Archive for ethics

Wal-Mart and DC City Council Wage Throw Down: A Story In GIFs

There was a little publicized law that DC passed that will either help raise the standard of living for the common man or doom DC citizens to a life of poverty  because they’ll lose interest from corporations.  This story can be best summarized in gifs:

The Washington DC city council has a bill called the Large Retailer Accountability Act.  The bill would require companies that make more than $1 billion in annual revenue to pay employees a raised minimum wage, $12.50 an hour instead of the regular $8.25.

Wal-Mart is the largest retailer in the world, and they’re notorious for their low wages and refusal to negotiate on wage matters.  They were planning on opening six new stores in the city (three of which are currently in construction) to bring some jobs and revenue to the area.

But when they heard about the proposed bill, they threatened to kill the deal unless the city council decided to abandon the bill.

Some economists worried that passing the bill could have negative consequences, mainly through lower property taxes, missing multiplier effects, and the abandoned sites where construction was stopped.

Others think it’ll have more positive consequences than negative ones since many people in the city will have a higher wage.

Either way, people from both sides of the issue were surprised when the council voted to pass the bill.

Some people think that DC made the best decision they could have, others think they didn’t think about the consequences of sending away big retailers.

Wal-Mart was the most vocal about the wage issue, but it’s possible that the bill won’t dissuade other box stores and lucrative retailers from coming to the city.

So now DC is all

 

And Wal-Mart is all

 

Regardless it doesn’t matter what either side thinks, since either way

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Supreme Court Strikes Down Pay For Delay Deals in Pharmaceutical Industry

Let’s say that you have an awful disease that can only be treated by a very specific medication.  WeHatePeople Inc. is the only pharmaceuticals company that makes the medication that can save your life, but unfortunately you’d have to pay thousands of dollars for each treatment (your insurance will help, but they can’t do much).

You go to drown your sorrows at a local bar, where you just happen to see someone in a snappy button down shirt with the WeHatePeople Inc. logo on the pocket.  You decide to march up to the person to give them a piece of your mind, and halfway through your story the employee bursts into a wild sob.  They explain that they work in the legal department of WeHatePeople Inc, and that they’ve been negotiating with SlightlyLessTerribleDrugCompany LLC to delay the generic version of your life saving miracle drug.

That weird and slightly implausible situation was sad, but thanks to a Supreme Court ruling it shouldn’t happen again anytime soon.  On Monday the Supreme Court ruled that pharmaceutical manufacturers can be sued over “pay for delay” deals.  The landmark ruling was surprising because most people weren’t aware that it was perfectly legal for other companies to do this.  Pay for deal isn’t just legal, it’s pretty dang common.  The Federal Trade Commission estimates pay-for-delay deals cost drug purchasers a cool $3.5 billion a year for it.  The Supreme Court ruling could open the flood gates for an array of lawsuits from wholesalers, retailers, insurers, and anti-trust enforces.

Since the ruling can only mean good things for the public, pharmaceutical lobbyists naturally assume that this decision will doom all of mankind.  Pharmaceutical Research and Manufacturers of America claim that the ruling will discourage companies for reaching settlements, and that it will negative affect patients and discourage investment opportunities.  They neglected to mention how having access to affordable medication is bad for patients, or how removing generic approval hurdles will negatively impact research.

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Apple Settles Lawsuit with Parents Who Got Smurfed in the Smurf From Expensive In-App Purchases

The village of the damned/smurfed

We’ve all been there before.  We’re stuck with a kid who can’t stop whining about being bored, needing food, or craving the love and discipline of an adult.  So to get them to shut up we hand them our iphone/ ipod/whatever electronic device and tell them to play something so we can shut them up.  We get a few hours a of peace, and then suffer from a few hours of abject horror when we get our monthly bill. We see that little Johnny spent $600 on smurf berries, and that a Steve Jobs clone is coming to punch our teeth down your throat if we don’t pay up.

