New Bookmarks
Year 2006 Quarter 2:  April 1 - June 30 Additions to Bob Jensen's Bookmarks
Bob Jensen at Trinity University

For earlier editions of New Bookmarks go to http://www.trinity.edu/rjensen/bookurl.htm 
Tidbits Directory --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm 

Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.

Choose a Date Below for Additions to the Bookmarks File

April 30

June 30

June 30, 2006

Bob Jensen's New Bookmarks on June 30, 2006
Bob Jensen at Trinity University 

For earlier editions of New Bookmarks go to http://www.trinity.edu/rjensen/bookurl.htm 

Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.

Bob Jensen's Blogs --- http://www.trinity.edu/rjensen/JensenBlogs.htm
Current and past editions of my newsletter called New Bookmarks --- http://www.trinity.edu/rjensen/bookurl.htm
Current and past editions of my newsletter called Tidbits --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm
Current and past editions of my newsletter called Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm
Bob Jensen's past presentations and lectures --- http://www.trinity.edu/rjensen/resume.htm#Presentations   




Click Here for Tidbits and Quotations Between June 1 and June 23, 2006

Click Here for Humor Between June 1 and June 30, 2006

For earlier editions of New Bookmarks go to http://www.trinity.edu/rjensen/bookurl.htm 

Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.

Bob Jensen's Blogs --- http://www.trinity.edu/rjensen/JensenBlogs.htm
Current and past editions of my newsletter called New Bookmarks --- http://www.trinity.edu/rjensen/bookurl.htm
Current and past editions of my newsletter called Tidbits --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm
Current and past editions of my newsletter called Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm
 

Bob Jensen's past presentations and lectures --- http://www.trinity.edu/rjensen/resume.htm#Presentations   
 

Bob Jensen's various threads --- http://www.trinity.edu/rjensen/threads.htm
       (Also scroll down to the table at http://www.trinity.edu/rjensen/ )

Click here to search this Website if you have key words to enter --- Search Site.
For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.

Bob Jensen's Home Page is at http://www.trinity.edu/rjensen/


Links to Documents on Fraud --- http://www.trinity.edu/rjensen/Fraud.htm

Bob Jensen's search helpers are at http://www.trinity.edu/rjensen/searchh.htm

Bob Jensen's Bookmarks --- http://www.trinity.edu/rjensen/bookbob.htm

Bob Jensen's links to free electronic literature, including free online textbooks --- http://www.trinity.edu/rjensen/ElectronicLiterature.htm

Bob Jensen's links to free online video, music, and other audio --- http://www.trinity.edu/rjensen/Music.htm

Bob Jensen's documents on accounting theory are at http://www.trinity.edu/rjensen/theory.htm 

Bob Jensen's links to free course materials from major universities --- http://www.trinity.edu/rjensen/000aaa/updateee.htm#OKI

Bob Jensen's links to online education and training alternatives around the world --- http://www.trinity.edu/rjensen/Crossborder.htm

Bob Jensen's links to electronic business, including computing and networking security, are at http://www.trinity.edu/rjensen/ecommerce.htm

Bob Jensen's links to education technology and controversies --- http://www.trinity.edu/rjensen/000aaa/0000start.htm

Bob Jensen's home page --- http://www.trinity.edu/rjensen/


Everyone is entitled to their own opinion, but not their own facts.
Senator Daniel Patrick Moynihan --- FactCheck.org --- http://www.factcheck.org/




Bob Jensen's complete set of Enron Updates are at http://www.trinity.edu/rjensen/FraudEnron.htm#EnronUpdates

Bob Jensen's threads on the Enron scandal are at http://www.trinity.edu/rjensen/FraudEnron.htm


Bob Jensen's Video Collection of Accounting Research at the University of Mississippi

Over the years I videotaped many presentations at meetings, particularly AAA meetings and some EAA meetings. Most of the presentations are by accounting professors and/or leaders from industry.

I've now donated these tapes to be archived at the University of Mississippi which seems to have the largest library of accounting history, particularly history of accounting in the U.S.

The tapes include some classic presentations and some real duds. In some cases the speakers like Ray Sommerfeld are now dead. Their presentations bring tears to the eyes of some old professors like me.

It may take a while for Dale to get these tapes cataloged, and eventually he may have digital copies of selected presentations available for distribution. In other cases, scholars may have to travel to Mississippi to view the presentations.

Except in the areas of technology, it's amazing how many problems in accounting are recycled without being able to solve systemic problems such as those illustrations listed at the following two links:

http://www.trinity.edu/rjensen/FraudConclusion.htm#BadNews

http://snipurl.com/JensenTheory

-----Original Message-----
From: Dale Flesher [mailto:acdlf@olemiss.edu
Sent: Wednesday, May 31, 2006 2:20 PM
To: Jensen, Robert
Subject: RE: AAA Videos

Bob:

I have just received two boxes of videotapes from you (144 tapes to supplement the 50+ you sent a couple of months ago).  This looks like a gold mine of information.  You had mentioned earlier that you would recommend some for digitization.  I have discussed this possibility with the librarian in charge of our AICPA National Library of the Accounting Profession and he indicates there are no major problems in digitizing the videos and making them available to the general public, although he wasn't sure about copyright restrictions. 

To ease his initial fears about copyright, we might begin with some videos of you speaking, since you could grant copyright release from both the photographer and the provider of information.

Let me know your thoughts, and thanks for the donation.

Dale Flesher


Free derivative financial instruments document from Ira Kawaller --- http://www.kawaller.com/

"10 Tenets of Derivatives" (loads very slow) --- http://www.kawaller.com/pdf/AFP_10Tenets.pdf 

Bob Jensen's tutorials on accounting for derivative financial instruments --- http://www.trinity.edu/rjensen/caseans/000index.htm


The Critical Shortage of Doctoral Graduates in Business and Accountancy in Particular
Quotations from a New Report Published in May 2006

An overview of doctoral program graduation rates is provided at http://www.trinity.edu/rjensen/HigherEdControversies.htm#DoctoralPrograms
There is a Ph.D. glut reported in some disciplines and shortages in other disciplines, especially in business education programs. The AACSB business education accrediting agency reports that doctoral graduate output is critically short in all specializations. The shortage is especially acute in accountancy.

Some of the references cited below are listed at http://www.trinity.edu/rjensen/395wpTAR/Web/TAR395wp.htm

In the 1960s huge catalysts for change in accounting research occurred when the Ford Foundation  poured millions of dollars into the study of collegiate business schools and the funding of doctoral programs and students in business studies. Gordon and Howell (1959) reported that business faculty in colleges lacked research skills and academic esteem when compared to their colleagues in the sciences. The Ford Foundation thereafter provided funding for doctoral programs and for top quality graduate students to pursue doctoral degrees in business and accountancy. The Foundation even funded publication of selected doctoral dissertations to give doctoral studies in business more visibility. Great pressures were also brought to bear on academic associations like the AAA to increase the scientific standards for publications in journals like TAR. A perfect storm for change in accounting research arose in the late 1950s and early1960s. First came the critical Pierson Carnegie Report (1959) and the Gordon and Howell Ford Foundation Report (1959). Shortly thereafter, the AACSB introduced a requirement requiring that a certain percentage of faculty possess doctoral degrees for business education programs seeking accreditation (Bricker and Previtts 1990). Soon afterwards, both a doctorate and publication in top accounting research journals became necessary for tenure (Langenderfer 1987).

Supply of doctoral graduates in accountancy rose sharply between 1960 and 1989 to where over 200 graduates per year were entering academe from over 100 doctoral programs. The largest programs were such as those at the Universities of Illinois and Texas were beginning to cut back by 1989. Subsequently, numbers of doctoral graduates nationwide began to taper off in spite of assorted newer doctoral programs.

The numbers of accountancy doctoral graduates in the past few years are critically short to meet increases in demand in college accountancy programs in virtually all states of the United States. Increasing salary levels to the highest levels in many colleges has not seemed to attract more entrants into doctoral programs. Rodgers and Williams (1996, 67-68) list 56 newer U.S. doctoral programs and some have been added since 1996. But these increases in the number of doctoral programs failed to alleviate the dramatic declines in graduation rates in larger and older programs.

As baby boomers from the World War II era begin to retire, we may experience a shortage of new faculty to take their place and meet the growing demand for business programs at universities. In August 2002, the AACSB International Management Education Task Force (METF) issued a landmark report, “Management Education at Risk.” The following is a quotation from the Foreword on Page 4 that appeals to a wide-ranging scholarship of “incredibly complex and dynamic environments”:

Let’s be clear about the real doctoral faculty issue. It’s not about day-to-day recruiting challenges, escalating faculty salaries, adhering to accreditation standards, or protecting the professoriate. The real threat is to the very core of collegiate business schools and institutions of higher education—scholarship. Doctoral faculty produces the body of knowledge that sustains intellectual inquiry and the ongoing development of a discipline. Any diminishment of our shared objective to advance such knowledge and ground education in solid conceptual frameworks will be a threat to the eventual academic legitimacy of our discipline. At a time when organizations operate in incredibly complex and dynamic environments, when different norms are colliding, and leadership credibility is at the lowest, such a retreat will compromise our ability to serve students and other constituents.

Data are provided in the above report about the serious decline in the number of doctoral degrees granted in recent years. Demand is more than double the projected supply of new doctoral faculty. For accounting in particular, Hasselback (2006) reports that the number of accounting doctoral degrees plunged from 212 in 1989 to 96 in 2004. Even if he missed some in his count, the trend is clearly critical.  Fewer and fewer accounting undergraduate and master’s degree graduates are returning to earn doctoral degrees. The reasons for this are complex, but there is considerable anecdotal evidence that some potential doctoral candidates are not interested in the narrow scientific methodology curriculum offered at most doctoral programs.

In 2004 American Accounting Association President Bill Felix formed an ad hoc Committee to Assess the Supply and Demand for Accounting Ph.D.s. The Committee conducted an exhaustive survey and published a report in May 2006 in the following reference:

"Assessing the Shortage of Accounting Faculty," by  R. David Plumlee (Chairman), Steven J. Kachelmeier, Silvia A. Madeo, Jamie H. Pratt, and George Krull, Issues in Accounting Education, Vol. 21, No. 2, May 2006, pp. 113-126.

Some of the highlights of this report are quoted below.

QUOTATION FROM PAGE 114
The AACSB predicts a major shortage of all business faculty with Ph.D.s over the next ten years (AACSB 2003).  Within accounting, there is substantial anecdotal evidence that a shortage of Ph.D.-qualified accounting faculty already exists and may grow.  Referring to the recent increase in accounting majors, the Wall Street Journal (2004) noted that "some universities face a problem: a shortage of professors to teach these young beancounters."  The article continues by stating that:

the comeback of the accounting career occurs as the number of business doctorates produced is at a 17-year low and universities struggle to recruit new accounting professors.  That leaves many wondering who will be left to teach all the new rules and regulations to the growing student pool.  While many academic fields are suffering from professor shortages, the issue is more acute in accounting because of the pull toward high-paying public-accounting jobs.  (Wall Street Journal 2004)

QUOTATION FROM PAGES 115-117
Table 1 details the estimated demand for new accounting faculty for the academic years 2005-08 at the three types of schools by rank.  We estimated that program leaders expected to hire 1,174 new accounting faculty in 2005-06.  However, new doctoral graduates represent only 30.0 percent of the faculty demand for 2005-06.  The demand for experienced Ph.D.s. (Assistant, Associate, and Full Professors) represents 35.5 percent of the total, and it remains at about the same level for the subsequent two years.  Demand for faculty whose primary responsibility is teaching (whether or not they have a doctoral degree) amounts to 36.6 percent of the total faculty demand.  When viewed at the school-category level, 56.0 percent of the "teaching only" faculty are expected to be hired by Undergrad Schools.

Table 2 shows sample responses indicating the number of faculty expected to be hired for each specialty, by both type of school and year.  The number of teachers that the three types of schools expect to hire within each teaching specialty differs substantially.  While financial accounting is the specialty in highest demand across all three types of schools, it is in highest relative demand for the Ph.D. Schools, with 40.3 percent of their expected hiring in financial accounting.  Master's Schools have a somewhat more balanced approach to hiring across specialties and have the highest demand for tax and systems teaching.  The category with the most surprising number of anticipated hires is the multiple-specialty category.  Table 2 indicates that the Master's and Undergrad Schools expect approximately one-fourth of their new Ph.D.s hires to teach in multiple areas.  The results of the Ph.D. program directors' survey found that none of the students are preparing themselves for multiple teaching specialties.  When asked about hiring strategies, Master's Schools had a strong preference for hiring to meet specific teaching needs, while schools in the other two categories showed a slight tendency to recruit the best candidate regardless of specialization.

 

TABLE 1
Estimated Accounting Faculty Demand for the Academic Year 2005-06
and the Subsequent Two Years, 2006-07 and 2007-08
             

2006 and 2007

   

2005

   
    Ph.D. Master's Undergrad
Only
2005
Totals
  Ph.D. Master's Undergrad 2006 and
2007
Totals
 
New Ph.D.   74 186    92   352   30.0%   99 342 149   590   42.6%
Experienced Assistant
Associate
Full Professor
  36
  31
  21
131
  46
  25
   57
   46
    0
  224
  123
    46
  19.1%
  10.5%
    3.8%
  28
  30
    6
150
  52
  49
115
  11
  11
  293
    93
    66
  21.2%
    6.7%
    4.8%
Teaching only Ph.D./ABD
Other
  12
  26
  22
128
  92
149
  126
  303
  10.7%
  25.9%
  13
  28
    8
  98
  80
115
  101
  241
    7.3%
  17.4%
  TOTAL 200 538 436 1174 100.0% 204 699 481 1384 100.0%

 

 

TABLE 2
Anticipated Demand for Teaching Specialties among
New Ph.D.s Hires for 2005-06, 2006-07, and 2007-08 Academic Years
 

Ph.D. Schools

Master's Schools

Undergrad Schools

  2005 2006 2007 Total Percent
of Total
2005 2006 2007 Total Percent
of Total
2005 2006 2007 Total Percent
of Total
Audit 11   8   1 19   12.3% 19 11 10   40   10.7% 1 4 0   5   10.6%
Cost 14   9   8 23   14.9% 15 22 16   53   14.2% 3 4 2   9   19.2%
Financial 31 31 20 62   40.3% 44 38 19 101   27.0% 9 5 1 15   31.9%
Tax   8   4   4 12     7.8% 21 13   9   43   11.5% 2 0 1   3     6.4%
Systems   4   4   1   8     5.2% 13 11 12   36     9.6% 1 0 0   1     2.1%
Multiple 14 10   8 24   15.6% 31 29 31   91   24.3% 5 6 2 13   27.7%
Other   5   1   4   6     3.9%   5   1   4   10     2.7% 0 1 0   1     2.1%
        154 100.0%       374 100.0%     6 47 100.0%

QUOTATION FROM PAGES 118-120
We estimate a total of 141 students will earn their Ph.D.s in 2005-06, 145 in 2006-07, and 187 in 2007-08.  Since some attrition in student numbers is likely, the supply may be overestimated for later years.  As shown in Table 3, 234 out of 391 students described in the responses (59.8 percent) have financial accounting as their teaching specialty.  The two identifiable specialties with the fewest students are auditing and tax with 7.4 percent and 5.9 percent of the students, respectively.

 

TABLE 3
Ph.D. Program Director's Estimates of the Number of Current Ph.D. Students in Various
Teaching Specialties Extrapolated to the Population of Schools with Ph.D. Programs
 

Sample Responses

    Estimated Number of Ph.D.s Graduating
  1st yr 2nd yr 3rd yr 4th yr 5th yr Sample
Totals
Est.
Pop.a
2005-06 2006-07 2007-08
Audit   9   6   4   8   2   29   49     7   12     8
Financial 37 62 45 52 38 234 396   91   85 108
Cost   8 13 18 17 11   67 113   27   29   37
Systems 11 10   8   5   3   37   63     8   10   19
Tax   4   4   7   5   3   23   39     8     9   14
Other   0   1   0   0   0     1     2     0     0     1
Totals 69 96 82 87 57 391 662 141 145 187
a  A linear extrapolation from the sample of 49 respondents to the population of 83 schools with accounting Ph.D. programs.

 

Estimated Shortages

One of the Committee's most critical tasks was to estimated the shortage of new Ph.D.-qualified faculty members.  Using the data collected from both the accounting program leaders and the Ph.D. program directors, we estimated the shortages in each teaching specialty--as well as overall shortages--by combining the program directors' estimates of students graduating and the accounting program leaders' estimates of the number they need to hire.  The shortages were estimated by taking the percentage demanded by specialty from the sample and multiplying those percentages by the estimated total supply of new Ph.D.-qualified faculty for two periods: (1) 2005-06 and (2) 2006-08.  For example, in Table 4, the demand for 43 new auditing Ph.D.s in 2005-06 is found by taking the percentage demanded for the audit specialty (12.3 percent as shown in Table 2) reported by the department heads who do hiring and multiplying that percentage by the estimated total supply of new Ph.D.s (352) in that year (shown in Table 4).

Table 4 shows that, across all specialties for 2005-08, the overall supply of new accounting faculty is only 49.9 percent of the number demanded.  Focusing just on the shortages estimated for 2005-06, the supply for every specialty falls short of the demand.  The two categories with the greatest shortages are multiple specialties and the "other" category, estimated to have none of their demand met.4  Nonetheless, we must acknowledge that many Ph.D. students will be expected to teach across specialties when they assume their first faculty position.  Financial accounting will have 79.1 percent of its demand met.  Tax will have only eight students graduating and auditing will only have seven, which is only 18.6 percent and 16.4 percent, respectively, of the expected demand for 2005-06.  Looking at the subsequent two years, shortages remain across all specialties; however, these shortages are less severe in most cases.

Figure 1 shows that over the three-year period 2005-2008, we expect substantial variation across specialties in the proportion of demand met.  As before, the "multiple" and the "other" categories fall well short in percentage terms.  For the "other" category, the characteristics of the faculty members demanded and the students being supplied are unlikely to match.  In the more defined specialties, graduate candidates are expected to supply only 27.1 percent of the tax faculty and 22.8 percent of the audit faculty demand, viewed cumulatively over the three years.  On the other hand, graduates interested in teaching financial accounting almost reach the level demanded (91.6 percent).  These shortages need to be considered with respect to the significant demand for experienced Ph.D.s; this demand can only be met in the short run by faculty moving from one school to another, creating more demand to replace those faculty members.


  Note, however, that the program directors were not given multiple specialties as a reporting option and "other" may have been perceived as too vague an option.


 

TABLE 4
Estimates of the Excess or Shortage of the Supply of New Ph.D.-Qualified Accounting Faculty Relative to the
Demand the Three Academic Years 2005-2008
 

Estimates for 2005-06

Estimates for 2006-08

Cumulative

  Demand Supply Excess
(Shortage)
Percent of Demand
Met
Demand Supply Excess
(Shortage)
Percent of
Demand
Met
Cumulative
Excess
(Shortage)
Percent of
Demand
Met
Audit   43     7   (36) 16.4%   71   19   (52) 26.6%   (88) 22.8%
Cost   44   27   (17) 61.4%   74  66     (8) 89.5%   (25) 79.0%
Financial 115   91   (24) 79.1% 194 192     (2) 99.2%   (26) 91.6%
Tax   43     8   (35) 18.6%   71   23   (48) 32.3%   (83) 27.1%
Systems   25     8   (17) 31.9%   41   29   (12) 69.9%   (29) 55.7%
Multiple   69     0   (69)   0.0% 115     0 (115)   0.0% (184)   0.0%
Other   13     0   (13)   0.0%   24     1   (23)% 2.3   (36)   1.4%
TOTALS 352 141 (211) 40.0% 590 330 (260) 55.9% (471) 49.9%

 QUOTATION FROM PAGE 125
Diversifying Training across Teaching Specialties

The Committee believes the dire shortages in tax and audit areas warrant particular focus.  One possible solution to these specific shortages is for Ph.D. programs to create new tracks targeted toward developing high-quality faculty specifically in these areas.  These tracks should be considered part of a well-rounded Ph.D. program in which students develop specialized knowledge in one area of accounting, but gain substantive exposure to other accounting research areas.  In addition, Master's Schools that do not currently offer a doctorate could develop accounting doctoral programs that support tax and audit education as part of an overall doctoral program.

A possible explanation for the shortages in these areas is that Ph.D. students perceive that publishing audit and tax research in top accounting journals is more difficult, which might have the unintended consequence of reducing the supply of Ph.D.-qualified faculty to teach in those specialties.  Given that promotion and tenure requirements at major universities require publication in to-tier journals, students are likely drawn to financial accounting in hopes of getting the necessary publications for career success.  While the Committee has no evidence that bears directly on this point, it believes that the possibility deserves further consideration.

 

CONCLUSIONS

The Committee has uncovered some valuable information about the nature of the demand for accounting faculty, the state of Ph.D. programs, and perceptions of current accounting Ph.D. students.  While there is surely some estimation error in determining the existence of a shortage of new accounting faculty, it is clear that particularly in the tax and auditing teaching specialties a shortage exists.  At this point there is neither an organized strategy to recruit more accounting Ph.D. students, nor is it evident that current accounting Ph.D. programs have the capacity to absorb additional students.  Despite the Committee's efforts, many questions and a great deal of work remain to be done in areas such as developing sources of information useful in recruiting new accounting Ph.D. students and developing creative ways to lower the costs to students of getting a Ph.D. and the costs to schools of offering doctoral programs.  Assuring an adequate supply of qualified accounting faculty in the future will require broad and dedicated efforts by Ph.D.-granting schools, the AAA, and other entities with a vested interest in the academic accounting profession.

 

Jensen Opinions

Although the reasons for the decline in doctoral students in accountancy are very complex, Bob Jensen's opinion is that the leading factor is that virtually all accountancy programs in the U.S. stripped most accounting courses from these programs in the shift toward mathematics, statistics, econometrics, finance, sociometrics, and psychometrics. In some programs the doctoral studies courses are not even taught in the business school. Students with high aptitudes and professional experience in accounting are discouraged from entering into doctoral programs unless they want to become economists or other social scientists.

It is also Bob Jensen's opinion that accountancy doctoral programs became social science programs due to the positivism biases of top accounting research journals that forced positivism research methods on virtually all accounting faculty seeking to publish in those leading journals. See http://www.trinity.edu/rjensen/395wpTAR/Web/TAR.htm

PG. #390 NONAKA
The chapter argues that building the theory of knowledge creation needs to an epistemological and ontological discussion, instead of just relying on a positivist approach, which has been the implicit paradigm of social science. The positivist rationality has become identified with analytical thinking that focuses on generating and testing hypotheses through formal logic. While providing a clear guideline for theory building and empirical examinations, it poses problems for the investigation of complex and dynamic social phenomena, such as knowledge creation. In positivist-based research, knowledge is still often treated as an exogenous variable or distraction against linear economic rationale. The relative lack of alternative conceptualization has meant that management science has slowly been detached from the surrounding societal reality. The understanding of social systems cannot be based entirely on natural scientific facts.
Ikujiro Nonaka as quoted at Great Minds in Management: The Process of Theory Development --- http://www.trinity.edu/rjensen//theory/00overview/GreatMinds.htm 

Leading accounting research journal biases for accountics in the past three decades illustrate the process of  Gemeinschaft to Gesellschaft where the "process eventually went too far." The Heck and Jensen (2006) paper is highly supportive of President Judy Rayburn's TAR Diversity Initiative. This is important not only for improved accounting research, it's important for expanded curricula of doctoral programs that more closely align academe with the accounting profession much in the same way that schools of law and medicine are aligned with their practicing professions.

For the good of the AAA membership and the profession of accountancy in general, one hopes that the changes in publication and editorial policies at TAR proposed by President Rayburn will result in the “opening up” of topics and research methods produced by "leading scholars." I might add that Paul Williams at North Carolina State University is a long-time advocate of such changes, and I thank Paul for some helpful input to the early stages of the Heck and Jensen paper.

I might also add that the Heck-Jensen paper tops off my long standing threads on the sad state of accounting research at
http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#AcademicsVersusProfession
Many problems of accounting research extend well beyond the TAR editorial policies.

An "Appeal" for accounting educators, researchers, and practitioners to actively support what I call The Accounting Review (TAR) Diversity Initiative as initiated by American Accounting Association President Judy Rayburn --- http://www.trinity.edu/rjensen/395wpTAR/Web/TAR.htm

An overview of doctoral program graduation rates is provided at http://www.trinity.edu/rjensen/HigherEdControversies.htm#DoctoralPrograms


Rigor in accounting doctoral programs has resulted in a critical shortage leading to more non-doctoral instructors of accounting in colleges nationwide.

"Teaching for the Love of It:  The joy of being an educator—eight career changers tell their stories," by Randy Myers, Journal of Accountancy, June 2006 --- http://www.aicpa.org/pubs/jofa/jun2006/myers2.htm

Once they earn their college degrees and embark on careers, many CPAs are perfectly happy never to see the inside of a classroom again. But others can’t wait to return. What happens when they follow their hearts and minds back to campus? To find out, we interviewed eight professionals—seven CPAs and one tax attorney—who gave up successful business careers in favor of academia. Some moved directly into the classroom and are now teaching as professionally qualified faculty (see “Emerging Opportunities for Professionally Qualified Faculty”). Others are students again, pursuing PhDs in accounting with an eye toward becoming university professors. Still others have already earned their PhDs and are working as senior faculty at some of the country’s leading business schools, where they divide their time between teaching and academic research. If you are considering a career in academia—or are simply curious about how the other half lives—this article is for you.

This article reveals what these eight professionals have come to learn, love and yes, question, about academia. It shows the road to the academic life has many forks, which can be pursued at almost any stage of a career in accounting. And it shows that even more than in the business world, CPAs in academia can tailor their careers to match their own interests and objectives.

Supply and Demand

Over the next three years, U.S. and Canadian universities will try to hire 942 new PhDs. Unfortunately, the number of graduates available to fill those slots is expected to total only 621.

Source: American Accounting Association.

Jensen Comment
Keep in mind that this does not mean that shortages are equally spread across all education programs. Some programs face far more difficulties than others for a variety of reasons. For example, some educators just do not want to relocate from Knee Deep, North Dakota to New York City and vice versa.

An overview of doctoral program graduation rates is provided at http://www.trinity.edu/rjensen/HigherEdControversies.htm#DoctoralPrograms


Property and Damage Costs of Schools
Something to consider in the design and implementation of AIS courses

From THEJournal Newsletter on June 28, 2006

Asset loss and damage costs the average district nearly a quarter of a million dollars a year. Larger districts lose even more, some topping $1.4 million in loss and damage annually. These are among the results of a recent study of district asset management, conducted in conjunction with Quality Education Data (QED). The study, which was co-sponsored by Follett Software Co., provides a picture of how districts manage their assets and the growing challenges they face. Its findings illustrate the importance of the emerging category of Educational Resource Management (ERM) solutions-products that centralize the management of district resources. The study surveyed 479 district business managers, administrators and technology chiefs in all 48 contiguous states. Respondents were asked about the problems they faced in managing assets, and about the systems they used to keep track of everything from laptops to band uniforms. They were also asked to estimate the cost of loss, damage, and redundant purchases of these assets. Other major findings of the study included:
  • Investments in educational technology (primarily computer and AV equipment) are among the assets most at risk, averaging more than $80,000 in loss annually per district.
  • Districts that used manual tracking for computers reported a 41% greater annual cost of loss/damage than those that used a commercial asset tracking program, and 32% greater loss than those that used a spreadsheet/database program.

For the full story, visit http://www.fsc.follett.com/newsnevents/pressreleases/release.cfm?pressID=22

Bob Jensen's threads on tricks and tools of the trade are at http://www.trinity.edu/rjensen/000aaa/thetools.htm

Resources for Faculty --- http://www.trinity.edu/rjensen/000aaa/newfaculty.htm 


The Courts Inevitably Protect Fees of Lawyers Above All Others

"Thompson Memo, R.I.P.?" The Wall Street Journal, June 28, 2006; Page A14 --- http://online.wsj.com/article/SB115146005782092658.html?mod=opinion&ojcontent=otep

Something remarkable and salutary happened in a Manhattan courtroom this week: U.S. District Court Judge Lewis A. Kaplan upheld the logic and meaning of the Constitution's Due Process Clause and the Sixth Amendment.

The case involves the Justice Department's prosecution of 16 former KPMG executives, accused of having engineered fraudulent tax shelters for their clients. We have our doubts about just how "fraudulent" those shelters were, seeing that they were never banned by the IRS, their legality was never tested in court, and KPMG stopped marketing them long before the IRS listed them as suspect. The criminal trial will be no slam dunk.

But the real whopper was the decision by KPMG to stop paying the legal fees of its former executives, largely to satisfy the requirements of the so-called Thompson memo. That 2002 document, written by then-Deputy Attorney General Larry Thompson amid corporate scandal fever, laid out the measures that companies facing prosecution could take to demonstrate cooperation and thereby avoid firm-wide indictment. Not wishing to share the fate of bankrupted Arthur Andersen, KPMG complied with the Thompson diktat and hung its executives out to dry while negotiating a deferred prosecution accord.

Enter Judge Kaplan, who on Monday delivered a scathing 83-page rebuke of the government's case. Noting that Constitutional rights to a fair trial and competent counsel were at stake here, he went on to limn a third principle, "not of constitutional dimension," but "very much a part of American life." To wit:

"Bus drivers sued for accidents, cops sued for allegedly wrongful arrests, nurses named in malpractice cases, news reporters sued in libel cases, and corporate chieftains embroiled in securities litigation generally have [the right] to have their employers pay their legal expenses." By holding "the proverbial gun to [KPMG's] head" with the threat of a company-wide indictment, the Judge wrote, the government had used the company as a proxy to violate the defendants' rights.

The 16 defendants must still contend with the charges of the indictment. But with KPMG now required to foot their legal bills, at least they don't face the bleak choice between financial ruin or copping a plea. As for the Justice Department, now is the time for Attorney General Alberto Gonzales to reinterpret, or better yet rewrite, those parts of the Thompson memo that his too-zealous prosecutors have been using in violation of defendants' due process rights.

The June 28, 2006 New York Times account of this is at http://www.nytimes.com/2006/06/28/business/28kpmg.html

Bob Jensen's threads on KPMG scandals are at http://www.trinity.edu/rjensen/Fraud001.htm#KPMG 


A Break Lurks in College Tuition
If you're writing a college-tuition check this summer, there may be a backdoor way to deduct a chunk of the payment that's perfectly legal yet utterly underutilized. The trick is to make a contribution to your state's "529" college-savings plan, as long as it's one of the 26 states (plus the District of Columbia) that give you a tax deduction or credit when you deposit money. Then, simply withdraw the money and use it to pay the college bill. Veteran users of 529 plans know all about the state tax breaks. But plenty of others don't -- and could benefit from the quick in-and-out. "This makes a lot of sense for wealthy people who don't need to save," says tax partner Bernard S. Kent of PricewaterhouseCoopers, who has advised both individuals and savings plans.
Ron Lieber, "A Break Lurks in College Tuition:  Some '529' Plans Offer Underused Move For Tax Deductions," The Wall Street Journal, June 10, 2006; Page B1 --- Click Here

 
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"Efficient Markets The Welfare of American Investors," by Henry G. Manne, The Wall Street Journal, June 13, 2006; Page A16 --- Click Here

Behavioral finance, a developing field of academic research that emphasizes investor irrationality (and ignorance) and the inefficiency of markets, has been hailed by defenders of the SEC as offering a solid economic rationalization for our vast scheme of federal securities regulations. Even apart from the obvious implications for the regulatory system of ignorance and irrationality on the part of regulators, a closer examination of the logic of behavioral finance leaves little for the pro-regulation crowd to crow about.

Initially, behavioral finance emerged as an academic antidote to a claim of substantial market perfection in the finance field, the well-known "efficient market" theory of stock prices. Numerous "anomalies" or irrationalities were discovered in the market for securities, such as various kinds of over- or under-reactions to new information, herding behavior, endowment effects, January effects, weekend effects, small-firm or distressed-firm effects, bubbles and crashes -- to name a few.

Faulty Data

Most of these alleged peculiarities proved in time to be far less anomalous than was first thought. The data on which they were based were often faulty, or the econometric models were measuring the wrong thing, or various kinds of relevant transactions costs were ignored. The effects of irrational or uninformed behavior were often canceled out by opposite forces, and much of it was simply irrelevant. Furthermore, the behavioralists did not -- and do not -- have a general theory that can explain why financial markets work as well as they do. Some close approximation of the efficient market theory is still the most accurate and useful model of the stock market that we have.

Still, some of the behavioralists' criticisms stuck, especially in regard to crashes and bubbles, events that arguably should not occur in perfectly efficient markets. In this connection the efficient market theorists had no choice but to reexamine and refine their own models, which they have now done with some success. Perhaps the most important behavioralist contribution to economics has been their reminder that the market-model claim of rationality often does not comport with actual human behavior.

Economists frequently failed to qualify economic pronouncements as being limited in application to aggregate behavior. Too many assumed that if markets in the aggregate behave rationally, it must be because the "marginal" participant -- the trader who has the correct information about what a price should be -- was himself a perfectly rational maximizer. This better-informed and rational trader would always arbitrage away any discrepancies from efficiency that a market displayed.

But there is a vast difference between economics and psychology, and we can thank the behavioralists for forcing economics back into its correct posture of dealing with aggregate behavior. We can also thank the behavioralists for demonstrating that the marginal trader/arbitrage theory cannot explain all price formation, since we have no way, a priori, of knowing that this hypothetical individual will be rational. Nor can we any longer assume that the arbitrageur (apart from a purchaser of 100% of the securities of a given company) will have all the information necessary to set the correct price.

That discovery left a serious gap in economic theory. The efficient market mavens were indeed correct in their conclusions about aggregate market behavior -- but how could they explain this near perfection of functioning markets while irrational and less-than-fully informed individuals (so-called "noise" traders) were known to abound?

Traditional economics did contain the start of an answer to this question, most notably in F.A. Hayek's classic "The Use of Knowledge in Society" (1945). There, Hayek (addressing the then-pressing problem of countering socialist doctrine) made the astute observation that centralized or socialist planning can never be economically efficient because it was impossible for a central planner to accumulate all the information needed for correct economic decisions ("correct" in the sense of displaying efficient market allocations of goods). The critical information, he noted, is too scattered in bits and pieces throughout the population ever to be assembled in one person's mind (or computer). Diffused markets, on the other hand, function well because the totality of relevant information, even subjective preferences, can be aggregated through the price mechanism into a correct market valuation.

This insight of Hayek's has been a mainstay of market theory ever since it was advanced, but it remains merely an observation and a conclusion. It does not detail how new information gets so effectively impacted into the prices of goods and services. In other words, how does this "weighted averaging" get done? And why should we assume that the impact of rational participants would dominate that of irrational ones in markets?

Similarly, the efficient market theory was based almost entirely on empirical observations and did not offer a theory of how the market came to be so efficient. Subsequent literature examined the mechanisms of market efficiency (including insider trading), but these were again observational and descriptive works that did not even recognize the absence of a good theory of how new information gets properly integrated into a price. The implicit and often explicit theory of price formation was always the "arbitrage" notion, with the marginal trader calling the shots.

Enter now financial journalist James Suroweicki and his charming and insightful book, "The Wisdom of Crowds" (2004). The book opens with the story of a contest at a county fair in England in 1906 to guess the weight of an ox on display after slaughter and dressing. There were about 800 guesses entered in the contest both by knowledgeable people and by those who had no expertise in such matters. We are not told what the winning guess was, but we are told that the average of all the guesses (1,197 pounds) was virtually identical to the actual weight (1,198 pounds).

Similar results show up regularly in the relatively new use of so-called "prediction" or "virtual" markets, primarily employed today in predicting outcomes of political elections, sporting events, new product introductions or new movies. Though there are still some problems with the technique, these "markets" have proved in the main to be much more accurate than traditional interview polls. And these various illustrations of the wisdom of crowds suggest a solution to the problem of how correct prices are formed in financial markets beset by irrational and poorly informed traders.

* * *

Weighted-average results are similar to "correct prices," since informed investors can be assumed to invest more money if their confidence in the validity of their information -- or the intensity of their desire for the product -- is higher, thus imparting a weighted average element to each price. And while the actual weight of an ox is a more objective measure than the "correct" price of a security, the main difference may be between a static and a dynamic figure with the "correct price" of a stock being a kind of moving target.

The literature on prediction markets makes clear that the more participants in a contest and the better informed they are, the more likely is the weighted average of their guesses to be the correct one. That is true, ironically, even though the additional participants have even less knowledge than the earlier ones. The only requirements for these markets to work well are that the various traders be diverse and that their judgments be independent of one another. Clearly, there is still a lot more work of a statistical and mathematical nature to be done before the idea of the wisdom of crowds is turned into a full-fledged theory of price formation, but at least we have identified the problem and made a start towards a solution.

'Wisdom of Crowds'

The implications of what we already know of this "wisdom of crowds" approach to price formation, as against the traditional marginal pricing/arbitrage approach, are apt to be startling. We should rethink any current policies based on a view of pricing in which we exclude the best-informed traders and discard the wisdom of the many. For instance, we now have a new and more powerful argument than we had in the past for legalizing most insider or informed trading.

Since such trading clearly makes the market process work more efficiently, it aids capital allocation decisions and informs business executives through market-price feedback of the best predictions about the value of new plans. Furthermore, the Supreme Court's "fraud on the market" theory of civil liability under the federal securities laws and Congress's ideas of correct civil damage claims for insider trading no longer have any intellectual merit. The same is true of any other part of our securities laws implicitly based on the notion of the marginal trader as a rational arbitrageur of price.

The new approach would suggest that it is undesirable to have laws discouraging stock trading by anyone who has any knowledge relevant to the valuation of a security. Thus, assembly-line workers, administrative assistants, office boys, accountants, lawyers, salespeople, competitors, financial analysts and, of course, corporate executives (government officials are another story) should all be encouraged to buy or sell stocks based on any new information they might have. Only those privately enjoined by contract or other legal duty from trading should be excluded. The "wisdom of crowds" can do far more for the welfare of American investors than all the mandated disclosures and insider trading laws that the SEC and Congress can think up.

Mr. Manne, a resident of Naples, Fla., is dean emeritus of George Mason University School of Law. This is the first of a two-part series.

Jensen Comment
Henry Manne's theory might fly if so many insiders were not rotten to the core with back dating of options and other exploitations of existing shareholders and potential investors. Bob Jensen's threads on "Rotten to the Core" are at http://www.trinity.edu/rjensen/FraudRotten.htm


Deloitte's Concept of Pricing Options is Legally and Ethically Questionable
(Recall that Deloitte is the Only Big 4 Firm that Did Not Sell its Consulting Division)

"Inquiry Into Stock Option Pricing Casts a Wide Net," by Eric Dash, The New York Times, June 19, 2006 --- http://www.nytimes.com/2006/06/19/business/businessspecial/19options.html?_r=1&oref=slogin 

So when new hires began complaining that the company's volatile share price meant that colleagues who had arrived just days earlier were receiving stock options worth thousands of dollars more, Micrel executives moved to satisfy the troops. They raised with their auditor, Deloitte & Touche, the idea of adopting a new options pricing strategy similar to one that other tech companies, including Microsoft, used at the time.

Instead of granting options at the market price on a new employee's hire date, Micrel proposed setting the price at the lowest point in the 30 days from when the grant was approved.

It seemed like an ideal solution. The 30-day window could help Micrel attract and reward new hires on a more equal footing, while helping to retain existing employees. And if it were extended up the corporate ladder, the prospect of built-in gains and tax breaks, worth millions of dollars, could enrich senior executives.

But the 30-day pricing method, which Micrel adopted in mid-1996, was an aggressive move legally and financially. In hindsight, it was also a major misstep.

Nearly five years later, Deloitte reversed its opinion and urged Micrel to restate its financial reports. The Internal Revenue Service came banging on its door. And today, Micrel and Deloitte are passing blame back and forth in court.

Micrel is hardly the only firm ensnared in such a mess. What began as a creative solution among a handful of technology firms to address recruitment issues soon became common practice in Silicon Valley. It appears the practice also became a way to enrich chief executives and other top managers.

The result is a nationwide scandal with major accounting, corporate governance, tax and disclosure ramifications. Dozens, perhaps hundreds, of companies are caught up in a giant civil and criminal law enforcement sweep by the Justice Department, the I.R.S. and the Securities and Exchange Commission.

It is no coincidence that stock option abuses are once again taking center stage in an unfolding scandal. The easy money that options can rain down on recipients motivated many of the numbers games that companies played with their quarterly earnings during the stock market boom, leading to numerous accounting fraud prosecutions at Enron, WorldCom and others.

In the latest scandal, companies seem to have handed out stock options that were already "in the money" on the date of grant, undermining the idea of using options as a pay-for-performance tool. The practice appears to have been widespread from the early 1990's to 2002, and possibly beyond.

Handing out in-the-money options is not illegal as long as the grants are disclosed to shareholders. At the time, in-the-money options had to be counted as an expense on the company's books. (New rules now require companies to routinely deduct options as an expense.) Failure to disclose or to deduct in-the-money options from income could lead to securities fraud charges. And because such options do not qualify for tax breaks once they are exercised, such grants raise tax fraud issues, too.

The Micrel case and others raise troubling questions about how companies that were pushing the envelope of accounting and tax practice were able to get the blessings of auditors and lawyers. And the widening scandal reveals the extent to which boards of directors, especially the compensation committees that approve option grants, may have failed to do their jobs.

"It appears, from the S.E.C. and a number of reports that are coming up daily, that there was a systemic problem at a lot of companies," said Bradley E. Beckworth, a plaintiffs' attorney who has filed one of the first class-action lawsuits against Brocade Communications and KPMG, its auditor, for options backdating. "If these accounts turn out to be true, you have to ask the question, Who was the gatekeeper here?"

Micrel, by most accounts, is one of the last technology companies where one might expect to find problems. While the chip manufacturer was one of the high-flying growth businesses of the 1990's, it was different in several respects from most of the era's fledgling public companies.

Its founder and longtime chief executive, Raymond D. Zinn, a 68-year-old engineer, is a Mormon who calls honesty his guiding rule. And unlike many of its technology rivals, Micrel's own profits, not venture financing, fueled its growth until it went public in 1994.

But like many high-tech firms in the mid-1990's, Micrel went on a hiring binge. The Bay Area was booming with opportunities for ambitious people. Companies were growing at astronomical rates and desperately needed talent to fill new jobs. And instead of higher salaries, companies preferred to grant stock options to lure new employees.

Micrel, a company that had a few hundred employees but was adding two or three new people a week, began facing a fairness problem in its options awards in mid-1996.

Continued in article

Bob Jensen's threads on options controversies are at
http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm

Bob Jensen's threads on Deloitte are at
http://www.trinity.edu/rjensen/Fraud001.htm#Deloitte


"Why '90s Audits Failed to Flag Suspect Options," by George Anders, The Wall Street Journal, June 22, 2006; Page B1--- http://online.wsj.com/article/SB115093901436887061.html?mod=todays_us_marketplace

When controversial options-timing practices were rippling through U.S. companies during the late 1990s, why didn't companies' own accounting systems spot anything odd?

Some clues can be found in the rise of an especially popular piece of options-tracking software, known as EquityEdge. Cheap and easy to use, it became a record-keeping backbone for thousands of companies. It logged in details of each options grant, it calculated their overall impact on a company's financial statements and it generated filings with the Securities and Exchange Commission.

But when EquityEdge was catching on a decade or more ago, it didn't offer much in the way of audit-trail capabilities aimed at spotting people tinkering with grant dates. Such systems would have been costly, and clients weren't asking for them. As a result, wrong or inconvenient data could be swept away while leaving hardly a trace.

Now, the SEC is focusing on the possibility that dozens of companies in the 1990s fiddled with options-grant dates so that executives could get the right to purchase stock at unusually cheap prices. Forensic accountants -- often hired by companies' independent directors -- are poring over EquityEdge databases, trying to see whether options grants were done properly or whether companies might need to address irregularities by restating earnings or paying additional taxes.

Ernest Ten Eyck, a forensic accountant based in King of Prussia, Pa., who is a senior managing director at FTI Consulting Inc., says his firm is reviewing at least 10 companies' historical EquityEdge records as part of a detailed look into possible cases of options backdating. What has been preserved is useful, he says, but not everything he would like.

That is because older versions of EquityEdge were designed to be simple and low-cost, he says, when it was assumed that no one was trying to game the system. "If everyone had been playing it right," he adds, "there would be no need for a lot of extra audit data."

EquityEdge got started in 1983 in Sunnyvale, Calif., by Cheryl Breetwor. She had worked at a Silicon Valley company whose efforts to handle stock-options accounting by hand got so badly snarled that it was forced to amend its proxy statement one year. "I figured there had to be a better way," she recalls. So she and a small team built EquityEdge as a desktop software product and sold it for as little as $3,000 per corporate customer. They named their company ShareData Inc.

ShareData's early clients included Microsoft Corp. and Oracle Corp. ShareData also signed up some companies that have received SEC inquiries about their options-timing practices, including Intuit Inc., KLA-Tencor Corp. and McAfee Inc. Representatives for all three client companies declined to comment on those probes.

Ms. Breetwor sold ShareData to E*Trade Financial Corp. in 1998 for about $35 million. She has since retired. But she remains an enthusiastic supporter of Silicon Valley's pro-options culture, which seeks to get more stock of fast-growing young companies into the hands of both executives and rank-and-file employees. The current probes into options-timing schemes amount to "a witch hunt," Ms. Breetwor contended in a phone interview this week.

Ms. Breetwor also said that while ShareData tried to educate its customers about the right ways to do options accounting, it wasn't her job to opine on legal issues or to flag regulators if she saw variations in the ways customers were handling certain issues.

Vito Palmieri, head of Equity Administration Solutions Inc., an options-software vendor in Pleasanton, Calif., says that the routine annoyances of data-entry errors were a bigger concern a decade ago. Glitches were common enough that customers wanted the freedom to revise or rework numbers with little interference. "The ability to be flexible was highly valued -- more so than auditability," Mr. Palmieri recalls.

Only after Sarbanes-Oxley legislation passed in 2002, tightening up corporate-governance requirements, did options-software vendors start focusing on audit-related issues. Since then, vendors have been retooling their programs so they can capture -- and highlight -- any tinkering with options-grant terms, for whatever reason.

EquityEdge's new owner, E*Trade, is beefing up the software to provide better auditing tools. Product manager Elizabeth Dodge says that when EquityEdge 7.0 is launched near year end, it will record any changes in individual options records and show which user made the change. Rejiggering data without leaving clear traces will be essentially impossible.

Similar changes have already been made to options-software packages sold by Computershare Ltd.

"Our systems don't prevent people from backdating options," says Gary Scrofani, a senior product manager at Computershare. "But the audit tool provides a clear record if anyone wants to try it."

While the options-backdating probe is still in its early days, inquiries in at least a half-dozen cases have led to executive departures or pledges to restate earnings. Some maneuvers may be traceable through options-tracking software; others may leave a paper trail only in the boardroom, where executives' options grants are approved. And in some cases, corporate lawyers say, ambiguous records may make it hard to tell exactly how grant dates were established.

For all the software vendors' current vigilance, their new changes amount to an attack on a problem that has largely been put to rest by other means.

Sarbanes-Oxley now requires executive options to be publicly disclosed within two business days of their granting. Under the old system, options grants didn't need to be disclosed for weeks or even months after they were made, creating much more maneuvering room for people wanting to pick favorable grant dates, after the fact.

As the current options probes play out, EquityEdge's founder, Ms. Breetwor, hopes that the uproar won't ruin stock options' image. "Used appropriately, options are a wonderful thing," she says. "Unfortunately, for some people, there came to be an expectation that they would be rewarded if the stock went down, as well as up."

Bob Jensen's threads on why "Incompetent and Corrupt Audits are Routine" are at http://www.trinity.edu/rjensen/FraudConclusion.htm#IncompetentAudits


"The thing I think that is more problematic is there have been some allegations that auditors knew about this and counseled their clients to do it," said Joseph Carcello, director of research for the corporate-governance center at the University of Tennessee. "If that turns out to be true, they will have problems."

"Backdating Woes Beg the Question Of Auditors' Role," by David Reilly, The Wall Street Journal, June 23, 2006; Page C1 --- http://online.wsj.com/article/SB115102871998288378.html?mod=todays_us_money_and_investing

Where were the auditors?

That question, frequently heard during financial scandals earlier this decade, is being asked again as an increasing number of companies are being probed about the practice of backdating employee stock options, which in some cases allowed executives to profit by retroactively locking in low purchase prices for stock.

For the accounting industry, the question raises the possibility that the big audit firms didn't live up to their watchdog role, and presents the Public Company Accounting Oversight Board, the regulator created in response to the past scandals, its first big test.

"Whenever the audit firms get caught in a situation like this, their response is, 'It wasn't in the scope of our work to find out that these things are going on,' " said Damon Silvers, associate general counsel at the AFL-CIO and a member of PCAOB's advisory group. "But that logic leads an investor to say, 'What are we hiring them for?' "

Others, including accounting professionals, aren't so certain bookkeepers are part of the problem. "We're still trying to figure out what the auditors needed to be doing about this," said Ann Yerger, executive director of the Council of Institutional Investors, a trade group. "We're hearing lots of things about breakdowns all through the professional-advisor chains. But we can't expect audit firms to look at everything."

One pressing issue: Should an auditor have had reason to doubt the veracity of legal documents showing the grant date of an option? If not, it is tough for many observers to see how auditors could be held responsible for not spotting false grant dates.

"I don't blame the auditors for this," said Nell Minow, editor of The Corporate Library, a governance research company. "My question is, 'Where were the compensation committees?' "

To sort out the issue, the PCAOB advisory group -- comprising investor advocates, accounting experts and members of firms -- last week suggested the agency provide guidance to accounting firms on backdating of stock options. A spokeswoman for the board said, "We are looking to see what action they may be able to take."

To date, more than 40 companies have been put under the microscope by authorities over the timing of options issued to top executives. Federal authorities are investigating whether companies that retroactively applied the grant date of options violated securities laws, failed to properly disclose compensation and in some cases improperly stated financial results. A number of companies have said they will restate financial statements because compensation costs related to backdated options in questions weren't properly booked.

All of the Big Four accounting firms -- PricewaterhouseCoopers LLP, Deloitte & Touche LLP, KPMG LLP and Ernst & Young LLP -- have had clients implicated. None of these top accounting firms apparently spotted anything wrong at the companies involved. One firm, Deloitte & Touche, has been directly accused of wrongdoing in relation to options backdating. A former client, Micrel Inc., has sued the firm in state court in California for its alleged blessing of a variation of backdating. Deloitte is fighting that suit.

The big accounting firms haven't said whether they believe there was a problem on their end. Speaking at the PCAOB advisory group's recent meeting, Vincent P. Colman, U.S. national office professional practice leader at PricewaterhouseCoopers, said his firm was taking the issue "seriously," but more time is needed "to work this through" both "forensically" and to insure this is "not going to happen going forward."

Robert J. Kueppers, deputy chief executive at Deloitte, said in an interview: "It is one of the most challenging things, to sort out the difference in these [backdating] practices. At the end of the day, auditors are principally concerned that investors are getting financial statements that are not materially misstated, but we also have responsibilities in the event that there are potential illegal acts."

While the Securities and Exchange Commission has contacted the Big Four accounting firms about backdating at some companies, the inquiries have been of a fact-finding nature and are related to specific clients rather than firmwide auditing practices, according to people familiar with the matter. Class-action lawsuits filed against companies and directors involved in the scandal haven't yet targeted auditors.

Backdating of options appears to have largely stopped after the passage of the Sarbanes-Oxley corporate-reform law in 2002, which requires companies to disclose stock-option grants within two days of their occurrence.

Backdating practices from earlier years took a variety of forms and raised different potential issues for auditors. At UnitedHealth Group Inc., for example, executives repeatedly received grants at low points ahead of sharp run-ups in the company's stock. The insurer has said it may need to restate three years of financial results. Other companies, such as Microsoft Corp., used a monthly low share price as an exercise price for options and as a result may have failed to properly book an expense for them.

At the PCAOB advisory group meeting, Scott Taub, acting chief accountant at the Securities and Exchange Commission, said there is a "danger that we end up lumping together various issues that relate to a grant date of stock options." Backdating options so an executive can get a bigger paycheck is "an intentional lie," he said. In other instances where there might be, for example, a difference of a day or two in the date when a board approved a grant, there might not have been an intent to backdate, he added.

