… going, plus his recent New Republic piece is a more than worthy addition to one of UD‘s most popular categories, Beware the B-School Boys. Gets a bit preachy at the end (“When a person’s worth is determined only by money, only by success as it is and can be monetized, when one has no sense of being without the BMW, the Rolex, the Armani suits, the yacht, etc, the moral flabbiness emerges. Indeed, it engulfs entire organizations and perhaps even entire societies.”), but one does tend to zoom out in one’s final paragraph…

[The idea that] the only duty of a corporation is return on investment [has now been] drilled into generations of business school graduates… [Further,] evidence suggests that not only are business students more impaired in their moral judgments in a broader sense than are those in other majors and professional schools, but that business schools themselves may be responsible.

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SCHOOL FOR SCANDAL: UD has long argued that this would be a wonderful new motto for Wharton.

It happens. When La Kid graduated from George Washington University, now-disgraced honorary degree awardee Brian Williams gave an address in which he lectured UD on personal ethics.

UD‘s kinda hurt because Williams lied to her in his speech: He said it doesn’t pay to cheat, but it does pay to cheat, and he knows it cuz he’s back at his old job after suffering only un p’tit peu for being a cheat.

University coaches are of course – if they’re any good at all – cheaters. Americans know this and love them for it. Coaches do what they have to do to get ahead, just like Brian Williams.

It almost always does pay to cheat in college sports. Wins matter more than integrity. This isn’t exactly a revelation. As Jerry Tarkanian used to say, “Nine out of 10 schools are cheating. The other one is in last place.” …Cheating pays. We’ve learned this from roided-up baseball players who walked away with tens of millions of dollars, and from white-collar criminals whose sentences paled in comparison to those of small-time crack dealers.

You can blame it on a toothless NCAA, or on a college sports system that values the almighty dollar over platitudes of integrity, or on an American culture that values winning over all else.

I’ll call it something else: The fact that schools cheat – and that they get away with it – is a natural result of the odd marriage in America between big-money athletics and academics.

The reference up there to white collar criminals reminds me of one of my all-time favorite commencement speeches, from Allen Greenspan to the young eager hedgies of Wharton. It’s a fascinating address rhetorically. Greenspan knows he’s talking to many of the most-honed, highest-level cheaters America has to offer the world, people who can barely stay seated in their chair before peeling off and starting a Ponzi scheme; and indeed he knows that the background of his talk is the most recent immense number of immense American corporate scandals… So what’s he going to say? Isn’t it all rather… futile….?

I do not deny that many appear to have succeeded in a material way by cutting corners and manipulating associates, both in their professional and in their personal lives. But material success is possible in this world, and far more satisfying, when it comes without exploiting others. The true measure of a career is to be able to be content, even proud, that you succeeded through your own endeavors without leaving a trail of casualties in your wake.

All the herbal viagra in the world won’t make this less limp.

Just as it’s especially amusing to watch the winningest coaches shovel the moral shit in their books and speeches, it’s a special treat to watch income inequality’s biggest boosters dish out the do-goodery.

The only trouble mondo cheato ever runs into is when pesky university students decide to get all judgmental about some of the important inspirational people on their campus. It bothers Yalies that Bill Cosby has an honorary degree that their school refuses to revoke. Why does it refuse to revoke Cosby’s degree? Yale says two things in response to this question:

1. It’s never revoked a degree before. (And we all know that timid backwater places like Yale can never do anything new.)

2. It doesn’t want to talk about it. Shut up.

UD rather admires Yale’s unwillingness even to try to argue the point. (Northwestern, where UD was an undergrad, is also opting for silence.) Tons of universities have revoked Cosby’s honorary degrees, and they’ve stated their reasons, but Yale’s like eh I don’t know didn’t I tell you to shut up? It’s like Yale acknowledges what UD has been saying which is like Hello? Everybody’s an asshole and the biggest assholes get honorary degrees. Nuff said.

One university leader has, however, been willing to go there. One leader has ignored the wisdom of the keep-mum crowd and gone there. Let us consider Stephen Trachtenberg’s opinion piece in the campus newspaper. Scathing Online Schoolmarm will interrupt his sentences with her commentary.

