Financial Sector Facing Crisis of Trust with U.S. Public
Jul 6th, 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
It seems shocking to ask, but has everybody finally got enough stuff? New survey data hints that America’s culture of materialism may be on the wane. More on that in a moment. First, some background.
In 1807, William Wordsworth complained that “the world is too much with us,” lamenting the relentless “getting and spending” of his English countrymen. In 1935, Porgy sang “I got plenty o’ nuttin’” in George and Ira Gershwin’s Porgy and Bess, contrasting his own simple contentment with the grasping anxiety of “folks with plenty of plenty.”
But by 1985, U.S. pop idol Madonna had agreed to go with the flow. “I am a material girl,” she sang for her millions of fans, “living in a material world.” Her message was blunt, unashamed, and crass: Plenty of plenty is great, and getting and spending is what it’s all about.
Madonna, of course, didn’t create the housing bubble or spawn the deepest recession since the 1930s. But she did capture something of the spirit of the age. What, she wanted to know, is wrong with lusting headlong after materialism? If everybody’s doing it, let’s just admit it, relish it, and get on with it.
Then, late last year, came Bernard Madoff, a man who forever will be remembered by two numbers: a $65 billion Ponzi scheme, and a 150-year prison sentence. Early this year, as catastrophic failures of financial-sector integrity fueled public outrage, Madoff became the object lesson for materialism run amok. For many, he so perfectly embodied the plenty-of-plenty crowd that, had he not walked on stage last December, he would have had to be invented.
As he exits, he leaves behind a changing world. Even in financial quarters, questions now are being raised that last year would have seemed hopelessly idealistic, if not downright naïve. Is life really about accumulating things? Is it true that he who dies with the most toys wins? Is getting and spending actually the goal? Can an economy keep going only if consumers are driven to accumulate more stuff? Isn’t there a better, simpler, more balanced way to live? Was materialism just a muscle car hurtling us toward a precipice — and did the recession slam on the brakes just in time? Even so, will materialism come roaring back once the danger has passed? Or are we at last outgrowing its excesses?
That last question is so complicated — almost transcendental, in fact — that it would be hard to know what signs to look for. You’d have to ask people two questions: “Are you accumulating less stuff now?” and, “Are you happy?” If they said, “Same amount of stuff,” you’d know that materialism wasn’t ebbing. If they said, “Less stuff, but I’m not happy about it,” you’d know materialism was only in temporary remission. You’d need to see less stuff coupled with greater happiness. And you’d need to see it for long enough to make a trend.
Which brings us back to the data. It’s not yet conclusive, but it just may suggest a turning point in the nation’s materialistic culture:
All of which prompts Gallup’s chief economist, Dennis Jacobe, to offer a startling prediction: “On the other hand, the failure of consumer spending to improve over recent months — even as the consumer mood has surged — suggests that current spending levels could reflect the ‘new normal.’”
Granted, these are faint signals. The Well-Being Index is a new scale, developed only 18 months ago. There’s a lot we don’t know about what influences consumer consistency, spending habits, and the accuracy of self-reporting. But if the new normal is a spend-less-save-more formula — and if people say, “I’m okay with that” — real change could be in the works. It will be tough on retailers. It will force a reevaluation of the economy and what makes it tick. But as the world of Madoff and Madonna loses its appeal, materialism itself finally may be seen to be on the wrong side of history.
©2009 Institute for Global Ethics
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“We burned to death 100,000 Japanese civilians in Tokyo — men, women, and children. [U.S. Army general Curtis] LeMay said, ‘If we’d lost the war, we’d all have been prosecuted as war criminals.’ And I think he’s right. He — and I’d say I — were behaving as war criminals. What makes it immoral if you lose and not immoral if you win?”
– Former U.S. Defense secretary Robert McNamara, speaking in the 2003 documentary, “The Fog of War: Eleven Lessons from the Life of Robert S. McNamara.” McNamara, who died Monday, ran statistical attack analyses for LeMay during World War II and later devised the failed U.S. strategy for the Vietnam War, a war he concluded was futile. In 1995, notes the New York Times, McNamara “took a stand against his own conduct of the war, confessing in a memoir that it was ‘wrong, terribly wrong.’”
According to the Times retrospective, McNamara “was the most influential defense secretary of the 20th century. Serving Presidents John F. Kennedy and Lyndon B. Johnson from 1961 to 1968, he oversaw hundreds of military missions, thousands of nuclear weapons and billions of dollars in military spending and foreign arms sales. He also enlarged the defense secretary’s role, handling foreign diplomacy and the dispatch of troops to enforce civil rights in the South.”
Source: New York Times, July 6.
Paper’s publisher admits “mistake” and apologizes; newsroom executives said they were not aware of the plan and vowed that no one will be able to buy access to Post journalists
WASHINGTON
The Washington Post backed into an ethical buzz saw last week after it was forced to cancel plans for a series of events that would offer lobbyists access to Post reporters and U.S. government officials.
According to the Agence France-Presse, the “policy dinners” were to be held at the home of Post publisher Katharine Weymouth. Participants would pay $25,000 to sponsor a single “salon” or $250,000 to underwrite an entire series of 11 sessions.
