Eliot Spitzer’s Harvard ethics lecture: Too soon for him to speak?

F. Scott Fitzgerald once said there were no second acts in America. He hadn’t met Eliot Spitzer. Recently, the former New York governor was invited to deliver a lecture on ethics at Harvard University’s Edmond J. Safra Foundation Center for Ethics.

Before I get to the ethics of this matter, let me just say: I have no interest in attacking Spitzer. Nor do I hold any personal judgment against the man for the events that forced him from office in March 2008. But I do think if you’re going to speak about ethics, you had better be willing to take a long, hard look at your own actions. Instead, Spitzer stuck to a script: “From Ayn Rand to Ken Feinberg — How Quickly the Paradigm Shifts.”

Yes, I’m sure Spitzer had lots of interesting things to say about policing Wall Street. But can you imagine how much more valuable an ethics talk would have been if he’d answered the question: “How does someone — in this case a savvy prosecutor — fall into the trap of things he once railed against?”

Maybe Spitzer is still trying to figure that out. I can sympathize. Soon after my release from federal prison in the mid-90s, I spoke about ethics before a few rotary clubs. Regardless of what I had to say, my audience had a preset skepticism about whether I had a valid message to offer.

Ten years later, it’s a different story. When I speak at universities, people now understand that enough time has passed for me not to have replicated the poor choices of year’s past. I don’t sweep that past under the rug, either. I am open about the choices I made that led to incarceration. That candor provides the greatest opportunity for learning. Because you can talk about theory all day long. What matters most are lessons you can share on how others can avoid the same mistakes.

So, here’s a question worth asking: What is the appropriate lag time before someone can step out again into the public sphere and talk about ethics? Is it too soon for Spitzer? Does he need to spend a little time in anonymity — five years, ten years? — before he can speak? You tell me.

Bruce Karatz, former CEO of KB Homes – Indicited! Were His Choices Ethical?

Having begun a formal probe by the SEC in 2007, a federal grand jury has indicted Bruce Karatz.  The 20-count indictment included seven counts of mail fraud, five counts of wire fraud, three counts of securities fraud, four counts of lying in statements to the U.S. Securities and Exchange Commission and one count of lying to KB Home’s accountants.

Well…with all those indictments, if found guilty on all charges, Mr. Karatz could face up to 415 years in prison.  Seems like the alleged frauds are getting larger as are the potential sentences.

Reported by the Dallas Business Journal:

Los Angeles-based KB Home was the 21st-largest home builder in North Texas in 2008, with 239 housing starts, according to DBJ research. The company started 513 North Texas homes in 2007, and 1,216 in 2006.

Karatz, 63, is alleged to have backdated stock options over seven years, awarding himself and others millions in stock-based compensation. Karatz resigned from KB Home (NYSE: KBH) in November 2006 under pressure in the wake of an options inquiry. Other top KB executives forced out were Richard B. Hirst, executive vice president and chief legal officer, and Gary A. Ray, the head of human resources.

The Los Angeles Times reports: “Karatz, 63, served as chairman and chief executive of Westwood-based KB Home from 1986 to 2006, when he resigned under fire. Over a three-year period ending in 2005, Karatz garnered more than $232 million in compensation.”

The Times further reports:

The indictment does not say exactly how much Karatz gained as a result, but KB Home required Karatz to pay back $13 million in backdating gains when he left the company in 2006. And the SEC agreed to a settlement of $7.2 million with Karatz in 2008 to cover what it reckoned were his gains.

Karatz has long been a target of shareholder activists and labor unions, who accused him of taking more than his fair share of company profit. In 2005, the year before he stepped down, Karatz had take-home pay of $6.3 million, but he received an additional $150 million, mostly from exercising stock options.

As a business ethics speaker, it is clear that transparency is the order of the day.  Long gone are the days (or at least they should be gone) when corporate compensation is a behind closed door discussion.  I am certainly open to executive compensation that is fair and rewards those in leadership for outstanding performance.  However, any person in executive leadership in a public company must be alert to the consequences of the choices they make.

Every choice has a conseqence.  Bruce Karatz has been dealing with the consequences of his leadership at KB Home for the past several years.  It would appear that, if convicted, he will have many years ahead to review his leadership choices.

