Borgman, D. (2002, August 20). What to Believe? S. Hamilton, MA: Center for Youth Studies.

OVERVIEW

Some things on economics should be written by those outside the discipline or practice—by those bound neither by ideology nor profit interest to a particular view or practice of economics. For those of us who care but don’t fully understand, the articles in the Business section of the New York Times (2002, August 8) serve a basic education.

Side by side were the following articles:

• Citigroup Chief Makes Changes in How Bank Does Business”
• “Ex-Managers Say Sham Deal Helped Enron: Merrill Lynch Denies It Aided Any Deception”
• “Ex-Drug Executive Faces U.S. Charges of Insider Trading: Indictment Also Alleges Bank Fraud and the Destruction of Files”
• “For WorldCom, Acquisitions Were Behind Its Rise and Fall”
• “When Mercurial Is the Word, Traders Speak of Love, or Not” (the differing philosophies and inside strategies of those who play with money for a living)
• “I.M.F. Agrees to Loan of $30 Billion for Brazil”

Merely thinking about these headlines gives one a sense of the culture of capitalism in this new millenium. Studying one of them demands reading behind the words, a kind of literary criticism or textual exegesis. (Our questions will appear in italics.)

Chief executive of Citigroup, Sanford I. Weill, is taking the offensive after weeks of negative publicity regarding the company’s role in financing Enron and WorldCom…

…outlined to employees yesterday several changes in the way it does business.

• Why weren’t these changes made before?

Weill said the bank would no longer provide financing for companies that plan to conceal debts by keeping them off the balance sheets. (Citigroup has previously maintained that it was not responsible for Enron’s attempts to hide its debts because Enron did not tell its bankers that it planned to hide the obligations.)

• This seems to be the crux of the matter, sir. Why would Citigroup ever provide financing for a company planning to conceal its debts? And how could it be that your sophisticated bankers were not aware of what was generally known among those in the business?

Mr. Weill also said that Citigroup planned to join a growing list of corporations that would begin recording stock options granted to employees as expenses.

• Aren’t these moral issues? How do you feel about employees who have lost their savings? How should executives who have profited from their loss be punished or compensate? As to listing such as expenses, when do gray areas become moral crimes?
• Isn’t capitalism supposed to be self-regulating? Why has it taken media spotlight, Senate Hearings, threat of prosecution, and new legislation from government to produce these changes?

The accounting changes will take effect next year.

• Shouldn’t something as terrible as this be changed immediately?

"Investors have made it clear that they want options accounted for in this manner, and we at Citigroup continue to place a high priority on our responsibilities to shareholders."

To whom else besides your investors do you have a responsibility? Besides the bottom profit line is there any consideration for the common good of society, or something even higher?

An earlier article describes youthful reaction to these scandals: “Corporate Bad Guys Make Many Seek the Road Less Traveled: A generation of aspiring professionals sees feet of clay on its business school idols,” [Rachel Lehmann-Haupt, R. & St. John, W. (2002, July 21). Sunday Styles. The New York Times, Section 9, pp. 1,5.]

Some of these young adults have put in 100-hour weeks for profiteering executives. Ameet Shah, 24, a Duke graduate, was one of these working at J.P. Morgan Chase on deals involving companies like Enron and Kmart.

‘I saw people who put 15 years of service into the company get laid off in a day because of irresponsible behavior of corporate executives. I started thinking that I didn’t want to be associated with that.’

So Shah walked away from his $50,000 job to join Teach for America. He is teaching summer school in a South Bronx classroom without air conditioning, living in a simple dorm room, and loving his work.

Murad Sofizade, 25, is one of those sharp young persons able to pursue joint degrees from Harvard Business School and the Kennedy School of Government. His thoughts:

‘It’s all an example of the kinds of abuse of power I read about in the public sector of underdeveloped countries…My belief was the private sector was more efficient and apparently that’s not the case. It’s a major shock for me…I’m now inclined to go to the public sector directly.’

Wellesley graduate, Kathryn Carlson, 24, lost her job through a recent merger. She looks back on her entry into the corporate world.

‘When I graduated in 2000, it seemed glamorous. All my friends were doing it, and the money was seductive. But when I found myself working into the middle of the night making money for the Enrons and WorldComs, it became harder to justify…I don’t have a clear direction of what I’m going to do next, but I definitely know it is not going to be banking…’

Jason Crawford, 22, majored in computer science and doesn’t rule out a career in business. Nor does he consider corruption to be as widespread as media attention may imply. But he asks, “ ‘If I become a businessman, am I going to be presumed guilty?’ ”

QUESTIONS FOR REFLECTION AND DISCUSSION

• How seriously do you take the scandals revealed about corporate America?
• Have you found yourself angry at executives who made $30 to 50 million dollars selling stock options while forcing workers to invest—and lying to them about the soundness of those investments?
• Does the contrast between how we treat common street criminals and big business or white-collar criminals bother you?
• What does the Bible have to say about economic fraud? How would Jesus react to corporate scams?
• What responsibilities do Christians inside businesses and outside have to correct such malfeasance?

IMPLICATIONS

• The scandals shaking the corporate world will hopefully restore some measure of ethics within.
• The ability to acquire money can offer great temptation to do so. It is a travesty that greed has run so rampant through corporate America.
• It is important for young people to carefully study the behavior and ways of the generation ahead of them. They can learn from their mistakes and forge a better way.
• In every field of work, there are those who will do right and those who will do wrong. It may not be fair to cast judgment on all business executives. It is a good idea to assume innocence until the proof clearly suggests guilt.

Dean Borgman cCYS