Majority Supports Government Efforts to Limit Exec Pay
Jun 22nd, 2009 • Posted in: Statline
For more information, see this week’s Research Report.

For more information, see this week’s Research Report.
by Rushworth M. Kidder
Over breakfast last week with several senior Washington-based analysts, we got talking about America’s moral character. One of them, after sketching out the greed and corruption underlying the current recession, concluded with a personal assertion.
“I don’t think anybody is honest anymore,” he said flatly.
It was said less in anger than in sadness, reflecting the disappointment of a lover of humanity more than the triumphalism of a cynic. He wasn’t arguing, as cynics would, that the very idea of goodness is an illusion. He just felt that, at every turn, people seemed ready to ignore or abuse goodness for their own selfish ends.
There’s nothing new about this argument. It surfaces among the ancient Greeks. It finds expression in Thomas Hobbes’s view that men in a state of nature, unmediated by government, are condemned to lives that are “solitary, poor, nasty, brutish, and short.” How to address it remains a key task of the world’s major religions. And how deeply it’s believed will determine how the citizens of any nation view one another along a scale stretching from suspicion to trust.
So I won’t try to refute it in a brief column. Instead, let me offer three recent global news items I wish I’d thought of that morning, all touching on the goodness of young people:
You can of course quibble about these issues. At Harvard, are students signing up because, as the Economist notes, many graduates “see non-profit and government jobs as their best bet” in a drooping corporate economy and think that “embracing the ‘values agenda’ could prove useful”? In Indonesia, where’s the evidence that youthful peer pressure, making it cool to be honorable in the cafes, will translate into an adult willingness to resist bribes worth thousands of times more than a bag of chips? In Tehran, is this just the hacker mentality at work among students who salivate at the chance to prove they can outwit their enforcers?
These are valid reservations, no doubt holding true for some young people. But I sense the makings of a larger trend toward honesty. Perhaps it has to do with the widely documented ethical lapses that led us into the current global recession. Perhaps it’s a reaction to the excesses of me-first materialism, coupled with a dimming of the life of the mind, that characterized recent decades. Perhaps it’s a sense of communal guilt at what we’ve done to ourselves — “Th’ expense of spirit in a waste of shame,” as Shakespeare called it. Or perhaps it’s simply that, as survey data shows, the coming generation expects to have a lower living standard but a higher moral standard than its elders.
Whatever the reason, I’d be hard pressed to make the case that honesty has rotted out. Yes, there’s a bumper crop of moral outrage. But if the choice is between that and moral apathy, I’ll take the former any day. A citizenry that has lost its capacity for outrage has lost its moral compass. And yes, it’s easy to lose heart under the journalistic jackhammer of bad-ethics headlines. But look what happens when we dig a little deeper. When the next generation of leaders is signing on to ethics oaths, paying for snacks on the honor system, and demanding electoral honesty, I’m a long way from being dispirited. Which, of course, is what I should have said over breakfast.
©2009 Institute for Global Ethics
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“On the record before us, there is no reason to deny access to the evidence and there are many reasons to provide it, not least of which is a fundamental concern in ensuring that justice has been done.”
– U.S. Supreme Court justice John Paul Stevens, dissenting in last week’s ruling that rejects the right of prisoners to examine DNA evidence that may clear their name, as reported in the Washington Post.
The 5-4 majority opinion, authored by chief justice John Roberts, admitted that new DNA testing technology offers an “unparalleled ability both to exonerate the wrongly convicted and to identify the guilty,” but then said such resources can remain off limits to prisoners while state legislatures consider the issue.
Source: Washington Post, June 19.
For more information, see: AP, June 18 — New York Times, June 18 — Related Newsline Research Report, Nov. 17, 2008 — Related Newsline story, Nov. 19, 2007.
Critics say proposal would concentrate too much power in the Fed and overreach government’s authority; backers argue such protections could have prevented current economic meltdown
WASHINGTON
President Obama’s plan to more closely regulate financial risk last week prompted ethical debate over how large a role the government should assume in protecting consumers.
