Did Rep. Ryan use inside information to dump bank stocks? The answer is no

Matthew Yglesias cites the Richmonder blog's accusation about Rep. Ryan's inside trading during the early days of the financial crisis.

From the Richmonder

Ryan attended a closed meeting with congressional leaders, Bush's Treasury Secretary Henry Paulson, and Federal Reserve Chairman Ben Bernanke on September 18, 2008. The purpose of the meeting was to disclose the coming economic meltdown and beg Congress to pass legislation to help collapsing banks.

Instead of doing anything to help, Ryan left the meeting and on that very same day Paul Ryan sold shares of stock he owned in several troubled banks and reinvested the proceeds in Goldman Sachs, a bank that the meeting had disclosed was not in trouble. 

As Yglesias writes, "it's about as clear an example of a public official trying to use his office to obtain personal benefits as you're likely to find."

The Business Insider investigates further. Although the transactions are reported to have occurred on the same day as the Paulson/Bernanke meeting, they may have happened just prior to the meeting.The Business Insider was also not able to obtain confirmation of who attended the meeting.

Given the miraculous timing of the transactions, it seems the Rep. Ryan has some 'splaining to do.

Update (5:16): Yglesias has walked back his story, saying the Richmonder doesn't "have the goods" to make its case. He cites Brad DeLong's analysis of all of Rep. Ryan's trades in 2008 which include numerous other instances of trading bank stocks.

Also, Rep. Ryan's office has offered an explanation that indicates that the timing was a coincidence.

Abusive priests' $20K good-bye gifts

If you thought that the moral rot among the Catholic Church's hierarchy couldn't go much deeper, think again.

The Milwaukee Journal Sentinel reports

The Archdiocese of Milwaukee confirmed Wednesday that it paid suspected pedophile priests to surrender their clerical collars, after a document surfaced in its bankruptcy discussing a 2003 proposal to pay $20,000 to "unassignable priests" who accept laicization.

The Survivors Network of Those Abused by Priests characterized the payments as payoffs and bonuses to priests who molested children, noting it was just $10,000 less than the $30,000 the archdiocese hoped to pay victims, according to the same document.

The Milwaukee Archdiocese, which was able to afford $20,000 going-away gifts for abusive priests and has bemoaned "infringement of government in the practice of (its) faith," is now using that same federal government to infringe on the legitimate claims of its victims.

The leader of the archdiocese at the time of the payments, then-Archbishop Timothy Dolan, is now a prominent cardinal.

Dolan then and archdiocese officials now have defended the practice as expedient--it got abusive priests out the door more quickly. And in a further display of moral repugnance, an archdiocese spokesperson blamed the survivors' organization, saying that it was the organization that wanted the priests thrown out. This follows Dolan's own efforts to discredit and delegitimize the organization.

BTW, can anyone explain why $20,000 is such a popular figure for making your "problem people" go away?

Funding a Republican near you

In a development that would make Ronald Reagan proud, it turns out that some of the wealth that has bankrolled the Tea Party and other conservative causes comes from sales of petrochemical capital to Iran. Bloomberg reports

A Bloomberg Markets investigation has found that Koch Industries -- in addition to being involved in improper payments to win business in Africa, India and the Middle East -- has sold millions of dollars of petrochemical equipment to Iran, a country the U.S. identifies as a sponsor of global terrorism.

Internal company documents show that the company made those sales through foreign subsidiaries, thwarting a U.S. trade ban. Koch Industries units have also rigged prices with competitors, lied to regulators and repeatedly run afoul of environmental regulations, resulting in five criminal convictions since 1999 in the U.S. and Canada.

From 1999 through 2003, Koch Industries was assessed more than $400 million in fines, penalties and judgments. In December 1999, a civil jury found that Koch Industries had taken oil it didn’t pay for from federal land by mismeasuring the amount of crude it was extracting. Koch paid a $25 million settlement to the U.S.

The Bloomberg article goes on to describe how Koch industries has stolen, lied, polluted, bribed and killed. One of Koch's employees called it, "the Koch method."

KochPAC has been a major contributor to Rick Perry, Michelle Bachmann, and other Republicans. Don't hold your breath, however, waiting for any of them to give any of that money back.

Deception overload

One piece of advice that I used to give my students at GW when considering whether an action or statement was right or wrong was to think about whether they would be comfortable with it being reported in the Washington Post. This would have been great advice for Richard Schiller, the former fundraising director for NPR, Wisconsin Gov. Scott Walker, and others who have recently been ambushed by impostors.