The theory behind the salon series was to offer lobbyists and association executives non-confrontational access to “the powerful few,” according to Politico.com. The offer was detailed in a flyer circulated to a health care lobbyist, who brought it to the attention of Politico because the lobbyist felt the Post was creating a conflict of interest by charging for access.
Publisher Weymouth said she had rushed the decision to hold the event and apologized to readers, according to the Post’s version of events in its own pages. She also said that the plan was portrayed in a flyer that was sent out without approval by a new marketing employee.
Weymouth also said that the actual plan for the dinners involved having multiple sponsors, so that a single sponsor would not be perceived as controlling the discussions.
PoynterOnline, a site from the journalism think tank, reports that executives in the Post’s news division denied knowing anything about the salon plans until they were revealed in the media.
Executive editor Marcus Brauchli said that no one can “buy access to a Washington Post journalist,” and in a newsroom memo confirmed that the Post “will not participate in events where promises are made … in exchange for money.”
Sources: Washington Post, July 5 — AFP, July 4 — Poynter Online, July 2 — Politico, July 2.
For more information, see: Related Newsline story, May 25 — Related Newsline story, Jan. 12 — Related Newsline story, Nov. 24, 2008 — Related Newsline story, Oct. 14, 2008 — Related Newsline story, Oct. 6, 2008.
Case has prompted debate over whether protecting a life or reporting the news is the higher principle; in aftermath, some argue that changing reference work — even to protect a life — crossed into even rockier ethical territory
VARIOUS DATELINES
The ethics controversy over the suppression of news about the kidnapping of a New York Times reporter took on new dimensions last week when it was revealed that online encyclopedia Wikipedia collaborated with the Times on the blackout.
According to the San Francisco Chronicle, Wikipedia agreed to block any information about the captivity of David Rohde, who had been abducted by the Taliban. Fearing that publicity would boost the perceived value of Rohde as a hostage, the Times had persuaded most Western media not to report the story.
But the Chronicle reports that the Wikipedia censorship raises new questions about the suppression of the story. Wikipedia editors, according to the Chronicle, immediately erased any changes to the Rohde story that alluded to his captivity.
The Times itself recognized the fundamental ethical difference between the handling of breaking news and reference works.
“Times executives believed that publicity would raise Mr. Rohde’s value to his captors as a bargaining chip and reduce his chance of survival. Persuading another publication or a broadcaster not to report the kidnapping usually meant just a phone call from one editor to another, said Bill Keller,” executive editor of the Times, according to a Times story written by Richard Pérez-Peña.
“But Wikipedia, which operates under the philosophy that anyone can be an editor, and that all information should be public, is a vastly different world,” Pérez-Peña writes.
“A dozen times, user-editors posted word of the kidnapping on Wikipedia’s page on Mr. Rohde, only to have it erased. Several times the page was frozen, preventing further editing — a convoluted game of cat-and-mouse that clearly angered the people who were trying to spread the information of the kidnapping.”
Jimmy Wales, Wikipedia’s co-founder, joined in the effort to delete any references to the kidnapping, according to journalism website MediaBistro.
The news blackout was maintained until Rohde escaped from his captors about two weeks ago.
In the aftermath of his escape, many in the journalistic community have held fast to the argument that the story was not worth endangering a life, while others argue that the cover-up may be seen as a special accommodation toward a fellow journalist.
Writing on the Nieman Journalism Lab website at Harvard University, Globe & Mail editor Mathew Ingram contends: “Employing what amounts to a sophisticated conspiracy to prevent news about Rohde from appearing publicly anywhere — including the fiercely independent Wikipedia — creates an obvious double standard. Journalists, including those at the New York Times and other media outlets, routinely report on people who have been kidnapped by terrorists, without any obvious qualms about how that reporting might or might not affect the chances that they might be released or escape.”
Sources: MediaBistro, July 6 — Nieman Journalism Lab, July 1 — San Francisco Chronicle, June 30 — New York Times, June 28.
For more information, see: Related Newsline story, June 29 — Related Newsline story, Nov. 24, 2008 — Related Newsline Commentary, Nov. 17, 2008 — Related Newsline story, Oct. 6, 2008 — Related Newsline story, Oct. 6, 2008.
Sarah Palin says costs of ethics probes were one factor in her surprise resignation; poll shows most in South Carolina think their governor is “about as ethical as other politicians” despite his highly visible issues; former North Carolina auditor takes his fight against public corruption private
VARIOUS DATELINES
The intersection of government and ethics proved a busy place last week. Among the developments:
Sources: Anchorage Daily News, July 4 — Congressional Quarterly, July 2 — Raleigh News-Observer, July 3.
For more information, see: Related Newsline Commentary, June 29 — Related Newsline story, June 29 — Related Newsline story, June 15 — Related Newsline story, June 8 — Related Newsline story, Oct. 20, 2008.
Judge sets aside verdict in MySpace suicide case; Reuters editor defends use of social-media reports in Iran coverage; researcher is programming “ethical governor” for battlefield robots
NEW YORK and LOS ANGELES
Last week saw a flurry of stories examining the moral dimensions of technology. Among the coverage:
Sources: Reuters, July 2 — CNN, July 2 — CNET, June 30.