Obama framed the issue in moral terms, saying enhanced regulation was called for because “a culture of irresponsibility took root from Wall Street to Washington to Main Street, ” reports the New York Times. “A regulatory regime basically crafted in the wake of a 20th century economic crisis — the Great Depression — was overwhelmed by the speed, scope, and sophistication of a 21st century global economy,” Obama said.
But critics say Obama’s plan, which essentially consolidates regulatory power in the Federal Reserve, gives too much power to the Fed — an agency that has been blamed for past recessions after detractors say it missed early warnings of looming problems.
Sen. Christopher Dodd (D-Conn.), who chairs the Banking Committee, said consolidating power in the Fed “is like a parent giving his son a bigger, faster car right after he crashed the family station wagon,” UPI reports.
The proposed super-agency residing in the Fed would be called the Consumer Financial Protection Agency and would have broad authority over consumer-oriented financial products, such as mortgages and credit cards. Obama’s blueprint for the agency says it will play a “leading role” in educating consumers about finance and ensure that financial products such as mortgages are offered in simplified, “plain vanilla” forms, according to Consumer Reports.
Executives of banks and other financial institutions characterized the proposal as overreaching. But proponents, such as Dean Baker of the Center for Economic and Policy Research, counter with the claim that such an agency could have prevented the most damaging abuses in the subprime real estate market and consumer lending.
“It is not hard for an expert in finance to devise financial instruments that most people cannot understand,” Baker told PBS’s “NewsHour.” “By blocking this path to profitability, these reforms, if effectively applied, will lead to a more efficient financial industry. The country does not benefit from having people at Goldman Sachs and Morgan Stanley spending their time devising ways to rip off small city school districts with auction rate securities.”
Sources: New York Times, June 19 — UPI, June 19 — Consumer Reports, June 18 — PBS’s “NewsHour,” June 18.
For more information, see: Related Newsline story, June 15 — Related Newsline story, June 15 — Related Newsline story, May 25 — Related Newsline story, May 4.
Are medical schools hygienic in separating marketing and education? Should prisoners have the right to DNA testing? Are “brain boosting” drugs immoral or just part of humanity’s continuing quest for improvement? Should wife be allowed to make decisions about life support for the man who allegedly killed her children?
VARIOUS DATELINES
Issues in medicine and the life sciences raised a number of ethics questions in last week’s press coverage. Among them:
Sources: Independent, June 19 — Houston Chronicle, June 18 — TIME, June 19 — Wall Street Journal, June 16.
For more information, see: Related Newsline story, June 1 — Related Newsline story, Apr. 13 — Related Newsline story, Mar. 16 — Related Newsline story, Mar. 16 — Related Newsline story, Mar. 9.
Job seekers in Montana city asked to provide passwords for blogs and social-media accounts; recording piracy case concludes with whopping damages assessment; congressional testimony reveals that very few Web users opt out of privacy collection; a researcher is writing computer code for a robot code of ethics
VARIOUS DATELINES
Some intriguing junctions of morality and technology were featured in press reports last week. Among them:
Sources: U.S. News & World Report, June 19 — KTVQ, Billings, Montana — Wired, June 18 — Forbes, June 18 — Popular Science, June 18.
For more information, see: Related Newsline story, June 8 — Related Newsline story, May 25 — Related Newsline story, May 18 — Related Newsline story, Apr. 27 — Related Newsline story, Feb. 9.
Kenyan bookstores have been reluctant to carry it for fear of libel suits
NAIROBI
A book about corruption in Kenya is causing widespread controversy, even though many bookstores are refusing to sell it because of fear of libel suits by the government.
The book, It’s Our Turn to Eat, details government official John Bithongo’s failed attempts to curb corruption and his subsequent exile.
Author Michela Wrong tells the Voice of America that the title is a common phrase in Kenya, used to indicate the notion that a particular ethnic group wants to feed on government resources.
Wrong told National Public Radio that a “rotating series of ethnic elites” have run the economy to benefit themselves, “and it’s an attitude that has obviously destroyed the economy.”
Ironically, reports the Nairobi’s Daily Nation, bookstores’ reluctance to carry the title has afforded it wide publicity and distribution. A partnership between media, churches, and other civic groups is distributing the book for free.
The churches also intend to start discussion groups focusing on the book.
