1000 words Total. Answer each question in paragraph form https://www.youtube.com/watch?v=wzicXbnmllc In the video, presented by Brooke Deterline, talks about creating ethical cultures in a business. One of Brooke’s main point was courage. She defines courage as our ability to act from our hearts in the face of fear and is a skill that we can build with practice. Brooke gives an example of life without courage and shows us many scenarios where it is still happening today, 10 years after the ENRON scandal. Courage is something that lacks in social situations where wrong is being done. She states that we all are vulnerable to situation influence all the time and that it is natural human wiring. It seems that most of us, including myself, can become a bystander to follow a leader or a group that we know is doing wrong because we want to be accepted. (1) Why do you think that the most ethical and compassionate among us can easily betray our values, in the face of challenging situations? What challenges does one face when they are presented with a difficult situation? (2) Do you believe that with practice we can retrain our brains to override our natural fear response when we are put in these challenging situations? Managers sometimes face business problems that raise difficult questions. When being faced with these problems they must choose between two ways of resolving it. Each of these alternatives is the right thing to do, but they can not do both ways. Badaracco characterizes right-versus-right dilemmas as “dirty-hands problems,” where managers or any employee often have to “get their hands dirty” by making tough choices between competing virtues such as honesty, fairness, respect, objectivity, and responsibility. He shows us three managers that face different right- versus-right conflicts. We see that these managers have the responsibilities to live up to the commitments they have made and the standards by which they want live by. However, it is not that simple to choose from wanting to be a successful manager and a decent, responsible person. (3) After reading the three different extremes of right- versus- right, why do you think that Badaracco emphasizes on the statement made by Oliver Wendell Holmes, “I do not give a fig for the simplicity on the this side complexity, but i would give my life for the simplicity on the other side of complexity,” and what do you think it means? A manager often encounters right-versus-right dilemmas where professional responsibilities conflict with personal values. For example, a senior manager may have knowledge of plans to lay off an employee-friend who is planning the purchase of a new home. Warning the friend about the upcoming layoff would certainly help the friend avoid the difficulty of paying for a new home without a job, but it may also violate an agreement with senior management and shareholders to keep such plans confidential until these plans are properly implemented. (4) In a challenging situation like this, should mangers rely on fundamental ethical principles and the company’s mission statement to help them decide what to do or should they consult their own moral instincts and intuitions?

1000 words Total. Answer each question in paragraph form https://www.youtube.com/watch?v=wzicXbnmllc In the video, presented by Brooke Deterline, talks about creating ethical cultures in a business. One of Brooke’s main point was courage. She defines courage as our ability to act from our hearts in the face of fear and is a skill that we can build with practice. Brooke gives an example of life without courage and shows us many scenarios where it is still happening today, 10 years after the ENRON scandal. Courage is something that lacks in social situations where wrong is being done. She states that we all are vulnerable to situation influence all the time and that it is natural human wiring. It seems that most of us, including myself, can become a bystander to follow a leader or a group that we know is doing wrong because we want to be accepted. (1) Why do you think that the most ethical and compassionate among us can easily betray our values, in the face of challenging situations? What challenges does one face when they are presented with a difficult situation? (2) Do you believe that with practice we can retrain our brains to override our natural fear response when we are put in these challenging situations? Managers sometimes face business problems that raise difficult questions. When being faced with these problems they must choose between two ways of resolving it. Each of these alternatives is the right thing to do, but they can not do both ways. Badaracco characterizes right-versus-right dilemmas as “dirty-hands problems,” where managers or any employee often have to “get their hands dirty” by making tough choices between competing virtues such as honesty, fairness, respect, objectivity, and responsibility. He shows us three managers that face different right- versus-right conflicts. We see that these managers have the responsibilities to live up to the commitments they have made and the standards by which they want live by. However, it is not that simple to choose from wanting to be a successful manager and a decent, responsible person. (3) After reading the three different extremes of right- versus- right, why do you think that Badaracco emphasizes on the statement made by Oliver Wendell Holmes, “I do not give a fig for the simplicity on the this side complexity, but i would give my life for the simplicity on the other side of complexity,” and what do you think it means? A manager often encounters right-versus-right dilemmas where professional responsibilities conflict with personal values. For example, a senior manager may have knowledge of plans to lay off an employee-friend who is planning the purchase of a new home. Warning the friend about the upcoming layoff would certainly help the friend avoid the difficulty of paying for a new home without a job, but it may also violate an agreement with senior management and shareholders to keep such plans confidential until these plans are properly implemented. (4) In a challenging situation like this, should mangers rely on fundamental ethical principles and the company’s mission statement to help them decide what to do or should they consult their own moral instincts and intuitions?