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‘I was the GW president back in the day when we gave Bill Cosby an honorary degree. At the time, he was arguably the most popular Commencement speaker of my tenure. His remarks at graduation were received with an ovation. All attending cheered him. He was celebrated for his contributions to American culture and for his comic genius. [Spectacular dude. Was his dissertation majorly bogus? Should this matter to a university like yours as it honors him? Nah.]

It would appear, on the basis of information only now revealed, that he had, in addition to his artistic gifts, a dark and troubling and tragic hidden side. [Tragic. Da guy’s a regular Hamlet already!] Had we known of that we would not have awarded him plaudits. But we did not.

All today seem well-informed of Mr. Cosby’s seemingly Dr. Jekyll and Mr. Hyde story. His life and reputation lie in tatters. One can only speculate on the mental health issues that may underlie the behavior that numerous women have reported regarding Mr. Cosby. [There, there. It’s all about his tragic mental issues. Let’s not get all moral about this… But UD can’t help wondering: Why didn’t Mr Cosby, during the century or so during which he drugged and assaulted women, consult someone about his troubling behavior? I guess had he known that he had psychological problems he would not have attacked all those women. But he did not.]

People of accomplishment can, as we know, also have criminal or evil characteristics. I think of Ezra Pound, a man of towering poetic, artistic and critical gifts, and a fascist war criminal who lived out his life in a prison hospital. [Yes. Pound was punished for what he did. And again unlike Cosby, Pound was indeed clinically insane. That’s why he was in a prison hospital. His Bollingen Prize was so controversial that Congress ended – revoked, if you like – the involvement of the Library of Congress in that award program.]

What good would it do to void Mr. Cosby’s diploma? Who actually celebrates it today? He is revealed and reviled. I am not keen on trying to rewrite history. We must own our past and learn from it. There is no Platonic device for awarding honors. We do our best to celebrate the good. We work with the best information available. But being human, we have erred in the past and will no doubt do so again in the future. [Enough platitudes for you? Mr Trachtenberg needs to go back and think about the many forms of public rejection, retraction, and revocation which have been a feature of the moral life of this country – and this country’s traditions – from the beginning. It does a lot of moral good – by way of clarification of one’s principles, and official removal from the community of people who seriously offend it – to void awards whose conferral turns out to have been a sick joke.]

We need to redouble our efforts to avoid such failures of judgement in the years to come but must in humility appreciate our limitations and permit experience to inform our thinking. There is a rough charm to the proposal that we should recall our degree from Mr. Cosby, but it is a blunt instrument that does not do real justice to the dreadful challenge it seeks to address. It does not actually get to right. It provides no real comfort to the abused. [How do you know? Have you heard what the abused have said? The obscenity of their attacker having been protected and even celebrated by the culture has featured prominently in their suffering. One of the reasons it took so long for law enforcement to catch up with Cosby was his many-laureled cultural identity, an identity to which GW contributed.]

Mr. Cosby knows that we no longer esteem him. Everybody knows. He is down. He is out. The degree is as null and void as it can be. It is self-executing. However much he may deserve it, I am disinclined to kick him again to underscore our own virtue. It’s too easy.’ [Oh yes, it’s just our virtue-narcissism at play. How contemptible of us.]

Ashamed? Ashamed? ASHAMED???

(Say it out loud like Bracknell saying A HANDBAG???)

What is happening to this country? People at Harvard Business School are ashamed to admit they were like this with great Americans like Lloyd Blankfein, Squido di Tutti Squidi? This country is about to elect as President a proud graduate of Wharton, the BIZnessest biz school in the world, and current students at HBS are ashamed of having worked in an investment bank? What the hell is that? Can it be that the, uh, symbolic value of people Blankfein, Jamie Dimon, and pretty boy Dick Fuld and his merry men is declining?

It’s partly the fault of those goddamn case studies.

“There are several case studies dealing with investment banks wherein students discuss the brutal work environment and incredibly out-of-whack work-life balance,” [said one observer]. “The banks’ efforts — their success or lack thereof — to bring about change have not been discussed, but what is consistently highlighted is the dark side of investment banks.”