If you worked for KB Homes and have an opinion on Mr. Karatz’s leadership feel free to comment!

The Ethics of Change – A Letter To President Elect Barack Obama

Today – the day after the election – we, as Americans, have seen yet another historic moment in a life that has seen many. Those of us with some age have seen the end of wars and the beginning of others; we have seen space travel and a man on the moon; we have seen technology change everything about our daily lives; and we have seen a man rise up and break barriers that once were thought to be iron clad. Mr. President Elect – your election may be historic for African-Americans, but, more important, it is historic for all Americans as we see through you a change of attitude and focus – we see hope in your eyes.

With the above said, Mr. President Elect, I must caution, in the midst of celebration, that we not lose sight of what got you there and what your task at hand is. President Elect Obama – we must restore a sense of ethics to this great nation and make choices – tough choices at times – based on sound ethical and moral principles that have guided us for so long.

I, of all people, have no right to lecture you on ethics or change – after all, you are our new President elect. But, like you, I know a thing or two about adversity and obstacles. As a former convicted felon (not something I am proud of) now professional speaker, I have risen above my poor choices from the past and become a voice for CHOICE and ETHICS. Regardless of the choices made, we can moving forward make better choices that will bring about positive results.

You said, “it’s been a long time coming, but tonight, because of what we did on this date in this election at this defining moment change has come to America.” Your statement is true…we have turned for too long away from choices that empower people to achieve greatness and focused on what’s wrong and how we exercise our muscle to the detriment of others.

You, Mr. President Elect, are aware of the challenges ahead. Your words reveal it, “For even as we celebrate tonight, we know the challenges that tomorrow will bring are the greatest of our lifetime — two wars, a planet in peril, the worst financial crisis in a century.” You know, as do we all, that the only way to succeed is to do so by making choices founded on the ethical foundation of our forefathers as they founded this great Nation.

I speak on ethics today, founded on the lessons I learned from not living an ethical life. Perhaps, as a Nation, we have not made the best choices – or even ethical choices. The challenges ahead are significant and you, yes you – Mr. President Elect – will be tempted beyond belief, after all you are the most powerful man in the world. Don’t lose your sense of ethics, sir. Remember your promise! “But I will always be honest with you about the challenges we face. I will listen to you, especially when we disagree. And, above all, I will ask you to join in the work of remaking this nation, the only way it’s been done in America for 221 years — block by block, brick by brick, calloused hand by calloused hand.”

Regardless of who authored these next comments you delivered – and delivered well – they form a promise of an ethical foundation for your Presidency.

“So let us summon a new spirit of patriotism, of responsibility, where each of us resolves to pitch in and work harder and look after not only ourselves but each other.

Let us remember that, if this financial crisis taught us anything, it’s that we cannot have a thriving Wall Street while Main Street suffers.

In this country, we rise or fall as one nation, as one people. Let’s resist the temptation to fall back on the same partisanship and pettiness and immaturity that has poisoned our politics for so long.”

Mr. President Elect – we need that foundation that you have stated so well – a foundation of hope and promise and belief that as American’s we can be proud of who we are and what we stand for – that we can be proud to call ourselves American’s here and around the world. You have given us that hope and for that we say – Thank you!

Regardless of political belief, I think we are witnessing the dawn of an new age for America. We will succeed or fail based on the choices we make moving forward. If our choices are based on fear, ego and power, we may find that we will be no better than we have been and perhaps even worse. Those choices and not based on sound ethical principles. On the other hand, if we make choices that foster freedom, opportunity and a spirit of selfless cooperation we might see the dawn of the “Age of Aquarius.”

Let me end with your words…

“America, we have come so far. We have seen so much. But there is so much more to do. So tonight, let us ask ourselves — if our children should live to see the next century; if my daughters should be so lucky to live as long as Ann Nixon Cooper, what change will they see? What progress will we have made?

This is our chance to answer that call. This is our moment.”

Lying = Prison! Detroit Mayor Kwame Kilpatrick Sentenced to Prison

Dethroned – that’s what I’d call it when you go from the top of the city’s food chain to serving time in prison.  Judgemental?  I think not.  I’ve been there and I know.  Every choice has a consequence and lying is a choice that brings nothing but pain.  I served time in federal prison for theft and lying.  Martha Stewart served time in federal prison for lying.  Now it seems that Kwame Kilpatrick will, too, serve time for his role in covering up an affair.

