For more information, see this week’s Research Report.

by Rushworth M. Kidder

As Barack Obama takes the nation’s helm, his greatest challenge can be summed up in a single word: ethics.

Really? Not economics? No. The nation’s economic crisis already has outgrown itself. The financial recession has morphed into an ethics recession. Increasingly, as the Madoff case makes clear, the core issue is no longer money and wealth, but character and integrity.

On the surface, of course, Obama’s task will be to bring together the fiscal wizards who can rekindle markets and grow assets. But the underlying challenge will be to find wizards of integrity — canny financial minds imbued with the moral authority to rebuild the nation’s shattered sense of responsibility. The goal is not just to get people to spend. It’s to get them to trust — a requirement for any market to function.

Fortunately, Obama’s greatest resource can also be summed up as ethics. He comes into office on a surge of public goodwill rooted in the perception of his moral character. A November Harris Poll found that 51 percent of voters pegged moral values as “very important in deciding which candidate to vote for.” Asked what they meant by “moral values,” most voters pointed to such personal characteristics as honesty and integrity, rather than to social or religious issues (like same-sex marriage or abortion) or political issues (like immigration or the Iraq war). The strength of that goodwill, evident in the crowds converging on Washington for this week’s inauguration, is evident also in the numbers. The Gallup Organization’s polling last week put Obama’s approval rating at 78 percent, up 10 points since the November election and easily eclipsing the pre-inaugural favorables for George W. Bush (62 percent in January 2001) and Bill Clinton (66 percent in 1993).

It shouldn’t surprise us, of course, that a public deeply troubled by an unprecedented ethics recession is hungering for a leader of integrity. But are his admirers endowing him with impossible attributes? Are they holding him to unattainable standards? Are they setting him up for failure?

I don’t think so, largely because Obama may be one of our most transparent presidents. Unlike Lyndon Johnson or Richard Nixon, there doesn’t appear to be any dark undercurrent swirling below a sociable surface. Nor does he seem to have difficulties aligning reality with truth-telling (Clinton’s challenge) or with ideology (Bush’s problem). To be sure, Obama’s transparency has been heightened by the dissection he endured under the microscope of an exhaustive campaign, but it also grows out of his very nature. Although he possesses one of the most intelligent and nuanced political minds of our era, he appears to be, paradoxically, a surprisingly uncomplicated thinker — dedicated to clarity, decidedly principled, and determinedly pragmatic.

But what about the moral landscape he’s entering? Are the challenges simply too daunting, too demanding of compromise, too corrosive of integrity? Not if he and his administration grasp three things:

1. Given the public’s mood, the issues he faces will need to be framed in moral terms. No solution will feel complete unless it is articulated in the language of ethics and integrity. The argument can’t be phrased in the old ideological polarizations of talk radio (”I’m absolutely right, so therefore you’re dead wrong and stupid to boot!”). It must be delivered in the new language of right-versus-right thinking, where each side receives a fair hearing and the dignity of civil discourse is respected.
2. Such thinking requires penetrating moral analysis of the world’s toughest dilemmas. Some, like the pending question of whether Israel committed war crimes during its invasion of Gaza, will center on the age-old tension between justice and mercy. Others, like the economic bailout, will devolve into questions of short-term benefits versus long-term needs. Still others, like the war in Afghanistan, will focus on the difference between the truth on the ground and the loyalty to certain leaders, policies, or positions. Finally, a wide range of issues — healthcare among them — will pit the needs of the individual against the rights of the community. Such issues can’t be addressed as black-and-white, right-versus-wrong problems; whichever side you’re on, the other side has too much moral credibility to be ignored or shouted down.
3. Resolving these dilemmas requires a consistent set of resolution principles. Under Clinton, the tendency was toward an ends-based, utilitarian principle, where ethics meant that you did the greatest good for the greatest number. In the Bush administration, the decision making was more rule-based, Kantian, and ideological: You invoked whatever precept you wanted everyone to follow, with less regard for immediate consequences. Obama well may draw on his empathetic, community-organizing days to invoke a care-based principle of reciprocity and the Golden Rule, asking what he would want others to do to him.

Given the ethics landscape, this is no country for moral cowardice. The world Obama campaigned in last spring has lost its moorings. It’s searching desperately for its self-confidence, its trust in others. It’s ready for an ethics revolution, not just an inauguration.

©2009 Institute for Global Ethics

Questions or comments? Write to newsline@globalethics.org.