What to do?

Big banks are fighting back, promising recruits more hours to sleep, the occasional day off and reasonable deadlines. The effort, prompted by the death of a Bank of America Corp. intern in 2013, is driven in part by fear that the brightest students no longer see investment banking as a sustainable career. Goldman Sachs Group Inc. invited celebrity author Deepak Chopra to talk to its staff a few months ago about wellness, relaxation and the value of vacation.

Deepak! Deepak baby! Teach them how not to die!

…PLUS it comes with a fantastic photograph!

UD has been saying for years that the burgeoning business of business ethics courses is a joke (details here), and that universities should trash them and just scare their MBA students with guest lecturer/jailbirds — high-flying CEOs still in, or just out of, prison because of their clever lucrative business practices.

Just as football is inherently violent, so a good amount of this country’s way of doing business is inherently illegal, or so achingly close to illegal that… you know…

So one college course with some clueless pontificating non-multi-millionaire at the head of the room isn’t going to change that, kiddies. It’s only going to make it worse.

But a first-rate speaker drawn from the teeming ranks of our MBA internees – someone like Enron’s Andrew Fastow, who smiles and holds up his CFO of the Year trophy in one hand, and his prisoner identification card in the other – is fucking unbeatable. I ain’t saying every jailbound junior in the room is going to be scared straight. I especially make no promises about anyone enrolled at Wharton, a feeder school for the federal pen. What I am saying is that the simple souls on their way to this country’s hedge funds and insider trading units will be, er, unresponsive to discursive thought but hyperreactive to some guy who used to be fuck-you rich and is now fending off rapes in FCI Otisville. Fastow looks the part – graying temples, wry older but wiser face, slim wiry illfed post-prisoner body… And he’s got the gig down — props, pithy cautionary tales that speak right to the cynicism to which his audience clings…

In a rare public lecture, former Enron Chief Financial Officer Andy Fastow held up his “CFO of the Year” award in one hand, and his federal prison ID card in the other.

“I got both of these for doing the exact same thing,” he said before a crowd of eager [University of New Mexico] business students.

Hear that? Hear that? EAGER. CROWD. Try getting that sort of turnout and enthusiasm for a UNM football game.

Plus Fastow’s funny.

“I think inviting me to talk about business ethics is a bit like inviting Kim Kardashian to talk about chastity,” he said.

Okay, the material’s pretty shitty. But a guy like that… with his personal history and his delivery.. the line’s gonna get a big laugh.

“I thought I was so smart; I thought I was a hero for bending the rules,” Fastow said. “It comes down to individual people making a decision — we always asked ‘is it allowed?’ not ‘is it the right thing to do?’ …

You can always find an attorney to get you the answer you want. You can always find an accountant to get you the answer you want,” Fastow said. “There’s only one gatekeeper — you.”

Unfortunately, you don’t have any sense of individuality; you’ve been trained from day one in your MBA course sequence to work in groups…

I mean, I don’t think, say, even one Fastow-or-better per semester can do much about a culture where people like insider trader extraordinaire Steve Cohen and big-time fraudster Zygi Wilf are university trustees (Wilf’s a trustee of a religious university!). I just think that if our universities are going to do anything about America’s corporate culture (it’s arguable that their MBA programs, at least, shouldn’t bother, because they hopelessly reflect that culture), they’d be much better off booking charismatic cons than pious professors.

Uh-oh. So what do we do with the growing battalion of business ethics professors battering their incorruptibility into the stubbornly corrupt hearts of MBA students? Batter my heart, twelve-person’d ethics faculty, as John Donne might put it; yet if Annabel Beerel (the kind of name Vladimir Nabokov would have loved – it’s like a word game involving coming up with a name using the smallest number of letters) is right –

Most MBAs have their sights on gargantuan salaries and huge share options. Any discussion regarding excess CEO pay, for example, even when the company has clearly lost significant market value over a sustained period, is typically shrugged off with, “Well whatever is legal is OK.”

