Instead of making banks and businesses act ethically, Roger Lowenstein tells consumers that they don’t have to.

In “The Way We Live” column of this week’s New York Times Magazine, Roger Lowenstein notes that about 10.7 million families owe more on their houses than the homes are currently worth.  He advises those people to do what any smart bank or business would do, which is to walk away from the loan and the house. 

The article is really quite canny in how it demonstrates that the amorality of business should rule the actions of the individual. He tries to dispose of the ethical constraints that prevent people from walking away from a bad debt, e.g., it debases the character of the borrower and it depresses the prices of the other houses in the neighborhood, by questioning why homeowners should have these feelings in the real world of commerce.   He gives many examples of businesses walking away from commitments through default and bankruptcy.  He also gives the example of a baseball team not signing a new contract with a big star as an example of why loyalty should not be considered a virtue in the world of business (although in this case, there is no contract!).

Of course, Lowenstein forgets that many loans are worth more than the asset that served as the reason for borrowing the money.  Every time a business or an individual buys a car, airplane, copy machine, computer or any other type of equipment, the value of the item declines immediately and precipitously, and to typically far below the funds borrowed. 

But instead of comparing a home to these loans, Lowenstein wants to turn the average homeowner into a sophisticated multinational corporation that makes all decisions based solely on improving the bottom line.

Roger, I have an idea:  Instead of asking homeowners to act more like amoral businesses, why don’t you instead call for new regulations that would bring some ethics into business actions? 

Roger would not even think of this approach because behind his article is the ideological message that underpins much writing about both economics and personal business: the idea that regulation of business is always wrong and that the marketplace will solve all our problems if we just get government and society out of the way.  Laissez faire means do what you want, and by giving homeowners permission to do what they want, he keeps that option open for the banks securitized and sold bad loans, big companies that walk away from communities to lower their cost structure or hedge fund managers who open new funds “rather than try to earn back their investors’ lost capital” (from the actual article).

But I wonder, if we all play by the rules of the big, do the small have any chance at all?

Corn Refiners Fight Myth that Sugar is More Natural

The Corn Refiners Association (CRA) has been running ads on prime time TV in which one mother begins to chide another about serving a fruit drink with corn syrup and the other mother rattles off a few confident assertions that the drink is natural and that corn syrup is a natural product made from natural corn.  The other mother stands corrected and takes a swig.  The ad ends with a call-to-action to find out more by going to sweetsurprise.com.  The CRA is not mentioned in the narration although I’m sure a teeny-tiny version of its logo is somewhere on the ad.

When I saw the commercial I mistakenly thought that whoever sponsored it was telling another big lie by trying to make us believe that sweetened drinks have attributes of organic or health foods, when in fact, they provide little nutrition and lots of empty calories.  

I hate big lies so I was angry.

That is, until I got to the website.  Now I’m just amused. 

The CRA is not trying to say that corn syrup is an organic or healthy food; merely that corn syrup was as natural, tasty and nutritional as cane sugar.  And of course it is, which is about like saying the 2009 Detroit Lions played football as well as the 2009 Kansas City Chiefs did.

It was at that point that I remembered that many makers of processed food products were touting cane sugar as a natural ingredient which is to lay claim to be healthier for you.  In fact, a number of products have changed their formulations and replaced other sweeteners with cane sugar and advanced the claim that they were now a “natural product.”

Of course saying that using cane sugar makes a product healthier is a lot like touting that the low fat content of a processed food is good for dieting, even though the only factor that figures into weight loss is calorie consumption (if you ate only fat but limited yourself to 1,500 calories a day of it, you would likely drop a few pounds a week).

The broader issue goes beyond cane sugar and corn syrup.  Both are always bad in beverages, and the processed food which contains either or both is typically not as good for you as making something from scratch, or eating something that has not been processed.  Experts and studies often list processed food and calorie-laden drinks as two of the causes of the obesity challenge we currently face in the U.S. and much of Europe.

