judge Amy St. Eve, who presided over his trial, also heard his re-sentencing. She ruled that Lord Black abused his position of trust, “stealing” money from shareholders and using “sophisticated means” to conceal it." ... lack-case/

"The success rate for federal prosecutions in Chicago is 90%".
Site Admin
Posts: 3068
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: The pathology of greed

Postby admin » Fri Jan 07, 2011 10:14 am

Can US Bankers and Politicians be Truthful?

By Ron Robins
Founder & Analyst - Investing for the Soul

Thursday, 6 January 2011 at 08:54

Like their counterparts elsewhere, US bankers and politicians regularly speak untruths. American bankers are unlikely to be truthful if it impacts negatively on the economy, their businesses—and especially their bonuses. And American politicians will rarely be honest if it inflicts damage on their poll numbers. Thus, are we dreaming to expect truthfulness from American bankers and politicians?

By 2006, it was clear that the US Federal Reserve’s (the Fed’s) own figures on mortgage and other consumer debt were demonstrably flashing red. And yet, Ben Bernanke, chairman of the Fed’s board of governors and thus arguably America’s most important banker, did not issue a warning about them.

Was Mr. Bernanke afraid to tell the truth about America’s mortgage/consumer debt problem? Perhaps he felt that given his position he could not provide such a warning as financial markets might react badly to such comments and thus he would be labelled as the instigator of a financial-economic slowdown.

Regardless, he appeared to offer even further encouragement in the promotion of mortgage/consumer debt.

On February 15, 2006, Mr. Bernanke said “our expectation is that the decline in [housing] activity or the slowing in activity will be moderate, that house prices will probably continue to rise, but not at the pace that they had been rising.” Then, just as the sub-prime mess was starting to unfold, on March 28, 2007, Mr. Bernanke said, "at this juncture, however, the impact on the broader economy and financial markets of the problems in the sub-prime market seems likely to be contained.” Only a few days later on April 2, 2007, one of the largest sub-prime lenders, New Century Financial, filed for bankruptcy, and the sub-prime mortgage panic began to engulf America and the world.

By contrast, perhaps having learned the lesson of the US, Mark Carney, the governor of Canada’s central bank, the Bank of Canada, together with the heads of Canada’s major banks this past December 16, openly expressed the desire to slowing the growth in Canadian mortgage/consumer debt. Canadian consumer debt levels are now close to those prevailing in the US before the credit markets there imploded.

At least in Canada we are seeing some truthfulness from top bankers. But as we know such truths by American bankers were virtually non-existent prior to its financial debacle.

At the heart of the US financial crises were bank balance sheets that were crippled with ‘toxic’ assets—mostly, but not exclusively, mortgaged-backed securities (MBS) where markets were largely non-functional and prices distressed. This led to massive losses on bank income statements and balance sheets.

Now a balance sheet is supposed to show the true financial condition and net worth of an entity on a given date. But this fundamental rule of honesty in accounting has been squelched to make banks’ balance sheets (and income statements, etc.) look much better in the wake of the 2008 financial collapse. It was claimed that continuing to value assets on the balance sheets at distressed prices accentuated the financial turmoil.

Hence, under extraordinary pressure from the US government and the banks in the spring of 2009, the American Financial Accounting Standards Board (FASB) relaxed its requirement that banks value applicable assets at real life market values. FASB now allowed banks to price difficult to value, thinly traded securities or those in distressed markets, to a self-proscribed bank computer ‘model.’ Magically, banks were suddenly profitable again and balance sheets improved! Here the belief is clearly that the “end justified the means.” Truth in basic accounting values got sacrificed.

Perhaps bankers, who purportedly espouse honesty and integrity, should have their banks issue two sets of audited public financial statements:

i. one which accounts for assets and liabilities being valued, where possible, at market prices (so called ‘mark to market’ or ‘fair value’), and

ii. the other set of statements using the current FASB’s directives.

Then let investors and stakeholders draw their own conclusions about the banks’ financial condition!

Just as US bankers are found lacking in truthfulness, so are American politicians. Martin Jay, a history professor at the University of California-Berkeley, discusses the honesty of politicians in his recent book, The Virtues of Mendacity: On Lying in Politics. In an interview with US News & World Report on May six he said,

“I’m not urging governments to lie, and I'm not urging the citizenry to be complacent about mendacity. But what I'm trying to say is that it's more important to focus on the issues, on the policies, and on the effects these have on people's lives, than to constantly look for discrepancies in promises and performance, or to look for inconsistencies in a person's career.”

So perhaps the electorate should be more interested in the issues and policies than about the politicians’ honesty. But if a person is seen as knowingly speaking lies or hiding truths, we believe they cannot be trusted. It is probably this dilemma that results in politicians almost everywhere being held in such low regard by their electorates.

But possibly, Americans do want to know more of the truth concerning the state of their economy, its unfunded liabilities, and so on. And if politicians were more truthful, then, perhaps, the respect the public has for them will improve. And maybe those politicians speaking more honestly will get elected. This yearning for truthfulness seems partly responsible for the growth of the US Tea Party Movement.

American history is replete with bankers and politicians telling lies and misleading the public. Maybe sometimes the consumer, the public, is not ready to hear the truth. But perhaps the only way for bankers and politicians to regain the confidence of their respective public is for them to be more honest. However, does the public not also share in the blame of the pervasive untruthfulness of bankers by allowing them inordinate power, and for continually electing politicians who disrespect or hide truths?