– and that’s only one of many points Beerel makes on the way to arguing that – as her headline has it – ETHICS TRAINING DOESN’T WORK.

Franchement, UD thinks she must be right, given all the battered by morally superior forces Wharton and Harvard MBAs out there insider trading and all.

But, with America’s large number of exquisitely, expensively educated white-collar crooks in mind, which business school will dare announce We’re firing our Force for Good and doing what UD‘s been, for years, saying we should do. We’re starting a speakers series featuring jailed miscreants who might scare at least a few of our students straight. I don’t see this happening. Amid the current crime-spree, B-Schools are compelled to look as though they’re doing something.

Really?

Yet another b-school guy (read UD’s LONG category on this blog titled Beware the B-School Boys) wrings his hands about the criminogenic nature of some of America’s business schools… Which is to say that many MBA programs (in particular Wharton) seem to groom and then graduate real bad asses. What to do? What to do?

Like most of the other hand wringers, this guy’s introducing another whole new revolutionary approach to taking men in America’s most hyper-capitalist educational settings and turning them into women.

See the headline on the guy’s article?

CAN YOU TEACH BUSINESSMEN TO BE ETHICAL?

Forget businesswomen. Either they don’t exist, or if they exist they’re … ethical …? The whole article is men men men.

I guess businesswomen are ethical because they’re not businessmen.

So then the point would be to make businessmen businesswomen. No competitiveness here! We’re collaborative. And if you fuck up and act assertive in class…

MBA programs could ditch their heavy reliance on class participation when assigning grades – a standard that unfairly rewards extroverts and fosters competition among students to impress the professor. Instead, students could be asked to grade each other on their level of professionalism in class. A few of us at NYU-Stern have begun doing this, and we find that it discourages grandstanding and encourages students to build on each other’s comments.

Shh! Don’t say anything, Susie! Just keep your eye on Babsie and tell me whether you think she’s been abnegating herself…

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Ecoute. Collaboration in b-school means Raj Rajaratnam meets his co-conspirators there. B-school brings like-minded criminals together.

It’s embarrassing, but

The daily scandals that expose corruption and deception in business are not merely the doing of isolated crooks. They are the result of an amoral culture that we — business-school professors — helped foster.

Look at the dean of Columbia University’s business school, for goodness sake.

B-school people seem to think that if they keep producing worried rhetoric and new ethics institutes we’ll forget the nature of the amoral culture their schools reflect and many of their graduates inhabit.

From William Galston’s review of Tyler Cowen’s book, Average Is Over:

There’s nothing we can do, says Mr. Cowen, to avert a future in which 10% to 15% of Americans enjoy fantastically wealthy and interesting lives while the rest slog along without hope of a better life, tranquilized by free Internet and canned beans.

Bread and circuses is not the policy of a republic, but rather of an empire entering moral senescence. Nonetheless, Mr. Cowen seems untroubled by his hyperpolarized vision.

The kindest description of his stance is moral indifference: “It will become increasingly common to invoke ‘meritocracy’ as a response to income equality,” he writes, “and whether you call it an explanation, a justification, or an excuse is up to you.” While allowing that some might consider extreme socioeconomic inequality unjust, he revives the neoconservative canard that relatively well-off academics lead the charge against such inequality because they envy the status privileges of the wealthy. He seems not to have considered the possibility that his depiction of our future might fill them with justified revulsion.

Over the course of writing this blog about universities and professors, UD has encountered the neoconservative canard about envious academics again and again. A few years ago, Jonathan Chait gathered a few of many examples in a Los Angeles Times column titled Envy Them? No. Tax Them? Oh Yeah. Greg Mankiw, Chait noted, thinks that academics concerned about staggering personal wealth in the context of rising inequality are simply caught up in “the politics of envy.”

What’s depressing is that even highly credentialed conservatives such as Mankiw equate any discussion of class inequality with “envy” of the rich. The accusation is actually bizarre. Liberals want to make the rich pay higher tax rates not because they hate them. (In fact, as conservatives love to point out in other contexts, many liberals are rich.) It’s because somebody has to pay for the government, and the rich can more easily bear higher rates.