So in this case, the pot is telling the truth when it says that it’s as black as the kettle.

How to use facts and logical thinking to create the big lie

In an opinion piece that filled half of the New York Times’ Op/Ed page on New Year’s Day, Denis Dutton demonstrates how you can use a logical presentation of accurate facts to create, or in this case, support a lie.  

The premise of “It’s Always the End of the World as We Know It,” is that mankind has always fabricated potential or probable holocausts and apocalypses.  He begins with an extended history of Y2K, which as many will remember, was the fear of an informational meltdown when masses of computers malfunctioned on January 1, 2000 because the original code built into them only accommodated two digits for the year, not the four that are required to distinguish 2010 from 1910.

Dutton does a credible job, first of demonstrating that reality did not bear out the Y2K hypothesis, and then of connecting it to the apocalyptic visions of various religions.  He jaunts nicely and logically through a quick analysis of why people love to fear disasters, with but one small mention warning of his true goal, which is to disprove the theory of global warming.

(Note to my fellow detail freaks: That small mention fits well into the context of his argument, which at the point of the mention is quite accurate and appropriate.  Here is that little mention: “Religions from Zoroastrianism to Judaism to Christianity to U.F.O. cults have been built around notions of sin and the world’s end.  The Y2K threat resonated with those ideas. Human beings have constructed an enormous, wasteful, unnatural civilization, filled with sin — or, worse in some minds, pollution and environmental waste.  Suppose it turned out that a couple of zeros inadvertently left off old computer codes brought crashing down the very civilization computers helped to create.  Cosmic justice!”)

So after 700 reasoned words on how Y2K exemplified the propensity of humans to create imaginary threats of imminent mass destruction, Dutton comes out of his climate change denying closet in the very last paragraph:

“This applies, in my view, to the towering seas, storms, droughts and mass extinctions of popular climate catastrophism.  Such entertaining visions owe less to scientific climatology than to eschatology, and that familiar sense that modernity and its wasteful comforts are bringing us closer to a biblical day of judgment.  As that headline put it for Y2K, predictions of the end of the world are often intertwined with condemnations of human “folly, greed and denial.”  Repent and recycle!”

If you’re not reading carefully, as most of us don’t, you could easily let this quiet slide from reason to deception go by unnoticed and find yourself agreeing with his conclusion, which expresses after all, our fondest dream, that global warming does not lead to worldwide suffering.

But if we analyze the article for a minute, we can see two big problems with his logic:

  1. Just because the reasoning leading up to the conclusion is correct does not mean the conclusion is correct. 
  2. He compares Y2K, which was a hypothesis, with global warming/climate change, which is a scientific theory.  A hypothesis is an idea of what could be true but maybe not, a kind of starting point for running controlled experiments. But when scientists start calling something a theory, they pretty much have gathered a preponderance of evidence to substantiate the idea.

The real question perhaps is why the New York Times decided to publish Dutton’s piece.  Would it publish a piece of philosophical rhetoric that concluded that the earth was flat or that the sun revolved around the earth?  Would it print an article on sociology that suddenly at the end proposed that flies regenerated spontaneously from dung?

Sometimes the public stature of the writer compels a newspaper or magazine to publish an article.  But the Times mini-bio describes Dutton as a professor of philosophy at a university in New Zealand.  His Wikipedia biography describes him as “an academic, web entrepreneur and libertarian media commentator/activist. “  In other words, he is neither Henry Kissinger, who might get a free pass onto virtually any publication’s Op/Ed page, or the chair of a Fortune 500 company who might be allowed to give her distorted view of a business news story which directly concerned her company.

By accepting the validity of the climate change deniers on this level of discourse — an Op/Ed column by a little known expert in another field — the Times does as much of a disservice to the U.S. public and our public discourse as it did by publishing the misleading evidence of weapons of mass destruction in Iraq without first substantiating it.