That story may sound a bit farfetched, but if anything it isn’t insane enough to show the problem some parents were having with their kids finding and using “hidden” in-app purchases.  In 2011 Stephanie Kay was taken aback when she received a bill for $1400 from Apple in her inbox, and was presumably even more shocked when she realized that the bill wasn’t a bizarre prank.  Her 8 year old daughter was playing the Capcom game Smurfs’ Village, a game that her mother was able to download for free.  Kay wasn’t aware that the manufacturer made the game free, but chose to make certain items in the game cost money.  These weren’t little multi-use items that cost under $1.99, this game was happily charging its users $99 for a wagon of smurfberries and $19 for a freaking bucket of snowflakes.

It isn’t exactly news that there are free to play games that charge their users for special in game content, but people were particularly outraged that a game that’s marketed to children could have so many covertly hidden and expensive items.  Kay wasn’t the only parent who had lost hundreds of dollars to the smurfs and other cute shovelware games; there were tons of parents that were unknowingly letting their kids play games with absurdly expensive items.  Capcom eventually added a disclaimer to the Smurfs’ Village game:

PLEASE NOTE: Smurf Village is free to play, but charges real money for additional in-app content. You may lock out the ability to purchase in-app content by adjusting your device’s settings.

But by the time they had posted it, it was already too late for some people.

Take my money Apple, I was only using it to make it rain on stockphoto models anyway

Since most apps didn’t require users to re-enter passwords to make in-game purchases, in 2011 rightfully pissed-off parents filled a lawsuit against Apple for making it too easy for kids to purchase in game goods.  Apple essentially changed their in-app purchasing systems in March of 2011, but by then most of the damage was already done.  In a surprising turn of events Apple ended up settling the lawsuit, but the U.S. district court judge who ruled the case is still ironing out the details.

Essentially users who spent more than $30 in in-app purchases can receive a cash refund after jumping through some hoops, and Apple will be required to notify the 23 million+ iTunes account holders who purchased content from certain games about the settlement.  Some people can expect to receive a $5 iTunes gift card for their troubles because Apple feels the need to give their loyal customers one final middle finger.

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US Department of Justice Files Suit Against S&P For Being Full of Terrible People

The global financial crisis happened in the fall of 2008 and in the beginning of 2013 we’re still looking for people to place the blame on.  Big banks have been sued for laughably small amounts and some companies have kicked out CEOs, but the most surprising 2008 crisis call out happened this past Monday.

Standard & Poor’s (that S&P thing media personalities occasionally mention when they’re giving out terrible investment advice) is a pillar of the American financial sector.  S&P has been around since 1860, they’re largest credit rating firm in the country, and they publish financial research and analysis on the stock market that people read like a fiscal holy book.

They’re also a division on The McGraw Hill Companies AKA: The people behind the worst text books ever

On Monday the US Justice Department filed civil fraud charges against the company, claiming that the company mislead the country by giving glowing appraisals to unstable securities and down played the true risk of the looming credit crisis that managed to screw up the global economy.  According to the government S&P misled investors by claiming their ratings and financial information was “uninfluenced by any conflict of interest”, when they pretty much were unabashedly promoting companies they held a financial stake in.  They claim that S&P’s desire to generate more money and earn more market share caused the company to grossly ignore the risks of shoddy investments from about 2004-2007.

Standard and Poor’s immediately went on damage control after the news broke and claimed that they totally knew that the US was gunning for them and they denied any wrong doing.  Their confidence of their innocence didn’t seem to help much since their stock plunged by a little over 20% less than 24 hours after the news became public.  The news of S&P’s impending suit was so bad that somehow the shares for Moody’s Corp, S&P’s main rival, to fall by 10.7%.

S&P’s most trumpeted innocence claim is that other credit rating companies managed to screw up as badly as they did.  Every mortgage-backed bond that the US Department of Justice review had received the same credit rating S&P gave from different rating agencies.  It’s also likely that they’ll defend their terrible mistakes by claiming their first amendment rights since their ratings are really their “opinions” and that they’re protected under the Constitution.  Luckily two federal judges have already claimed that any 1st amendment defense would be complete and utter crap.

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Apple’s Perfect Closing Price Probably Didn’t Happen Because of a Conspiracy

On Friday January 18th Apple stocks closed out the week at a healthy $500 a share.  Some people see the unusually high amount as a sign that they invested in the right company, others see it as undeniable proof of a twisted conspiracy plot that Apple has been planning for months.