"The thing I think that is more problematic is there have been some allegations that auditors knew about this and counseled their clients to do it," said Joseph Carcello, director of research for the corporate-governance center at the University of Tennessee. "If that turns out to be true, they will have problems."

Bob Jensen's threads on why "Incompetent and Corrupt Audits are Routine" are at http://www.trinity.edu/rjensen/FraudConclusion.htm#IncompetentAudits


Question
How does the U.N. fend off fraud investigations?

"U.N. Best Practices," The Wall Street Journal, May 5, 2006; Page A16 --- http://online.wsj.com/article/SB114679661661544615.html?mod=opinion&ojcontent=otep

Deep in the weeds of Turtle Bay, U.S. Ambassador John Bolton has been hacking a path toward United Nations reform -- an effort about as fraught as Marlow's quest for Captain Kurtz in Conrad's "Heart of Darkness," and no less horrifying.

But here's the good news: Two reports, released late last month by Congress's Government Accountability Office, are shedding light on how the U.N. mismanages its procurement and auditing functions. U.N. bureaucrats may be trying to downplay the findings, but the rest of us should pay attention.

Consider procurement. Thanks to various Oil for Food investigations, we learned that Alexander Yakovlev, a middle-ranking U.N. procurement officer, siphoned $1 million in bribes from $79 million worth of U.N. contract work. Mr. Yakovlev pleaded guilty in a U.S. court to three counts of fraud and money laundering last August.

But that's just the beginning. In January, Secretary General Kofi Annan placed eight top procurement officials on special leave, pending investigations by the U.N. and U.S. One of these officials is Sanjaya Bahel, former head of the U.N.'s Commercial Activities Services as well as its Post Office. Among other charges, Mr. Bahel, who also worked for the Indian Defense Ministry while at the U.N., is alleged to have improperly steered U.N. peacekeeping contracts to several Indian companies, one of them government-owned.

Also in January, the U.N.'s Office of Internal Oversight Services conducted an audit of U.N. peacekeeping procurement, the value of which has quadrupled over the last decade to $1.6 billion. The Office found that $110 million worth of expenditures had "insufficient" justification; another $61 million bypassed U.N. procedures; $82 million had been lost to various kinds of mismanagement; close to $50 million in contracts had shown indications of "bid rigging"; and $7 million were squandered through overpayment. That's a total of more than $300 million.

Senior U.N. management has responded with denial: "Not a penny was lost from the organization," insists Deputy Secretary General Mark Malloch Brown. But that point is hard to credit in light of the GAO's findings. Among them: The U.N. has set no training requirements for its procurement staff; has no independent process to address vendor protests; and has no internal mechanisms either to monitor procurement or identify areas prone to fraud or mismanagement.

On auditing, too, corruption starts at the top: Along with Mr. Yakovlev, the other U.N. official to have been recently indicted in the U.S. for bribery is Vladimir Kuznetsov, formerly head of the U.N.'s budget oversight committee. In theory, the oversight office is supposed to be an independent agency. In practice, it relies for its funding on the very U.N. agencies it is supposed to monitor and investigate.

The result, the GAO notes, is that "by denying OIOS [oversight office] funding, U.N. entities could avoid OIOS audits or investigations." A case in point was Benon Sevan's refusal to fund an audit of the $100 billion Oil for Food program, which he administered and from which he is alleged to have personally profited. That behavior is only symptomatic of ongoing U.N. practices: Oversight officials tell GAO investigators that they have "no authority to enforce payment for services rendered and there is no appeal process, no supporting administrative structure, and no adverse impact on an agency that does not pay or pays only a portion of the bill."

There's more of this, and we urge readers to see for themselves at www.gao.gov. Meantime, it would help if the Bush Administration paid more than lip service to holding the world body to account, not least by holding up its U.N. dues until meaningful reform is achieved. Until that happens, the world body will continue to breed corruption without remedy or consequence, in plain sight.

Bob Jensen's fraud updates are at http://www.trinity.edu/rjensen/FraudUpdates.htm


Fake Invoice Fraud
The owner of the nation's largest computerized machine tool maker was arrested yesterday morning at his California home and charged with orchestrating a tax fraud that cost the government nearly $20 million as well as intimidating witnesses and a federal agent investigating the case.Gene F. Haas, 54, of Camarillo, Calif., the owner of Haas Automation and other companies, was accused in a 52-page indictment of running a bogus invoicing scheme to create fake tax deductions. Mr. Haas was held without bail after his arraignment in Federal District Court in Los Angeles.
David Cay Johnston, "Executive Accused of Tax Fraud and Witness Intimidation," The New York Times, June 20, 2006 --- http://www.nytimes.com/2006/06/20/business/20tax.html?_r=1&oref=slogin

Bob Jensen's threads on accounting tricks and creative accounting are at http://www.trinity.edu/rjensen/FraudConclusion.htm#AccountingTricks

Bob Jensen's fraud updates are at http://www.trinity.edu/rjensen/FraudUpdates.htm


Question
What's a "cookie-cutter" lease and why does it illustrate why accounting standards are not neutral?

"FASB Launches Review of Accounting for Leases," AccountingWeb, June 12, 2006 ---
http://www.accountingweb.com/cgi-bin/item.cgi?id=102240

The Financial Accounting Standards Board (FASB) has begun reviewing its guidance on one of the most complex areas of off-balance sheet reporting, accounting for leases, Chairman Robert Herz told Forbes. The Securities and Exchange Commission (SEC) had requested that FASB review off-balance sheet arrangements, special purpose entities and related issues in a staff report issued in June 2005. The most prominent topics for review were pension disclosure and accounting for leases.

Having issued its Exposure Draft to Improve Accounting of Pensions and other Postretirement Benefits, FASB is now considering moving lease obligations from the current footnote disclosure to the balance sheet. But the sheer number of rules and regulations that relate to leases – hundreds, according to Business Week – offers experts plenty of opportunities to keep disclosure off the books and presents FASB with an enormous challenge.

Companies are currently required to record future lease obligations in a footnote, but actual rent payments are deducted in quarterly income statements. Approximately 10 percent of leases are already disclosed on the balance sheet as liabilities because the company can purchase the equipment at the end of the lease, and therefore the lease is treated as a loan, or because lease payments add up to 90 percent of the value of the leased property.

Robert Herz says, according to Business Week, that “cookie-cutter templates” have been created to design leases so that they don’t add up to more than 89 percent of the value of the property. And to add to the complexity, the AP says, if the contract describes a more temporary rental-type arrangement, it can be treated as an operating lease and recorded in the footnote.

Leasing footnotes do not reveal the interest portion of future payments and require the analyst or investor to make assumptions about the number of years over which the debt needs to be paid, the AP says, as well as the interest rate the company will be paying. David Zion, an analyst from Credit Suisse told the AP that many professionals interpret the footnotes by multiplying a company’s annual rental costs by eight.

Thomas J. Linsmeier, recently named a member of the FASB, said that the current rule for accounting for leases needed to be changed because it sets such specific criteria. “It is a poster child for bright-line tests,” he said, according to the New York Times.

The SEC requested the review it said in a press release because “the current accounting for leases takes an “all or nothing” approach to recognizing leases on the balance sheet. This results in a clustering of lease arrangements such that their terms approach, but do not cross, “the bright lines” in the accounting guidance that would require a liability to be recognized. As a consequence, arrangements with similar economic outcomes are accounted for very differently.”

Finding a way to define a lease for accounting purposes presents additional problems. Some accountants argue that since the lessor does not own the property and cannot sell it, the property should not be viewed as an asset, Business Week says. Others say that the promise to pay a rent is equal to any other liability.

Of 200 companies reviewed by SEC staffers in 2005, 77 percent had off-balance-sheet operating leases, totaling about $1.25 trillion, the Wall Street Journal reported.

Among the companies with the biggest lease obligations are Walgreen Co. with $15.2 billion, CVS Corp with $11.1 billion and Fedex Corp. with $10.5 billion, the AP reports. Walgreens owns less that one-fifth of its store locations and leases the rest. Fedex leases airplanes, land and facilities.

Robert Herz, in an editorial response in Forbes to Harvey Pitt, former SEC chairman, acknowledged that FASB’s current projects, including the review of lease accounting, could generate controversy. But he says that the complexity and volume of standards impedes transparency, and that the FASB is working jointly with the IASB to develop more principles based standards.

“Complexity has impeded the overall usefulness of financial statements and added to the costs of preparing and auditing financial statements – particularly for small and private enterprises – and it is also viewed as a contributory factor to the unacceptably high number of restatements,” Herz writes in Forbes.

Herz does not expect the new rules to be completed before 2008 or 2009, Business Week says.

Bob Jensen's threads on leases are at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#Leases


The Big Internet Pipelines Want to Rip Off Consumers

Forwarded by David Spener

"War On The Web Robert B. Reich," May 11, 2006

Robert Reich is professor of public policy at the Richard and Rhoda Goldman School of Public Policy at the University of California, Berkeley. He was secretary of labor in the Clinton administration. 

This week, the House is expected to vote on something termed, in perfect Orwellian prose, the "Communications Opportunity, Promotion and Enhancement Act of 2006." It will be the first real battle in the coming War of Internet Democracy.

On one side are the companies that pipe the Internet into our homes and businesses. These include telecom giants like AT&T and Verizon and cable companies like Comcast. Call them the pipe companies.

On the other side are the people and businesses that send Internet content through the pipes. Some are big outfits like Yahoo, Google and Amazon, big financial institutions like Bank of America and Citigroup and giant media companies soon to pump lots of movies and TV shows on to the Internet.

But most content providers are little guys. They’re mom-and-pop operations specializing in, say, antique egg-beaters or Brooklyn Dodgers memorabilia. They’re anarchists, kooks and zealots peddling all sorts of crank ideas They’re personal publishers and small-time investigators. They include my son’s comedy troupe—streaming new videos on the Internet every week. They also include gazillions of bloggers—including my humble little blog and maybe even yours.

Until now, a basic principle of the Internet has been that the pipe companies can’t discriminate among content providers. Everyone who puts stuff up on the Internet is treated exactly the same. The net is neutral.

But now the pipe companies want to charge the content providers, depending on how fast and reliably the pipes deliver the content. Presumably, the biggest content providers would pay the most money, leaving the little content people in the slowest and least-reliable parts of the pipe. (It will take you five minutes to download my blog.)

The pipe companies claim unless they start charge for speed and reliability, they won’t have enough money to invest in the next generation of networks. This is an absurd argument. The pipes are already making lots of money off consumers who pay them for being connected to the Internet.

The pipes figure they can make even more money discriminating between big and small content providers because the big guys have deep pockets and will pay a lot to travel first class. The small guys who pay little or nothing will just have to settle for what’s left.

The House bill to be voted on this week would in effect give the pipes the green light to go ahead with their plan.
Price discrimination is as old as capitalism. Instead of charging everyone the same for the same product or service, sellers divide things up according to grade or quality. Buyers willing to pay the most can get the best, while other buyers get lesser quality, according to how much they pay. Theoretically, this is efficient. Sellers who also have something of a monopoly (as do the Internet pipe companies) can make a killing.

But even if it’s efficient, it’s not democratic. And here’s the rub. The Internet has been the place where Davids can take on Goliaths, where someone without resources but with brains and guts and information can skewer the high and mighty. At a time in our nation’s history when wealth and power are becoming more and more concentrated in fewer and fewer hands, it’s been the one forum in which all voices are equal.

Will the pipe companies be able to end Internet democracy? Perhaps if enough of the small guys make enough of a fuss, Congress may listen. But don’t bet on it. This Congress is not in the habit of listening to small guys. The best hope is that big content providers will use their formidable lobbying clout to demand net neutrality. The financial services sector, for example, is already spending billions on information technology, including online banking. Why would they want to spend billions more paying the pipe companies for the Internet access they already have?

The pipe companies are busily trying to persuade big content providers that it’s in their interest to pay for faster and more reliable Internet deliveries. Verizon’s chief Washington lobbyist recently warned the financial services industry that if it supports net neutrality, it won’t get the sophisticated data links it will need in the future. The pipes are also quietly reassuring the big content providers that they can pass along the fees to their customers.

Will the big content providers fall for it? Stay tuned for the next episode of Internet democracy versus monopoly capitalism.


U.S. Senate Fax Numbers --- http://www.freerepublic.com/focus/f-news/1641026/posts

Senator, Murkowski ,(202) 224-5301
Senator, Stevens ,(202) 224-2354
Senator, Sessions ,(202) 224-3149
Senator, Shelby ,(202) 224-3416
Senator,Pryor,(202) 228-0908
Senator, Lincoln ,(202) 228-1371
Senator, Kyl ,(202) 228-1239
Senator, McCain ,(202) 228-2862
Senator, Boxer ,(202) 226-6701
Senator, Feinstein ,(202) 228-3954
Senator, Allard ,(202) 224-6471
Senator, Campbell ,(202) 224-1933
Senator, Dodd ,(202) 224-1083
Senator, Lieberman ,(202) 224-9750
Senator, Biden ,(202) 224-0139
Senator, Carper ,(202) 228-2190
Senator,Martinez,(202) 228-5171
Senator, Nelson ,(202) 228-2183
Senator,Chambliss,(202) 224-0103
Senator,Isakson,(202) 228-0724
Senator, Akaka ,(202) 224-2126
Senator, Inouye ,(202) 224-6747
Senator, Grassley ,(202) 224-6020
Senator, Harkin ,(202) 224-9369
Senator, Craig ,(202) 228-1067
Senator, Crapo ,(202) 228-1375
Senator, Durbin ,(202) 228-0400
Senator,Obama,(202) 228-4260
Senator, Bayh ,(202) 228-1377
Senator, Coats ,(202) 228-4137
Senator, Brownback ,(202) 228-1265
Senator, Roberts ,(202) 224-3514
Senator, Bunning ,(202) 228-1373
Senator,McConnell,(202) 224-2499
Senator,Vitter,(202) 228-5061
Senator, Landrieu ,(202) 224-9735
Senator, Kennedy ,(202) 224-2417
Senator, Kerry ,(202) 224-8525
Senator, Mikulski ,(202) 224-8858
Senator, Sarbanes ,(202) 224-1651
Senator, Collins ,(202) 224-2693
Senator, Snowe ,(202) 224-1946
Senator, Levin ,(202) 224-1388
Senator, Stabenow ,(202) 228-0325
Senator, Dayton ,(202) 228-2186
Senator,Coleman,(202) 224-1152
Senator, Bond ,(202) 224-8149
Senator,Talent,(202) 228-1518
Senator, Cochran ,(202) 224-9450
Senator, Lott ,(202) 224-2262
Senator, Baucus ,(202) 228-3687
Senator, Burns ,(202) 224-8594
Senator,Burr,(202) 228-2891
Senator,Dole ,(202) 224-1100
Senator, Conrad ,(202) 224-7776
Senator, Dorgan ,(202) 224-1193
Senator, Hagel ,(202) 224-5213
Senator, Nelson ,(202) 228-2183
Senator, Gregg ,(202) 224-4952
Senator,Sununu,(202) 228-4131
Senator,Lautenberg,(202) 228-4054
Senator,Menendez,(202) 228-2197
Senator, Bingaman ,(202) 224-2852
Senator, Domenici ,(202) 224-7371
Senator, Ensign ,(202) 228-2193
Senator, Reid ,(202) 224-7327
Senator, Clinton ,(202) 228-0282
Senator, Schumer ,(202) 228-3027
Senator, DeWine ,(202) 224-6519
Senator, Voinovich ,(202) 228-1382
Senator, Inhofe ,(202) 228-0380
Senator,Coburn,(202) 224-6008
Senator, Smith ,(202) 228-3997
Senator, Wyden ,(202) 228-2717
Senator, Santorum ,(202) 228-0604
Senator, Specter ,(202) 228-1229
Senator, Chafee ,(202) 228-2853
Senator, Reed ,(202) 224-4680
Senator,Graham,(202) 224-3808
Senator,Demint,(202) 228-5143
Senator,Thune,(202) 228-5429
Senator, Johnson ,(202) 228-0368
Senator, Frist ,(202) 228-1264
Senator,Alexander,(202) 224-3398
Senator,Conryn,(202) 228-2856
Senator, Hutchison ,(202) 224-0776
Senator, Bennett ,(202) 228-1168
Senator, Hatch ,(202) 224-6331
Senator, Allen ,(202) 224-5432
Senator, Warner ,(202) 224-6295
Senator, Jeffords ,(202) 228-0776
Senator, Leahy ,(202) 224-3595
Senator, Cantwell ,(202) 228-0514
Senator, Murray ,(202) 224-0238
Senator, Feingold ,(202) 224-2725
Senator, Kohl ,(202) 224-9787
Senator, Byrd ,(202) 228-0002
Senator, Rockefeller ,(202) 224-7665
Senator, Enzi ,(202) 228-0359
Senator, Thomas ,(202) 224-1724


From Jim Mahar's blog on May 31, 2006 --- http://financeprofessorblog.blogspot.com/

Dividends and Capital Structure

Hold on to your seats folks, this one gets exciting! Definitely I^3!

It starts off so easy: Are dividend policy and capital structure related? And if so how?

Surprisingly for two topics that have been central to corporate finance for decades, we still really do not have very good explanations to either. A new paper by Faulkender, Milbourn, and Thackor attempts to solve both problems with a new theory that suggests not only are dividends and debt related, and tied to investor uncertainty. Moreover, it appears the theory actually fits the data!
 

Super short version:
When managers and shareholders agree on the things stock prices rise. Moreover, debt levels and dividend payout ratios drop. This key insight is shown both theoretically and empirically.

 

Longer version:
While often studied, capital structure and dividend policy have many unanswered questions and none of our models fit the evidence very well.Hence the need to new thinking on the matter and that is what by
Faulkender, Milbourn, and Thackor have brought to the table (computer screen?) in Does Corporate Performance Determine Capital Structure and Dividend Policy?

A few quick look-ins:
 
“..troubling is the fact that existing theories also do not explain why some firms never pay dividends whereas others consistently do, why the payment of dividends seems dependent on the firm’s stock price, and why there seem to be correlations between firms’ capital structure and dividend policy...We are thus left without a theory of dividends that squares well with these stylized facts. The evidence on capital structure is even more troubling.”
 
“In this paper, we address this question by developing a fresh approach with a simple model that departs from the usual agency and signaling stories. We assume that the manager wishes to maximize a weighted average of the stock prices at the initial and terminal points in time. At the initial point in time he raises the funds needed for a future project with either debt or equity, and thereby determines the firm’s capital structure. Moreover, he also decides how large a dividend to promise to pay at the next point in time. At the time that the manager makes his financial policy choices, he is aware that investors may not agree with his future project choice… project-choice disagreement arises solely from potentially different beliefs about project value rather than agency or private information problems."
 

* Their main point:
 
“higher agreement between the manager and the investors implies a higher stock price, so the model predicts leverage and dividend payout ratios to be inversely related to the firm’s stock price."
 
After theoretically modeling the problems, the authors empirically test their predictions and find strong support. Again in their words:
 
"We find that firms for which there is greater agreement (i.e., lower analyst forecast dispersion and greater performance-based compensation) have significantly less debt in their capital structure – as measured by either market or book leverage, or interest coverage – and pay out a significantly smaller fraction of the earnings in the form of dividends, measured using both the dividend payout ratio and the dividend yield.”
 
Good stuff!!

You probably do want to read the whole thing on this one (indeed the literature review (disguised in the introduction) is excellent and is definitely understandable for even undergraduates!)


Cite: Faulkender, Michael W., Milbourn, Todd T. and Thakor, Anjan V., "Does Corporate Performance Determine Capital Structure and Dividend Policy?" (
March 9, 2006).
Available at SSRN: http://ssrn.com/abstract=686865

 


An Interview with Jack Treynor
FEN = Financial Engineering News

"The FEN One-on-One Interview," by Nina Mehta, FEN --- http://www.fenews.com/fen49/one_on_one/one_on_one.html

Jack Treynor is one of the river gods of finance. He helped develop the Capital Asset Pricing Model, which relates risk and expected return, in the early 1960s and spearheaded the field of performance measurement for investment funds. Over the decades Treynor’s reputation as a fearless, maverick thinker who clears his own path into topics that catch his interest has become legendary. Treynor developed a version of what became the Capital Asset Pricing Model in 1962, before the 1964 publication of William Sharpe’s paper laying out what became the CAPM. Treynor never published his paper. John Lintner, an economist at Harvard Business School, published a version of the CAPM in 1965. Sharpe won the 1990 Nobel Prize in Economics for the development of the CAPM (he shared the prize with Harry Markowitz and Merton Miller for contributions to financial economics).

In 1965 Treynor published “How to Rate Management of Investment Funds” in the Harvard Business Review, the first paper to spell out a method for evaluating the performance of money managers on a risk-adjusted basis. Treynor had an early and profound influence on Fischer Black, who, with Myron Scholes, developed the Black-Scholes option-pricing model. (Scholes and Robert C. Merton won the Nobel Prize in 1997 for developing a method to value options; Fischer Black was deceased by then.)

Treynor studied math at Haverford College and received an MBA from Harvard Business School in 1955. He worked at Arthur D. Little in Boston from 1956 to 1966, with a sabbatical year, 1962-63, studying economics at MIT. In 1966 he was hired by Don Regan at Merrill Lynch to start Wall Street’s first quantitative research group to help clients measure systematic risk and specific risk in stocks. He stayed at Merrill for three years. Treynor served as the editor of the Financial Analysts Journal from 1969 to 1981, and has run Treynor Capital Management since the mid-1980s. He has published more than 50 papers on a range of investment topics and consistently produces papers that flout conventional assumptions. In 1976 Treynor, William Priest and Patrick Regan wrote The Financial Reality of Pension Funding under ERISA. Richard Vancil and Treynor co-authored Machine Tool Leasing in 1956 while at Harvard Business School. Treynor’s 1962 paper on the CAPM has long been one of the most widely circulated unpublished papers in modern finance.

FEN: How did you get interested in finance? JT: I went to a small college, Haverford College, in Philadelphia’s Main Line. My real love was physics. The department at that time consisted of a man who was about to retire and a young man who was blind — so blind that when he went to blackboard to write an equation he’d hold the chalk in one hand and with the other hand he’d keep a finger on the first point of the thing he was writing to orient himself. I enjoyed both teachers, but thought this would be a limited education in physics. Actually it would have been limited to Newtonian physics. So I decided to major in math instead. Given that fondness for the apparent precisions of physics and the experience with math, maybe it was predictable that when I got exposed to the various skills Harvard Business School was exposing its first-year students to, I was probably more comfortable with the quantitative stuff.

FEN: What did your family think of your decision to go to business school? JT: My dad was a doctor, his brother was a doctor and their father was a doctor. My father was not sure about my qualifications or my promise as a doctor. One day, during a summer vacation between my college years when he had an operation, he invited me to come in and hold the head of the patient while he operated on the patient’s head. You can imagine my irrational reaction to that experience. I probably would have overcome this by working with cadavers, but that experience was sufficiently negative for me. I think I reacted the way my father expected and hoped I would react, and that the experience would turn me away from medicine.

FEN: I’ve been reading Perry Mehrling’s book, Fischer Black and the Revolutionary Idea of Finance. He says that Fischer Black saw finance as fundamentally different from physics, with its fixed laws of nature, and more like anthropology or psychology. Do you see finance in a similar way? JT: I have a neighbor who teaches in the social sciences, and he says that in the social sciences ideas progress one funeral at a time. There are several economists I admire tremendously, but the relation between economics and finance is peculiar. In my view economics today is where physics was in the fifteenth century. Before Francis Bacon, before the Royal Society, the main obstacle to progress in physics was academic – it was the teachers who had a big investment in the way they had been taught to think about the subject and couldn’t let go. That’s why the Keynesians and monetarists can go on year after year disagreeing about the most fundamental issues without ever finding any common ground to resolve those issues, and it’s why Fischer couldn’t get published in economic journals.

FEN: Has that relationship improved in recent years? JT: It’s gotten better but not much better. Professor Mehrling is one of the few economists who take finance seriously. He’s not the only one. Obviously Franco Modigliani did, Paul Samuelson did. You’d have to say James Tobin did. In his way, John Lintner did. There are probably some important people I’m overlooking. But these guys are a handful in a profession that certainly numbers in the hundreds, even if you include only tenured professors.

FEN: You came at the CAPM by way of corporate finance. JT: At Harvard Business School I hadn’t begun to think about the CAPM problem except that I was dissatisfied with the answer the finance guys, especially the corporate finance guys, were giving me for the choice of discount rate for evaluating long-term corporate projects. The notion of using the company’s internal rate of return was clearly an idea that isolated the company from the capital market.

After I graduated I stayed on to write cases for Bob Anthony, who was an accounting professor. He sent me to manufacturing companies to sit down with the accounting staff and write up a problem that they had told Professor Anthony would make a good case. I’d come back with my notes, and he reviewed them and we’d go from there. But the choice of discount rates for projects never came up.

At Arthur D. Little I had two different kinds of experience. I did a lot of work for senior people in the Operations Research Group. There were some brilliant people there. The Management Services Division had another, separate group called the Business Research Group, which did more conventional management consulting for companies like Philco, British Aircraft Corp. and Irish Sugar Company. Nobody said, “Hey Jack, we brought you on this case to compute the present value of a plant proposal.” In each case the business research people simply brought me in as the finance guy.

FEN: Were you keeping abreast of academic papers that were being published in finance? JT: The simple answer is no. But every summer I visited my parents who were living on the western side of Iowa and who tried to escape the summer heat by going to a little cabin in the Rocky Mountains. I remember going down to the University of Denver to read the 1958 paper by Franco Modigliani and Merton Miller. It was then and still is now a wonderful paper. It just thrilled me.

FEN: Did that paper have a direct impact on your research? JT: I came back from that three-week vacation [in 1958] with 44 pages of mathematical notes on this problem of how to discount corporate project proposals. After that I’d go into the office on Saturdays and Sundays to work on it. There was almost nobody there and it was quiet.

FEN: Those 44 pages become your 1961 paper, “Market Value, Time, and Risk,” right? JT: Yes. I think it was typed in 1960 but I’m not certain.

FEN: Who did you first show the paper to? JT: Probably John Lintner at Harvard. He was the only economist I knew, which is why I gave him my paper. He didn’t give me any encouragement. I suppose my paper seemed like a bunch of gobbledygook to John.

FEN: Eventually a colleague sent the paper to Merton Miller, who sent it to Franco Modigliani. JT: Franco was hired by MIT. Weeks or months after, he called me up and invited me to lunch. When we met he said, “Merton Miller gave me your paper, I’ve read it and frankly you need to study economics.” I accepted his assessment. I took a sabbatical year from Little in 1962-1963. Franco chose the courses I was to take – price theory, macroeconomics, econometrics, his course on capital theory, and so on, and he chose the teachers for me.

He did one other thing that was an enormous favor to me. He took my paper and broke it in two, and said from now on these are two separate papers. He called the first paper “Toward a Theory of Market Value of Risky Assets” (1962), which is kind of funny in the context of what we discussed before, because that’s a social-sciencey title. The second paper was called “Implications for the Theory of Finance” (1963). I presented both in separate presentations to the finance faculty seminar in MIT. The second paper was a failure. It wasn’t right. But the first paper was the CAPM. So basically Franco rescued the part of paper that was valid from the rest.

FEN: I know people who have dog-eared, 20th-generation copies of that 1962 paper. Why weren’t you more aggressive about publishing it? JT: After I left MIT I went back to Little. About three months later, I got a call from Franco. He said Sharpe was working on the same subject and asked me to send Sharpe a draft copy of my paper. He did the same with Sharpe, so we got a copy of each other’s paper. I thought that if Sharpe was going to publish, what’s the point of my publishing my paper? That represents my reaction then.

FEN: I’ve read that Franco Modigliani for his whole life regretted not having encouraged you more and not seeing that paper for what it was. JT: I’ve heard that too. We can look back now and talk about the significance of the CAPM, but if it has any real significance, it wasn’t evident at that time to anybody, so it’s not fair to Franco to have expected that.

FEN: What was the significance of the paper for you? JT: One thing I was trying to do in the original paper, which then became two papers, was approach the problem for the plant with a 40-year life by solving the problem for one year, then converting that solution into a partial differential equation and taking that down to the instantaneous limit; then I integrated that PDE, applying boundary conditions such as the cash flows for the project and whatever variables they depended on. That was the approach Black-Scholes later took to the option valuation problem – they solved the one-period problem, derived a PDE, then integrated that out over time to solve the finite time problem.

FEN: Looking back over the years, what’s most interesting and most powerful about the CAPM you developed? JT: To me the interesting thing about the CAPM is not the assumption I made about everyone having the same information, but rather the general equilibrium — the fact that the CAPM is a theory about risk-bearing that permits you and me to apply the same theory without conflict. There’s no fallacy of composition in applying the CAPM to decisions relating to investment risk. It may have problems, but it doesn’t have that problem.

FEN: Did you initially see that as important? JT: I’m sure I didn’t see that at the beginning.

FEN: How would you describe the differences between your version of the CAPM and Sharpe’s and Lintner’s? JT: I can say some things about how it looks to me. Bill came to the CAPM from his association with Harry Markowitz and their emphasis on constructing portfolios using linear programming. His CAPM quite understandably and predictably shows that influence. Mine is comparatively simple and uncomplicated and doesn’t say anything about linear programming. There are other differences between Sharpe and me, but I don’t think they’re important.

Lintner’s paper apparently went through many versions, and the final version introduces a sophistication that’s absent in my paper and in Sharpe’s paper — namely, disagreement among investors. Sharpe and I assumed that complexity away by attributing the same information to all investors. According to Professor Mehrling’s book, Lintner was uneasy with the idea of covariance and preferred the idea of variance. I think it’s easy to forget the environment Lintner was working in. Basically he was the only economist at Harvard Business School. The ideas that people were coping with at the time included judging a new project by using the company’s internal rate of return, which was dumb. If Lintner had started talking about covariance with a market portfolio with those guys, they wouldn’t have understood anything he was talking about and he wouldn’t have gotten anywhere.

FEN: What has been the main challenge to the CAPM? JT: One of the challenges to the CAPM is the idea that the market factor is not the only systematic factor in the market. However, the CAPM is utterly silent on whether there’s one systematic factor in the market or two or three or 10. The CAPM still holds if there are other systematic factors, but it does say that if there are systematic factors they will have risk premiums that are proportional to their covariance with the market portfolio.

FEN: How does the arbitrage pricing theory of Stephen Ross fit into this discussion of CAPM? JT: APT is a theory about systematic factors. What is a systematic factor? It’s a factor that has a big covariance with the market portfolio. But APT can’t get off the ground without that definition of a systematic factor. You need CAPM to define what’s systematic and what’s not. So APT is not a challenge to the CAPM. It needs the CAPM.

FEN: How would you describe the different approaches to thinking about problems you absorbed from Harvard Business School and MIT? JT: Looking back and trying to understand the two experiences, Harvard Business School was about seeing connections that other people didn’t see, maybe even that your teachers didn’t see. MIT was about learning. Without ever saying so explicitly, MIT was about learning abstract truths that were useful and powerful. At HBS there was no abstraction at all. The cases never required you to deal with abstractions; every case was sui generis.

FEN: Would you say you veered more toward the MIT approach? JT: I don’t know that that’s right. It certainly was a very important influence on my life — the opportunity to get to know Franco and the whole experience. I might have tended to say that Harvard Business School was the greater influence.

FEN: After your MIT year, when you returned to Arthur D. Little, you switched gears and focused on investment management issues. JT: My boss by then was Martin Ernst. Ernst called me up and said, ADL just spent a considerable amount of money on your sabbatical when you were at MIT. Is there anything in this stuff you’re working on that has any commercial value? I went away and came back with a list after a couple days. He went down this quite short list of four or five items and his finger stopped at performance measurement. He said, “Show me you can actually do something on this one, on performance measurement.” So I went away for a couple more days again and came back with a proposal. That became my first Harvard Business Review paper in 1965, called “How to Rate Management of Investment Funds.” My second Harvard Business Review paper was called “Can Mutual Funds Outguess the Market?” (1966). It was co-authored with Kay Mazuy, a statistics expert at Little.

FEN: You overlapped with Fischer Black for a year and a half at ADL. How did you meet? JT: He didn’t get there until 1965. This is embarrassing but I can’t remember how we met. Maybe Fischer walked into my office, introduced himself and said, “Hey I’m the new boy, what do you do?” That would be possible. Maybe we met at the lunch table.

FEN: How did your relationship develop? Did you become friends? JT: We never worked on a case together at Little. He was working on stuff when he first arrived that was unrelated to my interests in risk management and performance measurement. But I was interested in telling people about the two Harvard Business Review papers, and Fischer showed a lot more interest than anybody else. By the time I left for Merrill Lynch in New York we were certainly friends. After I left, Ernst eventually gave my casework to Fischer. We had a lot of phone conversations between Boston and New York.

Continued in article


PwC has a new helper comparing U.S. GAAP with international (IFRS) GAAP --- http://www.pwc.com/extweb/pwcpublications.nsf/docid/74d6c09e0a4ee610802569a1003354c8

Download: Similarities and Differences - A comparison of IFRS and US GAAP (2005 update) [PDF file, 469k]

Download: Similarities and Differences - A comparison of IFRS and US GAAP (2004) [PDF file, 314k]

Download: publication order form [PDF file, 212k]

Other publications in the Similarities and Differences series are also available.
 

You should also note the Deloitte helpers for comparisons of the IASB's IFRS with most domestic standards of other nations.  See http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#FASBvsIASB


From The Wall Street Journal Accounting Weekly Review on June 2, 2006

TITLE: Tribune's Response to the News Blues: a Buyback
REPORTER: Sarah Ellison and Dennis K. Berman
DATE: May 31, 2006
PAGE: A3
LINK: http://online.wsj.com/article/SB114900492721266404.html  TOPICS: Accounting, Asset Disposal, Bonds, Financial Accounting, Stock Price Effects

SUMMARY: This article introduces many topics in corporate restructuring, debt-to-equity ratios, and treasury stock transactions

QUESTIONS:
1.) Why is Tribune Co. planning to nearly double the amount of debt is has outstanding? Are you surprised by the expected use of the proceeds from issuance of the debt?

2.) What types of assets is the company considering selling? What types of transactions might be undertaken to effect those sales? What do you think the company might intend to do with any expected proceeds or profits from the sales of assets?

3.) Overall, what will be the combined effect on Tribune Company's balance sheet of all transactions described in the article? Answer this question in terms of increases and decreases to major balance sheet classifications.

4.) Compare reactions to the companies' announced plan by equity market participants and by bond market participants. Explain these reactions in terms of the company's debt to equity ratio, the company's prospects for future business, and any other relevant factors you note from the article. You may refer also to the related article to assist in developing your answer.

Reviewed By: Judy Beckman, University of Rhode Island

--- RELATED ARTICLES ---
TITLE: Corporate-Bond Investors Feel Heat
REPORTER: Tom Sullivan
PAGE: C5
ISSUE: May 31, 2006
LINK: http://online.wsj.com/article/SB114900429549566390.html

Bob Jensen's threads on accounting theory are at http://www.trinity.edu/rjensen/theory.htm


From PwC:  Current Developments for Audit Committees --- Click Here

Current Developments for Audit Committees 2006 is PricewaterhouseCoopers' annual update. It informs audit committee members of current business and regulatory developments affecting their responsibilities. Of particular interest in 2006 are:
  • landmark court decisions
  • dealing with investors who may have conflicting objectives
  • 404 and efforts to achieve sustainable compliance going forward
  • SEC areas of focus, emphasizing transparency
  • developments in the international arena, marked by accelerating progress toward convergence
  • major new financial reporting pronouncements

 


June 1 message from Jack Seward [JackSeward@msn.com]

Hi Bob,

I have been busy and did a good deal on this and you may be interested in this information, please see below. Pleae post this for us.

1. The Open Compliance and Ethics Group (OCEG - www.oceg.org) has released a new 88 page internal audit guide for use in auditing compliance & ethics programs.

2. The press release with all the details is available at:

www.oceg.org/downloads/2006.05.31.OCEG_InternalAuditGuide_PressRelease.PDF 

To obtain the Guide go to www.oceg.org  and then complete the short registration.

Jack

Jack Seward (917) 450-9328 and fax (212) 656-1486
jackseward@msn.com 

Mr. Seward's paper, as co-author on "Protecting Client-CPA-Attorney Information in the Electronic Age" will be included in the Research Forum Session of the International Meeting of the American Accounting Association 2006 Annual Meeting on August 6-9 in Washington, D.C.


Riches Without Restraint:  The Sad State of Corporate Governance

"Gilded Paychecks:  Ties That Bind With Links to Board, Chief Saw His Pay Soar," by Julie Creswell, The New York Times, May 24, 2006

Every October, some 50 former Home Depot managers, calling themselves the Former Orange-Blooded Executives, after the home-improvement chain's trademark bright orange color, gather in Atlanta to reminisce, chat about new jobs and pass around pictures of their children.

The discussion inevitably turns to the changes at Home Depot under its chief executive, Robert L. Nardelli. A growing source of resentment among some is Mr. Nardelli's pay package. The Home Depot board has awarded him $245 million in his five years there. Yet during that time, the company's stock has slid 12 percent while shares of its archrival, Lowe's, have climbed 173 percent.

Why would a company award a chief executive that much money at a time when the company's shareholders are arguably faring far less well? Some of the former Home Depot managers think they know the reason, and compensation experts and shareholder advocates agree: the clubbiness of the six-member committee of the company's board that recommends Mr. Nardelli's pay.

Two of those members have ties to Mr. Nardelli's former employer, General Electric. One used Mr. Nardelli's lawyer in negotiating his own salary. And three either sat on other boards with Home Depot's influential lead director, Kenneth G. Langone, or were former executives at companies with significant business relationships with Mr. Langone.

In addition, five of the six members of the compensation committee are active or former chief executives, including one whose compensation dwarfs Mr. Nardelli's. Governance experts say people who are or have been in the top job have a harder time saying no to the salary demands of fellow chief executives. Moreover, chief executives indirectly benefit from one another's pay increases because compensation packages are often based on surveys detailing what their peers are earning.

To its critics, the panel exemplifies the close personal and professional ties among board members and executives at many companies ­ ties that can make it harder for a board to restrain executive pay. They say this can occur even though all of a board's compensation committee members technically meet the legal definition of independent, as is the case at Home Depot.

"When you have a situation like this where it is so incestuous, it creates uncertainty whether Nardelli's pay is a reflection of these relationships or from his performance," said Jesse M. Fried, a professor of law at the University of California, Berkeley, and co-author of a book on executive compensation, "Pay Without Performance."

A showdown could occur at the annual meeting tomorrow as firms that advise large shareholders and activist groups are urging shareholders to withhold votes from several directors. The shareholder groups are also seeking the right to vote on the compensation committee's annual report and plan a rally outside the meeting in Wilmington, Del., to protest Mr. Nardelli's pay.

None of the current or former members of the compensation committee returned calls seeking comment, and the company would not make Mr. Nardelli available.

In an e-mail statement, Mr. Langone said: "Each and every board member at Home Depot is totally independent. Candidates for service have been suggested and put through the nominating process by a wide variety of directors, myself included. That is why there is such a diversity of thought, opinion and experience on the board and why our discussions are open, robust and objective."

Mr. Langone was instrumental in bringing the former G.E. star into the company. While he is not on the compensation committee, he has led the committee that nominates directors for the last seven years.

No stranger to controversy, Mr. Langone is currently under fire for his role as head of the compensation committee at the New York Stock Exchange, which granted the former chief executive Richard A. Grasso a pay package worth more than $140 million. Mr. Grasso sat on Home Depot's board from 2002 to 2004, including a stint on the compensation committee.

Mr. Langone "created the Home Depot board in his own philosophical image," said Richard Ferlauto, director of pension investment policy for the American Federation of State, County and Municipal Employees, whose pension fund owns shares in the company. "Arguably, Langone is the ringleader and the one who pulls the strings in this network," he added.

Riches With Restraint

The co-founders of Home Depot, Arthur M. Blank and Bernard Marcus, grew very rich on company stock that soared in value. But under them, Home Depot embraced a culture of restraint when it came to pay, said Paul D. Lapides, a corporate governance expert at Kennesaw State University in Georgia. "Bernie and Art took home a salary of $1 million or less and refused bonuses. The attitude was one of 'we're all in this together,' " said Mr. Lapides, who has never worked at Home Depot but has studied the company for years.

Representatives of Mr. Marcus and Mr. Blank, both retired from Home Depot, said neither would comment for this article.

Since hiring Mr. Nardelli, 58, the board has awarded him more than $87 million in deferred stock grants and $90 million in stock options, according to an analysis by Brian Foley, a compensation consultant in White Plains. Mr. Nardelli's salary, bonuses and a company loan make up most of the rest of his $245 million compensation.

Even last year, when Home Depot's stock was unchanged, the board raised his salary 8 percent, to $2.164 million, and increased his bonus 22 percent, to $7 million.

By contrast, from 2000 until his retirement early last year, the former chief executive of Lowe's, Robert L. Tillman, was awarded less than a quarter of what Mr. Nardelli was awarded through the end of last year, according to Mr. Foley. The many connections among Home Depot's directors cause some critics to ask whether the nominating committee is failing in finding truly "independent" board members. "The fact that you have so much overlapping boards here says to me: what was the nomination process to get on the board here, how wide was the net really cast?" asked Eleanor Bloxham, president of the Value Alliance, a group that advises companies on corporate governance issues.

The net may not have been cast much farther than Mr. Langone's circle of friends and associates, critics say. For instance, there is Bonnie G. Hill, who leads the Home Depot compensation committee.

The owner of a corporate-governance consulting firm, Ms. Hill is on the board of Yum Brands with Mr. Langone. Until recently, she served on the board of ChoicePoint, another company with which Mr. Langone has deep ties, including serving as a director. Mr. Langone's statement defending the ties of board members said the idea that they could not share friendships was ridiculous: "It not only sets up a make-believe standard but it is designed to please an agenda driven by activists with ulterior motives."

Ms. Hill is also on the compensation committee of Albertson's, the grocery chain, where she is determining the pay for the chief executive, Lawrence R. Johnston, who is also a Home Depot director. "Would Johnston be as eager to promote strict pay practices on the Home Depot board, where one of his pay setters is in a position to apply the same pay principles to his own pay package?" asked Jackie Cook, a senior research associate at the Corporate Library, an institutional advisory firm in Portland, Me.

Mr. Johnston was at G.E. at the same time as Mr. Nardelli, running the appliances unit.

Mr. Johnston turned to a well-known compensation lawyer, Robert J. Stucker, to negotiate his compensation package at Albertson's when he joined in 2001. Mr. Stucker had negotiated Mr. Nardelli's package at Home Depot just months earlier.

When it comes time for Mr. Nardelli to renegotiate his own contract, Mr. Johnston, as a member of the Home Depot compensation committee, is forced to negotiate against his own lawyer, said Charles M. Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. "By utilizing the same legal counsel, if there's ever a dispute between the company and Mr. Nardelli over pay, it puts a member of the compensation committee in a very awkward position," Mr. Elson said. A call to Mr. Stucker was not returned.

More links to G.E. are evident with Claudio X. Gonzalez, a board member. The longtime chairman and chief executive of Kimberly-Clark de Mexico, a unit of Kimberly-Clark, Mr. Gonzalez has known Mr. Langone and Mr. Nardelli for years as a G.E. director.

Besides Mr. Gonzalez and Mr. Johnston, the compensation panel includes three other current or former chief executives: Angelo R. Mozilo, who heads Countrywide Financial; John L. Clendenin, the former chief of BellSouth; and Richard H. Brown, the former chief of Electronic Data Systems.

Mr. Brown also has ties to Mr. Langone, who, as an investment banker, took Electronic Data Systems public in 1968 and was a large E.D.S. shareholder for years. Later, at his own investment bank, Invemed Associates, Mr. Langone underwrote security offerings by E.D.S. while Mr. Brown was chief executive. Mr. Brown is not up for re-election to the Home Depot board this year.

In his statement, Mr. Langone said: "Dick Brown is one of the finest business minds this country has ever produced and I am proud to call him my friend. He was not suggested for service on the board by me but I heartily endorsed the idea."

This Year's ' Disney'

The ire of shareholder activists was raised even more with the addition of Mr. Mozilo to the board in February. Mr. Mozilo now sits on the compensation committee.

His pay package, which is bigger than Mr. Nardelli's, already made him a target of governance groups. Last year alone, Mr. Mozilo took home $70 million, including salary, bonus, stock options, payments for tax- and investment-advisory services and country club memberships. "Good grief," said Paul Hodgson, a compensation analyst at the Corporate Library. "He's hardly likely to be an influence of restraint given his own pay package."

Shareholder activists are taking a more aggressive stance toward directors this year. "Home Depot, I think, is the Disney of this shareholder season," said Mr. Ferlauto, referring to the 2004 annual meeting of Disney shareholders at which 45 percent of the votes cast were withheld from the chief executive, Michael D. Eisner, in part because of his pay. Mr. Eisner later resigned.

At the Home Depot annual meeting tomorrow, several factions are recommending that investors withhold support from most of the directors. The dissidents include A.F.S.C.M.E.; the state pension fund of Connecticut; the California Public Employees Retirement System, the country's largest public pension fund; and Institutional Shareholder Services, which advises pension funds and mutual funds.

I.S.S. claims there is a "disconnect" between Mr. Nardelli's pay and Home Depot's performance. "Moreover, poor compensation design, a lucrative employment agreement, and arguably egregious compensation practices call into question the fitness of the company's Compensation Committee members to serve as directors," the advisory firm said in a report it issued two weeks ago.

The board disagrees, saying that it based Mr. Nardelli's pay and bonus last year on the company's "outstanding operating performance," his "continuing success in developing a new foundation for long-term growth" and his "continuing superior leadership," according to a statement from the company.

Mr. Langone concurs. "I have long felt that Bob Nardelli's abilities are absolutely first rate," he said in his statement. "He's doing a great job and the strong fundamentals he has built during his tenure are proof of his keen leadership. There are a whole variety of long-term indicators I find encouraging such as earnings growth, sales growth, equity value in the brand as well as systematic enhancements put in place companywide that have dramatically improved efficiency."

Last year Home Depot reported record earnings per share, record gross and operating margins and record sales of $81.5 billion. Yet, over the last five years, Home Depot stock has fallen 12 percent, performing worse than its peers and the Standard & Poor's 500 index, which fell 4 percent. Mr. Nardelli has also created a fair amount of friction since he joined the company, say some of his critics among the Former Orange-Blooded Executives, a few of whom were forced out once Mr. Nardelli took over. He moved quickly to introduce G.E.-inspired performance measures; issued edicts about store displays to managers who once enjoyed a great deal of autonomy; and replaced several longtime Home Depot executives with former G.E. associates.

Today, two of Home Depot's four highest-paid executives hail from G.E., including its director of human resources. A third executive, the general counsel, Frank L. Fernandez, was a lawyer in upstate New York who was occasionally hired as an outside counsel for G.E. when Mr. Nardelli ran its power systems group in the area.

In his latest moves, Mr. Nardelli is trying to retool Home Depot, snapping up lumber and building materials companies last year in order to push into the professional contractor market.

"He has made a big decision to get into the supply business, and Wall Street has greeted that decision with a yawn," said Eric Bosshard, a stock analyst at FTN Midwest Securities who does not own shares in the company. Despite these bold moves, Home Depot did not even know it was looking for a fix-it man when Mr. Nardelli hit its radar in the fall of 2000. The chief executive at the time, Mr. Blank, one of the co-founders, was actually on the hunt for a second-in-command, someone he could groom to take over his job eventually.

Those plans went out the window over Thanksgiving weekend that year when Mr. Nardelli, who had been in charge of G.E. Power Systems for five years, learned he had lost out to Jeffrey R. Immelt to succeed G.E.'s longtime chief executive, John F. Welch Jr. (Mr. Nardelli may have lost the battle for the title, but he is winning in the total compensation wars. Mr. Immelt has been awarded $108 million since taking over as G.E.'s chief, according to Mr. Foley, while the company's stock has fallen 19 percent.)

Mr. Langone, who sat on G.E.'s board and had watched Mr. Nardelli's career, moved fast to avoid losing the executive star. Hard-charging and ambitious, Mr. Nardelli was interested, but not in a No. 2 position. Worried he would go elsewhere, the Home Depot board decided Mr. Blank should step aside and Mr. Nardelli, who had no retail experience, should take his place.

Luring an executive of Mr. Nardelli's repute, however, came at a high price. Despite the fact that Mr. Nardelli had little incentive to remain at G.E., he required that he be "made whole," meaning he would have to be paid for what he was walking away from. He was given a stock option grant of 3.5 million shares. One million of those shares vested immediately and were worth $25 million.

That was just the beginning. He also received perks like use of a company plane for personal trips; a new car every three years, one similar in price to the Mercedes Benz S series; and a $10 million loan with an annual interest rate of 5.8 percent that would be forgiven over five years.

That $10 million loan wound up costing shareholders $21 million after the board agreed to pay all taxes on it, a so-called gross-up. Congress banned loans like this in 2002 after Mr. Nardelli joined the company.

And when it appeared that Mr. Nardelli might not hit one of the few performance goals the board had set to cause payment of a long-term incentive plan, the board lowered the goalposts, according to the Corporate Library.

The target for Mr. Nardelli had been total shareholder return ­ share price increases plus reinvested dividends ­ compared with a peer group, and the company was performing poorly by that measure in 2003, according to the Corporate Library. But that year, the board changed the target to one of growth in average diluted earnings per share, which takes into account the per share earnings decrease that occurs when stock options are awarded. In a report released in March of this year, the Corporate Library labeled Home Depot one of its 11 "Pay for Failure Companies."

A Question of Incentives

The change in the incentive target appeared to be "designed to ensure a payout," rather than provide an incentive to improve performance, the report said. Other critics say the new hurdle is even easier to hit with a board-approved share-repurchase program. Since 2002, the company has bought back nearly $10 billion of its own stock.

The one threat to Mr. Nardelli's pay is a proposal by A.F.S.C.M.E., the government workers' union, that would allow Home Depot shareholders to approve or reject the report from the compensation committee. But even if the proposal is accepted, any future rejection of the board panel's compensation report would be merely symbolic. The board can simply ignore shareholders and pay executives what they wish.

So far, similar proposals have been rejected at two other companies whose executive pay A.F.S.C.M.E. identified as a problem: Merrill Lynch and U.S. Bancorp. The Home Depot board is urging its shareholders to vote against the proposal.

Skepticism about Mr. Nardelli's strategy to move the company away from its retailing roots and concerns about a cooling in the housing market have caused some large investors to move out of the stock, said Michael E. Cox, a stock analyst at Piper Jaffray in Minneapolis, who does not personally own shares in the stock.

But like the majority of analysts on Wall Street, Mr. Cox recommends Home Depot's stock to investors because he believes that Mr. Nardelli's strategy will pay off in the long term for the company.

Furthermore, Mr. Nardelli's reputation has not been tarnished, insisted Gerard R. Roche, the high-profile recruiter who helped bring Mr. Nardelli to the retailer. "I know he has been approached by other companies. There are a number of people interested in lifting Nardelli out," Mr. Roche said. "I can tell you there are a number of companies telling me to get them another Nardelli."

Bob Jensen's threads on the sad state of corporate governance are at http://www.trinity.edu/rjensen/FraudConclusion.htm#Governance

Is any CEO really entitled to over $6  billion in gains on employee stock options?

"Calpers Puts Pressure on Board of UnitedHealth: Holder Demands a Meeting Over Option-Grant Timing; A Threat to Withhold Votes," by Vanessa Fuhrmans, The Wall Street Journal, April 26, 2006; Page A3 --- http://online.wsj.com/article/SB114599506269535599.html?mod=todays_us_page_one

The California Public Employees' Retirement System is demanding a conference call with the compensation committee of the board of UnitedHealth Group Inc. over its disclosure practices, and is threatening to withhold votes for board directors seeking re-election.

In a letter sent to James A. Johnson, chairman of the UnitedHealth board's compensation committee, Calpers board President Rob Feckner demanded a conference call ahead of Tuesday's UnitedHealth shareholders meeting to discuss what he called "serious threats to the credibility, governance and performance of UnitedHealth." Specifically, the letter criticized the company's failure to explain how it determined stock option grant dates for Chief Executive William McGuire and a handful of other executives in past years, and its "inconsistent" disclosure of its option-granting program.