Assignment One Suggested Due Date: July 17th In this assignment you will read three articles You will answer questions about Hayek, Lucas, and Mankiw et. al. which consider just those particular articles. Then at the end of the assignment there is a cluster of questions that deal with both Lucas and Mankiw et al where you will have an opportunity to compare and contrast those two articles. When you have completed the assignment, place it in the appropriate drop box in WTClass. Hayek: The Use of Knowledge in Society http://www.econlib.org/library/Essays/hykKnw1.html Adapted from Michael K. Salemi “The Use of Knowledge in Society” F. A. Hayek Discussion Questions 1.1. “The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form, but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess (H.3)” a. What does Hayek mean by a “rational economic order”? b. What does Hayek mean by “dispersed bits of incomplete and frequently contradictory knowledge”? c. Why is Hayek critical of the common assumptions in economic analysis that buyers, sellers, producers and the economist all know every relevant thing about the economy? d. What, in summary, does Hayek mean by the quoted statement? 1.2. What, according to Hayek, is the information needed to operate effectively in a complex market economy? a. What does Hayek mean by “planning”? b. What is the minimum information needed by economic planners and individuals? c. Does the minimum differ for planners and for individuals? How? Why? d. What happens when some individuals possess more information than other individuals? e. What does Hayek mean when he says (H.16) “…the sort of knowledge with which I have been concerned is knowledge of the kind which by its nature cannot enter into statistics and therefore cannot be conveyed to any central authority in statistical form”? f. Why, according to Hayek, can the “information problem” be solved by “the price system”? 1.3. Why, according to Hayek, is the true function of the price system the communication of information? a. Why does Hayek use the term ‘marvel’ in his discussion of the economy of knowledge? b. What does Hayek mean when he says (H.26) “…man has been able to develop that division of labor on which our civilization is based because he happened to stumble upon a method which made it possible”? Read Robert Lucas’ “Some Macroeconomics for the 21st Century” in the Journal of Economic Perspectives. (Skip the appendix.) All four of these links go to the same article. Some of the links might not be accessible to you, but I think that at least one of them should work for all of you. https://www.aeaweb.org/articles.php?doi=10.1257/jep.14.1.159 http://www.jstor.org/stable/2647059 http://www.econ.psu.edu/~aur10/Econ%20570%20Fall%202009/Lucas%20JEP%202000.pdf http://faculty.georgetown.edu/mh5/class/econ102/readings/Macro_21st_Century.pdf 1. According to Lucas, why has the world’s economy grown so much since 1960? 2. According to Lucas, why do some nations grow faster than others? 3. According to Lucas, why will growth and inequality decrease in the next 100 years? 4. Is Lucas’ model in this paper “economics?” Read Greg Mankiw, Romer and Wiel’s article in The Quarterly Journal of Economics. http://www.econ.nyu.edu/user/debraj/Courses/Readings/MankiwRomerWeil.pdf 1. Many economists think the Solow Growth Model is of limited use. (One of my professors at OU stated that it took economists 50 years to figure out that their growth model has nothing to do with growth.) But does the Solow model give “…the right answer to the questions it is designed to address?” 2. Why is human capital important when testing the Solow model against the data? 3. Explain how the authors conclude that the incomes of the world’s nations are converging? Now that you’ve answered questions about Lucas and Mankiw et al separately, consider this question: Both of these papers develop the notion that the economies of the world’s nations will tend to “converge” over time. Compare and contrast the way(s) in which the papers advance the idea of convergence. Assignment Two Due Date July 24th This assignment is very straight forward. You’ll read two papers and answer questions about each of them. Read Krugman’s paper on unemployment http://www.kc.frb.org/PUBLICAT/ECONREV/EconRevArchive/1994/4Q94KRUG.pdf 1. What is the difference between structural and cyclical unemployment? In this context, what is the difference between Europe and the US? What is the evidence that Krugman uses to back his opinion? 2. What is the natural rate of unemployment? Why is it higher/rising in Europe? Again, what is the evidence? 3. What is the relationship between the rising unemployment in Europe and the rise in inequality in the US. (What does Krugman mean by inequality?) 4. What is NOT to blame for either the rise in unemployment or inequality? 5. What policies, if any, can be put into place to combat rising inequality/unemployment? 6. Are you convinced by Krugman’s argument which rules out globalization as the likely cause for high European unemployment and high US wage inequality? 7. Consider Table 2 in Krugman. Why does Krugman include Table 2 in his paper? In other words, what point is strengthened by the data in Table 2 and why is it crucial to Krugman’s larger thesis? NOW, recreate the data for Table 2 for either the UK or US for the latest year possible. Has anything changed as a result of the Great Recession? Read Thomas Sargent’s paper about the credibility of “Reaganonomics.” http://minneapolisfed.contentdm.oclc.org/cdm/ref/collection/p15334coll1/id/366 http://minneapolisfed.contentdm.oclc.org/cdm/singleitem/collection/p15334coll1/id/366/rec/1 You might like this: http://www.ispot.tv/ad/7Lj9/ally-bank-predictions-featuring-thomas-sargent 1. What is a dynamic game? 2. Why should we think of monetary and fiscal policy as dynamic game? Who are the players and what are the strategies? 3. When are government budgets inflationary? (Again, think in terms of a game.) 4. What are the consequences if the monetary authority does not coordinate with fiscal policy agents? 5. Has Sargent done of good job characterizing the interplay between policymakers in the government, the central bank, and the public? 6. What is the connection between policy coordination and credibility? 7. Why, according to Sargent, were Reagan’s fiscal and monetary policy regimes “incredible?” Explain carefully. Assignment Three Due Date July 31 Read Taylor, Miskin, Obstfeld and Rogoff. Answer the questions for each article, then answer the final cluster that requires you to consider Miskin, Obstfeld and Rogoff. Suggested due date: January 2nd. Read John Taylor’s article about monetary transmission mechanisms. http://web.econ.unito.it/bagliano/ecmon_readings/taylor_jep95.pdf Also, to understand traditional monetary policy, listen to this: http://www.econtalk.org/archives/2008/08/john_taylor_on.html These questions refer to the article, not the podcast. 1. How does monetary policy (or changes in monetary policy) affect output and inflation? In other words, what is the monetary policy transmission mechanism? 2. What is the importance of financial market prices in Taylor’s view? 3. What is the importance of rational expectations and rigidities in the prices of labor and goods? 4. What is a reaction function? Why is a reaction function important? 5. What is an “optimal monetary policy rule?” 6. Has the monetary transmission mechanism changed? How? 7. What are the criticisms of Taylor’s views? How does he respond? What do you think? Read Mishkin’s article about global financial instability. http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.13.4.3 1. What is a financial crisis? 2. How did adverse selection and moral hazard contribute to the financial crisis in Mexico and East Asia in the 1990s? What are adverse selection and moral hazard? 3. Did irresponsible monetary and fiscal policy contribute to the crisis in the 90s? Why or why not? 4. How is it possible for the IMF to help in a crisis when a domestic central bank might not be able to help. 5. What should the US learn (or have learned??) from the crisis in the 90s? Read Rogoff’s article about global financial instability. http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.13.4.21 http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.13.4.21 Answer the questions and place the answers in the appropriate drop box in WTClass. 1. According to Rogoff, is the status quo in international lending viable or not? Explain. 2. Can the IMF handle international financial crises? Why or why not? 3. Rogoff gives six solutions to save the global financial system (deep pockets lender of last resort, an international financial crisis manager, an international bankruptcy court, an international regulator, international deposit insurance corporation, and a world monetary authority.) What is wrong with all of these? 4. Can developing economies cope with speculative capital flows without help? Explain. 5. What will be (should be) the role that equity financing play in developing country projects? Read Obstfeld on Global Capital Markets: http://www.nber.org/papers/w6559.pdf 1. Look at table 1 and figure 1. How does Obstfeld use the data in that table to suggest that 1) markets became less open then more open in the 20th century. 2. What is the “openness trilemma?” What are the economic and/or policy trade-offs with having a global, open and integrated financial system? 3. How does economic integration impact a nation’s ability to tax capital? Can you think of some high profile cases in the news lately that illustrate this fact? (Hint: you should be able to.) 4. What is the international diversification puzzle? What market failures have arisen (if any) have arisen due to more integration and openness? Comparing Obstfeld, Miskin, and Rogoff 1. Would the authors’ advice about policies to reduce the costs of financial integration be the same? Why or why not? 2. Would the authors’ agree that we need an international regulatory body to stave off international financial crises? Why or why not? 3. What is your opinion? Is it good to have a global financial market? Why or why not? Assignment Four Due Date August 7 Straight forward assignment: Read and answer the questions. Read Arnold Kling’s history of the policies that created the great recession http://mercatus.org/publication/not-what-they-had-mind-history-policies-produced-financial-crisis-2008 1. Using only the executive summary, what does Kling think caused the Financial Crisis of 2008? (Use only one sentence.) 2. One page 5, what is “the fact?” and what does this “fact” mean to you? 3. Briefly summarize the four components of the Financial Crisis? 4. On page 10, Kling states, “These property bubbles (in the U.K. and Spain) cannot be blamed on U.S. policy.” How confident are you on that point? Is Kling wrong? 5. Kling’s matrix of causes, gives almost all weight to what two factors? What three factors are almost completely not responsible? 6. Many have blamed designer financial (my term) like CDS and CDO and the shadow banking system for the collapse. How do these fit into Kling’s narrative? 7. Outline the progression of policy that caused/responded to economic conditions in the 30s, 70s and 80s and 00s. 8. What role did the mortgage interest deduction have on housing market? 9. What institution invented and allowed the expansion of mortgage-backed securities? 10. What is regulatory arbitrage? 11. Why did the Basel agreement create an advantage for mortgage securitization? 12. Did the Federal Reserve (and presumably other regulatory agencies know and even encourage regulatory capital arbitrage? What author does Kling cite to establish this? 13. What did the 2002 modification of the Basel Rules do to capital requirements? (See figure 4) 14. Summarize the Shadow Regulatory Committee’s statement 160. 15. Did non market institutions, such as the IMF and Bernanke, think, in 2006, that financial innovation had make the banking sector more or less fragile? 16. What is time inconsistency? (You can look this up elsewhere.) 17. How might “barriers to entry” by related to “safety and soundness?” 18. A Curmudgeon is an old man who is easily annoyed and angered. He also complains a lot. (I had to look it up.) I think I’ll change my xbox gamertag to this word, but I’ll bet it is taken. 19. How did credit scoring and credit default swaps enlarge the mortgage securities market? 20. Why, up until 2007, did we think that monetary expansion was all that was needed to mitigate the impact of financial crises? 21. Suppose that financial markets are inherently unstable. What does this mean are two goals of regulation and regulators? 22. Why are type two errors so problematic? (Two reasons.) 23. How could we make the banking sector easy to fix? Assignment Five Due August 13 Read the linked lectures and answer the questions. Lecture 1 http://econlog.econlib.org/archives/2008/11/lectures_in_mac.html 1.1 Why do you think macroeconomic realities must be reconciled with microeconomic analysis? (This is not a rhetorical question, but it will be hard for you to answer. There is no “wrong” answer you could give. Just think about it for a few minutes.) Lecture 2 http://econlog.econlib.org/archives/2008/11/lectures_in_mac_1.html 2.1 Consider this article after you have read Hayek. How do prices and wages perform the function of “central planning?” 2.2 Kling makes that claim that, because most workers do not do manual labor anymore, the economy is different that it was in 1930. Assuming he is correct, do you think central planning would be harder today or easier? Why? Lecture 3 http://econlog.econlib.org/archives/2008/11/lectures_on_mac.html 3.1 Give a one sentence definition of structural unemployment, of frictional unemployment and of cyclical unemployment. Lecture 4 http://econlog.econlib.org/archives/2008/11/lectures_on_mac_1.html 4.1 So, why does the economy adjust employment rather than wages? Lecture 5 http://econlog.econlib.org/archives/2008/11/lectures_on_mac_2.html 5.1 Kling gives 5 reasons the DotCom recession was worse than the previous two recessions (at least in duration). Which reason do you think is the most compelling? Lecture 6 http://econlog.econlib.org/archives/2008/11/lectures_on_mac_3.html 6.1 Why are Keynesian remedies (blunt fiscal and monetary policy measures) less appropriate in a post industrial economy, according to Kling? Lecture 7 http://econlog.econlib.org/archives/2008/11/lectures_on_mac_4.html 7.1 Why is it so hard to separate finance and government, according to Kling? Lecture 8 http://econlog.econlib.org/archives/2008/11/lectures_on_mac_5.html 8.1 Why is American Express Travelers Checks so interesting? Do credit cards work in a similar way? (I really don’t know the answer to this one. I just know that credit cards have made travelers checks obsolete.) Lecture 9. http://econlog.econlib.org/archives/2008/12/lectures_on_mac_6.html 9.1 According to this article, why do we have banks (financial sector or financial intermediation?) Lecture 10 http://econlog.econlib.org/archives/2008/12/lectures_on_mac_7.html 10.1 Why are banks better than barter, according to this leture? 10.2 Politics tends to favor bailouts of failed firms. Why is this exactly wrong?

