The TakeAway: The world may not have ended for us today, but it did for 27 women and children who were massacred at Sandy Hook Elementary School last Friday. That unspeakable tragedy reopens debates over gun ownership, violence, and mental health treatment. One dimension of “ownership”, however, involves not just the flow of guns but the flow of capital that makes gun manufacture possible. It’s time for investors to step up and make sure that their fiduciary role does not include investments in killing machines or other holdings that undermine human and planetary well-being. Rather than restricted to specific issues and certain portions of a portfolio – as was the case during the 1970s and 1980s’ debates over South Africa- and tobacco-related equity investments – the idea here is to view the fiduciary ethic as encompassing all asset classes and all issues. We need an Apocalypse Now, a positive approach that unveils the “ethics” of the “fiduciary ethic”, ethics that are nourished by civic moral roots that serve to inform and transform.
The world was supposed to come to an end today, according to apocalyptic interpretations of the Mayan calendar, but it didn’t.
But a week ago, for 26 innocent children and women, it did. That’s when their apocalyptic moment became burned into our consciousness. It wasn’t quite end times, but the world did feel turned upside down, and there were enough frightening images to keep you up at night, even if they weren’t from the Book of Revelation.
According to the American Heritage Dictionary, “apocalypse” commonly is associated with ancient Jewish and Christian texts from the second century B.C. to the second century A.D. that contain prophetic or symbolic visions. These images show the destruction of the world and the salvation of the righteous, the Rapture, and the “left behind”. Through the centuries, the Book of Revelation and its apocalyptic motif became canonic, despite the fact that in those days there were all kinds of prophecies and visions throughout Asia Minor and the Holy Land. Some were buried and forgotten, but Revelations lived on.
Indeed, an alternative interpretation of “apocalypse” begins with its ancient Greek meaning: to reveal something that’s hidden, to uncover, to unveil. The etymology of “apocalypse” – the Greek word is ἀποκάλυψις – comes from ἀποκαλύπτω (apokalúptō, “I disclose, reveal”), from ἀπό (apó, “from”) and καλύπτω (kalúptō, “I cover”). As such, apocalypse can serve as a neutral term that opens up other applications to modern life, more constructive ones that belie the fiery destruction of the Armageddon motif.
Let us ponder that kind of Apocalypse, a “great unveiling” that shows us another way of organizing our lives together, not end times but new times, where we rededicate ourselves to doing what is right, as God gives us to understand the right.
Here are a few ideas about what that means to me.
Politics and Policy │The impact of last Friday’s massacre at Sandy Hook was visceral, and continues to resonate. How could it be, that twenty precious children and six adult women charged with their care could be so brutally murdered? Policy and investment questions aside, as one whose sister was a young victim of heinous violence just over 40 years ago (and whose kidnapper and killer was never prosecuted), I know that the effects are permanent, that one never “forgets” because the sense of family wholeness and well-being has been shattered, forever. There will be no closure, no healing, no full sense of justice.
I also know that whole communities – even a nation – are touched by such tragedy, because it reaches into the core of what it means to be human. The suffering and grieving are shared, and rituals provide some source of comfort, a pattern that helps give expression to what otherwise cannot be expressed. The interfaith memorial service at Newtown was such an event, stunning in its simplicity. It was a plain but powerful platform for diverse religious traditions to call forth tender mercies in defiance of those who consider the gun “a reverenced god”, as Garry Wills so eloquently put it. At this service, held in a gymnasium with folding chairs, the starkness a reminder of how ordinary are those who suffer the most, President Barack Obama had his Gettysburg moment in the best speech of his presidency: that those slain shall not have died in vain, that, “whatever measure of comfort we can provide, we will provide. Whatever portion of sadness that we can share with you to ease this heavy load, we will gladly bear. Newtown, you are not alone….
In the coming weeks, I’ll use whatever power this office holds to engage my fellow citizens, from law enforcement, to mental health professionals, to parents and educators, in an effort aimed at preventing more tragedies like this, because what choice do we have? We can’t accept events like this as routine.”
On Wednesday, the President made good on this commitment. He announced the formation of a Cabinet-level initiative, led by Vice President Joe Biden, that will reach out to stakeholders and develop concrete proposals suitable for legislative submission by the end of January. The package would include proposals for banning assault weapons and high-capacity ammunition clips. But the problem will be examined from educational, mental health, and cultural perspectives. “There’s a space between what the 2nd Amendment allows and no rules at all,” he said. “And [the Vice President] will be working to try and fill it.”