The move by Calpers increases the scrutiny of the process by which Dr. McGuire received some of the $1.6 billion in unrealized gains he holds in company stock options. Calpers holds 6.55 million shares, or 0.5%, of UnitedHealth's outstanding stock. The pension fund, known for its strong stances on corporate governance, could spur other investors to join in its criticism. The move also increases pressure on UnitedHealth's board to more fully explain its past option-award practices soon, even though its board only launched a probe into them earlier this month.

Continued in article


Which brings us to Congress, the villain of this tale that the rest of the press corps wants to ignore. Executive greed is an easier story to sell, we suppose. But the same Members of Congress who most deplore big CEO paydays are the same ones who created the incentive for companies to overuse options as compensation.

"Backdate Backlash," The Wall Street Journal, May 27, 2006; Page A6 --- Click Here

These columns have never joined the media pack deploring executive pay, since wages are best determined by directors and shareholders. But that doesn't mean every pay practice is kosher, especially if it's done on the sly. That's where the recent news over the "backdating" of stock options is cause for some concern -- and for more aggressive director supervision.

CEO pay has been going up, in part because the market is putting a premium on the skills necessary to navigate today's legal and competitive minefields. Some of the increases also flow from the greater use of stock options, which came into their own in the 1990s thanks in part to Congress (more on that below). Options are supposed to align the interests of management with those of shareholders, but they can also be abused.

This appears to be the case with "backdating," which is the practice of moving the strike date for option grants to ensure lower exercise prices and thus a bigger payday. Companies grant options according to shareholder-approved plans, most of which require a grant to carry the stock price on the day it was awarded. If it turns out the grant carries a different day's price, those who do the "backdating" could be guilty of false disclosure and securities fraud.

The number of companies doing this isn't clear, though the SEC is investigating at least 20 and prosecutors have launched criminal probes into a half-dozen. In the least savory instances, executives may have been trying to pull a fast one by altering option dates without the approval of directors. Vitesse Semiconductor Corp. recently fired three top managers, including its CEO, because of what it called "issues related to the integrity of documents relating to Vitesse's stock option grant process." Never a good sign.

But some boards may also have been asleep at the option switch. Affiliated Computer Services recently announced it will take a charge against earnings of as much as $40 million due to accounting problems related to option grants. Why? Well, ACS explained that its board compensation committee has typically approved grants over the phone -- making them effective that day -- with official written consent coming later. ACS says it believes this practice was "permitted" under law, but shareholders might ask why they are now getting stuck with the $40 million surprise tab.

Then there's UnitedHealth Group CEO William McGuire, who is being pilloried for his $1.8 billion in unrealized option gains. The health insurer has said it may have to restate three years of results due to a "significant deficiency" in how it administered option grants, which would suggest backdating.

But what especially caught investor eyes was the news that the company's board had allowed Mr. McGuire to choose his own grant dates. Directors may well have meant this as an added perk for a CEO whose tenure has seen a 50-fold rise in UnitedHealth's share price. Yet the practice still looks like an abdication by the board, which represents shareholders and is supposed to guard against needless equity dilution.

Some companies have insisted that their boards consciously pegged option grants to coincide with relatively low stock prices. But this would seem to contradict the alleged purpose of options, which is to give management an incentive to raise the stock price and thus the return to shareholders. Granting options at a very low price amounts to additional guaranteed compensation, and ought to be labeled as such.

Especially since shareholders will end up paying for this executive privilege. UnitedHealth has lost more than $17 billion of its market value since the backdating story broke. Several companies are restating results, facing enormous back taxes and are already grappling with the usual opportunistic lawsuits. * * *

Which brings us to Congress, the villain of this tale that the rest of the press corps wants to ignore. Executive greed is an easier story to sell, we suppose. But the same Members of Congress who most deplore big CEO paydays are the same ones who created the incentive for companies to overuse options as compensation.

In 1993, amid another wave of envy over CEO pay, Congress capped the tax deductibility of salaries at $1 million. To no one's surprise except apparently the Members who passed this law, most CEO salaries have since had a way of staying just below $1 million year after year. But because companies still need to compete for and retain top talent, they have found other forms of compensation -- notably stock options.

And one of the problems with options is that they give executives every incentive to capitalize all company profits back into the stock price -- thus contributing to their own pay -- rather than paying out dividends to shareholders. As SEC Chairman Chris Cox has noted, the 1993 law deserves "pride of place in the museum of unintended consequences."

In a better world -- one in which Congress kept its nose out of wage decisions -- corporate directors could pay the salaries they wanted and wouldn't rely so much on options to motivate executives. This, in turn, would reduce the incentive for companies to stoop to such dubious pay practices as option backdating. But as long-time observers of Washington, we can say with certainty that backdating will cease as a corporate practice long before Congress admits its mistake.


Question
What are the primary alleged causes for the rapid increase in revisions to financial statements in the past few years?

June 14, 2006 message from Denny Beresford [DBeresfo@TERRY.UGA.EDU]

An official in Washington DC sent me a note today saying that he is " interested in understanding the cause for the increased number of restatements. Can you recommend any good articles or research that explains the root causes, trends, etc?

Can anyone suggest some good references to pass along?

Denny Beresford

June 14, 2006 reply from Ganesh M. Pandit, DBA, CPA, CMA [profgmp@HOTMAIL.COM]

Perhaps this might help...Financial Restatements: Causes, Consequences, and Corrections By Erik Linn, CPA, and Kori Diehl, CPA, published in the September 2005 issue of Strategic Finance, Vol.87, Iss. 3; pg. 34, 6 pgs.

Ganesh M. Pandit Adelphi University

June 15, 2006 reply from Bob Jensen

Evidence seems to be mounting that Section 404 of SOX is working in uncovering significant errors in past financial statements. This is to be expected in the early phases of 404 implementation. But the revisions should subside after 404 is properly rolling. Companies like Kodak found huge internal control weaknesses that led to reporting errors.

One of the most popular annual study if restatements is free from the Huron Consulting Group.

Free from the Huron Consulting Group (Registration Required) --- http://www.huronconsultinggroup.com/

"Restatements Should Subside as 404, Lease Issues Subside" --- http://www.huronconsultinggroup.com/uploadedFiles/CW-Restatements-021406.pdf

"2004 Annual Review of Financial Reporting Matters - Summary" --- Click Here
(I could not yet find the 2005 update, which is understandable since 2005 annual reports were just recently published.)

There also is an interesting 1999 paper entitled "Accounting Defects, Financial Statement Credibility, and Equity Valuation" by W. Bruce Johnson and D. Shores --- http://www.biz.uiowa.edu/acct/papers/workingpapers/99-01.pdf

Bob Jensen

June 15, 2006 reply from Saeed Roohani [sroohani@cox.net]

Bob,

Not to discount reasons for restatements noted earlier, I understand many restatements were also due to spreadsheet errors and perhaps inadequacy of ERP systems for external and regulatory reporting purposes. Even at big corporations, at the end of the year, the CFO has to compile and integrate dozens of spreadsheets coming from various divisions and departments and make adjusting entries; in some cases overlooking existing Excel formulas.

Saeed Roohani
Bryant University

June 16, 2006 reply from Paul Pacter (CN - Hong Kong) [paupacter@DELOITTE.COM.HK]

Denny,

In October 2002 GAO published a study of nearly 1,000 restatements "FINANCIAL STATEMENT RESTATEMENTS: Trends, Market Impacts, Regulatory Responses, and Remaining Challenges". It covered 1997-June 2002. I may be too old for your friend, but I have the study in PDF form (5mb, 272 pages) if you want it.

Paul

Bob Jensen's threads on quality of earnings, core earnings, and restatements are at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#CoreEarnings


"Investors Pay More Attention To Profit 'Purity'," by Peter A. McKay, The Wall Street Journal,  June 26, 2006; Page C1--- http://online.wsj.com/article/SB115127447377790167.html?mod=todays_us_money_and_investing

Various market watchers define earnings quality differently, but the general idea is that the best earnings are those that come from a company's main businesses firing on all cylinders, rather than from ancillary factors often outside the company's control, such as a change in accounting rules.

Michael Thompson, research director at Thomson Financial, says the earnings "purity" of stocks in the Standard & Poor's 500-stock index has risen since 2002. He arrived at that conclusion by taking the earnings figures presented by the companies and backing out certain charges, fees and other figures that say nothing about whether the company is selling more of its products or services. These days, Mr. Thompson is finding fewer items to exclude; thus, he thinks the quality of earnings is higher.

Continued in article

Bob Jensen's threads on quality of earnings and core earnings are at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#CoreEarnings


Question
What are the accounting and tax implications of backdating employee stock options?

The stock-options backdating scandal continued to intensify, with the announcement by a Silicon Valley chip maker that its chairman and its chief financial officer had abruptly resigned. That brought to eight the number of officials at various companies to leave their posts amid scrutiny of how companies grant stock options.
"Backdating Probe Widens as 2 Quit Silicon Valley Firm:  Power Integrations Officials Leave Amid Options Scandal; 10 Companies Involved So Far," by Charles Forelle and James Bandler, The Wall Street Journal, May 6, 2006; Page A1 --- http://online.wsj.com/article/SB114684512600744974.html?mod=todays_us_nonsub_page_one

More on Accounting Fraud Via Backdating Options

"ACS Says Some Options Carried Dates That Preceded Approvals," by Charles Forelle and James Bandler, The Wall Street Journal, May 11, 2006; Page A2 ---
http://online.wsj.com/article/SB114731443041049838.html?mod=todays_us_page_one

Affiliated Computer Services Inc. acknowledged that it issued executive stock options that carried "effective dates" preceding the written approval of the grants, saying it plans a charge of as much as $40 million to rectify its accounting related to the grants.

The announcement followed a preliminary internal probe at ACS, a Dallas technology outsourcer that is also under scrutiny by the Securities and Exchange Commission for its options practices. Between 1995 and 2002, the company granted stock options to Jeffrey Rich, its chief executive for part of that time, that were routinely dated just before sharp run-ups in the company's share price, and often at the nadir of big dips.

Mr. Rich left the company last year. A rising share price helped him reap more than $60 million from options during his tenure at the company. The timing of his grants helped, too. If his six grants had come at the stock's average closing price during the year they were dated, he'd have made about 15% less.

Continued in article

Is any CEO really entitled to over $ 6  billion in gains on employee stock options?
"Calpers Puts Pressure on Board of UnitedHealth: Holder Demands a Meeting Over Option-Grant Timing; A Threat to Withhold Votes," by Vanessa Fuhrmans, The Wall Street Journal, April 26, 2006; Page A3 --- http://online.wsj.com/article/SB114599506269535599.html?mod=todays_us_page_one

The California Public Employees' Retirement System is demanding a conference call with the compensation committee of the board of UnitedHealth Group Inc. over its disclosure practices, and is threatening to withhold votes for board directors seeking re-election.

In a letter sent to James A. Johnson, chairman of the UnitedHealth board's compensation committee, Calpers board President Rob Feckner demanded a conference call ahead of Tuesday's UnitedHealth shareholders meeting to discuss what he called "serious threats to the credibility, governance and performance of UnitedHealth." Specifically, the letter criticized the company's failure to explain how it determined stock option grant dates for Chief Executive William McGuire and a handful of other executives in past years, and its "inconsistent" disclosure of its option-granting program.

The move by Calpers increases the scrutiny of the process by which Dr. McGuire received some of the $1.6 billion in unrealized gains he holds in company stock options. Calpers holds 6.55 million shares, or 0.5%, of UnitedHealth's outstanding stock. The pension fund, known for its strong stances on corporate governance, could spur other investors to join in its criticism. The move also increases pressure on UnitedHealth's board to more fully explain its past option-award practices soon, even though its board only launched a probe into them earlier this month.

Continued in article

After the Horse is Out of the Barn:  UnitedHealth Halts Executive Options
The UnitedHealth Group, under fire for the timing of lucrative options grants to executives, said Monday that it had discontinued equity-based awards to its two most senior managers and that it would cease other perks like paying for personal use of corporate aircraft. UnitedHealth’s board said it had discontinued equity-based awards for the chief executive, William W. McGuire, who has some $1.6 billion in unrealized gains from earlier options grants, and for the president and chief operating officer, Stephen J. Helmsley.
"UnitedHealth Halts Executive Options," The New York Times, May 2, 2006 --- http://www.nytimes.com/2006/05/02/business/02unitedhealth.web.html

From The Wall Street Journal Accounting Weekly Review on May 19, 2006

TITLE: UnitedHealth Cites 'Deficiency' in Options Grants
REPORTER: James Bandler and Charles Forelle
DATE: May 12, 2006
PAGE: A1
LINK: http://online.wsj.com/article/SB114734563729450037.html 
TOPICS: Financial Accounting, Income Taxes, Materiality, Securities and Exchange Commission, Stock Options, Taxation, Accounting Changes and Error Corrections, Audit Quality, Auditing

SUMMARY: UnitedHealth Group Inc. disclosed on May 11 that "...a 'significant deficiency' in how it administered [stock option] grants could force it to restate results ...[and cut] net income by as much as $286 million over that period." The company also disclosed that the SEC is "conducting an informal inquiry into its options-granting practices"...UnitedHealth...said its internal review had indicated it had uncovered 'significant deficiency' in the way it administered, accounted for and disclosed past option grants and that it may be required to take certain accounting adjustments for 'stock-based compensation expense.' It said that could reduce operating earnings by up to $393 million in the past three years, adding that the company's management believes that any adjustments would not be 'material'."

QUESTIONS:
1.) Summarize the issue regarding accounting for stock options that was uncovered in a March 18, 2006, Wall Street Journal article and that has subsequently been the subject of SEC scrutiny.

2.) The summary description for this review quotes a paragraph in the article describing the financial statement effects of potential adjustments the deficiencies in UnitedHealth's option granting practices. The paragraph begins "In its filing, UnitedHealth, which reported $3.3 billion in net income last year..." Identify all of the terms in that paragraph with specific meaning for accounting and/or auditing purposes. Define each of those terms, explain why it has specific meaning in its use in accounting or auditing, and, if it is a relevant point, explain why understanding that meaning helps to analyze the impact of these options issues on UnitedHealth.

3.) Refer again to the paragraph described in question 1. The concluding sentence states that the company management believes that adjustments resulting from their review of options granting practices will not be material. Contrast this point to the comments by Professor James Cox of Duke University that "this isn't just a little material...for this kind of issue." Construct arguments to support one of these positions, being sure to refute arguments potentially in favor of your opposing side. In your answers to this and the preceding question, be sure to address the two components of materiality in an audit engagement.

4.) Refer to the list of companies in the table entitled "Key Companies in Options Probes." In what industry do most of these companies operate? Why is there industry concentration amongst this sample of firms?

5.) What are the potential issues facing UnitedHealth's auditors, Deloitte and Touche, regarding these matters? What basic audit steps do you think should be carried out in relation to any company's accounting for stock options?

6.) Do you think the situation with UnitedHealth necessarily indicates an audit failure on the part of Deloitte and Touche? In your answer, define the terms "audit risk", "business risk" in relation to audits, and "audit quality."

7.) Summarize the tax implications described in the article regarding these matters. How might adjustments to the tax accounting for these stock options exacerbate or reduce the impact of the adjustments to the accounting for stock based compensation expense?

Reviewed By: Judy Beckman, University of Rhode Island

--- RELATED ARTICLES ---
TITLE: The Perfect Payday
REPORTER: Charles Forelle and James Bandler
PAGE: A1
ISSUE: Mar 18, 2006
LINK: http://online.wsj.com/article/SB114265075068802118.html 

TITLE: How the Journal Analyzed Stock-Option Grants
REPORTER: Charles Forelle
PAGE: A5
ISSUE: Mar 18, 2006
LINK: http://online.wsj.com/article/SB114265125895502125.html


From The Wall Street Journal Accounting Weekly Review on May 5, 2006

TITLE: As Options Cloud Looms, Companies May Get Tax Bill
REPORTER: Charles Forelle and James Bandler
DATE: Apr 28, 2006
PAGE: C1
LINK: http://online.wsj.com/article/SB114619341731038487.html 
TOPICS: Accounting, Financial Accounting, Securities and Exchange Commission, Stock Options, Taxation

SUMMARY: Tax implications of the developing issues in stock options, covered also in a recent Weekly Review, are discussed.

QUESTIONS:
1.) What is the recently-developing concern with dating of executive stock options? In your answer, comment on the Securities and Exchange Commission investigation into the issue. You may refer to the related article for your answer.

2.) Define the terms "compensatory stock options"; "incentive stock options";"option grant date"; and "option exercise price".

3.) Summarize the tax implications to both executives receiving stock options and to companies issuing stock options if option grant dates are changed to a point when the stock price is higher than on the originally reported date, but the exercise price is not changed.

4.) The author quotes Mr. Brian Foley as saying that one company under SEC and IRS scrutiny for this issue, UnitedHealth, would have a "serious and incurable problem" if options were "backdated" and they have been exercised. What could be the difference between options that were exercised and options that have not been?

5.) What are the financial reporting implications of the problems highlighted in this article? How do the tax issues exacerbate the financial reporting problems?

Reviewed By: Judy Beckman, University of Rhode Island

--- RELATED ARTICLES ---
TITLE: The Perfect Payday
REPORTER: Charles Forelle and James Bandler
PAGE: A1 ISSUE: Mar 18, 2006
LINK: http://online.wsj.com/article/SB114265075068802118.html

"As Options Cloud Looms, Companies May Get Tax Bill," by Charles Forelle and James Bandler, April 28, 2006; Page C1 --- http://online.wsj.com/article/SB114619341731038487.html

Companies that backdated stock-option grants to top executives could face a costly reckoning with the Internal Revenue Service, with some potentially owing large sums in back taxes, legal experts say.

The tax problems, which could affect the personal tax filings of hundreds of individual employees, are the latest wrinkle in widening inquiries into stock-option awards.

A half-dozen companies, including insurance titan UnitedHealth Group Inc., have said their boards, or the Securities and Exchange Commission, are examining their past option grants amid concerns that some may have been backdated to take advantage of lower exercise prices. Backdating could have resulted in millions of dollars in extra compensation for insiders, at the expense of shareholders. Most of the probes are preliminary, and so far the SEC hasn't charged anyone.

If the investigations turn up backdated grants, the companies face a host of issues, including the prospect of earnings restatements and delistings. Such options offer the right to buy a stock at a fixed, or exercise, price, allowing the holder to profit by later selling the underlying shares at a higher price than the exercise price.

One company that has acknowledged "misdating" options, Mercury Interactive Corp., a Mountain View, Calif., software company, has had its stock delisted by the Nasdaq Stock Market and has said it will have to restate financial results. Vitesse Semiconductor Corp. last week suspended its chief executive and two other top officials, saying the move was related to the "integrity of documents" in its stock-option program. Late Wednesday, Vitesse said its board had discovered additional accounting issues and had hired a turnaround firm.

Granting an option at a price below the current market value, while not illegal in itself, could result in problems of wrongful disclosure under securities laws. Companies' shareholder-approved option plans and SEC filings often say options will carry the stock price of the day the company awards them or the day before.

Favorable tax treatment was one reason that options gained popularity in the 1990s as a way to compensate employees, particularly executives. When an option is exercised, the company typically can take any gain pocketed by the employee as a deduction on its tax return, because the IRS views the option profit as akin to extra compensation paid to the employee. The employee reports the gain on his or her personal tax return.

Tax experts say that options backdated to a day with a lower market price don't qualify for a deduction -- although the disqualification only affects options exercised by the chief executive or any of the next four most highly compensated executives. And $1 million of each of the executives' total compensation always can be deducted. As a result, they say, companies with backdated options could face the prospect of shelling out cash to revise prior years' tax returns -- and could be ineligible for the deductions they planned to take in the future on executive option gains.

A Wall Street Journal analysis, published in March, described a pattern of unusual stock-option grants to a handful of chief executives, including William McGuire, UnitedHealth's chief executive. Twelve grants to Mr. McGuire between 1994 and 2002 were each dated in advance of a substantial run-up in the company's share price, and three of them fell on yearly lows. Last week, Mr. McGuire told investors on a conference call that, "to my knowledge, every member of management in this company believes that at the time we collectively followed appropriate practices."

The potential tax issues could be big, particularly for companies whose stocks have greatly increased since the grants. UnitedHealth, Minnetonka, Minn., reported $346 million in realized option gains among its five best-paid executives from 2003 to 2005. At the end of last year, it said its five best-paid executives had another $2.4 billion in unrealized, exercisable options gains. UnitedHealth's stock has soared since the 1990s, when many of the options were granted. A board committee investigating options granting at the company hasn't completed its work, and it isn't known whether any option grants were backdated at all.

"If they had a backdating problem, and that's a big if, the tax consequences could certainly be ugly," says Brian Foley, a compensation consultant and tax lawyer in White Plains, N.Y. With respect to the already-exercised options, he added, "they would have an obvious and serious and incurable problem."

UnitedHealth had a corporate-tax rate ranging between 34.9% and 35.7% in the past three years. Although the company's actual payments likely were lower, that suggests the tax savings to UnitedHealth from exercised executive options could have been as much as $120 million from 2003 to 2005. As of end of 2005, the value of the future tax savings was as much as $800 million.

"That's a huge number," says Robert Willens, a tax and accounting expert at Lehman Brothers Holdings Inc.

UnitedHealth has reported substantial tax benefits from deducting its employees' stock option gains. Until recently, the company said in its proxy statements that it believed its executive option grants qualify for the tax deduction. Starting in a proxy filed in April 2005, it said some options might not qualify, but that the amounts involved were immaterial. Ruth Pachman, an outside spokeswoman for UnitedHealth, said in a statement that the company "continues to believe" that its proxy statements were accurate and remain accurate. She said the company "declined to speculate about hypothetical scenarios."

Executives at other companies reporting options investigations, including Vitesse and Affiliated Computer Services Inc., reported substantial options gains to top executives. ACS, which reported about $44 million in realized options gains by its top five executives in the most recent three fiscal years, didn't return calls. Vitesse officials didn't return several messages seeking comment.

S. James DiBernardo, a partner at Morgan, Lewis & Bockius LLP who specializes in tax issues, says there is no easy way to make grants comply with the terms of the tax code retroactively. A company could reprice the options, he says, but it would have to reprice them at the current share value, effectively erasing all of an executive's past gains. Another route is for the top executives to wait until after retirement to exercise the options -- when they are no longer executive officers.

Ethan Yale, an associate professor at Georgetown University Law Center who was retained by UnitedHealth to look into this matter, agreed that the issue could pose tax problems. He said this is largely uncharted territory and ambiguities in tax rules might allow a company to get back in compliance retroactively by repricing the options to the actual grant-date prices.

Continued in article


GASB PROPOSES TO PUT DERIVATIVES IN THE FINANCIAL STATEMENTS --- http://accountingeducation.com/index.cfm?page=newsdetails&id=143009

Bob Jensen's threads on accounting for derivative financial instruments are at http://www.trinity.edu/rjensen/caseans/000index.htm


The following is from one of my former masters program students at Trinity University

June 16, 2006 message from ccassell6@juno.com

There is a very good report issued in March 2006 by Glass Lewis & Co. "Getting it Wrong the First Time: A look at 2005's record breaking year for corporate restatements shows why investors can't afford a return to pre-Enron securities regulation".

I am a current Phd student and received the report from one of my professors. I couldn't find a copy online, so apparently my school subscribes to the service.

There is a ton of information in the report. I have attached a copy of a summary I found online.

CORY CASSELL

Reply from Bob Jensen

Hi Cory,

It’s nice to know that you still subscribe to the AECM.

I found the following summary at the Glass Lewis Web site --- http://www.glasslewis.com/solutions/trends.php

Analysis and Commentary on Significant Accounting Issues and Regulatory Developments

Glass Lewis publishes comprehensive studies on accounting issues and regulatory developments that disproportionately affect certain companies or industries.

Most recently, Glass Lewis published "Restatements – Traversing Shaky Ground." This report equips investors with the information necessary to identify restatement indicators and to deal effectively with post-announcement tremors. Glass Lewis presented detailed analysis of 2003 and 2004 restatements, including primary causes, relevant trends and key questions investors should ask when a restatement is announced.

The findings of this report include:

Other studies include:

Although the following does not pertain to the restatements thread, AECMers might be interested in the following transcript by one of my heroes (Lynn always does his homework) that is also served up by Glass Lewis --- http://www.glasslewis.com/solutions/trends.php

Glass Lewis & Co provides a transcript of Lynn Turner's testimony Lynn Turner's Testimony on International Accounting Standards Constitution Committee --- http://www.glasslewis.com/downloads/InternationalAccountingStandardsConstitutionCommittee1.pdf

The current discussion concerns most of the same issues that were debated in the late1990’s. In fact, many of the issues have been debated on more than one occasion in theU.S. For example the issue of full-time versus part-time membership was debated when the Financial Accounting Standards Board was formed in 1973 and it was also debated as part of the comment process on the SWP discussion memorandum. Likewise the notion of requiring a supermajority vote was debated during the SWP process. In the U.S. the FASB, which initially had a majority vote requirement, was forced to change to a supermajority vote in 1990 as a result of lobbying by the business community. That, of course, was recently changed back to a majority vote when as the result of the Enron implosion; it was found it impeded the ability of the accounting standard setter to issue timely standards. A move, I might add, I support.

I suspect that this debate will continue long after those of us here today have turned to dust. Debate and discussion is always healthy provided it focuses on improving the product delivered to the customer. In this case, the users of the financial statements, most often investors and creditors as well as regulators, are the customers. For those customers, it is important that they produce a high quality product that encompasses all of the following:

1. Financial statements that for all companies, regardless of size or location, reflect the true underlying economics of the transactions that have been undertaken.

2. Financial disclosures, regardless of size or location, that are necessary to present a complete and truthful picture of all material information necessary for an understanding and analysis of the business. Rules must be established that are considered by preparers as a floor and not a ceiling.

3. A product that results in companies accounting for similar transactions in a comparable fashion, so as to provide users with the ability to make informed decisions as to which companies they should allocate their capital. This also requires that companies are transparent in consistently using the same accounting from period to period.

4. To the greatest extent possible, financial statements and disclosures that are verifiable and auditable.


"Guidance on fair value measurements under FAS 123(R)," IAS Plus, May 8, 2006 ---
http://www.iasplus.com/index.htm

Deloitte & Touche (USA) has updated its book of guidance on FASB Statement No. 123(R) Share-Based Payment: A Roadmap to Applying the Fair Value Guidance to Share-Based Payment Awards (PDF 2220k). This second edition reflects all authoritative guidance on FAS 123(R) issued as of 28 April 2006. It includes over 60 new questions and answers, particularly in the areas of earnings per share, income tax accounting, and liability classification. Our interpretations incorporate the views in SEC Staff Accounting Bulletin Topic 14 "Share-Based Payment" (SAB 107), as well as subsequent clarifications of EITF Topic No. D-98 "Classification and Measurement of Redeemable Securities" (dealing with mezzanine equity treatment). The publication contains other resource materials, including a GAAP accounting and disclosure checklist. Note that while FAS 123 is similar to IFRS 2 Share-based Payment, there are some measurement differences that are Described Here.

Bob Jensen's threads on employee stock options are at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm

Bob Jensen's threads on fair value accounting are at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#FairValue

Bob Jensen's threads on valuation are at http://www.trinity.edu/rjensen/roi.htm


Enron Updates

Bob Jensen's complete set of Enron Updates are at http://www.trinity.edu/rjensen/FraudEnron.htm#EnronUpdates


David Fordham's proposal for principles-based standards and financial reporting

June 1, 2006 message from David Fordham, James Madison University [fordhadr@JMU.EDU]

I'm lurking, with serious interest actually, on the posting thread about accounting rule makers making mistakes... and the question of rules-based vs. principles-based standards.

And I'm wondering...where is Bill McCarthy?

It would seem to me that Bill's semantic modeling has the potential to make the entire debate somewhat moot.

If companies were to report events -- think of transactions, the fundamental basis of accounting in the first place -- rather than preparing financial statements and annual reports, it would eliminate the need for both "rules-based reporting" and "reporting principles", wouldn't it?

And semantic modeling, if I understand it correctly, makes it practical for companies to (electronically, of course) report data on transactions rather than wasting effort on arbitrarily (or even not so arbitrarily) contrived summations, groupings, classifications, etc. inherent in the preparation of standardized financial statements, whether rules- or principles-based. The notions of stuff that create the headaches: accruals, deferrals, all the way up through derivatives, -- all go away. The notion of "statements which present fairly the financial position" goes away. Auditors can now enjoy the relatively simple task of verifying that *events* are completely and accurately captured and reported.

Under the semantic modeling paradigm (if you agree to call it that), it is the user, not the preparer, who decides what data is relevant for his/her decision making. It is therefore the user, not the preparer, who makes choices of what to accumulate, what to group, what to include where, what to classify as what, etc. The preparer simply reports the business events. Liability is now transferred to the user, as long as the preparer reported the events in line with the model. Users would take much more care in their application of the information (which they should anyway!)

If events were reported (in terms of commerce), it would seem to me that antics (SPE's, for example) would become apparent to those decision makers sophisticated enough to care or need to care. Events (or transactions) not involving the company's primary product or services, for example, could be questioned more deeply. While motivations, attitudes, and secret plans might still remain undetected, the movement of large amounts of assets (read: equity to stockholders, liabilities to debt holders ... all of this would be determined by the user!) would at least raise questions among those who are interested in the financials enough to learn about those transactions. (Of course, under the semantic modeling paradigm, there aren't really things such as assets... there are resources on which activities occur, events which happen, agents who participate in the events, etc.)

Not being a serious student of semantic modeling, I have to defer to those more learned on the subject for more details. But based on what little I do know of it, it seems like semantic modeling has the potential to make one heckuva serious contribution to the current debate, if there is a debate going on.

Does Bill still subscribe to this list? I admire and respect Bill very highly, and although I historically have not been one of the rabid adopters of semantic modeling, it seems that this thread is beginning to reveal its wisdom and potential importance. I would be very interested in Bill's comments on the current discussion, if he cares to contribute. If not, perhaps another scholar much more learned than I on this paradigm might wish to? (Cheryl? Vickie? Stephanie? etc.? Preferably not a boot-camp graduate as much as a drill sergeant or even second lieutenant?)

David Fordham (somewhat out of my league here, and therefore eagerly willing to retract any incorrect interpretation of semantic modeling made above...)
James Madison University

June 2, 2006 reply from Jagdish S. Gangolly [gangolly@INFOTOC.COM]

Semantic modeling grew out of linguistics (the work of Quillian, and then later Peter Chen) where the objective was to represent language statements (specially those expressed in the indicative mood) in a graph theoretic model so that the power of graph algorithms could be harnessed to analyse them.

The formal basis for such modeling was some form (or subset) of First Order Logic (FOL). Since then, work in knowledge representation has been extended by the use of other logics. The one that is now becoming very popular is Description Logics that forms the basis of the Semantic Web initiative of W3C.

It is important to realise that FOL is static (does not have a temporal dimension), and completeness has to be implemented by assumptions (such as the closed world assumption as in, for example, databases).

Accounting is not static, and it is not clear if completeness is possible in a social discipline such as accounting (I made this argument in my CPA paper as well as in some other papers, giving as examples a bunch of rules in GAAP that either are partially specifies (just the 'if' part, or definitions by example).

I am therefore not sure semantic modeling as practiced today can do what David proposes. However, the future is certainly not bleak. We need research in two areas: 1. introducing time explicitly in the models, and 2. In the absence of completeness, come up with reasoning schemes that do the job. Other disciplines (specially medicine) have done it, and there is no reason why we can not.

However, nurturing this sort of research forces us to look way beyond accounting that has traditionally been our turf.

Jagdish

June 2 reply from Bob Jensen

In terms of aggregation of transactions data, what you seem to be describing is an object-oriented system of transaction database reporting. This, in turn, might one day become the ultimate XBRL object-oriented reporting system.

Standard setters would still have to prescribe some rules for aggregation in order to make aggregations comparable between different reporting entities. Then the debates regarding the brightness of lines commence all over again. For example, can we avoid bright lines with respect to operating versus capital leases?

And echoing your statement David, I'm "out of my league" here and happily retired. Not having to teach AIS anymore means not having to say you're sorry.

Definitions of object-oriented on the Web:

Bob Jensen

Bob Jensen's former AIS course is at http://www.trinity.edu/rjensen/acct5342/acct5342.htm

Bob Jensen's threads on accounting standard setting are at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#MethodsForSetting


June 16, 2006 message from Stacy Kovar [skovar@KSU.EDU]

I am working to put together a listing of journals that publish accounting information systems education research.  There are two journals that I find some information about, but that I can't locate a web page or current editorial guidance for - The Accounting Educator's Journal and Accounting Education: A Journal of Theory, Practice and Research.  Does anyone have current information on either of these journals?   I know the Accounting Educator's Journal had ceased publication some time ago, but it seems I saw an advertisement in the last year that the Accounting Educator's Journal was going to be resurrected as an online publication, but I can't seem to find a copy or other information.

For those that might be interested, the list I have come up with so far is below.  Of course, if anyone has additions, I would love to know!  Thanks.

Stacy Kovar,
Kansas State University


Accounting Education: An International Journal http://www.tandf.co.uk/journals/routledge/09639284.cfm
Advances in Accounting Education http://www.elsevier.com/wps/find/bookseriesdescription.cws_home/BS_AAE/description
The Journal of Accounting Case Research http://www.captus.com/information/catalogue/book.asp?Book+Number=854
The Journal of Accounting Education http://www.elsevier.com/wps/find/journaldescription.cws_home/840/description#description
Issues in Accounting Education http://aaahq.org/pubs/issues.htm
Review of Business Information Systems http://www.wapress.com/RBISMain.htm
Australian Journal of Accounting Education http://www.csu.edu.au/faculty/commerce/ajae/index.htm
Global Perspectives on Accounting Education http://gpae.bryant.edu/~gpae/index.html
Journal of Education for Business http://www.heldref.org/jeb.php
Business Education Forum http://www.nbea.org/market/forum.html
The Journal of Information Systems http://accounting.utep.edu/jis/

June 16, 2006 reply from Bob Jensen

Hi Stacy,

The Accounting Review is now inviting AIS papers to be submitted to its new AIS Associate Editor Bill McCarthy at Michigan State University.

You might contact Bill to see what the guidelines are vis-à-vis publishing in a more mainline AIS journal.

Bob Jensen


From The Wall Street Journal Accounting Weekly Review on June 16, 2006

TITLE: Retailers Discount Sales Stats
REPORTER: Jesse Eisinger
DATE: Jun 07, 2006
PAGE: C1 LINK: http://online.wsj.com/article/SB114964478269273353.html 
TOPICS: Accounting, Disclosure, Financial Statement Analysis, Generally accepted accounting principles

SUMMARY: Home Depot recently discontinued reporting same-store-sales data. They have trailed rival Lowe's on this key measure of retailing performance since 2003, but argue that they are discontinuing reporting it because of a change in the nature of their business to focus increasingly on supplying small businesses, making the company less of a retailing entity.

QUESTIONS:
1.) What measure is Home Depot discontinuing to report? How does that measure provide information critical to assessing performance by retailing entities?

2.) What argument does Home Depot offer to explain discontinuing to provide this performance measure? What is the response to that reasoning? How would Home Depot have to categorize their sales revenue data in order to provide relevant information to financial statement users?

3.) What other entities also are reducing the frequency of disclosure of same-store-sales data? What are their arguments for doing so?

4.) The author notes that this information on same-store-sales is not information that is required under generally accepted accounting principles. Why does that lead to his argument that companies therefore "game the number"?

5.) What is the problem with relying too heavily on one measure of performance such as same-store-sales data? What other information does that performance statistic ignore? How can investor focus on one primary statistic lead to less than optimal behavior?

6.) What financial statement ratios can provide information to investors to address the problems highlighted in the article in relation to investor focus on same-store-sales data? Specifically name the financial statement ratio, describe how it is calculated, and explain the meaning of the ratio to financial statement users.

Reviewed By: Judy Beckman, University of Rhode Island

 


Great Book by an XBRL Pioneer
June 15, 2006 Message from Saeed Roohani [sroohani@cox.net]

This XBRL book by Charles Hoffman is an excellent resource for anyone to use - it has examples for introductory and intermediate users. It is also a good reference book if you are teaching XBRL as part of your course. If you are training people on XBRL, this book is a valuable resource Also, it is reasonably priced that even your students can purchase it.

For additional information see the following comments from Brian.

Saeed Roohani Bryant University

To: xbrl-public@yahoogroups.com From: "briandelacey" <bdelacey@gmail.com> Date: Wed, 14 Jun 2006 14:01:16 -0000 Subject: [xbrl-public] Excellent XBRL Book by Charles Hoffman now available

As I was trying to learn about XBRL, I scoured the internet for information on specifications, working details, and examples. I found a number of great presentations and PDFs as explanatory documents. However, I had a hard time finding a definitive and current book through established online book retailers like Amazon. I was thrilled to recently discover a title that provides especially good coverage of XBRL in book form:

Financial Reporting Using XBRL: IFRS and US GAAP Edition, by Charles Hoffman, CPA, copyright 2006 UBMatrix. (Hoffman works as Director of Industry Solutions, Financial Reporting at UBMatrix.)

This book, written by the historic "father of XBRL" and early visionary of its evolution, provides exhaustive and expansive coverage. The chapters include detailed examples across a wide range of XBRL topics. Sample files are also available for the reader's own practice and experimentation.

You can find the book at http://www.ubmatrix.com/xbreeze/  with a description at the bottom of the page. This 500+ page book is presently available for a retail price of only $14.85 + shipping and I feel makes an enormous contribution towards improving understanding and accelerating adoption of XBRL. I'm hoping a future edition of this book will find its way to Amazon.com and other publishing outlets.

Bob Jensen's threads on XBRL are at http://www.trinity.edu/rjensen/XBRLandOLAP.htm#TimelineXBRL


Executives Are Betting On Yesterday's Horse Races

As an aside, once again this shows that finance and accounting go hand in hand as Collins, Gong, and Li are accounting professors!

From Jim Mahar's blog on May 23, 2006 --- http://financeprofessorblog.blogspot.com/

Do managers backdate options?

Do managers backdate options? It sure seems that way.

From
Reuters:
 
A U.S. government probe into stock option grants for executives widened on Tuesday with more technology companies being called on to explain the way these grants are awarded.

The investigation focuses on whether companies are giving executives backdated options after a run-up in the stock. Backdated securities are priced at a value before a rally, which boosts their returns.

From NPR:

The Securities and Exchange Commission (SEC) is reportedly examining the timing of stock option awards by corporations." (BTW this is included to you can listen to it--has several professors speaking on it.)

From the LA Times:
 

""The stock-option game is supposed to confer the potential for profit, but also some risk," said John Freeman, a professor of business ethics at the University of South Carolina Law School who was a special counsel to the SEC during the 1970s. "When in essence the executives are betting on yesterday's horse races, knowing the outcome, there's no risk whatever.""

What does past academic research have to say on this? Most of the evidence suggests that backdating probably does occur.

For years there have been papers showing that managers tend to announce bad news prior to option grants and even time the grants prior to price run ups (see Yermack 1997) it has only been more recently that researchers have noticed that the price appreciation was not merely due to firm specific factors (which managers may be able to control and time) but also market wide factors (i.e. the stock market goes up after option grants).

Last year a paper by Narayanan and Seyhun suggested that this may be the result of backdating the option grants. More recently two papers by Collins, Gong, and Li (a) and (b) find further evidence that backdating is (or at least was) happening and that unscheduled grant dates (where this can occur) tend to be found more commonly at firms whose management has relatively more control over their board of directors.
Stay tuned!!

* A quick comment to any manager who may have done this: Why bother? Why risk it all cheating for a few extra dollars? (Indeed it reminds me of the Adelphia case where the firm outsourced snow plowing to a Rigas owned firm. It just doesn't seem worth it.)

*As an aside, once again this shows that finance and accounting go hand in hand as Collins, Gong, and Li are accounting professors!


June 27, 2006 message from Jack Seward [JackSeward@msn.com]

Perhaps you would enjoy reading the article, "E-mail Insecurity in a Litigious Society" published by ComputerWorld and found at:
http://computerworld.com/action/article.do?command=viewArticleBasic&articleId=111607 

And besides quoting me, it's a great piece.

Jack

Jack Seward (917) 450-9328 and fax (212) 656-1486
jackseward@msn.com 

Mr. Seward's paper, as co-author on "Protecting Client-CPA-Attorney Information in the Electronic Age" will be included in the Research Forum Session of the International Meeting of the American Accounting Association 2006 Annual Meeting on August 6-9 in Washington, D.C.


Is any CEO really entitled to over $6  billion in gains on employee stock options?

"Calpers Puts Pressure on Board of UnitedHealth: Holder Demands a Meeting Over Option-Grant Timing; A Threat to Withhold Votes," by Vanessa Fuhrmans, The Wall Street Journal, April 26, 2006; Page A3 --- http://online.wsj.com/article/SB114599506269535599.html?mod=todays_us_page_one

The California Public Employees' Retirement System is demanding a conference call with the compensation committee of the board of UnitedHealth Group Inc. over its disclosure practices, and is threatening to withhold votes for board directors seeking re-election.

In a letter sent to James A. Johnson, chairman of the UnitedHealth board's compensation committee, Calpers board President Rob Feckner demanded a conference call ahead of Tuesday's UnitedHealth shareholders meeting to discuss what he called "serious threats to the credibility, governance and performance of UnitedHealth." Specifically, the letter criticized the company's failure to explain how it determined stock option grant dates for Chief Executive William McGuire and a handful of other executives in past years, and its "inconsistent" disclosure of its option-granting program.

The move by Calpers increases the scrutiny of the process by which Dr. McGuire received some of the $1.6 billion in unrealized gains he holds in company stock options. Calpers holds 6.55 million shares, or 0.5%, of UnitedHealth's outstanding stock. The pension fund, known for its strong stances on corporate governance, could spur other investors to join in its criticism. The move also increases pressure on UnitedHealth's board to more fully explain its past option-award practices soon, even though its board only launched a probe into them earlier this month.

Continued in article

Question
What are the accounting and tax implications of backdating employee stock options?

The stock-options backdating scandal continued to intensify, with the announcement by a Silicon Valley chip maker that its chairman and its chief financial officer had abruptly resigned. That brought to eight the number of officials at various companies to leave their posts amid scrutiny of how companies grant stock options.
"Backdating Probe Widens as 2 Quit Silicon Valley Firm:  Power Integrations Officials Leave Amid Options Scandal; 10 Companies Involved So Far," by Charles Forelle and James Bandler, The Wall Street Journal, May 6, 2006; Page A1 --- http://online.wsj.com/article/SB114684512600744974.html?mod=todays_us_nonsub_page_one

More on Accounting Fraud Via Backdating Options

"ACS Says Some Options Carried Dates That Preceded Approvals," by Charles Forelle and James Bandler, The Wall Street Journal, May 11, 2006; Page A2 ---
http://online.wsj.com/article/SB114731443041049838.html?mod=todays_us_page_one

Affiliated Computer Services Inc. acknowledged that it issued executive stock options that carried "effective dates" preceding the written approval of the grants, saying it plans a charge of as much as $40 million to rectify its accounting related to the grants.

The announcement followed a preliminary internal probe at ACS, a Dallas technology outsourcer that is also under scrutiny by the Securities and Exchange Commission for its options practices. Between 1995 and 2002, the company granted stock options to Jeffrey Rich, its chief executive for part of that time, that were routinely dated just before sharp run-ups in the company's share price, and often at the nadir of big dips.

Mr. Rich left the company last year. A rising share price helped him reap more than $60 million from options during his tenure at the company. The timing of his grants helped, too. If his six grants had come at the stock's average closing price during the year they were dated, he'd have made about 15% less.

Continued in article

Is any CEO really entitled to over $ 6  billion in gains on employee stock options?
"Calpers Puts Pressure on Board of UnitedHealth: Holder Demands a Meeting Over Option-Grant Timing; A Threat to Withhold Votes," by Vanessa Fuhrmans, The Wall Street Journal, April 26, 2006; Page A3 --- http://online.wsj.com/article/SB114599506269535599.html?mod=todays_us_page_one

The California Public Employees' Retirement System is demanding a conference call with the compensation committee of the board of UnitedHealth Group Inc. over its disclosure practices, and is threatening to withhold votes for board directors seeking re-election.

In a letter sent to James A. Johnson, chairman of the UnitedHealth board's compensation committee, Calpers board President Rob Feckner demanded a conference call ahead of Tuesday's UnitedHealth shareholders meeting to discuss what he called "serious threats to the credibility, governance and performance of UnitedHealth." Specifically, the letter criticized the company's failure to explain how it determined stock option grant dates for Chief Executive William McGuire and a handful of other executives in past years, and its "inconsistent" disclosure of its option-granting program.

The move by Calpers increases the scrutiny of the process by which Dr. McGuire received some of the $1.6 billion in unrealized gains he holds in company stock options. Calpers holds 6.55 million shares, or 0.5%, of UnitedHealth's outstanding stock. The pension fund, known for its strong stances on corporate governance, could spur other investors to join in its criticism. The move also increases pressure on UnitedHealth's board to more fully explain its past option-award practices soon, even though its board only launched a probe into them earlier this month.

Continued in article

After the Horse is Out of the Barn:  UnitedHealth Halts Executive Options
The UnitedHealth Group, under fire for the timing of lucrative options grants to executives, said Monday that it had discontinued equity-based awards to its two most senior managers and that it would cease other perks like paying for personal use of corporate aircraft. UnitedHealth’s board said it had discontinued equity-based awards for the chief executive, William W. McGuire, who has some $1.6 billion in unrealized gains from earlier options grants, and for the president and chief operating officer, Stephen J. Helmsley.
"UnitedHealth Halts Executive Options," The New York Times, May 2, 2006 --- http://www.nytimes.com/2006/05/02/business/02unitedhealth.web.html

From The Wall Street Journal Accounting Weekly Review on May 19, 2006

TITLE: UnitedHealth Cites 'Deficiency' in Options Grants
REPORTER: James Bandler and Charles Forelle
DATE: May 12, 2006
PAGE: A1
LINK: http://online.wsj.com/article/SB114734563729450037.html 
TOPICS: Financial Accounting, Income Taxes, Materiality, Securities and Exchange Commission, Stock Options, Taxation, Accounting Changes and Error Corrections, Audit Quality, Auditing

SUMMARY: UnitedHealth Group Inc. disclosed on May 11 that "...a 'significant deficiency' in how it administered [stock option] grants could force it to restate results ...[and cut] net income by as much as $286 million over that period." The company also disclosed that the SEC is "conducting an informal inquiry into its options-granting practices"...UnitedHealth...said its internal review had indicated it had uncovered 'significant deficiency' in the way it administered, accounted for and disclosed past option grants and that it may be required to take certain accounting adjustments for 'stock-based compensation expense.' It said that could reduce operating earnings by up to $393 million in the past three years, adding that the company's management believes that any adjustments would not be 'material'."

QUESTIONS:
1.) Summarize the issue regarding accounting for stock options that was uncovered in a March 18, 2006, Wall Street Journal article and that has subsequently been the subject of SEC scrutiny.

2.) The summary description for this review quotes a paragraph in the article describing the financial statement effects of potential adjustments the deficiencies in UnitedHealth's option granting practices. The paragraph begins "In its filing, UnitedHealth, which reported $3.3 billion in net income last year..." Identify all of the terms in that paragraph with specific meaning for accounting and/or auditing purposes. Define each of those terms, explain why it has specific meaning in its use in accounting or auditing, and, if it is a relevant point, explain why understanding that meaning helps to analyze the impact of these options issues on UnitedHealth.

3.) Refer again to the paragraph described in question 1. The concluding sentence states that the company management believes that adjustments resulting from their review of options granting practices will not be material. Contrast this point to the comments by Professor James Cox of Duke University that "this isn't just a little material...for this kind of issue." Construct arguments to support one of these positions, being sure to refute arguments potentially in favor of your opposing side. In your answers to this and the preceding question, be sure to address the two components of materiality in an audit engagement.

4.) Refer to the list of companies in the table entitled "Key Companies in Options Probes." In what industry do most of these companies operate? Why is there industry concentration amongst this sample of firms?

5.) What are the potential issues facing UnitedHealth's auditors, Deloitte and Touche, regarding these matters? What basic audit steps do you think should be carried out in relation to any company's accounting for stock options?

6.) Do you think the situation with UnitedHealth necessarily indicates an audit failure on the part of Deloitte and Touche? In your answer, define the terms "audit risk", "business risk" in relation to audits, and "audit quality."

7.) Summarize the tax implications described in the article regarding these matters. How might adjustments to the tax accounting for these stock options exacerbate or reduce the impact of the adjustments to the accounting for stock based compensation expense?

Reviewed By: Judy Beckman, University of Rhode Island

--- RELATED ARTICLES ---
TITLE: The Perfect Payday
REPORTER: Charles Forelle and James Bandler
PAGE: A1
ISSUE: Mar 18, 2006
LINK: http://online.wsj.com/article/SB114265075068802118.html 

TITLE: How the Journal Analyzed Stock-Option Grants
REPORTER: Charles Forelle
PAGE: A5
ISSUE: Mar 18, 2006
LINK: http://online.wsj.com/article/SB114265125895502125.html

 

From The Wall Street Journal Accounting Weekly Review on May 5, 2006

TITLE: As Options Cloud Looms, Companies May Get Tax Bill
REPORTER: Charles Forelle and James Bandler
DATE: Apr 28, 2006
PAGE: C1
LINK: http://online.wsj.com/article/SB114619341731038487.html 
TOPICS: Accounting, Financial Accounting, Securities and Exchange Commission, Stock Options, Taxation

SUMMARY: Tax implications of the developing issues in stock options, covered also in a recent Weekly Review, are discussed.

QUESTIONS:
1.) What is the recently-developing concern with dating of executive stock options? In your answer, comment on the Securities and Exchange Commission investigation into the issue. You may refer to the related article for your answer.

2.) Define the terms "compensatory stock options"; "incentive stock options";"option grant date"; and "option exercise price".

3.) Summarize the tax implications to both executives receiving stock options and to companies issuing stock options if option grant dates are changed to a point when the stock price is higher than on the originally reported date, but the exercise price is not changed.

4.) The author quotes Mr. Brian Foley as saying that one company under SEC and IRS scrutiny for this issue, UnitedHealth, would have a "serious and incurable problem" if options were "backdated" and they have been exercised. What could be the difference between options that were exercised and options that have not been?

5.) What are the financial reporting implications of the problems highlighted in this article? How do the tax issues exacerbate the financial reporting problems?

Reviewed By: Judy Beckman, University of Rhode Island

--- RELATED ARTICLES ---
TITLE: The Perfect Payday
REPORTER: Charles Forelle and James Bandler
PAGE: A1 ISSUE: Mar 18, 2006
LINK: http://online.wsj.com/article/SB114265075068802118.html

"As Options Cloud Looms, Companies May Get Tax Bill," by Charles Forelle and James Bandler, April 28, 2006; Page C1 --- http://online.wsj.com/article/SB114619341731038487.html

Companies that backdated stock-option grants to top executives could face a costly reckoning with the Internal Revenue Service, with some potentially owing large sums in back taxes, legal experts say.

The tax problems, which could affect the personal tax filings of hundreds of individual employees, are the latest wrinkle in widening inquiries into stock-option awards.

A half-dozen companies, including insurance titan UnitedHealth Group Inc., have said their boards, or the Securities and Exchange Commission, are examining their past option grants amid concerns that some may have been backdated to take advantage of lower exercise prices. Backdating could have resulted in millions of dollars in extra compensation for insiders, at the expense of shareholders. Most of the probes are preliminary, and so far the SEC hasn't charged anyone.

If the investigations turn up backdated grants, the companies face a host of issues, including the prospect of earnings restatements and delistings. Such options offer the right to buy a stock at a fixed, or exercise, price, allowing the holder to profit by later selling the underlying shares at a higher price than the exercise price.

One company that has acknowledged "misdating" options, Mercury Interactive Corp., a Mountain View, Calif., software company, has had its stock delisted by the Nasdaq Stock Market and has said it will have to restate financial results. Vitesse Semiconductor Corp. last week suspended its chief executive and two other top officials, saying the move was related to the "integrity of documents" in its stock-option program. Late Wednesday, Vitesse said its board had discovered additional accounting issues and had hired a turnaround firm.