Calling him “arrogant and defiant,” a Wayne County Circuit Judge on Tuesday sentenced former Detroit Mayor Kwame Kilpatrick to four months in jail with no early release under the terms of a plea deal.  This reported by CNN.

From my former blog – Detroit Mayor Kwame Kilpatrick and his chief of staff, Christine Beatty five years ago were having an affair. The lies and deception that followed cost the City of Detroit more than $9 million dollars, and cost former police officers their career.

Now the two are accused of lying under oath – Perjury, Obstruction of Justice and Misconduct in Office. If you recall, perjury is what Martha Stewart was convicted of and served time in prison for. Now these two are facing the same issue.

According to CNN -

Kilpatrick pleaded guilty last month to two felony obstruction of justice charges stemming from his efforts to cover up an extramarital affair. He also pleaded no contest to charges of assaulting a police officer attempting to serve a subpoena on a Kilpatrick friend in that case.

Kilpatrick resigned from office last month after pleading guilty to charges resulting from a sex scandal.

He was accused of blocking a criminal investigation into his office and firing a police deputy to cover up an extramarital affair and other possible illicit activities.

How did this all come about? It appears that the allegations of the affair were made public in a whistle blower trial for two former officers of the city. While “perjury” is generally used in a criminal case, this may be the first time that the Wayne County prosecutor’s office has used perjury from statements made in a civil case.

“In January, the Free Press reported that in an analysis of nearly 14,000 text messages on Beatty’s city-issued pager it found some from 2002 and 2003 that indicated she and the mayor were having an affair.”

Prompted by the judge to recount his wrongdoing last month, Kilpatrick admitted, “I lied under oath in the case of Gary Brown and Harold Nelthrope versus the city of Detroit. … I did so with the intent to mislead the court and the jury and to impede and obstruct the fair administration of justice.”

Kilpatrick had faced eight felony counts. As part of a plea agreement, six counts related to misconduct in office were dropped, and a perjury count was changed to a second obstruction of justice charge.

But, every choice has a consequence. As a business ethics speaker (www.chuckgallagher.com), I share that sentiment with audiences nation wide. You can run but you cannot hide – from the truth. It is said that you reap what you sow. Most of the people who find themselves facing consequences they did not anticipate – assume that if they are not caught or can cover up the truth – what is hidden will stay that way forever. That is further from the truth. Funny, but “truth” has a way of sneaking to the surface.

In this case the truth will either set you free or be the catalyst for a prison sentence – Kilpatrick has found the later to be the case.

YOUR COMMENTS ARE WELCOME!

McCain – Obama Dance Off…Business Ethics? – NO… Campaign Fun? – YES!

As a 51 year old business ethics speaker, I must say…this presidential election has been interesting.  Not only is it historic but the level of creativity has been over the top.

For the younger generation – history has been made as the first black man in history has won the nomination of his party and is a viable candidate for president of the United States.  And, had it not been Obama chosen, then history would still have been made as the nomination of her party would have been a female.  Either way, this is an historic election.

Likewise, the selection of Sarah Palin as a VP candidate has been attention getting in and of itself.  Should McCain win – many will credit his victory to Sarah’s down home charm.  Should he lose – there is not doubt she will be blamed.  Either way the governor of Alaska has received national attention.

So…with a race that some say is not so close…what can we do to bring some excitement to this race.  Well…here’s a solution.  Click on this next link – give it time to download and enjoy.  As I said, the creativity that has come from all sectors is rather amazing.

Dance off

Politics, Religion and Ethics – Obama’s Presidential Campaign and Messages from the Pulpit!

Let me begin by saying, this writing is 100% about law, ethics and the application of the law.  I am in no way, taking a political stand through the content of this entry.  Rather, I am amazed as what I believe is the flagrant violation of the law when it comes to influencing votes in this presidential campaign.

According to Merriam-Webster the definition of ethics is the discipline dealing with what is good and bad and with moral duty and obligation.  Now, that definition is broad and clearly subject to interpretation.  However, good and bad must also be judged in accordance with the law.  One might judge a particular action to be good and ethical, but that same action might be against the law.  Hence, regardless of opinion, the action is unethical.