A reader reacts to last week’s commentary about apportioning blame to those involved in the Madoff scandal:

My personal story reflects at the most micro level what happens when we mistake money for value. With my stockbroker, I traded modestly and esoterically — he sometimes joked that he would get me a t-shirt stating, “I am the market.” My small gains — low five-figure amounts from month to month — enabled me to make modest home improvements and donate generously to my church and other causes with which I sympathized. It made me giddy. It made me smug. My money was making money, and I wasn’t squandering it; I was using it for good.

But pride and greed, like pregnancy, don’t come in degrees. You either are or you aren’t. My pace quickened when I saw the zeros extend, and the reason was digital, not moral. In September, my losses swallowed the six-figure assets it had taken me decades to amass and as well took me deep into margin.

Guilt and blame ill-fit the humble lady on Main Street, but pride and greed nevertheless caught her up in their merry game. We love to be clever. We love thinking we’re special. Did I bother to scrape at the shiny film to find if there was a moral issue at stake? Did I lump together the components of ethics rather than place them piece by piece on the table for close inspection and assimilation?

All of us — me and my mad money; Madoff’s accomplices and victims — must take full responsibility for taking pride in patronage, pride as we see the gap widen between us and the masses. Pride links arms with greed and forms the chain that binds us to a Madoff.

– Sharon Cooper
Des Moines, Washington

Another writer comments on what may be a different level of culpability when comparing classes of investors who placed their money with Madoff:

Perhaps there’s a useful distinction to be made between the legal culpability of institutions (purporting to be accredited, professionally competent, etc.) that invested money from investors who were unaware that the institution they were dealing with was investing with Madoff versus those who, acting on their own, foolishly invested their own money directly with Madoff (without legal culpability).

Interesting question!

– Robert Fles
Philadelphia, Pennsylvania

– Compiled by Ethics Newsline® editor Carl Hausman

“We tortured Qahtani.”

– Retired judge Susan J. Crawford, breaking with the Bush administration’s repeated denials of torturing detainees, in an interview with journalist Bob Woodward. Crawford serves as the “top Bush administration official in charge of deciding whether to bring Guantánamo Bay detainees to trial,” reports the Washington Post.

Mohammed al-Qahtani is believed to have been the missing “20th hijacker” in the 9/11 attacks. While Crawford believes Qahtani to be a terrorist threat, she said she declined to refer his case for prosecution because “his treatment met the legal definition of torture,” she told Woodward in the Post.

The U.S. military interrogated Qahtani with techniques “that included sustained isolation, sleep deprivation, nudity and prolonged exposure to cold, leaving him in a ‘life-threatening condition,’” reports Woodward. Qahtani’s lawyers say his treatment has rendered him suicidal and too broken for trial.

Sources: Washington Post, Jan. 14 — New York Times, Jan. 14 — AP, Jan. 14.

Estimates put the death toll at 13 Israelis and 1,300 Palestinians, with children constituting at least a third of the dead; U.N. being pressured to investigate for war crimes

VARIOUS DATELINES
Rocket attacks by Hamas and Israel’s invasion of Gaza are raising ethics questions on the world stage about whether either side in the conflict is committing war crimes.

The Voice of America reports that while civilian casualties in war are nothing new, critics are saying that combatants in the current conflict are avoiding their moral responsibility to minimize them as much as possible.

“Where you have war, you have war crimes. And the only question is how many, how frequent and how serious,” attorney Jonathan Drimmer, a specialist in international law who teaches at Georgetown University, told VOA. “Hamas seems to be using human shields. Israel seems to be taking the bait. Whether they are doing so in a way that violates the laws of war is a little bit less clear.”

Israel’s actions have been sharply criticized by the International Red Cross, Amnesty International, and Human Rights Watch. In addition the “U.N.’s senior human rights body approved a resolution … condemning the Israeli offensive for ‘massive violations of human rights,’” reports the Guardian.

Before the weekend ceasefire was declared, estimates put the death toll at 13 Israelis and 1,300 Palestinians. “At least a third of those killed were children, according to Gaza Health Ministry figures that the United Nations deems credible,” reports the Los Angeles Times.

Late last week, Arab and Muslim leaders meeting in Qatar accused Israel of “crimes of war and genocide,” according to the Agence France-Presse.

But many Israelis insist that Israel has taken extraordinary measures during the fighting in Gaza to prevent civilian casualties, saying Hamas bears the blame for using civilian shields.

According to a BBC analysis, while public opinion in Israel has remained firmly in support of the offensive against Hamas, the “harrowing pictures of the aftermath of the conflict have raised a clamor of criticism elsewhere in the world and divided Jewish opinion overseas.” The BBC cites recent demonstrations by Jewish protestors in Britain, Canada, and the United States.