Granting an option at a price below the current market value, while not illegal in itself, could result in problems of wrongful disclosure under securities laws. Companies' shareholder-approved option plans and SEC filings often say options will carry the stock price of the day the company awards them or the day before.

Favorable tax treatment was one reason that options gained popularity in the 1990s as a way to compensate employees, particularly executives. When an option is exercised, the company typically can take any gain pocketed by the employee as a deduction on its tax return, because the IRS views the option profit as akin to extra compensation paid to the employee. The employee reports the gain on his or her personal tax return.

Tax experts say that options backdated to a day with a lower market price don't qualify for a deduction -- although the disqualification only affects options exercised by the chief executive or any of the next four most highly compensated executives. And $1 million of each of the executives' total compensation always can be deducted. As a result, they say, companies with backdated options could face the prospect of shelling out cash to revise prior years' tax returns -- and could be ineligible for the deductions they planned to take in the future on executive option gains.

A Wall Street Journal analysis, published in March, described a pattern of unusual stock-option grants to a handful of chief executives, including William McGuire, UnitedHealth's chief executive. Twelve grants to Mr. McGuire between 1994 and 2002 were each dated in advance of a substantial run-up in the company's share price, and three of them fell on yearly lows. Last week, Mr. McGuire told investors on a conference call that, "to my knowledge, every member of management in this company believes that at the time we collectively followed appropriate practices."

The potential tax issues could be big, particularly for companies whose stocks have greatly increased since the grants. UnitedHealth, Minnetonka, Minn., reported $346 million in realized option gains among its five best-paid executives from 2003 to 2005. At the end of last year, it said its five best-paid executives had another $2.4 billion in unrealized, exercisable options gains. UnitedHealth's stock has soared since the 1990s, when many of the options were granted. A board committee investigating options granting at the company hasn't completed its work, and it isn't known whether any option grants were backdated at all.

"If they had a backdating problem, and that's a big if, the tax consequences could certainly be ugly," says Brian Foley, a compensation consultant and tax lawyer in White Plains, N.Y. With respect to the already-exercised options, he added, "they would have an obvious and serious and incurable problem."

UnitedHealth had a corporate-tax rate ranging between 34.9% and 35.7% in the past three years. Although the company's actual payments likely were lower, that suggests the tax savings to UnitedHealth from exercised executive options could have been as much as $120 million from 2003 to 2005. As of end of 2005, the value of the future tax savings was as much as $800 million.

"That's a huge number," says Robert Willens, a tax and accounting expert at Lehman Brothers Holdings Inc.

UnitedHealth has reported substantial tax benefits from deducting its employees' stock option gains. Until recently, the company said in its proxy statements that it believed its executive option grants qualify for the tax deduction. Starting in a proxy filed in April 2005, it said some options might not qualify, but that the amounts involved were immaterial. Ruth Pachman, an outside spokeswoman for UnitedHealth, said in a statement that the company "continues to believe" that its proxy statements were accurate and remain accurate. She said the company "declined to speculate about hypothetical scenarios."

Executives at other companies reporting options investigations, including Vitesse and Affiliated Computer Services Inc., reported substantial options gains to top executives. ACS, which reported about $44 million in realized options gains by its top five executives in the most recent three fiscal years, didn't return calls. Vitesse officials didn't return several messages seeking comment.

S. James DiBernardo, a partner at Morgan, Lewis & Bockius LLP who specializes in tax issues, says there is no easy way to make grants comply with the terms of the tax code retroactively. A company could reprice the options, he says, but it would have to reprice them at the current share value, effectively erasing all of an executive's past gains. Another route is for the top executives to wait until after retirement to exercise the options -- when they are no longer executive officers.

Ethan Yale, an associate professor at Georgetown University Law Center who was retained by UnitedHealth to look into this matter, agreed that the issue could pose tax problems. He said this is largely uncharted territory and ambiguities in tax rules might allow a company to get back in compliance retroactively by repricing the options to the actual grant-date prices.

Continued in article

"Guidance on fair value measurements under FAS 123(R)," IAS Plus, May 8, 2006 ---
http://www.iasplus.com/index.htm

Deloitte & Touche (USA) has updated its book of guidance on FASB Statement No. 123(R) Share-Based Payment: A Roadmap to Applying the Fair Value Guidance to Share-Based Payment Awards (PDF 2220k). This second edition reflects all authoritative guidance on FAS 123(R) issued as of 28 April 2006. It includes over 60 new questions and answers, particularly in the areas of earnings per share, income tax accounting, and liability classification. Our interpretations incorporate the views in SEC Staff Accounting Bulletin Topic 14 "Share-Based Payment" (SAB 107), as well as subsequent clarifications of EITF Topic No. D-98 "Classification and Measurement of Redeemable Securities" (dealing with mezzanine equity treatment). The publication contains other resource materials, including a GAAP accounting and disclosure checklist. Note that while FAS 123 is similar to IFRS 2 Share-based Payment, there are some measurement differences that are Described Here.

Bob Jensen's threads on employee stock options are at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm

Bob Jensen's threads on fair value accounting are at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#FairValue

Bob Jensen's threads on valuation are at http://www.trinity.edu/rjensen/roi.htm


Forwarded by a friend named Don

Understanding Engineers 

Understanding Engineers - Take One 

Two engineering students were walking across a university campus when one said, 

"Where did you get such a great bike?" 

The second engineer replied, "Well, I was walking along yesterday, minding my own business, when a beautiful woman rode up on this bike,  threw it to the ground, took off all her clothes and said, "Take what you want." 

The second engineer nodded approvingly and said, "Good choice; the clothes probably wouldn't have fit you anyway." 



Understanding Engineers - Take Two 

To the optimist, the glass is half full. 
To the pessimist, the glass is half empty. 
To the engineer, the glass is twice as big as it needs to be. 



Understanding Engineers - Take Three 

A priest, a doctor, and an engineer were waiting one morning for a particularly slow group of golfers. 

The engineer fumed, "What's with those blokes? We must have been waiting for fifteen minutes!" 

The doctor chimed in, "I don't know, but I've never seen such inept golf!" 

The priest said, "Here comes the greens keeper. Let's have a word with him." 

He said, "Hello, George! what's wrong with that group ahead of us? They're rather slow, aren't they?" 

The greens keeper replied, "Oh, yes. That's a group of blind fire fighters. They lost their sight saving our clubhouse from a fire last 
year, so we always let them play for free anytime." 

The group fell silent for a moment. 

The priest said, "That's so sad. I think I will say a special prayer for them tonight." 

The doctor said, "Good idea. I'm going to contact my ophthalmologist colleague and see if there's anything he can do for them." 

The engineer said, "Why can't they play at night?" 



Understanding Engineers - Take Four 

What is the difference between mechanical engineers and civil engineers? 
Mechanical engineers build weapons and civil engineers build targets. 



Understanding Engineers - Take Five 

The graduate with a science degree asks, "Why does it work?" 
The graduate with an engineering degree asks, "How does it work?" 
The graduate with an accounting degree asks, "How much will it cost?" 
The graduate with an arts degree asks, "Do you want fries with that?" 



Understanding Engineers - Take Six 

Three engineering students were gathered together discussing the possible designers of the human body. 
One said, "It was a mechanical engineer. Just look at all the joints." 
Another said, "No, it was an electrical engineer. The nervous system has many thousands of electrical connections." 
The last one said, "No, actually it had to have been a civil engineer. Who else would run a toxic waste pipeline through a recreational area ?" 



Understanding Engineers - Take Seven 

Normal people believe that if it ain't broke, don't fix it. 
Engineers believe that if it ain't broke, it doesn't have enough features yet. 



Understanding Engineers - Take Eight 

An engineer was crossing a road one day, when a frog called out to him and said, "If you kiss me, I'll turn into a beautiful princess." 

He bent over, picked up the frog and put it in his pocket. 

The frog spoke up again and said, "If you kiss me and turn me back into a beautiful princess, I will stay with you for one week." 

The engineer took the frog out of his pocket, smiled at it and returned it to the pocket. 

The frog then cried out, "If you kiss me and turn me back into a Princess, I'll stay with you for one week and do ANYTHING you want." 

Again, the engineer took the frog out, smiled at it and put it back into his pocket. 

Finally, the frog asked, "What is the matter? I've told you I'm a beautiful princess, and that I'll stay with you for one week and do 
anything you want. Why won't you kiss me?" 

The engineer said, "Look, I'm an engineer. I don't have time for a girlfriend, but a talking frog, now that's cool." 


From The Wall Street Journal Accounting Weekly Review on April 27, 2006

TITLE: Alcatel Stands to Reap Tax Benefit on Merger
REPORTER: Jesse Drucker and Sara Silver
DATE: Apr 26, 2006
PAGE: C3
LINK: http://online.wsj.com/article/SB114601908332236130.html 
TOPICS: Accounting, International Accounting, Net Operating Losses, Taxation

SUMMARY: "Lucent's operating losses in [the] wake of [the] tech bubble may allow big deductions" for the merged firm's U.S. operations.

QUESTIONS:
1.) What is the purpose of allowing net operating losses (NOLs) to be deducted against other years' income amounts?

2.) Summarize the U.S. tax law provisions regarding NOLs. Why has Lucent been unable to use up all of its NOL carryforwards since the tech bubble burst in 2000-2001?

3.) Define the term deferred tax assets. Describe how NOLs fit the definition you provide. What other types of deferred tax assets do you think that Lucent has available and wants to take advantage of?

4.) How is it possible that the "federal, state and local deductions" from the deferred tax assets described in answer to question #3 "will nearly double the U.S. net income that the combined company [of Alcatel and Lucent Technologies] will be able to report"?

5.) How does the availability of NOL carryforwards, and the expected timing of their deductions based on an acquirer's earnings or the recent tax law change referred to in the article, impact the price an acquirer is willing to pay in a merger or acquisition transaction?

6.) How did the availability of deferred tax asset deductions drive Alcatel's choice of its location for its headquarters? What other factors do you think drive such a choice?

Reviewed By: Judy Beckman, University of Rhode Island

 


The World's Largest Charity That Isn't

May 20, 2006 message from Miklos A. Vasarhelyi [miklosv@andromeda.rutgers.edu]

IKEA

"Flat-pack accounting" May 11th 2006 From The Economist print edition

Forget about the Gates Foundation. The world's biggest charity owns IKEA­and is devoted to interior design

FEW tasks are more exasperating than trying to assemble flat-pack furniture from IKEA. But even that is simple compared with piecing together the accounts of the world's largest home-furnishing retailer. Much has been written about IKEA's remarkably effective retail formula. The Economist has investigated the group's no less astonishing finances.

What emerges is an outfit that ingeniously exploits the quirks of different jurisdictions to create a charity, dedicated to a somewhat banal cause, that is not only the world's richest foundation, but is at the moment also one of its least generous. The overall set-up of IKEA minimises tax and disclosure, handsomely rewards the founding Kamprad family and makes IKEA immune to a takeover. And if that seems too good to be true, it is: these arrangements are extremely hard to undo. The benefits from all this ingenuity come at the price of a huge constraint on the successors to Ingvar Kamprad, the store's founder (pictured above), to do with IKEA as they see fit.

Although IKEA is one of Sweden's best-known exports, it has not in a strict legal sense been Swedish since the early 1980s. The store has made its name by supplying Scandinavian designs at Asian prices. Unusually among retailers, it has managed its international expansion without stumbling. Indeed, its brand­which stands for clean, green and attractive design and value for money­is as potent today as it has been at any time in more than 50 years in business.

The parent for all IKEA companies­the operator of 207 of the 235 worldwide IKEA stores­is Ingka Holding, a private Dutch-registered company. Ingka Holding, in turn, belongs entirely to Stichting Ingka Foundation. This is a Dutch-registered, tax-exempt, non-profit-making legal entity, which was given the shares of Mr Kamprad in 1982. Stichtingen, or foundations, are the most common form of not-for-profit organisation in the Netherlands; tens of thousands of them are registered.

Most Dutch stichtingen are tiny, but if Stichting Ingka Foundation were listed it would be one of the Netherlands' ten largest companies by market value. Its main asset is the Ingka Holding group, which is conservatively financed and highly profitable: post-tax profits were €1.4 billion ($1.7 billion) ­ an impressive margin of nearly 11% on sales of €12.8 billion ­ in the year to August 31st 2004, the latest year for which the group has filed accounts.

Valuing the Inkga Holding group is awkward, because IKEA has no direct competitors that operate globally. Shares in Target, a large, successful chain of stores in the United States that makes a fifth of its sales from home furnishings, are priced at 20 times the store's latest full-year earnings. Using that price/earnings ratio, the Ingka Holding group is worth €28 billion ($36 billion).

This is probably conservative, given IKEA's growth prospects. Sales ­ the only financial information that IKEA releases­for the year to August 31st 2005 were €14.8 billion, 15.6% up on a year earlier. And there is plenty of scope for more stores. Ingka Holding has only 26 outlets in America. By contrast, in Europe, a market of comparable size, it has over 160, accounting for more than 80% of its total turnover. In April IKEA opened its first store in Japan.

If Stichting Ingka Foundation has net worth of at least $36 billion it would be the world's wealthiest charity. Its value easily exceeds the $26.9 billion shown in the latest published accounts of the Bill & Melinda Gates Foundation, which is commonly awarded that accolade.

Measured by good works, however, the Gates Foundation wins hands down. It devotes most of its resources to curing the diseases of the world's poor. By contrast the Kamprad billions are dedicated to “innovation in the field of architectural and interior design”. The articles of association of Stichting Ingka Foundation, a public record in the Netherlands, state that this object cannot be amended. Even a Dutch court can make only minor changes to the stichting's aims.

If Stichting Ingka Foundation has net worth of at least $36 billion it would be the world's wealthiest charity

The Kamprad foundations compare poorly with the Gates Foundation in other ways, too. The American charity operates transparently, publishing, for instance, details of every grant it makes. But Dutch foundations are very loosely regulated and are subject to little or no third-party oversight. They are not, for instance, legally obliged to publish their accounts.

Under its articles, Stichting Ingka Foundation channels its funds to Stichting IKEA Foundation, another Dutch-registered foundation with identical aims, and which actually doles out money for worthy interior-design ideas. But the second foundation does not publish any information either. So just how ­ or whether ­ Stichting Ingka Foundation has spent the €1.6 billion that it collected in dividends from Ingka Holding in 1998-2003 remains hidden from view.

IKEA says only that this money is used for charitable purposes and “for investing long-term in order to build a reserve for securing the IKEA group, in case of any future capital requirements.” IKEA adds that in the past two years donations have been concentrated on the Lund Institute of Technology in Sweden. The Lund Institute says it has recently received SKr12.5m ($1.7m) a year from Stichting Ikea (which also gave the institute a lump sum of SKr55m in the late 1990s). That is barely a rounding error in the foundation's assets. Clearly, the world of interior design is being tragically deprived, as the foundation devotes itself to building its own reserves in case IKEA needs capital.

Although Mr Kamprad has given up ownership of IKEA, the stichting means that his control over the group is absolutely secure. A five-person executive committee, chaired by Mr Kamprad, runs the foundation. This committee appoints the boards of Ingka Holding, approves any changes to the company's statutes, and has pre-emption rights on new share issues.

Mr Kamprad's wife and a Swiss lawyer have also been members of this committee, which takes most of its decisions by simple majority, since the foundation was set up. When one member of the committee quits or dies, the remaining four appoint his replacement. In other words, Mr Kamprad is able to exercise control of Ingka Holding as if he were still its owner. In theory, nothing can happen at IKEA without the committee's agreement.

That control is so tight that not even Mr Kamprad's heirs can loosen it after his death. The foundation's objects require it to “obtain and manage” shares in the Ingka Holding group. Other clauses of its articles require the foundation to manage its shareholding in a way to ensure “the continuity and growth” of the IKEA group. The shares can be sold only to another foundation with the same objects and executive committee, and the foundation can be dissolved only through insolvency.

Yet, though control over IKEA is locked up, the money is not. Mr Kamprad left a trapdoor for getting funds out of the business, even if its ownership and control cannot change. The IKEA trademark and concept is owned by Inter IKEA Systems, another private Dutch company, but not part of the Ingka Holding group. Its parent company is Inter IKEA Holding, registered in Luxembourg. This, in turn, belongs to an identically named company in the Netherlands Antilles, run by a trust company in Curaçao. Although the beneficial owners remain hidden from view­IKEA refuses to identify them­they are almost certain to be members of the Kamprad family.

Clearly, the Kamprad family pays the same meticulous attention to tax avoidance as IKEA does to low prices in its stores

Inter IKEA earns its money from the franchise agreements it has with each IKEA store. These are extremely lucrative: IKEA says that all franchisees pay 3% of sales. The Ingka Holding group, the company owned by the Kamprad foundation, is the biggest franchisee, with its 207 stores; other franchisees run the remaining 28 stores, which are mainly in the Middle East and Asia.

How much money does Inter IKEA Systems make? Its results are included in its parent company's accounts filed in Luxembourg. These show that in 2004 the Inter IKEA group collected €631m in franchise fees and made pre-tax profits of €225m. This profit is after deducting €590m of “other operating charges”.

Although IKEA would not explain these charges, because its policy is not to comment on the accounts of a private group of companies, Inter IKEA appears to make large payments to I.I. Holding, another Luxembourg-registered group that is almost certain to be controlled by the Kamprad family and which made a profit of €328m in 2004.

Together these companies had nearly €11.9 billion in cash and securities at the end of 2004, even after I.I. Holding paid out a dividend of nearly €800m during the year. Most of this money has undoubtedly come from the collection of franchise fees. In total, these two groups suffered tax bills of a mere €19m in 2004 on their combined profits of €553m. Clearly, the Kamprad family pays the same meticulous attention to tax avoidance as IKEA does to low prices in its stores.

The IKEA financial system of stichtingen and holding companies is extremely efficient. Even so, next time you wonder how anyone could have come up with the fiendish plans for a Hensvik storage unit or a Bjursta sideboard, spare a thought for the Kamprads' accountants.

Bob Jensen's fraud updates are at http://www.trinity.edu/rjensen/FraudUpdates.htm




Tidbits and Quotations Between June 1 and June 23, 2006

Tidbits Directory --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm

I recently sent out an "Appeal" for accounting educators, researchers, and practitioners to actively support what I call The Accounting Review (TAR) Diversity Initiative as initiated by American Accounting Association President Judy Rayburn --- http://www.trinity.edu/rjensen/395wpTAR/Web/TAR.htm




Tidbits on June 1, 2006
Bob Jensen
at Trinity University 

Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm
For earlier editions of New Bookmarks go to http://www.trinity.edu/rjensen/bookurl.htm 
Archives of Tidbits: Tidbits Directory --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm

Bob Jensen's various threads --- http://www.trinity.edu/rjensen/threads.htm
       (Also scroll down to the table at http://www.trinity.edu/rjensen/ )

Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.

Internet News (The News Show) --- http://www.thenewsshow.tv/daily/

Informercial Scams (even those carried on the main TV networks)--- http://www.infomercialscams.com/

Security threats and hoaxes --- http://www.trinity.edu/its/virus/

25 Hottest Urban Legends (hoaxes) --- http://www.snopes.com/info/top25uls.asp 
Hoax Busters --- http://hoaxbusters.ciac.org/ 
Stay up on the latest and the oldest hoaxes --- http://www.snopes.com/

Bob Jensen's home page is at http://www.trinity.edu/rjensen/


Online Video
In the past I've provided links to various types of music and video available free on the Web. 
I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/music.htm

From NPR
Video Captures Underwater 'Brimstone and Fire' --- http://www.npr.org/templates/story/story.php?storyId=5428421 
Book TV (CSPAN interviews with authors) ---  http://www.booktv.org 
From Jim Mahar's Blog on May 24, 2006 --- http://financeprofessorblog.blogspot.com/ 

Thomas Friedman on Google Video

Long time followers of FinanceProfessor.com know I am a big fan of Thomas Friedman. From his early books to The World is Flat and most of his NY Times articles, I think I have read everything he has written. I may not agree with everything, but at least I have read it (or more aptly ristened to it) and agreed with MOST of it.

Thus, I was excited when I found the following from
Google Video (one of my new favorite sites).

From Charlie Rose (actually with guest host John Doerr):
On energy and much more. He also talks about entrepreneurship, a gas tax, geo-green, globalization (a little), and even a bit on social responsibility and incentives. And much more. (BTW the link says 99 cents, but I think that is to buy, I watched it for free) (from May 22, 2006):

For all Google Video on Thomas Friedman check out
this search.
 

 


Free music downloads --- http://www.trinity.edu/rjensen/music.htm

In the past I've provided links to various types of music and video available free on the Web. 
I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/music.htm

From NPR
Galileo's Letters Inspire a Musical Tribute --- http://www.npr.org/templates/story/story.php?storyId=5420134

From NPR
A Musical Conversation with T Bone Burnett --- http://www.npr.org/templates/story/story.php?storyId=5418424

From 'New False Identity' :  * 'Palestine, Texas' * 'Hollywood Mecca of the Movies'
From 'Twenty Twenty':  * 'Fatally Beautiful' * 'Diamonds Are a Girl's Best Friend' * 'Driving Wheel'

From NPR
The Wiggles Rock! (Just Ask Your Kids) --- http://www.npr.org/templates/story/story.php?storyId=5414895

From NPR
Enrico Rava, Italy's Gift to Jazz (featuring the trumpet) --- http://www.npr.org/templates/story/story.php?storyId=5403156

From NPR
Arias, Updated: The East Village Opera Company --- http://www.npr.org/templates/story/story.php?storyId=5405416

From NPR
Dixie Chicks Return, 'Taking the Long Way' --- http://www.npr.org/templates/story/story.php?storyId=5424238

From NPR
A Chance Encounter with the Blues (Joe Holmes) --- http://www.npr.org/templates/story/story.php?storyId=5425762

 


Photographs and Art

Annie Oakley --- http://www.pbs.org/wgbh/amex/oakley/index.html

Higgins Armory Museum --- http://www.higgins.org/

African Crisis --- http://www.africancrisis.org/default2.asp

From the Scout Report on May 12, 2006

Cryptozoology: Out of Time Place Scale --- http://ctd.bates.edu/~mwilliams/crypto/main.html 

The Bates College Museum of Art has put together a Web exhibition that explores the "fertile margins of the history of science and museums, taxonomy, myth, creativity and discovery." Cryptozoology, the search for proof of mythical creatures such as the Loch Ness Monster and Bigfoot, is itself a marginalized science. The featured show has entries for the 15 artists, which are in various stages of development - there is at least one work by each of them, and additional biographical and contextual information for most. Works submitted include installations, such as Mark Dion's Museum of Cryptozoology Director's Office, as well as sculpture, paintings, and prints. There is also a film series associated with the exhibition, that will screen a 1972 film, "The Legend of Boggy Creek", a docu-drama that looks for proof of the existence of a monster in an Arkansas swamp, and the 2002 Discovery Channel production, "The End of Extinction: Cloning the Tasmanian Tiger".

 


 


Online Books, Poems, References, and Other Literature
In the past I've provided links to various types electronic literature available free on the Web. 
I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/ElectronicLiterature.htm


From NPR
Revisiting Allen Ginsberg's 'Howl' at 50 (with audio) --- http://www.npr.org/templates/story/story.php?storyId=5419033

Round the Red Lamp by  Arthur Conan Doyle (1859-1930) --- Click Here

Across the Plains by Robert Louis Stevenson (1850-1894) --- Click Here

Billy Budd by  Herman Melville (1819-1891) --- Click Here

A Connecticut Yankee in King Arthur's Court by Mark Twain (1835-1910) --- Click Here

Tales of Terror and Mystery by Arthur Conan Doyle (1859-1930) --- Click Here




Education is not to reform students or amuse them or to make them expert technicians. It is to unsettle their minds, widen their horizons, inflame their intellects, teach them to think straight, if possible.
Robert M. Hutchins as quoted by Mark Shapiro at http://irascibleprofessor.com/comments-05-30-06.htm

Education is a private matter between the person and the world of knowledge and experience, and has little to do with school or college.
Lillian Smith as quoted by Mark Shapiro at http://irascibleprofessor.com/comments-05-18-06.htm 

Time Warner is charging more to folks who can least afford to pay. Geneva Hurst, 82, is upset because she had to pay a dollar extra when she paid her cable bill in person at a Texas City service center. She doesn't have a checking account or credit card and cashes her Social Security check to buy food and pay bills. Geneva said, "I goes there. I don't have a checking account but I pays it in cash. And I walk in there one day and I paid it in cash and she says when I paid--'Oh, you know, we have to charge a dollar extra.' . . . It's a sad thing. It's so sad, 'cause poor people, we just barely getting by with what we're already paying."
"Customers who pay their bill in person charged extra fee," ABC13.com, May 22, 2006 ---
http://abclocal.go.com/ktrk/story?section=action13&id=4195646

That sound you just heard might have been the first piece of the sky hitting the roof.
Doug Lederman, "Ever-Expanding False Claims Act,"  Inside Higher Ed, May 27, 2006 --- http://www.insidehighered.com/news/2006/05/26/false 

So to appease them (environmentalists), the pipeline was put on stilts where it crossed the caribou graze lands. What happened? The caribou decided to gather at the spot where the pipeline came down to the ground. Seems the caribou liked to lie against the pipeline because the pipe was warm from the oil passing through it.
Roger Hedgecock, May 28, 2006 --- http://rogerhedgecock.com/content/view/177/77/

Louisiana will have nearly its full force of Guard personnel at home preparing for the 2006 hurricane season. “They’re sorting all that out [at the federal level],” Major Ed Bush of the Louisiana National Guard said, according to the Independent News. “There’s no planned rotation for any Louisiana guard brigade at this time.”
AccountingWeb, May 26, 2006 --- http://www.accountingweb.com/cgi-bin/item.cgi?id=102195




Great Minds in Management:  The Process of Theory Development --- http://www.trinity.edu/rjensen//theory/00overview/GreatMinds.htm

In April 2006 I commenced reading a heavy book entitled Great Minds in Management:  The Process of Theory Development, Edited by Ken G. Smith and Michael A. Hitt (Oxford Press, 2006).

The essays are somewhat personalized in terms of how theory development is perceived by each author and how these perceptions changed over time.

In Tidbits I will share some of the key quotations as I proceed through this book. The book is somewhat heavy going, so it will take some time to add selected quotations to the list of quotations at http://www.trinity.edu/rjensen//theory/00overview/GreatMinds.htm 

Managing Organizational Knowledge: Theoretical and Methodological Foundations

IKUJIRO NONAKA

PG. #376 & 377 NONAKA 18.1 KNOWLEDGE/TRUTH
Knowledge has been traditionally defined as "justified true belief."  A fundamental issue in various streams of epistemology is how one can justify one's subjective belief as objective "truth."  In other words, the issue is whether human beings can ever achieve any form of knowledge that is independent of their own subjective construction since they are the agents through which knowledge is perceived or experienced (Morgan and Smircich, 1980).  While the ontological position of positivism as the world as concrete structures supports objective knowledge, the phenomenological philosophers see part of the world inherently subjective.

The Cartesian split and power of reasoning supports the view of objective knowledge and truth in positivism.  John Locke, among the others, maintained that human knowledge is an inner mental presentation (or mirror image) of the outside world that can be explained in linguistic signs and mathematics through reasoning.  All things beyond the thought/senses consequently do not exist and/or are irrelevant.  Loosely following this conceptualization, traditional economic and psychological theories are limited to objective knowledge, which can be processed through formal logic and tested empirically.  The advantage of this mono-dimensional notion of knowledge is that it allows scholars further to claim that all genuine human knowledge is contained within the boundaries of science.

In contrast, for phenomenological philosophers knowledge is subjective, context-specific, bodily, relative, and interpretational (Heidegger, 1962; Husserl, 1970, 1977; Merleau-Ponty, 1962).  They rather uniformly claim that the mental and the physical worlds evolve in a dialectic joint advent.  As meanings emerge through experiences, the primacy is paid on subjective tacit knowledge over objective prepositional knowledge.  Practical knowledge is often prioritized over theoretical knowledge (Hayek, 1945; Polanyi, 1952, 1966).  Tacit knowledge, accumulated in dialectic individual-environment interaction, is very difficult to articulate (Polanyi, 1952, 1966).  Husserl (1977) believed in attaining true knowledge through "epoche" or "bracketing," that is, seeing things as they are and grasping them through a kind of direct insight.  Pure phenomenological experience is even claimed to precede cognition (Nishida, 1970).

The identified wide and fundamental ontological and epistemological differences in positivism and phenomenology create methodological challenges.  It can be claimed that the positivist dominance has limited comprehensive context-specific discussions on knowledge in management science.  This problem was already noticed by Edith Penrose (1959) who argued that the relative negligence was the result of the difficulties involved in taking knowledge into account.  This is because positivist epistemology is based on the assumption that lived experiences can be linguistically carved up and conventionally portioned into preexistent conceptual categories for the purposes of systematic analysis and casual attribution.  In effect, positivism-based social science tries to freeze-frame the dynamic and living social world into a preexisting static structure.

In contrast to the context-free positivist mirror image of human mind and the environment, the knowledge-creating theory is rooted on the belief that knowledge inherently includes human values and ideals.  The knowledge creation process cannot be captured solely as a normative causal model because human values and ideals are subjective and the concept of truth depends on values, ideals, and contexts.

However, the knowledge-creating theory does not view knowledge as solely subjective.  It treats knowledge creation as a continuous process in which subjective tacit knowledge and objective explicit knowledge are converted into each other (Nonaka, 1991, 1994; Nonaka and Takeuchi, 1995).  The boundaries between explicit and tacit knowledge are porous as all knowledge and action is rooted in the tacit component (Tsoukas, 1996).  Tacit knowledge, in turn, is built partly on the existing explicit knowledge since tacit knowledge is acquired through experiences and observations in the physical world.

Viewing the knowledge-creating process as the conversion process between tacit and explicit knowledge means that it is viewed as the social process of validating truth (Nonaka, 1994; Nonaka and Takeuchi, 1995).  Contemporary philosophers claim that group validation produces knowledge that is not private and subjective (Rorty, 1979).  As long as the knowledge stays tacit and subjective, it can be acquired only through direct sensory experience, and cannot go beyond one's own values, ideals, and contexts.  In such a case, it is hard to create new knowledge or achieve universality of knowledge.  Through the knowledge conversion process, called SECI process, a personal subjective knowledge is validated socially and synthesized with others' knowledge so that knowledge keeps expanding (Nonaka and Takeuchi, 1995).

Unlike positivism, the knowledge-creating theory does not treat knowledge as something absolute and infallible.  The truth can be claimed to be incomplete as any current state of knowledge is fallible and influenced by historical factors such as ideologies, values, and interests of collectives.  The knowledge-creating theory views knowledge and truth as the result of a permanent and unfinished questioning of the present.  While absolute truth may not be achieved, the knowledge validation leads to ever more true and fewer false consequences, increasing plausibility.  The pragmatic solution is to accept collectively "objectified" knowledge as the "truth" because it works in a certain time and context.  Hence, knowledge-creating theory defines knowledge as a dynamic process of justifying personal belief towards the "truth."

PG. #390 NONAKA
The chapter argues that building the theory of knowledge creation needs to an epistemological and ontological discussion, instead of just relying on a positivist approach, which has been the implicit paradigm of social science.  The positivist rationality has become identified with analytical thinking that focuses on generating and testing hypotheses through formal logic.  While providing a clear guideline for theory building and empirical examinations, it poses problems for the investigation of complex and dynamic social phenomena, such as knowledge creation.  In positivist-based research, knowledge is still often treated as an exogenous variable or distraction against linear economic rationale.  The relative lack of alternative conceptualization has meant that management science has slowly been detached from the surrounding societal reality.  The understanding of social systems cannot be based entirely on natural scientific facts.




Martha Launches an Old Biscuits Mixer

Last week, Martha Stewart Living Omnimedia Inc. -- which already has magazines, a radio show, a television show and a line of furnishings featuring the eponymous founder and domestic expert -- said it would enter the social network space by launching a site in late 2007. It will be similar to MySpace.com, the social network site hugely popular with teens and young adults, but aimed at adult women, the company said.
"Martha's New Invitation: Your Space, Or Hers? by Frank Ahrens, The Washington Post, May 28, 2006; Page F06 --- Click Here

The company said . . . okay, that's it. I can't hold a straight face any longer in this story. The mind reels with the comic possibilities:

· It'll be just like MySpace. That is, if your space happens to be an 8-by-10 jail cell in a federal pen.

· Why do I have a feeling it will be a lot more like Martha's Space than MySpace?

· Further, how will she stand all of those people in her space, clicking on things, looking at things, getting things out of place? You people ever hear of viruses? Stop touching everything!

· And then there is this: 2007? I bet a couple smart guys in a garage could set up a decent-looking social network site in about a month. By the time Stewart hangs her site, social networks could be so 2006. We may be into anti-social networks by then, which is what I'm looking forward to, as in, KeepOutOfMySpace.com. (Note to self: Register that, quick.)

MySpace, which was bought by Rupert Murdoch's News Corp. last year, has some 70 million users and is growing. The idea is a proven one. Talking to investors last week, Susan Lyne -- the chief executive of Stewart's company (and one of the ABC executives who got fired after green-lighting "Desperate Housewives" and "Lost") -- said Stewart's social network site will be aimed at the 25-to-45-year-old female set, and will let them swap such things as pictures, recipes and scrapbook-making tips.

Continued in article


And now, the Latino Jihad
Four years ago, The Economist ran a cover story on the winner of the Brazilian election, the socialist leader Luiz Inacio Lula da Silva. It was an event of great hemispherical significance. Hence the headline: "The Meaning Of Lula." The following week, a Canadian reader, Asif Niazi, wrote to the magazine: "Sir, The meaning of Lula‚ in Urdu, is penis."  . . . Frank Gaffney's new book War Footing is sub-titled Ten Steps America Must Take to Prevail in the War for the Free World and includes, as one might expect, suggestions for the home front, the Middle East, the transnational agencies. But it's some of the other chapters that give you pause when it comes to the bigger picture - for example, he urges Washington to "Counteract the reemergence of totalitarianism in Latin America." That doesn't sound like the fellows Condi and Colin were cooing over in Quebec. Yet, as Gaffney writes, "Many Latin American countries are imploding rather than developing. The region's most influential leaders are thugs. It is a magnet for Islamist terrorists and a breeding ground for hostile political movements. The key leader is Chavez, the billionaire dictator of Venezuela, who has declared a Latino jihad against the United States."
Mark Steyn, "And now, the Latino Jihad," Jerusalem Post, May 28, 2006 --- Click Here


Professor Churchill found guilty of "misconduct and plagiarism"

Last week the University of Colorado panel investigating Ward Churchill found that the controversial professor of Native American studies committed serious acts of research misconduct and plagiarism. It’s now up to the university to decide on an appropriate punishment for the tenured professor, who could be fired or suspended without pay. I don’t know enough about the situation to support or challenge the panel’s unanimous findings, or to suggest what the university should do about them, but one aspect of the committee’s 125-page report signals a chilling warning to academics: If you want to stay below the radar, keep your politics and your scholarship to yourself.
Dennis Barron, "Churchill Fallout: It’s About Academic Freedom," Inside Higher Ed, May 26, 2006 --- http://www.insidehighered.com/views/2006/05/26/baron

"Churchill Fallout: There Are More Like Him," by Anne D. Neal, Inside Higher Ed, May 26, 2006 --- http://www.insidehighered.com/views/2006/05/26/neal

The American Council of Trustees and Alumni’s report “How Many Ward Churchills?” has caused an uproar in some corners of the Internet. Criticism has centered on two issues: method and message. The report’s principal critics, Swarthmore history professor Timothy Burke and The Myth of Political Correctness author John K. Wilson, have attacked it, respectively, as a “casual, lazy, cherrypicking survey of whatever materials the author(s) were able to access on the Web,” and as part of “a vast new right-wing witch hunt on college campuses.” Both critiques share confused and erroneous assumptions about the report’s message and about ACTA’s right to criticize academic culture.

rke complains that the report’s criticisms are ill-founded: They “see what they want to see,” they “ignore context or specificity,” and they “avoid REAL argument of the kind that scholars routinely engage in,” he grumbles. “The report talks about the need to guarantee that students have unrestrained rights to the free exchange of ideas in the classroom. Seriously, unless you bother to get off your ass and stop reading catalogues online, you have no idea what happens in classrooms.”

Setting aside Burke’s contemptuous tone, let’s examine the gaps in his reasoning. Burke’s initial objections are throw-away examples of faulty logic. The first, in which he accuses ACTA of post ergo propter hoc thinking, is itself an example of that logical fallacy: Burke sees ACTA seeing what ACTA wants to see because Burke wants to see ACTA that way. But the course descriptions ACTA cites are hardly unique or isolated. There are hundreds of similarly tendentious descriptions published by institutions across the country. They were chosen for their utter typicality, not their uniqueness.

Burke’s second objection is remarkably solipsistic — context and specificity are whatever he defines them to be. ACTA quotes course descriptions verbatim, working from exactly what students (and interested parents) read to select a class. The reason? Course descriptions are designed to stand alone — if they are all a prospective student needs to know about a class, then they are also all tuition-paying parents, taxpayers, and concerned citizens need in order to form a preliminary judgment.

This objection is part of Burke’s larger criticism of the report’s reliance on course descriptions. But his claim that these documents — the main resource students use to decide whether or not to register for a class — do not tell us anything about what happens in the classes in question is illogical at best, disingenuous at worst. If true, this charge would mean either that professors routinely engage in false advertising or that the process by which students choose courses is a charade that fools no one but students themselves.

In so arguing, Burke has chosen to stretch a point ACTA freely concedes — that course descriptions are neither courses nor perfect windows into the curriculum — in order to avoid ACTA’s more fundamental argument about why course descriptions matter. They matter because they are professors’ own public representations of what happens in their classrooms. That so many professors describe their pedagogical aims in ideologically loaded ways raises entirely legitimate questions about accountability and balance.

Of course, ACTA has never claimed to know exactly what is happening in classrooms, and does not assume authority to determine whether a class is pedagogically sound. All ACTA’s report does is to urge college and university presidents, deans, and faculty to examine the issue themselves. ACTA has already outlined ways campus leaders can review departments and programs while still being fair, respectful, and sensitive to academic freedom and academic autonomy. Our 2005 report, “Intellectual Diversity: Time for Action,” was praised for its sensitivity to academic freedom and self-governance. Burke’s hasty and intemperate critique studiously evades these points.

Burke’s other criticism, that ACTA avoids “REAL” argument because it does not argue in the same manner as scholars do, is self-servingly dismissive: ACTA’s argument need not be considered, Burke implies, because ACTA has not made its argument as Burke thinks arguments should be made. But the truth is that ACTA’s report is expressly not an academic paper. It is a report designed to initiate dialogue about the college curriculum by outlining some of the dominant terms and patterns displayed in course offerings across the country. To condemn it, as Burke has, for failing to maintain scholarly standards of data analysis is like damning an apple for not being an orange.

Burke thus badly misunderstands ACTA’s report. He both thinks ACTA isn’t qualified to judge the academic curriculum and complains that ACTA has not framed a satisfactory program of reform. But ACTA stresses that academics should address the problem of self-regulation, and that they should do so now — in the face of mounting legislative interest in controlling the curriculum. ACTA’s report is as friendly to institutional self-governance and academic freedom as it is possible for a watchdog organization to be.

Now for Mr. Wilson.

Writing at Inside Higher Ed, John K. Wilson treats ACTA’s report as Exhibit A in “a vast new right-wing witch hunt on college campuses”: “The far right is already pursuing leftist academics for expressing their views in the classroom,” Wilson writes. “ACTA threatens that academic freedom will be revoked from colleges unless they start censoring their professors and ban [courses that mention social justice, sex, or race].” But Wilson’s scaremongering misrepresents the report to an audience who, he seems to expect, will not check his sources.

Nowhere does ACTA advocate censoring professors or banning courses. The report urges academic officials to address — voluntarily, and in institutionally appropriate ways — professors’ obligation to respect students’ academic freedom to learn about controversial issues. The report recommends institutional self-study, hiring administrators committed to intellectual diversity, careful vetting of job candidates’ work, review of personnel practices, post-tenure review, and — most importantly — fostering robust debate on campus.

Here are the study’s concluding paragraphs, which follow directly from the sentence Wilson quoted to argue that ACTA is endorsing censorship:

Ultimately, greater accountability means more responsible decision-making on the part of academic administrators, more judicious hiring on the part of departments, and more balanced, genuinely tolerant teaching on the part of faculties. It also means acknowledging—openly and unapologetically—that education and advocacy are not one and the same, that the invaluable work of opening minds and honing critical thinking skills cannot be done when professors are more interested in seeing their own beliefs put into political practice.Finally, it means defending the academic freedom of even the most militantly radical academics. Our aim should not be to fire the Ward Churchills for their views, but to insist that they do their job—regardless of their ideological commitments. We must insist that, in their classrooms, they teach fairly, fostering an open and robust exchange of ideas and refusing to succumb to a proselytizing or otherwise biased pedagogy. Only then will their ideas be subject to debate; only then will they and their students learn to defend their positions in the marketplace of ideas. Only then will other views challenge, complicate, and even displace theirs. Only then can we hope to create a truly diverse academy.

Far from calling for censorship or the banning of classes, ACTA urges transparency about what professors teach; far from trying to silence politically engaged professors, ACTA defends academic freedom while at the same time noting that 1) academic freedom does not mean freedom from criticism or freedom from accountability; and 2) students have academic freedom too. Also worth noting: When the Ward Churchill scandal broke in 2005, ACTA defended Churchill from those who sought to fire him for his speech.

Wilson mistrusts definitions of research misconduct that include egregiously misleading citations — and no wonder. His own argument about ACTA depends on the willful manipulation of sources.

Neither Burke nor Wilson reads ACTA’s report objectively, choosing instead to see it as proof of that worn professorial complaint, that no one outside the ivory tower understands academics. But what neither grasps is that it is not the public’s job to intuit the special worth of professors. Insofar as Burke and Wilson represent an academic consensus that outsiders are not qualified to judge — or scrutinize, or question — higher education, they signal the depth of the complacent insularity ACTA’s report takes to task.

If ACTA’s report has a take-home message for academics, it is that they urgently need to justify to a skeptical public why their work deserves special protections. Only then, ironically, will they have a chance of preserving the independence they cherish. With transparency comes respect; with accountability comes autonomy. That’s the paradoxical point of “How Many Ward Churchills?” — that the more open one is about one’s practices, the more willing one is to allow one’s work to be scrutinized, the more responsive one is to legitimate criticisms, the more likely one is to be allowed to carry on without undue interference. What a pity that Burke and Wilson could not take off their ideological blinders long enough to see that.

Anne D. Neal is president of the American Council of Trustees and Alumni.AACRAO Consulting

 

Many comments accompany the above article --- http://www.insidehighered.com/views/2006/05/26/neal

 

Bob Jensen's threads on Ward Churchill are at http://www.trinity.edu/rjensen/HypocrisyChurchill.htm

Also see http://www.trinity.edu/rjensen/hypocrisy.htm


"The Mathematical Structure of Terrorism," PhysOrg, May 22, 2006 --- http://physorg.com/news67524254.html


Software for faculty and departmental performance evaluation and management

May 30, 2006 message from Ed Scribner [escribne@NMSU.EDU]

A couple of months ago I asked for any experiences with systems that collect faculty activity and productivity data for multiple reporting needs (AACSB, local performance evaluation, etc.). I said I'd get back to the list with a summary of private responses.

No one reported any significant direct experience, but many AECMers provided names and e-mail addresses of [primarily] associate deans who had researched products from Sedona and Digital Measures. Since my associate dean was leading the charge, I just passed those addresses on to her.

We ended up selecting Digital Measures mainly because of our local faculty input, the gist of which was that it had a more professional "feel." My recollection is that the risk of data loss with either system is acceptable and that the university "owns" the data. I understand that a grad student is entering our data from the past five years to get us started.

Ed Scribner
New Mexico State University
Las Cruces, NM, USA

Jensen Comment
The Digital Measures homepage is at http://www.digitalmeasures.com/

Over 100 universities use Digital Measures' customized solutions to connect administrators, faculty, staff, students, and alumni. Take a look at a few of the schools and learn more about Digital Measures.

Bob Jensen's threads on assessment are at http://www.trinity.edu/rjensen/assess.htm


Article by an unhappy former academic

"The Apparently Bearable Unhappiness of Academe," by Rebecca Steinitz, Inside Higher Ed, March 28, 2006 --- http://www.insidehighered.com/workplace/2006/03/28/steinitz

And here we reach the heart of the matter. We academics are deeply invested in our own significance. We were the smartest ones in the class. We believe the life of the mind is sacred and we are living it. Our ideas are our selves. When we come up against biased tenure committees or uncongenial locations or grinding teaching loads, we convince ourselves that this is the price we must pay for the greatness we are meant to achieve, and we suck it up, complaining all the way.

I do know happy academics of my generation. Some are wildly successful, living out the myth. Others have found niches in which they can happily do work that satisfies them, giving up the myth. But too many of us hang onto the myth and let go of satisfaction.

When people say I’m a brave role model, I have to laugh. I don’t feel very brave. Mainly I feel shell-shocked. Giving up the security of tenure and remaking one’s life at 41 is hard, so hard that sometimes I ask myself why I’m doing it. Is it an act of hubris, based on the continuing belief that I am great and only need to find the arena in which my greatness will be appreciated, or is it an act of submission, acquiescing to my own ordinariness? I don’t know the answer to that question, but I do know that no longer an academic, I’m a lot happier.

Continued in article


The entire 2006 current ethics flap about climbers not rendering aid to a supposedly dying climber on Mt. Everest was preceded by a great 1983 real world case called the Parable of the Sadhu from the Harvard Business School --- Click Here

The Parable of the Sadhu was and still is widely used in ethics courses, especially regarding issues of situational ethics and group versus individual ethics. The author Bowen H. McCoy was the managing director of the investment banking firm Morgan Stanley & Co. After returning to New York, McCoy was conscious stricken about leaving a dying religious man during an Everest climb. The climbers at that time shed some clothes to keep the dying man warm. But climbers from various nations (U.S., Switzerland, and Japan) actually moved on and did not help the man down to shelter because they all felt that he was going to die in any case. Also, the weather was such that the climbers could not complete their climbing goal if they delayed to carry the dying man to shelter.

McCoy wrote the following after returning to New York:

We do not know if the sadhu lived or died. For many of the following days and evenings Stephen and I discussed and debated our behavior toward the sadhu. Stephen is a committed Quaker with deep moral vision. He said, "I feel that what happened with the Sadhu is a good example of the breakdown between the individual ethic and the corporate ethic. No one person was willing to assume ultimate responsibility for the sadhu. Each was willing to do his bit just so long as it was not too inconvenient. When it got to be a bother everyone just passed the buck to someone else and took off . . . "

. . .

Despite my arguments, I feel and continue to feel guilt about the sadhu. I had literally walked through a classic moral dilemma without fully thinking through the consequences. My excuses for my actions include a high adrenaline flow, super-ordinate goal, and a once-in-a-lifetime opportunity --- factors in the usual corporate situation, especially when one is under stress.

Real moral dilemmas are ambiguous and many of us hike right through them, unaware that they exist. When, usually after the fact, someone makes an issue of them, we tend to resent his or her bringing it up. Often, when the full import of what we have done (or not done) falls on us, we dig into a defensive position from which it is very difficult to emerge. In rare circumstances we may contemplate what we have done from inside a prison.

Had we mountaineers have been free of physical and mental stress caused by the effort and the high altitude, we might have treated the sadhu differently. Yet isn't stress the real test of personal and corporate values? The instant decisions executives make under pressure reveal the most about personal and corporate character.

Among the many questions that occur to me when pondering my experience are:  What are the practical limits of moral imagination and vision? Is there a collective or institutional ethic beyond the ethics of the individual? At what level of effor or commitment can one discharge one's ethical responsibilities?

Continued in this 1983 Harvard Business School Case.

Jensen Comment
I might add that this 1983 case was written before the breakdown in ethics during the 1990s high tech bubble in which investment banking, executive compensation, corporate governance, and corporate ethics in general sometimes become rotten to the core --- http://www.trinity.edu/rjensen/FraudRotten.htm

********************

You can read more about the 2006 repeat of the dilemma at
"Everest pioneer appalled that climber was left to die," by Steve McMorran, Seattle Times, May 25, 2006 --- http://seattletimes.nwsource.com/html/nationworld/2003017177_everest25.html

May 28, 2006 reply from Andrew Priest [a.priest@ECU.EDU.AU]

Hi Bob

And you can contrast this action and the 2006 with the help given to Lincoln Hall again this year (events still going on). Lincoln was left on the mountain, assumed dead. He was not and is lower down the mountain and doing okay. Details at < http://www.mounteverest.net/news.php?id=3315and more details at
< http://www.mounteverest.net/news.php?id=3311> .

Compassion and caring wins out every time in my view over selfishness.

Andrew


Flashback from The Wall Street Journal, May 30, 1997
When "MWD" opens Monday on the Big Board, investors will get their first chance to buy shares of the newly combined Wall Street firm of Morgan Stanley, Dean Witter, Discover & Co. The new firm's stock symbol will represent each of the brands of the combined firm.


Jim Mahar's Picks for Finance Book Summer Reading
(I prefer the last three listings)

From Jim Mahar's blog on May 17, 2006 --- http://financeprofessorblog.blogspot.com/

Finance Reading List

I was asked for a "summer reading list" for finance classes so here you go: ten (non technical) finance/economics books I would recommend.

1. The World is Flat by Thomas Friedman. It has been talked about everywhere (even the SBU graduation speaker mentioned it by name) but it is definitely worth the read! Probably my favorite of the bunch. Read what I wrote about it previously.

2. The Wisdom of Crowds by Jame Surowiecki. Great. Tells you more about market efficiency (and the lack thereof) than several classes could.

3. Random Walk Down Wall Street-by Burton Malkiel. A must read classic!

4. Against the Gods--Peter Bernstein. I remember my first reaction to this book was--Wow! It makes risk management not only interesting but fun!

5. The End of Poverty by Jeff Sachs. It is about ending extreme poverty. I really liked it! An important read that covers strategies to fight poverty from China to India to Africa. Also has an interesting economic history of the world. Introduction is by Bono.

6. Heard on the Street: Quantitative Questions from Wall Street Job Interviews--even if you are not interviewing, this one is interesting and somewhat fun! EVERY business school should have this one!

7. Barbarians at the Gate--Yeah, it's outdated. Yeah, it reads like a novel. Yeah, I like it and still use some of the examples.

8. Freakonomics--by Steven Levitt and Stepham Dubner. It is an interesting and fast read. Levitt is always a worthwhile read.

9. Fooled by Randomness by Nassim Nicholas Taleb. I hate to admit it but I think about this book during almost every sporting event I watch. It may not be the best written book on the list (and I have to agree with the Amazon review, he does come across as arrogant) but it is still definitely a VERY worthwhile read.

10. Worry Free Investing by Zvi Bodie. Basic idea: invest in bonds and options. Might be a tad text-bookish, but such a great idea. I hope more people do it!

Well there you have it. Ten Finance books to read this summer ;) No doubt I have forgotten many others as well, but here are a few to whet your appetite.

Miss Chechnya Beauty Contest (for real) --- http://www.freerepublic.com/focus/f-news/1639633/posts
(Something you will not see in Iran)


Ancient Finance from Harvard Business School

From Jim Mahar's blog on May 17, 2006 --- http://financeprofessorblog.blogspot.com/

 
The HBS Working Knowledge site has an interesting article by William Goetzmann on financial instruments back in the time of the Romans and Greeks. For instance on checks:

...bankers' checks written in Greek on papyri appeared in ancient Egypt as far back as 250 B.C. Papyri preserved well in Egypt thanks to its arid climate, but Goetzmann thinks it's safe to say such checks changed hands throughout the Mediterranean world . . . So the whole tradition of bank checks predates the current era and has its roots at least in Hellenistic Greek times," he says.

Bob Jensen's threads on ancient history of accounting --- Click Here


Birthright:  The easiest way to make your whole family U.S. citizens
In 1970, six percent of all births in the United States were to illegal aliens. In 2002, that figure was 23 percent. In 1994, 36 percent of the births paid for by Medi-Cal, California's Medicaid, were to illegals. That figure has doubtless increased in the intervening 12 years as the rate of illegal immigration has risen. Any child born in the United States automatically becomes a U.S. citizen. He or she is instantly eligible for panoply of social services, food stamps and other forms of aid. When the child reaches the age of 21, he can petition to have his parents and siblings declared permanent residents.
Mona Charin, ""Anchors" away," Townhall, May 19, 2006 --- http://townhall.com/opinion/columns/monacharen/2006/05/19/197982.html


"SOME COMPANIES ARE SMARTER," by Jay Hammond, AccountingWeb Newsletter, May 18, 2006

Some companies, like some people, are smarter than others. Really. Don't believe me? A business professor at Washington University in St. Louis, Missouri, has developed a method for measuring an organization's IQ based on the effectiveness at innovation.