The notion of an Apple stock conspiracy is in no way new, people have been coming up with conspiracy theories about Apple since the company made its debut.  The reason people were riled up on Friday had to do with the suspiciously   perfect closing price.  It closed at $500 on the dot, not $499.99 or $500.0182487, but a neat little $500.  Their perfect price announcement also comes after Apple insiders have been discussing the relatively low demand for the latest iPhone.

Now we may not be able to complete debunk the rumor/theory that Steve Jobs and Steve Wozniak made a pact with Satan in order to ensure that their computers sell, but there is a simple explanation for their “impossibly perfect” closing price.

Friday the 18th was an option expiry day, that magical day when all of the calls and puts (guess/hunches about whether a certain stock will rise to the income heavens or crash and burn in bankruptcy hell) make it to put up or shut up time.  These puts and calls give owners the ability to make stock transactions on a certain date for a specific price (also known as the strike price because financial terms aren’t already difficult enough to learn).  When expiry day rolls around all of the puts and calls disappear to make way for new estimations, and on this day many investors go absolutely insane buying and selling.  The perfect $500 is probably the result of investors with high hopes, not an elaborate price fixing plan.

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Lance Armstrong: The Newest Blacklisted Celebrity Corporate Sponsorship

just kidding guys, i totally did all of the drugs ever

Lance Armstrong probably wants to let you know that he’s sorry for lying about his doping habits for a decade.  This past Monday Armstrong filmed an interview with Oprah where he admitted to doping and lying to millions of people.  Ever since Armstrong charmed the nation with Livestrong bracelets there have been people that have accused the cyclist of doping.  Trainers, journalists, and even Armstrong’s own teammates have made a variety of complaints about the Livestrong founder’s performance enhancing drug use, and each time Armstrong vehemently denied every accusation.

When the United States Anti-Doping Agency (USADA) accused Armstrong of both doping and the trafficking of drugs in June 2012 the cyclist celebrity could have handled it better.  He filed a lawsuit in Texas in hopes of barring the USADA from pursing its case against Armstrong and issuing any sanctions against him because he felt that the organization was violating his constitutional rights.

(Fun fact: The US constitution protects citizens from being called out on their blatant lies)

Up until that point the public didn’t seem to take the allegations seriously and rallied behind Armstrong, but that all changed on August 20th when the US District Judge Sam Sparks ruled in favor of the USADA.  Four days after the ruling the USADA stripped Armstrong of all competitive results from August 1, 1998 up until the present time.

The fallout from the USADA ruling was pretty typical for celebrity scandals, but it still dealt a heavy blow to Armstrong’s wallet.  RadioShack and Nike officially dropped Armstrong as their sponsor on October 12th, and on the same day Anheuseur-Busch made an announcement that they would not continue their relationship with Armstrong after 2012.  24 Hour Fitness, Trek Bicycle Corporation, Giro, and nearly every business that was endorsed or involved with Armstrong cut ties with him.  The organization people are most worried about taking a big financial blow from the scandal is Livestrong, and some worry that it may not ever be able to make the money it used to.

The interview aired on OWN yesterday, and today people are wondering what consequences the interview will have.   Armstrong wasn’t exactly beloved in America before his interview, but this interview made sure to crush any more support for the man who used to be the country’s go-to guy for inspirational stories. Others in the business world are using the interview as an opportunity to examine the troublesome side of corporate sponsorship.

There is one thing we can be sure of, Oprah’s struggling network OWN got a nice amount of publicity from the interview.  At least when we reflect on the impact Armstrong had on our society we can know that when he went down in roid fueled flames he helped out America’s #1 inspirational story.

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The Business of Flirting

Shut up this is totally business news, don’t be so #*$& picky

Remember last week when you flipped out on your girlfriend/wife/ FWB because you thought they were flirting at the office?  They may have called you irrational and begged you to not cause a scene, but your anger was justified.

Last December Confused.com, a British insurance website that clearly has its mind in the gutter, surveyed 2,000 men and women about flirting in the office.  Female respondents were more likely to flirt, and 21% claimed that they flirted in hopes of getting preferential treatment.  Apparently 2012 was a red letter year for learning about office flirting statistics, since this past October a study co-authored by a University of California, Berkeley professor revealed that that some friendly and flirty chatting with men gets women a better deal in zero-sum negotiations.  The study had women greet used car salesmen with varying degrees of friendliness.  Women who were flirty on average had 20% more taken off the final asking price than others did.

