Warren Buffet’s partner, Charlie Munger, writes about what he regards as the “reciprocation tendency” in On Success. We consciously or subconsciously want to reciprocate favors, he says. The tendency is stronger when it’s our employer’s money we use for paying back. The tendency is particularly strong when it is government’s money.
Munger feels Sam Walton was wise to prohibit, absolutely, any gifts or favors for his Walmart buyers: “He wouldn’t let purchasing agents accept so much as a hot dog from a vendor.” Munger said that if he controlled the Defense Department its policies would mimic Walton’s.
Would that be too high a bar for our politicians? If those in Congres were prohibited from accepting so much as a stick of gum, would it keep honest and decent people from running? Would we, the people, gain all that much? Perhaps we would.
Munger writes that one psychology researcher blamed Watergate on the genetic tendency we have to reciprocate favors. He felt it encouraged the attorney general to go along with the burglary that — when botched — began the debacle. That mess felled a president. With his fall came changes of all dimension in U.S. and world affairs.
Countrywide Financial Corp was knee-deep in the housing mess that nearly brought down our financial house. Rep. Darrell Issa’s oversight committee found the company made 150 sweetheart loans to Fannie Mae employees. These included the executives at the top. Fannie Mae granted Countrywide favored treatment. Reciprocal?
Issa’s probe also found Countrywide made 30 sweetheart loans to U.S. senators and their employees. What favors did they get in return?
Our congress people are blessed and cursed with the same genes the Watergate Attorney General John Mitchell was. Call me an idealist, but it seems to me we would all be better off if our laws commanded we do them no favors and that they accept none.
Not one grape’s worth.