On Friday, President Obama expressed his support of a public petition on gun control. “I can’t do it alone,” he said in a video posted on the White House web site. “I need your help. If we’re going to succeed, it’s going to take a sustained effort from mothers and fathers, daughters and sons, law enforcement and responsible gun owners, organizing, speaking up, calling their members of Congress as many times as it takes, standing up and saying enough on behalf of all our kids. That’s how change happens.”
But also on Friday, the National Rifle Association, after days of silence, finally spoke out. Rather than support any kind of initiative aimed at curbing gun violence, the NRA called for Congress “to act immediately to appropriate whatever is necessary to put armed police officers in every single school in this nation. And, to do it now to make sure that blanket safety is in place when our kids return to school in January.” It then offered up its own “school shields emergency response” program for doing so. “The only thing that stops a bad guy with a gun is a good guy with a gun,” said Wayne LaPierre, NRA executive vice president.
He went on to blame the media industry for a culture of violence conducive to school shootings. “Rather than face their own moral failings, the media demonize gun owners,” he said. He then introduced former Arkansas congressman and U.S. Drug Enforcement Agency official Asa Hutchinson to lead the effort, who said the “model security plan” featuring “trained, armed, qualified” personnel represents “one key component among many that can provide the first line of difference as well as the last line of defense.” Then the surreal press conference ended abruptly, with no questions taken.
Personal Grieving │Along with the grieving process comes an overwhelming desire to make sense of it, to find causal roots, to feel somehow that such violence and loss could have been prevented. “If only…” becomes a mantra, a counterfactual that gives one some semblance of power in the face of such overwhelming powerlessness. This impulse for rationalizing the unfathomable occurs at both an individual and societal level. That’s why almost as soon as the news hit the airwaves, the debates over gun control and mental illness swelled up to fill the space, that hole blasted through the social fabric held together by love’s innocence and the duty to protect and preserve.
The space that exists when you realize that really, really awful things can happen, that you are not safe in this world and utterly helpless in the face of such horror.
That space, as Elisabeth Kübler Ross described, between denial and acceptance, before it’s kicked in, where you have yet to absorb the shock and sadness, much less come to grips with the sheer magnitude that your life’s forever changed.
The families affected by the Sandy Hook massacre are at the earliest stages of a lifelong process, and no one can say how each person will be able to cope. For now, there are funerals to finish (27 in one week), holidays and birthdays to endure, thank-yous to those offering sympathy, composure to muster and show to the world—while inside you’re in pieces and don’t know if you’re coming or going.
For a long time daily life will be filled with harsh reminders of the sheer suddenness of it: unopened Christmas presents, favorite toys and pictures, the smell, the soiled laundry, the bed sheets and clothes of loved ones who will never return. When my sister was murdered, there was no such thing as grief counseling – or, for that matter, mass school shootings – and we were miles away from understanding the neurobiological roots of psychopathy (or its allied field, “neurolaw”) or that even 9-year olds could be psychopaths. This time, it’s different, but only partly. Outpourings of love and support will provide some solace, and certain routines will provide some glimmers of hope that, somehow, life will go on. But the long, sad journey for those affected is a deep and private one, affecting relationships and worldviews for generations. No social policy or medical prescription will change that.
Social Pathologies │And it’s not just the Newtown families. Thousands of other families are suffering, too, but they’re not high-profile. Some grim (and bizarre) figures:
- According to the FBI’s Uniform Crime Reporting Program, 14,612 people were murdered in the U.S. in 2011 (a decline from previous years, but still one murder every 36 minutes), with firearms killing 8,583.
- The U.S. has the highest gun ownership rate in the world, with 80 guns for every 100 Americans as opposed to 6 in England and Wales.
- There are more gunshops in the U.S. (58,000, according to government statistics) than there are Starbucks worldwide (fewer than 20,000, according to Starbucks).
We like to shrug our shoulders and say, “It’s too complicated. There’s nothing we can do. There’s always a crazy person out there who will find a way of doing what they’re determined to do.”
Really? Really? Is that what we’ve become? THAT IT’s TOO COMPLICATED??? Just who’s crazy here?