There are different reasons why flirting has become common in the workplace.  The changing environment and social attitudes at work play a considerable role in the proliferation of office flirting.   People in the younger generations have made the average office a lot less formal, dress codes have become more flax, bosses have become more flexible, and the attitudes about what makes certain things “work appropriate” have drastically changed.  Co-workers also socialize with their peers a lot more outside of work because of social media, so many of their office peers may seem more like friends than their fellow workers.

This new attitude towards flirting in the workplace doesn’t mean that your office will be getting a make-out closet or condom dispense anytime soon.  Flirting has become more common, but common decency hasn’t changed.  The cute new temp may be smiling and twirling her hair a little more than usual, but that doesn’t mean that anything will happen beyond some PG interaction.

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Playboy’s Bizarre Insider Trading Scandal

All of these women probably have company stock stuffed in their fluffy tails

When most people search for Playboy news (because I guess that’s something people do) they’ll come across articles about parties and confusing marriages.  Unfortunately the Playboy empire isn’t all beautiful young ladies and octogenarian sex, the company has had to deal with a serious insider trading case.  The trading scandal broke in 2010 and has since been ruled and resolved, but Bloomberg released a scathing article about Playboy’s insider trading problem that has brought the issue into the spotlight again.

Like any other good media empire, Playboy Enterprises INC. started out as a family owned business.  Christine Hefner, daughter of Hugh Hefner, was made the chairman of the board and CEO of Playboy Enterprises INC in 1988.  She held on to the title for nearly 20 years and shocked people when she announced that she was stepping down in 2009 since ater the 2008 election win of Barack Obama she felt compelled to spend more time doing charity work (She may be the only CEO in American history to be inspired to be more charitable after Barack Obama became president instead of spending time throwing a tantrum).

Christine was well into her charity work when her husband William Marovitz approached her on a March evening in 2010 to tell her that he was being investigated by the SEC for insider trading.  Marovitz’s confession shocked Christine to her core, mainly because she wasn’t even aware that her husband had any shares of Playboy to begin with.  Christie is the kind of woman who liked to set boundaries between business and pleasure.  Even though the Playboy company helped Marovitz broker a casino deal Christine was very adamant on not having her husband get involved with Playboy Enterprises.  In 1998 she had her lawyers draft a brief that explained the many negative consequences Marovitz would endure if he purchased Playboy stock.  Luckily Marovitz is a good looking rebel who plays by his own rules so he promptly ignored stock rules set by his wife.

In 2004 Marovitz purchased 5,000 shares of Playboy stock before his wife was scheduled to announce that the company was going to use new stock to help pay down their debt.  Marovitz continued to illegally buy, sell, and trade Playboy stock until the SEC told him to cut it out in early 2010.  When he testified before SEC investigators he denied any wrong doing and used his Fifth Amendment right 179 times during his testimony.

Marovitz may have denied any wrong doing, but that didn’t stop the SEC from slapping him with a $168,352 fine.  After the case was settled the Christine and William separated after what was probably the most awkward few months of their lives.

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Take the Money and Run

When I did a Google image search for corporate greed this image came up, so feel free to interpret the meaning of this photo

Last week people were filling their toilets with powerful projectile rage vomit over Judge Drain’s decision to allow Hostess executives to collect their bonuses despite the fact that the company is going bankrupt.  After running the company into the ground from gross mismanagement and obscenely high CEO pay raises, the people on top of the Hostess food chain get rewarded for their incompetence while workers struggle to fend for themselves.

When the company was looking into declaring bankruptcy in July 2011 board members voted to increase the salary for Hostess’ chief executives and other higher-ups.  Five months later the company filed for Chapter 11 (their second bankruptcy in 10 years), and when union members and creditors found out they were outraged.  They claimed that Hostess CEOs deliberately ransacked company funds when they knew that they were going under to avoid a federal law that restricts retention bonuses for company insiders after a bankruptcy case is filed.