Sources: Los Angeles Times, Jan. 19 — BBC, Jan. 19 — Washington Post, Jan. 19 — New York Times, Jan. 18 — Voice of America, Jan. 17 — BBC, Jan. 17 — AFP, Jan. 16 — Jerusalem Post, Jan. 15 — Guardian, Jan. 13.

For more information, see: Related Newsline story, Aug. 11, 2008 — Related Newsline story, July 24, 2006 — Related Newsline story, July 24, 2006 — Related Newsline story, April 3, 2006 — Related Newsline story, Mar. 27, 2006.

Interior designate says he will clean up scandal-plagued department; attorney general nominee says waterboarding is torture; Hillary Clinton hits minor turbulence as Republicans question potential conflicts of interest

WASHINGTON
Ethics figured in the confirmation hearings of several nominees for positions in Barack Obama’s incoming cabinet. Among the issues:

• Colorado senator and Interior Department secretary-designate Ken Salazar vowed last week to fix one of the government’s most ethically troubled departments, reports the Denver Post. During his confirmation hearing, Salazar said his “first and foremost task will be to restore the integrity of the Department of Interior and to bring the highest level of ethics back to the functions of this critical department,” which was hammered last year in a sprawling scandal replete with kickbacks, drugs, and sex between Interior workers and those they are supposed to regulate.
• Eric Holder, Barack Obama’s nominee for U.S. attorney general, last week broke with the Bush administration’s repeated equivocating, unambiguously stating that waterboarding is torture. “If you look at the history” of waterboarding, Holder said, “we prosecuted our own soldiers for using it in Vietnam. “Holder said he would conduct an immediate “damage assessment” within the Justice Department, reports the Chicago Tribune.
• Hillary Clinton sailed through the first rounds of her confirmation hearings last week, but was questioned on potential conflicts of interest with her husband’s fundraising work, reports the Associated Press. Senator Richard Lugar, an Indiana Republican who is the senior minority member of the Foreign Relations Committee, suggested that Bill Clinton’s foundation should reject any future overseas contributions and take other steps to increase its transparency. Sen. Clinton rejected that suggestion, saying her agreement to publish a list of the foundation’s donors and alert ethics officials to potential conflicts eliminates any problems.

Sources: Denver Post, Jan. 17 — Chicago Tribune, Jan. 16 — AP, Jan. 15.

For more information, see: Related Newsline story, Jan. 5 — Related Newsline story, Dec. 15, 2008 — Related Newsline story, Nov. 17, 2008 — Related Newsline Commentary, Nov. 10, 2008 — Related Newsline story, Nov. 10, 2008.

Apple’s chief takes a medical leave after months of denial that his health is declining; many feel that because he is so closely linked with the firm’s creative vision, Steve Jobs should be required to release more information

NEW YORK
Speculation about the health of Apple CEO Steve Jobs has raised ethics questions about whether the heads of publicly traded firms have a right to medical privacy.

CNBC reports that the issue is on the minds of many investors after Apple announced that Jobs will take a leave of absence until the end of June due to heath problems “more complex” than originally thought.

Writes CNBC’s Lee Brodie: “Jobs, a pancreatic cancer survivor, dropped his bombshell in a cryptic announcement on Wednesday — only nine days after he soothed jumpy investors somewhat by saying his dramatic weight loss over the past seven months was due to an easily treatable hormone imbalance. He had promised to remain at the helm throughout his treatment.”

For several months, Apple insisted that Jobs’s health was a private matter with no impact on the firm, releasing little information, reports CNET.

While there are no hard-and-fast legal guidelines about disclosing CEO health, CNET’s Steven Musil maintains that any health issue affecting a CEO’s ability to run the company needs to be disclosed to the board of directors and the public.

The problem at Apple, reports ABC News, is that Jobs is closely associated with Apple’s creative vision. His announcement in the last week sent the company’s stock down several points.

Kirk Hanson, at ethicist at California’s Santa Clara University, tells ABC that Jobs is a unique CEO, arguing that “his health affects the interest of so many other people that he gives up some of his right to privacy.”

Jobs’s health has captured media attention partly because Apple has been coy about releasing information, says Fortune senior editor Roger Parloff. “The Apple board appears to have consistently bowed to Steve Jobs’ desire to keep his health issues private. Accordingly, the board has kept investors informed about these matters — to paraphrase a line from the play A Thousand Clowns – primarily by means of rumor. Some have argued that the board’s conduct has actually been illegal or, if it isn’t, ought to be made so in the future,” Parloff writes.