Assignment One Suggested Due Date: July 17th In this assignment you will read three articles You will answer questions about Hayek, Lucas, and Mankiw et. al. which consider just those particular articles. Then at the end of the assignment there is a cluster of questions that deal with both Lucas and Mankiw et al where you will have an opportunity to compare and contrast those two articles. When you have completed the assignment, place it in the appropriate drop box in WTClass. Hayek: The Use of Knowledge in Society http://www.econlib.org/library/Essays/hykKnw1.html Adapted from Michael K. Salemi “The Use of Knowledge in Society” F. A. Hayek Discussion Questions 1.1. “The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form, but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess (H.3)” a. What does Hayek mean by a “rational economic order”? b. What does Hayek mean by “dispersed bits of incomplete and frequently contradictory knowledge”? c. Why is Hayek critical of the common assumptions in economic analysis that buyers, sellers, producers and the economist all know every relevant thing about the economy? d. What, in summary, does Hayek mean by the quoted statement? 1.2. What, according to Hayek, is the information needed to operate effectively in a complex market economy? a. What does Hayek mean by “planning”? b. What is the minimum information needed by economic planners and individuals? c. Does the minimum differ for planners and for individuals? How? Why? d. What happens when some individuals possess more information than other individuals? e. What does Hayek mean when he says (H.16) “…the sort of knowledge with which I have been concerned is knowledge of the kind which by its nature cannot enter into statistics and therefore cannot be conveyed to any central authority in statistical form”? f. Why, according to Hayek, can the “information problem” be solved by “the price system”? 1.3. Why, according to Hayek, is the true function of the price system the communication of information? a. Why does Hayek use the term ‘marvel’ in his discussion of the economy of knowledge? b. What does Hayek mean when he says (H.26) “…man has been able to develop that division of labor on which our civilization is based because he happened to stumble upon a method which made it possible”? Read Robert Lucas’ “Some Macroeconomics for the 21st Century” in the Journal of Economic Perspectives. (Skip the appendix.) All four of these links go to the same article. Some of the links might not be accessible to you, but I think that at least one of them should work for all of you. https://www.aeaweb.org/articles.php?doi=10.1257/jep.14.1.159 http://www.jstor.org/stable/2647059 http://www.econ.psu.edu/~aur10/Econ%20570%20Fall%202009/Lucas%20JEP%202000.pdf http://faculty.georgetown.edu/mh5/class/econ102/readings/Macro_21st_Century.pdf 1. According to Lucas, why has the world’s economy grown so much since 1960? 2. According to Lucas, why do some nations grow faster than others? 3. According to Lucas, why will growth and inequality decrease in the next 100 years? 4. Is Lucas’ model in this paper “economics?” Read Greg Mankiw, Romer and Wiel’s article in The Quarterly Journal of Economics. http://www.econ.nyu.edu/user/debraj/Courses/Readings/MankiwRomerWeil.pdf 1. Many economists think the Solow Growth Model is of limited use. (One of my professors at OU stated that it took economists 50 years to figure out that their growth model has nothing to do with growth.) But does the Solow model give “…the right answer to the questions it is designed to address?” 2. Why is human capital important when testing the Solow model against the data? 3. Explain how the authors conclude that the incomes of the world’s nations are converging? Now that you’ve answered questions about Lucas and Mankiw et al separately, consider this question: Both of these papers develop the notion that the economies of the world’s nations will tend to “converge” over time. Compare and contrast the way(s) in which the papers advance the idea of convergence. Assignment Two Due Date July 24th This assignment is very straight forward. You’ll read two papers and answer questions about each of them. Read Krugman’s paper on unemployment http://www.kc.frb.org/PUBLICAT/ECONREV/EconRevArchive/1994/4Q94KRUG.pdf 1. What is the difference between structural and cyclical unemployment? In this context, what is the difference between Europe and the US? What is the evidence that Krugman uses to back his opinion? 2. What is the natural rate of unemployment? Why is it higher/rising in Europe? Again, what is the evidence? 3. What is the relationship between the rising unemployment in Europe and the rise in inequality in the US. (What does Krugman mean by inequality?) 4. What is NOT to blame for either the rise in unemployment or inequality? 5. What policies, if any, can be put into place to combat rising inequality/unemployment? 6. Are you convinced by Krugman’s argument which rules out globalization as the likely cause for high European unemployment and high US wage inequality? 7. Consider Table 2 in Krugman. Why does Krugman include Table 2 in his paper? In other words, what point is strengthened by the data in Table 2 and why is it crucial to Krugman’s larger thesis? NOW, recreate the data for Table 2 for either the UK or US for the latest year possible. Has anything changed as a result of the Great Recession? Read Thomas Sargent’s paper about the credibility of “Reaganonomics.” http://minneapolisfed.contentdm.oclc.org/cdm/ref/collection/p15334coll1/id/366 http://minneapolisfed.contentdm.oclc.org/cdm/singleitem/collection/p15334coll1/id/366/rec/1 You might like this: http://www.ispot.tv/ad/7Lj9/ally-bank-predictions-featuring-thomas-sargent 1. What is a dynamic game? 2. Why should we think of monetary and fiscal policy as dynamic game? Who are the players and what are the strategies? 3. When are government budgets inflationary? (Again, think in terms of a game.) 4. What are the consequences if the monetary authority does not coordinate with fiscal policy agents? 5. Has Sargent done of good job characterizing the interplay between policymakers in the government, the central bank, and the public? 6. What is the connection between policy coordination and credibility? 7. Why, according to Sargent, were Reagan’s fiscal and monetary policy regimes “incredible?” Explain carefully. Assignment Three Due Date July 31 Read Taylor, Miskin, Obstfeld and Rogoff. Answer the questions for each article, then answer the final cluster that requires you to consider Miskin, Obstfeld and Rogoff. Suggested due date: January 2nd. Read John Taylor’s article about monetary transmission mechanisms. http://web.econ.unito.it/bagliano/ecmon_readings/taylor_jep95.pdf Also, to understand traditional monetary policy, listen to this: http://www.econtalk.org/archives/2008/08/john_taylor_on.html These questions refer to the article, not the podcast. 1. How does monetary policy (or changes in monetary policy) affect output and inflation? In other words, what is the monetary policy transmission mechanism? 2. What is the importance of financial market prices in Taylor’s view? 3. What is the importance of rational expectations and rigidities in the prices of labor and goods? 4. What is a reaction function? Why is a reaction function important? 5. What is an “optimal monetary policy rule?” 6. Has the monetary transmission mechanism changed? How? 7. What are the criticisms of Taylor’s views? How does he respond? What do you think? Read Mishkin’s article about global financial instability. http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.13.4.3 1. What is a financial crisis? 