E-mail the writer:
Site Admin
Posts: 3068
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: The pathology of greed

Postby admin » Sat Oct 16, 2010 4:08 pm

William K. BlackAssoc. Professor, Univ. of Missouri, Kansas City; Sr. regulator during S&L debacle
Posted: October 15, 2010 06:18 PM ... 64948.html
Capitalism Would Have Killed the Chilean Miners: A Reply to Mr. Henninger

One of our family sayings is: "you can't compete with self-parody". Daniel Henninger is the most recent proof of this saying. He authored a column on October 14, 2010 entitled "Capitalism Saved the Miners." Mr. Henninger is an editorial writer/editor for the Wall Street Journal. His essay, of course, was designed to attack President Obama. Mr. Henninger wrote that the rescue of the Chilean miners reflected badly on President Obama's criticism of Republican candidates' views about markets:

"The basic idea is that if we put our blind faith in the market and we let corporations do whatever they want and we leave everybody else to fend for themselves, then America somehow automatically is going to grow and prosper."

Henninger's responded to this quotation from the President:

"Uh, yeah. That's a caricature of the basic idea, but basically that's right. Ask the miners.

If those miners had been trapped a half-mile down like this 25 years ago anywhere on earth, they would be dead. What ... meant the difference between life and death for those men?

Short answer: the Center Rock drill bit.

Longer answer: The Center Rock drill [was] developed by a small company in it for the money, for profit. That's why they innovated down-the-hole hammer drilling. If they make money, they can do more innovation.

This profit = innovation dynamic was everywhere at that Chilean mine."

Well, not really. Let's begin with why the miners needed to be saved. They needed to be saved because the private mine they worked for appears to have been a "control fraud."

In a control fraud the person controlling a seemingly legitimate entity uses it as a "weapon." Our ongoing financial crisis was driven by an epidemic of accounting control fraud, which caused the housing and commercial real estate bubbles to hyper-inflate. Accounting control frauds target creditors and shareholders as their primary victims. Anti-purchaser control frauds maximize profits by defrauding purchasers about quality and/or quantity in order to gain a competitive advantage over honest sellers. George Akerlof described this form of control fraud in his famous 1970 article on "lemons." Anti-purchaser control frauds can maim or kill their victims, e.g., Chinese infant formula frauds. The worst anti-employee control frauds increase profits by avoiding costs that would protect workers from being maimed and killed. Illegal, private Chinese coal mines are the infamous example of this type of control fraud.

We know that the Chilean mine was private, that it had a bad safety record, and that it has been ordered to shut down permanently. The BBC reports that the (strongly conservative) President Pinera promised the people of Chile that: "never again in Chile would people be allowed to work in such inhumane conditions." Reports from Chile stress that the mine violated the law in failing to have a second entrance to the mine (which would have greatly reduced the risk of the miners being trapped by the collapse of a portion of the shaft). Local officials have claimed that the only way the mine owners could have gotten away with such an obvious violation of the safety rules was through bribery of the regulatory officials.

Reports from Chile also state that the mine did not have the required ladder that would have allowed the workers to escape the mine in the immediate aftermath of the collapse through a ventilation shaft that subsequently became inaccessible. The "innovation dynamic" that was "everywhere" in the Chilean mine due to the profit motive also explains why the ladder was not there. To sum it up, the miners wouldn't have had to be rescued but for the perverse incentives of that unregulated capitalism inherently produces (which is what Obama warned about). (The governmentally-owned coal mines in China also have a far better safety record than the private Chinese coal mines.)

Once the mine shaft collapsed in Chile, the private mining company declared that it not only could not pay to rescue the miners -- it could not even pay their wages. The private company threatened to file for bankruptcy. The rescue was paid for by the State-owned mine (i.e., the Chilean government had to bail out the private mine owner to the tune of an estimated rescue cost of $10 to $20 million in order to rescue the miners). A $25 ladder apparently would have prevented the tragedy, but the private owners' profit motive led them to avoid that expense. The Chilean mine had gold and copper ore. Both of those minerals are selling for record prices. This makes the private mining company's failure to provide another exit and a ladder all the more outrageous. Where did the profits go? Capitalism would have left the miners to die. The government paid to rescue the miners.

Mr. Henninger is right to advise that we should "ask the miners" -- because that is exactly what the private mine and Mr. Henninger failed to do. The private mine ignored the miners' warnings about the inadequate safety of the mine. The government of Chile did not listen to the miners' union on safety issues. And the miners' families sued the private mine owners -- blaming them for the collapse that nearly killed them.

When we prevent a corporation from engaging in fraud or endangering its workers we do not harm capitalism, but rather save honest businesses from being driven from the marketplace. Akerlof demonstrated in 1970 -- forty years ago -- that control frauds can produce a "Gresham's" dynamic in which the markets drive ethical firms and professionals out of the marketplace. When cheaters prosper, markets become perverse. Effective regulators serve as the "cops on the beat" that allow honest firms, workers, lenders, investors, consumers, and taxpayers to prosper.

Crossposted from New Deal 2.0. ... 64948.html
Site Admin
Posts: 3068
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Corporate Greed and Pathology

Postby admin » Sat Oct 16, 2010 4:03 pm

Jennifer S. Altman for The New York Times
Scholars including from left, Sudhir Venkatesh, Dorian Warren and Shamus Khan, attended the first Elites Research Network conference.


Published: October 15, 2010

THE rich are sitting firmly in the public cross hairs, especially as the economy continues to stumble. Reports that Wall Street bonuses will again be high, and the debate in Congress over tax increases for the wealthy, just add to the outrage.


Bucks Blog: Studying the Rich (October 15, 2010)

So it was a serendipitous time for Columbia University to convene the first Elites Research Network conference last week. The conference drew in scholars focused on inequality across academic disciplines, like economics, political science, sociology and history.

In the academic world, this was remarkable. As several of the scholars acknowledged, there has traditionally been some unease in talking about the elite, let alone researching them.