Writing in the Huffington Post, Geoffrey Stone, Levi Distinguished Service Professor of Law at the University of Chicago, tells us that during the last 20 years, fewer Americans think our laws regulating the sale and possession of firearms should be made stricter, dropping from 78 percent to 43 percent.
Meanwhile, the average firearm homicide rate for the United States is approximately 17 times higher than in our peer nations (Australia, Canada, England, France, Germany, Italy, Ireland, Japan, New Zealand, and Spain). “Of course it may just be that Americans are 17 times crazier than Canadians, Germans, Italians, Australians, etc.,” Stone writes. “Just ask the NRA.
They’ll tell you that’s the explanation. And it is. But the crazies are those who support the NRA and who systematically distort the facts, ultimately contributing to the bloody deaths of thousands upon thousands of innocent men, women and children every year.
Tell me, really: Who are the crazy people?
Looking for Remedies │ Meanwhile, at a wider level, as the investigation continues into the motives and means associated with the case, debates over gun control and mental health services – and video games and movies, and school security, and the criminal capacity for moral judgment – begin anew. There are many dimensions to this tragic story, and many questions and decisions to be made. Over time perhaps some good things will happen – many already have started – while others are discarded, or set aside for another day.
As for the rest of us, we may suffer what psychologists call “vicarious trauma” – I know I have – and feel compelled to do something – anything – to rebalance what’s gotten out of whack. For some, in addition to condolences and suffering presence, this involves small steps toward immunizing society from future atrocities such as this. At a personal level, we can hold all our children and loved ones close this Christmas, vowing always to treat them with love and compassion. We can learn how best to talk to kids about what happened, and take care of ourselves, too.
At a societal level, we can apply our limited energies to areas that count – including the economic sphere – thus converting our grief and outrage into constructive action affecting the congeries of issues that cause such pain.
The ideas flowed: Famed TV doctor Dr. Mehmet Oz says we need a Homeland Security approach to mental health. Joseph A. Califano, Jr., top domestic policy advisor to President Lyndon B. Johnson, reminds us of earlier attempts at comprehensive gun control, and the famous two-week policy window within which to act. Within the economic sphere, Dick’s Sporting Goods, a chain with more than 500 stores, temporarily halted the sale of “modern sporting rifles” in its nationwide stores, while removing all guns from sale and display at its Newtown region store.
These are great ideas, but now’s a good time to consider another approach, too—one that focuses on the production of these semiautomatic weapons and high-capacity magazines, in addition to their legality, distribution, and demand. The late Dr. Judah Folkman taught us that if you cut off the blood supply to cancer cells, they won’t grow and kill people. That approach should be taken to the manufacture of assault weapons and their bullets: you cut off the money supply to gunmakers, so they can’t produce products that kill people.
So what are those entities? According to the New York Times, Cerberus Capital Management is one of several private equity firms – perhaps the most prominent – that have holdings in gun manufacturers. Others institutional gun owners include Sciens Capital Management (which is advised by the Blackstone Group) and a fund operated by Credit Suisse, which jointly own Colt Defense “which was spun out of the maker of the .44-40 Colt revolver.” (A former Credit Suisse investment banker then moved to Colt.) Cerberus Capital built the Freedom Group, which owns Bushmaster Firearms International, manufacturer of the AR-15 semiautomatic rifle used at Sandy Hook. According to Bloomberg News, Cerberus bought the Bushmaster gun company in 2006, as part of a strategic effort to build the Freedom Group into a weapons production powerhouse—or “Big Shot”, said the New York Times headline from November 2011.
Of course, we can’t expect Wall Street to step up and cut their ties to these widely-available killing machines—it’s not the nature of their animal spirits, of profit at any price. Commenting on the reluctance of Wall Street to advocate against their own self-interest, the Times’ Andrew Ross Sorkin recently wrote, “private equity firms have a long history of investing in ‘sin’ companies, including guns, alcohol, gambling and tobacco, in part because the companies often are inherently discounted.”
But what about those beneficiaries for whom private equity firms serve as a fiduciary? Come to think of it, does upholding the fiduciary obligation mean that you always pick profit, no matter the impact or price? What if the price was the sacrifice of 20 innocent children? Is the fiduciary obligation to beneficiaries to be measured in lucre, instead of blood? Is that what retirees choose when they entrust their savings to money managers? That in exchange for pension earnings, you get “twenty dead six- and seven-year-olds in ten minutes, their bodies riddled with bullets designed to rip apart bone and organ”, in The New Yorker’s Adam Gopnik’s stark words?