2. How did adverse selection and moral hazard contribute to the financial crisis in Mexico and East Asia in the 1990s? What are adverse selection and moral hazard? 3. Did irresponsible monetary and fiscal policy contribute to the crisis in the 90s? Why or why not? 4. How is it possible for the IMF to help in a crisis when a domestic central bank might not be able to help. 5. What should the US learn (or have learned??) from the crisis in the 90s? Read Rogoff’s article about global financial instability. http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.13.4.21 http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.13.4.21 Answer the questions and place the answers in the appropriate drop box in WTClass. 1. According to Rogoff, is the status quo in international lending viable or not? Explain. 2. Can the IMF handle international financial crises? Why or why not? 3. Rogoff gives six solutions to save the global financial system (deep pockets lender of last resort, an international financial crisis manager, an international bankruptcy court, an international regulator, international deposit insurance corporation, and a world monetary authority.) What is wrong with all of these? 4. Can developing economies cope with speculative capital flows without help? Explain. 5. What will be (should be) the role that equity financing play in developing country projects? Read Obstfeld on Global Capital Markets: http://www.nber.org/papers/w6559.pdf 1. Look at table 1 and figure 1. How does Obstfeld use the data in that table to suggest that 1) markets became less open then more open in the 20th century. 2. What is the “openness trilemma?” What are the economic and/or policy trade-offs with having a global, open and integrated financial system? 3. How does economic integration impact a nation’s ability to tax capital? Can you think of some high profile cases in the news lately that illustrate this fact? (Hint: you should be able to.) 4. What is the international diversification puzzle? What market failures have arisen (if any) have arisen due to more integration and openness? Comparing Obstfeld, Miskin, and Rogoff 1. Would the authors’ advice about policies to reduce the costs of financial integration be the same? Why or why not? 2. Would the authors’ agree that we need an international regulatory body to stave off international financial crises? Why or why not? 3. What is your opinion? Is it good to have a global financial market? Why or why not? Assignment Four Due Date August 7 Straight forward assignment: Read and answer the questions. Read Arnold Kling’s history of the policies that created the great recession http://mercatus.org/publication/not-what-they-had-mind-history-policies-produced-financial-crisis-2008 1. Using only the executive summary, what does Kling think caused the Financial Crisis of 2008? (Use only one sentence.) 2. One page 5, what is “the fact?” and what does this “fact” mean to you? 3. Briefly summarize the four components of the Financial Crisis? 4. On page 10, Kling states, “These property bubbles (in the U.K. and Spain) cannot be blamed on U.S. policy.” How confident are you on that point? Is Kling wrong? 5. Kling’s matrix of causes, gives almost all weight to what two factors? What three factors are almost completely not responsible? 6. Many have blamed designer financial (my term) like CDS and CDO and the shadow banking system for the collapse. How do these fit into Kling’s narrative? 7. Outline the progression of policy that caused/responded to economic conditions in the 30s, 70s and 80s and 00s. 8. What role did the mortgage interest deduction have on housing market? 9. What institution invented and allowed the expansion of mortgage-backed securities? 10. What is regulatory arbitrage? 11. Why did the Basel agreement create an advantage for mortgage securitization? 12. Did the Federal Reserve (and presumably other regulatory agencies know and even encourage regulatory capital arbitrage? What author does Kling cite to establish this? 13. What did the 2002 modification of the Basel Rules do to capital requirements? (See figure 4) 14. Summarize the Shadow Regulatory Committee’s statement 160. 15. Did non market institutions, such as the IMF and Bernanke, think, in 2006, that financial innovation had make the banking sector more or less fragile? 16. What is time inconsistency? (You can look this up elsewhere.) 17. How might “barriers to entry” by related to “safety and soundness?” 18. A Curmudgeon is an old man who is easily annoyed and angered. He also complains a lot. (I had to look it up.) I think I’ll change my xbox gamertag to this word, but I’ll bet it is taken. 19. How did credit scoring and credit default swaps enlarge the mortgage securities market? 20. Why, up until 2007, did we think that monetary expansion was all that was needed to mitigate the impact of financial crises? 21. Suppose that financial markets are inherently unstable. What does this mean are two goals of regulation and regulators? 22. Why are type two errors so problematic? (Two reasons.) 23. How could we make the banking sector easy to fix? Assignment Five Due August 13 Read the linked lectures and answer the questions. Lecture 1 http://econlog.econlib.org/archives/2008/11/lectures_in_mac.html 1.1 Why do you think macroeconomic realities must be reconciled with microeconomic analysis? (This is not a rhetorical question, but it will be hard for you to answer. There is no “wrong” answer you could give. Just think about it for a few minutes.) Lecture 2 http://econlog.econlib.org/archives/2008/11/lectures_in_mac_1.html 2.1 Consider this article after you have read Hayek. How do prices and wages perform the function of “central planning?” 2.2 Kling makes that claim that, because most workers do not do manual labor anymore, the economy is different that it was in 1930. Assuming he is correct, do you think central planning would be harder today or easier? Why? Lecture 3 http://econlog.econlib.org/archives/2008/11/lectures_on_mac.html 3.1 Give a one sentence definition of structural unemployment, of frictional unemployment and of cyclical unemployment. Lecture 4 http://econlog.econlib.org/archives/2008/11/lectures_on_mac_1.html 4.1 So, why does the economy adjust employment rather than wages? Lecture 5 http://econlog.econlib.org/archives/2008/11/lectures_on_mac_2.html 5.1 Kling gives 5 reasons the DotCom recession was worse than the previous two recessions (at least in duration). Which reason do you think is the most compelling? Lecture 6 http://econlog.econlib.org/archives/2008/11/lectures_on_mac_3.html 6.1 Why are Keynesian remedies (blunt fiscal and monetary policy measures) less appropriate in a post industrial economy, according to Kling? Lecture 7 http://econlog.econlib.org/archives/2008/11/lectures_on_mac_4.html 7.1 Why is it so hard to separate finance and government, according to Kling? Lecture 8 http://econlog.econlib.org/archives/2008/11/lectures_on_mac_5.html 8.1 Why is American Express Travelers Checks so interesting? Do credit cards work in a similar way? (I really don’t know the answer to this one. I just know that credit cards have made travelers checks obsolete.) Lecture 9. http://econlog.econlib.org/archives/2008/12/lectures_on_mac_6.html 9.1 According to this article, why do we have banks (financial sector or financial intermediation?) Lecture 10 http://econlog.econlib.org/archives/2008/12/lectures_on_mac_7.html 10.1 Why are banks better than barter, according to this leture? 10.2 Politics tends to favor bailouts of failed firms. Why is this exactly wrong?