Retention bonuses are supposed to serve as motivation for employees to stick with companies during troubled times, so some people believe that they’re crucial for preventing mass employee walk-outs and trying to keep struggling companies afloat.  When they’re used properly they could help businesses during dire times.  But there is a major difference between rewarding hard working employees and snatching up corporate funds before it’s too late to do it.

It seems absurd that Hostess CEOs will be getting bonuses while their company attempts to find a way to pay the $860 million the company owes its creditors, and the $1 billion hostess owes its employees for unfunded pension liabilities.  The bonus situation at Hostess is infuriating, but it isn’t uncommon.  The Wall Street Journal did an in-depth story on the phenomena of corporate plundering and their findings have the potential to induce another rage vomit.  When Blockbuster finally kicked the bucket after spending years trying to compete with Netflix and Redbox, the company approved around $775,000 in bonuses for a dozen top executives just one week before they filed for bankruptcy.  Blockbuster isn’t alone, the WSJ found more than 1,600 executives and company insiders have received over $1.3 billion in bonuses and salary increases.

It’s isn’t really surprising to learn that some businessmen have exploited laws and taken more than their fair share of company funds, but it doesn’t make it less disgusting or infuriating.  It’s time to find a way to cut the strings on the golden parachutes of CEOs.  Henry Mintzberg, another WSJ writer, wrote an excellent opinion piece on why executive bonuses need to disappear.  Letting CEOs take as much money as they want doesn’t help job growth or keep “job makers” happy.  Undeserved pay raises and bonuses just manage to rub more salt in the wounds of the people affected by CEO greed.

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The Battle of Black Friday

It’s official, retailer workers are 100% sick of Black Friday (although there was never really a doubt that they liked it in the first place).  In the past retail employees had to look forward to an early Thanksgiving meal and an abnormally long and early work day, but this year it has gotten far worse.  Because of all the shopping frenzy that happens around this time of the year almost every major retail chain has decided to start their sales early on Thanksgiving.  Many people have been forced to not celebrate the holiday with their loved ones because they’ll be busy stocking the electronics shelves at WalMart, but somehow missing a major family holiday isn’t even the worst part of Black Friday for retail workers.

Every year the post Thanksgiving shopping sprees manage to get more out of control and occasionally violent.  We’ve all heard stories of employees being pinned up against boxes and windows because of a large crowd of shoppers, but an uncomfortable and squeezed meeting with a display window is the best these people can hope for.  Employees have been forced to break up fights with aggressive customers and occasionally they have to defend themselves from aggressive customers.  People have been sprayed with mace, stabbed, and in some gruesome cases trampled to death during Black Friday sales.  Retail employees are tired of missing their Thanksgiving to act as a criminally underpaid riot control force, and they’re taking a stand against it.

Last year there were many online petitions circulating that called to an end of Black Friday because of the unfair strain it puts on retailers, by the end of the holiday there were around 150 in total. Right now there are almost 100 petitions on Change.org that have workers from Target, Toys R Us, WalMart, and other big retailers demanding an end to their unfair Black Friday treatment, and many believe that by the end of week that they’ll surpass last year’s amount.  Because of WalMart’s strict anti-union policies people never thought they’d see the day WalMart employees would revolt, but we may very well see it happen this upcoming Friday.  To be fair their protest is more about having living wages, benefits, and being treated like they’re people, but the fact that they’re planning a big walk out on the biggest shopping day of the year is pretty poignant.

Even if you don’t look at the anti-Black Friday stance from a moral perspective, putting an end to the Black Friday rush in stores makes a lot of sense.  Every year more and more people choose to avoid the in-store insanity and just shop online.  Choosing to shop for the holidays online isn’t just less stressful, it can also be a lot cheaper since the discounts people get from shopping online can eclipse what people are getting in store.  Brick and mortar stores have been fighting an uphill battle with e-tail giants like Amazon and Ebay, and stores will keep having to come up with unbelievable sales to compete with the online shopping world.

It seems like overall people are just getting plain sick of Black Friday.  They’re missing Thanksgiving with their loved ones because they have to work, and some of them are literally risking their lives to compete with thousands of shoppers who are eager to get the same big ticket items.  Do yourself and retail employees a favor this year, skip the frenzy, shop online, and join the 21st century by not valuing a slightly cheaper Wii U over human happiness.

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