The Ethical Barometer

An outside review by Kirkland & Ellis, LLP concluded that nine statements made by Trevor Milton, founder of the electric truck company Nikola, were inaccurate. One of the inaccuracies was that the video of a moving electric truck was in fact not a moving truck, just a truck sent rolling downhill.

A short-seller report prompted both the departure of Mr. Milton as well as the external review. Nikola’s stock price has dropped 57% since the short seller ‘s report was made public in September 2020.

The Justice Department and the SEC have issued subpoenas to Nikola. Although the report by Kirkland & Ellis offered no legal conclusions, the author of the short seller report, Hindenberg Research, said it believes the findings are an admission of securities fraud.

Canada was having a rugged roll-out of its vaccines. So, Mark Machin, the now former CEO of one of the world’s largest pension funds, flew to the UAE and got his vaccine there. As Canadians struggle and wait in line, the CEO of the country’s pension plan found the time for a round trip to UAE and a shot.

When the Wall Street Journal reported on the trip, Mr. Machin resigned. Comments were filled with the word “trust.” If someone will leap-frog ahead of distribution guidelines, well, just think of that person being around the pension fraud.

It’s the best of both worlds, It’s gaming the system, once again. If the financial reports of companies that have had to close down stores look fairly decent, well, there may be an accounting mumbo-jumbo explanation.

Operating income was reduced. The retailers took a charge for impairment because of the reduced value of those stores. But tax credits then increased their value. However, retailers’ “adjusted operating income” then took out the impairment charge, as it should. But, lo and behold, those federal tax credits stayed put despite their one-time nature. The result? Adjusted operating income was not bad. For some companies, their adjusted operating income would have been one-half of what was reported had the federal aid been taken out as a one-time deal. That will keep the share prices up a tad.

Accounting has its gray areas, but consistency in reporting is not one of them. The SEC is on the case. See Jean Eaglesham and Nina Trentmann, “Pandemic Accounting Scrutinized,” Wall Street Journal, February 24, 2021, p. B5.

There is no limit to the human mind’s capacity for gaming systems, especially those developed by government agencies. According to one Elaine in Dallas who wrote into the New York Times‘ “The Ethicist,” her city offers COVID-19 vaccines to volunteers who have worked 15 hours at a vaccination site. Elaine has received her vaccine but wonders whether she should give up the her future volunteer time slots to friends so that they can work the 15 hours and get their vaccines. Elaine is assured that her friends will get her time slots for working the site.

Elaine! Elaine! Why are you not continuing to work to help? You are now protected but so is everyone else who has contact with you in your work at the site. How exactly are you going to pick and choose among your friends? What would happen if everyone quit volunteering after receiving their shots? Constant turnover is a way to increase the likelihood of transmission as the unvaccinated keep joining the ranks.

Let’s hope someone in Dallas reads “The Ethicist” and finds a way to close this game-the-system loophole. What a commentary on society. Those who honor the plan for distribution lack the DNA for diabolical. They take precautions, wait, and hope for the best. It seems, however, when it comes to vaccines, it is every man, woman, and child for himself. Just because you can do something within the rules (skirting that line ever so dangerously close) does not mean you should do it.

Desperate times. Desperate people. Desperate actions. Gaming ’tis not a far, far better thing to do.

At some point, the children will need to rebel and force the adults to allow them to go back to school. Who would have thought kids would ever be begging parents to let them go to school? That point may have been reached. The Wall Street Journal reports that teachers are now forcing students to keep their cameras on at home so that teachers may monitor whether their students are actually at the computer whilst a random act of alleged and fleeting education occurs. Forcing young ‘uns to sit and interact with a screen all day is right up there with waterboarding.

So, the parents turned the screens back on so the teachers could see. Then, a parent got her 7-year-old’s report card with the comment that the child seemed distracted during the 6 hours of Zoom instruction. Wow– there’s a discovery! A seven-year-old struggles to sit long enough to eat an Uncrustable. Who would put such a comment on a report card based on Zoom instruction?

They are cheating if the cameras are not on, but they get marked down if they are in front of the cameras but not with eyes straightforward. Some of these kids have three to four siblings sitting in the same room studying with different teachers. What could possibly distract them in such an environment? The insanity must, at some point, stop.

Read this:

“Because then we were in a position where we weren’t sure if what we were going to give to the Department of Justice, or what we give to you guys, what we start saying, was going to be used against us while we weren’t sure if there was going to be an investigation… That played a very large role into this.”