“When we study the poor, it’s relatively easy,” said Sudhir Venkatesh, a professor of sociology at Columbia and the author of “Gang Leader for a Day” (Penguin Press, 2008). “The poor don’t have the power to say no. Elites don’t grant us interviews. They don’t let us hang out at their country clubs.”

But Dorian Warren, an assistant professor of political science at Columbia, said the increasing concentration of wealth, moving from the top 10 percent of Americans to the top 1 percent, has made this the right time to look more closely at the group. “We have to understand what’s going on at the top,” Mr. Warren said.

The discussion quickly went beyond examining how those with more had traditionally exercised control over those with less. Many of the younger scholars said their goal was to do more than just look at tax returns and see who sat on boards. Instead, they said, they want to start looking at the relationships between the elite and the non-elite.

“If you look at the poor as a problem, you’ll be angry at elites or you’ll expect them to come up with a solution,” said Mr. Venkatesh, who took the most pragmatic line. “You have to come in accepting that there will always be poor people in society and there will always be wealthy people in society, and neither of the two reached that status by their own efforts.”

That’s not the usual description of this issue. But otherwise, you risk viewing the rich as rapacious thieves or seeing the poor as lazy freeloaders.

That said, there were other academics who hewed to an older model of power dynamics. Jeffrey Winters, associate professor of political science at Northwestern University, talked of the wealthy in America in terms of oligarchy. And he advanced an argument against what he called the “income defense industry.”

The term referred to the accountants, lawyers and financial advisers employed by the wealthy — and the merely affluent — to manage their financial affairs. Mr. Winters argued that this group was hurting the non-elite by minimizing tax collection. He estimated that $70 billion was lost yearly just from offshore accounts.

There is no denying that members of the elite have a lot of money and would like to hang on to as much of it as they can. But that’s true of most people.

Olivier Godechot, a French academic on the sociology panel, presented research that quantified just how skewed the increase in wealth at the very top has become. Mr. Godechot, a researcher at the National Center for Scientific Research in France, said that two professions — finance and business services — accounted for almost all of the increase in income inequality.

D. Michael Lindsay, assistant professor of sociology at Rice University, said his research showed that many of the people now considered elite in America did not start out that way. He is conducting what he described as the largest study ever of top leaders in America, having talked to over 500 so far across business, nonprofits and academia.

He said he had found that a privileged upbringing did not matter as much as generally thought. Nor, he said, did many of the top leaders inherit large sums of money. While many went to top colleges and a large number attended Harvard Business School, the biggest determining factor of whether someone moved into the elite was an early career opportunity.

Being able to look beyond their specialty early — as opposed to being highly specialized their entire career and then thrust into a leadership role — distinguished great leaders more than any inherent advantage in their upbringing, he said.

“These people had a chance to be a generalist early on, as opposed to being specialists their whole career,” Mr. Lindsay said. “They had that experience in their early 30s or 40s.”

Some of the conference presenters took note that they themselves were almost entirely from Ivy League and other elite universities — only one was from a state university.

“When we send our kids to the Brookline schools, we’re not making a judgment about the Boston schools,” said Michèle Lamont, a sociology professor at Harvard University. “There are unintended consequences to our actions.”

Mr. Warren put it more bluntly: “I did not come up as a child of privilege, but I got into Yale for graduate school. I’m going to want to do the same for my kids. It’s not a malicious intent to exclude others; it’s a rational impulse to maintain the advantage.”

Those at the conference defined the elite as people with power over others, and the debate was framed largely in economic terms. But professors at an Ivy League university are part of an elite, even if their salaries do not reflect it.

Shamus Rahman Khan, a conference organizer and assistant professor of sociology at Columbia, seemed to be most at ease with the conflict. The son of a Pakistani father and Irish mother who both emigrated to the United States, he said he came from a wealthy but not elite family. His father, a successful surgeon, paid his son’s way to the St. Paul’s School, a top boarding school.

Yet when Mr. Khan arrived there in the mid-1990s, he said he lived in the “minority students dorm.” He used that experience and a later teaching stint at St. Paul’s to write a book on the nature of advantage, “Privilege: The Making of an Adolescent Elite at St. Paul’s School,” which will be published by Princeton University Press in January.

“Is it morally responsible for you to get your kids into very expensive schools if it will advantage them?” Mr. Khan said. “It’s hard not to do it. But by doing it, you’re not explicitly squirting some other kid in the eye with pepper spray. It’s more subtle.”

His concern is what the concentration of wealth means for American society in the future. He said he wondered whether the post-World War II era in America — as defined by prosperity and rising income levels — was a historical anomaly and was coming to an end.

He cited data showing that the United States now had the second-lowest level of intergenerational income mobility in the world, after England.

“If we lose this truly American thing — that you can become anything if you just work at it — then you’re really going to lose what makes America America,” he said. “It already appears that it will take a tremendous amount of time for people to bring their families out of poverty and for the wealthy to fall from the advantages they have.”

Jim Roache
Ottawa, ON
Site Admin
Posts: 3068
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Corporate Greed and Pathology

Postby admin » Sun Jul 25, 2010 9:51 pm

this paper ... 0526-e.htm

from the Canadian Library of Parliament that was prepared by Tara Gry back in August 2005. For those of you that don't know what a dual class share structure is, here's the definition from the paper:

"Many company founders wish to avoid the dilution of control that normally accompanies the public issuance of shares. One mechanism at their disposal is to issue different classes of shares that confer different voting rights on the holder. These are known as dual-class share structures, or, alternatively, as restricted- or subordinate-voting share structures."

In Canada, there are several examples including Shaw, Bombardier, Onex, Magna, Power Corporation and of course, Hollinger International. The Magna/Frank Stronach story is in the media right now because he has just been paid nearly a billion dollars for his multiple voting shares by the company he founded. As it stood before the deal was struck, Frank Stronach held 0.6% of the total shares outstanding but had 66% of the voting rights.

