Bottom Line Ethics

I read a very interesting article in The Wall Street Journal about who young people turn to for advice. In short, the answer is that they largely turn to their peers, for a number of reasons. Being old, I have the sense that this is a really bad idea. But reading the article opened my eyes to a few things.

In general, I think people are well served by listening to older and more experienced people. Mark Twain once said, “When I was a boy of fourteen, my father was so ignorant I could hardly stand to have the old man around. But when I got to be twenty-one, I was astonished by how much he’d learned in seven years.” Nowadays, it seems that the sense that parents are out of touch extends well into adulthood.

Historically, people have thought wisdom was linked to age. I am not sure the research bears this out, though it is inherent and explicit in most authoritative religious literature. Perhaps the research results vary from the assumptions because it is so difficult to live wisely for a long period of time. Longevity and consistency in relationships is all too rare, and we are regularly greeted by examples of middle- or older-aged moral collapse.

As I have written, wisdom seems to include dialogical and dialectical thinking at a minimum, the ability to consider others’ perspectives and to think long-term. Reading the Wall Street Journal article made me consider that perhaps people of my generation have different strengths and vulnerabilities than those of the generation of students I teach. Each has the potential for great wisdom, and also the opportunity to make crash-and-burn decisions.

I think what I have noticed is that my students, and my children, are far more dialogical than I am. They are incessantly communicating with one another and sharing their perspectives. They are getting input from all over—from best friends, from strangers, from Facebook, from authority figures, from the media. Though, to older people, they sometimes seem to have trouble distinguishing the relative reliability of the sources, they are listening.

That is the weakness of people like me. I become entrenched in my position, and I often fail to listen respectfully the way I should. In closing myself to those sources I consider to be of questionable reliability, I find that I have often failed to listen to unique viewpoints that may help me get closer to truth. More painfully, this can be true of me as a father. I want my children to see me as the expert, and I don’t always enter the conversation listening. Or worse, I wait for the weakness in their arguments to emerge, and I pounce. They rightly cut me off as a source of advice. Even when I am right, I am not to be trusted.

But my young friends have a weakness too, and that comes in the difficulty they have thinking dialectically. There is no way they can be expected to have a long-term perspective, when they have not had a life experience of major failings and mistakes, or of fruitful choices that paid off. Of course they underestimate long-term negative consequences of their decisions. Why wouldn’t they, unless they have experienced those consequences directly in the form of fallout from their parents’ lack of wisdom?

Where is wisdom to be found? I think it is in recognizing our vulnerability to these tendencies, and in engaging each other in conversations respectfully. For my part, I am working on becoming a better listener and not trying to solve problems before I even hear them. If that meets up with young people who really want to develop a long-term perspective, there is potential for real conversation. Even more, it may lead a few steps down the road to wisdom.

They say a father is someone who carries pictures in his wallet where his money used to be. That money is spent in hopes that his children will make wise decisions that lead to a good life. For me, it always seemed that financial investment, and my commitment to my kids, earned me the right to be heard, and listened to.

But I think, instead, it is an investment that must be combined with the kind of character in my own life that allows me to listen, even when it is hard to sit still. If I want to be wise, and to help my children grow in wisdom, I will need to engage them humbly and learn from them as well. And that is what I intend to do.

So, reader, to whom do you turn for wisdom? And why is it that you see that person as wise?

I have been wrestling lately with the issue of sudden ethical collapses in people’s lives, dramatic one-time or short-window events that change the course of their lives and careers. Why do they happen, and what can be done to reduce the probability that they will?

I am not talking about the final revelation of people who have spent a lifetime manipulating people and finally experience what virtually always occurs. I am concerned with those who seem to be cruising along, often on smooth waters with fair winds. And then, suddenly, it happens.