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Which statement regarding science technology is false? Select one: Science technology has brought about life-improving discoveries, such as antibiotics. Science technology helps us to understand the causes of cancer. Science technology is a basis for all ethical or moral decisions. Science technology may ease the feeding of the world population by producing new plant strains. Scientific experimentation may make use of a model instead of an actual subject.

Which statement regarding science technology is false? Select one: Science technology has brought about life-improving discoveries, such as antibiotics. Science technology helps us to understand the causes of cancer. Science technology is a basis for all ethical or moral decisions. Science technology may ease the feeding of the world population by producing new plant strains. Scientific experimentation may make use of a model instead of an actual subject.

Which statement regarding science technology is false? Select one: Science … Read More...
Book review The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public by Lynn Stout Provide 1) a 900 word review of this book (word range 900-1,200) and 2) a 350 word reflection where you force yourself to relate the message of the book . As per the format of the review, I like the ones done by the folks of the WSJ. This is an example: http://forums.delphiforums.com/diversecity/messages?msg=17531.1264 or http://www.wsj.com/articles/book-review-how-adam-smith-can-change-your-life-by-russ-roberts-1413846808?KEYWORDS=book+reviews

Book review The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public by Lynn Stout Provide 1) a 900 word review of this book (word range 900-1,200) and 2) a 350 word reflection where you force yourself to relate the message of the book . As per the format of the review, I like the ones done by the folks of the WSJ. This is an example: http://forums.delphiforums.com/diversecity/messages?msg=17531.1264 or http://www.wsj.com/articles/book-review-how-adam-smith-can-change-your-life-by-russ-roberts-1413846808?KEYWORDS=book+reviews

The Shareholder Value Myth: How Putting Shareholders First Harms Investors, … Read More...
Watch the video below, and then answer the questions below. http://www.youtube.com/watch?v=tZbDMUaqwE8 What does J.D. Bowen say is the problem with realism? A. Realism places too much emphasis on security, and thus its answers are all about conflict. B. Realism is too deterministic, ignoring the unpredictable human element in international relations. C. Realism discounts the possibility of progress and positive change. D. Realism can’t explain why a small country would fight a larger, more powerful one. E. Realism is like liberalism without a moral compass. Which of the following is NOT a characteristic of liberal thought? A. There are important issues in international relations beyond security and conflict. B. International actors have opportunities for cooperation. C. There is no real conflict of interests in international politics. D. Businesses and other non-state organizations have power. E. Interdependence is a facet of the international system. According to liberal theory, which of the following would be a potential actor in the international political system? A. states B. businesses C. aid groups D. churches E. all of these options Bowen claims that the United Nations is based on a “clearly liberal logic.” What is that logic? A. preventing conflict through the efforts of non-state actors B. preventing conflict through collective security C. preventing conflict through nuclear deterrence D. promoting freedom and democracy E. holding Germany accountable for its aggression in World War II Which of the following would most likely be a research topic for liberal theorists? A. how cultures develop identities B. how states can measure their military power by counting equipment and personnel C. how the United Nations can be more effective at preventing war D. why security is a masculine concept E. all of these options ———————————————————————————————————————

Watch the video below, and then answer the questions below. http://www.youtube.com/watch?v=tZbDMUaqwE8 What does J.D. Bowen say is the problem with realism? A. Realism places too much emphasis on security, and thus its answers are all about conflict. B. Realism is too deterministic, ignoring the unpredictable human element in international relations. C. Realism discounts the possibility of progress and positive change. D. Realism can’t explain why a small country would fight a larger, more powerful one. E. Realism is like liberalism without a moral compass. Which of the following is NOT a characteristic of liberal thought? A. There are important issues in international relations beyond security and conflict. B. International actors have opportunities for cooperation. C. There is no real conflict of interests in international politics. D. Businesses and other non-state organizations have power. E. Interdependence is a facet of the international system. According to liberal theory, which of the following would be a potential actor in the international political system? A. states B. businesses C. aid groups D. churches E. all of these options Bowen claims that the United Nations is based on a “clearly liberal logic.” What is that logic? A. preventing conflict through the efforts of non-state actors B. preventing conflict through collective security C. preventing conflict through nuclear deterrence D. promoting freedom and democracy E. holding Germany accountable for its aggression in World War II Which of the following would most likely be a research topic for liberal theorists? A. how cultures develop identities B. how states can measure their military power by counting equipment and personnel C. how the United Nations can be more effective at preventing war D. why security is a masculine concept E. all of these options ———————————————————————————————————————