Back to Conrad Black. Here's a quote from the section of the paper entitled "Disadvantages":

"Hollinger International Inc. presents an extreme example of the detrimental effects of dual-class share structures. Former Chief Executive Officer Conrad Black controlled all of the company’s Class B shares, which gave him 30% of the equity and 73% of the voting power. Holders of publicly traded shares of Hollinger had limited rights to make decisions in terms of executive compensation, board appointments, and mergers and acquisitions. According to a report made public by the Securities and Exchange Commission, Mr. Black appointed the majority of board members, who, in turn, were unlikely or unwilling to oppose his authority. The same report found that Mr. Black exacted excessive management fees, consulting payments, and personal dividends from the company. In all, the aggregate funds taken by Mr. Black and Hollinger’s other chief executives were estimated at 95.2% of Hollinger’s entire adjusted net income during 1997-2003, sums in excess of $400 million."

Site Admin
Posts: 3068
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Corporate Greed and Pathology

Postby admin » Mon Jul 05, 2010 11:19 am

A reader who is another former advisor and now happy to be out of the game forwarded the following
after my message a few days ago about the high rise in investor complaints to the OBSI. ... tual-funds

How can we sum up all these rip-offs in life, whether it be financial advisors or other areas of life. I think it is simple.

1.) There is no morally right substitute for being upfront and honest.

2.) There is no morally right substitute for doing the right thing

If 1 and 2 are not followed, then it is just a matter of the degree of deception that replaces them.

Why certain people cannot just be upfront with customers or clients baffles me.
When it comes to relationships, it baffles me all the more. Those who do it think they are clever.
However, they are deluding themselves.

Deceptive practices show a lack of character, a personality driven by ego, an ego that cannot permit itself to accept responsibility.

When all of the above is condoned by regulators and their respective provincial government finance departments,
it is nothing more than a "legalized scam" to mislead the investing public.

Deception comes in a large variety of ways, but suffice to say that it is one person taking advantage of another
usually during a trusting relationship. To put it bluntly, deception of any sort is simply a lie.

Large numbers of people have become fed up placing trust in those who just sit in wait to earn fat commissions off them.

The financial industry in particular have their work cut out to regain the trust they have lost over the years.

Thanks to the internet, online investing combined with new low cost options is just what the doctor ordered, so to speak.

Be careful who you place your trust in. The world is full of illusionary promises.

Regards to all,

Site Admin
Posts: 3068
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Corporate Greed and Pathology

Postby admin » Sun May 02, 2010 5:04 pm

Fraudonomics: 10 Fun Fraud Facts
By Mark Ames

Ever since I got kicked out of Russia and forced back home, I’ve been collecting all kinds of news articles about fraud, in a document file titled “America Is Russia.” Here’s a little taste of the wonderful world of American Fraud:

1). Accounting Fraud: Last year, America’s leading banks were insolvent. They had tens or hundreds of billions in losses on their books, and the only way to wipe those losses out would be to either a) own up to the mess, raise enormous amounts of money on top of all the bailout money; or b) get out a big fat eraser, and wipe those losses off the books as if they never existed. The first option was nice and all, but a real hassle. So Geithner and Larry Summers chose Door Number Two: Accounting Fraud. They forced the FASB to accept a rule-change in the accounting methodology called “mark-to-model” which let banks decide how much their assets were worth, rather than letting the markets decide. So if for example a BofA owned a complex security called “Orion Butt Fungus” that was worth 5 pesos on the open market, but BofA was too broke to go out and raise 5 pesos to cover that loss, under the new accounting rules, the government told BofA that rather than pricing “Orion Butt Fungus” at what the market will actually pay for it, why not first ask, “How much would BofA like ‘Orion Butt Fungus’ to be worth, in a perfect world?’” If BofA answers, “Doyee, gee I dunno, how about $500 million?” then under the “mark-to-model” accounting rules, BofA could now value “Orion Butt Fungus” at $500 million, and voila! Their problems are over. That wasn’t so hard, was it? Suddenly, BofA looks like it knows how to pick winners! And no one’s going to second-guess them, because everyone else is mark-to-modeling their “Orion Butt Fungi” too! The end result: under the old rules, BofA would have had to raise money just to cover its debts, sort of like you and me have to do, and that’s just a lot of money going to waste. But now that its portfolio is so profitable, BofA has a much easier time raising money, which it uses to pay ginormous bonuses to its executives.