Mark Hurd, HP’s CEO is just the latest example. He recently resigned under pressure from the board of directors after settling a sexual harassment lawsuit brought by a contractor for the company. This is not the type of topic I enjoy writing about a lot, because it is hard to be dispassionate about passion, and the genuine benefit of debating the downfall of folks where “close personal relationships” are involved gets swamped by the smirking over the details. But I think there is something for a lot of us to learn from Mark Hurd’s experience.

We are most vulnerable to doing something foolish when we are desperate and when we are very successful. The headlines that go with a desperate fool are short-lived—think convenience store hold-ups. Those that involve a successful person falling tend to have a life of their own, far beyond the importance of the event.

Most people can understand why a person who is desperate might end up in the headlines. They have a harder time explaining why someone who has virtually everything at his disposal would do the same, particularly when the incremental gains in happiness are so small.

I think, in the end, there is a sense of invulnerability that goes with a long string of successes that makes a star subject to imploding. The examples run from King David to Tiger Woods, and infidelity is not the only manifestation. Gradual increases in abuse of those under their authority, increasing isolation, and a smug self-sufficiency have been the recurring themes for the leaders of failed and fraudulent companies that I have studied for the past two decades. At the root of all of this is that the leader stops listening.

And the failure to listen is a critical mistake. I am often tempted to stop listening to my wife, because I am vulnerable to her ability to see underlying weaknesses in my life that others miss. If others are not criticizing me, why should she? Those who love us most and know us best must continually be reassured that we are listening to them and that we trust their perspective.

Perhaps just as important, we must listen to the criticism of those who oppose us, even those who mock us. The clearest presentation of our real weaknesses and long-term vulnerabilities often comes from those who are looking for an advantage or would like to bring us down. Their criticisms are often unhearable. Who wants to know what somebody in Austin thinks about us?

Earlier this week a Halliburton employee, Jesse Gagliano, testified that he had warned BP that if they did not use more risers to control the pressure in the Deepwater Horizon well, it risked a serious gas flow incident. Gagliano apparently recommended 21 risers to control the flow; BP went with six, according to The Wall Street Journal.

Perhaps BP did not listen to its friends. And I am sure it is tempting for BP now to just get past this incident and ignore the catcalls of its enemies. But it does so at its peril.

And if I am wise, I will cultivate honesty not just in my wife or my closest friends, but in those who think I am a simpleton. It takes combing through their criticisms for what is legitimate, and listening to things that are hard to hear. But it may just be the key to preventing an ethical blowout in my life.

They walked down the road from the lake about 100 yards ahead of us, bouncing off one another shoulder-to-shoulder about every three steps, in animated conversation. Nothing new—Katie and Nathan are almost always in conversation. I feel sure they were talking about nothing particularly deep or important at the moment, but they were continuing the step-by-step farewell that occupies our family right now as our daughter prepares to leave for college.

We are parents of five, with births spread across 16 years and four presidents. But for the last eight years, we have been parents of two, the classic one-girl/one-boy family of four. Easily seated in cars and at the dinner table, evenly matched in our ability to tease one another, we have had a delicately balanced ecosystem that has served us well. We have grown together as our last two kids have grown up, and we have a drawer full of common experiences that are not shared by our older kids. We are the Shaubs, Updated Edition.

But all that is about to change, and I find myself wrestling inside with what it means for my life. I have three more years to invest in Nathan, and I am excited about the things still ahead of us. But the sun is setting on our parenting days the way it does at the beach, when you watch that orb disappear like liquid into the water in a matter of seconds. I wonder what comes next.

The little lake house is one thing that comes next, a place to write, to play golf with Nathan, to read, to spend time alone with my wife. It is a place to walk and to bring grandkids, or at least we hope it is. It is a place of the later years. If God grants good success and economic stability, it is a second home; if not, a first.

My investment in students, and my search for wisdom, continues. I have a group of friends with whom I can be honest, and I have the woman I love close by me. I hope for 15 productive years as a professor, perhaps 20.