I don’t think so.
Flexing Fiduciary Muscle │ On Wednesday, Peter Kinder, one of the pioneers in socially responsible investing, wrote on his blog The Bell that Cerberus Capital Management, like many private equity firms, took its name from Greco-Roman mythology. That is, it comes from ‘Cerberus’, the three-headed dog, “which kept the shades in Hades”. That’s “an apt image for a PE firm, as would be ‘Bane Capital’,” Kinder wrote. “That endowments and pensions remain heavily committed to PE, after 25 years of maximizing shareholder value, tells all about their concern for anything other than the bottom line.”
That’s the argument former New York State Attorney General Eliot Spitzer made. Writing on Slate, Spitzer pointed out the enormous power held by institutional investors to affect business enterprise. Stating that it’s time to apply pressure to the private equity firm that dominates the gun industry, he called upon college students and pensioners to channel their moral outrage into inquisition, to find out if they’re indirect beneficiaries of gun manufacturers. “Every student at a university should ask the university if it is invested in Cerberus. Every member of a union should ask their pension-fund managers if they are invested. Information is the key first step. From there, action will quickly follow.”
Within hours, state treasurers and institutional investors began to act.
On Monday, California State Treasurer Bill Lockyer announced he would ask California’s two major pension funds (the largest in the U.S.) – the California State Employees Retirement System (CalPERS) and the $155 billion California State Teachers Retirement System (CalSTRS) – to divest investments in firearms manufacturers that produce guns prohibited under state law. “CalPERS and CalSTRS should not be invested in any company that makes guns which are illegal in California,” Lockyer said. “These weapons have no place in our communities. Our families and children are safer without them.”
(Even though the Federal assault weapon ban ended in 2004, California has its own restrictions on gun sales. Other states, according to ProPublica, have loosened theirs. But as of late Tuesday, President Obama announced his support of California Senator Dianne Feinstein’s expected legislation to reinstate the federal ban.) CalSTRS agreed to review its investment in Cerberus, which has a stake in the Freedom Group. According to a CalSTRS spokesman, it also holds ownership stakes in Sturm, Ruger & Co. and Smith & Wesson Holding Corp., two publicly traded gun manufacturers.
Other states and municipalities followed suit: Massachusetts, Connecticut, New York, and New York City are reviewing their public pension funds for direct and indirect holdings in weapons companies. Universities are, too; for example, the University of California’s retirement plan has investments amounting to more than $35 million in Cerberus.
Years ago, weapons manufacturers were the target of divestiture campaigns waged by church investors and others concerned about our engagement with war. These, along with tobacco, gambling, and nuclear companies, were classified as “sin stocks” that were anathema to responsible investors. More recently, sin stocks have receded as an issue, in part due to the far larger focus on sustainability and other definitions of “responsible investing”. But now they’re back. Robert Zevin, founder of Zevin Asset Management and another pioneer in the field of socially responsible investing, told Boston’s WBUR.FM news on Wednesday that investors play an important role in affecting public policy, demonstrated by earlier efforts involving divestiture from South Africa and tobacco-related investments.
According to a spokesperson, Zevin believes “this is an opportune time for states to begin to express interest in addressing the cost of state police, prisons, healthcare and public safety while attracting investments from outside the state by reducing gun ownership and gun violence. States could do this by first codifying their beliefs by divesting from such companies and then taking other avenues such as lawsuits against handgun and rifle companies as a beginning for legislation on these matters.”
Investor decisions to “stay” or “sell” also was picked up by ethicist and human rights activist Christine Bader. “Divestment is exactly the wrong outcome: Running away from the problem doesn’t solve it,” Bader wrote in a blog appearing on the Huffington Post. She said that investors should use their ownership power to “lobby company management, file shareholder resolutions, and work with peer institutions on initiatives that promote responsible investment….For all of the complexities and problems that companies can bring to a situation, they can bring leverage and scrutiny.”
This is a familiar conundrum, articulated by political economist Albert O. Hirschman in 1970 (the year my sister was murdered). Hirschman’s classic Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States, made the case for either “exit” or “voice” as tactics for organizational change. In one of those ironic examples of timing, Hirschman died last week at the age of 97.