2). Big Pharma Fraud. Remember that scene early in Fight Club, when Edward Norton explained his job, when it was more profitable to let a car defect go and pay whatever lawsuit settlements come from the deaths, and when it’s better to recall the cars because the number of deaths will result in too many lawsuits? This is humanitarian do-gooder stuff compared to the savage real-world fraud-for-profit model that drives America’s drug companies. It’s really simple and it goes like this: the more fraud a drug company commits, so long as it’s off-the-scale fraud with the most horrible consequences for the victims, the drug company’s profits always outdo the criminal fines and lawsuits by factors of 20, 30, 100… It’s as simple as that. Because the billion in penalties here or the two billion in class action lawsuit settlements there are always far less than the tens of billions you earn from pushing harmful drugs on unsuspecting idiots. To wit: Between May 2004 and March 2010, a handful of top drug companies like Pfizer, Eli Lilly and Bristol-Myers paid over $7 billion in criminal penalties for bribing doctors to prescribe drugs for unapproved uses, with sometimes deadly consequences. However, as a Bloomberg report noted, the fines are always a fraction of the profits—Pfizer alone paid almost $3 billion in criminal fines since 2004, yet that was just one percent of their total revenues; Eli Lilly got busted bribing doctors to prescribe a schizophrenia drug, Zyprexa, to elderly patients suffering from dementia, even though company-run clinical trials showed an alarming death rate of 31 people out of 1,184 participants (double the placebo rate). Whatever—the market for elderly dementia patients meant billions in extra revenues. So Eli Lilly continued pushing Zyprexa on the elderly for another four years until it the Feds busted them. Eli Lilly got hit with $1.42 billion fine, but that was peanuts compared to the $36 billion it earned on Zyprexa sales from 2000-2008. To make it happen, the drug companies buy off all the checks and balances: lawsuits revealed the enormous bribes they pay to doctors, and even America’s medical journals are so corrupted by drug company influence that they’re no longer reliable as much more than hidden advertisements, according to a recent UCSF study. Medical journals are 5 times more likely to publish “positive” drug reviews than negative reviews, and one-quarter of all clinical trials are never published at all, leading doctors to prescribe drugs assuming they have all the information. The result: prescription drugs kill one American every five minutes …while Americans pay more for drugs than anyone in the world, spending a total of $12 billion on drugs in 1980 to spending $291 billion in 2008—a 1,700% increase. America is ranked only 17th in the world in life expectancy.

3). Alan Greenspan: Fraudonomics Maestro. America’s central banker from 1987-2006 once told a do-gooder regulator not to fuck with the bankers’ fraud schemes, because in Greenspan’s mind, fraud was not a crime and didn’t need to be regulated. Then Greenspan forced the regulator, Brooksley Born, to resign. Just in time for his next and final act as Central Bank chief: from 2001-2004, Greenspan pumped up the biggest housing bubble in human history by holding rates down to nothing, while touring the country promoting the glories of subprime and Alt-A mortgages. Then in late 2005, when the bubble was ready to burst, Greenspan tendered his resignation and switched over to the other side, signing lucrative contracts with three investment firms all of which bet big against gullible American homeowners, and reaped billions. First, Greenspan signed up to work for Deutsche Bank, which is being sued for securities fraud for selling an Abacus-like CDO to a Warren Buffett-owned bank, M&T; Greenspan also worked for Pimco, which earned $2 billion in a single day in September 2008, when Fannie Mae and Freddie Mac were nationalized with Greenspan’s lobbying help; and lastly, Greenspan went to work for Paulson & Co., the hedge fund that raked in $1 billion off the same Abacus CDO deal that brought the SEC fraud suit against Goldman Sachs. It’s an unusually perfect record for Greenspan, given his atrocious forecasting record at the Fed. It recalls the old Greenspan circa 1984-5, when he worked as a lobbyist for Charles Keating trying to push regulators off his back and vouching on the record for Keating’s character…Keating was eventually jailed for fraud in the worst savings and loan collapse of all.

4). Municipal Debt Fraud. America’s $2.8 trillion municipal bond market is rife with fraud of the sort you’d expect in an emerging tinpot economy: opacity rather than transparency, plenty of corruption and kickbacks, resulting in decimated budgets and services cutbacks in communities across the country. The problem all stems from way the bonds are issued these days: instead of holding open tenders, nearly all are the result of backroom deals. Back in 1970, only 15 percent of municipal bond contracts were awarded through no-bid contracts; last year, 85% of muni bond deals were assigned in no-bid, non-transparent agreements of the sort that made Halliburton rich in Iraq. Studies show that no-bid bonds invariably cost municipalities more than bonds resulting from open tenders. So far, fraud and corruption charges have been leveled against state employees and city councilors in Florida, New York, New Mexico, Alabama and California, to name a few. Muni bond defaults soared from just $348 million in 2007 to $7.4 billion in 2008—that’s an increase of 20 times– with growing numbers of cities, counties and states on the verge of bankruptcy. And here’s the real kicker: the biggest bailed-out banks and funds stand to make huge profits again if California’s state and city bonds fail–meaning they make big fees selling the bonds in corrupt deals, then they bet against the bonds buying CDS derivatives. Right now Wall Street has a $27 billion bet against the California bonds they helped to sell–and you better believe Wall Street will use every trick in the book to push California into bankruptcy and make those CDS bets pay off big. In fact just last year, the big banks made $1 billion in fees by selling off Obama-stimulus-backed Build America Bonds which were basically a way of massively overpaying bankrupt banks to lined up bankrupt cities and states with skittish investors to fund corrupt projects–like the San Francisco Bay Bridge modernization, which went from $1.8 billion to $13.6 billion, $8 billion just in interest. Good news is that Wall Street is making tons of money, which is always something to cheer–and of course, the bill is all being charged to regular car-driving suckers, who pay a $5 toll today to cross the bridge, up from $2 in 2003.

5). Journalism fraud. The Washington Post got caught whoring out their venerable editorial staff to corporate lobbyists for anywhere from $25,000 to $250,000 a date, depending on the access. The Atlantic Monthly admitted to TalkingPointsMemo that it routinely sold access to its editorial staff for cash. As for business journalism, all sorts of articles and studies have asked the obvious question: “How did every mainstream business outlet miss the financial collapse of 2008?” Among all the self-flagellating mea-kinda-culpas, you won’t find the word “fraud” in their answer. Speaking of business journalism and fraud, The Business Insider, one of the top business news blogs, published a pair of articles defending Goldman Sachs against the SEC fraud charges. The author of the articles defending Goldman Sachs is Business Insider’s co-founder and editor, Henry Blodget. In 2003, Blodget himself was charged with securities fraud by the SEC for repeatedly misleading clients into buying stocks of companies that in private emails Blodget referred to as “piece of shit.” Under the terms of Blodget’s settlement with the SEC, he agreed to a lifetime ban from the securities industry, and he paid $4 million in fines and disgorgements. Since he is not barred from the world of business journalism, Blodget was able to post an article last Friday headlined: “HOLD EVERYTHING: The SEC’s Fraud Case Against Goldman Seems VERY Weak.”