So, what does this have to do with the election?  Well…it is generally presumed to be against the law for a non-profit religious organization to use their pulpit (I use that term loosly) to influence public opinion for election results or outcome.   Non-profit religious organization can lose their non-profit status if they openly work to endorse a political candidate.  This loss could be costly indeed.

So how would one know if such a thing is happening?  Funny you should ask.  But today I received information about the link I am providing.  It was sent to me raising a question as to what my opinion was related to ethics, politics and the law.  What I saw was amazing – a flagrant disregard for the law and the non-profit status at stake.

PLEASE NOTE:  The following, should you decide to watch, is anti-Obama.  The message is clear.  What is more serious is that someone would knowingly and publically risk the non-profit status with such a clear political message.

Judge for yourself.  Here’s the link.  The message is from ATLAH World Ministries and it’s steamy.  Again, I express no opinion other than the amazement as to the message and risk inherent in its delivery.

WHAT ARE OTHERS SAYING:

Americans United for Separation of Church and State has asked the IRS to investigate the Roman Catholic Diocese of Paterson, N.J. and Rock Christian Fellowship in Espanola, New Mexico.

According to AU’s letter to the IRS, Roman Catholic Bishop Arthur J. Serratelli has published a letter on Catholic Diocese of Paterson, N.J.’s website and newspaper attacking Barack Obama.”

The letter criticizes Obama for his pro-choice stance and encourages parishioners not to vote for Obama.

AU also wants the IRS to investigate Rock Christian Fellowship in Espanola, New Mexico for posting a large display that encourages voters to support republican candidates over democratic candidates.

In my opinion, what the above mentioned organizations have done is small change in contract to the ATLAH video.

An NPR article states the following:

On Sunday, 33 ministers will take part in a nationwide effort to violate the 54-year-old ban on political preaching and endorse or oppose a candidate from the pulpit. The effort is called the Pulpit Initiative.

Two weeks ago, more than 100 pastors squeezed into a hotel meeting room in Washington, D.C., to learn about the Pulpit Initiative, a brain child of the conservative legal group, Alliance Defense Fund. Attorney Erik Stanley walked them through it.

“If the IRS chooses to come after these churches, we will sue the IRS in federal court,” Stanley said.

Stanley says pastors are fed up. In the past four years, the IRS has stepped up its investigations of clergy. It sent letters to 47 churches, including some liberal ones — not just for explicit endorsements, but also for using code words like pro-choice or pro-life in relation to candidates.

“What’s been happening is that the government has been able to go into the pulpits of America, look over the pastor’s shoulder, and parse the content of their sermon. And that’s unconstitutional,” Stanley said. “No government official should entangle itself with religion in that way.”

HERE’S THE QUESTION FOR YOU – THE READER:  Which is ethical – (1) for the church to follow the dictates of the law and avoid endorsing or disparaging a politicial candidate or (2) to make a “good” decision based on a moral duty and obligation (in the face of the law)?

If you watch the ATLAH video…come back to this site and share your opinion.  Otherwise, your comments welcome on the ethics of religion and politics.

Texas Ranks High in Governmental Ethics Says the Better Government Association

As an ethics speaker, I have the opportunity to travel the country and meet citizens of all the states in our great nation.  Amazing what you can find when you just take the time to ask questions.  People are in many cases better connected than our leaders might think.

When it comes to Texas, as a recent resident of that great state, I can say that, overall, there is a feeling of positive prosperity.  Texans expect government to be responsive to them and, for the most part, it seems that it is working.

The report just issued came from the Better Government Assoication.  Founded in 1923, the Better Government Association is an independent, non-partisan government watchdog.  Their mission is to combat waste, fraud, and corruption in government by conducting investigative research and litigation to expose problems; researching policy solutions promoting transparency and accountability in government; and using internship programs to train the next generation of investigators and public interest lawyers.

Texas ranked 7th among all fifty states overall.  By issue area Texas ranked 17th in open records laws; 4th in whistleblower laws; 36th in campaign finance laws; 22nd in open meetings laws; and 3rd in conflict of interest laws.  Despite its number 7 overall ranking, Texas achieved a modest 60% overall score.

