The Ethical Barometer

When it seems to be too good to be true, it is too good to be true. The phenomenal growth of Under Armour now has an explanation. To meet numbers, executives scrambled by forcing retailers to take more inventory than they ordered. The old channel-stuffing trick. The company also redirected merchandise that was headed for its factory outlets to off-pice chains in order to book those as sales. In short, the company was borrowing against future quarters in order to meet the numbers for the present quarter. Once you start, you can’t stop because the goals of 20% is elusive and the sales were not real. Under Armour could not and did not stop. Insert tangled web and deception saying here. The SEC is on it, but, no worries, Under Armour assures that it has been cooperating with the SEC since 2017. Also, they assure that everyone in the retail industry pulls the same sleights of hand. We can all sleep better tonight with those confidence-inspiring assurances.

Canadian Prime Minister Justin Trudeau is dealing with a political scandal. It seems that the We Charity paid nearly $300,000 (Canadian) to the prime minister’s mother, brother, and wife in speaking fees (and another $187,000 in expenses (Canadian)).

The WE Charity was awarded a $43 million (Canadian) contract to manage a $900 million (Canadian) contract for helping students struggling to find summer jobs. Mr, Trudeau insists that he did not instruct officials to award the contract to WE Charity. However, the Prime Minister did sit in on the discussions among cabinet members on awarding the contract. The contract was not put out for bids.

Mr. Trudeau said that he did not know how much his mother and brother were paid. He did, however, perhaps know about his wife. The Canadians do file income tax returns and pay taxes. (Canadian dollars, of course). Hmmm.

Two Baffert-trained horses tested positive for lidocaine. One had won the Arkansas Derby on May 2 ($300,000 prize). The other had won the Acorn Stakes at Belmont by 19 lengths in record time. Baffert, a trainer’s trainer has trained two Triple-Crown winners. Justify, the 2018 Triple-Crown winner, had tested positive to scopolamine following his win in the Santa Anita Derby. But, the closed hearing of the California Horse Racing Board concluded (after the Triple Crown results and after Justify was sold for breeding rights for $60 million) that environmental conditions, not intentional doping, caused the presence of scopolamine. There is a suit pending by the second-place winner in the Santa Anita Derby over the findings in the hearing on Justify. The suit contends the amount of scopolamine in Justify was too high to have come from feed or bedding.

At the hearing on Carlatan and Gamine, the two lidocaine-positive horses, Baffert and others argued that the horses were accidentally exposed to lidocaine by an assistant trainer had applied a medicinal patch to his own back, i.e., he used Salonpas, which transferred small amounts to the horses through the application of a tongue tie (keeps horses from getting their tongues over the bit — it is elastic wrapped around a horse’s tongue and then tied along the lower jaw). Following the hearing Baffert was suspended for 15 days and the first-place wins for the horses were taken back, along with the cash.

No wonder the horses want Lidocaine — try tying your tongue down to your lower jaw. The explanations for the positive tests have begun to look like “dog ate my homework” stuff.

Steve Jobs’s e-mails played an integral role in the Apple/book-publisher antitrust suit. Mr. Jobs had passed away two years earlier, but those e-mails were the damning evidence for the government’s antitrust case. Jeff Bezos, Tim Cook, and Mark Zuckerberg all appeared saintly in their testimony before a House committee. “What? Me engage in anticompetitive behavior? Nay, nay!” But, the e-mails the House staff uncovered and used during the testimony of the tech titans paint a different picture. Mark Zuckerberg was surely putting the pressure on Instagram for an acquisition. Here is an excerpt used by the House staff to make the case that sure look like the words of a monopolist:

“One way of looking at this is that what we’re really buying is time. Even if some new competitors springs up, buying Instagram, Path, Foursquare, etc now will give us a year or more to integrate their dynamics before anyone can get close to their scale again. Within that time, if we incorporate the social mechanics they were using, those new products won’t get much traction since we’ll already have their mechanics deployed at scale.”

Forty-five minutes later, a repentent Zuckerberg sent a sort of retraction:

“I didn’t mean to imply that we’d be buying them to prevent them from competing with us in any way.”

Those who were his targets referred to Zuckerberg’s acquisition strategy as “Copy, acquire, and kill.” The giants threaten the startups with a plan to mimic them unless they agree to be acquired. Instagram gave it up for a billion bucks. Mr. Zuckerberg said that he was really “buying time.” He would get “a year or more to integrate their dynamics before anyone can get close to their scale again.” Hmmm — those on not the words of a formidable competitor. Those are the words of a giant whose day has passed. Devoid of ideas, and rich in cash, you take them before they come up with anything else that is clever. The old question in antitrust was once, ‘Did you get ahead because you built a better mousetrap or did you just squelch the little guys who were in the process of doing so? The e-mails always tell the truth. The hearings are feigned humility under oath.