6). Fraudonomics K-12. If you want your kid to grow up to succeed in a fraud-based economy, you need to teach him the ABC’s of cheating starting at a young age. This is one area where America’s schools aren’t failing their students. Cheating is so rampant in schools that nowadays if the student doesn’t cheat on his exam, chances are his teacher or administrator will cheat on his test for him. One in five elementary schools in Georgia are currently being investigated for tampering with the students’ standardized test scores—although suspicious patterns of erasing and remarking answers showed up in half of the state’s elementary schools. In California, as many as two-thirds of its public schools admitted to fudging its students’ standardized test scores. A survey of graduate school students found that 53 percent of business school grad students admitted to cheating, more than any other grad school discipline. Overall, up to 98 percent of college students today admit to cheating, compared to just 20 percent who cheated in 1940.

7). Boardroom Fraud. Corporate America’s boardrooms are stacked up these days in tight, intertwined relationships that turn public companies into crime scenes, plundering money from unsuspecting shareholders and divvying up the loot among the directors and top executives. In 2008, Chesapeake Energy’s stock price collapsed from $74 per share to $9.84, wiping out $33 billion in shareholder value. The CEO, Aubrey McClendon, gambled and lost 94% of his stock in the company on a margin call, personally losing about $2 billion. So what did the board of directors do? They voted to award McClendon $112 million for 2008, the highest of any CEO in America. Shareholders were outraged, calling it a “bailout,” and several pension funds tried suing Chesapeake, but the courts in Oklahoma blocked the lawsuits. That’s because Aubrey McClendon is sort of the George Bush of Oklahoma—a spoiled fuck-up with a rich and powerful granddaddy—Robert Kerr, former governor and senator, and founder of Kerr-McGee—meaning plenty of VIP connections for the loser grandkid. So on Chesapeake’s board, you had Aubrey’s cousin, Breene Kerr; Frank Keating, Republican ex-governor of Oklahoma whose son Chip (and Chip’s wife) works for Chesapeake; Don Nickles, Republican ex-Senator of Oklahoma who co-funded with Aubrey the Republican anti-gay marriage campaign in 2004; Richard Davidson, the former head of Union Pacific, whose corrupt board of directors (which included the head of the US Chamber of Commerce) lavished Davidson with tens of millions in bonuses and a $2.7 million per year pension when he retired… Now multiply a board of directors like this by the sum total of “Corporate America” and you get…a corrupt, tin-pot corporate culture masquerading as a civilized First World corporate culture. That’s us. (You can read about this problem in an excellent new book Money For Nothing: How The Failure of Corporate Boards is Ruining American Business and Costing Us Trillions.)

8). Corrupt credit rating agencies. The only way big institutional investors like pension funds could justify buying a piece of the Orion Butt Fungus CDO pie was if ratings agencies like S&P or Moody’s gave it a top-notch seal of approval: AAA rated, with a little star on the forehead for good behavior. And in the world of fraudonomics, good behavior looks like this email from a Standard & Poor ratings analyst in December 2006:

“Rating agencies continue to create an even bigger monster _ the CDO market. Let’s hope we are all wealthy and retired by the time this house of cards falters.”

The happy ending to this story is that a huge percentage of thieving scum like this emailer saw their hopes become reality: they got wealthy and retired before the CDO market crashed in a trillion-plus dollar heap of shit. And if they didn’t retire, even better—because bonuses in 2009 were soaring, thanks to the always-gullible American taxpayer.

9). Regulatory Fraud: In the OTS, OCC, Fed, pension benefit guaranty agency and of course the SEC, where whistleblowers were routinely ignored because the regulators were too busy painting their monitors while surfing sites like

10). Judicial Fraud: Juvenile court judges in Pennsylvania took millions of dollars in kickbacks from privately run prisons in exchange for sentencing thousands of innocent kids to juvenile prison terms. Chronic on-the-bench masturbation is running rampant: an Oklahoma judge was accused of using a penis pump on the bench, while nearby in Texas, a Harris County judge masturbated and ejaculated on a defendant’s hand. Speaking of Texas, the entire juvenile prison system there was turned into a sex abuse racket involving Texas state officials–over 750 official complaints about prison administrators molesting or raping underaged inmates in all 13 juvenile facilities had been officially logged between 2000 and 2007.

The list goes on and on. Hell, even our literature was corrupted with fraud: James Frey’s addiction “memoir” A Million Little Pieces turned out to be A Million Pieces of Bullshit, the biggest literary fraud of our time. Fooled readers sued, Oprah chewed him out and Frey is now a bestelling “fiction” author. Frey was just one literary con-artist among many, recounting fake tales of street prostitution, being raised by wolves, even fake Holocaust memoirs (read John Dolan’s article about literary frauds).
This is just scratching the surface, but you get the point. We’re way past the point of redemption. No wonder everyone’s dreaming of a violent apocalypse to wipe the slate clean, and take us away to another plane where everything would be better. Anything but this.
Site Admin
Posts: 3068
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Corporate Greed and Pathology

Postby admin » Thu Jan 14, 2010 9:02 pm

How Psychological Pitfalls Generated
the Global Financial Crisis

Hersh Shefrin
Mario L. Belotti Professor of Finance
Santa Clara University
Santa Clara, California

Forthcoming in Voices of Wisdom: Understanding the Global Financial Crisis. Edited by
Laurence B. Siegel. Charlottesville, VA: Research Foundation of CFA Institute.