Michael Gerson has a column today on the morality of these ruses. The ruses are ethically dicey because they start with lies. The perpetrators' hope is that one wrong will cause another which will make the whole scheme right. Gerson concludes that these types of deceptions are rarely justified. He also points out that that the deceptive editing of the NPR "gotcha" video is unethical (the initial lie of the scheme is compounded by other lies in the presentation of the evidence) and that there was no good in the underlying objective (to cause embarrassment).

However, in a column that's thoughtful and balanced in most respects, Gerson slips in these digs against Schiller and NPR.

The interviewers posed as representatives of a Muslim organization that wanted to donate $5 million to NPR. The stingers bought access to NPR executives with fake money.

...There is no ethical imperative to provide a prostitute to a weak man and then videotape the scandal, or to provide drugs to a recovering addict and then report the result — or to promise $5 million to a radio executive to get him nodding to leading questions.

The implication is that meeting with the impostors itself was immoral and wrong and a sign of succumbing to temptation.

Although he is aware of it and mentions it earlier in the column, Gerson's later statements conveniently ignore that the executive in question was NPR's director of fundraising--the person responsible for developing relationships with potential donors. Thus, the only "access" that was "bought" was contact with the employees responsible for donor contacts (the director of fundraising and his assistant for institutional giving). Moreover, Schiller had an obligation and responsibility to meet with and encourage possible donors.

The deception put Schiller in a damned if you do, damned if you don't situation. If he meets with the imposters, he gets accused of providing "access" to a Muslim organization. However, if Schiller doesn't meet with the impostors, he's open to an accusation of discrimination against Muslims and more generally of not doing his job.

To be clear, none of this justifies or excuses Schiller's comments regarding the Tea Party, which were dumb, thoughtless and biased. He was wrong to have said them and embarrassed himself and NPR. Several other comments that he made were also embarrassing and ill-advised.

However, Schiller was obligated to follow up on the contact with the impostors. The deception didn't trade on Schiller's weakness but rather on his responsible and obligated behavior, which makes the deception even more under-handed.

It's not moral being green

Slate has a fascinating article this morning about how acting "green" may lead people to behave less morally.

The article describes results from a set of two-stage experiments that examined how exposure to green items and the purchase of green items affected subsequent "moral" behavior. In first stage of the "exposure" experiment, subjects were asked to evaluate items from a hypothetical on-line store. In this set-up, subjects were randomly assigned to stores that varied in the number of green and conventional goods that they carried. In the first stage of the "purchase" experiment, subjects were also randomly assigned to stores with different numbers of green goods but tasked with making purchases from the assigned store.

In the second stage of each experiment, subjects then played a dictator game in which they were given a small amount of money to allocate anonymously between themselves and somebody else. In these games, the amount of money that a subject gives to someone else is a sign of economic altruism (other- or giving-oriented preferences). A purely selfish person would keep all the money for himself or herself, while a person who has strong concerns about fairness, others' well-being, or the appearance of these things gives some money away.

In the exposure experiment, the researchers found that subjects who were exposed to green goods gave more in the dictator game (behaved more altruistically) than those who were just exposed to conventional goods. The result is consistent with a "demonstration effect" in which exposure to good behavior prompts people to incorporate that norm into their subsequent behavior.

The really interesting result, however, came in the purchase experiment. Subjects who made green purchases gave less money in the dictator game than people who made conventional purchases.

The researchers followed these experiments up with another in which subjects were randomly assigned to purchase green or conventional goods and then given a task that tested their honesty. Once again, purchasing green goods was associated with less moral behavior.

The experiments are highly artificial, and some of the differences in moral behavior were very marginal. However, the results are consistent with a type of "licensing" in which performing one moral act gives people latitude to act less morally later. Licensing itself is consistent with people having preferences over moral and selfish acts and balancing their behavior across these acts.

This type of moral accounting could explain other phenomena, such as people's behavior in church parking lots. After an hour of prayer, reflection, and fellowship, congregants cut each other off and curse each other in the parking lot. An hour devoted to a higher purpose gives them license to act like jerks the minute they get behind the wheel.

In the experiment and the parking lot examples, the moral behavior comes first. However, the sequence could also be reversed. You could think of cases where people atone for immoral acts by subsequent moral acts (you honk at the idiot in the parking lot who is letting everyone pull out in front of him and then atone next Sunday by fixing pancakes for the homeless). In either order, people mentally keep track of moral credits and balance them across one another.

A broader implication of the findings is that there are limits to the amount of "good behavior" that society can get people to engage in. If the government or some other authority incentivizes or mandates one type of good behavior, people will conform in that dimension but compensate by acting poorly in some other dimension.

As my Mom is fond of saying, "I guess we just can't have nice things."