This was an AOL headline that pops up as one skulks through the click-bait to the real goal: e-mail. The headline itself was stunning because:
1. It was a positive statement about a famous person.
2. There was no ridicule of the relative of a famous person.
3. It did not say, “Despite her politics . . . ”
4. It was not COVID-19 data.
5. It did not label anyone a racist.
6. It did not say, “Despite having to live in this country . . .”
7. She was not wearing a mask.

In short, here was a story that was not negative or an attack. A story that brought back memories of the talent of Lucille Ball and her incredible comedic timing. It was a reminder that despite the problems and challenges we face, that there is still the standby comfort of family. And while we all have limited time here, we do leave behind those who carry memories of us and some of our characteristics.

In short, Lucille Ball and her granddaughter brought hope — hope that there are still good things and good people in the world. Hope that our lives go on even when we lose our loved ones. Hope that we see those loved ones in those they left behind. Hope that kindness and compliments remain in our fiber. Hope that we need not always be finding flaws. That’s not a bad haul on the way into the e-mail.

Hope is the thing with feathers
That perches in the soul
And sings the tune without the words
And never stops–at all–
And sweetest–in the Gale– is heard–
And sore must be the storm
That could abash the little Bird
That kept so many warm ….

Emily Dickinson

Lisa Gilbert, Public Citizen (a Washington, D.C. advocacy group). Ms. Gilbert was referring to the ethical downfalls of so many public officials, a downfall that begins with high-ranking officials asking members of their security detail or staff to pick up their dry cleaning. The act of having someone else pick up your clothes at the dry cleaners seems to be the gateway drug to misuse of public resources and funds.

The assignment of errands seems like such a small thing, but it constitutes, in the words of Robin Thicke (or New York Times, May 20, 2020, p.A22.

The critical lesson of blurred lines goes beyond just that dangerous first step. The dry-cleaning assignments are evidence of a character flaw. These officials are asking professionals to be flunkies. The ease with which an official can assign tasks well below the experience, education, and training of a staff member shows an insensitivity to human dignity. They are asking staff members to do things those staff members would be fired for doing.

How we treat those who wield no power over us is a measure of character. Ironically, staff members actually wield the ultimate power; they have information that public officials do not want public. So, the moral of the story is to use caution in how we treat those who we perceive cannot harm us. They hold the trump card.

The Digital Millennium Copyright Act (DMCA) was well intentioned legislation designed to protect websites from copyright infringement claims when the site owners are not the ones doing the infringing. For example, colleges and universities have entire student bodies pirating copyrighted music and films. They are not held liable for infringement if they take good-faith steps to stop the little darlings. So, warnings, monitoring, and the banishment from using the universities’ servers do the trick.

Likewise, Google and its YouTube and other sites have to follow a process when someone copyrighted material shows up on their sites. The process is the copyright owner or representative contacts Google and says, “Take it down. It’s infringement.” Google then takes it down.

The loophole in the process was that Google is not required to verify the authenticity of the party requesting the take-down. As a result, the diabolical among us have figured out that the way to get rid of negative stories, information, and opposing political views is to pose as their authors and request the take-down. So, those irritated with a Wall Street Journal editorial pose as the WSJ and write to the site linking or posting the editorial. They demand a take-down. Not wishing to lose the DMCA protection, the site asks no questions — it goes right for removal.

There are even fake law firms sending letters requesting take-downs. If the stationery is good enough, well, you get your wish. The WSJ did a story on this diabolical activity, using its own experience. Working with Google, the Journal restored 52,000 links that Google had removed pursuant to official requests.

Bad actors are a creative lot. The moral of the story is follow your links — see if they are still there. Until the U.S. Copyright Office finds a solution, we are responsible for policing the rogues.

Elon Musk is a visionary who makes a status car whilst running a company with a net worth greater than Ford and General Motors. He also has a child named X AE A-12. No word on pronunciation for that one. And his Tweets bring on the wrath of the SEC and frustration among the company’s lawyers.

Mr. Musk tweeted to his 34 million followers that they should take the red pill when it comes to the corona virus. The red pill advice, the red pill online groups, and the Silicon Valley red-pill movement come from the film, “The Matrix.” The Barometer knows nothing of the films or Neo, but research reveals that Neo (Keanu Reeves) is given the option of taking a red pill so that he can see society as it really is. Seems to be borrowed from Lewis Carroll’s “Through the Looking Glass,” and Alice’s trip to wonderland.You can see a different world with pills. Alice saw a hookah-smoking caterpillar and the druggies of the sixties thought they could fly. Even Advil takes away a headache, but it cannot address the underlying cause of those headaches.