The root cause of the financial crisis that erupted in 2008 is psychological. In the events which
led up to the crisis, heuristics, biases, and framing effects strongly influenced the judgments and
decisions of financial firms, rating agencies, elected officials, government regulators, and
institutional investors. Examples involving UBS, Merrill Lynch, Citigroup, Standard & Poor’s,
the SEC, and end investors illustrate this point. Among the many lessons to be learned from the
crisis is the importance of focusing on the behavioral aspects of organizational process.

Holy about hitting the nail on the head Batman!! (advocate comments) I find it amazing to think of folks so "tuned in" to human behaviors.
Site Admin
Posts: 3068
Joined: Fri May 06, 2005 9:05 am
Location: Canada

Re: Corporate Greed and Pathology

Postby admin » Mon Jan 04, 2010 10:51 am

Winnipeg Free Press
January 4, 2010

The Canadian Press - ONLINE EDITION
Canada's 100 highest paid CEOs pocketed an of average $7.3 million in 2008
By: Romina Maurino, THE CANADIAN PRESS
3/01/2010 10:20 PM | Comments: 0

TORONTO - Canada's 100 highest paid CEOs pocketed an of average $7.3o million in 2008, the same year Canadians were hard hit by the emergence of the worldwide recession, according to a new report by the Canadian Centre for Policy Alternatives.
Economist Hugh Mackenzie, who authored the report, said that's 174 times more than the average Canadian wage.
And while the average compensation for the top CEOs outpaced inflation by 70 per cent between 1998 and 2008, people earning the average income lost six per cent to inflation over that period, he said.
"To put that in perspective, Canadians will work full-time throughout the year to earn the national average of $42,305," Mackenzie said.
"The top 100 CEOs pocket that amount by 1:01 p.m. on Jan. 4 - the first working day of the year."
Thomas Glocer of Thomson Reuters Corp. was the top earner with a total salary of $36.6 million, followed by the late Ted Rogers at $21.5 million.
Big bank executives were also on the list with healthy compensation, despite a federal government bank bailout in the form of mortgage purchasing that helped banks preserve their annual profit-making, the report said.
TD Bank CEO Edmund Clark made $11.1 million in 2008, while National Bank's Louis Vachon pocketed $10.5 million and Gordon Nixon of Royal Bank took home $9.6 million.
Richard Waugh of the Bank of Nova Scotia had total earnings of $9.2 million, William Downe of the Bank of Montreal made $6.4 million and CIBC's Gerry McCaughey had a salary of $6.3 million.
None of the CEOs from troubled automakers GM and Chrysler, which at the height of the economic crisis received billions in government bailouts, made it onto the list since those companies are U.S.-based.
Magna International chairman Frank Stronach, however, was No. 16 with earnings of $10.8 million in 2008.
Mackenzie said in an interview he was surprised at how high the compensation was given what happened to the economy in 2008, adding that several corporations have either two or three executives who share the chief executive title - and all two or three can make the list.
"If you rolled up some of those double and triple counts you'd have some pretty stratospheric numbers for what executives are paid," he said.
The numbers, he added, also showed quite a bit of resilience in the face not only of the downturn of the economy but also "increasing criticism of the corporate executive pay system, both from significant political leaders and from... leaders within the business academic community."
"In a year in which we dropped into the biggest recession since the '30s, (you'd think) you would have seen executive compensation go down," said Mackenzie.
"Yet we still saw the top 100 get an average of $161,000 a year in bonuses related to stock options and much more than that in stock grants."
Rupert Duchesne of Groupe Aeroplan Inc. was in the 100th spot with earnings of $3.2 million.
Here is a list of their salaries, from highest to lowest, as compiled by the Canadian Centre for Policy Alternatives:
-Thomas Glocer, Thomson Reuters Corp. $36.6 million.
-Ted Rogers, Rogers Communications Inc. $21.5 million.
-J. M. Lipton, Nova Chemicals Corp. $19.8 million.
-George Cope, BCE Inc. $19.6 million.
-Robert Brown, CAE Inc.$17.3 million.
-William Doyle, Potash Corp. of Saskatchewan $17 million.
-Hunter Harrison, Canadian National Railway Co. $13.4 million.
-Dominic D'Alessandro, Manulife Financial Corp. $13.3 million.
-Stephen Wetmore, Bell Aliant Regional Com. Income Fund $11.6 million.
-Serafino Iacono (co-chairman), Pacific Rubiales Energy Corp. $11.3 million.
-Miguel de la Campa (co-chairman), Pacific Rubiales Energy Corp. $11.3 million.
-Jeffrey Orr, Power Financial Corp. $11.3 million.
-Jean Claude Gandur, Addax Petroleum Corp. $11.2 million.
-Edmund Clark, Toronto-Dominion Bank $11.1 million.
-Tye Burt, Kinross Gold Corp. $11.1 million.