"In essence, firms fall into one of two camps," says Anne Marie Knott, assistant professor of entrepreneurship and management at the Olin School of Business. "Smart firms" or "high IQ firms" produce more bang for their R&D buck and therefore spend money to do their own research and development. Less smart firms rely on other firms rather than spending their own money on R&D.

"Interestingly, firms that aren't smart with their own R&D seem to be better able to use the innovations of rivals," Knott says. "This result stands in contrast to a very popular theory in the management literature known as absorptive capacity. That theory holds that a firm's ability to absorb what other firms are doing is a function of how much R&D the acquiring firms actually does itself. The notion is that you can't understand cutting edge research unless you actually do some yourself.

"But in practice, that's not what appears to be happening," Knott continues. "Instead, high IQ firms, those that are most productive with their own R&D spending, actually have a lower ability to absorb the work of others. In other words, while they are 'high IQ' with respect to innovating, they are 'low IQ' with respect to imitating. Conversely, firms that are 'low IQ' with respect to innovating tend to be 'high IQ' in respect to imitating."

The practical application of this finding is that we now know why firms choose particular strategies, either innovative or imitative. This knowledge can in turn help firms and investors make wiser decisions regarding R&D investment.

Written by Jay Hammond, Managing Editor, AccountingWEB.com editor@accountingweb.com 


Larry Summers' Harvard Presidency: "It isn't Pretty"
Boston Magazine’s June issue offers an in-depth, behind the scenes look at the last days of Larry Summers’s presidency at Harvard University. It isn’t pretty.
Inside Higher Ed, May 31, 2006 --- http://www.insidehighered.com/news/2006/05/31/qt


Harvard announces plan to create engineering school as
Stanford and others join push toward interdisciplinary work.

In a significant sign of the growth of interdisciplinary engineering approaches — and of the profile of the discipline of engineering itself — Harvard University is no longer content to allow that other Cambridge institution be the only one with engineering in lights. Harvard this week announced plans for the creation of the School of Engineering and Applied Sciences. Harvard expects to approve the new school by the end of fall. Harvard will add 30 faculty members to the 70 already in the Division of Engineering and Applied Sciences. Perhaps most importantly, as Lawrence H. Summers, president of Harvard said in a statement: “It marks our recognition of the profound importance of technology and applied sciences for every aspect of our society.”
David Epstein, "The Technology Mosaic," Inside Higher Ed, May 25, 2006 --- http://www.insidehighered.com/news/2006/05/25/engineering


National Academy of Engineering --- http://www.nae.edu/


"Ever-Expanding False Claims Act," by Doug Lederman, Inside Higher Ed, May 27, 2006 --- http://www.insidehighered.com/news/2006/05/26/false

That sound you just heard might have been the first piece of the sky hitting the roof.

A federal judge in California on Tuesday cleared the way for three former adjunct professors at Chapman University to sue the institution under the False Claims Act, which permits lawsuits by an individual who believes he or she has identified fraud committed against the federal government, and who sues hoping to be joined by the U.S. Justice Department. (The plaintiff then shares in any financial penalties, which can include trebled damages.) In siding with those who sued Chapman, Judge James V. Selna not only cited the Seventh Circuit’s decision in United States of America ex. rel. Jeffrey E. Main v. Oakland City University as a key precedent, but expanded on it in significant ways. Most notably, the judge concludes that a college can run afoul of the False Claims Act by violating a requirement imposed not directly by the federal government but by an accrediting group — a position the Justice Department endorsed.

“This is exactly what we were worried about with the Main case, and in fact it broadens it and takes it a step further,” said Mark L. Pelesh, executive vice president at Corinthian Colleges and a longtime higher education lawyer. “Now making false claims to an accreditor somehow translates, through this conflationary approach, into making false claims for money to the federal government.”

This is complicated legal terrain, so let’s back up. First, last October’s decision by the Seventh Circuit was perceived as breaking new ground because it concluded that a college or other recipient of federal funds could be held accountable under the False Claims Act for breaking a promise or commitment it makes to the government at one point in time or at one stage of a federal application process, even if it does not make a similar promise at the point at which it formally requests or receives the funds. Specifically, the court ruled that a former admissions director could sue Oakland City for allegedly paying recruiters based on enrollment because the initial, “phase one” application that it and other colleges make to the Education Department for certification to eventually award federal financial aid funds bars it from doing that, even though no money passes hands at that point.

. . .

But lawyers who tend to sue colleges in cases like this say that the lawyers’ “sky is falling rhetoric” overstates the threat to the institutions. Daniel Bartley, who represents the three instructors in the Chapman case as well as those in the pending Phoenix case, says college lawyers are wrong to say that the new line of False Claims cases allow colleges to be sued if they have violated any of the hundreds of regulations that the government — or, under the Chapman ruling, an accreditor — imposes on them. “This applies only where there is a material breach of a condition of payment, and it’s flagrant,” Bartley said. “The only colleges that face trouble are those that are not obeying the law and the material accreditation standards that underlie their getting loans and grants.”

Exactly what laws, regulations and standards are considered “material,” of course, will be one of the many issues that could keep the courts (and colleges’ lawyers) busy for months and years to come, if this line of False Claims Act cases continues to gather steam.

Continued in article


Why the U.S. Wins Wars and Will Win the War on Terror
Frontpage Interview’s guest today is Larry Schweikart, the co-author of A Patriot's History of the United States: From Columbus's Great Discovery to the War on Terror. He is a professor of history at the University of Dayton and has written more than 20 books on national defense, business, and financial history. He is the author of the new book, America's Victories: Why the U.S. Wins Wars and Will Win the War on Terror.

Jamie Glazov, "America's Victories," FrontPage Magazine, May 25, 2006 --- http://www.frontpagemag.com/Articles/ReadArticle.asp?ID=22620


In his new book, The Great Deluge, Douglas Brinkley describes a New Orleans ripe for disaster as Hurricane Katrina approached. The city was crippled by poverty, corruption and the lack of a workable disaster plan.
"'The Great Deluge': A Katrina Post-Mortem:  Listen to this story...,"  by Farai Chideya, NPR, May 22, 2006 --- http://www.npr.org/templates/story/story.php?storyId=5421017 


Chinese-language version of Wikipedia
China's biggest Internet search site, Baidu.com, has launched a Chinese-language encyclopedia inspired by the cooperative reference site Wikipedia, which the communist government bars China's Web surfers from seeing. The Chinese service, which debuted in April, carries entries written by users, but warns that it will delete content about sex, terrorism and attacks on the communist government. Government censors blocked access last year to Wikipedia, whose registered users have posted more than 1.1 million entries, apparently due to concern about its references to Tibet, Taiwan and other topics. The emergence of Baidu's encyclopedia reflects efforts by Chinese entrepreneurs to take advantage of conditions created by the government's efforts to simultaneously promote and control Internet use.
"Baidu, the most popular search engine in China, has launched a Chinese-language version of Wikipedia," MIT's Technology Review, May 18, 2006 --- http://www.technologyreview.com/read_article.aspx?id=16896


Euston.... We Have a Problem
Tomorrow night at a church in London, there will be a gathering of several hundred people to celebrate the launch of “The Euston Manifesto” — a short document in which one sector of the British and American left declares itself to be in favor of pluralist and secular democracy, and against blowing people up for the glory of Allah . . . As I was musing over all of this, a friend pointed out a conspicuous absence from the list of signatories to the manifesto: Todd Gitlin, a professor of sociology and journalism at Columbia University. His book The Intellectuals and the Flag, published earlier this year by Columbia University Press, defends the idea of left-wing American patriotism with a frank interest “in the necessary task of defeating the jihadist enemy.” This would seem to put him in the Eustonian camp, yet he did not endorse the manifesto. Why not? I contacted him by e-mail to ask. “I recognize a shoddy piece of intellectual patchwork when I see one,” Gitlin responded.
Scott McLemee, "Euston.... We Have a Problem," Inside Higher Ed, May 24, 2006 --- http://www.insidehighered.com/views/2006/05/24/mclemee


Florida State Funds May Not Reimburse travel expenses to terrorist and communist states, including
include Cuba, Syria, Iran, North Korea and the Sudan (nothing is said about China)

State Rep. David Rivera, a Republican who hails from a district composed largely of Cuban Americans, has spent the past several months garnering legislative support for a bill that he believed would do all those things. He not only ushered the bill through passage in the House, but he also persuaded Sen. Mike Haridopolos, also a Republican, to take similar actions in the Senate. Ultimately, the bill passed both chambers and made its way to Governor Jeb Bush’s desk on Tuesday. The governor — against the advice of academic groups — has said that he has every intention of signing the legislation. The new legislation would, in part, prohibit “the use of state or nonstate funds made available to state universities to implement, organize, direct, coordinate, or administer activities related to or involving travel to a terrorist state.” Countries deemed terrorist states by the U.S. include Cuba, Syria, Iran, North Korea and the Sudan. The law will go into effect on July 1.Rivera said Tuesday that many Cuban Americans he’s spoken with are pleased, especially after recently seeing a professor and a counselor affiliated with Florida International University indicted on charges of spying for the Cuban government.
Rob Capriccioso, "Florida Isolationism," Inside Higher Ed, May 25, 2006 --- http://www.insidehighered.com/news/2006/05/25/florida


Ten Emerging Technologies
MIT's Technology Review --- http://www.technologyreview.com/special/emerging/index.aspx

Comparative Interactomics
By creating maps of the body’s complex molecular interactions, Trey Ideker is providing new ways to find drugs.

Nanomedicine
James Baker designs nanoparticles to guide drugs directly into cancer cells, which could lead to far safer treatments.

Epigenetics
Alexander Olek has developed tests to detect cancer early by measuring its subtle DNA changes.

Cognitive Radio
To avoid future wireless traffic jams, Heather “Haitao” Zheng is finding ways to exploit unused radio spectrum.

Nuclear Reprogramming
Hoping to resolve the embryonic-stem-cell debate, Markus Grompe envisions a more ethical way to derive the cells.

Tensor Imaging
Kelvin Lim is using a new brain-imaging method to understand schizophrenia.

Universal Authentication
Leading the development of a privacy-protecting online ID system, Scott Cantor is hoping for a safer Internet.

Nanobiomechanics
Measuring the tiny forces acting on cells, Subra Suresh believes, could produce fresh understanding of diseases.


WebPhoto:  Microsoft introduces a new picture file compression technology

According to BetaNews, a Microsoft spokesperson claims that WMPhoto will offer the same or better image quality as JPEG at half the file size. That's twice the compression (12:1 versus the standard 6:1 of JPEG) with the same or better quality.
Monkey Bites, May 26, 2006 --- http://blog.wired.com/monkeybites/

Click here for more information
http://www.betanews.com/article/Microsoft_Unveils_JPEG_Alternative/1148594312


Updates from WebMD --- http://www.webmd.com/

Latest Headlines on May 25, 2006

Latest Headlines on May 28, 2006


"Researchers produce images of AIDS virus that may shape vaccine," PhysOrg, May 29, 2006 --- http://www.physorg.com/news68085377.html


"Vaccine to Cut Risk of Shingles in Older People Is Approved," by Garniner Harris, The New York Times, May 27, 2006 --- Click Here
The vaccine, called Zostavax, is roughly equivalent to 14 doses of the pediatric chickenpox vaccine.

Also see http://www.webmd.com/content/article/122/114846


Scientists back autism link to measles vaccine

"US scientists back autism link to MMR," by Beezy Marsh and Sally Beck, London Telegraph, May 28, 2006 --- Click Here


Lesbian teens five times more likely to attempt suicide
Lesbian teens are nearly five times more likely to attempt suicide than heterosexual girls, according to a survey presented at a national conference of public health experts in Vancouver Monday. The survey found 38 per cent of lesbian girls and 30.4 per cent of bisexual girls said they had attempted suicide in the previous year, compared with 8.2 per cent of heterosexual girls. The results were from a 2003 survey of 30,000 students between grades 7 and 12 done by the B.C.-based McCreary Centre Society, which asked students if they had attempted suicide in the previous year.
Glenn Bohn, "Survey bares lesbian teens-suicide link:  Numbers suggest lesbian teens five times more likely to attempt killing themselves," Canada.com, May 30, 2006 --- Click Here


Heroin doesn't hook people; rather, people hook heroin
"Poppycock," by Theodore DAlrymple, The Wall Street Journal, May 25, 2006; Page A14 --- http://online.wsj.com/article/SB114852365443262675.html?mod=todays_us_opinion

In 1822, Thomas De Quincey published a short book, "The Confessions of an English Opium Eater." The nature of addiction to opiates has been misunderstood ever since.

De Quincey took opiates in the form of laudanum, which was tincture of opium in alcohol. He claimed that special philosophical insights and emotional states were available to opium-eaters, as they were then called, that were not available to abstainers; but he also claimed that the effort to stop taking opium involved a titanic struggle of almost superhuman misery. Thus, those who wanted to know the heights had also to plumb the depths.

This romantic nonsense has been accepted wholesale by doctors and litterateurs for nearly two centuries. It has given rise to an orthodoxy about opiate addiction, including heroin addiction, that the general public likewise takes for granted: To wit, a person takes a little of a drug, and is hooked; the drug renders him incapable of work, but since withdrawal from the drug is such a terrible experience, and since the drug is expensive, the addict is virtually forced into criminal activity to fund his habit. He cannot abandon the habit except under medical supervision, often by means of a substitute drug.

In each and every particular, this picture is not only mistaken, but obviously mistaken. It actually takes some considerable effort to addict oneself to opiates: The average heroin addict has been taking it for a year before he develops an addiction. Like many people who are able to take opiates intermittently, De Quincey took opium every week for several years before becoming habituated to it. William Burroughs, who lied about many things, admitted truthfully that you may take heroin many times, and for quite a long period, before becoming addicted.

Heroin doesn't hook people; rather, people hook heroin. It is quite untrue that withdrawal from heroin or other opiates is a serious business, so serious that it would justify or at least mitigate the commission of crimes such as mugging. Withdrawal effects from opiates are trivial, medically speaking (unlike those from alcohol, barbiturates or even, on occasion, benzodiazepines such as valium), and experiment demonstrates that they are largely, though not entirely, psychological in origin. Lurid descriptions in books and depictions in films exaggerate them à la De Quincey (and also Coleridge, who was a chronic self-dramatizer).

Continued in article


Congratulations Karen

"Karen Pincus Earns Distinguished Achievement in Accounting Education Award," AccountingWeb, May 24, 2006 --- http://www.accountingweb.com/cgi-bin/item.cgi?id=102187

“The future of our profession is built on the quality and the number of the young people who join us,” Leslie Murphy, American Institute of Certified Public Accountants (AICPA) Chair explained while presenting the Distinguished Achievement in Accounting Education Award to Karen V. Pincus, Chair of the Department of Accounting at the University of Arkansas. “That, in turn, depends on whether quality people decide to study accounting and how well they are trained in their collegiate and post-collegiate education. The Institute annually selects a member of the academic community who best serves these truths to receive the award.”

Pincus has received numerous recognitions for teaching excellence, curriculum development and service to the accounting academic and practicing professions. Most notably, she received the American Accounting Association Innovation in Accounting Education Award for designing and implementing a totally new curriculum approach to accounting education. In Arkansas, she is also the S. Robson Walton Professor of Accounting, as well as President of Beta Alpha Psi, the student professional association.

Pincus is currently a member of the AICPA’s Nominations Committee. From 2002 to 2005 she was an elected member-at-large of the AICPA governing committee. She is also past Chair of the Pre-Certification Education Executive Committee and a past member of the virtual Grassroots Panel and Accounting Careers Subcommittee.

She has also served as President of the Federation of Schools of Accountancy, the association of accredited graduate accounting programs, and Vice President of the American Accounting Association, in addition to serving on many committees for both organizations. She is the author of numerous professional articles and research papers.

Also see http://accounting.smartpros.com/x53101.xml

Jensen Comment
Karen was instrumental in developing the Walton School core curriculum that has no traditional core courses such as traditional principle of accounting courses --- http://waltoncollege.uark.edu/


Fast Food Not Only Hooks People; It Hooks Their Incomes
They found that for the initial 67-cent average cost of upsizing a fast-food meal — and the subsequent 36-gram weight gain — the total cost for increased energy needs, gasoline and medical care would be between $4.06 and $7.72 for men and $3.10 and $4.53 for women, depending on their body type. The bottom line: Although upsizing a meal brings you 73 percent more calories for only an additional 17 percent in price, the hidden financial costs drive the price of that meal up between 191 and 123 percent.
"Super-sizing your food takes hidden toll on pocketbook," PhysOrg, May 24, 2006 --- http://www.physorg.com/news67704755.html


National Institutes of Health: Office of Science Education --- http://science-education.nih.gov/ 


At last many credit card users are listening to us
The credit-card industry has a problem: Although Americans are deeper in debt than ever, they are paying off bigger portions of their monthly credit-card bills. For card issuers, which profit by collecting interest on unpaid balances, that's bad news. In the past, when interest rates crept up, as they are doing now, fewer cardholders could afford to pay down balances. "Normally at this point in the economic cycle, you start to see payment rates decline. But that's not happening," says Richard Srednicki, who runs the credit-card business at J.P. Morgan Chase & Co., the nation's second-largest card issuer. "It is a tougher business if payment rates continue to stay up and consumers continue to pay off more. It's something we've got to understand and work at."
Robin Sidel, "As Users Juggle Their Debts, Revenues to Banks Fall; The Home-Equity Effect Ms. Bode Seeks a Fresh Start," The Wall Street Journal, May 25, 2006; Page A1---
http://online.wsj.com/article/SB114852256641562637.html?mod=todays_us_page_one

Bob Jensen's threads on the dirty secrets of credit card companies are at http://www.trinity.edu/rjensen/FraudReporting.htm#CreditCounseling


"Gas Rewards: The New Frequent Flier Mile?" AccountingWeb, May 21, 2006 ---
http://www.accountingweb.com/cgi-bin/item.cgi?id=102160

For years, credit card issuers have tried to lure consumers into using their card by offering frequent flier miles. The recent dramatic rise in gas prices, however, has led some of these companies to promote gas rewards and rebates instead. The question is, how does anyone decide which card, including rewards, is best for them?

Credit cards offering gas rebates should not be confused with the gas credit cards issued by the gas companies and that can be used only to purchase gas at their stations. Cards offering gas rebates are regular credit cards from MasterCard, Visa, Discover, American Express or whomever, that offer rebates and rewards for the purchases made on the card each month.

“Gas, like other rewards, can just be a gimmick to get you to sign up for the card,” Scott Bilker, founder of Debtsmart.com, told SmartMoney. The News Journal (Wilmington, Del.) reports that some cards offer initial “teaser” rates as high as 10 percent to attract new customers, however most rebates range from 3 to 5 percent once the “honeymoon” is over.

It’s not just the rates that vary, either. Gas rebates come in two types, those that are tied to specific stations, like Mobil, Chevron, etc. and those that can be earned by purchasing gas at any station. When it comes to reducing the amount spent each month on fuel, the non-station specific card is probably the wiser choice, as it allows the buyer to shop around and purchase gas at the lowest available price. Paying the full amount off every month will also help reduce the overall amount spent on gas because the refund won’t be eaten up in interest.

“Make the credit card companies pay you,” Curtis Arnold, founder of CardRatings.com, told the News Journal. “If you use these cards in a savvy manner, they can be a great way to get a break on gas prices.”

CNNMoney.com goes even further, stating that gas rebates are a good value only if the credit score of the cardholder is 720 or higher and the gas tank needs filling at least twice a month. Even if you fall into this category, there are a few things to know about gas rewards cards before rushing out and signing up. Besides knowing whether a card is tied to a specific station, consumers will want to find out:

 

“Typically, to get the full rebate, which is generally 5 percent, you have to go to a standalone stations,” Arnold explained to Kiplingers, further describing a standalone station as “a place whose primary function is selling gas.”

Consumers can gather information to help them make a wise decision about which, if any, gas reward card they should apply for. Several sites compare credit card details including:
 

If the cardholder carries a balance on their card, it is unlikely they will see significant savings from rebates on a credit card. Most debt advisors agree such consumers are better off choosing a credit card with the lowest possible rate and working to pay down the debt owed as swiftly as possible. However, it doesn’t make sense to acquire more debt in an effort to save a few dollars at the pump. Using a credit card or gas station card can help consumers track purchases for tax purposes.

“The big question behind any reward is what’s the cost?” Howard Dvorkin, founder of Consolidated Credit Services Inc. and author of Credit Hell: How to Dig Out of Debt, told Florida’s Sun-Sentinel. “Everything has a limitation. Understand what you are getting into and don’t take it by face value.”

Bob Jensen's threads on dirty secrets of credit card companies are at
 http://www.trinity.edu/rjensen/FraudReporting.htm#FICO


Credit Counseling Frauds

"IRS Cracks Down on Credit Counsel Services," SmartPros, May 16, 2006 --- http://accounting.smartpros.com/x53013.xml

The Internal Revenue Service has canceled the tax-exempt status for some of the nation's largest educational credit counseling services after audits revealed they exist mainly to prey on debt-ridden customers, Commissioner Mark Everson said Monday.

"These organizations have not been operating for the public good and don't deserve tax-exempt status," Everson said. "They have poisoned an entire sector of the charitable community."

A two-year investigation of 41 credit counseling agencies resulted in the revocation, proposed revocation or other termination of their tax-exempt status, he announced.

Everson said that many of those groups, representing more than 40 percent of the revenue in a $1 billion industry, offered little, if any, counseling or education as required of groups with tax-exempt status.

Other such agencies will be required to report on their activities. The IRS is sending compliance inquiries to each of the other 740 known tax-exempt credit counseling agencies not already under audit.

"Depending on the responses received, additional audits may be undertaken," the agency said.

Everson said groups looking to make a profit would secure tax exempt status and make cold phone calls to people in desperate financial straights. They would use scare tactics to sell the people "cookie-cutter" debt management plans that often were not geared toward reducing the consumers' debt and often were too costly to pay. Administrative fees, he said were sometimes collected by third parties handling the paperwork for a profit.

Everson recommended that consumers pick one of the 150 consumer counseling organizations approved by groups like the Better Business Bureau. But bad actors may exist even among those, because guidelines for approval differs between agencies, he said.

Everson added that the agency is following up the revocations with some criminal investigations, but would not detail them.

The IRS also is issuing new guidance on how to comply with federal law to legitimate organizations which educate people on how to maintain good credit.

The agency in recent years has tightened up its review of new applications by credit counseling firms for tax-exempt status. Since 2003, the IRS has reviewed 100 such applications and approved only three.

The actions come consumers and the counseling industry are having to learn to live under a new and more restrictive federal bankruptcy law.

Congress last year gave the financial counseling sector a new role in the nation's bankruptcy system by making it harder for people to wipe out debt and requiring consumers to consult with an approved credit counselor before they seek the protection of a bankruptcy court.

 Bob Jensen's threads on consumer frauds are at http://www.trinity.edu/rjensen/FraudReporting.htm



Flashback:  The Wall Street Journal, May 25, 1960
The nation's petroleum producers, badly shaken by sliding prices and disappointing demand, are taking drastic measures to pull out of a deepening industry slump. They're cutting payrolls and turning increasingly to automation to pare costs.
 

May 22, 2006 message from lucy@booksprice.com

Dear Bob,

My name is Lucy. I would like to inform you regarding a new web site that I hope you will find interesting for you and for the 'Bob Jensen's Links to Electronic Literature' page, and to ask you to add our link to the other book related links on the 'Online Book and Table of Contents Finders' section.

http://www.booksprice.com  is a free innovative service of finding the best price on a purchase of several books together. This service is more useful than the standard services which perform one book comparison at a time: acquiring several books together may reduce the total price of shipping the books, as usually the shipping rate for the second book is lower than the cost for the first book.

I will really appreciate adding a link to our site. You can use this html to create the link to our site:

I hope that you find the service interesting. If you have any queries or you'd like more information, kindly contact me.

Sincerely,

Lucy Orbach Webmaster lucy@booksprice.com 
www.booksprice.com 

Jensen Comment
A better place to add Lucy's message is at http://www.trinity.edu/rjensen/searchh.htm#Books


"'Black' features can sway in favor of death penalty, according to study," by Lisa Trei, Stanford Report, May 3, 2006 --- http://news-service.stanford.edu/news/2006/may3/deathworthy-050306.html 

Male murderers with stereotypically "black-looking" features are more than twice as likely to get the death sentence than lighter-skinned African American defendants found guilty of killing a white person, Stanford researchers have found. The relationship between physical appearance and the death sentence disappears, however, when both murderers and their victims are black.

"Race clearly matters in criminal justice in ways in which people may or may not be consciously aware," said Jennifer Eberhardt, associate professor of psychology. "When black defendants are accused of killing whites, perhaps jurors use the degree to which these defendants appear stereotypically black as a proxy for criminality, and then punish accordingly."

Eberhardt's findings are published in the May issue of the journal Psychological Science. "Looking Deathworthy: Perceived Stereotypicality of Black Defendants Predicts Capital-Sentencing Outcomes" is co-authored with Paul G. Davies, a former Stanford postdoctoral scholar who is now an assistant professor at the University of California-Los Angeles; former Stanford graduate student Valerie J. Purdie-Vaughns, now an assistant professor at Yale University; and Cornell University law Professor Sheri Lynn Johnson, an expert on the death penalty.

Continued in article


Forwarded on May 22, 2006 by Carl Hubbard

Accounting in the Peninsular War


MESSAGE FROM THE DUKE OF WELLINGTON TO THE BRITISH FOREIGN OFFICE IN LONDON -- written from Central Spain, August 1812

Gentlemen,

Whilst marching from Portugal to a position which commands the approach to Madrid and the French forces, my officers have been diligently complying with your requests which have been sent by H.M. ship from London to Lisbon and thence by dispatch to our headquarters.

We have enumerated our saddles, bridles, tents and tent poles, and all manner of sundry items for which His Majesty's Government holds me accountable. I have dispatched reports on the character, wit, and spleen of every officer. Each item and every farthing has been accounted for, with two regrettable exceptions for which I beg your indulgence.

Unfortunately the sum of one shilling and ninepence remains unaccounted for in one infantry battalion's petty cash and there has been a hideous confusion as the the number of jars of raspberry jam issued to one cavalry regiment during a sandstorm in western Spain. This reprehensible carelessness may be related to the pressure of circumstance, since we are war with France, a fact which may come as a bit of a surprise to you gentlemen in Whitehall.

This brings me to my present purpose, which is to request elucidation of my instructions from His Majesty's Government so that I may better understand why I am dragging an army over these barren plains. I construe that perforce it must be one of two alternative duties, as given below. I shall pursue either one with the best of my ability, but I cannot do both:

1. To train an army of uniformed British clerks in Spain for the benefit of the accountants and copy-boys in London or perchance.

2. To see to it that the forces of Napoleon are driven out of Spain.

Your most obedient servant

Wellington


Question
What types of diversity just is not accepted by many liberal college faculty?

"Faculty's Chilly Welcome for Ex-Pentagon Official," by Jason DeParle, The New York Times, May 25, 2006 --- http://www.nytimes.com/2006/05/25/education/25georgetown.html?_r=1&oref=slogin

Douglas J. Feith's table at the Georgetown University faculty club is shaping up as a lonely one.

The move to a teaching position at the School of Foreign Service at Georgetown by Mr. Feith, a former Pentagon official, set off a faculty kerfuffle, with 72 professors, administrators and graduate students signing a letter of protest, some going as far as to accuse him of war crimes.

Some critics complain about the process. (He was hired without a faculty vote.)

Some complain about the war in Iraq. (Mr. Feith has been accused of promoting it with skewed intelligence.)

All say the open protest is unusual at a place that embraces former officials as part of its panache. A former secretary of state, Madeleine K. Albright; a former national security adviser, Anthony Lake; and a former director of central intelligence, George J. Tenet, have joined the faculty without event.

But Mr. Feith, a former under secretary of defense for policy planning and analysis, is another story.

"I'm not going to shake hands with the guy if he's introduced to me," said Mark N. Lance, a philosophy professor who teaches nonviolence in the program on Justice and Peace and who organized the protest. "And if he asks why, I'll say because in my view you're a war criminal and you have no place on this campus."

The dispute can be read as — take your pick — an explosion of fury at a disastrous war, an illustration of the pettiness of academic politics or evidence of Mr. Feith's talent for attracting invective.

Gen. Tommy R. Franks of the Army, the top commander of the Iraq invasion, once referred to him as "the stupidest guy on the face of the earth."

In an interview on Wednesday, Mr. Feith said he welcomed debate "in a proper, civil and rigorous way." But he called the accusations that he had politicized intelligence, advocated torture and attacked the Geneva Conventions as "false," "flatly false" and "outrageous."

A graduate of Harvard and the Georgetown Law School, Mr. Feith served in the Reagan administration and joined other neoconservatives in 1998 in calling on President Bill Clinton to overthrow President Saddam Hussein of Iraq.

Joining the Bush administration in 2001, he set up two Defense Department units that have drawn scrutiny. One was the Office of Special Plans, which took the lead in the Pentagon's preparation for a postwar Iraq, planning that has been widely faulted.

Continued in article


Running Out of Russians
In his state of the union address recently, Vladimir Putin divided his attention between his country's strategic forces and its alarming demographics. The former is a familiar matter of Western commentary and concern, but the latter is not; and this was the first time a Russian president had raised the topic on such an occasion. While Mr. Putin confronted this critical issue, however, he failed to provide a compelling set of solutions. The key problem he addressed was the decline in the Russian population, which has dropped from 148.7 million in 1992 to 143.5 million in 2003. The U.N. estimates that it could fall to 101.5 million by 2050. Earlier contractions of Russia's population were brought about by the massive losses associated with World War I, the civil war, famine, the repression and purges of the 1930s, and World War II. The current demographic decline is the result of a declining birth rate and a high mortality rate.
Padma Desai, "Running Out of Russians," The Wall Street Journal, May 22, 2006; Page A13 --- Click Here

"Russia becoming a Muslim state!" by Salah Uddin Shoaib Choudhury, Asian Tribune, May 22, 2006 --- http://www.asiantribune.com/index.php?q=node/211

Imagine Russia in 2050! According to Paul Goble, a specialist on ethnic minorities in the Russian Federation has predicted that within the next several decades, Russia will become a Muslim majority state. There is another bad news with fast decline in country’s population. This has already become a headache for Russian politicians and policy makers. President Vladimir Putin has called already for Russian women to have more children, because demographers predict that Russia’s population will fall from 143 million to 100 million by 2050. This situation has alarmed Russians as well Western leaders, more so because analysts estimate that Muslims will comprise the majority group in Russia’s population in few decades.

The Muslim population growth rate since 1989 is between 40 and 50 percent, depending on ethnic groups. Today Russia has about 8,000 mosques while 15 years there were only 300 mosques. According to statistics, by the end of 2015, number of mosques in Russia will cross 25,000. These statistics are frightening for many ethnic Russians who associate Islam with the Kremlin’s war against insurgents in Chechnya. Russia is shrinking. Alarmed by the situation, Putin has offered incentives to women who will have more children.

He said that the government would offer 1,500 roubles for the first child, and 3,000 roubles for the second child. He further said that the government will offer financial incentives to those couples who will adopt Russian orphans. But, response to Vladimir Putin’s call is almost zero. Main reason behind fast decline in non-Muslim population in Russia is, particularly larger section of young females in the country is not in favor of having even any child. If someone has, that is also limited within one only. On the other hand, almost all the Muslim couples have at least three children. The number generally ranges between 3-5.

Talking to Blitz, a leader of Moscow’s most populated area said, if the growth of Muslim population continues in the present trend, with the serious decline in population of other religious communities, Russian might ultimately end up as a Muslim state in next two decades. He suggested massive propaganda in favor of having more children in country’s mass media as well increase in the amount of incentives. He also pointed to the fact that, in most cases, such incentives might again go to the Muslim mothers, who generally have more than one child. This is not the question of incentives; it is a matter of realization for the entire non-Muslim Russian population. They should understand that by limited number of children, they are gradually pushing the fate of the country towards an Islamic federation.

Commenting on the issue, a former diplomat said, after the fall of Soviet Union, unfortunately, the entire Russian nation has lost their nationalist spirit, because of poverty and other socio-political adversities. Now they fear in having more than a single child in the family as the cost of living has become extremely expensive, while in most cases, female members of the families are rather forced to work in various fields to bring extra money for their families.

Continued in article


"Cannes sex films question role of porn, Internet," Rueters, May 24, 2006 --- Click Here

Directors at the Cannes film festival this year say they are using radical images of sex to challenge mainstream pornography and its widespread availability on the Internet.

A series of filmmakers say Internet porn alone now shapes many young people's perception of sex and, in many cases, replaces the experience of real physical relationships.

"There are kids who have seen pornography from a very early age, before they are ever gonna have sex," said Larry Clark, one of the directors of the eccentric "Destricted" -- a compilation of explicit sex-centered stories.

In his own short film, Clark interviews young men about their sexual preferences and then allows one candidate to appear with his favorite porn-star.

"When I was a kid noone told me nothing. Now you can go onto the Internet and find out anything ... (Young people) are looking at pornography and they are thinking that this is the way to have sex," Clark said, noting his film was educational.

U.S. director John Cameron Mitchell, who has brought "Shortbus" to Cannes, agrees that young people are increasingly using the Internet to replace real sex.

In Shortbus, he has collected an ensemble of non-professional actors who engage in real on-screen sex and masturbation in an attempt to de-mystify the subject. He does not consider his film to be pornography.

He said that the United States had a puritanical view of sex which turned it into an issue in young people's minds. In one particularly provocative scene in his film, three gay men engage in a sex session while singing "The Star-Spangled Banner".

Continued in article


You will probably be getting a phone tax refund

May 26, 2006 message from Scott Bonacker [aecm@BONACKER.US]

'Antique' Phone Tax Dropped Treasury to Refund $13 Billion Collected on Long-Distance By Albert B. Crenshaw Washington Post Staff Writer Friday, May 26, 2006; D02

The Treasury Department, conceding that it has no right to continue collecting a 108-year-old tax on long-distance telephone calls, announced yesterday that it will drop its legal battle for the tax and instead refund some $13 billion to callers who have paid the tax in the past three years.

The 3 percent tax, enacted in 1898 to help pay for the Spanish-American War and revised in 1965, has been declared illegal by five federal courts of appeal during the past year as the result of challenges brought by companies forced to pay it.

Long-distance carriers have been required to bill customers for the tax and remit it to the government.

Treasury Secretary John W. Snow yesterday called it "an outdated, antiquated tax that has survived a century beyond its original purpose, and by now should have been ancient history."

The tax, which was originally considered a luxury tax because only wealthy people had telephones at the time, will go out of existence on July 31.

Read the rest at:
http://www.washingtonpost.com/wp-dyn/content/article/2006/05/25/AR2006052500 

 


"My Last Senior Year," by Felice Prager, The Irascible Professor, May 189, 2006 --- http://irascibleprofessor.com/comments-05-18-06.htm

With two sons, each attending public school for 13 years, added to my own 13 years as a public school student and a decade plus as a public school teacher, I proudly announce that I am finally done! The light at the end of the tunnel is so near that I need sunglasses. As my younger son joins the rest of his graduating senior class next month, tossing his cap high into the air, I may bring a cap of my own so I can toss mine as well. "No more pencils. No more books. No more teachers' dirty looks!" "School's out for summer! School's out forever!"

It has been a long sentence. I tried to serve it diligently, holding up my end of the bargain at each intersection where students, teachers, and parents collide. At times, I played the role of student; at other times, I played the role of teacher; and on this final leg of my journey, I have uncomfortably played the role of parent. Each role was different and difficult, especially this last stretch since I have been watching from the wings while having a very difficult time keeping my trap shut. I am exhausted. I have so much to say and so many people to say it to, but it does not matter anymore. I am ready to head off into the Pacific to retire with my husband on a desert island where I never have to see another school cafeteria, another auditorium, another classroom, or another front office again. I no longer have to be politically correct in fear that someone will take it out on my kid. True, we cannot actually head off into the sunset until our younger son completes his studies at one of our state universities. He still needs us here in order to qualify for in-state tuition. However, that is just temporary. The island is out there, and the sails on our sailboat are hoisted and ready for a good strong wind.

. . .

When I was a senior in high school, I could not wait until I was finished. Senior year seemed endless, and I discovered many creative ways to do my work and get good grades by making as few personal appearances in the school building as possible. I was a rebel, but more importantly, I was already mentally in college. I had shopped for college clothes, had a new 8-track player that would be small enough for the dorm, and my boyfriend-of-the-month was a college student. High school was boring. High school guys were immature. In high school, they said they treated us like adults, but they did not. All I wanted was the diploma so I could get on with my life. I did not want to go to my own high school graduation ceremony, but I made a deal with my parents that involved use of my mother's car for the summer if I would wear a cap and gown and take part in what I thought at the time was a silly, meaningless ceremony. At 18 years old, I had an answer for everything, just like the two young men who have lived in my house and have had their own share of answers. I do not remember any of my high school graduation ceremony except I gave my dad a hard time over taking pictures of me, and I was annoyed that I had to get out of my jeans to wear something nice beneath my cap and gown that no one would ever see. I did not go to my prom. I was not into that, and even if I were, I would have been embarrassed asking my college boyfriend-of-the-month to go with me. I do not remember if there were any parties after graduation. If there had been, I did not go because I was already driving my mom's new Oldsmobile Cutlass Supreme from New Jersey to my summer job in New Hampshire where I was going to be a counselor at a sleep-away camp for a whopping $800. The whopping $800 was for the entire summer, not per week.

Continued in article


May 18, 2006 message about middle school technology from John L. Hubisz [hubisz@mindspring.com]

I have not looked at this site thoroughly enough to strongly recommend it yet, but what I have seen is very good.

http://www.learningscience.org/index.htm 

I would like to have your thoughts on a part of the site that you have visited (It is huge and free!) Use hubisz@unity.ncsu.edu  rather than sending to everyone on the list.

I will collect your thoughts and report to the listserv or add it to my recommended sites.

Happy hunting!

John Hubisz


Moral of the Story:  In Australia Short Criminals Get Lighter Sentences
There has to be moral hazard here:  Is the Roo Mafia already training short hit men?

"Judge: Man is too short for prison," Yahoo News, May 25, 2006 --- Click Here

A judge said a 5-foot-1 man convicted of sexually assaulting a child was too small to survive in prison, and gave him 10 years of probation instead.

His crimes deserved a long sentence, District Judge Kristine Cecava said, but she worried that Richard W. Thompson, 50, would be especially imperiled by prison dangers.

"You are a sex offender, and you did it to a child," she said.

But, she said, "That doesn't make you a hunter. You do not fit in that category."

Thompson will be electronically monitored the first four months of his probation, and he was told to never be alone with someone under age 18 or date or live with a woman whose children were under 18. Cecava also ordered Thompson to get rid of his pornography.

He faces 30 days of jail each year of his probation unless he follows its conditions closely.

Continued in article


Moral of the Story:  In Massachusetts it pays to live in luxury at taxpayer expense and steal underwear

"Panty raider slips out of prison time: Thief took welfare for $117G," by Laura Crimaldi, Boston Herald, May 25, 2006 --- http://news.bostonherald.com/localRegional/view.bg?articleid=140730

A brazen lingerie hustler who lived luxuriously for years in an Andover gated community while bilking $117,500 in welfare from taxpayers is still tooling around in a sleek $40,000 Mercedes SUV despite pleading guilty this week to defrauding the government.

“It just ticks me off because we work and we’re still struggling,” said Joyce Sheehan, whose neighbor, Jennifer Stevanovich, 32, escaped jail time Tuesday after admitting to swindling state and federal authorities out of $117,555.11 in housing vouchers, health care, food stamps and cash aid.

 The state Department of Transitional Assistance, who gave Stevanovich $57,790 in cash, food stamps and health care from January 2000 to January 2005, refused yesterday to explain how the mother of three deceived them except to say its investigators closed 6,400 welfare accounts and referred another 2,400 accounts to fraud investigators last year.

    “I think the six perjury convictions speak volumes about her MO,” DTA spokesman Dick Powers said.
    Stevanovich has taken a hard fall, going from a comfortable Andover apartment complex with a pool, tennis courts and clubhouse to living with her mother in a Lawrence duplex where the white paint is chipping, the gate is rusting and the screen door is busted.
    Stevanovich, a hairdresser at Super Cuts in Burlington, was nabbed for welfare fraud after Andover police snagged her performing a panty raid on a Victoria’s Secret shop that cost the business some $14,000 in slinky lingerie.
    She secreted the scants from the shops by using a sack lined with foil that foiled the metal detectors.

    “It’s kind of weird that she’s on Section 8 and on welfare and driving a Mercedes,” said Andover police Detective David Carriere, who brought down Stevanovich in the undies scam with Detective Mike Lane. The silver 2005 Mercedes ML 350 parked in Stevanovich’s driveway yesterday was valued at $39,350, state investigators said.
    Investigators for State Auditor Joe DeNucci found Stevanovich was paying just $113 monthy rent in 2004 while her bank account ballooned to $76,468 that year from cash made selling the stolen lingerie and goods pilfered from other swanks shops on eBay.

Continued in article


From The Wall Street Journal Accounting Weekly Review on May 19, 2006

TITLE: With Special Effects the Star, Hollywood Faces New Reality
REPORTER: Merissa Marr and Kate Kelly
DATE: May 12, 2006
PAGE: A1
LINK: http://online.wsj.com/article/SB114739949943750995.html 
TOPICS: Accounting, Budgeting, Cost-Volume-Profit Analysis, Managerial Accounting

SUMMARY: Special effects are driving a lot of movies to become box office hits. However, "in the area of special effects, technology can't deliver the kind of efficiencies to Hollywood that it generally provides to other industries...Amid the excitement, studios are beginning to realize that relying on special effects is financially risky. Such big budget films tend to be bonanzas or busts."

QUESTIONS:
1.) The author notes that studios are beginning to realize that films utilizing a lot of special effects might tend to be "bonanzas or busts." In terms of costs, why is this the case? In your answer, refer to the high level of costs associated with special effects work.

2.) Why do special effects teams tend to amass significant costs? In your answer, define the terms "cost management" and "costs of quality" and explain how these cost concepts, that are typically associated with product manufacturing, can be applied to movie production.

3.) Define the term "fixed cost." How does this concept relate to the financial riskiness of movies with significant special effects and resultant high cost? Also include in your answer a discussion of the formula for breaking even under cost-volume-profit analysis.

4.) Define the term "variable cost." Cite some examples of variable costs you expect are incurred by studios such as Sony Pictures, Universal Pictures, and others.

5.) Now consider firms such as Industrial Light & Magic, "a company set up by director George Lucas in 1975 to handle the special effects for his 'Star Wars' movies." Based on the discussion in the article, describe what you think are these firms' fixed and variable costs.

6.) What manager do you think is responsible for costs of quality and cost control in producing movies? Suppose you are filling that role. What steps would you undertake to ensure that your hoped-for blockbuster film will have the greatest possible chance of financial success?

Reviewed By: Judy Beckman, University of Rhode Island

Bob Jensen's threads on accrual accounting and estimation are at http://www.trinity.edu/rjensen//theory/00overview/theory01.htm#AccrualAccounting


The Center of Juvenile and Criminal Justice --- http://www.cjcj.org




"This Course May Make You Uncomfortable," by David E. Harrington, Inside Higher Ed, May 30, 2006 --- http://www.insidehighered.com/views/2006/05/30/harrington

She says, “He continued to [quiz international students about their understanding of English] in other classes, singling out the international students and making them look inferior to the rest of the class.”

If the student had listened to the quality of her international classmates’ answers to my questions, she would have realized that they were academically superior to the vast majority of their classmates. Indeed, their median grade was 4.0; they all spoke English fluently; and, their essays had fewer grammatical errors than most of their classmates. It seems implausible to me that any rational observer would infer that they were inferior based on my questions about their knowledge of a few English words.

But even Nora looked embarrassed when she “confessed” that she didn’t know what gutters were. She had no reason to be embarrassed, yet she was. Why?

Perhaps, it has to do with the power of gut feelings, which allow people to quickly categorize experiences without having to think too deeply about them. Following them can even save your life in situations where you need to make quick decisions, implying that gut feelings are probably hard-wired into us via evolution. Hence, gut feelings probably can’t easily be turned off, implying that Nora could have been embarrassed by the gutters episode regardless of whether it was justified. And this is a shame — because good class interactions should be full of professors and students going in any number of directions, some of them uncomfortable, without worrying about appearances or comfort levels (or whether some comment is going to make you a poster child for the Academic Bill of Rights).

I was in a gray area with Nora, one that I did not perceive as being gray until I thought about the comments of this student. I feel badly that I might have embarrassed Nora — it was certainly not my intention. Nevertheless, asking Nora whether she knew the word for gutter in Bulgarian was the highlight of the course for me. My intuition screamed at me to ask it and her answer rewarded the impulse — not because I was happy to discover that she didn’t know the word, but because it made me think more deeply about the way in which languages compete with one another for survival. Indeed, many languages face extinction because they are cluttered with words that people no longer find useful. For example, some languages have dozens and dozens of different words for ice, which may not be a selling point in the coming age of global warming.

Nobel laureate Robert Solow argues that the most difficult thing to teach students is how to be creative in economics, followed closely by critical judgment. It is much easier to teach tools, such as demand and supply, than how to use them creatively, or critically. The first step in using economics creatively is to ask interesting questions, ones that naturally arise during genuine conversations sparked by observing differences like those concerning the acquisition of language. While these conversations are crucial in teaching students to be creative, they are also likely to tumble into gray areas and sometimes produce dry holes, two things that make some students uncomfortable.

Another way to be creative in economics is to apply economic reasoning to topics commonly thought to lie outside the realm of economics. Hence, I want my students to learn that there are no boundaries to the usefulness of economic reasoning. I mean NO boundaries, absolutely none. Boundaries smother creativity because they encourage students to turn off their economic reasoning skills whenever they cross them.

Last semester, I described how a San Diego abortion cartel in the late 1940s charged women different prices depending on the quality of their clothing and the characteristics of the person accompanying them, a practice that economists call price discrimination. For example, a young woman who was brought to the clinic by an unrelated, well-dressed Sacramento businessman was charged $2,600 for an abortion. If the woman had come alone, she would have paid something closer to $200. Four students have come to my office or e-mailed me with concerns over the use of examples like this one. For example, one student argued that abortion is too morally charged to be used as fodder for examples, especially ones that are so narrowly drawn.

Crossing the border into conversations about race is especially dangerous, because the border is patrolled by guards searching for insensitive comments. It takes courage and tolerance on the part of both students and professors to have genuine conversations about race. However, no topic is more important to discuss in economics courses given the glaring disparities in economic outcomes between African-Americans and whites. For another course I teach, students are required to read an article about the controversy that erupted when members of one middle-class community proposed naming a “nice street” after Martin Luther King Jr. The proponents wanted to weaken the correlation of his name with poverty and crime, while the opponents feared that naming a street after him would cause their neighborhood to decay. I admire the proposal yet empathize with the opponents. Since streets bearing his name are more commonly found in poor neighborhoods, (even unprejudiced) people might rationally “steer clear” of the area if they name a street after Martin Luther King Jr., a phenomenon economists call statistical discrimination.

Teaching students to use economics creatively requires having conversations that are not smothered by fears of saying something wrong or of stepping over some boundary beyond which economic reasoning is prohibited. But genuine conversations require that students have done enough of the reading to participate with intelligence — and checking on that may also make students uncomfortable.

A student last fall accused me in his or her course evaluation of picking on students, saying that “if it was obvious a student was unprepared or had not done the assigned reading [Professor Harrington] would call them out on it.” It’s true. I admit it. Failing to read the assigned articles imposes spillover costs on other students that can be corrected by imposing penalties on unprepared students. For example, one student could not answer straightforward questions about the readings in two consecutive classes, prompting me to ask him whether he had ever heard of the expression, “three strikes and you’re out.” At the beginning of the third class, he joined the conversation, easily answering my initial questions and making a few comments of his own.


Smart blonde joke forwarded by Paula

A Blonde walks into a bank in New York City and ask for the loan officer. She says she's going to Europe on business for two weeks and needs to borrow $5,000. The bank officer says the bank will need some kind of security for the loan, so the blonde hands over the keys to a new Rolls Royce. The car is parked on the street in front of the bank, she has the title and everything checks out. The bank agrees to accept the car as collateral for the loan.

The bank's president and its officers all enjoy a good laugh at the blonde for using a $250,000 Rolls as collateral against a $5,000 loan. An employee of the bank then proceeds to drive the Rolls into the bank's underground garage and parks it there.

Two weeks later, the blonde returns, repays the $5,000 and the interest, which comes to $15.41. The loan officer says, "Miss, we are very happy to have had your business, and this transaction has worked out very nicely, but we are a little puzzled. While you were away, we checked you out and found that you are a multimillionaire. What puzzles us is, why would you bother to borrow $5,000?"

The blond replies, "Where else in New York City can I park my car for two weeks for only $15.41 and expect it to be there when I return?"

 

 




More Tidbits from the Chronicle of Higher Education --- http://www.aldaily.com/

Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm
For earlier editions of New Bookmark s go to http://www.trinity.edu/rjensen/bookurl.htm 
Archives of Tidbits: Tidbits Directory --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm

Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.

International Accounting News (including the U.S.)

AccountingEducation.com and Double Entries --- http://www.accountingeducation.com/
        Upcoming international accounting conferences --- http://www.accountingeducation.com/events/index.cfm
        Thousands of journal abstracts --- http://www.accountingeducation.com/journals/index.cfm
Deloitte's International Accounting News --- http://www.iasplus.com/index.htm
Association of International Accountants --- http://www.aia.org.uk/ 
WebCPA --- http://www.webcpa.com/
FASB --- http://www.fasb.org/
IASB --- http://www.fasb.org/
Others --- http://www.trinity.edu/rjensen/bookbob1.htm

Gerald Trite's great set of links --- http://iago.stfx.ca/people/gtrites/Docs/bookmark.htm 

Richard Torian's Managerial Accounting Information Center --- http://www.informationforaccountants.com/ 

I highly recommend TheFinanceProfessor (an absolutely fabulous and totally free newsletter from a very smart finance professor, Jim Mahar from St. Bonaventure University) --- http://www.financeprofessor.com/ 
Jim's great blog is at http://financeprofessorblog.blogspot.com/

 

Professor Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
Jesse H. Jones Distinguished Professor of Business Administration
Trinity University, San Antonio, TX 78212-7200
Voice: 210-999-7347 Fax: 210-999-8134  Email:  rjensen@trinity.edu  




I recently sent out an "Appeal" for accounting educators, researchers, and practitioners to actively support what I call The Accounting Review (TAR) Diversity Initiative as initiated by American Accounting Association President Judy Rayburn --- http://www.trinity.edu/rjensen/395wpTAR/Web/TAR.htm


I released the June 6 edition of Tidbits a day early because June 6 is the 666 day of apocalypse!

"Apocalypse tomorrow? 666 arrives," by Seth Borenstein, Washington Times, June 5, 2006 --- http://washingtontimes.com/national/20060605-121953-9265r.htm

Is tomorrow's date -- 6-6-6 -- merely a curious number, or could it mean our number is up?

    There's a devilishly odd nexus of theology, mathematics and commercialism on the sixth day of the sixth month of the sixth year. OK, it's just the sixth year of this millennium, but insisting on calling it 2006 takes the devil-may-care fun out of calendar-gazing.

    Something about the number 666 brings out the worry, the hope and even the humor in people, said the Rev. Felix Just, a professor of theology and religious studies at the University of San Francisco. A Jesuit priest, Father Just has taught both apocalyptic theory and mathematics and maintains a "666-Numbers of the Beast" Web site that contains history, theology, math and precisely 66 one-line jokes about 666.

    One can even make sport of it, betting online if the apocalypse will happen on that date. The good news is that one online oddsmaker has made the world a 100,000-to-1 favorite to survive tomorrow -- something that Father Just said is supported by theology.