But Katie is leaving. Leaving. Parents understand what that word means, and it does not mean what it means for the kids: freedom. For parents, a child leaving brings a mixture of pride and loneliness. It leaves a sense of accomplishment and despair simultaneously. There is absolutely nothing else I can do to get her ready for this. And there is absolutely nothing else I need to do.

I have done this three times before, so I thought I would be practiced and poised. In my job I watch parents go through it year after year with bemused detachment. But it is my turn again. And it is my Katie who is walking out the door.

We will regain our equilibrium. The gyroscope is spinning a bit out of control, but we will calibrate again. There will be a new norm, with one side of the dinner table empty. And with my son as a new driver I will sometimes be in the back seat.

In fact, that’s how it feels. It feels like, after all these years of being the Dad in the driver’s seat for all those family trips, I am being relegated to the back seat. You can’t see as clearly back here, and other people seem to be making the decisions about where we are going.

For many years, particularly with Katie and Nathan, we sang at the beginning of each trip out of town, “We’re going on an adventure, and we don’t know where.” Today, for me, we are. But with one seat empty.

It was a seat that held giggles and baby dolls. I will look in the back seat and see Amish romance novels and adventure stories, a cheerleading outfit and a megaphone. I will see an iPod with one ear bud in Katie’s ear and the other in Nathan’s.

And then, I’ll turn around, face forward, look out the windshield and drive on. We raised her to leave that seat empty some day. And when some day comes, driving on is all there is to do.

I wrote last week about LeBron James’s over-the-top announcement show. Jim Gray, who interviewed James for the show, is not my favorite announcer. His self-interest comes through loud and clear in what he does, and he claimed in an interview with Charlie Rose last night that the program was his idea. Despite Gray’s lack of objectivity in the matter, he made one valid point. The owner of the Cleveland Cavaliers, Dan Gilbert, vented after James made his decision to leave Cleveland to join the Miami Heat, saying that LeBron was a traitor and that he had quit during the playoffs. Gray pointed out that Gilbert had not let that stop him from trying to sign LeBron, and he said the criticism was way over the top, something he had never seen before.

Then he hasn’t been looking. Burning bridges is becoming an art form in our society. I have not really figured out why this is so. Why are people so willing to sacrifice long-established relationships for the brief satisfaction of retaliating for a hurt?

Of course, many more people spend time on blogs (not this one) blowing off steam and accusing unseen others of having bad motives in their comments. They practice retaliation on people they don’t know without any readily discernible consequences. But this not only changes the quality of our discourse, it changes these people inside. The practiced emboldening enabled by the anonymous blog eventually laps over into conversations with people they know, and even people they love.

When the U.S. economy struggles, employer loyalty tends to wane. Layoffs lead to a generally suspicious tone in many workplaces, where employees no longer believe that management has their best interests at heart. Layoffs lead to accusations against the company, and those making the decisions. There are legitimate reasons to sue employers (including being fired as a retaliatory move for doing the right thing), but doing it just to make yourself feel better and make them miserable is a losing proposition.

Pennsylvania senator Arlen Specter is a poster child for bridge burning. However, his transparent reasons for switching parties did not win him great favor within the Democratic party, and he was not even able to survive his first primary contest running as a Democrat. I am pretty confident that he will not be recruited back by the Republicans.

Dan Gilbert’s response to LeBron’s abandonment seemed to be visceral, and not simply contrived, though I am guessing it will sell tickets and pump up season ticket holder loyalty. In fact, many Cleveland fans wrote in offering to pay part of his fine from the NBA for his comments. But he has burned a bridge with his former star, one it would have been hard to imagine him burning just a month or two ago. His temper tantrum will likely have permanent effects.

Perhaps the most devastating bridge burning I have seen has been in failing marriages, where one hurt is layered on top of the next. And it not only twists the characters of the vengeful parents, it leaves scars on the children that linger long after. I weep for those kids.