-Frank Stronach (Chairman), Magna International Inc. $10.8 million.
-Louis Vachon, National Bank of Canada $10.5 million.
-Randall Eresman, EnCana Corp. $10.3 million.
-Gordon Nixon, Royal Bank of Canada $9.6 million.
-Ron Brenneman, Petro-Canada $9.2 million
-Richard Waugh, Bank of Nova Scotia $9.2 million.
-Michael Wilson, Agrium Inc. $9.2 million.
-Gregory Wilkins, Barrick Gold Corp. $8.9 million.
-John A Manzoni, Talisman Energy Inc. $8.8 million.
-Allan Leighton, Loblaw Cos. Ltd./Weston $8.8 million.
-Kevin McArthur, Goldcorp Inc. $8.7 million.
-Craig H. Muhlhauser, Celestica Inc $8.7 million.
-Harold Kvisle, TransCanada Corp. $8.6 million.
-Eugene C. McBurney, (Chairman) GMP Corp. $8.3 million.
-Jim Shaw, Shaw Communications Inc. $8.2 million.
-Richard George, Suncor Energy Inc. $8 million.
-Pierre Beaudoin, Bombardier Inc.$7.8 million.
-Richard J. Harrington, Thomson Reuters Corp. $7.8 million.
-D.A. Loney, Great-West Lifeco Inc. $7.3 million.
-Pierre Peladeau, Quebecor Inc. $7 million.
-James Kinnear, Pengrowth Energy Trust $6.9 million.
-Darren Entwistle, TELUS Corp. $6.9 million.
-Stephen Snyder, TransAlta Corp. $6.9 million.
-Donald Stewart, Sun Life Financial Inc. $6.6 million.
-Robert A. Milton, ACE Aviation Holdings Inc. $6.6 million.
-Donald Lindsay, Teck Cominco Ltd. $6.5 million.
-Peter Munk, Barrick Gold Corp. $6.5 million.
-Patrick Daniel, Enbridge Inc. $6.5 million.
-William Downe, Bank of Montreal $6.4 million.
-Nancy Southern, Atco Ltd./Canadian Utilities Ltd. $6.3 million.
-Gerry McCaughey, Canadian Imperial Bank of Commerce $6.3 million.
-Jacques Lamarre, SNC-Lavalin Group Inc. $6.3 million.
-Charles Fischer, Nexen Inc. $6.2 million.
-Bruce Aitken, Methanex Corp. $5.9 million.
-Donald Walker, Magna International Inc.$5.9 million.
-Jurgen Schreiber, Shoppers Drug Mart Corp. $5.9 million.
-Edward M. Siegel Jr., Russel Metals Inc. $5.8 million.
-Siegfried Wolf, Magna International Inc. $5.7 million.
-David Goodman, Dundee Wealth $5.6 million.
-Mario Longhi, Gerdau Ameristeel Corp. $5.6 million.
-Ronald Pantin, Pacific Rubiales Energy Corp. $5.5 million.
-Allen Chan, Sino-Forest Corp. $5.3 million.
-Geoffrey T. Martin, CCL Industries $5.3 million.
-Sean Boyd, Agnico-Eagle Mines Ltd. $5.3 million.
-Scott Saxberg, Crescent Point Energy Trust $5.3 million.
-Ian Greenberg, Astral Media Inc. $5.3 million.
-Paul Desmarais Jr., Power Corp. of Canada $5.2 million.
-James Balsillie, Research in Motion Ltd. $5.2 million.
-Michael Lazaridis, Research in Motion Ltd. $5.2 million.
-Andre Desmarais, Power Corp. of Canada $5 million.
-Francois Coutu, Jean Coutu Group $4.9 million.
-Jay Hennick, FirstService Corp. $4.8 million.
-John Lau, Husky Energy Inc. $4.8 million.
-Frederic Green, Canadian Pacific Railway Ltd. $4.7 million.
-John Macken, Ivanhoe Mines Ltd. $4.7 million.
-Steve Laut, Canadian Natural Resources Ltd. $4.6 million.
-Peter R. Jones, HudBay Minerals Inc. $4.6 million.
-Gerald Grandey, Cameco Corp. $4.6 million.
- Marc Tellier, Yellow Pages Income Fund $4.6 million.
-Mayo M. Schmidt, Viterra Inc. $4.5 million.
-Marvin F. Romanow, Nexen Inc. $4.5 million.
-M.H. McCain, Maple Leaf Foods Inc. $4.4 million.
-Keith A. Carrigan, BFI Canada Ltd. $4.4 million.
-Alain Bedard, TransForce Inc. $4.3 million.
-Wm. Wells, Biovail Corp. $4.3 million.
-Gerald Schwartz, Onex Corp. $4.3 million.
-Raymond McFeetors, Great-West Lifeco Inc. $4.2 million.
-Ellis Jacob, Cineplex Galaxy Income Fund $4.1 million.
-Robert S Pritchard, Torstar Corp. $4.1 million.
-Michael Waites, Finning International Inc. $4.1 million.
-Stephen H. Sorenson, Uex Corp $4 million.
-B.H. March, Imperial Oil Ltd. $4 million.
-Charles Jeannes, Goldcorp Inc. $4 million.
-Luc Desjardins, Transcontinental Inc. $4 million.
-Stanley Marshall, Fortis Inc. $3.9 million.
-Peter Marrone, Yamana Gold Inc. $3.9 million.
-Marcel Coutu, Canadian Oil Sands Trust $3.7 million.
-Kevin Loughrey, Thompson Creek Metals Co. Inc.$ 3.7 million.
-Thomas Gauld, Canadian Tire Corp. $3.6 million.
-Brett Herman, TriStar Oil & Gas Ltd. $3.6 million.
-S. Defalco, MDS Inc. $3.5 million.
-W.P. Buckley, ShawCor Ltd. $3.5 million.
-D.L. Rogers, Sears Canada Inc. $3.5 million.
-Edward Sonshine, RioCan REIT $3.4 million.
-Rupert Duchesne, Groupe Aeroplan Inc. $3.2 million.
Source: The Canadian Centre for Policy Alternatives.
This article has not yet been rated.
We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high. If you thought it was well written, do the same. If it doesn’t meet your standards, mark it accordingly.
You can also register and/or login to the site and join the conversation by leaving a comment.

Create and embed a Winnipeg Free Press breaking news widget on your site or blog

Winnipeg Free Press on Facebook
Site Admin
Posts: 3068
Joined: Fri May 06, 2005 9:05 am
Location: Canada


Return to Click here to view forums

Who is online

Users browsing this forum: No registered users and 1 guest