Paul Krugman echoes Chait.

To show concern over the growing inequality is to engage in the “politics of envy.”

But the real reasons to worry about the explosion of inequality since the 1970’s have nothing to do with envy. The fact is that working families aren’t sharing in the economy’s growth, and face growing economic insecurity. And there’s good reason to believe that a society in which most people can reasonably be considered middle class is a better society – and more likely to be a functioning democracy – than one in which there are great extremes of wealth and poverty.

Reversing the rise in inequality and economic insecurity won’t be easy: the middle-class society we have lost emerged only after the country was shaken by depression and war. But we can make a start by calling attention to the politicians who systematically make things worse in catering to their contributors. Never mind that straw man, the politics of envy. Let’s try to do something about the politics of greed.

Krugman and Chait were writing in 2005. That Cowen can happily continue the canard suggests that it will be very difficult to kill. You can call it a canard; you can call it bizarre; you can call it a straw man. It will keep coming at you.

What UD has tried to do in some of her writing here is, as Krugman suggests, look in a different direction: the politics of greed. She has been intrigued by this statement from Robert Hughes about the art market:

[T]he present commercialisation of the art world, at its top end, is a cultural obscenity. When you have the super-rich paying $104m for an immature Rose Period Picasso – close to the GNP of some Caribbean or African states – something is very rotten. Such gestures do no honour to art: they debase it by making the desire for it pathological.

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A certain amount of envy toward the rich is normal. It is to be expected. Indeed, that envy can be an engine, a motivator, a thing that helps our economy of entrepreneurs hum along. The politics of envy crowd, however, wants to scare us into believing that this emotion is becoming pathological, even violent, a threat to the republic. Lawrence Kudlow writes that the envious are really saying

“How dare they be successful earners and investors… Should we go out and shoot [the super-rich] for their success?”

Eric Cantor also seems to have in mind French revolutionaries using envy of the rich to trigger civil war:

There are politicians and others who want to demonize people that have earned success in certain sectors of our society. They claim that these people have now made enough, and haven’t paid their fair share. But, pitting Americans against one another tends to deflate the aspirational spirit of our people and fade the American dream.

I believe, with Galston and Krugman, that the greater menace lies in the “moral senescence” of a country of “great extremes.” Senescence, not riots. As Robert Reich remarks, “If you give up on democracy, you are basically saying to the moneyed interests, the powerful people and institutions of society Take it all… Then we are a hundred percent plutocracy.” This is why, on the subject of universities, I dwell on obscene endowments and the universities who pay each of their money managers $35 million a year to make their endowments grow toward… what? They are already in the tens of billions. The hundreds of billions? It’s why I talk about universities who honor trustees like Steven Cohen, a man with a personal fortune of nine billion dollars, and a man in constant trouble with the SEC.

This comment alone suggests that the New Jersey Institute of Technology was probably right to fire one of Wharton’s finest.

… who oversee one of America’s most larcenous, most corrupt universities, the University of Louisville. A local paper wants to know why no one seems to catch all the thieving UL administrators until long after they’ve taken millions… The sports program is WAYYYYY-scuzzy….

Like other criminogenic schools – Wharton, the University of Medicine and Dentistry of New Jersey, Yeshiva – the University of Louisville is a comprehensive model of degeneracy, featuring indifferent trustees, comatose students, and… professors? Are there professors there? Oh – right…

Students there aren’t letting Trustee Steve settle into a non-story as the school year begins. They’re perfectly aware that Hedgie Houdini’s continued trusteeship of their university is a scandal, a disgrace, a major blot on the school. Throw in Bruonians Richard Lee and Steven Rattner and Brown begins to look like Wharton, which, as you know, this blog has long called Forcing Ground of the Great Insiders. (Wharton also proudly claims future United States of America and current Trump University President Donald Trump. )

I mean, when your university’s last president, “a member of Goldman Sachs’s compensation committee…approved a $67.9 million bonus, still a Wall Street record, for Chairman and Chief Executive Officer Lloyd Blankfein,” you should probably watch yourself. With this latest business, the Steven Cohen business, Brown’s building a really scummy critical mass for itself. Only its students, apparently, are willing to bring any moral seriousness to the problem.