There may be bridges worth burning, but most are not. I have come within a word or two of doing it on occasion. In fact, in a few instances, I have likely said that word or two. But I am hard at work learning never to do it again.

I can say it is because life is too short for prolonged anger, and that is true. But, more importantly, in surrendering to the temptation to retaliate, I have allowed that other person to control who I am as a man. They have no right; only I can give it to them.

And it is my hope, in the inevitable day when my personal circumstances deteriorate because of someone else’s actions, that I will not give them that right.

Sometimes even nice people are so self-serving that they deserve a blog of their own. Cleveland Cavaliers star LeBron James is not a very interesting character for me to write about normally. But tonight, he will announce to a breathless world where he will be playing basketball for the next five or six years. Since the announcement consists of one word (probably “Miami” or “Cleveland”), it seems a little over-the-top to schedule a one-hour special with a full slate of commercials. That is, of course, unless you see yourself as an industry rather than a person.

Of course, some of the money from selling the advertising will reportedly go to the Boys and Girls Clubs, a very worthwhile charity, and one that James faithfully supports. I have seen the kind of difference they make in our community, and I am hesitant to be critical of any effort that benefits them, even if the whole thing smacks of self-promotion.

But the self-worship that characterizes the NBA nowadays makes it difficult for me to be objective in evaluating motives. It is becoming increasingly difficult to identify stars with at least significant vestiges of humility any more. I lived in San Antonio for the prime of Tim Duncan’s career, and I watched him willingly share the limelight with teammates like David Robinson, Manu Ginobili, and Tony Parker. In fact, he was always the person speaking to the press about the exploits of those who were rarely lauded—Bruce Bowen or Steve Kerr or Malik Rose. And he won four championships, none of which the San Antonio Spurs would have won without him.

Now NBA players seek their own cult following. Dwayne Wade, the Miami Heat star who is trying to lure James to his team, was on TV today wearing a t-shirt that said Miami-Wade County, a take-off on Dade County, Miami’s home. This is not a t-shirt you wear YOURSELF; you leave it to all those people-worshippers who pour their money out to sustain money-producing machines like the NBA. But there he was, wearing this “worship me” shirt on national television, completely unaware that there might be an issue in doing so.

This might make Miami the perfect fit for James. Certainly, Shaquille O’Neal found his last professional relevance there, in a place where he was as famous for his house as for anything he did on the court. What better place than South Beach to operate as a stratosphere of stars who really enjoy looking in the mirror?

Since Miami is also planning to sign Toronto Raptors star forward Chris Bosh, they will have to trade Michael Beasley, one of their two remaining players, and the only one making any real money. That will mean, under NBA salary cap rules, that Miami will have to sign eleven other players to minimum contracts. It will be a roster of misfits, used-to-be’s and never-wases, and they will probably win two or three NBA titles. Bring back Stephon Marbury and Latrell Sprewell! They will carry the water, literally, for the three stars. Start working on your jump shot, because you are a candidate. And you can’t wipe the smile off NBA commissioner David Stern’s face.

Because he knows that self-serving sells tickets. It also sells business deals, and gets you CEO jobs and key government appointments. This is, unfortunately, because we are a nation of people worshippers—politicians and corporate leaders as much as athletes. We tune in to await the latest wisdom and to validate ourselves in identifying with them. Nothing can deter us—lying executives, politicians without consciences, athletes in every sport from baseball to cycling using performance enhancing drugs. Because performance is all that matters—not character, not conscience, not substance.

And tonight, America will tune in for the latest performance.

It has been a painful week for me personally. Part of it was my own fault. I was trimming my lawn, when I managed to do something I had never done before—thoroughly weed whack my ankle. I am pretty sure that the scar left on my ankle is a gang symbol, though I’m not sure which one. I think it might be the Smurfs.

