Does Your Money Support Greed?

Interesting article in the New York Times today - comparing a company that embraces social responsibility vs. one that pursues profit over customer service.  Starbucks vs. Goldman Sachs

I don't know enough about Starbucks to cheerlead for it, but I think what they're saying is what we hope for from an American business.

On Wednesday, Howard Schultz, the chairman and chief executive of Starbucks, will take the podium at his company’s annual meeting and talk about the importance of morality in business.

Yes, morality. I don’t know that he’ll use that exact word. But there can be little doubt that in recent years, especially, Schultz has been practicing a kind of moral capitalism. Profitability is important, he believes, but so is treating customers, employees and coffee growers fairly. Recently, Schultz has defined Starbucks’s mission even more broadly, creating programs that have nothing at all to do with selling coffee but are aimed at helping the country recover from the Great Recession. 

In the speech, Schultz plans to make a direct link between Starbucks’s record profits and this larger societal role the company has embraced. He will make the case that companies that earn the country’s trust will ultimately be rewarded with a higher stock price. “The value of your company is driven by your company’s values,” he plans to say. 

That's a sharp contrast to Goldman Sachs, which got a public smackdown from an executive who aired his concerns about the predatory greed as he resigned.  Bloomberg rushed to their defense.

Apparently, when Greg Smith arrived at Goldman Sachs Group Inc. (GS) almost 12 years ago, the legendary investment firm was something like the Make-A-Wish Foundation -- existing only to bring light and peace and happiness to the world. 

Smith, who was executive director and head of the firm’s U.S. equity derivatives business in Europe, the Middle East and Africa, does not go into details in his already notorious op-ed article in Wednesday’s New York Times, “Why I Am Leaving Goldman Sachs.” But one imagines Goldman bankers spending their days delivering fresh flowers to elderly shut-ins and providing shelters for abandoned cats. Serving clients was paramount. “It wasn’t just about making money,” Smith writes. “It had something to do with pride and belief in the organization.” 

That article is one of the saddest things I've ever read.  Corporate responsibility, community involvement is so far from the Wall Street pale that it's actually mocked.  There was a time when a company's reputation was its most valuable asset.  To be accused of putting profit above morals and ethics would be a slur that would have to be answered vehemently and definitively.  These days, the response is a cynical "Get your head out of the clouds, Pollyanna - that's business."

It doesn't have to be.  Research. Go to Good Company - see the company ratings.  And stop doing business with the ones that don't share your values.

Corporate America - Meet the New Boss

I don't consider myself a raving conspiracy theorist.  But recent events make me wonder if I should reconsider and become one.

The Occupy Movement's central theme is disgust with what corporations are doing.  They control health care. They control media.  They control finances and they control what we eat.  They control energy and they want to control the earth's water supply.

And the bottom line, for all of it, is profit.

I recently interviewed one of the authors of "Good Company", a book that studied the behaviors of the Fortune 100.   They established a list of criteria that studied them as employers, as producers and as stewards of the environment and communities.  And most of them scored no better than a D.

The good news is that the study also showed that those companies who scored better also were more profitable.  Consumers respond positively to good companies.  But most companies studied aim for a quick profit and chew up employees, communities, the environment and produce poor quality products while skirting regulations or break laws while building the cost of fines into the price of doing business.

While researching a story on the shortage of psychiatrists in my region, I found that insurance companies manipulate the market.  They collect profits while offering seemingly-sufficient panels of specialists.  But those panels are composed of doctors who don't accept new patients, who no longer accept their insurance, or who've been dead for years.  Other psychiatrists take only cash because they cannot spend the time filling out the reams of paperwork required by insurance companies.  Treatment centers have to fight with insurance companies to get continuing coverage for patients who still need care.

 Doctors are pressured to prescribe the newest medicines because they have a better profit margin.  Companies spend millions on ad campaigns to get you to ask your doctor for them.

And it's so "normal" we haven't even stopped to ask what the hell is going on. It's capitalism run amok - create the demand to satisfy the needs of an ever hungrier group of investors.  Maximize profit, minimize expense.  Taken to extremes, it means shortcuts.  Cheap labor.  Defective, insufficiently tested products raced to market.  Minimal care with maximum profit.

Thank you, Occupy Wall Street.  You're forcing a second look.  And the view is disturbing.