AWKward.

A former student of [University of Chicago Business School professor Gary] Becker’s told me that he found many of his classmates to be remarkably amoral… They perceived any failure to commit a high-benefit crime with a low expected cost as a failure to act rationally, almost a proof of stupidity. The student’s experience is consistent with the experimental findings I mentioned above [See this post’s headline.].

AWKward.

Yes, UD‘s back in one of her most-used categories: Beware the B-School Boys. Click on it at the bottom of this post for years of stories about guys who went directly from America’s very best business schools (Wharton does our financial criminals proudest, but Harvard’s in there trying) to a life of global money mayhem. The swath of destruction they leave suggests that remarkable amorality is only Part One. There’s also a brilliant nihilistic malice in play.

Since the deeper they get into their business school curriculum, the more some students seek to reduce the earth to cinders, one might ask, as Luigi Zingales does in the pages of Bloomberg’s (whose founder makes anyone who doesn’t flaunt his rule-breaking, anti-social, privileges look stupid), whether, as he puts it, business schools “incubate” criminals.

UD wouldn’t use the word incubate. B-schools refine criminals; they take naive inchoate rapacious instincts and educate them. They also – as the Rajaratnam case confirms – bring criminals together. They provide the critical mass without which conspiracies cannot flourish.

… but it’s pretty clear that there are at least two groups of clever people out there actively checking your letters and numbers, your words and your music, your alpha and omega. So don’t be paranoid, but look sharp.

There are all those Germans with their plagiarism-detection websites… They’ve taken down a defense minister and many other high-ranking people and they’re definitely still at it.

And then there are statisticians like Uri Simonsohn. Uri’s a young Wharton professor who checks out your numbers and on finding them bogus destroys your career.

That may sound harsh, but do we really want social psychologists feeding us all sorts of bullshit all the time and gaining fancy professorships thereby? I don’t think people should be rewarded for taking advantage of our propensity to believe anything.

After Sussex, [Raj Rajaratnam] decided to get an M.B.A. at Wharton. Of the 600-odd students there, 20 were South Asian. That’s where the Galleon network began. His roommate ended up being head of investor relations at Galleon; another classmate later oversaw Asia for Galleon. Altogether, four people from his class ended up working for him.

UD thanks David.

He crapped out on giving the speech, but here’s part of it.

There are politicians and others who want to demonize people that have earned success in certain sectors of our society. They claim that these people have now made enough, and haven’t paid their fair share. But, pitting Americans against one another tends to deflate the aspirational spirit of our people and fade the American dream.

Keep the aspirational spirit flated! Two billion dollars per year per hedgie!

In the grand tradition of Goldman’s Lloyd Blankfein, another tough guy – the House Majority Leader, for chrissake – has cantered (might as well keep playing with his name) away from a public speech because protests were planned.

Eric Cantor claims Wharton (Wharton! He was among friends! One of whom, angry at the protestors – but why not be angry at his hero for backing down? – hung a sign out of a Wharton window for the protestors to see: GET IN OUR BRACKET.) told him it’d be a nice civilized talk open only to the amazingly well off, or at least people guaranteed to agree with Cantor’s take on the whole 1% / 99% thing… Wharton says au contraire – “there [has] been no change in the attendance policy.”

The Wharton speaker series is typically open to the general public, and that is how the event with Majority Leader Cantor was billed.

A number of amusing things were said along the way to this latest retreat coming from the God forbid unseemly envy of the successful should tear this country apart crowd. One student remarked, “I think it’s a little too much to bring the protest to a college campus.” Of all the places for a protest!

Another Wharton student sweetly said: “I definitely understand the anger. …But they have to realize that corporate greed is not taught at school. If you spend time at this school, never is greed, unfairness, and immoral behavior ever taught or propagated.”

Then how did so many of your only recently greatly celebrated alumni (start with Raj Rajaratnam) learn it? This student should glance over the Wharton rap sheet. Short version: It’s long.

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Update: Note to Cantor: Here’s how it’s done.