But the more painful event in my week was inflicted on me by the Texas State Board of Public Accountancy. June is my month to report continuing education and renew my license, and I generally benefit from the conferences and sessions that help me maintain my certification. But every other year CPAs in Texas are required to report a four-hour session from a small group of select courses approved by the Board. You might be surprised to know that what caused me so much pain was an ethics course.

There are a number of reasons why that ought not to be true. One relatively obvious one is that I happen to love the topic and teach it for a living. I care deeply about the ethical reasoning and behavior of CPAs, particularly of my students. I am also invigorated by my students when I am with them in the accounting ethics classroom. I cannot tell you how much I learned from my 138 students this past spring as they related to one another in ethics accountability groups, and put together some stunning and meaningful presentations. These students also each developed a set of principles to guide their professional lives. I was challenged and moved by the growth in students’ perspectives during the course.

Another major reason the Board-approved ethics course should not have been a problem for me is that I have a high tolerance for boredom. I am, after all, a CPA, and have been for almost 27 years. I am also a professor who has sat through innumerable commencement speeches and faculty meetings. I may have to pull the hair on my legs to stay awake, but I can usually manage to get through most sessions that normal people would find intolerable.

I had a couple of factors working against me. I had waited till the last minute and had no choice but to sit through the whole course at one time. In addition, I had decided to go the low cost route in selecting my course, insuring an online delivery method that was as interesting as reading the phone book.

You might think I was bored because I already know all this stuff. But the stuff I know was actually the interesting part of the course. The course also covered, but essentially never tested over, innumerable philosophers’ perspectives, a few of which were actually relevant to decisions we make in the accounting profession. And there were endless pages of minutiae to protect the public from such dangers as two CPAs using the same staff and incorrectly representing that they were a partnership. Wow! There oughta be a law! That will bring down the republic!

But it ought not to be this way. This course is a perfect example of why people look at me with a puzzled expression when I talk about how much I enjoy teaching ethics. The nice ones ask, “Can you teach ethics?” Of course, they mean, “Can you teach it up? Can you help people make better decisions?” Everybody knows that you can teach it down; my profession has plenty of examples.

In fact, perhaps the most painful experience of my week was an e-mail from a former student who related having to make an ethical decision at her CPA firm in a ten-minute window. She chose to tell the truth, and did what was right, and it got her fired. It made my blood boil.

She told me that she remembered what I had said in class about having to make hard decisions. And she was writing to say thanks, to say that she was content and her conscience was clear, when she could easily have been writing to tell me I was wrong, and how could she have ever listened to me?

I’m sure there are better ethics continuing education courses that I can take, and maybe two years from now I will open my pockets wider and hope for the best. But I know the best hope for changing the profession is not in this futile biennial requirement.

It is in that classroom I will return to, where hearts and lives are shaped and changed. I have the chance to fan the flame of moral courage in a remarkable group of students from a variety of backgrounds. The accounting profession may not like what they get sometimes. But as long as I have breath, and as long as I prepare Aggies, people like my student are what I am going to send them.

I was going to write a shallow column this week about what a low life Seattle Seahawks head coach Pete Carroll is for jumping from USC and leaving them on probation and banned from postseason play. And then reality interrupted—I lost a dear friend to a brain aneurysm. And suddenly college football, and its unlimited number of self-centered numskulls, just did not matter all that much any more.

Ann was a person who lit up a room with her energy and raised, along with her husband Rick, three of the kindest children you could ever hope to meet. By an act of God’s grace, one of those children married my precious daughter, and they have given me the gift of my beautiful granddaughter, Avery.

Ann invested her life in people. She loved kids with all that was in her. Besides her own kids, she shaped the lives of countless children in her elementary school classrooms. She would speak of those children with exasperated affection, of her deep desire to help those who most needed it, of how hard the task had sometimes become. And then she would go and have a wonderful year, one in which she made a difference. Many, many young people bear her mark.