New York Governor Andrew Cuomo’s aide, Melissa DeRosa, in a private call to Democrats in the New York State Assembly, explaining why the Cuomo administration released false numbers about the number of COVID deaths in the state’s nursing homes. The call was later leaked.

You can tell a child is lying when:

1. The child does not want to take responsibility.
2. What the child is saying makes no sense, is a series of run-together sentences, includes “you guys,” and blames a bogeyman. The evil Justice Department.
3. The child does not realize that the story being told gives the reason the child lied in the first place.
4. The explanation the child gives is different from explanations given previously.
5. The child originally told a whopper.

Then, to add whipped cream and a cherry on top of a spinning frenzy of a stream of conscience, the child adds, “Basically, we froze.” Then the child apologizes to the wrong people for the wrong thing. So, of course, Ms. DeRosa apologized to the Democrats in the New York State Assembly, “So, we do apologize. I do understand the position that you were put in. I know that it is not fair. It was not our intent to put you in that political position with the Republicans.” 

Ms. LaRosa’s public explanation was different from the phone call explanation. The public explanation put the bogeyman of our times, Donald Trump, as the real problem. Donald Trump’s Justice Department made them do it because Mr. Trump was questioning nursing home admission mandates in several states. As much as a child wants to blame someone else, the blame must go back to the root cause.

Mr. Trump was raising the nursing home mandates not as a political but in response to reports from medical experts about the March 25 Cuomo mandate. That follow-the-science-mandate seems to have been flexible. Dr. Elaine Healy, a clinician, an experienced medical director, and an officer in an association of nursing homes in New York sent information to the Wall Street Journal on March 25 2020 about the Cuomo mandate for nursing homes to admit COVID-positive patients. Dr. Healy was contacting everyone she could to stop the madness of the mandate. Dr. Healy contacted radio host Mark Levin to disclose the mandate. Mr. Levin, so shocked, initially accused her of being a hoax call.

By May, the Wall Street Journal ran a full story on the real damage the Cuomo policy was causing. Despite FOIA requests, no one could get the New York Department of Health to release the real death numbers. The growing outrage, spearheaded by weatherperpson Janice Dean, who lost two family members in nursing homes to COVID, continued. In August 2020, New York’s Attorney General began an investigation. That report was released just weeks ago with the stunning truth — the number of nursing home deaths in New York City was understated by 40-50%. (See February 1, 2021 post)

Governor Cuomo responded, “But who cares? 33 [percent]. 28 [percent]. Died in a hospital. Died in a nursing home. They died.” A child does not process harm to others — only the harm to himself that will result if he tells the truth. A child does not process his role in the harm. Again, the child is focused on immediate harm to himself, not damage to others.

The families who lost loved ones are owed an apology. Absent governmental immunity, the damages owed to the loved ones, not only being for being kept in the dark but being kept away from their loved ones just when they were most needed, would induce salivation in class-action lawyers. The families, who were COVID-free, were not permitted into these nursing homes to be with their loved ones. These dear souls ended their earthly sojourn alone. As a comedian noted, “In New York, you had to have COVID to get into a nursing home.”

What happened in New York is a tragedy beyond description. The measure of the character of a society is how it treats its most vulnerable. There is one more measure: What s society does when it learns of abuse of the most vulnerable. The real number of deaths was 15,000. The number the Cuomo administration reported was 8,671. This was one heck of a whopper.

What now? One wants o scream, “Enough with the politics! Grow up!” Sadly, the children are still in charge, weaving more tales and spinning more yarns. Society weeps, both for its losses and at the reflection in the mirror of a society that has sunk to a new low.

After a week of SoulCycle line-cutters and amoral technicians finagling their ways to the head of the vaccine line, along comes Sister Andre. Sister Andre, 117, survived COVID. Blind and living in the Catherine Laboure nursing home in Toulon, France, Sister Andre just felt a bit “patraque.” (off color). 

Sister Andre lived through the 1918 flu pandemic and said as the fear of COVID swept through the nursing home, “I’m not afraid of COVID because I am not afraid of dying, so give my vaccine to those who need them.” She did not take the vaccine and lived to tell about it.

Ah, the courage of a 117-year-old blind woman in a wheelchair. She let others go ahead of her in the vaccine line. She is now planning a celebration that includes a feats. Vive le Sister Andre. 

Mr. Clinesmith received no prison time because, in the words of the sentencing judge, “Anybody who has watched what Mr. Clinesmith has suffered is not someone who will readily act in that fashion.  Weighing all of these factors together — both in terms of the damages he has caused and what he has suffered and the positives in his own life — I believe a probationary sentence is appropriate here and will therefore impose it.” Charlie Savage, “Ex-FBI Lawyer Who Altered Email in Russia Case Is Given Probation,” New York Times, January 30, 2020, p. A20. 