What Next? │ In response to this pressure, on Tuesday, Cerberus issued a statement stating it was selling the company to avoid being “drawn into the national debate” about gun control. Its decision to sell the Freedom Group came within hours of the California treasurer’s and CalSTRS’ announcements. (In a poignant twist to the story, Bloomberg News also reported that the father of Cerberus’ founder is a resident of Newtown.)
Commenting Tuesday on the speed with which Cerberus responded, Spitzer wrote on Slate that there’s “a significant message here: Ownership matters. Ownership can be more powerful than regulation. The capacity of pension funds and endowments to act collectively and use their rightful interest in having their funds invested in a way that reflects their core values is something we have largely forgotten.
It is too easy when things go fundamentally awry to call for more legislation or blame failed regulators. And surely we shouldn’t diminish the pressure we apply to Congress now to enact real gun control. But at the end of the day, it is those who own the shares and invest the dollars who can and must be held to account. And if those investors awoke to this responsibility and possibility, they could make enormous improvements in American life.
Imagine if investors in Wal-Mart really cared about bribery at that company’s overseas operations or safety standards at its overseas manufacturing plants. If investors pulled their capital, corporate leaders would have to respond.
Imagine if the pension funds and endowments that own much of the equity in our financial services companies demanded that those companies revisit the way mortgages were marketed to those without adequate skills to understand the products they were being sold. Management would have to change the way things were done.
And to return to guns, imagine if the shareholders pressured large retailers to cease the sale of certain semi-automatic weapons or risk having their shares sold? You can bet that those retailers would reconsider their gun sales.
Shareholders have the right and obligation to set the parameters of corporate behavior within which management pursues profit. The speed with which Cerberus said it was getting out of the gun business shows how easy it could be to change corporate behavior, if only shareholders set their minds to it.”
Ownership matters. Ownership can be more powerful than regulation. The capacity of pension funds and endowments to act collectively and use their rightful interest in having their funds invested in a way that reflects their core values is something we have largely forgotten. It is too easy when things go fundamentally awry to call for more legislation or blame failed regulators. And surely we shouldn’t diminish the pressure we apply to Congress now to enact real gun control. But at the end of the day, it is those who own the shares and invest the dollars who can and must be held to account. And if those investors awoke to this responsibility and possibility, they could make enormous improvements in American life.
Apocalypse Now │ The story of the Sandy Hook tragedy doesn’t end here, of course. Over coming weeks, the airwaves will be filled with passionate controversy over which approach, what policy, who should be accountable, and how. We know we need to stop the madness that’s infected our society, that devalues life and elevates profit. Maybe we’ve reached a tipping point regarding laws affecting gun-related violence—I don’t know.
What I do know is that it’s up to each of us to decide how best to respond, in ways that are constructive and respectful and do not undermine what fragile ties remain in our great body politic. After all, words are bullets, too.
What I also know is that the families affected – along with those millions of other families touched by violence, who have borne a burden beyond belief – will go through this holiday season with heavy hearts. And as the seasons come and go, their pain will never go away. They will find, somehow, ways of making space in their lives for it, and carrying on.
And I know that the power of that interfaith service called forth a higher law that serves as a beacon for peace and prosperity affecting our economic and political lives, and how we govern ourselves. That’s a law that speaks to the core of what it means to be human, to be trusted, to take care.
If you ask me, we need an Apocalypse Now, a positive approach that unveils the “ethics” of the “fiduciary ethic”, ethics that are nourished by civic moral roots that serve to inform and transform. Ethics which are bounded by notions of trusteeship, of stewardship, of being a custodian or guardian. Ethics which are rooted in civic moral principles related to “the good life” and the “common goods” that can be harmonized with investment policy and practice. Rather than restricted to specific issues and certain portions of a portfolio – as was the case during the 1970s and 1980s’ debates over South Africa- and tobacco-related equity investments – the idea here is to view the fiduciary ethic as encompassing all asset classes and all issues.
The path I’ve chosen for the past 40 years is this: to make our institutions more accountable to the simple rules of love and justice, to try and dig deeper and articulate the fundamental civic moral principles that lie at the core of the fiduciary and stewardship tradition, and restore them to their proper place in 21st century asset and corporate management practice.
It won’t bring my sister back to life, nor erase the decades of pain and suffering my family has endured, and continues to experience.
But it does aim for the roots of how we organize our economic, political, and social lives together, in shared common cause, even if we disagree about tactics. There are many roads to Jerusalem. And that’s a revelation, an apocalypse, I can live with.