She had recently retired from teaching and, along with Rick, she was serving kids at a Lutheran camp in Colorado this summer when she was stricken. It was no surprise that she was serving because, in fact, that is who Ann was. The vacations of retirement could wait for another day. There was work to be done, and people to be changed, in a Colorado setting that had known decades of life-changing summers.

And her pattern of life has fallen to her children. Her oldest is my son-in-law, and he models for me how a man ought to treat his wife, even though I’m the one who is supposed to be setting the pace. He learned a lot from watching his Dad, and he has built on those lessons to become a husband and father of integrity and faith.

Her youngest daughter is an Aggie, bleeds maroon and Fish Camp and all the traditions. The middle son is a Tech grad, creative and artistic, but with an obvious undercurrent of entrepreneurism like his father. I mostly admire these three from afar, evidence of the fruit of two well-invested lives joined in a lifetime commitment.

But that lifetime was too brief, and for no reason that I can explain. I cling to an eternal hope, but it does not always bring clarity, at least now. Nor should it, perhaps. Clarity will be for another time.

Today we are standing with Rick and his children in the midst of their pain. I have lost a Mom and a brother of my own, but I do not have the right words to comfort them. But I can see the circle of those they love closing around them, surrounding them, keeping them from despair. They will be—we will be—with them for as long as it takes, even if it takes forever.

Few of the people I write about in these columns will have as sweet, and as simple, and as momentous an impact as Ann had in her too few years. She energized, she ennobled, she blessed, she loved the people she touched, including me.

And I thought I ought to tell you.

I am not the only one to notice that we seem as a nation, and as a world, to be reeling from one catastrophe to another. I have seldom seen a period of pessimism like the one that envelops us right now. The last time I can remember this type of feeling in the U. S. was in the late 1970’s and early 1980’s. I am generally an optimist about our nation, because we have always been a country whose people learned from its mistakes and made better decisions when encountering similar circumstances. We have made gradual progress over the last 234 years with respect to issues of racial equality, and caring for the poor, and providing justice. It comes in fits and starts, but it comes. We have had a history of growing wiser, and learning from our mistakes.

But I cannot remember a time when we have been more shortsighted. People like to blame the media because of the short news cycle and the immediacy that comes with internet coverage of every minor glitch, along with the need to endlessly feed news consumers. Long-term thinking is boring. But, as Tufts University’s Robert Sternberg would say, wisdom requires both dialogical and dialectical thinking. Dialogical thinking involves interacting with others and actively considering their perspectives. Dialectical thinking requires a focus on the long-term, rather than just considering short-term outcomes. These two seem to go hand-in-hand; rarely do you see one without the other.

I see evidences of these failures in thinking in all the major issues in the headlines, and perhaps worse on the horizon. We are not just drilling in depths we have never drilled before. One of the reasons that energy prices remain stable is the vast expansion of natural gas reserves, mostly in shale formations. Exploration and production companies are producing this natural gas in close proximity to homes and schools in bedroom communities around Dallas/Ft. Worth. Many homeowners have suddenly become royalty owners. But there have also been interesting impacts on neighborhoods, and no one really knows what the seismic effects will be long-term. They have stopped drilling in Flower Mound because of concerns. Earthquakes anyone?

Our country, like others, is taking on precipitous debt, playing fast and loose with our credit standing. There has been no serious discussion about whether it is worthwhile as a strategy. There is a dearth of long-term thinking, and people mostly shout past each other. The borrowers are in the majority, so we dig the national debt to depths no one could have imagined twenty years ago. Those financial tremors you feel in Greece and Spain are real.

But one good thing that failure brings is the opportunity to change, to acknowledge our failures in thinking. Sternberg says that the five fallacies of thinking are egocentrism, omnipotence, omniscience, invulnerability, and unrealistic optimism. Disasters that are in your face every day tend to mute these fallacies. Not too many people at BP believe they are all powerful to stop disasters, or know everything about how to make a well a mile deep in the Gulf stop spewing out oil, or that they are invulnerable to the anger and financial consequences that will wash over them as surely as the crude washes up on the shores of the Gulf Coast. An unrealistic optimist now hopes the damage is contained to this summer, and that ecosystems largely recover in a decade or two.