Watch the video below, and then answer the questions below. … Read More...
1-Two notions serve as the basis for all torts: wrongs and compensation. True False 2-The goal of tort law is to put a defendant in the position that he or she would have been in had the tort occurred to the defendant. True False 3-Hayley is injured in an accident precipitated by Isolde. Hayley files a tort action against Isolde, seeking to recover for the damage suffered. Damages that are intended to compensate or reimburse a plaintiff for actual losses are: compensatory damages. reimbursement damages. actual damages. punitive damages. 4-Ladd throws a rock intending to hit Minh but misses and hits Nasir instead. On the basis of the tort of battery, Nasir can sue: Ladd. Minh. the rightful owner of the rock. no one. 4-Luella trespasses on Merchandise Mart’s property. Through the use of reasonable force, Merchandise Mart’s security guard detains Luella until the police arrive. Merchandise Mart is liable for: assault. battery. false imprisonment. none of the choice 6-The extreme risk of an activity is a defense against imposing strict liability. True False 7-Misrepresentation in an ad is enough to show an intent to induce the reliance of anyone who may use the product. True False 8-Luke is playing a video game on a defective disk that melts in his game player, starting a fire that injures his hands. Luke files a suit against Mystic Maze, Inc., the game’s maker under the doctrine of strict liability. A significant application of this doctrine is in the area of: cyber torts. intentional torts. product liability. unintentional torts 9-More than two hundred years ago, the Declaration of Independence recognized the importance of protecting creative works. True False 10-n 2014, Cloud Computing Corporation registers its trademark as provided by federal law. After the first renewal, this registration: is renewable every ten years. is renewable every twenty years. runs for life of the corporation plus seventy years. runs forever. 11-Wendy works as a weather announcer for a TV station under the character name Weather Wendy. Wendy can register her character’s name as: a certification mark. a trade name. a service mark. none of the choices 12-Much of the material on the Internet, including software and database information, is not copyrighted. True False 13-In a criminal case, the state must prove its case by a preponderance of the evidence. True False 14-Under the Fourth Amendmentt, general searches through a person’s belongings are permissible. True False 15-Maura enters a gas station and points a gun at the clerk Nate. She then forces Nate to open the cash register and give her all the money. Maura can be charged with: burglary. robbery. larceny. receiving stolen property. 16-Reno, driving while intoxicated, causes a car accident that results in the death of Santo. Reno is arrested and charged with a felony. A felony is a crime punishable by death or imprisonment for: any period of time. more than one year. more than six months. more than ten days. 17-Corporate officers and directors may be held criminally liable for the actions of employees under their supervision. True False 18-Sal assures Tom that she will deliver a truckload of hay to his cattle ranch. A person’s declaration to do a certain act is part of the definition of: an expectation. a moral obligation. a prediction. a promise. 19-Lark promises to buy Mac’s used textbook for $60. Lark is: an offeror. an offeree a promisee. a promisor. 20-Casey offers to sell a certain used forklift to DIY Lumber Outlet, but Casey dies before DIY accepts. Most likely, Casey’s death: did not affect the offer. shortened the time of the offer but did not terminated it. extended the time of the offer. terminated the offer.

1-Two notions serve as the basis for all torts: wrongs and compensation. True False 2-The goal of tort law is to put a defendant in the position that he or she would have been in had the tort occurred to the defendant. True False 3-Hayley is injured in an accident precipitated by Isolde. Hayley files a tort action against Isolde, seeking to recover for the damage suffered. Damages that are intended to compensate or reimburse a plaintiff for actual losses are: compensatory damages. reimbursement damages. actual damages. punitive damages. 4-Ladd throws a rock intending to hit Minh but misses and hits Nasir instead. On the basis of the tort of battery, Nasir can sue: Ladd. Minh. the rightful owner of the rock. no one. 4-Luella trespasses on Merchandise Mart’s property. Through the use of reasonable force, Merchandise Mart’s security guard detains Luella until the police arrive. Merchandise Mart is liable for: assault. battery. false imprisonment. none of the choice 6-The extreme risk of an activity is a defense against imposing strict liability. True False 7-Misrepresentation in an ad is enough to show an intent to induce the reliance of anyone who may use the product. True False 8-Luke is playing a video game on a defective disk that melts in his game player, starting a fire that injures his hands. Luke files a suit against Mystic Maze, Inc., the game’s maker under the doctrine of strict liability. A significant application of this doctrine is in the area of: cyber torts. intentional torts. product liability. unintentional torts 9-More than two hundred years ago, the Declaration of Independence recognized the importance of protecting creative works. True False 10-n 2014, Cloud Computing Corporation registers its trademark as provided by federal law. After the first renewal, this registration: is renewable every ten years. is renewable every twenty years. runs for life of the corporation plus seventy years. runs forever. 11-Wendy works as a weather announcer for a TV station under the character name Weather Wendy. Wendy can register her character’s name as: a certification mark. a trade name. a service mark. none of the choices 12-Much of the material on the Internet, including software and database information, is not copyrighted. True False 13-In a criminal case, the state must prove its case by a preponderance of the evidence. True False 14-Under the Fourth Amendmentt, general searches through a person’s belongings are permissible. True False 15-Maura enters a gas station and points a gun at the clerk Nate. She then forces Nate to open the cash register and give her all the money. Maura can be charged with: burglary. robbery. larceny. receiving stolen property. 16-Reno, driving while intoxicated, causes a car accident that results in the death of Santo. Reno is arrested and charged with a felony. A felony is a crime punishable by death or imprisonment for: any period of time. more than one year. more than six months. more than ten days. 17-Corporate officers and directors may be held criminally liable for the actions of employees under their supervision. True False 18-Sal assures Tom that she will deliver a truckload of hay to his cattle ranch. A person’s declaration to do a certain act is part of the definition of: an expectation. a moral obligation. a prediction. a promise. 19-Lark promises to buy Mac’s used textbook for $60. Lark is: an offeror. an offeree a promisee. a promisor. 20-Casey offers to sell a certain used forklift to DIY Lumber Outlet, but Casey dies before DIY accepts. Most likely, Casey’s death: did not affect the offer. shortened the time of the offer but did not terminated it. extended the time of the offer. terminated the offer.

1-Two notions serve as the basis for all torts: wrongs … Read More...
Many experts argue that when the government bails out a private financial institution it creates a problem called “moral hazard,” meaning that if the institution knows it will be saved, it actually has an incentive to take on more risk, not less. What do you think?