“Texas should be congratulated that it beat out forty-three other states” said Stewart, “however, there is clearly a lot of room for improvement.  If you look at the percentage score, Texas received 60%, the equivalent of a D letter grade, hardly a cause for celebration.”

The 2nd edition of the BGA-Alper Integrity Index relies on data compiled through 2007.  Most of the data was collected by the BGA and the BGA created the scoring system for four of the five laws.  The BGA relied on the work of the Center for Public Integrity in regard to conflict of interest laws.

Generally the BGA reviewed the relevant laws in all fifty states and created a scoring system for each law that ran on a 0 to 2 scale with half point increments or a 0 to 4 scale on whole point increments.  The better the law the higher the score.  For the BGA better was usually defined as lower limits, more transparency and higher penalties.   The BGA scored areas of each type of law that were common across all fifty states.

The BGA-Alper Integrity Index is the only tool that attempts to measure the performance of all fifty states across a number of good government laws.  As with any analytical tool, it can’t measure every variable that impact on government integrity.  However, laws are generally the reference point against which ethical behavior is measured.  By rating the quality of the laws we reviewed it at least gives an indication of how important ethics are to each state.

“We hope that legislators and leaders in Texas will use the Integrity Index as a tool to spur reform and upgrade their laws in regard to transparency, accountability and limits.  Better yet, we hope Texas comes up with a tough new standard that then becomes the measure against which other states will be judged” said Stewart.

7th out of 50 isn’t bad, but a “D” rating gives pause to reflect.  Obviously, there is substantial room for improvement in the realm of governmental ethics.

A full copy of the BGA-Alper Integrity Index is available for free on the BGA’s website at http://www.bettergov.org/.

Darren Reagan – Choices and Consequences That Include Prison! Comments by Business Ethics Speaker Chuck Gallagher

In June of 2008 Darren Reagan was convicted of theft of public money – a federal offense. On October 8th, 2008 he was sentenced to 12 months in federal prison. But this is not the end for Reagan, as he will face additional charges and a hearing in January 2009 for other alleged offenses.

As a business ethics speaker, I remind audiences around the nation that every choice has a consequence. More times than not, we might make simple (unethical or illegal) choices that seem innocent at the time, with the full intent on paying back. Reality is, however, you cannot escape the consequence of the choices made. I know and speak from experience, as it was thirteen years ago to the month that I took my first steps into federal prison for the choices that I made.

According to the US Attorneys Office:

Reagan, who is currently in federal custody, is also a defendant in the Dallas City Hall corruption investigation case, charged with conspiracy to commit extortion, two counts of extortion by public officials, one count of conspiracy to commit money laundering and four counts of tax evasion. That case is scheduled to go to trial in January 2009.

At trial, the jury found that from October 1, 2002, through September 1, 2007, Reagan knowingly stole approximately $45,000 in rental housing assistance payments from the Dallas Housing Authority (DHA) in connection with the rental of certain property to his mother-in-law, Leatha Kirven. Reagan falsely claimed to the DHA that he had no blood, marital, or other familiar relationship to Ms. Kirven, and as such, caused DHA to pay him housing assistant payments to which he was not entitled.

Mrs. Kirven testified in a videotaped deposition taken from her hospital room that she knew that when she signed up for the Section 8 housing assistance with Mr. Reagan, that she knew it was against the rules. She also testified that she told federal agents, when questioned by them two years ago, that she knew it was wrong.

Darren L. Reagan is also a defendant in the Dallas City Hall corruption investigation case, charged with conspiracy to commit extortion, two counts of extortion by public officials, one count of conspiracy to commit money laundering and four counts of tax evasion. That case is scheduled to go to trial in January 2009.

Politics and Ethics – A Question

Ethics is defined as the discipline dealing with what is good and bad and with moral duty and obligation. Now if that is generally true – that ethical choices are defined as those choices that deal with a moral duty and obligation, then the question is can ethics and politics truly go hand in hand?

Some would, of course, say yes. I’ve heard it said that ethical people are always ethical. However, from my experience personally and in observing the behavior of others, I am not sure that is true. I have come to believe that ethical or moral people can become so tempted that they make unethical or bad decisions. And, speaking from experience, the first decision although mentally difficult is the one that paves the way for more to follow.