Seeking, finding, and then seeing truth is a tall order. Sometimes we do not know the truth. Analytics and models give information, but until events unfold, they are not truth. Predicting the future is not the stuff of truth. We know from politics that what is said on television is not the same as what is said when the same folks are under oath. Truth comes through vigilant study, healthy skepticism, and an open mind. You can spot a truth-seeker among those who challenge conventional wisdom. Views and opinions are not truth, even when Elon Musk is the one opining. Mr. Musk may be correct; he may be wrong. A truth-seeker does not attack Mr. Musk for his views but explores the source, foundation, and basis of those views.

‘Tis an odd position to be defending Elon Musk. The Barometer is still trying to figure out how Tesla can be worth billions and still be so cash-poor.

However, truth is vital despite the ongoing slog to find it. So, sally forth, drug-free, and pump those neurons in seeking the truth. No pill can do the work.

Ken Osmond, the actor-turned-police-officer who played Wally Cleaver’s best friend on the TV series, “Leave It to Beaver,” died at age 76. The series ran from 1957-1963. The character Mr. Osmond played, an obsequious, duplicitous snake, Eddie Haskell, was so memorably etched that Mr. Osmond could escape the typecasting. He became part of the thin blue line.

Eddie was a charmer, offering, “Good evening, Mr. and Mrs. Cleaver,” but that was quickly followed by his day-to-day demeaning chatter to the Cleaver boys, “Look Sam, if you can make the other guy feel like a goon first, then you don’t feel like so much of a goon.” Sometimes Wally was “Gertrude,” or “Chief.”

Mr. and Mrs. Cleaver were on to Eddie: “Your father gave me a funny look when I came in… like I’m a teenage werewolf or something.” In answering Wally as to why he believed Ward Cleaver did not like him, Eddie offered, “On account of the way he looks at me when he opens the door. Sometimes I think he’d be happier to see Khrushchev standing there.”

We laughed at Eddie’s pseudo-charms and behind-the-back barbs because we know Eddie Haskell is alive and well. We went to school with Eddie Haskells. In their book, “Developing and Reporting Systems for Student Learning,” Thomas R. Guskey and Jane M. Bailey discuss the “Eddie Haskell effect” in describing the manipulative students who earn “brownie points” (from the junior Girl Scout organization called “Brownies) with teachers in order to earn a good grade. Today’s generation has a far harsher phrase than “brownie points,” but you get the idea. The brownie points are, in the experts’ words, “crucial in the grade commodity market.” (p. 19) We sloggers just studied, too shy or too respectful of authority to work the system.

We work with Eddie Haskells. They brag. They create the appearance of being loyal, hard-working employees. We are on to them; the boss is not. They come in and leave a jacket or sweater on their chairs and then disappear for hours. We do hear from them in their extended absences. They call in or text to have us go into their offices to re-activate the motion-sensor lights. When they are not dodging, they are doing the brownie-point thing. Or taking credit for others’ ideas.

Some of us have had Eddie Haskell children. Angels at home and hellions at school. There is even a checklist for determining whether you are dating an “Eddie Haskell.” “http://newsonrelevantscience.blogspot.com/2011/11/10-ways-to-tell-you-are-dating-eddie.html. Who has not listened to an obsequious politician with flattering words only to find them voting the opposite of those promises and compliments once in office? If you are really looking for duplicity, study foreign relations.

It is the duplicity. And duplicity’s heart is dishonesty. A CEO once commented that the greatest test of integrity is whether a person behaves the same way around everyone. Officers in a board meeting are not the same people as those officers in a meeting sans the board The language is different, the bottomline is different, and the deference is gone. How those officers treat their staff members is yet another story.

One of the great challenges in life is learning to treat everyone the same way as you would treat Ward and June. Ken Osmond, thanks for bringing us one of TV’s most memorable characters, thanks for teaching us to be on the lookout for the duplicitous and obsequious, and thank you for dedicating your life to honorable public service. You did escape the typecasting after all. You, sir, are no Eddie Haskell, RIP.

Adam Neumann, one of the co-founders of WeWork has filed suit against SoftBank because the bank backed out of a deal to pay up to $3 billion for shares in WeWork, $970 million of which would have gone to Mr. Neumann as part of a plan to get him out of the company. SoftBank backed out because the civil and criminal investigations into the company were not resolved by the deal’s April 1 deadline.

Who would have been responsible for the conduct the resulted in the civil and criminal investigations? The conflicts of interest. The sloppy finances. Well, Mr. Neumann was the CEO. Staggers the imagination that Mr.Neumann fancies himself a plaintiff.

The odds are astronomical, but Tara Reade’s allegations that former Senator, Vice President, and now presidential candidate (presumptive nominee) sexually assaulted her just got some street crew. Turns out that in 1993, when the events occurred (according to Ms. Reade), a woman from San Luis Obispo called into the Larry King Show on August 11, 1993 and asked the following question of King,”Yes, hello. I’m wondering what a staffer would do besides go to the press in Washington?” My daughter has just left there after working for a prominent senator, and could not get through with her problems at all, and the only thing she could have done was go to the press, and she chose not to do it out of respect for him.”