Many experts argue that when the government bails out a private financial institution it creates a problem called “moral hazard,” meaning that if the institution knows it will be saved, it actually has an incentive to take on more risk, not less. What do you think?

I agree. It is human character to press limits, and … Read More...
This assignment provides you the opportunity to reflect on the topics ethics and how one might experience ethical challenges early in one’s career. The attached scenario is based on actual events and used with permission of ASCE. Using the attached scenario and American Society of Civil Engineers (ASCE) code of ethics, develop a response to the questions that are included within the scenario. Your deliverable must be in the form of a memorandum, which could be used as a reference or guideline when discussing the importance of ethics colleagues. When answering the questions you should be specific in identifying the components of the code of ethics you use to reflect on the questions posed and how they would be used to assist someone facing the same scenario. Ethics Scenario and Questions: Last month, Sara was reported to her State’s Engineer’s Board for a possible ethics violation. Tomorrow morning she would meet with the Board and though she felt she had done nothing unethical, Sara’s eyes had been opened to the complexity and gravity of ethical dilemmas in engineering practice. She wished she had sought and/or received better guidance regarding ethical issues earlier in her career. Sara reflected on how she got to this point in her career. When Sara had been a senior Civil Engineering student in an ABET-accredited program at the State University, she immersed herself in her course work. Graduating at the top of her class assured Sara that she would have some choice in her career direction. Knowing that she wanted to become a licensed engineer, Sara took and passed the Fundamentals of Engineering (FE) exam during her senior year and after graduation, went to work as an Engineer Intern (EI) for a company that would allow her to achieve that goal. Sara was excited about her new job — she worked diligently for four years under licensed engineers and was assigned increasing responsibilities. She was now ready to take the Professional Engineer (PE) exam and become licensed. Just before taking the PE licensing exam, Sara’s firm was retained to investigate the structural integrity of an apartment complex that the firm’s client planned to sell. Sara’s supervisor informed her in no uncertain terms that the client required that the structural report remain confidential. Later, the client informed Sara that he planned to sell the occupied property “as is.” During Sara’s investigation she found no significant structural problems with the apartment complex. However, she did observe some electrical deficiencies that she believed violated city codes and could pose a safety hazard to the occupants. Realizing that electrical matters were, in a manner of speaking, not her direct area of expertise, Sara discussed possible approaches with her colleague and friend, Tom. Also an Engineer Intern, Tom had been an officer in the student chapter of ASCE during their college years. During their conversation, Tom commented that based on the ASCE Code of Ethics, he believed Sara had an ethical obligation to disclose this health-safety problem. Sara felt Tom did not appreciate the fact that she had been clearly instructed to keep such information confidential, and she certainly did not want to damage the client relationship. Nevertheless, with reluctance, Sara verbally informed the client about the problem and made an oblique reference to the electrical deficiencies in her report, which her supervisor signed and sealed. Several weeks later, Sara learned that her client did not inform either the residents of the apartment complex or the prospective buyer about her concerns. Although Sara felt confident and pleased with her work on the project, the situation about the electrical deficiencies continued to bother her. She wondered if she had an ethical obligation to do more than just tell the client and state her concerns in her report. The thought of informing the proper authorities occurred to her, especially since the client was not disclosing the potential safety concerns to either the occupants or the buyer. She toyed with the idea of discussing the situation with her immediate supervisor but since everyone seemed satisfied, Sara moved onto other projects and eventually put it out of her mind. Questions to consider (What were the main issues Sara was wrestling with in this situation? ; Do you think Sara had a “right” or an “obligation” to report the deficiency to the proper authorities? ;Who might Sara have spoken with about the dilemma? ; Who should be responsible for what happened – Sara, Sara’s employer, the client, or someone else? ; How does this situation conflict with Sara’s obligation to be faithful to her client? ; Is it wise practice to ignore “gut feelings” that arise? These and other questions will surface again later and most will be considered at that point, but let’s continue for now with Sara’s story. During her first few years with the company, and under the supervision of several managers, Sara was encouraged to become active in technical and professional societies (which was the policy of the company). But then she found her involvement with those groups diminishing as her current supervisor opposed Sara’s participation in meetings and conferences unless she used vacation time. Sara was very frustrated but did not really know how to rectify the situation. In the course of time, Sara attended a meeting with the CEO on a different matter and she took the opportunity to inquire about attending technical and professional society meetings. The CEO reaffirmed that the company thought it important and that he wanted Sara to participate in such meetings. Sara informed her supervisor and though he did begin approving Sara’s requests for leave to participate in society meetings, their relationship was strained. Questions to consider: What might Sara have done differently to seek a remedy and yet preserve her relationship with her supervisor? ; Where could Sara have found guidance in the ASCE Code of Ethics, appropriate to this situation? The story continues….. As Christmas approached the following year, Sara discovered a gift bag on her desk. Inside the gift bag was an expensive honey-glazed spiral cut ham and a Christmas greeting card from a vendor who called on Sara from time to time. This concerned Sara as she felt it might cast doubt on the integrity of their business relationship. She asked around and found that several others received gifts from the vendor as well. After sleeping on it, Sara sent a polite note to the vendor returning the ham. Questions to consider: Was Sara really obligated to return the ham? Or was this taking ethics too far? ; On the other hand, could Sara be obligated to pursue the matter further than just returning the gift she had received? A few years later, friends and colleagues urged Sara, now a highly successful principal in a respected engineering firm, to run for public office. Sara carefully considered this step, realizing it would be a challenge to juggle work, family, and such intense community involvement. Ultimately, she agreed to run and soon found herself immersed in the campaign. A draft political advertisement was prepared that included her photograph, her engineering seal, and the following text: “Vote for Sara! We need an engineer on the City Council. That is simple common sense, isn’t it? Sara is an experienced licensed engineer with years of rich accomplishments, who disdains delays and takes action now!” Questions to consider: Should Sara’s engineering seal be included in the advertisement? ; Should she ask someone in ASCE his or her opinion before deciding? As fate would have it, a few days later, just after announcing her candidacy for City Council, the matter of Sara’s investigation of the apartment complex so many years ago resurfaced. Sara learned that the apartment complex caught on fire, and people had been seriously injured. During the investigation of the cause of the fire, Sara’s report was reviewed, and somehow the cause of the fire was traced to the electrical deficiencies, which she had briefly mentioned. Immediately this hit the local newspapers, attorneys became involved, and subsequently the Licensing Board was asked to look into the ethical responsibilities related to the report. Now, sitting alone by the shore of the lake, Sara pondered her situation. Legally, she felt she might claim some immunity since she was not a licensed engineer at the time of her work on the apartment complex. But professionally, she keenly felt she had let the public down, and she could not get this, or those who had been hurt in the fire, out of her mind. Question to consider: Occasionally, are some elements of the code in conflict with other elements In the backseat of the taxi on the way to the airport, Sara thumbed through her hometown newspaper that she had purchased at a newsstand. She stopped when she saw an editorial about her City Council campaign. The article claimed that, as a result of the allegations against her, she was no longer fit for public office. Could this be true? Question to consider: How should she respond to such claims?