So here me out and please, with your comments, answer this question! I submit that Darren Reagan started out being a good man. Like most of us, he likely had his flaws, but I bet there are those who would read this and vouch that Reagan was a good man. If that is so, then what happened that caused an otherwise good man to make choices that ended him up with a home in federal prison? Could it be that the power of politics proved to be too much temptation?

Those who have a connection to this case – your comments are welcome!

Business Ethics, Bank Failures and Government Bailouts – Are They Compatable?

Just last night I was having dinner with with the head of a company and two retired physicians, none of whom I knew before my wife and I were seated.  As one might expect, the conversation turned to career as we played the get to know you game.

“What do you do,” one of the retired physicians asked?

“I speak across the country to businesses and associations on ‘ethics’,” I replied.

“Well,” the business exec at the table spoke up immediately, “you should be booked solid now.  I’ve never seen it so bad.  Seems that those guys on Wall Street and in Washington need your service desperately.”

With those comments the table broke into a sad sort of laughter, although the comment made was no laughing matter.  Rarely, if ever, in my lifetime (and I’m 51) have we seen a time in our country where the choices that have been made have had the potential for a more disastrous outcome.

Before the month of October begins in earnest the headline late on a Sunday night on CNN is: U. S. bank failures almost certain to increase in next year. Based on all that we’ve seen in the short scope of the last two months I tend to agree.  And here’s what is more baffling – people much smarter than I must have known that we would one day face this outcome.  The writing was on the wall.  You can’t extend credit to someone who can’t afford to pay you back and assume that everything will somehow work out.

Every choice has a consequence.  That is a universal law (although it seems that many people would prefer to ignor its existence).  All we heard for the past several years is how robust the US economy was.  The housing market was strong in most sectors of the nation and it would appear that we were set to continue to enjoy long term economic prosperity.  Really?  Here’s a segment of the CNN story:

Weakened by huge losses on risky home loans, the banking industry is now on the shakiest ground since the early 1990s, when more than 800 federally insured institutions failed in a three-year period. That was during the clean-up phase of a decade-long savings-and-loan meltdown that wound up costing U.S. taxpayers $170 billion to $205 billion, after adjusting for inflation.

Now, like many who read this, I was around during the Savings and Loan crisis.  It wasn’t pretty and friends, I hate to say this, but this is no savings and loan crisis.  That economic hardship pales in comparison to what we could face based on bad choices and business ethics gone awry.  The government bailout – hum, let me rephrase – the taxpayer bailout may preserve some of the “stronger” institutions, but there is a substantial belief that many more will fail, buried under the weight of their poor choices.

The following quote from the CNN article is very accurate:

“I don’t see why things will be that much different this time,” said Joseph Mason, an economist who worked for the U.S. Treasury Department in the 1990s and is now a finance professor at Louisiana State University. “We just had a big party where people and businesses overborrowed. We had a bubble and now we want to get back to normal. Is it going to be painless? No.”

I think it is interesting his choice of words, “people and businesses overborrowed.”   That statement is factual, but the more significant underlying question is how did that occur and why?  The answer to that is where – ETHICS – comes into play.

Now let me simply define ETHICS for the purpose of this discussion:  “Ethics is the discipline dealing with what is good and bad and with moral duty and obligation.”

So let me get back to the comment “people and businesses overborrowed.”  While the comment is true neither people or businesses had control of the purse strings.  People were “unethically” encouraged to overborrow.  Rarely a day would go by without the mailbox being filled with credit offers.  “Zero percent this and transfer balance that.”  We saw big burley viking men touting Capital One and God knows my college aged son received more offers for credit than he could count – even though he had no source of income.

While there is plenty of blame to go around, YOU CAN’T BLAME THE PEOPLE.  People did what people do – they responded to effective marketing campaigns and accepted offers made by many of those very banks who soon will be buried in the business grave yard of failure.  Poor business choices combined with poor business ethics will equal business failure.

We hear all too much about the mortgage crisis again with many stating that people over borrowed.  That may be true, but the bank or financial institution again controlled access to the money.  Now if a bank is so overzealous to prop up growth and earnings that they make loans to unqualified individuals or loan against property that is overvalued, I contend that is unethical.