    "Many people avoid the number. They're afraid of it almost, and there's absolutely no reason to be afraid of it," he said. "It is not a prediction of future events. It is not supposed to be taken as a timetable for when the world is going to end."

    It all started with Revelation 13:18 in the Bible: "This calls for wisdom: let him who has understanding reckon the number of the beast, for it is a human number, its number is six hundred and sixty-six."

    The beast is also known as the Antichrist, according to some apocalyptic theories.

    Many scholars, such as Father Just, say the beast is really a coded reference -- using Hebrew letters for numbers -- for the despotic Roman emperor Nero, and 616 appears instead of 666 in some ancient manuscripts. The Book of Revelation isn't prophesying a specific end of times but "is about the overall cosmic struggle of good versus evil," Father Just said.

    But for some more apocalyptic theologians, the end of times is coming, even if not specifically tomorrow. The evangelical Raptureready.com Web site puts its "rapture index" at 156, calling that "fasten your seat belts" time.

    It's not the date June 6 that's worrisome, but the signs in our society of the approach of the 666 Antichrist, said the Rev. Tim LaHaye, founder of a self-named ministry and co-author of the best-selling "Left Behind" series of apocalyptic novels.

    "I don't think that people understand that 666 is not a good time," Mr. LaHaye said. He said he sees signs of an upcoming "tribulation period" that leads to the Antichrist's arrival in a movement toward one-world government, a single economic system and single religion.

    Apocalyptic culture and theology, especially those surrounding 666, "is especially appealing for people in an underdog situation," said Father Just.

    So people have looked for -- and found -- 666 in all sorts of places. Believers in the number's power have used a biblical letter-numeric code to convert the names of countless political leaders, including many popes, to come out 666, marking them as that generation's Antichrist. That includes Franklin Delano Roosevelt, John F. Kennedy, Ronald Reagan and Bill Clinton.

    The math of 666 is also open to biblical interpretation and manipulation. Father Just points out that 666 is the sum of all the numbers on a roulette wheel. Other oddities include variations on pi and products of prime number multiplication.

    There's also something special about the number 6, which in the Bible stands for man, said Brian C. Jones, a religion professor at Wartburg College in Iowa.

    "People need to lighten up about this," Mr. Jones said, adding that it's hard to take tomorrow seriously as a day of reckoning. "Monday, we always hate Mondays. Wednesday is hump day. Friday sometimes has the 13th attached to it. But Tuesdays and Thursdays, they don't ring for me as days when bad things happen or good things happen. They're filler days."

June 6, 2006 update from Kurt C. Wilner [kwilner@OPTONLINE.NET]

As usual, so-called "religious" wackos have it wrong: today is 6/6/2006 -- or, in the way of Excel defaults, 06/06/2006. As I explained it to my 15- year-old yesterday -- after some of her peers tried to impress that 'point' upon her, despite the fact that she's performed a Bat Mitzvah -- there are four "haloes" trumping those three 6's (plus a 2 I just don't know what to make of, having given numerology as much credence as astrology for all my adult life). My daughter enjoyed learning this quasi-numerological rebuttal to offensively proselyte peers -- and I confidently expect she'll enjoy asking every one of them, today, "so why aren't we toast yet?" I still have no hope that my daughter would like to learn to play bridge, but I am quite satisfied that she appreciates that analogy. Secularly, hopefully yours,

Kurt Wilner




Tidbits on June 6, 2006
Bob Jensen

Interesting Online Clock --- http://home.tiscali.nl/annejan/swf/timeline.swf
Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm
For earlier editions of New Bookmarks go to http://www.trinity.edu/rjensen/bookurl.htm 
Archives of Tidbits: Tidbits Directory --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm

Bob Jensen's various threads --- http://www.trinity.edu/rjensen/threads.htm
       (Also scroll down to the table at http://www.trinity.edu/rjensen/ )

Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.

Internet News (The News Show) --- http://www.thenewsshow.tv/daily/

Informercial Scams (even those carried on the main TV networks)--- http://www.infomercialscams.com/

Security threats and hoaxes --- http://www.trinity.edu/its/virus/

25 Hottest Urban Legends (hoaxes) --- http://www.snopes.com/info/top25uls.asp 
Hoax Busters --- http://hoaxbusters.ciac.org/ 
Stay up on the latest and the oldest hoaxes --- http://www.snopes.com/

Bob Jensen's home page is at http://www.trinity.edu/rjensen/


Online Video and Audio
In the past I've provided links to various types of music and video available free on the Web. 
I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/music.htm

From The New Yorker
The New Yorker publishes a selection of letters, journal entries, and personal essays by soldiers, airmen, sailors, and marines who served in the current war in Iraq. Here, five of the servicemen read from their work, accompanied by their photographs.
"The Home Front" The New Yorker, June 5, 2006 --- http://www.newyorker.com/online/content/articles/060612on_onlineonly01 

The (Humorous) History Of Dance (during my lifetime) --- http://www.youtube.com/v/dMH0bHeiRNg 

Fantastic Fred Astaire and Eleanor Powell Tap Dancing  --- http://www.cs.trinity.edu/~rjensen/video/ 

Documenting the American South: Oral Histories of the American South ---  http://docsouth.unc.edu/sohp/

National Academy of Engineering --- http://www.nae.edu/ 

Virtual Visit of the Canadian Space Agency --- http://www.space.gc.ca/asc/eng/virtual_visit.asp


Free music downloads --- http://www.trinity.edu/rjensen/music.htm

In the past I've provided links to various types of music and video available free on the Web. 
I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/music.htm

Center for Black Music Research --- http://www.cbmr.org/

From the Scout Report
Two on J.S. Bach
Bach Cantatas --- http://www.bach-cantatas.com/ 
J.S. Bach: Texts of the Complete Vocal Works with English Translation and Commentary http://www.uvm.edu/~classics/faculty/bach/

New Music Files from Janie Breck
June 2, 2006 message from Janie

http://mjbreck.com/IBelieve506.html
 
http://jbreck.com/itsshardtokiss.html     (Revised)
 
http://jbreck.com/gbwishiwas.html
 
http://jbreck.com/gbeverybodyneedsarainbow.html

http://www.bab25.com/marriageis.html    (one of my favorite songs  :-))

 
http://jbreck.com/bootscootinboogie.html
 
http://www.jbreck.com/romeo.html
 
Thanks!
 
Love Your Links !!!
 
Janie
http://mjbreck.com/index.html

Photographs and Art

Royal Photographic Society --- http://www.rps.org

A Photographic Atlas of Selected Regions of the Milky Way ---
http://www.library.gatech.edu/about_us/digital/barnard/index.html

Sinking of the Oriskany (Aircraft Carrier) on May 17, 2006 --- http://www.irishmansoftware.com/Oriskany.htm

JAMESTOWN'S 400th ANNIVERSARY --- http://www.americas400thanniversary.com/

From Time Magazine (What do people look out upon from inside their houses around the world?)
Readers of Andrew Sullivan’s Blog, The Daily Dish, sent him images of the views from their windows ---
Through the Looking Glass

Photographer James Nachtwey shows how the health crises created by the war in Congo
can kill long after the shooting stops ---
The Congo's Hidden Killers

 


Online Books, Poems, References, and Other Literature
In the past I've provided links to various types electronic literature available free on the Web. 
I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/ElectronicLiterature.htm

Rewards And Fairies - Rudyard Kipling (1865 1936) --- Click Here

The Dynamiter by  Robert Louis Stevenson (1850 1894) --- Click Here

Pride and Prejudice by Jane Austen (1775-1817) --- Click Here

May 25, 2006 message from Marsha@perryweb.com

I wanted to let you know about a link-worthy site featuring quotations from literature. The site is LitQuotes at: http://www.litquotes.com 

I thought it might be a nice addition to this page on your site: http://www.trinity.edu/rjensen/ElectronicLiterature.htm#Quotations 

At http://www.litquotes.com  you can:

Enjoy two types of daily quotes Search quotes by topic View quotes by author Explore quotes by title Email quotes to yourself or to a friend Search by word or phrase

Best wishes,

Marsha Perry
Webmaster -
LitQuotes
http://www.litquotes.com/




Nations that welcome immigrants are the most dynamic in the world.
Kofi A. Annan, "In Praise of Migration," The Wall Street Journal, June 4, 2006 --- http://www.opinionjournal.com/editorial/feature.html?id=110008473

The tactful aspect of audacity is knowing to what extent one can go too far.
Jean Cocteau (1889-1963) --- http://en.wikipedia.org/wiki/Jean_Cocteau

The art of winning is learned from defeats.
Simón Bolívar (1783 - 1830) --- http://en.wikipedia.org/wiki/Sim%C3%B3n_Bol%C3%ADvar

Gilberts, Illinois- David Thomson and Jim Bourassa of the Quantum AetherDynamics Institute (QADI) released a new theory which mathematically predicts and explains the measured values of physics with striking precision. Their Aether Physics Model includes the "Holy Grail" of physics sought by Albert Einstein; the Unified Force Theory. "Our model shows the forces are unified by a simple set of general laws explainable as the fabric of space-time itself, which is a dynamic, quantum-scale Aether," said Bourassa.
Jim D. Bourassa (listed as the contact), "New unified force theory predicts measured values of physics," Eurekalert, June 5, 2006 --- http://www.eurekalert.org/pub_releases/2006-06/qai-nuf060106.php




Great Minds in Management:  The Process of Theory Development --- http://www.trinity.edu/rjensen//theory/00overview/GreatMinds.htm

In April 2006 I commenced reading a heavy book entitled Great Minds in Management:  The Process of Theory Development, Edited by Ken G. Smith and Michael A. Hitt (Oxford Press, 2006).

The essays are somewhat personalized in terms of how theory development is perceived by each author and how these perceptions changed over time.

In Tidbits I will share some of the key quotations as I proceed through this book. The book is somewhat heavy going, so it will take some time to add selected quotations to the list of quotations at http://www.trinity.edu/rjensen//theory/00overview/GreatMinds.htm 

The Experience of Theorizing: Sensemaking as Topic and Resource

KARL E. WEICK

PG. #395 WEICK 19.1 ON SENSEMAKING
Sensemaking, viewed as central both to the process of theorizing and to the conduct of everyday organizational life, is a sprawling collection of ongoing interpretive actions.  To define this "sprawl" is to walk a thin line between trying to put plausible boundaries around a diverse set of actions that seem to cohere, while also trying to include enough properties so that the coherence is seen as distinctive and significant but something less than the totality of the human condition.  This bounding is a crucial move in theory construction.  It starts early, but it never stops.  Theorizing involves continuously resetting the boundaries of the phenomenon and continuously rejustifying what has newly been included and excluded.  In theorizing, as in everyday life, meanings always seem to become clear a little too late.  Accounts, cognitions, and categories all lie in the path of earlier action, which means that definitions and theories tend to be retrospective summaries of ongoing inquiring rather than definitive constraints on future inquiring.  These complications are evident in efforts to define sensemaking.

Some portraits of sensemaking suggest that it resembles an evolutionary process of blind variation and selective retention.  "An evolutionary epistemology is implicit in organizational sensemaking, which consists of retrospective interpretations built during interaction" (Weick 1995b: 67).  Hence we see sensemaking being aligned with the insight that "a system can respond adaptively to its environment by mimicking inside itself the basic dynamics of evolutionary processes" (Warglien, 2002, 110), an insight that is tied directly to theory development when theorizing is described as "disciplined imagination" (Weick, 1989).

PG. #405 WEICK
The "known facts" and "empirical findings" that theories "explain" can precede theory construction or follow it.  The fact that theory construction is a form of retrospective sensemaking, does not decouple it from facts.  Rather, it means that facticity is often an achievement.  Having first said something, theorists discover what they have been thinking about when they look more closely at that talk.  A close look at the talk often suggests that the talk is about examples, experiences, and stories that had previously been understood though not articulated.  The talk enacts facts because it makes that understanding visible, explicit, and available for reflective thinking, but the talk doesn't create the understanding.  Instead, it articulates the understanding by converting "know how" into "know that."  Sensemaking, with its insistence on retrospective sensemaking, is a valuable standpoint for theorizing because it preserves the proper order for understanding and explanation (understanding precedes explanation: Sandelands, 1990: 241-247).  It reminds the investigator to keep saying and writing so that he or she can have something to see in order then to think theoretically.

PG. #406 WEICK
This is not haphazard as it sounds.  Instead, these stop rules for theory simply recognize that theories are coherent orientations to events, sets of abstractions, consensually validated explanations and embodiments of aphoristic thinking.

Reber's definition is also intriguing because it talks about theory as a label that is "awarded" to almost any honest attempt at explanation.  Here we get a hint that theory is a continuum and an approximation.  The image of theory as continuum comes from Runkel.

Theory belongs to the family of words that includes guess, speculation, supposition, conjecture, proposition, hypothesis, conception, explanation, model.  The dictionaries permit us to use theory for anything from "guess" to a system of assumptions...(Social scientists) will naturally want to underpin their theories with more empirical data than they need for a speculation.  They will naturally want a theory to incorporate more than one hypothesis.  We plead only that they do not save theory to label their ultimate triumph, but use it as well to label their interim struggles.  Runkel and Runkel, 1984; 130)

As we have seen, most products that are labeled theory actually approximate theory.  Robert Merton (1967: 143-149) was sensitive to this point and suggested that there were at least four ways in which theory was approximated.  These were (1) general orientation in which broad frameworks specify types of variables people should take into account without any specification of relationships among these variables (e.g., Scott, 1998 analyzes rational, natural, and open systems); (2) analysis of concepts in which concepts are specified but not interrelated (Perrow, 1984 analyzes the concept of normal accident); (3) post factum interpretation in which ad hoc hypotheses are derived from a single observation, with no effort to explore new observations or alternative explanations (e.g., Weick, 1990 analyzes behavioral regression in the Tenerife air disaster); and (4) empirical generalization in which an isolated proposition summarizes the relationship between two variables, but further interrelations are not attempted (e.g., Pfeffer and Salancik, 1977) analyze how power flows to those who reduce significant uncertainties.


"Management needs fewer fads, more reflection," Stanford Magazine, May/June 2006 --- http://www.stanfordalumni.org/news/magazine/2006/mayjun/dept/management.html

Jeffrey Pfeffer, PhD ’72, and Robert I. Sutton would like to foment a little revolution—one in which leaders in business and the world at large base their decisions on facts and logic, not ideology, hunches, management fads or poorly understood experience. Pfeffer, the Thomas D. Dee II Professor of Organizational Behavior, and Sutton, a professor of management science and engineering and, by courtesy, of organizational behavior in the Graduate School of Business, are the authors of Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-Based Management (Harvard Business School Press, 2006). STANFORD asked them about bringing more reason to organizational life.

What’s some of the total nonsense that occurs in companies?

Sutton: Probably the biggest single problem for human decision making is that when people have ingrained beliefs, they will put a much higher bar for evidence for things they don’t believe than for things they do believe. Confirmation-seeking bias, I think, is what social psychologists call it. Organizations can have amazingly good evidence, but it has no effect on the decisions they make if it conflicts with their ideology.

Do you have a favorite unsupported belief?

Pfeffer: One would be stock options. There are more than 200 studies that show no evidence that there is a relationship between the amount of equity senior executives have and a company’s financial performance. . . . Just as you would never bet on a point spread on a football game because it encourages bad behavior, you should not reward people for increasing the spread in an expectations market.

Overreliance on financial incentives of all sorts drives all kinds of counterproductive behavior.

Evidence-based management derives from evidence-based medicine. Explain what kind of decision making we’re talking about.

Continued in interview




Question
Is education suffering from a self-injury epidemic?

17% of Students at Cornell and Princeton Practice Self Abuse
Nearly 1 in 5 students at two Ivy League schools say they have purposely injured themselves by cutting, burning or other methods, a disturbing phenomenon that psychologists say they are hearing about more often. For some young people, self-abuse is an extreme coping mechanism that seems to help relieve stress; for others it's a way to make deep emotional wounds more visible. The results of the survey at Cornell and Princeton are similar to other estimates on this frightening behavior. Counselors say it's happening at colleges, high schools and middle schools across the country.
Lindsey Tanner, "17 Pct. at 2 Schools Practice Self-Abuse," ABC News, June 5, 2006 --- http://abcnews.go.com/US/wireStory?id=2039503

According to a new study, published today in the June issue of Pediatrics, the Real World alum is just one of thousands of college-aged individuals — both males and females — who are engaging in self-injurious behavior, including cutting, biting, bruising, breaking one’s own bones, and ripping off one’s skin or hair. Clinicians and researchers say that there’s a need to promote awareness about this seemingly growing problem, and to treat the underlying causes.
Rob Capriccioso, "Self-Injury Epidemic," Inside Higher Ed, June 5, 2006 --- http://www.insidehighered.com/news/2006/06/05/injury

While the annual American College Health Association conference in New York City was filled with many questions this year where the profession is headed and how to assist mentally ill students looming large among them – the problem that is attracting ever more attention from many health professionals continues to be the ever-present risk of suicide on campus.
Rob Capriccioso, "Suicide on the Mind," Inside Higher Ed, June 5, 2006 --- http://www.insidehighered.com/news/2006/06/05/acha

Jensen Comment
This indicates that grade inflation is not relieving stress, although there are more complicated and interactive causes beyond stress to attain perfect grade averages.


Author John Updike asserts "liberals will never understand this age in which we live"
The New York Times recently conducted an interview with author John Updike about his newest novel. This interview was revealing of why liberals will never understand this age in which we live. It is indicative of how they just don’t understand the evil we face in Islamofascism. (See story - Click here) Updike, as obsessed with fallen Christianity as he is with prurient sex scenes, must have seen the writing on the wall while in the midst of penning his newest novel, a sort of thriller titled Terrorist.
Charles McGrath, "In 'Terrorist,' a Cautious Novelist Takes On a New Fear," Newsbusters, June 5, 2006 --- http://newsbusters.org/node/5677


I wish legislators themselves all had to read all 24,000 pages of GE's Tax Return

Forwarded by Glen Gray [glen.gray@CSUN.EDU]

GE E-Files Nation's Largest Tax Return

General Electric Corp. and the Internal Revenue Service offered each other a mutual pat on the back for their joint efforts in getting the company's tax return filed, and accepted, electronically. On paper, the return would have been approximately 24,000 pages long. Instead, GE submitted the return as a 237 MB file.

http://www.webcpa.com/article.cfm?articleid=20437&pg=news 

 


Important New Open Sharing College Course Site

From the Scout Report on May 19, 2006

Webcast.Berkeley [iTunes, Real Player] http://webcast.berkeley.edu/

Over the past few years, a number of colleges and universities have created initiatives to place some of their course materials online for the general public. MIT was one of the first to do so, and Berkeley has also started to offer a number of webcasts and podcasts of select courses on this website.

Drawing on the strengths of the Berkeley Multimedia Research Center, they have begun to place some of these excellent materials on this site. On their well-designed homepage, visitors can either look at an archive of course webcasts and podcasts or take a gander at the archived webcasts that feature prominent speakers who have visited the campus. The events archive dates back to a January 2002 appearance by Bill Clinton, and includes dozens of interesting talks and lectures. Visitors can learn about each event in the information section, and for some, they have the option to download the audio portion of each event. The course section is equally delightful, as visitors can view webcasts here, and also download podcasts. The range of courses here is quite broad, and includes lectures on general chemistry, wildlife ecology, and surprise, surprise: foundations of American cyberculture. Finally, visitors can also subscribe to event and course podcasts.

I did not see any accounting or business courses listed at this point in time. Economics 100A (Micro) is available.
Bob Jensen's threads on open sharing of college course materials are at http://www.trinity.edu/rjensen/000aaa/updateee.htm#OKI


New Technology for Proctoring Distance Education Examinations

"Proctor 2.0," by Elia Powers, Inside Higher Ed, June 2, 2006 --- http://www.insidehighered.com/news/2006/06/02/proctor

It’s time for final exams. You’re a student in Tokyo and your professor works in Alabama. It’s after midnight and you’re ready to take the test from your bedroom. No problem. Flip open your laptop, plug in special hardware, take a fingerprint, answer the questions and you’re good to go.

Just know this: Your professor can watch your every move ... and see the pile of laundry building up in the corner of the room.

Distance learning programs – no matter their structure or locations – have always wrestled with the issue of student authentication. How do you verify that the person who signed up for a class is the one taking the test if that student is hundreds, often thousands, of miles away?

Human oversight, in the form of proctors who administer exams from a variety of places, has long been the solution. But for some of the larger distance education programs — such as Troy University, with about 17,000 eCampus students in 13 time zones — finding willing proctors and centralized testing locations has become cumbersome.

New hardware being developed for Troy would allow faculty members to monitor online test takers and give students the freedom to take the exam anywhere and at any time. In principle, it is intended to defend against cheating. But some say the technology is going overboard.

Sallie Johnson, director of instructional design and education technologies for Troy’s eCampus, approached Cambridge, Mass.-based Software Secure Inc. less than two years ago to develop a unit that would eliminate the need for a human proctor. Johnson said the hardware is the university’s response to the urgings of both Congress and regional accrediting boards to make authentication a priority.

The product, called Securexam Remote Proctor, would likely cost students about $200. The unit hooks into a USB port and does not contain the student’s personal information, allowing people to share the product. The authentication is done through a server, so once a student is in the database, he or she can take an exam from any computer that is hardware compatible.

A fingerprint sensor is built into the base of the remote proctor, and professors can choose when and how often they want students to identify themselves during the test, Johnson said. In the prototype, a small camera with 360-degree-view capabilities is attached to the base of the unit. Real-time audio and video is taken from the test taker’s room, and any unusual activity — another person walking into the room, an unfamiliar voice speaking — leads to a red-flag message that something might be awry.

Professors need not watch students taking the test live; they can view the streaming audio or video at any time.

“We can see them and hear them, periodically do a thumb print and have voice verification,” Johnson said. “This allows faculty members to have total control over their exams.”

Douglas Winneg, president of Software Secure, said the new hardware is the first the company has developed with the distance learning market in mind. It has developed software tools that filter material so that students taking tests can’t access any unauthorized material.

Winneg, whose company works with a range of colleges, said authentication is “a painful issue for institutions, both traditional brick-and-mortar schools and distance learning programs.”

Troy is conducting beta tests of the product at its home campus. Johnson said by next spring, the Securexam Remote Proctor could commonly be used in distance learning classes at the university, with the eventual expectation that it will be mandatory for students enrolled in eCampus classes.

Bob Jensen's threads on onsite versus online proctoring are at http://www.trinity.edu/rjensen/assess.htm#OnsiteVersusOnline

Bob Jensen's threads on emerging tools of our trade --- http://www.trinity.edu/rjensen/000aaa/thetools.htm


"Harvard profs lay down Law: No laptops in class," by Marie Szaniszlo, Boston Herald, June 4, 2006 --- http://news.bostonherald.com/localRegional/view.bg?articleid=142079

Harvard Law School, the world’s self-described “premier center for legal education and research,” may ban Internet use in the classroom this fall because so many students are frittering away time surfing the Web.
    The school’s faculty has yet to vote on the proposal. But several professors, fed up with students shopping online or checking Red Sox scores when they should be heeding lectures, have gone so far as to outlaw laptops in class.
 
    “They interfere with discussion,” Harvard law professor Bruce L. Hay said. “When you add to that the fact that many students have trouble resisting the temptation to check their e-mail or cruise the Internet, laptops become intolerable.”
    The electronic paper chase has become enough of a problem that Harvard Health Services has added “computer and Internet distraction and overuse” to its list of leading health concerns, alongside depression, stress, eating disorders and alcohol and drug abuse.
 
    In a 2004 National College Health Assessment, in fact, nearly 1 out of 4 Harvard undergraduates reported that computer or Internet use was an impediment to their academic performance.
 
    In this respect, Harvard is hardly unique.
 
    “Students on the Web in class is a bane of professors everywhere,” said David Olson, a 2000 Harvard Law School graduate and fellow at the Stanford Law School Center for Internet and Society. “Stanford professors would love a ban. But as one faculty member said, they’re afraid of the riot that would ensue if they tried to impose one.”
 
    In a recent survey by the Harvard Law School Student Council, nearly 2 out of 3 students opposed a ban. And nearly 1 in 4 said they would actually attend class less often if the faculty instituted one.
 
    “People are already talking about how to get around it,” said council President Michael Sevi. If all else fails, he said, they could always fall back on that old standby: passing notes in class.
 
    “People will always find something to distract themselves,” said Regina Fitzpatrick, 26, who just finished her first year at Harvard Law. “If they aren’t paying attention, that’s their own fault. We’re adults, and people should be free to make their own choice.”
 
    But while the majority of students may not like the idea of having to give up the Web during class, 39 percent of those surveyed admitted they would probably pay more attention in class.  

Continued in article

 


The Condition of Education 2006
The Education Department on Thursday released “The Condition of Education 2006,” this year’s version of an annual compilation of statistics on a range of issues at all levels of education. The report provides the latest data on enrollment trends, most of them consistent with previous projections about enrollment increases and about the growing gender gap in which more women than men enroll.
Inside Higher Ed, June 2, 2006 --- http://www.insidehighered.com/news/2006/06/02/qt

Bob Jensen's threads on the incredible shrinking men in higher education --- http://www.trinity.edu/rjensen/HigherEdControversies.htm#Men


Google's New Contribution to Data Visualization

June 1, 2006 message from Brown, Curtis [cbrown@trinity.edu]

I just stumbled across some very interesting tools for visualizing data that I can't resist sharing. There's a wild play-with-it-yourself tool at http://tools.google.com/gapminder/ , and some prepackaged presentations at http://www.gapminder.org

I went through the "Human Development Trends 2005" presentation at the second link above and found it fascinating and informative (and also helpful for developing a sense of the significance of the images in the do-it-yourself tool at the first link).

A minor frustration: toward the end, the presentation includes data on income and child mortality distribution within 42 different countries (it gives the income and child mortality rates of the poorest 20% of the population of the country, the next richest 20%, etc.), but it only has average data for the United States (as far as I could see). I wonder why? Anyone know how to find comparable data for the US?

Curtis

Curtis Brown
Philosophy Department
Trinity University
One Trinity Place
San Antonio, TX 78212

Jensen Comment
For many years I've been especially interested in multivariate data visualization and analysis --- http://www.trinity.edu/rjensen/352wpvisual/000datavisualization.htm


More Bias and Inaccuracy in the Media

"UK TIMES SMEARS OUR MARINES," by Michelle Malkin, June 3, 2006  --- http://www.michellemalkin.com/

If you are left with the impression that the dead bodies on the ground were massacred by our Marines, that is exactly what the Times intends. Note the caption: "Victims in al-Haditha. The US is carrying out two inquiries (AP)."

Now, look at this photo closely:

Insert Photo Here

It is clearly the same location. The same set of dead bodies. The second is a wider shot with three additional bodies in the foreground.

But guess what? The photo, according to this Newsweek caption of the scene, is not of the Nov. 19 incident in Haditha involving our Marines, as the UK Times would have you believe.

Read the caption:

"Insurgents in Haditha executed 19 Shiite fishermen and National Guardsmen in a sports stadium."

Our Marines did not kill these people.

The terrorists did.

Here's more from the Newsweek article from last May--that is, six months before the incident involving our Marines:

Hussein Hashimi has a CD-ROM full of pictures of the dead. For the last two months, the young Shiite says, Sunni extremists rampaged through his hometown of Madaen. They torched the local police stations, abducted dozens of members of the local Shiite minority, burned down the mosque and killed not only the imam but his 8-year-old son. Many Shiite families fled; others barricaded themselves in their homes. Last week Iraqi security forces finally came in and restored order. Hashimi has lists of the missing and of the dead who have been identified. He has the names of the alleged perpetrators and a map showing the home of the Sunni he accuses of being responsible for the atrocities.

So is Hashimi fighting back? Not at all. "We just ran away," he says without a trace of embarrassment. "Sistani and the religious authorities in Najaf decided not to use force, so we couldn't do anything." To the Shiites of Iraq, Grand Ayatollah Ali Sistani's word is law. "We must obey."

Their obedience was tested yet again last week—and again it held firm. In Madaen and villages nearby, corpses bobbed to the surface of the Tigris River until police counted 60. Hashimi and his friends photographed 55 of the bodies and delivered the pictures and lists to Baghdad. Shiite politicians accused the insurgents of ethnic cleansing, and demanded that the caretaker government act. Insurgents in another town near Baghdad, Haditha, responded by kidnapping 19 Shiite fishermen and National Guardsmen, lining them up against a wall in a sports stadium and shooting them dead.

And more from an LA Times article from April 2005 (reprinted at SFGate.com):

In Baghdad, the Ministry of Defense said that 19 Iraqis who were kidnapped, taken to a soccer stadium in Haditha, lined up against the wall and fatally shot on Wednesday were actually Shiite fishermen, and not Iraqi troops, as previously described by an Interior Ministry official.

Saleh Sarhan, the ministry's chief spokesman, described the victims as fishermen from the Shiite cities of Najaf and Diwaniya who had traveled to the huge Lake Tharthar in the Sunni-dominated Anbar province, northwest of Baghdad and east of Haditha. He offered no explanation for why insurgents would target the fishermen, or how they had been identified.

As Joe G., who blogged his discovery of this obvious, unconscionable error, writes:

"I think this goes beyond a slant, this is slander."

Reader Eric. T adds:

Notice in the photo that the slain people have their hands tied i.e. murdered assassination style. This makes it seem even more of an outrage against the Marines!

This must not stand. And the Times must not be allowed to make a covert correction without a public acknowledgement. The editors must apologize for this blatant smear.

Send a letter to the editor here (include postal address and daytime telephone number for publication):

letters@thetimes.co.uk 

Also e-mail:

Gerard Baker, US editor of the UK
Times...gerard.baker@the-times.co.uk


An Internet Casualty:  The Losing Research Edge of Elite Universities

"Losing Their Edge?" by Scott Jaschik, Inside Higher Ed, June 1, 2006 --- http://www.insidehighered.com/news/2006/06/01/edge

As the Internet changed the nature of higher education in the last decade or so, considerable research has examined the question of whether students were changing enrollment patterns. But three scholars whose findings were just published by the National Bureau of Economic Research suggest that there has been a significant and largely overlooked relocation going on since learning went online: among faculty members.

n “Are Elite Universities Losing Their Competitive Edge?,” the scholars examine evidence that the Internet — by allowing professors to work with ease with scholars across the country and not just across the quad — is leading to a spreading of academic talent at many more institutions than has been the case in the past.

The research by E. Han Kim, Adair Morse and Luigi Zingales is based on an analysis of faculty members in economics and finance departments, but many of the conclusions do not appear to be factors that would apply only in those disciplines. ( An abstract of the findings is available online, where the full paper may be ordered for $5).

The basic approach of the research was to examine the productivity of professors at elite universities (defined as the top 25 in economics and finance) in the 1970s, ’80s, and ’90s. What the scholars found isn’t good news for those top departments. In the 1970s, a faculty member moving from a non-top 25 university to Harvard University would nearly double in productivity (based on various measures of journal publishing, which is where most economics research appears). By the 1990s, this impact had almost entirely disappeared.

Beyond Harvard, the study found that moving to 17 of the top economics departments would have had a significant positive impact on productivity during the 1970s, while moving only to 5 of them had a significant negative impact on productivity. By the 1990s, only 2 such departments were having a positive impact on productivity while 9 had a significant negative impact. Finance departments also saw a decline in productivity impact.

The findings do not necessarily mean that top economics departments are full of deadwood. But they do suggest a “de-localization of the externality produced by more productive researchers.” In other words, these days professors are no longer likely to be more productive just because there is a genius down the hall. The cultural norms of departments still matter, the authors write, and being surrounded by non-productive colleagues has a negative impact on productivity.

But you no longer need a critical mass on your own campus to do good work. Part of this, the authors suggest, is that databases can now be shared more easily across campuses, and so there is less of a distinct advantage to being physically located at the top universities, which also tend to be the places where more databases, library collections, etc., reside.

And as more people are spread out at more institutions, the elite professors work with them. At the start of the 1970s, the authors write, only 32 percent of the articles in top economics journals that were written by a professor at an elite institution had a co-author from a non-elite institution. That percentage had increased to 61 percent by 2004.

The implications of these shifts, the authors write, can be seen at both non-elite and elite departments. Faculty members are now “more mobile,” the authors write, “making it easier for a new place to attract away the most talented researchers with higher salary.”

But the “universal access to knowledge” is also having a benefit for faculty members at the top 25 departments. Prior to the Internet, the authors write, the benefits of working in a top department were greater, so professors might accept slightly lower pay because of such benefits. With the disappearance of such benefits, data on salaries indicate greater increases at the top 25 institutions that experienced the greatest losses in productivity.

The authors of the piece work at top universities. Kim is professor of business administration at the University of Michigan. Morse is a graduate student in business at Michigan. Zingales is a visiting professor of economics at Harvard.

June 1, 2006 message form Carolyn Kotlas [kotlas@email.unc.edu]

IS THE INTERNET WEAKENING THE ELITES' EDGE?

In a study of economics and finance faculty affiliated with the top 25 U.S. universities, E. Han Kim, Adair Morse, and Luigi Zingales looked at the changes on scholarly research brought about by the Internet. They sought answers to several questions: "How did these changes modify the nature of the production of academic research? Did local interaction become less important? If so, how does this decline affect the value added of elite universities and hence their competitive edge?" Their findings are published in the report "Are Elite Universities Losing Their Competitive Edge?" (National Bureau of Economic Research Working Paper No. 12245, May 2006). The complete report is available online at http://papers.nber.org/papers/W12245 

Founded in 1920, the National Bureau of Economic Research (NBER) is a "private, nonprofit, nonpartisan research organization dedicated to promoting a greater understanding of how the economy works." For more information, contact: National Bureau of Economic Research, Inc., 1050 Massachusetts Avenue, Cambridge, MA 02138-5398 USA; tel: 617-868-3900; fax: 617-868-2742;
email: info@nber.org 
Web: http://www.nber.org/ 

Stanford University Experiments With the Latest Classroom Technology and Building Design

"Wallenberg Hall:  Opening the Door to New Technologies," by Melinda Sacks, Syllabus, September 2004, pp. 13-16 --- http://www.syllabus.com/article.asp?id=9936 

 

Each Wallenberg Hall classroom offers a platform for a new level of teaching, at the same time serving as a laboratory for testing and analyzing the value and potential of new technology. Some of the tools will prove invaluable, SCIL researchers believe, while other tools may not be worth their expense. Such information could prove useful to everyone, from an academic department deciding whether to invest a small amount of money in several tablet PCs for the classroom, to a university redesigning or creating a new multimedia auditorium, to a college seeking funding to reinvent its learning spaces.

“The teaching and research happening here in Wallenberg Hall could be of enormous value to our colleagues at all levels of education regardless of their geography,” says Steinhardt. “Wallenberg Hall represents the university’s commitment to explore new ways of enhancing learning and education through targeted investments in technology.”

Research and Teaching at Wallenberg

Research

The broad range of multidisciplinary projects includes:

  • High-Performance Learning Spaces: A multidisciplinary team of researchers is examining two years’ worth of audio and video records of Wallenberg classes, related interviews, activity surveys, and focus group data to assess the effects of technology on teaching and learning. Results will assist educators at all levels in how to best employ technology in the classroom.
  • DIVER: Created by a team led by SCIL co-director Roy Pea, DIVER software enables users to focus attention on relevant portions of any video footage, then annotate and analyze the video to share it with colleagues and peers. This year, student teachers utilized DIVER to reflect on tapings of their own teaching to evaluate their performances through “guided noticing.” DIVER also has promising applications in the fields of law, medicine, film study, and architecture.
  • Folio Thinking: Based on the hypothesis that documenting and tracking learning through the use of an electronic portfolio deepens learning, students in an engineering class in Wallenberg Hall are the focus of SCIL’s current research on ePortfolios. Findings will help researchers understand more about how students learn and what tools most complement their experience.
  • Virtual Video Collaboratory: Supported by a grant from the National Science Foundation, a team of SCIL researchers is creating the world’s first Digital Video Collaboratory—a multimedia library that will be available on the Internet. The library will allow the viewing, annotating, and editing of a vast array of useful footage collected and catalogued from sources around the world.
  • Teachable agents: The CAT2 Lab at SCIL, which has developed its own “learn by teaching” software, is studying the idea that a powerful way to learn is by teaching.
  • Interactive toys and robots: This broad project involves the development and testing of interactive toys and robots that teach and entertain, utilizing concepts and ideas from psychology, sociology, linguistics, computer science, robotics, communication, and education.
  • Social responses to communication technology: This new research is examining the extent to which human interactions with computers, television, and new communication technologies are conditioned by real social relationships and the navigation of real physical spaces.
Teaching

Since Wallenberg Hall first opened its doors to classes in 2002, it has grown from a magnet for early adopters to a widely sought-after learning center for faculty and students from more than 20 departments and schools at Stanford University. Courses offered in the high-performance learning spaces of the hall have included anthropology, history, biochemistry, classic Greek, engineering, and Hebrew, reflecting the fact that virtually any subject can benefit from a well-designed, technology-enriched environment.

Every day from early in the morning until late into the evening, teachers and students utilize the frequently updated classroom equipment such as interactive Webster boards, video conferencing tools, in-class laptops, tablet PCs, and reconfigurable furnishings to create a seamless multimedia experience. As faculty and students employ these technologies, researchers from the Stanford Center for Innovations in Learning (SCIL), who also reside in Wallenberg Hall, evaluate and analyze the impact in an ongoing study of technology in education.

Highlights from some of the innovative courses taught in Wallenberg Hall include:

  • Using iRoom software, Prof. Russ Altman had his students download Web pages on particular diseases each was studying, then asked them to share the material with the class. PointRight, experimental software, allowed them to “beam” their material to the computerized Webster white board. During discussion, the Webster screens were jointly controlled by the students from their own computers so that anyone could point out highlights and issues without passing around a keyboard or leaving their seats.
  • In her course, “Introduction to Hebrew,” instructor Vered Shemtov used the three large screens in the Peter Wallenberg Learning Theater to present diverse content, from written poems, to music, to video clips, maps, and artwork. One screen could display the course outline for the day, while another showed a piece of literature and a third ran a related video clip. Moving from one medium to another occurred without hesitation, all controlled by one remote computer mouse.
  • The Program in Writing and Rhetoric (PWR), directed by Prof. Andrea Lunsford, is a requirement of all freshmen and sophomores at Stanford. Freshmen practice everything from working individually on their laptops, to working collaboratively in small groups with one computer and a large plasma display, to whole class discussions utilizing the Webster smart boards. The PWR program is an excellent example of how Wallenberg Hall allows teaching and learning to keep pace with technological advances.

Bob Jensen's threads on classroom, building, and campus design are in a module at  http://www.trinity.edu/rjensen/000aaa/thetools.htm

Bob Jensen's threads on higher education controversies are at http://www.trinity.edu/rjensen/HigherEdControversies.htm


Accreditation: Why We Must Change
Accreditation has been high on the agenda of the Secretary of Education’s Commission on the Future of Higher Educationand not in very flattering ways. In “issue papers” and in-person discussions, members of the commission and others have offered many criticisms of current accreditation practice and expressed little faith or trust in accreditation as a viable force for quality for the future.
Judith S. Eaton, "Accreditation: Why We Must Change," Inside Higher Ed, June 1, 2006 --- http://www.insidehighered.com/views/2006/06/01/eaton

"Accreditation: A Flawed Proposal," by Alan L. Contreras, Inside Higher Ed, June 1, 2006 --- http://www.insidehighered.com/views/2006/06/01/contreras

A recent report released by the Secretary of Education’s Commission on the Future of Higher Education recommends some major changes in the way accreditation operates in the United States. Perhaps the most significant of these is a proposal that a new accrediting framework “require institutions and programs to move toward world-class quality” using best practices and peer institution comparisons on a national and world basis. Lovely words, and utterly fatal to the proposal.

he principal difficulty with this lofty goal is that outside of a few rarefied contexts, most people do not want our educational standards to get higher. They want the standards to get lower. The difficulty faced by the commission is that public commissions are not allowed to say this out loud because we who make policy and serve in leadership roles are supposed to pretend that people want higher standards.

In fact, postsecondary education for most people is becoming a commodity. Degrees are all but generic, except for those people who want to become professors or enter high-income professions and who therefore need to get their degrees from a name-brand graduate school.

The brutal truth is that higher standards, applied without regard for politics or any kind of screeching in the hinterlands, would result in fewer colleges, fewer programs, and an enormous decrease in the number and size of the schools now accredited by national accreditors. The commission’s report pretends that the concept of regional accreditation is outmoded and that accreditors ought to in essence be lumped together in the new Great Big Accreditor, which is really Congress in drag.

This idea, when combined with the commitment to uniform high standards set at a national or international level, results in an educational cul-de-sac: It is not possible to put the Wharton School into the same category as a nationally accredited degree-granting business college and say “aspire to the same goals.”

The commission attempts to build a paper wall around this problem by paying nominal rhetorical attention to the notion of differing institutional missions. However, this is a classic question-begging situation: if the missions are so different, why should the accreditor be the same for the sake of sameness? And if all business schools should aspire to the same high standards based on national and international norms, do we need the smaller and the nationally accredited business colleges at all?

The state of Oregon made a similar attempt to establish genuine, meaningful standards for all high school graduates starting in 1991 and ending, for most purposes, in 2006, with little but wasted money and damaged reputations to show for it. Why did it fail? Statements of educational quality goals issued by the central bureaucracy collided with the desire of communities to have every student get good grades and a diploma, whether or not they could read, write or meet minimal standards. Woe to any who challenge the Lake Wobegon Effect.

So let us watch the commission, and its Congressional handlers, as it posits a nation and world in which the desire for higher standards represents what Americans want. This amiable fiction follows in a long history of such romans a clef written by the elite, for the elite and of the elite while pretending to be what most people want. They have no choice but to declare victory, but the playing field will not change.

Alan L. Contreras has been administrator of the Oregon Office of Degree Authorization, a unit of the Oregon Student Assistance Commission, since 1999. His views do not necessarily represent those of the commission.

Bob Jensen's threads on higher education controversies are at http://www.trinity.edu/rjensen/HigherEdControversies.htm


Manchester B-school grads are enjoying higher salaries and more opportunity, thanks to an improving economy and new opportunities to work in Britain
"Manchester's Mojo Rising," Business Week, May 26, 2006 --- Click Here

Jensen Comment
Large international accounting firms are among the active list of recruiters.


"Your Photos, Your Rights, and the Law: Answers to questions about copyright and your rights as a photographer," by Dave Johnson, PC World via The Washington Post, May 31, 2006 --- Click Here

Ironically, the answer to this simple question is not so simple anymore. But for almost any digital photo you take today, you can count on the copyright lasting for 70 years.

Creative Commons is a nonprofit organization that has pioneered a new way to share creative works. The group offers a number of licenses with names like Attribution, NoDerivs, NonCommercial, and ShareAlike.

If you choose to share your photos with a Creative Commons license, you're telling the world that you're offering to let other people use your photos in ways that are traditionally not supported by standard copyright law. Using an Attribution license, for example, is like releasing your photo in the public domain, though it requires anyone using your photo to give you credit. Attribution-NonCommercial is similar, but specifically prohibits people from using your photo for commercial use.

While using a Creative Commons license is a nice idea, and you'll find a lot of people using them on sites like Flickr.com, keep in mind that Creative Commons has no legal teeth. Only copyright law has that.

There are three ways to copyright a photo (or any other creative work).

Here's the easy way: Any work you create is automatically copyrighted. In other words, you don't need to do anything at all to receive some protection under copyright law.

However, there are copyrights--and then there are copyrights. While technically you never have to take action to copyright a creative work, simply putting a copyright notice on your work strengthens your copyright protection. To assert your claim to a digital photo, for example, just place a copyright notice somewhere on the picture. Commonly, photographers use the text tool in a photo editing program to do this in the lower-right corner.

The most aggressive copyright action you can take is to register your photo with the Registrar of Copyrights in Washington, DC. There is a form to fill out and a $30 fee to pay, but this approach provides you with the highest level of protection available. For more info go to the U.S. Copyright Office's Web site.

Continued in article

Bob Jensen's threads on copyright law are at http://www.trinity.edu/rjensen/000aaa/theworry.htm#Copyright


The 100 Best Products of the Year
This year's edition--"The 100 Best Products of the Year" --starts here . Once again, the festivities span both print and online. to see an expanded version offering extras such as video clips and, on June 6, a live chat session with Senior Writer Alan Stafford, who edited the feature and spearheaded the weeks of meetings, ballots, and impromptu hallway dialogues that determined our winners.
"How the 100 Best Products Got That Way Eclectic. Inventive. Essential. Our World Class winners are all that and more," by Harry McCracken,  PC World via The Washington Post, May 31, 2006 --- Click Here


Questions
What should you do if you think you're a possible victim of ID theft?
What are the best things you can do to prevent ID theft?

Answer
There are a number of things to do, especially the following:
Fill out an identity theft report with your local, state or federal law enforcement agency. It's unclear if the mere loss or theft of personal information constitutes identity theft, but filing a report may offer additional protections. The FTC makes an affidavit available at http://www.consumer.gov/idtheft/pdf/affidavit.pdf

"Tips for Preventing or Catching Identity Theft:  Contacting one of three credit reporting agencies is the key to monitoring possible fraud," MIT's Technology Review, May 24, 2006 --- http://www.technologyreview.com/read_article.aspx?id=16923

Consumer advocates have some advice for the 26.5 million veterans whose personal information was stolen from the home of a Veterans Affairs employee: Don't panic.

Identity theft may be a growing problem that affected 9.3 million Americans last year, according to Javelin Strategy and Research. But consumer advocates say a few precautions can lessen the chances of becoming a victim, even for people whose personal information has been stolen.

The first thing to do if you think your Social Security number, birth date or other sensitive data has fallen into the wrong hands is to place an initial fraud alert on your credit reports. There are three major credit reporting agencies, but a call to one -- for instance, Equifax at 800-525-6285 -- will ensure the other two are notified.

A fraud alert entitles you to a free copy of your credit report from each of the three companies. Order one from each and scrutinize them carefully for accounts you didn't open or debts you don't recognize. Also, make sure that information such as your Social Security number and employer are correct on each report.

If you discover accounts or transactions you didn't authorize, call and speak with someone in the fraud department of each company involved. Keep a log of each person contacted, along with the date, time and topics discussed on each call.

An initial fraud alert also requires businesses to take additional steps to confirm your identity before issuing loans or opening accounts in your name. Be prepared for loan and credit card applications to take slightly longer to be processed.

It's important to understand that an initial fraud alert, as the name implies, is only a temporary fix. That's because it remains in effect for only 90 days. To prevent becoming a victim after the three months are up, you'll need to take additional steps.

Next, fill out an identity theft report with your local, state or federal law enforcement agency. It's unclear if the mere loss or theft of personal information constitutes identity theft, but filing a report may offer additional protections. The FTC makes an affidavit available at http://www.consumer.gov/idtheft/pdf/affidavit.pdf 

Ask each of the three credit reporting companies to place a freeze or extended alert on your account. Seventeen states have enacted laws that require the reporting companies to block access to your files in most instances. Check with the Consumers Union Web site or attorney general in your state to see if this is available where you live.

Even if your state doesn't offer this protection, ask Equifax, TransUnion and Experian to give you an extended alert anyway. This option will entitle you to two free credit reports per year, and it will also require the credit reporting companies to remove you from lists marketers use to send prescreened credit offers for five years.

To qualify for an extended alert, the reporting companies will require you to prove you've been the victim of identity theft, even though it is not always clear how the law defines a victim in this case. Be sure to include the FTC affidavit or other law enforcement report you filed. It is legal documentation that your personal identification has been stolen.

Finally, recognize that safeguarding your privacy is a never-ending task, even for people who have no reason to believe their personal information has been stolen. A little education and prevention, say consumer advocates, can go a long way.

''You need an ongoing vigilance,'' says Paul Stephens, a policy analyst with the Privacy Rights Clearinghouse in San Diego. ''We want people to be proactive, to be vigilant, but we also don't want to have people panicking.''

On the Net:

http://www.ftc.gov/bcp/conline/pubs/credit/idtheft.htm 

http://privacyrights.org 

http://www.consumersunion.org/creditmatters/creditmatterslearnmore/002583.html

Some other contact sites are provided at Bob Jensen's fraud reporting site at http://www.trinity.edu/rjensen/FraudReporting.htm

Especially note http://www.trinity.edu/rjensen/FraudReporting.htm#IdentityTheft


"The Dangerous Side of Search Engines:  Popular search engines may lead you to rogue sites. Here's what you need to know to avoid dangerous downloads, bogus sites, and spam," by Tom Spring, PC World via The Washington Post, May 27, 2006 --- Click Here

Who knew an innocent search for "screensavers" could be so dangerous? It may actually be the riskiest word to type into Google's search engine. Odds are, more than half of the links that Google returns take you to Web sites loaded with either spyware or adware. You might also face getting bombarded with spam if you register at one of those sites with your e-mail address.

A recently released study, coauthored by McAfee and anti-spyware activist Ben Edelman , found that sponsored results from top search engines AOL, Ask.com, Google, MSN, and Yahoo can often lead to Web sites that contain spyware and scams, and are operated by people who love to send out spam.

The study concluded that an average of 9 percent of sponsored results and 3 of organic search results link to questionable Web sites. The study was based on analysis of the first five pages of search results for each keyword tested.

According to the results of the study, the top four most dangerous searches on Google are:

The study defined dangerous sites as those that have one or a combination of the following characteristics: its downloads contain spyware and/or adware; its pages contain embedded code that performs browser exploits; the content is meant to deceive visitors in some way; it sends out inordinate amounts of spam to e-mail accounts registered at the site.

These results are a sobering wake-up call to Web surfers, and they illustrate the changing nature of Internet threats today. It used to be that most viruses and scams made their way to our PCs via our inboxes . But thanks to security software that's getting better at filtering out viruses, spam, and phishing attacks from our e-mail, rogue elements are having a difficult time booby-trapping our PCs.

"Scammers and spammers have clearly turned to search engines to practice their trade," says Shane Keats, market strategist for McAfee.

McAfee says that of the 1394 popular keywords it typed into Google and AOL alone, 5 percent of the results returned links to dangerous Web sites. Overall, MSN search results had the lowest percentage of dangerous sites (3.9 percent) while Ask search results had the highest percentage (6.1 percent).

Given the study's findings, it shouldn't come as a big surprise that the company has a free tool, called McAfee SiteAdvisor, for tackling the problems. In my tests I found it does a great job of protecting you from the Web's dark side.

Since March McAfee has been offering a browser plug-in that works with Mozilla Firefox and Microsoft Internet Explorer. SiteAdvisor puts a little rectangular button in the bottom corner of the browser. If a site you're visiting is safe, the SiteAdvisor button stays green. When you visit a questionable Web site the button turns red or yellow (depending on the risk level) and a little balloon expands with details on why SiteAdvisor has rated the site as such.

SiteAdvisor ratings are based on threats that include software downloads loaded with adware or spyware, malicious code embedded in Web pages, phishing attempts and scams, and the amount of spam that a registered user gets.

SiteAdvisor takes it a step further with Google, MSN, and Yahoo. With these search engines, it puts a rating icon next to individual results. This is a great safety feature and time saver, steering you clear of dangerous sites before you make the mistake of clicking on a link.

Continued in article

Bob Jensen's search helpers are at http://www.trinity.edu/rjensen/searchh.htm

Bob Jensen's threads on computer and networking security are at http://www.trinity.edu/rjensen/ecommerce/000start.htm


"Checking the Validity of Web Sites:  What can browsers tell me about how safe an e-commerce site is?" MIT's Technology Review, May 31, 2006 --- http://www.technologyreview.com/read_article.aspx?id=16946

Q. What can browsers tell me about how safe an e-commerce site is?

A. Security experts have long recommended that you look for the closed padlock at the bottom of the browser window to make sure your transactions are safe.

Unfortunately, the presence of a padlock is no longer enough.

Sites wishing to enable the padlock must obtain a digital certificate from any number of private companies known as certificate authorities.

In the early days, the certificate authority performed a series of checks to make sure sites were really who they said they were. The authority may have asked for ID or a copy of a business license, or it may have checked information a site submitted against state business databases.

Older authorities still do that, but some newer ones try to cut costs and corners by checking only that the site owns the domain name -- not the business said to run on that domain, said Johannes Ullrich, chief technology officer with the SANS Institute's Internet Storm Center.

The difference in cost can be significant: Ullrich said a site may spend $20 for the domain-only check, compared with $100 or more for a traditional certificate. Consumers have no easy way to tell the difference.