We are creative and intelligent. We know how to drill deep into formations we could never reach, to produce gas in places we never thought we would, to temporarily wash away crises with floods of money. But we are not wise. We think about now, and we refuse to seriously engage one another about the future. We are neither dialogical nor dialectical.

We have a chance, if we grab it, to throw aside the fallacies of thinking and admit that there are real risks that accompany what we are trying to do, and that some of them are not worth taking. It will take humility and teachability. But the best time for something like that to happen is when we get it really wrong.

Now is that time.

One of the major problems with capitalism is the outsourcing of externalities, expected or unexpected events that have broader effects beyond the company causing them. Transocean’s Deepwater Horizon problem, with the thousands of gallons of oil pouring into the Gulf, is a classic example of an externality, and it provides an interesting example of how regulation can actually increase the costs to the populace when a disaster of this nature takes place.

People are understandably infuriated at the outcomes from the well explosion. They are reacting by fleeing companies connected to the event. BP alone has lost $17 billion of its market capitalization, according to The Wall Street Journal. BP representatives have made regular comments about accepting responsibility for legitimate claims. The well’s operator, Transocean, has sought protection from unlimited liability under an 1851 law, the Shipowner’s Limitation of Liability Act. According to the Associated Press, this would limit the company’s liability to $27 million. This seems wrong on its face to most people, and it has enraged Senator Chuck Schumer, who wants the law repealed. Admittedly, Senator Schumer has been known to get apoplectic over a lot less; he seems to have a propensity for getting excited. But this is an easy opportunity for him to capitalize on public anger over the spill.

What he does not mention is that this 1851 regulation had its own externalities, its own unforeseen consequences. If Transocean’s liability is, in fact, limited, the Shipowner’s Act is explicitly the cause of Transocean’s ability to outsource the externality to American taxpayers (or other unfortunate parties involved who may be held to greater levels of liability under joint and several liability laws). I am doubting that Congress, almost a decade before the French developed the first ironclad battleship, had floating oil rigs in mind. Who can blame them? But Congress in recent years has shown a penchant for demonstrating far less foresight, and they are on a roll.

Sending attorney general Eric Holder to Louisiana to threaten criminal prosecution is not the kind of action that leads to good legislation either. There are significant ethical issues involved in this problem, as there are in all externality situations. The environment needs to be protected in a time when unemployment is high. There needs to be strategic thinking about how to address justice concerns and allocation of liability, as well as addressing how to minimize the probability of these “black swan” unexpected events happening.

Shutting down new drilling in the Gulf for six months, as ordered by the president, will do this to some extent. It will also insure that rigs are sent elsewhere in the world, and with them American jobs. These issues are joined at the hip, and when anger causes sudden swerves in a deliberate problem-solving track, you rarely get better ethical decisions. What you get is short-term solutions, and the externalities that go with them.

But I am well aware that as long as the public is watching the BP camera showing oil pouring into the Gulf, deliberate decision making is unlikely. We are witnessing a risk management failure at BP of enormous proportions. I just returned from a Gulf coast vacation, and I wonder if I will be able to go on another one in the near future. I shake my head thinking of the damage to wildlife. What has happened is devastating.

I do not expect to be listened to on this issue, because populist anger is all the rage (pun intended). But we must carefully discern what must be done to minimize harm from what seems just to do in the moment to eliminate all risk and get revenge on those we blame. If not, we should not be surprised at the externalities we outsource to future generations.