One year probation and 400 hours of community service.

An FBI lawyer, sworn to uphold the law, falsified a document that damaged the lives of others. including portraying Carter Page as a Russian spy and subjecting him to unwarranted surveillance.  Carter Paige was working with the CIA at the time. (See Post of August 17, 2020 on Clinesmith’s charges) The judge should have weighed those factors as well.  

As for the likelihood of Mr. Clinesmith’s recidivism? The lighter the punishment in relation to the harm of the crime, the more likely the offender offends again — ask any experienced prosecutor who witnesses the same defendants recycling through his or her court. Ask any judge who has given a light sentence and a lecture how effective both were in terms of preventing a repeat performance by a woe-is-me defendant. Even Laurie Laughlin, the ambitious and bribing Hallmark actress mother, got real time for paying to get her daughter into USC. Her press coverage surpassed that of Clinesmith’s.  And she is no longer on the Hallmark channel. There is no line of directors and producers seeking her in their films. And the likelihood of her hoping up with another college admissions grifter?  Zero.  

Equal justice under the law? 

The reasons they got their vaccine early — their COVID-19 ticket to immunity ahead of their classifications based on need — vary. Some folks shared their sign-up codes with friends who then went ahead and got their appointments. Some just knew health-care workers who called them and said, “I’ve got an extra dose.” Then there are the amoral technicians, such as Stacey Griffith, a SoulCycle instructor. She claimed to be an educator, got her vaccine early, and, foolishly ( as less bright law breakers do) posted her cleverness on Instagram.

She is a line-cutter who put her needs ahead of health-care workers, first responders, and the elderly. Desperation makes folks do desperate things. Hunger brought line-cutting in food lines. The race to get home in traffic finds a host of line-cutters. Line-cutters have caused stampedes, road-rage, and death.

Ms. Griffith has apologized, “I made a terrible error in judgment and for that I am truly sorry.”

A “terrible error in judgment” is putting too much Tide in your HE Washer, serving cotton candy and Mountain Dew at a birthday party for five-year-olds, or showing The Godfather to fourth graders studying immigration. What Ms. Griffith did was unconscionable, immoral, and just plain wrong. Oh, and selfish. When seeking forgiveness, contrition is evident from the choice of words.

Letitia James, the Attorney General for the state of New York, released a preliminary report on nursing homes and COVID. The report is deeply troubling on so many levels. There are the usual nursing home issues with cleanliness, staffing, and lack of equipment. However, the pandemic exacerbated those deficiencies. In addition, the report includes two additional disturbing behaviors:

1. A larger number of nursing home residents died from COVID-19 than New York’s Department of Health’s data reflected.

The nursing homes did not report COVID-related deaths for their COVID-infected residents who were sent to hospitals and died there — an understatement estimated at about 50%.The data nursing homes furnished to the Office of Attorney General investigators were different from the data reported to the DOH.

Investigators were unable to find explanations for all of the discrepancies.

2. Government guidance requiring the admission of COVID-19 patients into nursing homes may have put residents at increased risk of harm in some facilities and may have obscured the data available to assess that risk. The relevant order from New York’s Department of Health provided:

“[n]o resident shall be denied re-admission or admission to the nursing home solely based on a confirmed or suspected diagnosis of COVID-19. Nursing homes are prohibited from requiring a hospitalized resident who is determined medically stable to be tested for COVID-19 prior to admission or re-admission.” DOH, Advisory: Hospital Discharges and Admissions to Nursing Homes, March 25, 2020

The March 25th order put those with COVID-19 into homes occupied by those most vulnerable to the disease. Every death diminishes us. These deaths should cause us to hang our heads in shame. However, the governor of New York, who issued the order, has instead received an Emmy and a book contract for his “leadership” in handling the COVID crisis in New York. Perhaps the better measurement of society would be how it treats those who harm the most vulnerable.

Insurance agents work on commissions. We all know that and live with it. However, there is a new twist in agent compensation. Some companies require sales agents to reach a minimum level of sales in order to qualify for subsidies for the cost of their company-provided health insurance. That ought to put the pressure on the sales force. The cost doubles for the agents if they are not entitled to the subsidies.

There is a conflict here. And a new question for clients to ask their agents and brokers, “Does the sale of this annuity or policy help you get cheaper health insurance?” The industry does not see a conflict. So, the only solution is for customers to grill their agents prior to their purchase. Just ask them what their health insurance costs. They will sing like canaries.