That doesn't mean the cheaper certificates are all suspect -- Ullrich's group even has one. But the variation opens the door for scammers known as phishers to easily obtain one and create a site that mimics a real bank's. Customers can then be tricked into revealing passwords and other sensitive details.

Scammers ''realize that as awareness of phishing increases, one thing customers are doing is looking for a lock,'' said Tim Callan, group product marketing manager for VeriSign Inc., one of the old-style certificate authorities. ''As an anti-phishing measure, the padlock has become increasingly unimportant.''

Melih Abdulhayoglu, chief executive of Comodo, another issuer of traditional certificates, said the padlock is still a good sign that a site is encrypted so sensitive information won't be leaked in transit, but ''you could be encrypting for the fraudsters for all you know.''

So all certificates -- those with and without thorough checks -- are being put into question, because a customer is not likely to know what went on behind the scenes.

Fortunately, change is on the way.

Later this year, the certificate authorities that undergo thorough checks will mark their certificates differently. Browsers could then highlight sites with such high-assurance certificates. The address bar might turn green, for instance, when visiting such sites, distinguishing them from ones that carry only a padlock.

Until then, still look for the closed padlock.

If it's missing, or if a warning appears about a missing or expired certificate, that's a sign that something could be wrong. Newer browsers are trying to make the padlock easier to see -- in Firefox and Opera, for instance, the padlock is moved up top, next to the address bar.

''Just because you see the padlock, it doesn't mean it's meaningful, but it's not meaningless,'' said Greg Hughes, chief security executive at Corillian Corp., a provider of online banking technology.

Comodo, meanwhile, has a free tool at http://www.vengine.com to help identify legitimate sites.

But ultimately, it comes down to common sense.

Ask yourself, is it a site you've done business with before? Is it a big operation located in the United States? Did you type in the Web address directly into the browser rather than click on an e-mail link? Is the address a familiar one, one that appears in a bank's brochure?

Beau Brendler, director of Consumer Reports WebWatch, suggests that people also look for ''https'' -- the ''s'' for secure -- instead of just ''http'' in the address bar.

''If you see the padlock and more importantly the https, you've got a fairly good indication that the page is secure,'' he said. ''They are one element of several things to possibly look for.''

But of course, he said, ''you're never necessarily guaranteed anything. There's a certain amount of risk in any transaction.''

Bob Jensen's threads on spoofing are at http://www.trinity.edu/rjensen/ecommerce/000start.htm#Phishing


Global Principles for College Rankings by the Media
Higher education officials from more than a dozen countries have crafted a set of principles designed to standardize what they call “the global phenomenon of college and university rankings.” The “Berlin Principles,” as the series of good practices are called, touch on the purposes and goals of such rankings, the design and weighting of the measures used, collection and processing of data, and presentation. The principles were drafted at a meeting in Berlin this month convened by the UNESCO-European Center for Higher Education and the Institute for Higher Education Policy.
Inside Higher Ed, May 31, 2006 --- http://www.insidehighered.com/news/2006/05/31/qt

Best Academic Program Does Not Always Equate to Highest Media Ranking Program

Forwarded on January 31, 2006 by David Albrecht [albrecht@PROFALBRECHT.COM]
"Graduates of Best Business Schools Don't Always Draw Top Pay, Study Finds," by Katherine S. Mangan, Chronicle of Higher Education, January 31, 2006 --- http://chronicle.com/daily/2006/01/2006013102n.htm 

Companies pay higher salaries to graduates of the most prominent business schools, even when they believe that lesser-known schools offer better educations, according to a study described in the December/January issue of the Academy of Management Journal.

The study, conducted by researchers at the University of Maryland's Robert H. Smith School of Business, found that those two variables do not always go hand in hand. In their analysis of data from a poll of 1,600 professional recruiters, the researchers found that the business schools considered to be the most prominent didn't always get top marks for quality.

The biggest bucks went to graduates of high-profile schools -- the kind that top the charts in national magazine ratings or have faculty members with lofty pedigrees. A report on the study does not give the names of any of the schools mentioned by the recruiters.

"There's an old cliché that nobody got fired for buying from IBM," said Violina P. Rindova, an assistant professor of strategy at the Maryland business school and one of the study's authors. "There's a certain reassurance that if you recruit someone from a prominent school, the boss won't be upset and that you'll have a stronger guarantee."

Continued in article at http://chronicle.com/daily/2006/01/2006013102n.htm 
Paid subscription required for access.

Bob Jensen's threads on college ranking controversies are at http://www.trinity.edu/rjensen/HigherEdControversies.htm#BusinessSchoolRankings


From The Washington Post on May 30, 2006

XM Satellite Radio Holdings Inc. says it won't reach its subscriber target this year, and will likely end 2006 with 8.5 million subscribers. Approximately how many subscribers does its rival, Sirius Satellite Radio Inc., have now?

A. 1 million
B. 3 million
C. 6 million
D. 9 million
 


Student Plagiarism, Faculty Responsibility
A review by two Ohio University officials has found “rampant and flagrant plagiarism” by graduate students in the institution’s mechanical engineering department — and concluded that three faculty members either “failed to monitor” their advisees’ writing or “basically supported academic fraudulence” by ignoring the dishonesty. The report by the two-person review team called for the dismissal of two professors, and university officials said they would bring in a national expert on plagiarism to advise them.
Doug Lederman, "Student Plagiarism, Faculty Responsibility," Inside Higher Ed, June 1, 2006 --- http://www.insidehighered.com/news/2006/06/01/plagiarism

June 2, 2006 reply from Linda Kidwell, University of Wyoming [lkidwell@UWYO.EDU]

Bob's post reminded me of an interesting article I recently read:

Woessner, M.C. (2004). "Beating the house: How inadequate penalties for cheating make plagiarism an excellent gamble." PS: Political Science & Politics, 37 (2): 313 – 320.

His article is interesting in two ways. First, he argues that "it is unethical for faculty to knowingly entice students to plagiarize by promoting policies that actually reward dishonesty." He maintains that we may entice our students by anything from active neglect to ineffective enforcement, and he even throws in some Biblical support from Leviticus: You shall not place a stumbling block before the blind.

Second, he uses expected value functions to illustrate how ineffective policies make it an excellent gamble for students to plagiarize, using different combinations of probabilities of being caught, severities of punishment, and weighting of plagiarized assignments. I fault the paper for assuming all students are value neutral, in that he does not include any factor for the cost of compromising your standards (internal social control in some studies) or, for that matter, the benefit of going along with the crowd (culture conflict theory in others).

Nonetheless, if we assume away any moral or ethical component to the decision to cheat, he demonstrates that unless probabilities of detection are high due to vigilence and penalities are severe (F in the course, not just on the assignment), students have a strong incentive to cheat.

So back to Bob's post, Woessner certainly implies that the faculty are at least as culpable as the students when massive cheating such as that in the engineering department at Ohio University takes place.

I'm not sure I agree on an individual student level, but it's food for thought.

Linda

June 2, 2006 message from John Brozovsky [jbrozovs@VT.EDU]

Faculty are only culpable if you accept the premise that students are inherently amoral. If our accounting students are amoral then Enron is the tip of the iceberg as they will all behave the same way in a similar circumstance (you would have to assume they are just waiting on the ideal time to pull shenaigans).

[We do have a fairly decent honor code with reasonable penalties for those judged guilty by a jury of their peers (4 students 1 faculty member). The peers are typically very willing to find for guilt in the juries I have served on.]

John

June 3, 2006 reply from Bob Jensen

Trinity University adopted an honor code that has a student court investigate cheating and assess penalties. The students are more apt to be tougher on cheating students.

But for faculty it has been a little like rape in that the hassle involved in reporting it discourages the reporting in some suspected instances of cheating (in truth I've not made a formal study of this).

On several occasions in the past (before the new Honor Code) I've simply flunked the student and reported the incident to the Academic Vice President who maintained a file of reported incidents and could, for repeat offenders, inflict more serious punishments. Now faculty must appear in "court." More significantly, the authority to sign the F grade for cheating is thereby taken out of the hands of the faculty member responsible for grades in a course.

Bob Jensen

June 2, 2006 reply from Jagdish S. Gangolly [gangolly@INFOTOC.COM]

I have been following this thread with some interest.

Medical schools have a pompous ceremony for orientation for all entering students. It is usually called "white coat" ceremony.

While the pomp and circumstance at such a ceremony is incidental, the main objective is to make sure that the students are being inducted into a noble and learned profession, that their behaviour after should be different, that they have responsibilities that transcend averything else, life is precious, their ethical behaviour determines the future of the profession, etc., etc.,,,

In my own department, I have for a long time suggested that we desperately need something like that. This is especially important to accounting, since unlike medical schools that get mature adults (22-30+ years old), we get juveniles who are less worldly experienced and more prone to making wrong choices simply because they are younger (if one agrees with Kohlberg).

The question is, what do we do in such a pompous but solemn ceremony? What do we call it? Where is our equivalent of the Hippocratic oath?

I reproduce below both the classic oath and the modern oaths below. May be we can come up with one of our own.

Jagdish

____________________________________________________
Hippocratic Oath -- Classical Version

"I swear by Apollo Physician and Asclepius and Hygieia and Panaceia and all the gods and goddesses, making them my witnesses, that I will fulfil according to my ability and judgment this oath and this covenant:

To hold him who has taught me this art as equal to my parents and to live my life in partnership with him, and if he is in need of money to give him a share of mine, and to regard his offspring as equal to my brothers in male lineage and to teach them this art - if they desire to learn it - without fee and covenant; to give a share of precepts and oral instruction and all the other learning to my sons and to the sons of him who has instructed me and to pupils who have signed the covenant and have taken an oath according to the medical law, but no one else.

I will apply dietetic measures for the benefit of the sick according to my ability and judgment; I will keep them from harm and injustice.

I will neither give a deadly drug to anybody who asked for it, nor will I make a suggestion to this effect. Similarly I will not give to a woman an abortive remedy. In purity and holiness I will guard my life and my art.

I will not use the knife, not even on sufferers from stone, but will withdraw in favor of such men as are engaged in this work.

Whatever houses I may visit, I will come for the benefit of the sick, remaining free of all intentional injustice, of all mischief and in particular of sexual relations with both female and male persons, be they free or slaves.

What I may see or hear in the course of the treatment or even outside of the treatment in regard to the life of men, which on no account one must spread abroad, I will keep to myself, holding such things shameful to be spoken about.

If I fulfil this oath and do not violate it, may it be granted to me to enjoy life and art, being honored with fame among all men for all time to come; if I transgress it and swear falsely, may the opposite of all this be my lot."

Translation from the Greek by Ludwig Edelstein. From The Hippocratic Oath: Text, Translation, and Interpretation, by Ludwig Edelstein. Baltimore: Johns Hopkins Press, 1943. ____________________________________________________________________________

____________________________________________________________________________ Hippocratic Oath—Modern Version

"I swear to fulfill, to the best of my ability and judgment, this covenant:

I will respect the hard-won scientific gains of those physicians in whose steps I walk, and gladly share such knowledge as is mine with those who are to follow.

I will apply, for the benefit of the sick, all measures [that] are required, avoiding those twin traps of overtreatment and therapeutic nihilism.

I will remember that there is art to medicine as well as science, and that warmth, sympathy, and understanding may outweigh the surgeon's knife or the chemist's drug.

I will not be ashamed to say "I know not," nor will I fail to call in my colleagues when the skills of another are needed for a patient's recovery.

I will respect the privacy of my patients, for their problems are not disclosed to me that the world may know. Most especially must I tread with care in matters of life and death. If it is given me to save a life, all thanks. But it may also be within my power to take a life; this awesome responsibility must be faced with great humbleness and awareness of my own frailty. Above all, I must not play at God.

I will remember that I do not treat a fever chart, a cancerous growth, but a sick human being, whose illness may affect the person's family and economic stability. My responsibility includes these related problems, if I am to care adequately for the sick.

I will prevent disease whenever I can, for prevention is preferable to cure.

I will remember that I remain a member of society, with special obligations to all my fellow human beings, those sound of mind and body as well as the infirm.

If I do not violate this oath, may I enjoy life and art, respected while I live and remembered with affection thereafter. May I always act so as to preserve the finest traditions of my calling and may I long experience the joy of healing those who seek my help."

Bob Jensen's threads on plagiarism are at http://www.trinity.edu/rjensen/plagiarism.htm


Disabled Iraq veteran sues Michael Moore over 9/11 film
A veteran who lost both arms in the war in Iraq is suing filmmaker Michael Moore for $85 million, alleging that Moore used snippets of a television interview without his permission to falsely portray him as anti-war in "Fahrenheit 9/11." Sgt. Peter Damon, a National Guardsman from Middleborough, is asking for damages because of "loss of reputation, emotional distress, embarrassment, and personal humiliation," according to the lawsuit filed in Suffolk Superior Court last week. Damon, 33, claims that Moore never asked for his consent to use a clip from an interview Damon did with NBC's "Nightly News." He lost his arms when a tire on a Black Hawk helicopter exploded while he and another reservist were servicing the aircraft on the ground. Another reservist was killed in the explosion. In his interview with NBC, Damon was asked about a new painkiller the military was using on wounded veterans. He claims in his lawsuit that the way Moore used the film clip in "Fahrenheit 9/11" - Moore's scathing 2004 documentary criticizing the Bush administration and the war in Iraq - makes him appear to "voice a complaint about the war effort" when he was actually complaining about "the excruciating type of pain" that comes with the injury he suffered.
Denise Lavois, "Iraq veteran sues Moore over 9/11 film," TheState.com, May 31, 2006 --- http://www.thestate.com/mld/thestate/entertainment/movies/14709855.htm

Michael Moore is silent about this event --- http://www.michaelmoore.com/


It's called "Michael & Me," and, as you might imagine, it emulates the style of Michael Moore's documentaries and turns the tables on the filmmaker responsible for "Bowling for Columbine." This time it's Moore who is hunted down for an ambush interview the way he famously stalked Roger Smith, the chief executive officer of General Motors, in "Roger & Me," and an ailing Charlton Heston in "Columbine." This time it's Elder scoring all the propaganda points – with the truth and facts, rather than distortions and cinematic gimmicks.
"Michael & Me', by Joseph Farah," WorldNetDaily --- http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=46707


The truth about America’s oil refineries
Unfortunately, the lack of capacity that Washington sees as a crisis looks like an ideal business model to oil refiners. There are so few refineries in the U.S. now that they are run tight to the bone, typically using about ninety per cent of their total capacity. The result is that refining—which, until recently, was a tough, low-margin business—has become tremendously lucrative. Last year, refiners’ profits jumped thirty-nine per cent, to twenty-four billion dollars, and this year should be even better. In California, gasoline prices have risen forty-eight per cent since the end of last year, even though crude-oil prices are up just seventeen per cent. Most of that difference has gone straight into refiners’ pockets.
 James Surowiecki, "The truth about America’s oil refineries," The New Yorker, June 12, 2006 --- http://www.newyorker.com/talk/content/articles/060612ta_talk_surowiecki


Updates from WebMD --- http://www.webmd.com/

Latest Headlines on May 31, 2006

Latest Headlines on June 3, 2006

 


"Ultrasensitive Test for Heart Attacks, Alzheimer's:  A powerful but cheap tool available this year could test for everything from genetic diseases to heart-attack signs," by Kevin Bullis, MIT's Technology Review, May 31, 2006 --- http://www.technologyreview.com/read_article.aspx?id=16938&ch=biztech

An ultrasensitive DNA and protein detector, expected to be widely available later this year, could save lives by detecting genetic and infectious diseases early, before they turn deadly or spread. Its relatively low cost and simplicity will make diagnostic tests that today can be done only in specialized labs available at local hospitals. Furthermore, because it's extremely sensitive, it could detect signs of disease invisible to current tools.

The device, which has been developed by Nanosphere, Northbrook, IL, based on research by Chad Mirkin, professor of chemistry at Northwestern University, is already being in used in several research labs and is awaiting Food and Drug Administration approval before it enters general use.

[Click here for illustrations of the process used by the Nanosphere protein and DNA detector.]

In its first application, the gold nanoparticle-based detector will tell doctors whether patients have a genetic trait that makes them likely to develop blood clots during surgery, helping doctors prevent strokes. Soon after, pending the results of ongoing clinical trials, it could diagnose previously undetected heart disease and help researchers diagnose and develop treatments for Alzheimer's disease by detecting levels of telltale proteins in the blood at concentrations "undetectable by any other technology," says Bill Moffitt, CEO of Nanosphere.

Each year 100,000 patients complaining of heart attack-like symptoms are sent home without treatment because current methods cannot diagnose some heart attacks, Moffitt says. Of these people, 20 percent die within a month, he says. And the rest have a much greater risk of dying from a heart attack in the coming year. Moffitt says that by detecting concentrations a thousand times lower that current methods of a protein released in the body during a heart attack, the Nanosphere technology may help doctors diagnose and treat these attacks.

Continued in article


From the Scout Report on May 26, 2006

Trail Runner 1.0 http://www.trailrunnerx.com/english.html 

For those who enjoy a run of some distance across a variety of terrains, this application is definitely worth a look. With Trail Runner, users can create a geographic display of their workout area, plan routes interactively, and also export route descriptions onto their iPod. While the application does not actually contain digital maps itself, it does offer ample directions and instructions on where to obtain such maps online. This version of Trail Runner is compatible with all computers running Mac OS X 10.4 and newer.

Bob Jensen's travel helpers are at http://www.trinity.edu/rjensen/Bookbob3.htm#Travel


KlipFolio 3 --- http://www.klipfolio.com/index.php?action=downloads,download 

Dashboards on a car are essential. Dashboards on one’s computer screen aren’t always essential, but they can certainly make monitoring different sets of information quite a bit easier. Essentially users of this program create a collection of “klips”, which collect and display weather information, email notifications, and stocks. And in an age of user- interface customization, it is not surprising to find that the program also contains a number of skins which can be used at the users’ discretion. Finally, the program can be used in a variety of different languages, including German, Dutch, and Spanish. This version is compatible with computers running Windows 2000 and XP.

 


"What Are We Willing to Do to Improve Education?" by Georganne Spruce, The Irascible Professor, May 30, 2006 --- http://irascibleprofessor.com/comments-05-30-06.htm

Education – what a mess! Everyone is looking for someone to blame and for a quick fix to improve the system. In my view there's only one thing to blame: change. And there's only one solution: change that solves the problem holistically.

If you have a food processor that has a faulty power cord and you've lost the blades and broken the cover, just buying a set of blades won't fix the problem. The same is true of education. Requiring more standardized testing and better preparation for teachers isn't adequate repair. Society has changed greatly in the last forty years and those changes have affected who our students have become.

I began teaching high school in 1966. With the draft in place, grade inflation became a way of life to avoid failing a student who would be sent to Vietnam. After the draft ended, schools continued to expect less of students instead of challenging them and raising standards.

In 1975 the Education for All Handicapped Children's Act became law. It required schools to provide a "free, appropriate, public education to children with disabilities." These children were given an Individualized Educational Plan, which guided teachers in implementing the child's education. Despite this law, many children with disabilities didn't receive "appropriate" education and most were segregated from regular classes. After the passage of the Individuals with Disabilities Education Act (IDEA) schools were closely monitored to assure their compliance.

Now most disabled students are mainstreamed into regular classes where many flourish and develop social and academic skills that help them to function more successfully in society. But their inclusion creates a classroom where teachers are stretched to meet a greater diversity of student needs. Unfortunately, many teachers aren't trained to teach these exceptional children who require methods that are different from those used to teach the average student. In addition to these special needs students, teachers in some schools also may be working with large numbers of non-English speakers.

Today there are more students in the regular classrooms who have behavior problems and who frequently disrupt classes. They're not, by any means, all exceptional children with behavior disorders. In the past, these were the kids who were expelled or who dropped out because schools didn't tolerate disobedience and disrespect, and parents supported that attitude. Too many hours of learning time are wasted while teachers deal with such disruptive students and the paperwork these incidents generate.

As our society has grown more legalistic and less willing to accept personal responsibility, school administrators have become more compliant in dealing with complaining parents. This puts teachers in an untenable position. If the teacher insists on disciplining a student for misbehaving, it may be seen as a challenge to the administrator's authority and an affront to the parent. But if the student isn't disciplined, the teacher's authority is undermined, and in most cases the student continues to be a problem in class.

Once I was asked to adjust my grading so that a high school senior who had attended only half my classes and had done very few assignments could graduate. He was the son of a prominent community leader, and the principal didn't want any "trouble." When I refused, the principal was outraged! It's difficult to convince students to make the effort to learn when they know someone will rescue them from their bad decisions.

Drug and alcohol abuse and early sexual experiences are significant problems among the young in every strata of society. These behaviors seriously interfere with learning, impair judgment, and create depressive and aggressive behaviors that often disrupt the classroom. To make matters worse, students are constantly sent messages through the media and video games that violence, overt sexual expression, and disrespectful behaviors are "cool." To be "bad" is good, so we have more students who seek to disrupt the learning environment in order to get attention and earn the respect of their peers through misbehavior. To make matters worse, the laws make it virtually impossible to suspend or expel disruptive “exceptional students” even when they are capable of understanding the consequences of their actions. This creates an inequity that undermines discipline in the classroom and teaches the students that they don't have to be responsible.

The most significant influence on a child's ability to learn is the parent and the home environment. Today many parents have less time available to spend with their children monitoring homework, teaching social skills, self-discipline and responsibility. Many must work longer hours sometimes on multiple jobs just to make ends meet. As the income of an increasing number of families falls below the poverty line, more children lack the nutrition they need for normal brain function and development. Even among those who are not poor, poor eating and exercise habits take their toll on learning.

Continued in article


"Business Ethics Magazine Lists Top Corporate Citizens:  Environmental awareness is boon for high-tech firms," SmartPros, May 4, 2006 --- http://accounting.smartpros.com/x52863.xml

Business Ethics Magazine has released its annual survey of the "100 Best Corporate Citizens," with Waterbury, Vermont-based Green Mountain Coffee Roasters topping the list.

The coffee company was cited for its "meticulous attention to corporate social responsibility," including its pioneering work in the fair trade movement, which pays coffee growers stable, fair prices. Green Mountain has been among the top 10 companies on Business Ethics' list for four years running.

Now in its seventh year, the list for 2006 is striking because of the dominance of technology firms among the top 10, including Hewlett-Packard, Advanced Micro Devices, Motorola and Agilent Technologies.

Why the strong showing by tech? "Surprisingly, it's not due to financial out-performance," said Marjorie Kelly, editor of Business Ethics, "since none of the top tech companies ranked in the top 10 in financial returns." Instead, Kelly noted, most top tech companies do well on environmental issues. They also tend to be active in their communities and score high in employee relations, she said. "These firms know that to attract and retain talent, it pays to be socially enlightened. High-tech seems to be a genuinely socially responsible sector."

The list saw quite a bit of turnover from 2005, with 33 companies appearing for the first time. Newcomers Johnson & Johnson and McGraw-Hill Companiesscore particularly high in workforce diversity. Newcomer Milwaukee-based Johnson Controls rates high marks because of products that help conserve energy.

The 100 Best Corporate Citizens list puts a numerical rating on service to these various stakeholders. Environmental, social and governance ratings are drawn from an online social research database created by KLD Research & Analytics, Inc.

More details regarding the 100 Best Corporate Citizens list are available at
http://www.business-ethics.com/whats_new/100best.html


"Improved Visual Search:  Researchers are trying to make computers see as we do," by Neil Savage, MIT's Technology Review, May 25, 2006 --- http://www.technologyreview.com/read_article.aspx?id=16926&ch=infotech

Search engines work wonderfully when you want to find something in a long stretch of text. Just type in a word or phrase, and the computer quickly scans through a Web page or Word document and picks it out. But for a computer to do the same thing with an image -- find a particular person or object somewhere in a video recording, for instance -- is much more difficult. Whereas a human eye instantly distinguishes a tree from a cat, it's a lot of work to teach a computer to do the same.

That challenge is being tackled by researchers at MIT's Center for Biological and Computational Learning (CBCL), led by Tomaso Poggio, the Eugene McDermott Professor in the Brain Sciences and Human Behavior. Some students at the center are proposing software that could work, say, with surveillance cameras in an office building or military base, eliminating the need for a human to watch monitors or review videotapes. Other applications might automate computer editing of home movies, or sort and retrieve photos from a vast database of images. It might also be possible to train a computer to perform preliminary medical diagnoses based on an MRI or CT scan image.

But the work to make such exciting applications possible is daunting. "The fact that it seems so easy to do for a human is part of our greatest illusion," says Stanley Bileschi, who this month earned his PhD in electrical engineering and computer science at the CBCL. Processing visual data is computationally complex, he says, noting that people use about 40 percent of their brains just on that task. There are many variables to take into account when identifying an object: color, lighting, spatial orientation, distance, and texture. And vision both stimulates and is influenced by other brain functions, such as memory and reasoning, which are not fully understood. "Evolution has spent four billion years developing vision," Poggio says.

Scientists have traditionally used statistical learning systems to teach computers to recognize objects. In such systems, a scientist tells a machine that certain images are faces, then tells it that certain other images are not faces. The computer examines the images pixel by pixel to figure out, statistically, what the face images have in common that the nonface images do not.

For instance, it might learn that a set of pixels representing the brow is a brighter than the pixels representing the pupils, and that the two sets are a standard distance apart. It might notice that the mouth tends to be horizontal, and that there is a sharp change in brightness where the head stops and the background begins. Once trained, it can look at new images and see how closely they match the rules.


Compare these numbers with the total body count in Iraq
Simmering conflict in Congo has killed 4 million people since 1998, yet few choose to cover the story. TIME looks at a forgotten nation--and what's needed to prevent the deaths of millions more.
Simon Robinson and Vivienne Walt, "The Deadliest War In The World:  Simmering conflict in Congo has killed 4 million people since 1998, yet few choose to cover the story," Time Magazine Cover Story, May 20, 2006 --- Click Here


There's a spouse out there for almost everyone of any age

"An Iconic Report 20 Years Later:  Many of Those Women Married After All," by Jeff Zaslow, The Wall Street Journal, May 25, 2006; Page D1 --- http://online.wsj.com/article/SB114852403706762691.html?mod=todays_us_personal_journal

Twenty years ago, unmarried, college-educated women over age 30 got some bad news, and America took great pity on them.

The impetus was a Newsweek cover story in June 1986 titled "Too Late for Prince Charming?" It showcased a study by Yale and Harvard researchers suggesting that 30-year-old white, college-educated single women had only a 20% chance of finding husbands. At age 40, the probability fell to 2.6%. Using hyperbole and humor that became infamous then, and sound far more awful today, Newsweek said those 40-year-olds were "more likely to be killed by a terrorist" than land a mate.

A lot of us recall the hand wringing over that study, the countless articles and TV debates, the tearful conversations between single women and their mothers. The statistics were later challenged by U.S. Census Bureau demographer Jeanne Moorman, who calculated that those 30-year-olds actually had a 58% to 66% likelihood of finding a husband; for 40-year-olds it was 17% to 23%. But the Harvard-Yale study's core message -- that educated, career-focused women risk spending their lives alone -- still reverberates today.

Well, it turns out that less than 10% of college-educated women now ages 50 to 60 have never been married, census records show. And I did something far less scientific: I checked in with 10 women who in 1986 appeared in Newsweek and other media reports about the study. Eight of them had found a husband. Two others were single by choice.

Continued in article


Journal of Religion and Popular Culture (a Web-based refereed journal) --- http://www.usask.ca/relst/jrpc/


Dysfunctional Families:  Should they run or stay and fight?

"Home Remedy," by Paul Raiburn, The New York Times, May 28, 2006 --- Click Here

Three years ago, Mary Beth Towell, a counselor in Canton, Ohio, was assigned to a family in a crumbling neighborhood of dilapidated houses, drug dealers and gangs. Even in that tough neighborhood, this family stood out as desperate. In a single month, child-protective services fielded more than 30 calls from teachers, police officers and others demanding that the children be removed.

The mother had bipolar disorder and was a heavy marijuana user. The children's father no longer lived in the home. Two of the girls, 15 and 10, and a boy, 11, were violent and suicidal. They threatened one another with knives and fought viciously. (The remaining child, a 14-year-old girl, was somehow O.K.)

Few families in such bad shape survive intact. The children may be sent to residential treatment centers or juvenile corrections facilities. "These programs generate high recidivism rates," says Bart Lubow, director of the program for high-risk young people at the Annie E. Casey Foundation in Baltimore. And they can cost at least $50,000 a year per child. "That would be O.K. if you were getting a reasonable return on your investment," Lubow says. "But the outcomes are very poor."

Stark County in Ohio is trying something different. Towell was part of a team using an innovative antiviolence program called multisystemic therapy, or MST. Developed over the last 30 years by Scott Henggeler, a clinical psychologist and a professor of psychiatry at the Medical University of South Carolina, it is based on the assumptions that families should remain together and that all of the causes of antisocial behavior should be attacked at once.

Taking his cues from family therapy as well as from social ecology, which emphasizes that behavior is shaped by multiple aspects of the environment, Henggeler studies the ecosystem composed by family, neighborhood, schools, peer groups and the broader community. Instead of removing children from that ecosystem, he tries to change it: solve the drug problems and the legal problems, get kids away from delinquent peers and encourage academic success.

A central idea is to focus on the parents. "We want the therapist to build the competency of the parents, because the parents are going to be there after the therapist leaves," he says. If the parents can't handle the job, he might ask an uncle, aunt or grandparent to fill in.

MST therapists like Towell have small caseloads — four to six families at a time. They visit the families every day, if necessary, and are always on call. If the police grab a child at 2 a.m., the therapist can help sort things out. Because of this intensive effort, MST isn't cheap. It typically lasts four to five months and costs between $5,000 to $7,500 per child. To make it cost-effective, it is directed at kids at high risk of expensive out-of-home placements. If enough of them can be kept at home, the program can pay for itself — and even save communities money.

MST is one of only a handful of "evidence based" programs that have been shown to be effective for violent children. In a recent 14-year evaluation, kids who had been through MST programs had 54 percent fewer arrests and spent 57 percent fewer days in jail. "These programs have a higher success rate than what else is out there," Henggeler says. The single most important piece of the treatment is getting children away from deviant peers.

While the program has become more popular in recent years, it is still relatively small. Edward Latessa, head of the division of criminal justice at the University of Cincinnati, contends that MST is one of the best programs for delinquent kids, but he adds that it isn't for everyone. "The problem with MST is it's a difficult model to implement," he says. "It requires a caregiver that's really committed. It's not easy, so some agencies give up." With such concerns in mind, Henggeler has set up a private company called MST Services to help communities develop programs, train therapists and make sure they stick with the program. Meanwhile, he is extending MST-style programs to other arenas, like the treatment of sexual offenders and abused or maltreated kids.

Towell had surprisingly good luck with the Canton family. She discovered that the children liked to draw, and she helped them join art classes. There they met the sort of other kids she wanted them to associate with. With pressure from Towell, the mother cleaned herself up and made the commitment to turn things around. It wasn't easy, but it worked. "She was willing to do whatever it took," Towell says. "That's when we have the most successful cases."

Paul Raeburn is the author of "Acquainted With the Night," a memoir of raising children who have depression and bipolar disorder.


From the Scout Report on May 19, 2006

Economic Statistics Briefing Room --- http://www.whitehouse.gov/fsbr/money.html 

While more than a few curmudgeons have offered their honest opinions about statistics, we here at the Scout Report like to provide our readers with the facts and let them decide on their own. Fortunately, there are sites like the Economic Statistics Briefing Room provided by the White House. Here, visitors can peruse sections that offer information on income, output, transportation, and prices. Drawing on the research and statistical databases of several dozen federal agencies (including the National Agricultural Statistics Services), visitors can view tables and charts that offer such timely material as crude oil prices, poverty rates, and household wealth. Within each section, visitors can view summary statistics, and then if they wish, they can proceed to the homepage of the agency that provided each set of information.

Bob Jensen's threads on economic statistics are at http://www.trinity.edu/rjensen/Bookbob1.htm#EconStatistics


Congratulations to Neal!

I knew about this earlier but I waited until Neal gave me permission to announce it. I think the FAF made a good choice.

From: Neal Hannon [mailto:njhannon@f-a-f.org]
Sent: Friday, June 02, 2006 12:20 PM
To: Jensen, Robert
Subject: FAF

Hi Bob,

Here’s an update on my new job.  As of June 1, 2006, I joined the FAF as Director, Financial Reporting Technologies.  In my new role, I will guide the Foundation, the FASB and the GASB in their efforts relating to XBRL and other reporting technologies.  The challenges in the new position are many and I will need the support of the entire financial community to be successful.  Thank you for all your help and support and I look forward to a continuing relationship in my new role.

Neal

Neal J. Hannon
Director, Financial Reporting Technologies
Financial Accounting Foundation
Norwalk, CT  06856
Work: 203-956-5219   Cell: 401-225-6082

 

 


Fighting Words
A former Marine's favorite books on the military.

BY JAMES WEBB
Saturday, May 27, 2006 12:01 a.m. EDT --- http://www.opinionjournal.com/weekend/fivebest/?id=110008438

1. "Once an Eagle" by Anton Myrer (Holt, Rinehart & Winston, 1968).

Quite simply, America's "War and Peace." "Once an Eagle" is the finest novel ever written about what it means to spend a career in the military, and how the military relates to the civilian world. Myrer traces the career and personal life of a talented, often selfless career soldier from the 1916 Pershing expedition along the Mexican border to the beginnings of the Vietnam War, skillfully blending in human foibles, political debates and the moral dilemmas that leaders always must face. A Marine veteran of Iwo Jima, Myrer writes with great skill about combat and with intelligence about a variety of societal and human issues.

2. "Hell In a Very Small Place" by Bernard Fall (Lippincott, 1966).

For anyone who believes that France's Dien Bien Phu operation in Vietnam in 1954 was little more than a blunder, and for anyone who believes that the French were not capable fighters in Vietnam, this comprehensive and often surprising nonfiction account of the siege that brought France to its knees will be a deserved surprise. Bernard Fall, the Frenchman who was the most perceptive observer of Vietnam's shaky march away from French colonialism, wrote several books about Vietnam; he was killed while on a patrol with the U.S. Marines in 1966. This book--his best--shows us the underappreciated complexities of that war, the regional issues that drove many local decisions and the tragic heroism of France's finest fighting forces.

3. "History of the Second World War" by B.H. Liddell Hart (Putnam, 1970).

Liddell Hart is most remembered for his essays on strategy (he largely coined the doctrine of the "indirect approach") and for his early advocacy of armored warfare in the years following World War I. It was an advocacy ignored by the British, studied and adapted by the Germans. But this book, which he was still working on at his death in 1970, is his masterpiece. Leaving politics behind, Hart gives us a splendid chronology of the war from a military context, which allows the reader to cover the entire global landscape of the war from beginning to end. The book's only defect is Hart's forgivable imbalance of attention paid to the European theater as opposed to Asia. Americans who have not read beyond our own military experiences in World War II emphatically need to read this book, in order to comprehend the ferocity of the German-Russian warfare, which is too frequently overlooked in our own discourse.

4. "The Forgotten Soldier" by Guy Sajer (Harper & Row, 1971).

This memoir from the perspective of one who fought on the German side in World War II is probably the most overwhelming book ever written about ground combat. Guy Sajer, an Alsatian drafted into the German army, fought for three years as an infantry soldier, mostly on the Russian front. Germany fielded an army of 12 million soldiers and lost 3.7 million combat dead, a preponderance of those casualties occurring in the mind-boggling, massive engagements with the Soviets. Sajer, who had no politics and little enthusiasm for soldiering, nonetheless demands an understanding of the immensity of this human experience, and is the perfect voice to ask for it.

5. "The Guns of August" by Barbara W. Tuchman (Macmillan, 1962).

This is the book that every policy maker pushing for the invasion of Iraq should have read, marked, learned from and digested before sending the U.S. off to war. Barbara Tuchman's brilliant analysis of how World War I began in the summer of 1914 is remarkable not only for her understanding of the issues at play among national leaders, but also for her descriptions of how the trenches became immediately bogged down, resulting in a four-year war from which Europe has never fully recovered. The Germans were certain that World War I would be over in six weeks, but unforeseen circumstances and unintended consequences are the rule in warfare. Instead of a quick march to Paris, the summer of 1914 saw, horribly, several nations begin the process of bleeding and spending themselves away from greatness.

Mr. Webb, former secretary of the Navy, is the author of eight books, including "Fields of Fire," a novel about the Vietnam War. He is now a Democratic candidate for the U.S. Senate in Virginia.

 




What gratitude is all about

Forwarded by Auntie Bev

 

 

The Whale

 

If you read the front page story of the SF Chronicle, you would have read about a female humpback whale who had become entangled in a spider web of crab traps and lines.

 

She was weighted down by hundreds of pounds of traps that caused her to struggle to stay afloat. She also had hundreds of yards of line rope wrapped around her body, her tail, her torso, a line tugging in her mouth.

 

A fisherman spotted her just east of the FarraloneIslands (outside the Golden Gate) and radioed an environmental group for help.

 

Within a few hours, the rescue team arrived and determined that she was so bad off, the only way to save her was to dive in and untangle her ... a very dangerous proposition.

 

 

One slap of the tail could kill a rescuer.

 

 

They worked for hours with curved knives and eventually freed her.

 

When she was free, the divers say she swam in what seemed like joyous circles.

She then came back to each and every diver, one at a time, and nudged them, pushed gently around-she thanked them. Some said it was the most incredibly beautiful experience of their lives.

 

The guy who cut the rope out of her mouth says her eye was following him the whole time, and he will never be the same.

 

May you, and all those you love, be so blessed and fortunate ... to be surrounded by people who will help you get untangled from the things that are binding you.

 

And, may you always know the joy of giving and receiving gratitude.

 

 

I pass this on to you, my friend, in the same spirit.

 

 

 




Forwarded by Auntie Bev

Here is a math trick so unbelievable that it will stump you. Personally I would like to know who came up with this and why that person is not running the country.

The easy way: Click on your calculator and do it while you read it.

1. Grab a calculator. (you won't be able to do this one in your head)

2. Key in the first three digits of your phone number (NOT the area code)

3. Multiply by 80

4. Add 1

5. Multiply by 250

6. Add the last 4 digits of your phone number

7. Add the last 4 digits of your phone number again.

8. Subtract 250

9. Divide number by 2

Do you recognize the answer?

 




More Tidbits from the Chronicle of Higher Education --- http://www.aldaily.com/

Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm
For earlier editions of New Bookmark s go to http://www.trinity.edu/rjensen/bookurl.htm 
Archives of Tidbits: Tidbits Directory --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm

Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.

International Accounting News (including the U.S.)

AccountingEducation.com and Double Entries --- http://www.accountingeducation.com/
        Upcoming international accounting conferences --- http://www.accountingeducation.com/events/index.cfm
        Thousands of journal abstracts --- http://www.accountingeducation.com/journals/index.cfm
Deloitte's International Accounting News --- http://www.iasplus.com/index.htm
Association of International Accountants --- http://www.aia.org.uk/ 
WebCPA --- http://www.webcpa.com/
FASB --- http://www.fasb.org/
IASB --- http://www.fasb.org/
Others --- http://www.trinity.edu/rjensen/bookbob1.htm

Gerald Trite's great set of links --- http://iago.stfx.ca/people/gtrites/Docs/bookmark.htm 

Richard Torian's Managerial Accounting Information Center --- http://www.informationforaccountants.com/ 

I highly recommend TheFinanceProfessor (an absolutely fabulous and totally free newsletter from a very smart finance professor, Jim Mahar from St. Bonaventure University) --- http://www.financeprofessor.com/ 
Jim's great blog is at http://financeprofessorblog.blogspot.com/

 

Professor Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
Jesse H. Jones Distinguished Professor of Business Administration
Trinity University, San Antonio, TX 78212-7200
Voice: 210-999-7347 Fax: 210-999-8134  Email:  rjensen@trinity.edu  




I recently sent out an "Appeal" for accounting educators, researchers, and practitioners to actively support what I call The Accounting Review (TAR) Diversity Initiative as initiated by American Accounting Association President Judy Rayburn --- http://www.trinity.edu/rjensen/395wpTAR/Web/TAR.htm




Tidbits on June 11, 2006
Bob Jensen

Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm
For earlier editions of New Bookmarks go to http://www.trinity.edu/rjensen/bookurl.htm 
Archives of Tidbits: Tidbits Directory --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm

Bob Jensen's various threads --- http://www.trinity.edu/rjensen/threads.htm
       (Also scroll down to the table at http://www.trinity.edu/rjensen/ )

Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.

Internet News (The News Show) --- http://www.thenewsshow.tv/daily/

Informercial Scams (even those carried on the main TV networks)--- http://www.infomercialscams.com/

Security threats and hoaxes --- http://www.trinity.edu/its/virus/

25 Hottest Urban Legends (hoaxes) --- http://www.snopes.com/info/top25uls.asp 
Hoax Busters --- http://hoaxbusters.ciac.org/ 
Stay up on the latest and the oldest hoaxes --- http://www.snopes.com/

Bob Jensen's home page is at http://www.trinity.edu/rjensen/


Online Video and Audio
In the past I've provided links to various types of music and video available free on the Web. 
I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/music.htm

Hatsheput: From Queen to Pharaoh --- http://www.metmuseum.org/special/Hatshepsut/pharaoh_more.asp

Big Girl Doll --- http://video.google.com/videoplay?docid=-1522158746296131750

The Halls of Ivy --- http://www.otrpodcast.com/shows/comedy/hallsofivy.html

Faces of the Fallen (veterans talking about their experiences) --- http://projects.washingtonpost.com/fallen/

Snow White South of the Rio Grande --- http://www.youtube.com/v/tAq3hWBlalU 

From Jim Mahar's blog on June 10, 2006 --- http://financeprofessorblog.blogspot.com/

Milken Institute Audio

Wow. I may never turn the computer off ;)

Audio presentations from the Milken Institute. These are really interesting. On everything from the economic impact of terrorism to globalization to education to civil liberties to medicine.

I have a feeling if Ben Franklin or Thomas Jefferson were around today, this is what they would be listening to!


Oh yeah, video clips are also available.

Free music downloads --- http://www.trinity.edu/rjensen/music.htm

In the past I've provided links to various types of music and video available free on the Web. 
I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/music.htm

Snow White South of the Rio Grande --- http://www.youtube.com/v/tAq3hWBlalU 

One More Once’: A Centennial Celebration of the Life and Music of Count Basie http://newarkwww.rutgers.edu/ijs/cb/index.html

From NPR
Impulse Records: 'The House That Trane Built' --- http://www.npr.org/templates/story/story.php?storyId=5452186

Forwarded by Paula

FOLK MUSIC OF ENGLAND, SCOTLAND, IRELAND, WALES and AMERICA. http://www.contemplator.com/england/ 

OLD-TIME MUSIC. Traditional folk music of U.S. Southern Appalachians. http://www.gordonbanks.com/gordon/interests/otmusic.html 

SPOON PLAYING. "If you can keep the beat by tapping the floor with your toes or by drumming on the table with your fingers, you, too, can play the spoons," says A. Claude Ferguson.

http://www.spoonplayer.com/

http://www.spoonplayer.com/chap12.html 

TENNESSEE. Transcription of the "Company Store Ledger" at the Bright Hope Furnace in western Greene County, Tennessee for the years 1834-35. Contains an index to the several hundred names found in the ledger. http://www.kiva.net/~jeskewic/brighthope.html 

SOME SITES WORTH SEEING: SCOTTISH (DIGITAL) ARCHIVE NETWORK http://www.scan.org.uk/digitalarchive/index.htm 

ENGLISH FOLK AND TRADITIONAL MUSIC ON THE INTERNET http://web.ukonline.co.uk/martin.nail/Folkmus.htm


Photographs and Art

Virtual Visit of the Canadian Space Agency --- http://www.space.gc.ca/asc/eng/virtual_visit.asp

From the American Mathematical Society
Mathematical Imagery http://www.ams.org/mathimagery/

SwarmSketch --- http://www.swarmsketch.com/

MooTube (as seen through the eyes of a cow) --- http://www.mootube.com/

From The New Yorker
The New Yorker publishes a selection of letters, journal entries, and personal essays by soldiers, airmen, sailors, and marines who served in the current war in Iraq. Here, five of the servicemen read from their work, accompanied by their photographs.
"The Home Front" The New Yorker, June 5, 2006 --- http://www.newyorker.com/online/content/articles/060612on_onlineonly01 
 


Online Books, Poems, References, and Other Literature
In the past I've provided links to various types electronic literature available free on the Web. 
I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/ElectronicLiterature.htm

Can Such Things Be? by Ambrose Bierce (1842 1914) --- Click Here

Bartleby, the Scrivener by  Melville Herman (1819-1891) --- Click Here

Maria by Mary Shelley (1797-1851) --- Click Here

Nicholas Nickleby by Charles Dickens (1812-1870) --- Click Here

Project Gutenberg and World eBook Library plan to make ''a third of a million'' e-books available free for a month at the first World eBook Fair. Downloads will be available at the fair's Web site from July 4, the 35th anniversary of Project Gutenberg's founding, through Aug. 4. The majority of the books will be contributed by the World eBook Library. It otherwise charges $8.95 (euro6.98) a year for access to its database of more than 250,000 e-books, documents and articles. But the book fair will not be the last chance for e-bookworms to devour works ranging from ''Alice's Adventures in Wonderland'' to ''Old Indian Legends,'' not to mention dictionaries and thesauruses, without paying for them. Project Gutenberg founder Michael Hart, who first announced the ambitious plan a month ago, said Friday the partners are on track to make 1 million books available for the annual fair's one-month run in 2009, with more appearing in subsequent years. About 100,000, he said, will be permanently available at the handful of Project Gutenberg sites on the Internet.
"Electronic book devotees may want to set aside some extra screen time this summer, as two nonprofits are preparing to provide free access to 300,000 texts online," PhysOrg, June 2, 2006 --- http://www.physorg.com/news68484530.html
Project Gutenberg --- http://promo.net/pg/
World eBook Library --- http://worldlibrary.net/
World eBook Fair --- http://worldebookfair.com/
Also see http://www.technologyreview.com/read_article.aspx?id=16956




Maybe the anti-immigrant slogan should be: "Keep America stupid--seal the borders!"
See module from the Boston Globe given below

The future of children is always of today. Tomorrow will be too late.
Gabriela Mistral (1889-1957) --- http://en.wikipedia.org/wiki/Gabriela_Mistral

As far as the laws of mathematics refer to reality, they are not certain; and as far as they are certain, they do not refer to reality.
Albert Einstein as recently quoted by Mark Shapiro at http://irascibleprofessor.com/comments-06-07-06.htm

Women now make up more than 60 percent of all accountants and auditors in the United States, according to the Clarion-Ledger. That is an estimated 843,000 women in the accounting and auditing work force.
AccountingWeb, "Number of Female Accountants Increasing," June 2, 2006 ---
http://www.accountingweb.com/cgi-bin/item.cgi?id=102218

Perhaps it was as easy to uncover the truth as it was to demonstrate the falsehood.
Author - Marcus Tullius Cicero (106 BC-43 BC) --- http://en.wikipedia.org/wiki/Cicero

According to Census Bureau statistics from 2000, American Indians make up 2.8 percent of the U.S. population. However, only 0.3 percent of students in medical schools and 0.5 percent of students enrolled in schools of pharmacy are American Indians.
Rob Capriccioso, "Indian Training Centers at Risk," Inside Higher Ed, June 7, 2006 --- http://www.insidehighered.com/news/2006/06/07/indians

Lead in to Commencement Address by Former Senator Bill Bradley at Ithaca College
President Williams, members of the faculty, members of the class of 2006, friends and family of the class of 2006. I want to continue my acknowledgments. I'm very sensitive, I want to make sure that I acknowledge every element of this community. And so let me borrow from Garry Trudeau and continue my acknowledgments: and so I recognize Chairman Bill Haines and members of the board of trustees, bored members of the trustees, those who watch "The Sopranos," those who watch "American Idol," those who still watch the reruns of "Frasier," those who don't like TV. Denizens of Ithaca, denizens of the night, knights of Tompkins County, people of class, classy people, people of height, the vertically constrained, people of hair, the indifferently coiffed, the optically challenged, the temporarily sighted, the insightful, the out of sight, the out-of-towners, the Afrocentrics, the Eurocentrics, the Eurocentrics with Eurail passes, the eccentrically inclined. The sexually disinclined, people of sex, sexy people, earthy people, animal companions, friends of the earth, friends of the boss, the temporarily employed, the differently employed, the differently optioned, people with options, people with stock options, Knick fans, Celtic fans, those who don't have the wisdom to be either Knick or Celtic fans, the divestiturists, the deconstructionists, the home constructionists, the homeless, the temporarily housed at home, and, God save us parents, the permanently housed at home. Good morning!
Bill Bradly, "Graduates Get an Earful, From Left, Right and Center," The New York Times, June 11, 2006 --- Click Here
 




Great Minds in Management:  The Process of Theory Development --- http://www.trinity.edu/rjensen//theory/00overview/GreatMinds.htm

In April 2006 I commenced reading a heavy book entitled Great Minds in Management:  The Process of Theory Development, Edited by Ken G. Smith and Michael A. Hitt (Oxford Press, 2006).

The essays are somewhat personalized in terms of how theory development is perceived by each author and how these perceptions changed over time.

In Tidbits I will share some of the key quotations as I proceed through this book. The book is somewhat heavy going, so it will take some time to add selected quotations to the list of quotations at http://www.trinity.edu/rjensen//theory/00overview/GreatMinds.htm 

The Development of Stakeholder Theory: An Idiosyncratic Approach

R. EDWARD FREEMAN

PG. #422 FREEMAN
During this time, I began to work with Professor William Evan, a distinguished sociologist at Penn.  I was very flattered when Evan called me one day and asked to meet to discuss the stakeholder idea.  Evan saw this project as a way to democratize the large corporation.  Even though he was an impeccable empirical researcher, he immediately saw the normative implications of coming to see business as "serving stakeholders."  We began to meet weekly and talk about how to do the "next project" after Strategic Management: A Stakeholder Approach, even though that project wasn't yet finished.  We began an empirical study aimed at seeing how Chief Executive Officers made trade-offs among stakeholders and we began to plan a book that would deal with the normative implications of reconceptualizing the corporate governance debate in stakeholder terms.  While we never finished the book, we did complete a number of essays, one of which is reprinted countless times in business ethics textbooks.  What I learned from Bill Evan was invaluable: to be the philosopher that I was, rather than some positivist version of a social scientist.  Evan gave me the courage to tackle the normative dimension, in an intellectual atmosphere, the modern twentieth-century Business School that had disdain for such analysis.

In summary, I spent most of my time from 1978 until 1982 teaching executives and working with them to develop very practical ways of understanding how they could be more effective in the relationships with key stakeholders.  In the summer of 1982, I sat down at my home in Princeton Junction, New Jersey and drafted the initial manuscript of Strategic Management: A Stakeholder Approach.  I tried to set forth a method or set of methods/techniques for executives to use to better understand how to manage key stakeholder relationships.  In addition, I wanted to track down the origins of the stakeholder idea, and give credit to its originators and the people whose work I had found so useful.

PG. #432 & 433 FREEMAN

    Open questions remain.  For instance:

  1. Is there a useful typology of enterprise strategy or answers to questions of purpose?
     

  2. How can we understand the relationship between fine-grained narratives of how firms create value for stakeholders, and the idea of stakeholder theory as a genre or set of loosely connected narratives?
     

  3. If we understand business, broadly, as "creating value for stakeholders' what are the appropriate background disciplines?  And, in particular what are the connections between the traditional "social sciences" and "humanities"?
     

  4. How can the traditional disciplines of business such as marketing and finance develop conceptual schemes that do not separate "business" from "ethics" and can the stakeholder concept be useful in developing these schemes?
     

  5. If we understand "business," broadly, as "creating value for stakeholders," under what conditions is value creation stable over time?
     

  6. Can we take as the foundational question of political philosophy, "how is value creation and trade sustainable over time" rather than "how is the state justified"?

I am certain that there are many additional research questions, and many more people working on these questions than I have mentioned here.  I hope this paper has clarified some of my own writing in the stakeholder area, and provoked others to respond.