It’s May, and another semester is over. It’s time to turn my attention to the important things of life, like sports. Unfortunately, my two favorite baseball teams, the Orioles and the Astros, are each firmly ensconced in last place, and likely will be for the duration of the season. The NBA just had its powerball lottery to find out who gets to draft John Wall, the Kentucky point guard who is leaving after one year and may have to race to beat his coach out the door. The winner of the lottery was the Washington Wizards, who used to be the Bullets, before that unfortunate moniker became symbolic of the plight of our nation’s capital. The NBA playoffs drone on to the inevitable Lakers-Celtics final.

But the real attention is being paid to two NFL players, Houston wide receiver Andre Johnson and Tennessee running back Chris Johnson, who want to have their contracts renegotiated. Both are arguably among the best players at their positions, and it is understandable that they are interested in being paid more. They are not actually holding out, since this is the season of voluntary workouts. But these types of posturings often end up with players being late reporting to training camp, and generally violating explicit parts of their contracts. Theoretically, fines result, but often negotiations will end up minimizing or eliminating those fines, perhaps in the context of a restructured contract.

So is it ethical for players to do this? It is legal, as long as they are willing to live with the terms of the contract, or retire, and they do not play for another team. It is certainly self-interested behavior, and it is rational for people to act in their self-interest. It is really the only leverage these athletes have. But is it ethical?

Well, technically, yes—this is what we call ethical egoism. In other words, what is ethical is what is best for me. But in the sense of what most people think of as ethical, the answer is no. Yet these players will have many apologists in the press who will excuse the behavior because NFL players have a short window of opportunity, and their careers can end at any time, and NFL owners will ruthlessly cut them if they are hurt. All of these claims are true. But it is still unethical for NFL players to hold out when they are under contract.

Andre Johnson is burdened by an eight-year, already renegotiated contract under which he received a guaranteed $15 million. I am not mocking the amount that he has received, and my opinion does not depend on the details of the numbers. Assuming it was an arm’s length transaction, whether or not he used an agent, he signed the deal weighing his risk and return. This risk included his potentially short career and the aforementioned heartlessness of management if he is hurt. If he was deliberately misinformed by the Texans, then my opinion would change.

Ethical egoism, of course, does not value the keeping of promises. Ethical egoists will ignore promises unless they believe the cost of violating the promise will exceed the benefits. For a football player, there are at least two costs to consider—the legal costs of violating the promise and the reputation costs of being a proven liar. Any rational person who is negotiating with a known liar will demand a bigger return, which means that future football teams’ negotiations with the player will not yield the player top dollar. But if a football player sees his career as limited to a few years, he calculates the reputation costs as being near zero. He may never get to negotiate another contract. So all he has to calculate is the legal costs, and that’s why he has an attorney. And if he feels no duty to keep promises, then what he does is hold out.

Team management does cost-benefit analyses as well, and their calculations may cause them to choose to renegotiate or, in the case of Denver’s Brandon Marshall, trade the player to get value. I may personally prefer not to negotiate with liars, but they are looking to maximize their self-interest as well. But once you renegotiate one player’s contract, watch out for his teammates to come calling, particularly those the team can least afford to lose. I think those costs are routinely underestimated by NFL teams when they deal with the Johnsons of the world.

Andre Johnson could have insured that he would get full market value by signing one-year contracts, or at least short-term contracts. But he would have had to live with the risk that the full market value for his services in a given year (and forever), likely because of injury, was zero. Professors complain for similar reasons, particularly when people are hired in at higher salaries. We want to receive market value, but the market is determined for those who are willing to leave their universities, not for those who want to stay where they are. You have to be willing to assume the risks that go with moving to a new place, with all its uncertainty, if you want to make top dollar. And, in some cases, you have to be willing to give up tenure. The return is linked to the risk.

What professors want is what Andre Johnson wants—return without risk. It’s great if you can get it, but it takes a fool being on the other side of the transaction. Andre Johnson is not holding out, and he has the right to posture all he wants during voluntary workouts. He is just being selfish. But if he holds out this summer, he is violating a promise, and he is being unethical.