For more information, see: Related Newsline story, June 29 — Related Newsline story, June 22 — Related Newsline story, June 8 — Related Newsline story, Jan. 28, 2008 — Related Newsline Commentary, Dec. 3, 2007.
Arizona Republic profiles student who uses bootleg brain booster; Boston Globe says new state ethics policy will increase transparency of drug prescription process and lower prices; AMA publication reports on new policy saying doctors have ethical obligation to care for poor patients
VARIOUS DATELINES
Press reports last week covered various angles on medical ethics. Among the week’s stories:
Sources: Arizona Republic, July 5 — Boston Globe, July 5 — American Medical News, June 29.
For more information, see: Related Newsline story, June 22 — Related Newsline story, June 1 — Related Newsline story, May 25 — Related Newsline story, May 11 — Related Newsline story, May 4.
Christian Science Monitor reports on dilemma of well-to-do Western tourists who bring money but, some say, threaten authenticity of culture
MAYANGE, Rwanda
The growing popularity of so-called poverty tours has raised ethical questions about whether the practice is instructive or merely exploitative, the Christian Science Monitor reports.
Correspondent Jina Moore, filing from Rwanda, writes: “Well-to-do Western tourists are plunking down serious dollars to see how the other five-sixths live. Like all tourism, this experiential off-roading can be a mixed bag for the local people, damaging the environment and threatening the authenticity of culture.”
“The bad kind has earned a seedy-sounding nickname — ‘poorism’ — that means to suggest what experts say can be little more than a voyeuristic excursion to see just how poor the poor really are.”
But Moore notes that some observers contend that Western tourists learn about places that are culturally rich even if economically poor.
Also, while tourist dollars are sometimes the subject of controversy they can produce a small windfall for impoverished areas.
In the Rwandan village of Mayange, the Monitor notes, one tourism company donates 70 percent of its profits from the $35-per-head tourist fee to the village. Most of that money is used to fund a local tourism cooperative that makes decisions about how to spend the money and generates ideas to attract more visitors, according to the report.
Source: Christian Science Monitor, July 3.
For more information, see: Related Newsline story, Apr. 9. 2007 — Related Newsline Commentary, Aug. 9, 2004 — Related Newsline story, Jan. 5, 2004 — Related Newsline story, Dec. 22, 2003 — Related Newsline story, Jan. 28, 2002.
Move comes as world leaders gather for G-8 economic summit; Pope has urged conveners to “reform the international financial architecture” so that poor do not bear the brunt of an economic collapse they did not cause
THE VATICAN
Pope Benedict XVI reportedly is preparing to issue an encyclical advocating an ethical economy. Vatican Radio reports that the encyclical — a major teaching for Catholic believers — was written in preparation for the upcoming G-8 Summit, a meeting of the leaders of the most powerful nations in the Northern Hemisphere.
USA Today reports that the moral aspects of the global economy have been a recurring theme of this pope. In March, he told reporters that “a fundamental element” of the worldwide economic crisis “is precisely a lack of ethics in financial structures; it has been understood that ethics are not something ‘outside’ the economy but ‘inside’ it, and the economy does not work if it does not contain the ethical component.”
In a letter to the Italian premier who will chair this week’s G-8 summit, the pope called on leaders to “reform the international financial architecture” to avoid reckless speculation and ensure that the poor do not bear the brunt of an economic crisis they did not cause, reports the Associated Press.
The pope and President Obama are scheduled to meet briefly at the conclusion of the G-8 summit. According to TIME magazine, the two leaders share some views on foreign policy but clash on ethical issues such as abortion rights and stem cell research.
Sources: TIME, July 5 — AP, July 5 — Vatican Radio, July 4 — USA Today, July 2.
For more information, see: Related Newsline story, Mar. 23 — Related Newsline story, Apr. 6 — Related Newsline story, Dec. 22, 2008 — Related Newsline story, Dec. 15, 2008 — Related Newsline story, Oct. 20, 2008.
“Just 4% say Wall Street is honest and trustworthy,” Harris finds
From Harris Interactive:
“Over the past few months, Americans have watched as financial institutions have received government bailouts, or been shut down and have had to close their doors due to the economic crisis. It is perhaps not surprising then that almost three in five Americans (58%) say they do not consider any of nine financial institutions and insurance companies to be honest and trustworthy, that is, they would not believe a statement by someone who works for one of these companies…. More specifically:
“So What?
“The Obama Administration is trying to do everything in its power to shore up the economic situation and respond to the crisis. One problem is that the industries which will actually be working with the consumer to lend money or refinance mortgages are in dire straits with Americans. There is a serious lack of trust that has developed and until this trust is rebuilt, these financial industries will be looked at with at the very least skepticism, but also scorn. It may take years to see a rebuilding of at least some trust here….”
For the full press release from Harris, June 30, click here.
“Whether the stone bumps the jug or the jug bumps the stone, it is bad for the jug.”
– Folk saying
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