Sources: CNN/Fortune, Jan. 16 — CNBC, Jan. 16 — CNET, Jan. 16 — ABC News, Jan. 16.

For more information, see: Related Newsline story, Nov. 3, 2008 — Related Newsline story, Oct. 14, 2008 — Related Newsline story, Aug. 4, 2008 — Related Newsline story, Jan. 16, 2007 — Related Newsline story, Jan. 2, 2007.

It appears that his firm may never have executed a single real trade, according to press reports; also, there is considerable outrage over the decision that allows him to remain free on bail

NEW YORK
There were several new developments in the unfolding story of what appears to be one of the biggest swindles in history. Among the Bernard Madoff coverage:

• The extent of the fabrications engineered by Bernard Madoff became more clear last week after it was revealed that authorities believe he may never have executed even a single trade with his supposed investment fund. The New York Daily News reports that if this is true, statements sent to investors were complete fabrications — something perhaps not surprising given the underlying structure of the alleged Ponzi scheme.
• A judge’s decision to allow Madoff to remain free on bail comes with strings attached, CBS News reports. He cannot transfer assets, must provide an inventory of everything in his Manhattan apartment, and must let authorities open and review all his mail.
• The fact that Madoff was allowed to stay in his luxury apartment outraged many who want him jailed — or worse. According to Boston Globe columnist Scott Burns, more than 3,000 readers have contacted him with suggested punishments, ranging from enforced poverty, imprisonment in Guantánamo, and even the death penalty. Many readers posited that it was unfair for someone to receive five to 10 years in prison for robbing a store while a white-collar crime can incur a lighter penalty yet be much more devastating. According to Burns’s calculations, the dollar value of Madoff’s alleged crime is equal to three full years’ worth of property crimes in America.

Sources: New York Daily News, Jan. 17 — CBS, Jan. 16 — Boston Globe, Jan. 15.

For more information, see: Related Newsline Commentary, Jan.12 — Related Newsline story, Jan. 12 — Related Newsline Commentary, Jan. 5 — Related Newsline story, Jan. 5 — Related Newsline story, Dec. 22, 2008.

WIPRO barred from doing business with World Bank; it’s the second major incident to erupt in as many weeks, and observers worry the news may endanger a trillion-dollar industry

NEW DELHI
Recent scandals in India’s technology industry have triggered new scrutiny of the country’s ethics practices and standards.

In the most recent development, WIPRO, one of India’s biggest computer outsourcing firms, was blacklisted by the World Bank for allegedly providing “improper benefits” to Bank staff, reports Forbes.

The Bangalore-based group confirmed it was banned from dealing with the World Bank for four years, according to the Hindu newspaper.

Bloomberg reports that the Bank made the prohibition after World Bank staffers allegedly were offered shares of stock for the firm’s initial share sale in the United States. The action, along with a list of other companies blacklisted, was made public last week.

The news was the second major blow for India’s outsourcing industries. Two weeks ago, Satyam faced controversy after its chairman, Ramalinga Raju, admitted cooking the company’s books for several years, reports Forbes.

It also was revealed last week that Satyam is on the list of firms blackballed from doing business with the World Bank, notes Forbes.

The Washington Post notes that while many in India contend that the Satyam fraud is “an aberration, they concede that cleanup is overdue and that the global image of ‘corporate India,’ which fuels a trillion-dollar economy, is at stake.”

The Post continues: “The scandal has raised fears that there could be other skeletons lurking in Indian corporate practices and comes as the global financial crisis has renewed discussion among business leaders about moving to international financial reporting standards by 2011.”

Experts interviewed by the Post contend that ethics and corporate governance, once considered a boring topic in India, now are holding the interest of business leaders.

Sources: Hindu, Jan. 15 — Financial Times, Jan. 15 — Bloomberg, Jan. 14 — Forbes, Jan. 12 — Washington Post, Jan. 10.

For more information, see: Related Newsline story, Jan. 12 — Related Newsline story, Dec. 22, 2008 — Related Newsline Commentary, Aug. 4, 2008 — Related Newsline story, June 30, 2008 — Related Newsline story, Jan. 28, 2008.

The condition is sometimes linked with high achievement; some worry that the test could screen out geniuses

CAMBRIDGE, England
British scientists announced last week that they have developed a test that may enable a pre-birth screening for autism — a prospect that immediately sparked controversy in the European press.

Professor Simon Baron-Cohen, who developed the test, told the London Independent that there should be a vigorous ethics debate on this issue.