The Barometer has had the same post office box for three years. During the 2020 election cycle, the Barometer received 3 mailings from the Voter Participation Center addressed to “Kathleen XXXXX XXXXX.” The Barometer does not know Kathleen and turned the first mailing back to the post office. The clerk indicated the post office was not worried about it.

The Barometer noted that the mailing included the following: “If you need a ballot-by-mail, request it in two minutes online at my.arizona.vote/Early/ApplicationLogin,aspz.”

Hmmmm — sending voter solicitation information to a PO Box. Worse, the mailing went on to read, “”Public records show that your voting record is ABOVE AVERAGE.” So, this Arizona voter has been voting with only a PO Box address in the past.

Perhaps someone should take a gander at both the voting rolls and the Voter Participation Center.

The Confederate statues were removed. And then the purging took a turn. The San Francisco Unified School District voted to remove the names of these schools: Abraham Lincoln, George Washington, Thomas Jefferson, Daniel Webster, and Dianne Feinstein. The standard for removal was whether the individuals had promoted slavery, oppression of women, or “diminished the opportunities of those amongst us to the right to life, liberty, and the pursuit of happiness.

Stand by and say nothing about the cancel culture and, sooner or later, they come for you. No one appears to be immune, even one of their own elected officials.

The source is unknown, but to whomever had the idea: All Hail!

The quote is apropos at this time as we have witnessed day-traders catch the hedge-funders in their own game. “Buy low, sell high” and whoever said that did not understand hedge funds. The stock markets have long been dominated by “Bet against stocks when they are high and cash in when they go low.” The problem with the strategy is that one must be correct in the bet, a bet that is highly leveraged. If, per chance, the stock goes high, then the hedge funders must make good on their bets to purchase.

GameStop, like most strip mall and mall retailers, was struggling. The hedge-funders bet that GameStop would fail. What the wizards of Wall Street failed to research was that there is one entire generation of day-traders who grew up in GameStop. This was no ordinary retailer. The Barometer spent more time in GameStop waiting to purchase the newest game; waiting for an appraisal so that her sons could trade in old games for new games, and just waiting in line. And GameStop was one sly retailer — whatever it paid for old games and equipment was paid only in store credits — no cash changed hands. Sort of like Wall Street until you get burned. To this day, the Barometer has $196.71 in GameStop credits that her sons never used.

We parents and our children bonded in GameStop. It was a way of life. We prayed together that there would be no more new video games. We were willing to become Amish so that there would be no electricity in our homes in order to stop the addictive hold that GameStop had on our youth. Apparently, however, our children had formed a lifelong bond. So, those children who grew up to be day-traders rallied together to “Save GameStop.” These former addicted youths were now adults with children. Who can parent without a local GameStop? So, social media addicts that they are, they got the word out. The day-traders bought put options as the hedge funders were buying call options. GameStop stock went from $2.43 a share on February 5, 2020 tp $491.98 per share on January 25, 2021.

The GameStop fans put it to the hedge funds. Literally and figuratively. They want the hedge-funders who were positioned short on GameStop to buy their shares. Oh, the weeping, wailing, and gnashing of teeth coming from the billionaires of hedge funds who have never imagined so much as a widget, let alone built one. They want the SEC to step in. The trading platforms are banishing GameStoppers from their sites. Trading on those platforms has been halted.

Truth be told, the amateurs got the better of the professionals at their own game. A revolution launched by former gamers who hung around GameStop with their parents. The novices beat the professionals at the game the professionals created that was one risky way to earn a living. They did very well, until they struck a company with a heart created by its fans.

From an ethical perspective, if you want to play a risky game, you play by the pre-established rules. And the rules are you must come up with the cash for those who stepped in under the same rules. Was it an organized effort to manipulate the stock? Only in the sense of its psychological bond. The same thing happened with K-tel stock when it was teetering. It went from $-0.39 to $1.39 during a similar bubble. However, the stakes were much lower. Folks did not want to lose those ads for the TV marketer who provided as much entertainment in hocking its products as whatever was provided by the shows themselves.

As the New York Times headline blared “The ‘Dumb Money’ Outfoxing Wall Street Titans.” Ante up, gang, you got beat at the game you started and for which you wrote the rules. Making money for doing nothing is a proposition that always has a downside. And you cannot even get a controller to step in and save you. But you might be able to purchase a used one at Game-Stop. Be sure to take a parent long; you seem to need adult supervision on your trades.