Ms. Reade’s mother, Jeanette Altus, lived in San Luis Obispo at the time of the call. She has since passed away, but Ms. Reade identified the voice as that of her mother and that her mother wanted her to go to the police when the alleged event occurred.

The odds are indeed astronomical that the tape would emerge, but these things just find a way, particularly in politics and potential Oscar hosts.

There were $349 billion dollars in loans sent out from the Feds to small businesses to help them through our analytic-induced coma now crippling the U.S. economy. However, the big banks, the bane of Main Street’s existence since about 2007 with their subprime, bail-out, and other interpretive shenanigans, stepped in and scooped up the loans for their biggest customers.

Many of the customers did not even have to do the loan paperwork — they just had to call. JPMorgan Chase, Citibank, and U.S. Bank approved the loans for nearly all of their big customers. Meanwhile the riff-raff small business folk struggled with convoluted forms, and netted a two out of 30 loan approval. That the money was never intended for the big guns was not an issue. Where there’s a loophole to exploit, count on the big banks exploiting away until the Feds catch up and try more regulation.You can’t regulate an amoral technician. They just find a way to get around laws for their own financial gain at the expense of others.

Other examples of amoral technicians? The mother in Illinois who turned her child over to a guardian so that she could qualify for financial aid. With zero income. that’s a sure thing. Then there are the Ivy Leagues who solicit applicants they know are not qualified in order to lure them into applying, thereby increasing your denominator (in the language of those health-care, plateau-seeking, now vaccine-seeking analytic experts). Increase the denominator and your acceptance rate us strikingly low, thereby enhancing exclusivity. It’s not real, but it does bring in the money. By donation or the back-door way through coaches paid to use their slots for the physically untalented of wealthy parents.

The ethical mind always asks, ‘What would happen if everyone did what I am doing, how would the world look? In the case of the bank, they all did it, there was no money left for small businesses, and they lost more business or trotted over to Chapter7 bankruptcy. ‘Tis a lovely world amoral technicians can create.

The Barometer and her husband had avoided the grocery stores and the great toilet paper drain, as it were, of 2020, until March 20. We are stockers, and had sufficient TP to decorate a house or two in the manner of our younger days. Until our adult children swooped in because of their millennial ways of, “What, me worry? My phone is down to 10% battery before I think about charging it.” So, off we went foraging that Friday for baked potatoes, milk, and TP.

The TP was being doled out, one package per family, at the manager’s desk. No pick-up from the aisles for this precious commodity. TP had become like Bose headphones at Best Buy. You must ask for them, they are locked in a cabinet, and only certain employees are trusted to dole them out to non-scruffy customers who must pay prior to handling them.

We approached the manager humbly, “Please, sir, could we have just one?” We mentioned that we were stunned that the Walmart Neighborhood Market had become so involved in rationing. Another employee stepped up, leaned forward, and whispered to us as only someone with inside information would, “You know they are sending in the marshal on Monday.” Visions of Matt Dillon riding into Mesa, Arizona came to mind.

However, research showed that there was an Internet rumor that the Feds were going to impose martial law that Monday. The old game of telephone is alive and well, all with the exponential power of technology. Around the country the rumor spread. The hang-up for the fearful was the spelling. Or was the hang-up that no one understood what martial law was? Whatever the reason, the blasted Internet, the tweeters, the flash-grammars, the chap-shatters, and the rest all fell for it and rushed in to get theirs. AH, the makings of a brutal Netflix series were there before our eyes. Have mercy on us through April 30 as people are locked up with their phones and computers. Who knows what showdowns at the corral are coming, or it it coral?

New Wells Fargo CEO, Charles Scharf, testifying before the House Financial Services Committee, regarding the findings of a House report on behaviors at Wells since the time of the discovery of the 3.5 million fake accounts, give or take a few thousand here and there.

The e-mails and conduct in the report reveal a bank looking only to have its cap on growth eliminated. Here’s a classic quote from the now former chief risk officer,”If any of the $200MM [for customers injured due to unauthorized accounts] is left over, we promise to give it to charity—only after the CFPB and the OCC let us out of the consent orders. If they do not, no donation. Put the onus back on them.” Yes, that’s where the onus should be, after all.

So, to get out from under the cap and their consent decree, the chief risk officer used charitable donations as a bargaining chip. Remember all those ads Wells was running about its dedication to social causes and the extent of its donations? This is one scary crowd.

Here’s wishing Mr. Scharf well in his efforts at the bank. Between reading the baseball commissioner’s report on the Astros and this latest report on Wells Fargo, the Barometer has her head shaking like a baseball bobble figure on a dashboard.