It’s Our Turn to Eat has attracted attention in other African nations, reports the Kampala, Uganda, Weekly Observer, because in the years following its 2002 elections, many international observers regarded Kenya as a test case for democratic and economic reform throughout Africa.
Sources: Voice of America, June 18 — NPR, June 16 — Nairobi Daily Nation, June 16 — Kampala Weekly Observer, June 10.
For more information, see: Related Newsline story, Mar. 2 — Related Newsline story, June 30, 2008 — Related Newsline story, June 30, 2008 — Related Newsline story, Feb. 4, 2008 — Related Newsline story, Jan. 22, 2008 — Related Newsline story, Jan. 14, 2008.
Newsweek essayist calls for moral compass in capitalism; Monitor writer warns that ethics programs are cut back in hard economic times, exactly when they are needed; new research counters common perception of whistle-blowers
VARIOUS DATELINES
Business ethics was the topic of several essays and features last week. They included:
Sources: Newsweek, June 22 — Christian Science Monitor, June 19 — Management-Issues.com, June 19.
For more information, see: Related Newsline Commentary, June 15 — Related Newsline story, June 15 — Related Newsline story, June 1 — Related Newsline story, June 1 — Related Newsline Commentary, May 4.
But study author says that even if results are taken at face value, it doesn’t mean that ethicists can’t teach others to behave better
RIVERSIDE, Calif.
A poll of philosophy professors rating their peers’ ethics finds that the professionals don’t seem to behave more ethically than anyone else, according to a university study.
The education journal Inside Higher Ed reports that the study’s co-author, Eric Schwitzgebel of the University of California at Riverside, said he presumed at the start of the study that ethicists “would behave with particular moral scruple. After all, they devote their careers to studying and teaching about morality. Presumably, many of them care deeply about it. And if they care deeply about it, it is not unreasonable to expect them to act on it.”
But most of the 227 survey respondents, all philosophy professors, reported no correlation between an academic focus on ethics and personal moral behavior, Inside Higher Ed reports. Respondents who specialized in ethics generally gave more charitable evaluations to fellow ethicists than did philosophers from other disciplines.
But Schwitzgebel cautions that his study can’t be used to justify banishing ethics from the curriculum. In addition to the small sample size and the fact that respondents might be biased in rating their peers’ behavior, ethics professors might very well teach others to behave more ethically even if they don’t practice what they preach.
Schwitzgebel’s next study will look at whether ethics books are any less likely to be stolen from campus libraries than non-ethics texts, notes Inside Higher Ed.
Source: Inside Higher Ed, June 16.
For more information, see: Related Newsline story, June 8 — Related Newsline story, Apr. 20 — Related Newsline story, Apr 6 — Related Newsline story, Feb. 16 — Related Newsline story, Aug. 28, 2006.
Republicans and upper-income earners least likely to support idea, Gallup notes
From Gallup:
“Just days after the Obama administration announced a series of proposals seeking more oversight of the salaries and bonus structures for executives at publicly traded companies, a new Gallup Poll finds that most Americans (59%) endorse government action to limit executive pay.
“There has been a great deal of public anger over executives who have received large paydays while their companies teetered on the brink of collapse and needed government money to survive. The most prominent example came earlier this year, when it was revealed that many top executives at insurance company AIG — one of the biggest recipients of government bailout money — were paid bonuses.
“In conjunction with the economic stimulus legislation passed by Congress earlier this year, the Treasury Department has put limits on the pay of executives at companies receiving federal bailout money; their pay plans must now be approved by a federal ‘pay czar’ and their bonuses may be no greater than one-third of their total compensation.
“The latest proposals seek to go further and attempt to change the rules governing how executive pay is determined at publicly traded companies (including those that did not receive bailout money), shifting the power from company management to independent corporate compensation commissions and giving shareholders a voice in the process.
“Seventy-seven percent of self-identified Democrats favor the government’s taking steps to limit executive pay, as do 56% of independents. More Republicans oppose (56%) than favor (42%) the idea….
“Additionally, only a slim majority of upper-income Americans, 51%, favor government limits on executive pay. Support is higher among Americans at lower income levels….”
For the full release from Gallup, June 16, click here.
“Elbow grease is the best polish.”
– English proverb
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