This assignment provides you the opportunity to reflect on the topics ethics and how one might experience ethical challenges early in one’s career. The attached scenario is based on actual events and used with permission of ASCE. Using the attached scenario and American Society of Civil Engineers (ASCE) code of ethics, develop a response to the questions that are included within the scenario. Your deliverable must be in the form of a memorandum, which could be used as a reference or guideline when discussing the importance of ethics colleagues. When answering the questions you should be specific in identifying the components of the code of ethics you use to reflect on the questions posed and how they would be used to assist someone facing the same scenario. Ethics Scenario and Questions: Last month, Sara was reported to her State’s Engineer’s Board for a possible ethics violation. Tomorrow morning she would meet with the Board and though she felt she had done nothing unethical, Sara’s eyes had been opened to the complexity and gravity of ethical dilemmas in engineering practice. She wished she had sought and/or received better guidance regarding ethical issues earlier in her career. Sara reflected on how she got to this point in her career. When Sara had been a senior Civil Engineering student in an ABET-accredited program at the State University, she immersed herself in her course work. Graduating at the top of her class assured Sara that she would have some choice in her career direction. Knowing that she wanted to become a licensed engineer, Sara took and passed the Fundamentals of Engineering (FE) exam during her senior year and after graduation, went to work as an Engineer Intern (EI) for a company that would allow her to achieve that goal. Sara was excited about her new job — she worked diligently for four years under licensed engineers and was assigned increasing responsibilities. She was now ready to take the Professional Engineer (PE) exam and become licensed. Just before taking the PE licensing exam, Sara’s firm was retained to investigate the structural integrity of an apartment complex that the firm’s client planned to sell. Sara’s supervisor informed her in no uncertain terms that the client required that the structural report remain confidential. Later, the client informed Sara that he planned to sell the occupied property “as is.” During Sara’s investigation she found no significant structural problems with the apartment complex. However, she did observe some electrical deficiencies that she believed violated city codes and could pose a safety hazard to the occupants. Realizing that electrical matters were, in a manner of speaking, not her direct area of expertise, Sara discussed possible approaches with her colleague and friend, Tom. Also an Engineer Intern, Tom had been an officer in the student chapter of ASCE during their college years. During their conversation, Tom commented that based on the ASCE Code of Ethics, he believed Sara had an ethical obligation to disclose this health-safety problem. Sara felt Tom did not appreciate the fact that she had been clearly instructed to keep such information confidential, and she certainly did not want to damage the client relationship. Nevertheless, with reluctance, Sara verbally informed the client about the problem and made an oblique reference to the electrical deficiencies in her report, which her supervisor signed and sealed. Several weeks later, Sara learned that her client did not inform either the residents of the apartment complex or the prospective buyer about her concerns. Although Sara felt confident and pleased with her work on the project, the situation about the electrical deficiencies continued to bother her. She wondered if she had an ethical obligation to do more than just tell the client and state her concerns in her report. The thought of informing the proper authorities occurred to her, especially since the client was not disclosing the potential safety concerns to either the occupants or the buyer. She toyed with the idea of discussing the situation with her immediate supervisor but since everyone seemed satisfied, Sara moved onto other projects and eventually put it out of her mind. Questions to consider (What were the main issues Sara was wrestling with in this situation? ; Do you think Sara had a “right” or an “obligation” to report the deficiency to the proper authorities? ;Who might Sara have spoken with about the dilemma? ; Who should be responsible for what happened – Sara, Sara’s employer, the client, or someone else? ; How does this situation conflict with Sara’s obligation to be faithful to her client? ; Is it wise practice to ignore “gut feelings” that arise? These and other questions will surface again later and most will be considered at that point, but let’s continue for now with Sara’s story. During her first few years with the company, and under the supervision of several managers, Sara was encouraged to become active in technical and professional societies (which was the policy of the company). But then she found her involvement with those groups diminishing as her current supervisor opposed Sara’s participation in meetings and conferences unless she used vacation time. Sara was very frustrated but did not really know how to rectify the situation. In the course of time, Sara attended a meeting with the CEO on a different matter and she took the opportunity to inquire about attending technical and professional society meetings. The CEO reaffirmed that the company thought it important and that he wanted Sara to participate in such meetings. Sara informed her supervisor and though he did begin approving Sara’s requests for leave to participate in society meetings, their relationship was strained. Questions to consider: What might Sara have done differently to seek a remedy and yet preserve her relationship with her supervisor? ; Where could Sara have found guidance in the ASCE Code of Ethics, appropriate to this situation? The story continues….. As Christmas approached the following year, Sara discovered a gift bag on her desk. Inside the gift bag was an expensive honey-glazed spiral cut ham and a Christmas greeting card from a vendor who called on Sara from time to time. This concerned Sara as she felt it might cast doubt on the integrity of their business relationship. She asked around and found that several others received gifts from the vendor as well. After sleeping on it, Sara sent a polite note to the vendor returning the ham. Questions to consider: Was Sara really obligated to return the ham? Or was this taking ethics too far? ; On the other hand, could Sara be obligated to pursue the matter further than just returning the gift she had received? A few years later, friends and colleagues urged Sara, now a highly successful principal in a respected engineering firm, to run for public office. Sara carefully considered this step, realizing it would be a challenge to juggle work, family, and such intense community involvement. Ultimately, she agreed to run and soon found herself immersed in the campaign. A draft political advertisement was prepared that included her photograph, her engineering seal, and the following text: “Vote for Sara! We need an engineer on the City Council. That is simple common sense, isn’t it? Sara is an experienced licensed engineer with years of rich accomplishments, who disdains delays and takes action now!” Questions to consider: Should Sara’s engineering seal be included in the advertisement? ; Should she ask someone in ASCE his or her opinion before deciding? As fate would have it, a few days later, just after announcing her candidacy for City Council, the matter of Sara’s investigation of the apartment complex so many years ago resurfaced. Sara learned that the apartment complex caught on fire, and people had been seriously injured. During the investigation of the cause of the fire, Sara’s report was reviewed, and somehow the cause of the fire was traced to the electrical deficiencies, which she had briefly mentioned. Immediately this hit the local newspapers, attorneys became involved, and subsequently the Licensing Board was asked to look into the ethical responsibilities related to the report. Now, sitting alone by the shore of the lake, Sara pondered her situation. Legally, she felt she might claim some immunity since she was not a licensed engineer at the time of her work on the apartment complex. But professionally, she keenly felt she had let the public down, and she could not get this, or those who had been hurt in the fire, out of her mind. Question to consider: Occasionally, are some elements of the code in conflict with other elements In the backseat of the taxi on the way to the airport, Sara thumbed through her hometown newspaper that she had purchased at a newsstand. She stopped when she saw an editorial about her City Council campaign. The article claimed that, as a result of the allegations against her, she was no longer fit for public office. Could this be true? Question to consider: How should she respond to such claims?

MEMO       To: Ms. Sara From: Ethics Monitoring … Read More...