Banks have more than a duty to earn money and grow, their greater duty is to do both of those things and (most importantly) survive!  Their moral duty and obligation (their ethical duty) is to survive while achieving success.  I agree with my dinner mates, if there is ever a time for ethical reflection it is now!

Another comment from the article that has alarming numbers attached:

Using statistics from the S&L crisis as a guide, Mason estimates total deposits in banks that fail during the current crisis at $1.1 trillion. After calculating gains from selling deposits and some of the assets of the failed banks, Mason estimates the clean-up this time will cost the FDIC $140 billion to $200 billion.

The FDIC’s fund currently has about $45 billion, a five-year low. But the agency can make up for any shortfalls by borrowing from the U.S. Treasury and eventually repaying the money by raising the premiums that it charges the healthy banks and S&Ls.

Perhaps next is the issue of Goverment Ethics.  By all accounts, Alan Greenspan reported to Congress many years back – talking in “Greenspeak” about what was likely to happen and how it could be avoided.  Did the government take action?  NO!  The concern, it seems, for most politicians is staying elected or getting elected, not making ethical decisions.  The moral duty and obligation that our elected officials have (or should have) is to represent those they govern and protect them from the disaster we are now facing.

And, not to be a cynic, but when have you known any financial projection to come in at or under the budget or estimate.  In my lifetime – never!  So by guess is the $700 billion will be more like $2 trillion when it is over.  The bailout here and proping up the FDIC there, not counting what else will arise that is undisclosed at this time.  It all adds up and is dumped on our shoulders.  In reality all we, as a nation, are doing is on a bigger scale exactly what the “people and businesses” did – borrow to pay off what we could not afford in the first place.

So back to the question – Bank Failure and Government Bailouts – are they compatable?  Neither represent good business ethics and yet both will happen.  Perhaps the comment was right at dinner, I need to camp out in Washington and NY – although now it might be too little too late.

For information about my presentations visit my web site.  Your comments, by the way, are welcome.

Palin – Biden Showdown! Will Tonight’s Debate Decide the Election?

In the heartland of our country the east will take on the west, the experienced Washington insider take on the Alaskan outsider to inside belt line politics and the outcome could be a deciding factor in this hotly contested presidential race.

Palin is articulate (something that as a speaker I like), a self proclaimed outsider and someone who has shown that she is not in full command of what is going on politically. Now, by no means am I saying that she is dumb or incapable of serving as Vice-President, but she is earning her stripes as a political newcomer and outsider by some of the comments and answers she gives. Yet, with all of her missteps, she is gutsy and has infused energy into the McCain campaign – something it desperately needed. The question is – will Sarah Palin step up to the plate and hit a home-run for the team or strike out leaving her team flat.

According to CNN:

Palin’s interview gave the vice presidential candidate a chance to showcase elements of her life story and demonstrate some of the folksiness that’s been central to her political success.

It’s exactly the kind of interview that voters can expect to see from the governor in the coming weeks, according to a Palin adviser, who recognized that there is hunger in Republican circles and among the public at large to see a less-scripted, more authentic candidate.

Biden, on the other hand, has years of experience inside the belt line and, most would say, ignoring political choices, would come across Presidential due to his age, experience and understanding of how Washington works. Those attributes could be Biden’s assets, but too many they are substantial liabilities. CNN states in an article:

For the Democrats, Biden has served in the Senate for 35 years. His biggest challenge will be to stick to the script. He’s known for making off-the-cuff remarks, including some gaffes.

Either way, the debate tonight should be noteworthy. It’s odd to observe, but Obama (a newcomer to the political scene) selected an experienced insider as his running mate. On the other hand, McCain (an experienced Washington insider) selected a new comer as his running mate. It seems both candidates are playing a balancing act that has significant ramifications. I’m sure that both candidates are a bit nervous about how the person in their court will do.

With the economy in the tank and more negative publicity floating in the media than one can keep up with, it would appear that Obama has the potential for taking the lead. Perhaps tonight will give American’s more information with which to make this all important decision.

QUESTION: If you read this before the debate – (1) who do you think will win? If you read this after the debate (2) share your opinions on what you observed.