“Would [a test] be desirable?” he asked, according to the Independent. “What would we lose if children with autistic spectrum disorder were eliminated from the population? There is a test for Down’s syndrome, and that is legal, and parents exercise their right to choose termination. But autism is often linked with talent. It is a different kind of condition.”

Part of the problem, according to the U.K. Guardian: It is thought that many mathematics and engineering giants may very well have been autistic, as the condition is sometimes seen in people with very high skill development in certain areas but minimal skill at interaction.

Writing in a Times of London opinion piece, journalist Mangus Linklater suggests, “So if we found a test for autism, and gave parents the opportunity of aborting the fetus, we might eliminate not just an unwanted and difficult child but a potential genius.”

Sources: Independent, Jan. 13 — Guardian, Jan. 13 — Daily Mail, Jan. 13 — Times of London, Jan. 12.

For more information, see: Related Newsline story, Nov. 3, 2008 — Related Newsline story, Sep. 22, 2008 — Related Newsline story, Dec. 17, 2007 — Related Newsline story, Aug. 15, 2006.

The New York Times’s Nicholas Kristof defends sweatshops, profiling scavengers at a Cambodian landfill who long for a factory job

PHNOM PENH, Cambodia
New York Times columnist Nicholas Kristof used his tour of a garbage dump in Cambodia — a festering landfill where children scavenge for food and scraps of plastic they hope to resell — to defend sweatshops and suggest that Barack Obama and his economic team consider the real-life scene before formulating new trade standards.

In a column titled “Where Sweatshops are Only a Dream,” Kristof argues that “Mr. Obama and the Democrats who favor labor standards in trade agreements mean well, for they intend to fight back at oppressive sweatshops abroad. But while it shocks Americans to hear it, the central challenge in the poorest countries is not that sweatshops exploit too many people, but that they don’t exploit enough.”

Kristof maintains that while many are rightly repelled by the idea of importing products made by “poorly paid, barely legal workers in dangerous factories,” banning sweatshops would cut off a vital avenue of escape from grinding poverty.

“When I defend sweatshops,” Kristof writes, “people always ask me: But would you want to work in a sweatshop? No, of course not. But I would want even less to pull a rickshaw. In the hierarchy of jobs in poor countries, sweltering at a sewing machine isn’t the bottom.”

Source: New York Times, Jan. 15.

For more information, see: Related Newsline story, Jun 23, 2008 — Related Newsline story, Nov. 5, 2007 — Related Newsline story, Aug. 20, 2007 — Related Newsline story, Aug. 21, 2006 — Related Newsline story, Sep. 19, 2005.

“Crime fighting, Medicare, national parks, Social Security, and defense have the strongest public support”

From Harris Interactive:

“A new study finds that public support for government services is substantially higher than it was in 2005. However, the level of support varies greatly from service to service. The services supported by the most people are crime fighting and prevention, Medicare, the national parks, Social Security and defense.

“The most widely supported services are:

• “Crime-fighting and prevention (57% support it ‘a great deal’ and fully 91% support it ‘a great deal’ or ’somewhat’)
• “Medicare (63% and 90%)
• “National parks (46% and 88%)
• “Social Security (60% and 88%)
• “Defense (53% and 85%)
• “Unemployment benefits (44% and 83%)
• “Federal aid to public schools (49% and 83%)
• “Environmental protection (42% and 81%)

“Of the 13 services listed, only one, foreign aid, was supported ‘a great deal’ (9%) or ’somewhat’ (32%) by less than half of all adults….

“For every one of 13 services that were asked about in 2005 and in this new Harris Poll, the percentage of people supporting them (’a great deal’ or ’somewhat’) has increased over the last three years.

“The biggest increases in support are for:

• “Intelligence services, up to 18 points to 79%
• “Immigration and naturalization, up 17 points to 64%…

“The changes between December 2005 and December 2008 are very striking. We believe that they reflect a more positive attitude to government in general now compared to three years ago.

“A major reason for this change is surely a decline in the belief that ‘government is the problem’ and a stronger belief that ‘government is part of the solution’ — as a result of the economic and financial crisis, and discussion of government plans to ‘bail out’ or ‘rescue’ the banks and the auto industry, and of the need for a government stimulus program to generate economic recovery….”

For the full press release from Harris, Jan. 13, click here .

“Moral courage is a rarer commodity than bravery in battle or great intelligence. Yet it is the one vital quality for those who seek to change a world that yields most painfully to change. And those with the courage to enter the moral conflict will find themselves with companions in every corner of the globe.”

– Robert F. Kennedy (U.S. senator and attorney general, 1925-1968)