If I try to summarize the lessons for management theorists of the development of stakeholder theory they would be four.  First, don't underestimate the role of serendipity and context.  My role would have been very different, indeed probably nonexistent, if a few key life events had unfolded differently.  Second, don't underestimate the contributions of others.  Really, my own contribution has been to try and synthesize the contributions of many others.  I am always amused and somewhat horrified when I'm at a conference and am introduced as the "father of stakeholder theory."  Many others did far more work, and more important work than I did, and that continues today as stakeholder theory unfolds in a number of fields.  Third, pay attention to the real world of what managers, executives, and stakeholders are doing and saying.  Our role as intellectuals is to interpret what is going on, and to give better, more coherent accounts of management practice, so that ultimately we can improve how we create value for each other, and how we live.  That, I believe is a kind of pragmatist's credo.  Finally, surely the author has a role in management theory.  Overemphasis on reviews, reviewers, revisions, and the socialization of the paper-writing process can lead to a kind of collective group think.  I believe that I could not have published the work in Strategic Management: A Stakeholder Approach as a set of A-journal articles.  By publishing a book, I managed to create a voice, building heavily on the voices of others that could express a point of view.  I believe that in today's business school world, that is much more difficult, and that we need to return to a more ancient idea of the author in management theory.


"Management needs fewer fads, more reflection," Stanford Magazine, May/June 2006 --- http://www.stanfordalumni.org/news/magazine/2006/mayjun/dept/management.html

Jeffrey Pfeffer, PhD ’72, and Robert I. Sutton would like to foment a little revolution—one in which leaders in business and the world at large base their decisions on facts and logic, not ideology, hunches, management fads or poorly understood experience. Pfeffer, the Thomas D. Dee II Professor of Organizational Behavior, and Sutton, a professor of management science and engineering and, by courtesy, of organizational behavior in the Graduate School of Business, are the authors of Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-Based Management (Harvard Business School Press, 2006). STANFORD asked them about bringing more reason to organizational life.

What’s some of the total nonsense that occurs in companies?

Sutton: Probably the biggest single problem for human decision making is that when people have ingrained beliefs, they will put a much higher bar for evidence for things they don’t believe than for things they do believe. Confirmation-seeking bias, I think, is what social psychologists call it. Organizations can have amazingly good evidence, but it has no effect on the decisions they make if it conflicts with their ideology.

Do you have a favorite unsupported belief?

Pfeffer: One would be stock options. There are more than 200 studies that show no evidence that there is a relationship between the amount of equity senior executives have and a company’s financial performance. . . . Just as you would never bet on a point spread on a football game because it encourages bad behavior, you should not reward people for increasing the spread in an expectations market.

Overreliance on financial incentives of all sorts drives all kinds of counterproductive behavior.

Evidence-based management derives from evidence-based medicine. Explain what kind of decision making we’re talking about.

Continued in interview




Distance Learning Today will be a quarterly supplement to USA Today newspaper
Dr. John G. Flores, CEO of The United States Distance Learning Association, today announced his organization's sponsorship of "Distance Learning Today," a quarterly supplement in USA TODAY. "Distance learning is transforming the American educational landscape, through on-line technology, video conferencing systems, satellite delivery and other media," Flores said. "We expect this supplement to be an invaluable guide for millions of present and potential distance learners as well as a means for our member institutions and corporate sponsors to reach them." The first supplement will appear in September and is expected to exceed twenty pages. Editorial will include features on the distance learning revolution, financing a distance education, increasing acceptance of distance learning degrees among employers, technology requirements and, importantly, how to evaluate the quality of a distance learning offering. "Today, there are thousands of institutions offering degrees and certifications for distance learners," Flores said. "It's timely to provide the public with a reliable information resource concerning this dynamic educational alternative." Formed in 1987, the United States Distance Learning Association is a non-profit organization dedicated to serving the needs of the distance learning community by promoting the development and application of distance learning for education and training and by providing advocacy, information, networking and distance learning opportunities.
PRWeb, June 9, 2006 --- http://www.prweb.com/releases/2006/6/prweb396750.htm

Jensen Comment
PRWeb is a tremendous (overwhelming?) source of news in a huge set of categories --- http://www.prweb.com/newsbycategory/index.htm

Bob Jensen's threads on distance learning alternatives are at
http://www.trinity.edu/rjensen/crossborder.htm

Bob Jensen's threads on higher education controversies are at
http://www.trinity.edu/rjensen/HigherEdControversies.htm

Portal to Asian Internet Resources --- http://webcat.library.wisc.edu:3200/PAIR/index.html 

U.S. Department of Education  --- http://www.ed.gov/index.jhtml

Department of Education: Office of Vocational and Adult Education ---
http://www.ed.gov/about/offices/list/ovae/index.html?src=oc

European Centre for Higher Education --- http://www.cepes.ro/


"Was Earning That Harvard M.B.A. Worth It?" by Abby Ellin, The New York Times, June 11, 2006 --- Click Here

THE popularity of the (MBA) degrees has surged. In 1970, for example, business schools handed out 26,490 M.B.A.'s, according to the Department of Education. By 2004, after a period marked by an economic boom and heightened competition for top-flight business careers, that figure had jumped to 139,347. But opinion and data appear divided on the tangible benefits of an M.B.A.

. . .

In 2003, Professor Mintzberg tracked the performance of 19 students who graduated from the Harvard Business School in 1990 and were at the top of their class academically. Ten of the 19 were "utter failures," he said. "Another four were very questionable, at least," he added. "So five out of 19 did well."

Research varies on the value of an M.B.A. A 2006 study by the Lubin School of Business at Pace University, looking at 482 companies listed on the New York Stock Exchange, found that only 162 of them had chief executives with graduate degrees in business. The companies with chief executives who went to more prestigious schools did no better than those who went to less prestigious schools, according to the study. Why this was so is unclear.

"One possibility is that if you don't have a graduate degree from a top school then you have to work that much harder to succeed," said Aron A. Gottesman, an associate professor at Pace and a co-author of the study.

On the other hand, Professor Gottesman and a colleague found in a separate study, published earlier this year in the Journal of Empirical Finance, that mutual fund managers with M.B.A.'s from BusinessWeek's 30 top-ranked business schools — including Harvard — generally outperformed other mutual fund managers. Professor Gottesman is not sure why this was so, either. "One possibility is that at higher-quality schools they simply teach better technical skills," he speculated. "Or students at top-tier schools have a higher I.Q."

Continued in article

Bob Jensen's threads on higher education controversies are at
http://www.trinity.edu/rjensen/HigherEdControversies.htm


And now there's a helper site for Harvard's "utter failures" (as quoted above)

"Help Site for the Poor," Wired News, June 9, 2006 ---
http://www.wired.com/news/technology/0,71116-0.html?tw=wn_index_17

The site would provide information about such basics as public safety, emergency services, education, health care and jobs. U.S. Senators John McCain, an Arizona Republican, and Barack Obama, an Illinois Democrat, serve as honorary co-chairmen of the group.

Continued in article

The One Economy homepage is at http://www.one-economy.com/


Warning Video for Mutual Fund Investors: 
"The more mangers take, the less investors make"

From Jim Mahar's blog on June 9, 2006 --- http://financeprofessorblog.blogspot.com/

Video of Bogle's speech on the Mutual Fund Industry

I finally got around to watching Bogle's speech to Independent Mutual Fund Directors. It is available on the Bogle eblog.

My favorite quotes:
 
"...the more mangers take, the less investors make."

"If you do not believe we are we are in teh marketing business, consider rate of fund failure....there have been 30,000 funds in history, 11,000 of them are gone....Even in the last 5 years, 25%, actually 27% of all equity funds have vanished....I am afraid to say, it is largely a marketing business."
Well worth a listen!

Bob Jensen's threads on mutual fund frauds are at
http://www.trinity.edu/rjensen/FraudRotten.htm#MutualFunds


How are professors like priests?
Should confidential knowledge about a serial rapist go unreported?

"Keeping a Secret, Paying a Price," by David Epstein, Inside Higher Ed, June 9, 2006 --- http://www.insidehighered.com/news/2006/06/09/indict

It was either betray her students’ confidence or perhaps let rape go unpunished.

Patricia O’Toole, former dean of students at Notre Dame College, in Ohio, may have thought she was bound to stay tight-lipped about students who confided in her, but the Cuyahoga County Prosecutor’s Office didn’t agree.

On Tuesday, a grand jury indicted O’Toole on three counts of failure to report a felony.

According to officials in the prosecutor’s office, two Notre Dame students told O’Toole last October that they had been sexually assaulted by Daniel Carl Wolfe, a 19-year-old student. The officials said the dean then received an internal complaint in which a third woman said Wolfe had assaulted her. That report indicated that Wolfe had a 17-year-old woman in his room who was so drunk she had to be taken to the hospital, according to court filings.

Jamie Dalton, a spokeswoman for the prosecutor’s office said that, in December, police were investigating a separate incident involving Wolfe, and came to ask O’Toole a question. O’Toole then told campus police officers that she had knew of two other incidents that the college should include in its filings under the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act, a federal law that requires colleges to make an annual report of campus crime.

O’Toole had not come forward with the information earlier, however, and declined to give officers the names of the accusers, because she apparently had told the students that she would keep their identities secret. Police had to find the students on their own.

“If she would have reported this immediately, we might not have any other Jane Doe’s,” Dalton said, referring to other unnamed women who were allegedly assaulted by Wolfe.

“She was concerned about their identities,” Dalton said, “but what about the whole rest of the campus? What about other people that could have been victimized?”

According to Ohio law, failure to report a felony is a fourth degree misdemeanor, which carries a maximum penalty of 30 days in a jail and a $250 fine.

The law grants exemptions from the reporting requirement in specific circumstances, for members of the clergy, for example, and for counseling services “provided in an informal setting by a person who, by education or experience, is competent to provide those services.”

Peter D. Brown, associate executive director of the American College Personnel Association, said that “every student affairs professional has to balance the confidence of students and helping students, with, of course, legal obligations,” he said. “It’s often a tight line to follow.”

Brown added that staff members who deal with student conduct are often faced with students saying “Hey this happened to me, I’m just telling you but don’t want you to do anything about it.”

Mary Ann Kovach, a spokeswoman for Notre Dame, said that, when the allegations came to light in December, O’Toole was placed on administrative leave “while we were trying to figure out what was going on,” Kovach said. O’Toole then resigned. Kovach said Notre Dame could not comment further on the matter, because of the pending legal action.

Wolfe was suspended, and, before he could be expelled, transferred to Defiance College in Ohio. Defiance has learned of the allegations, and is currently preparing to expel Wolfe. He is being charged with 22 counts of crimes, ranging from rape and assault, to kidnapping, against six different women. Wolfe could not be reached for comment.

O’Toole could not be reached, either, and officials at the prosecutor’s office said that she may not have a lawyer yet.


Carnegie-Mellon University joins the open sharing initiative

A collection of "cognitively informed," openly available and free online courses and course materials that enact instruction for an entire course in an online format.
Open Learning Initiative at Carnegie Mellon University --- http://www.cmu.edu/oli/index.html

Bob Jensen's threads on open sharing of course materials at various major universities (MIT, Stanford, Rice, etc.) are at http://www.trinity.edu/rjensen/000aaa/updateee.htm#OKI


"Video goggles turn iPod into virtual full-size TV," PhysOrg, June 7, 2006 --- http://physorg.com/news68916885.html


Maybe the anti-immigrant slogan should be: "Keep America stupid--seal the borders!"

From Opinion Journal on June 7, 2006

The Boston Globe website published the pictures of each valedictorian http://www.boston.com/news/education/k_12/gallery/valedictorians?pg=25 in Boston's high schools and other high school programs. As you thumb through the pictures, it is striking how many of these students are immigrants. So many, that I decided to take some statistics. The Globe listed the country of birth for each student. For some US-born students I guessed that they were 2nd generation immigrants (for instance if they were Vietnamese). Almost 2/3 of the Boston valedictorians are either immigrants or children of immigrants. From my analysis: here is the breakdown of the 38 valedictorians:

 

1st or 2nd generation US 63.2%

 

Later than 2nd generation US 32.8%

 

Born in the US 52.6%

 

Born overseas 47.4%

 

*** END QUOTE ***

 

Maybe the anti-immigrant slogan should be: "Keep America stupid--seal the borders!"

Jensen Comment
The valedictorian in Princeton's Class of 2006 is an illegal immigrant who from age four raised himself out of a NYC slum. His inspiration as a child was a single book on the ancient world. Now he's an expert on classical studies. His current problem is now how to remain in the U.S.


Political Correctness of the Worst Kind in a Prestigious University
There are Afrocentric historians who make factual claims that contradict existing historical evidence, such as the claim that Aristotle stole his philosophy from the library at Alexandria when, as Mary Lefkowitz points out, that library was not built until after Aristotle’s death. Lefkowitz was shocked to get no support from her colleagues when she pointed out factual errors of this kind, and even more shocked when the dean of her college (Wellesley) told her that “each of us had a different but equally valid view of history.” And so on (there’s a lot of the “so on” in the book)
Scott McLemee, "The Truth? You Can’t Handle the Truth!" Inside Higher Ed, June 7, 2006 --- http://www.insidehighered.com/views/2006/06/07/mclemee

Fortunately, Why Truth Matters by Ophelia Benson and Jeremy Stangroom, is something different. As polemics go, it is short and adequately pugnacious. Yet the authors do not paint their target with too broad a brush. At heart, they are old-fashioned logical empiricists -– or, perhaps, followers of Samuel Johnson, who, upon hearing of Bishop Berkeley’s contention that the objective world does not exist, refuted the argument by kicking a rock. Still, Benson and Stangroom do recognize that there are numerous varieties of contemporary suspicion regarding the concept of truth.They bend over backwards in search of every plausible good intention behind postmodern epistemic skepticism. And then they kick the rock.The authors run a Web site of news and commentary, Butterflies and Wheels. And both are editors of The Philosophers’ Magazine, a quarterly journal. In the spirit of full disclosure, it bears mentioning that I write a column for the latter publication.
Scott McLemee, "The Truth? You Can’t Handle the Truth!" Inside Higher Ed, June 7, 2006 --- http://www.insidehighered.com/views/2006/06/07/mclemee


Weapons of Ass Destruction
Security forces thwarted a bombing in a southern Afghan town by capturing a donkey laden with explosives and a man who was plotting to blow up the animal in a rebel attack, a government spokesman said Thursday. The donkey had 30 kilograms of explosives and several land mines strapped to its back hidden in old sacks, said Ali Khail, a local government spokesman in Qalat town. The charge was linked to a remote-controlled detonator. Acting on a tip-off, the man and animal were captured as they walked into the city from the surrounding countryside in Zabul province, where Taliban rebels are believed to hide.
"Afghan donkey attack thwarted," Globe and Mail as linked in the Opinion Journal, June 9, 2006 --- Click Here


If top scientists can do it, why can't the American Accounting Association (especially its new electronic publication platform) offer an opportunity for "a peer-reviewed publication that publishes all rigorously performed science, a vibrant online forum that encourages scientific dialogue and debate, and will offer a hassle-free process that gets your work online within weeks"?

From the University of Illinois Library's Issues in Scholarly Communications blog on June 9, 2006 --- http://www.library.uiuc.edu/blog/scholcomm/

As reported in the Chronicle of Higher Education's Blog, and Peter Suber's Open Access Blog, the Public Library of Science appears poised to start the publication of PLoS OPEN. It will be "a peer-reviewed publication that publishes all rigorously performed science, a vibrant online forum that encourages scientific dialogue and debate, and will offer a hassle-free process that gets your work online within weeks." It will "offer multidisciplinary scope, rapid turn-around, open review, and powerful personalization and discussion tools." Additional characteristics (from the PLoS site):


Take a look at the prototype and learn more about this new journal at: http://www.plosone.org/

Support AAA President Judy Rayburn's TAR Diversity Initiative ---
http://www.trinity.edu/rjensen/395wpTAR/Web/TAR.htm


Business Week's Special Report on Computer Security, June 7, 2006 --- Click Here

Phisher Kings Court Your Trust
Computer-based fraudsters are finding new ways to trick people -- not technology -- to get the information they seek

What I Learned at Hacker Camp
It's easy to create malicious code, penetrate firewalls, and steal personal and financial information. "Ethical hacker" Andrew Whitaker can show you how

A Guide to PC Security Products
Slide show: Concerned about your computer, but confused about how to keep it safe? Here's a look at some helpful hardware and software

This Bug Is Nasty, Brutish, And Sneaky
Cyberthieves have raised the stakes with a clever new program almost immune to detection

Stopping a Scam from Spreading
Thwarted by bigger banks, ID thieves are taking aim at smaller financial institutions. One credit union provides a model for fighting back

Dazed and Confused: Data Law Disarray
A profusion of legislation regarding privacy and data breaches puts businesses in a bind and consumers at risk

Gator is Dead. Long Live Claria
The company that annoyed countless Net surfers with its adware is reinventing itself with a new custom portal service

Bob Jensen's threads on computer and network security are at http://www.trinity.edu/rjensen/ecommerce/000start.htm#SpecialSection


Forwarded by Helen Terry

At a flea market I just bought the hard drive you sent to Best Buy for repairs
One year ago, Hank Gerbus had his hard drive replaced at a Best Buy store in Cincinnati. Six months ago, he received one of the most disturbing phone calls of his life. "Mr. Gerbus," Gerbus recalls a stranger named Ed telling him. "I just bought your hard drive in Chicago." Gerbus, a 77-year-old retiree, was alarmed. He knew the old hard drive was loaded with his personal information -- his Social Security number, account numbers and details of his retirement investments. But that's not all. The computer also included data on his wife, Roma, and their children and grandchildren, including some of their Social Security numbers.
Bob Sullivan, The Red Tape Chronicles, MSNBC, June 5, 2006 ---
http://redtape.msnbc.com/2006/06/one_year_ago_ha.html#posts

Jensen Comment
Years ago I had a hard drive replaced and discovered that it had scads of Cisco data. Evidently the vendor reconditioned a Cisco hard drive without erasing the Cisco data when the hard drive was sent to me as a replacement drive.

Bob Jensen's fraud updates are at http://www.trinity.edu/rjensen/FraudUpdates.htm


A Mystery in Academe: Who Really Did It?

"Plagiarism Mystery," by Doug Lederman, Inside Higher Ed, June 5, 2006 --- http://www.insidehighered.com/news/2006/06/05/wesley

“An unknown individual” with “an ax to grind” against the college’s president creates plagiarized documents and affixes the president’s name to them. Later, the “ax grinder” posts the articles on the president’s Web page without his knowledge and then waits, patiently, for years to “spring his/her trap.” Only years later — when critics attacking the president in ways that are “unworthy of a Christian, church-centered institution” find the plagiarized documents in an archive of decommissioned Web pages — do they come to light.

In language that could have been drawn from an academic cloak and dagger novel (and a not very good one at that), an external panel appointed by trustees at Wesley College confirmed Friday that President Scott D. Miller’s name appeared on at least three documents in the late 1990s that were clearly plagiarized from the work of others. But the committee but said it was impossible to know without “a skilled forensic scientist” whether Miller or someone “out to get” the president had been responsible for creating and posting the fraudulent articles. Based on the committee’s report and recommendations (courtesy of the Wilmington, Del. News Journal), Miller apologized to the victims of the plagiarism and to Wesley’s students, staff and alumni Friday (while insisting he did no wrong), and trustees said the president would keep his job.

“The board is confident that this is a very self-contained set of events,” said David Wilks, a lawyer who represents the Dover, Del., liberal arts college, and to whom Miller referred all questions. “Nothing like this has repeated itself in the last six years, and given the undeniable success and achievement the president has had in every area of his performance, the board is satisfied that this matter is closed.”

. . .

Mask, the faculty member who brought forward several of the charges against Miller, said he found aspects of the panel’s report troubling. “If you had a faculty member who was outrageously popular with students, unquestionably an excellent teacher, and it was found that she or he had committed plagiarism, their career would be over, and I don’t know why it should be different for a college president,” he said. “What was called for here was an investigation into plagiarism, and what we have is that close associates of Dr. Miller’s have found there were three serious new instances of plagiarism for which there has been no explanation.”

Continued in article

Review of plagiarism charges against Wesley president was orchestrated by consultant who’s a mentor to the accused
So when Wesley’s president, Scott D. Miller, faced plagiarism charges this spring, for the second time in his career, the trustees — after rallying to Miller’s defense — agreed to conduct an independent review of the accusations and of the college’s overall status. They asked Fisher, their trusted adviser, to put together a review panel, and he recruited three current or former college presidents, all of whom have worked with or for Fisher on other university consulting jobs. In its report last month, the review panel concluded that plagiarism had occurred, but said it could not figure out whether Miller or someone else had committed it. Over all, the report praised Miller for essentially saving the college, saying he was “in the midst of one of the most successful college presidencies in the nation.” Fisher’s involvement, even at some distance, in the review of Miller troubles some observers on the campus and elsewhere, given what they say are the very close ties between Fisher and the president.
Doug Lederman, "A Question of Independence," Inside Higher Ed, June 7, 2006 --- http://www.insidehighered.com/news/2006/06/07/wesley


Plunging proportions of African American first-year students at UCLA
This fall 4,852 freshmen are expected to enroll at UCLA, but only 96, or 2%, are African American — the lowest figure in decades and a growing concern at the Westwood campus. For several years, students, professors and administrators at UCLA have watched with discouragement as the numbers of black students declined. But the new figures, released this week, have shocked many on campus and prompted school leaders to declare the situation a crisis.
Rebecca Trounson, "A Startling Statistic at UCLA,"The Los Angeles Times, June 3, 2006 --- http://www.latimes.com/news/printedition/front/la-me-ucla3jun03,1,5599672.story?coll=la-headlines-frontpage

In a telephone interview before the meeting, Carnesale described the preliminary numbers for black freshmen as "a great disappointment" and said that UCLA has been trying for years to boost those levels, within the limits allowed by law.

He and other officials at UCLA and elsewhere said the problem of attracting, admitting and enrolling qualified black students is found at competitive universities across the country and that its causes are complex. In California, the problem is rooted partly in the restrictions placed on the state's public colleges and institutions by Proposition 209, the 1996 voter initiative that banned consideration of race and gender in admissions and hiring.

Other factors include the socioeconomic inequities that undermine elementary and high school education in California and elsewhere, with minority students disproportionately affected because they often attend schools with fewer resources, including less-qualified teachers and fewer counselors.

Many students and professors also say the declining presence of blacks on campus discourages some prospective students from attending, thus exacerbating the problem. Some of those interviewed, including UCLA sociologist Darnell Hunt, said the campus could be doing more than it is.

Hunt, who heads UCLA's Bunche Center for African American Studies, and several colleagues have been studying the issue as part of a multiyear research project on the challenges facing black students in California universities.

In a draft of a report to be released this month, the researchers compared the admissions criteria and processes at UC's three most competitive campuses: UCLA, UC Berkeley and UC San Diego. (At the latter, the incoming black freshman class stands at 52 students, or 1.1%, even lower than the others.)

The report found that UC San Diego's admissions process relied most heavily on numbers, while UC Berkeley's was most "holistic," allowing a single reader to review all parts of an applicant's file, including academic and personal achievements or challenges.

At UCLA, in what admissions officials have described as an attempt to increase fairness and objectivity, applicants' files are divided by academic and personal areas, and read by separate reviewers. The researchers asserted that UC Berkeley's process may be the fairest, because it allows students' achievements to be seen in the context of their personal challenges.

In an interview, Hunt acknowledged the difficulty for a campus like UCLA, which received 47,000 applications this year. Yet he criticized the school for rejecting many black students based on what he described as factors of questionable validity, and that he said may be linked more to socioeconomic privilege than academic merit.

"There's a common misperception that this is a horrible problem but that black students just need to do better," he said. "But most of the black students who don't get in go to other top-notch schools — Harvard, Duke, Michigan. We're losing students who could be here."

Ward Connerly, the conservative former UC regent who was an architect of Proposition 209, countered that the issue was not the law he helped create.

"The problem — and this is an old song, I know — starts with the small number of black students who are academically competitive," he said, pointing out that many also choose to attend historically black colleges or private schools. "But I don't think we solve this problem by tinkering with the admissions criteria to make it easier to get in."

No matter the cause, the effect is apparent on campus.

Karume James, 20, a graduating senior who led a recent student protest on campus over the issue, said he remembered the excitement he felt when he arrived at UCLA for student orientation in the summer of 2003.

Then just 17, James was preparing to transfer to the big-city campus from a community college in Riverside, his hometown. And he recalled what he felt when he looked around.

Also see
"Struggling to Keep Black Students," by David Epstein, Inside Higher Ed, June 6, 2006 --- http://www.insidehighered.com/news/2006/06/06/black


Selling the Computer Revolution: Marketing Brochures in the Collection ---
 http://www.computerhistory.org/brochures/index.php


"Five Things Every Homeowner Needs To Know About The Mortgage Business; Help Wanted: Honest Mortgage Brokers/Lenders," PRWeb, May 30, 2006 --- http://www.prweb.com/releases/2006/5/prweb383659.htm

The average American consumer/homeowner has little to no chance of getting an honest or fairly priced mortgage in today's double standard, murky mortgage environment. That is if you are a consumer/homeowner attempting to discover what is fair from a mortgage fee/interst rate pricing standpoint and what is not. As a result The Homeowners Consumer Center & its partner The Mortgage Inspection Service are recruiting honest mortgage brokers/lenders who are ready to compete in their local markets with an honest approach in working with consumers/homeowners.

(PRWEB) May 31, 2006 -- The Homeowners Consumer Center (Http://www.HomeownersConsumerCenter.Com) along with its partner the Mortgage Inspection service (Http://www.MortgageInspectionService.com) have called for a national consumer alert to all homeowners about the realities of the current US mortgage market, in the form of five critical consumer tips they need to know. At the same time the Homeowners Consumer Center is seeking information about locally owned mortgage firms/lenders that are tired of trying to compete against dishonest mortgage lenders. The targets of this campaign are as follow:

1. TV Pitchmen promising consumers/homeowners they will get numerous mortgage firms to compete for a mortgage deal, or that someone should have called so and so. The problem; the sales pitch does not always measure up to what the consumer actually gets ( a much higher than market interest rate, ridiculous fees or both).

These same types of ads often times say, or talk about a "no point" gimmick, which is not exactly "no fees", if you are a consumer. The actual translation is the consumer just got a higher interest rate and a higher monthly mortgage payment.

2. National Homebuilders in many to most cases exclude borrowers from getting a competitive quote from local mortgage lenders. Typically the homebuilder prices the home buyers mortgage products 25 to 125 basis points over par (par=the best available interest rate for the borrower) and frequently these transactions are loaded with junk mortgage fees. If the borrower wants to get a competitive quote he/she or they get told, " the house will cost more", or they will not get a "bonus". What the homebuilder failed to tell the consumer is that because they are a "mortgage banker", they are not required to disclose the "yield spread premium" to the borrower=higher monthly mortgage payment. Mortgage brokers are required to disclose yield spreads to consumers.

A second severe problem with homebuilders is that they frequently tell appraisers what they want their homes to sell for, rather than allow the appraiser/appraisal firm to their job. "Either hit our values", the homebuilder wants (real or not), or they find another appraiser/appraisal firm that will. If there is a real estate bubble burst this year, it will start with homebuilders slashing their in some cases false valuations. Inflating real estate appraisals/massive appraisal fraud is the ticking time bomb that could potentially crush the US economy/real estate markets nationwide. Once again Wall Street was asleep at the switch for a disaster that could be worse than the S&L crisis of the 1980's.

3. Mortgage Lead generation scams on the Internet.: Once again the consumer/homeowner can get taken for a ride, or ends up with a much more expensive mortgage product. Most Internet providers have gladly sold advertising space to just about any lender, honest or not. Do business with local or well known mortgage firms.

4. Real Estate firms that also want to be the consumer's mortgage lender. We feel it is the ultimate conflict of interest for a real estate agent/firm to also be wearing the hat of mortgage lender. We believe the functions of real estate sales & real estate financing need to be separate. Next to national homebuilders blackmailing appraisal firms into unrealistic valuations, are real estate agents acting as mortgage lenders doing the same thing. Consumers are advised to steer clear of real estate agents/brokers also acting as mortgage bankers.

5. If anyone is looking to the Bush Administration, HUD, or the US Senate or House Banking Committees for help, don't hold your breath. In light of the Abramoff & Duke Cunningham Congressional bribery scandals one would hope that a consumer/homeowner friendly environment might exist. Nothing could be further from the truth.

In reality banks and mortgage bankers are not held to the same standards as are mortgage brokers with respect to serious consumer disclosure issues. At the very top of this list are 'yield spread premiums" (a kick back for increasing the mortgage interest rate).

Many have concluded, unlike mortgage brokers, banks and mortgage bankers are not being required to disclose these kick-backs because, they are the number one contributer to US House & Senate Banking Committees. President Bush had his Gala re-election campaign party in part financed by a mortgage lender that has been ordered to pay $300 million+ back to consumers.

The Homeowners Consumer Center
(Http://HomeownersConsumerCenter.Com) and The Mortgage Inspection Service (Http://MortgageInspectionService.Com) want consumers/homeowners to understand these realities and at the same time they would like to partner with local, reputable mortgage firms/lenders that are interested in advancing educational campaigns in their communities so that consumers will be better educated when making application for mortgages or refinances. The goal of this campaign is to increase originations for participating mortgage firms/lenders & at the same time give the consumer an honest mortgage product/refinance.

The Homeowners Consumer Center also think it important that states and the federal government eliminate loop holes that prevent transparency in a mortgage transaction, regardless of a lenders status as broker, banker or the amount of money they contributed/paid to a politician.

Honest mortgage lenders/brokers who want to treat their customers with honesty are encouraged to contact the Homeowners Consumer Center
( Http://HomeownersConsumerCenter.Com ) for more information about a state by state campaign to get the word out about honest or hard working mortgage lenders. To join the Homeowners Consumer Center in this campaign, mortgage firms/ lenders will be required to agree to a realistic consumer disclosure agreement. A straight forward approach like this is long over due in todays mortgage world. Homeowners & consumers deserve better, and The Homeowners Consumer Center and its partner, The Mortgage Inspection Service think this is a very solid step to try to cure problems associated with an out of control mortgage industry.

Bob Jensen's threads on consumer frauds are at http://www.trinity.edu/rjensen/FraudReporting.htm


It pays to be an illegal
If Congress adopts the Bush plan and gives amnesty to illegal aliens, Senate Republicans will be asking President Cheney for a pardon. Bush wants to grant illegal aliens amnesty while sounding like he's really cracking down on them. It tells you where Americans stand on illegal immigration that Bush has to pull the Democrat trick of hiding from the public what he really believes when it comes to immigration. The "path to citizenship" that Bush and the Senate are trying to pawn off on Americans requires that illegals pay huge fines and back taxes. "Huge" is defined as a $2,000 fine and taxes for three of the last five years. Even with the special Two Years Tax-Free package for illegals, this is about as likely as me paying my dad back the money I "borrowed" from him when I was in college.
Ann Coulter, "It pays to be an illegal," Pittsburgh Tribune-Review, June 4, 2006 --- Click Here


Financial Woes of Case Western Reserve University
An undisclosed number of non-faculty employees lost their jobs at Case Western Reserve University last week, as the institution started a round of layoffs, The Cleveland Plain Dealer reported. Large deficits at the university led this spring to faculty anger, which in turn led to the resignation of Edward M. Hundert as president.
Inside Higher Ed, May 30, 2006 --- http://www.insidehighered.com/news/2006/05/30/qt


ACLU's Free Speech Advocacy Depends on Who's Doing the Speaking
Meyers thinks the ACLU's backing of the Maloney bill is an indication that the organization has strayed from its "traditional free-speech roots" and turned to "identity politics." It's hard to imagine the ACLU of 10 or 20 years ago asking government to monitor advertising. But the ACLU now has issue-oriented lobbies inside it. They are called "projects" and include the "Reproductive Freedom Project," the "Women's Rights Project" and the "Lesbian and Gay Rights Project." The influence of the projects, and the money they bring in, often tend to sway the ACLU away from its once primary concern about free speech.
John Leo, "ACLU's Free Speech Advocacy Depends on Who's Doing the Speaking," Lifenews.com, June 4, 2006 --- http://www.lifenews.com/nat2323.html


NASA Shows You How to Build Your Own Rocket

Rocket Science 101  --- http://www.nasa.gov/externalflash/RocketScience101/RocketScience101.html


June 1, 2006 message form Carolyn Kotlas [kotlas@email.unc.edu]

THE ROLE OF EMOTION IN THE DISTANCE EDUCATION EXPERIENCE

"Presence, a sense of 'being there,' is critical to the success of designing, teaching, and learning at a distance using both synchronous and asynchronous (blended) technologies. Emotions, behavior, and cognition are components of the way presence is perceived and experienced and are essential for explaining the ways we consciously and unconsciously perceive and experience distance education." Rosemary Lehman, Distance Education Specialist Manager at the University of Wisconsin-Extension, explores the idea that understanding the part emotion plays in teaching and learning "can help instruct us in effective teaching, instructional design, and learning via technology." Her paper, "The Role of Emotion in Creating Instructor and Learner Presence in the Distance Education Experience" (JOURNAL OF COGNITIVE AFFECTIVE LEARNING, vol. 2, no. 2, 2006), is available online at http://www.jcal.emory.edu/viewarticle.php?id=45

Journal of Cognitive Affective Learning (JCAL) [ISSN: 1549-6953] is a peer-reviewed, open-access journal published twice a year by Oxford College of Emory University. To access current and back issues go to http://www.jcal.emory.edu/ . For more information, contact: Journal of Cognitive Affective Learning, c/o Prof. Ken Carter, Oxford College of Emory University, 100 Hamill Street, Oxford, GA 30054 USA; tel: 770-784-8439; fax: 770-784-8408;
email:
kenneth.carter@emory.edu


USING BLOGGER TO GET STARTED WITH E-LEARNING

In "Using Blogger to Get Teachers Started with E-Learning" (FORTNIGHTLY MAILING, May 25, 2006), Keith Burnett discusses how "[s]imple class blogs can be used to post summaries of key points, exercises, links to Web pages of value, and to provide a sense of continuity and encourage engagement with the material." He includes a link to an online blogging tutorial and to examples of how some instructors are using blogs in their classes. The article is online at http://fm.schmoller.net/2006/05/using_blogger_t.html 

Fortnightly Mailing, focused on online learning, is published every two weeks by Seb Schmoller, an e-learning consultant. Current and back issues are available at http://www.schmoller.net/mailings/index.pl. For more information, contact: Seb Schmoller 312 Albert Road, Sheffield, S8 9RD, UK; tel: 0114 2586899; fax: 0709 2208443;
email: seb@schmoller.net 
Web: http://www.schmoller.net/

 


BOOKS VS. BLOGS

"Why would I write a book and wait a year or more to see my writing in print, when I can blog and get my words out there immediately?" In "Books, Blogs & Style" (CITES & INSIGHTS, vol. 6, no. 7, May 2006), Walt Crawford, both a book author and a blogger, considers the different niches and purposes of the two communication media. The essay is online at http://cites.boisestate.edu/civ6i7.pdf 

Cites & Insights: Crawford at Large [ISSN 1534-0937], a free online journal of libraries, policy, technology, and media, is self-published monthly by Walt Crawford, a senior analyst at the Research Libraries Group, Inc. Current and back issues are at available on the Web at http://cites.boisestate.edu/ . For more information contact: Walt Crawford, The Research Libraries Group, Inc., 2029 Stierlin Ct., Suite 100, Mountain View, CA 94043-4684 USA; tel: 650-691-2227;
Web:
http://waltcrawford.name/ 


RECOMMENDED READING

"Dr. Tom's Method of Multiples: A Concrete Taxonomy Development Method" http://www.twason.com/Docs/MethodOfMultiples.pdf 

Abstract: "An effective metadata system can be established with the participation of multiple teams each with a different perspective, the subject matter expert (SME) teams. Each SME team is comprised of multiple members. The SME teams are given a carefully chosen concrete task that spans their different perspectives. As they work on the task in facilitated joint meetings, a taxonomy team records the comments of SME teams. The taxonomy team is comprised of multiple, independently tasked recorders. The intent is to define and capture metadata and taxonomy definitions from each of several different vantage points. Each recorder provides separate reports that are consolidated into a single report with resulting recommendations for metadata and taxonomies. These recommendations are then validated by an independent set of SME participants. A case study using this method is presented. The results are compliant with SCORM, IEEE-LOM and IMS-MD specifications."

Bob Jensen's threads on the controversial future of technology in education are linked at http://www.trinity.edu/rjensen/000aaa/0000start.htm


June 1, 2006 message form Carolyn Kotlas [kotlas@email.unc.edu]

DESIGNING THE FUTURE PHYSICAL UNIVERSITY

"In discussions about the future of the university, little has been said about how these changes will affect its spatial layout, even though a university's physical characteristics must complement and strengthen its mission." In "Designing the University of the Future" (PLANNING FOR HIGHER EDUCATION, vol. 34, no. 2, 2005-2006, pp. 5-19) Rifca Hashimshony and Jacov Haina discuss several factors, including teaching and learning technology, that may define what the physical facilities of the university of the future will look like.
The paper is online ---
Click Here 

Planning for Higher Education is published by the Society for College and University Planning, 339 E. Liberty, Suite 300, Ann Arbor, MI 48104 USA; tell: 734-998-7832; fax: 734-998-6532;
email: info@scup.org 
Web: http://www.scup.org/ 

See also:

"The Impact of Facilities on Recruitment and Retention of Students" by David Cain and Gary L. Reynolds FACILITIES MANAGER, vol. 22, no. 2, March/April 2006 http://www.appa.org/FacilitiesManager/article.cfm?ItemNumber=2567&parentid=2542  or http://www.appa.org/files/FMArticles/fm030406_f7_impact.pdf 

According to a survey conducted by the Association of Higher Education Facilities Officers: "Nearly three out of 10 students spurned a college because it lacked a facility they thought was important."

"Facilities Can Play Key Role in Students' Enrollment Decisions, Study Finds" by Audrey Williams June THE CHRONICLE OF HIGHER EDUCATION, May 30, 2006 http://chronicle.com/daily/2006/05/2006053002n.htm
(Online access requires a subscription to the Chronicle.)

Bob Jensen's threads on classroom, building, and campus design are in a module at  http://www.trinity.edu/rjensen/000aaa/thetools.htm


May 25, 2006 message from Andrew Priest [a.priest@ECU.EDU.AU]

>I just received this request for some sort of ball park figure for a starting salary. My school is in Ohio, in the midwestern part of the US.

Dear David

There are salary surveys around the place. I would suggest hitting Google or I think it is the NACE website.

Regards
Andrew Priest

May 26, 2006 reply from Bob Jensen

I tend to discourage students from putting too much emphasis on starting salaries. The important factors are learning opportunities, client exposures, nature of job assignments, work loads, degree of travel, family supportiveness, and growth potential.

There are various accounting salary links and related information at http://www.trinity.edu/rjensen/Bookbob1.htm#careers 

Salary varies by locale and by size of firm with smaller local firms generally paying less (but possibly with greater chances for promotion and partnership admission). Salary also varies by job security with governmental accountants often making less but having tremendous job security and benefits.

The NACEWeb site is at http://www.naceweb.org/ 

He might try Payroll Online --- http://www.payrollonline.com/mainpage.asp 

There is a SmartPros salary survey at http://accounting.smartpros.com/x51651.xml 

There is some salary information for managerial accountants at http://www.imanet.org/ima/index.asp 

Also check with the latest Bureau of Labor tables --- http://accounting.smartpros.com/x43328.xml 

Once again, I stress that salary surveys are of limited value unless they are related to a particular locale.


Updates from WebMD --- http://www.webmd.com/

Latest Headlines on June 6, 2006

Latest Headlines on June 8, 2006


Liquorice compounds could be a key component for cheaper, more effective liver cancer treatment, reports Lisa Richards in Chemistry & Industry magazine.
See PhysOrg, June 5, 2006 --- http://www.physorg.com/news68703822.html


Regrowing the Damaged Brain
In recent years, scientists have discovered that the brain has a remarkable capacity for self-repair. Hoping to take advantage of this ability, researchers have developed a technology to deliver electrical stimulation directly to brain tissue. The therapy, now being tested in large clinical trials, could boost the brain's repair mechanisms and improve recovery after stroke. Studies in both laboratory animals and humans have shown that after stroke, neurons near the damaged tissue begin to reorganize themselves in an attempt to compensate for the injured areas. However, this healing ability can be hit or miss -- some patients regain the ability to walk or talk while others are left permanently disabled.
Emily Singer, "Regrowing the Damaged Brain:  Electrically stimulating the cerebral cortex could help stroke recovery," MIT's Technology Review, June 8, 2006 --- http://www.technologyreview.com/read_article.aspx?id=16966&ch=biotech

[Click here for illustrations of the brain's areas and device's functions.]


Defibrillation's Alternative: A new approach would stop ventricular fibrillation before it started
Treating a failing heart by zapping it with a painful, powerful electrical shock has become a common procedure. Now, a medical device company, based in West Henrietta, NY, has patented a technique that avoids the need for such dramatic treatment, by predicting the onset of fibrillation -- the heart rhythm that can lead to sudden death -- and treating it before it occurs. The preventative treatment does, like defibrillation, involve electrically stimulating the heart, says Michael Weiner, CEO of Biophan Technologies. But this new technique's weak signal would be minuscule compared to the jolt that defibrillators normally deliver. "I know patients with defibrillators who live in fear of that son-of-a-gun going off," he says.
Duncan Graham-Rowe, "Defibrillation's Alternative: A new approach would stop ventricular fibrillation before it started," MIT's Technology Review, June 7, 2006 --- http://www.technologyreview.com/read_article.aspx?id=16964&ch=biotech


A Huge Amount of Data on Family Comparisons --- Click Here

The snipped link is http://snipurl.com/FamilyStatistics


Ernst & Young Computer Stolen
Thousands of Hotels.com customers may be at risk for credit card fraud after a laptop computer containing their personal information was stolen from an auditor, a company spokesman said Saturday. The password-protected laptop belonging to an Ernst & Young auditor was taken in late February from a locked car, said Paul Kranhold, spokesman for Hotels.com, a subsidiary of Expedia.com based in Bellevue, Washington. "As a result of our ongoing communication with law enforcement, we don't have any indication that any credit card numbers have been used for fraudulent activity," Kranhold said. "It appears the laptop was not the target of the break-in." Both Hotels.com and Ernst & Young mailed letters to Hotels.com customers this past week encouraging them to take appropriate action to protect their personal information.
"Data Breach: Hotels.com Customers," Wired News, June 4, 2006 --- Click Here

June 6, 2006 reply from Mooney, Kate [kkmooney@STCLOUDSTATE.EDU]

One of our former students, a partner with E&Y, told us that at the Minneapolis office they were encrypting all the laptops. He said it was painful and expensive, but probably worth it. I guess so.

K

June 6, 2006 reply from Jagdish S. Gangolly [gangolly@INFOTOC.COM]

Kate,

Those who believe encryption to be a panacea should read the recent works of Bruce Schneier (www.counterpane.com , which, by the way, is headquartered in Minneapolis) who wrote one of the earliest and most popular texts on cryptography. He has been totally disenchanted with encryption for quite a while.

Security is not a condition, but a process. Belief in the omnipotence of encryption is based on the tenet that security is a condition, and therefore you only need to find a "technical" (more appropriately a "techie") solution to the problem of deviations from the secure state. Real world is not so, and therefore we need to look at security as a process.

In that view, encryption is just a means to an end, and not an end in of itself. Management of keys, passwords, adoption of security policies, all have a great role to play in the "process".

Jagdish

June 6, 2006 reply from Robin A. Alexander [alexande.robi@UWLAX.EDU]

Couple of points: My Dell has a feature whereby one can set a password that needs to be entered as the computer boots. I don't think that protects the data on the computer. The hard drive could be removed and read directly by anyone having the right equipment.

Encrypting the data is more secure, I believe. I'm not sure why Kate says it's a painful process. I use BestCrypt on my lowly data on all my personal computers. It's easy to use and even facilitates data backup since it creates a file that loads as a virtual drive. Backing up can be done by just copying that file to whatever medium you wish to use.

Robin Alexander

June 6, 2006 reply from Sam A. Hicks [shicks@VT.EDU]

It seems to me a better method would be to put client data on servers and access when the data is needed. If the decrypt program is easy to use, the person with the laptop can decrypt the data stored on the laptop. I expect that every thing will require passwords, but they can be identified in many cases.

 

Given the problems in the last year [VA, AICPA, Choice Point, E&Y and I am certain that there are others] companies are going to have to take strong action to protect data.

 

Have a Good Day!

June 6, 2006 reply from Bob Jensen

Sam’s correct about not putting all the data on a laptop. However, at times some of the data must be stored on the client (laptop) machine if that machine is doing the edits.

One means of encrypted access to a server is the Cisco VPN system that I’m now using to access servers back at Trinity University. It works fairly well but is slow. I think this is due to the decryption process.

I noticed a huge difference in software use with the Cisco VPN. I never edit a file back on the server and save it directly because this is painfully slow, especially with MS FrontPage. I edit a file on my local machine and then save it back to the server using Windows Explorer (which shows my Network drives). This is a faster process.

If my laptop is stolen, the thieves would only be able to access the Network drives if they know my password which is nowhere on my laptop. However, if there were something of value in my Network files on a Trinity University server, a thief could force me to disclose the password in much the same manner as a thief can force a person to withdraw money from an ATM machine.

I cannot access files on Network servers that I am not authorized to access, e.g., files of other professors.

Jagdish is correct in stating that the problem is not so much one of password and encryption protection as it is a process such as partitioning server files in order to limit which files an employee can access. It is absurd, for example, that a single VA Employee could compromise all personal data of millions upon millions of retired military and active duty military. No one employee should have access to such a large file. More internal controls are required to limit what files he or she can access even in front of the barrel of a gun.

Bob Jensen


From the Scout Report on June 2, 2006

MappingService 1.0 http://web.mac.com/rjsdev/iWeb/software/MappingService.html 

More and more applications are offering the ability to map various addresses and locations, and users seem to enjoy having this option embedded into such programs. With that in mind, users may also find Mapping Service 1.0 quite helpful. Essentially, the application allows users to selected an address in an email (or other document) and then immediately use the mapping function to display a map using Google Maps. This version is compatible with computers running Mac OS X 10.4.6.

Bob Jensen's mapping helpers are at http://www.trinity.edu/rjensen/searchh.htm


The Benjamin Franklin Tercentenary --- http://www.benfranklin300.org/index.php 

In his writings, Benjamin Franklin once observed, “If you would not be forgotten as soon as you are dead and rotten, either write things worth reading, or do things worth the writing.” Franklin certainly followed this sage advice, as people continue to read his works and replicate some of his experiments (and adventures) across the globe. 2006 happens to mark the three-hundredth anniversary of his birth, and a consortium of interested organizations and individuals have created this website to act as a clearinghouse of information about the various celebrations, exhibits, and other such activities that will be taking place over the next couple of years to celebrate Franklin’s life and accomplishments. Complete with a typeface that would be familiar to those reading American printed works of the 18th century, the homepage contains sections on the ongoing Franklin exhibition that is traveling the world and an education area that contains materials for teachers seeking to incorporate discussion of Franklin into their classrooms. The “Programs” area is a real gem, as it contains links to a variety of projects (including a multimedia site designed by middle school students that examines Franklin’s legacy) created in honor of this most momentous occasion.


The Happiness Formula [Real Player] http://news.bbc.co.uk/1/hi/programmes/happiness_formula/ 

Measuring something as subjective as the feeling or state of happiness is a tricky business. While some may take pleasure in closing a big financial merger, others may be content to watch a babbling brook as they sip lemonade. The BBC has never shied away from taking on such weighty matters and they have recently created this website to complement their ongoing series titled “The Happiness Formula”. Users may wish to orient themselves to the site by viewing some of the short video clips featured on the right- hand side of the site’s homepage. The site also contains material on the relationship between economic success and overall happiness levels and the health benefits of happiness. The site is rounded out by a place where visitors can offer their own suggestions for improving happiness and another area where they can take a quiz on happiness.


Feeding Desire: Design and the Tools of the Table, 1500-2005 [Macromedia Flash Player] http://www.cooperhewitt.org/EXHIBITIONS/feeding_desire/ 

To the millions of individuals with harried lifestyles, the artistic flourish or design of a fork or knife may escape notice. However, the Cooper-Hewitt Design Museum in New York is intimately concerned with such matters, and they have created this delightful online exhibit that explores the design of various table tools and accessories from 1500 to 2005. As its focal point, the website is primarily concerned with the “Big Three” of the table: the fork, the knife, and the spoon. Visitors can browse through the interactive timeline offered here that traces through each utensil’s respective evolution, as well as read three short “biographies” of each. Along the way, visitors are treated to images of a ponderous spoon from 17th century Germany and a dagger-like knife from 16th century France. The site also contains a number of specialized thematic offerings, such as short essays and images that address the ergonomics of the table, flatware for children, and the naturalism movement in tableware design.


Two on Bankruptcy and Credit Bankruptcy: Maxed out in American [Real Player]

http://americanradioworks.publicradio.org/features/bankruptcy/ 

Credit Score, Reports, and Getting Ahead in America [pdf] http://www.brookings.edu/metro/pubs/20060501_creditscores.pdf


Frozen Angels [Real Player] http://www.pbs.org/independentlens/frozenangels/index.html 

Since the creation of that now celebrated sheep Dolly in Scotland back in 1996, there has been a deluge of talk (and significant scholarly work) about the possibility of creating scientifically engineered humans. This recent documentary from the people at the Independent Lens organization takes a close look at the current research being done in the field of reproductive technology. On the homepage, visitors can look through sections that offer profiles of the people featured in the film, ask questions of the filmmakers, and also read a provocative and thoughtful essay by Professor Lori Andrews of the Chicago-Kent College of Law about the ethical ramifications of various reproductive technologies. Visitors will not want to miss the “Talkback” area, which features some rather heated debate and a few retorts, which might be expected given the sensitive material covered by such a program.



Flashback from The Wall Street Journal, June 5, 1986
Oil prices tumbled to six-week lows in what many industry analysts and traders said could be the beginning of another move toward $10 a barrel. Oil prices have been extremely volatile, and some analysts have been predicting that prices will range between $10 and $16.
 

June 6, 2006 message from Ganesh M. Pandit [profgmp@HOTMAIL.COM]

An  article published in the March 2006 issue of the CPA Journal says "Accounting did not cause the recent corporate scandals such as Enron and WorldCom. Unreliable financial statements were the results of management decisions, fraudulent or otherwise. To blame management's misdeeds on fraudulent financial statements casts accountants as the scapegoats and misses the real issue....". The article can be accessed at http://www.nysscpa.org/cpajournal/2006/306/essentials/p48.htm 

Any thoughts from anybody??

Ganesh M. Pandit
Adelphi University

June 6, 2006 reply from Bob Jensen

Shame on the Lin and Wu!

Enron's Chief Accounting Officer, Rick Causey, now sits in prison after having admitted to falsifying accounts. He refused to testify in the Lay/Skilling trial unless granted immunity from other prosecution.

Other Enron executives, including some accountants, have confessed to accounting fraud.

Accounting fraud committed by accountants purportedly because their bosses ordered them to knowingly participate in the fraud does not make the fraud non-accounting fraud no matter what the NYSSCPA Society tries to tell us.

The NYSSCPA Society published this Lin and Wu article. Recall that the NYSSCPA Society only took CPA licenses away from CPAs convicted of drunk driving and overlooked CPA fraud for decades in New York. I don't place much stock in this NYSSCPA Society defense of accountants. I don't find the article that you mention even worth citing. The authors did not do their homework on the Enron or Worldcom scandals.

When Andersen auditor Carl Bass sniffed out both charge-off and derivatives accounting fraud, his boss David Duncan had him removed from the Enron audit.

The Worldcom fraud was Accounting 101 where over $1 billion in expenses were knowingly capitalized by the CFO and top accounting executives. The top accountant mainly involved confessed that he knew what he did was against the law but played along because of his need for the large paycheck. Only when Worldcom internal auditor Cynthia Cooper finally figured out what was going on and refused to play along was this enormous accounting fraud brought to light.

These were huge ACCOUNTANT frauds contrary to what the Lin and Wu would like to make you believe with a whitewash article that should be beneath the professional standards of a CPA society. CPAs are under tremendous pressure to lobby on behalf of clients to water down Section 404 of SOX. The NYSSCPA is simply playing along with defending accountants who knowingly committed felonies. Now if they also had DWI convictions they'd be in bigger trouble with the NYSSCPA Society.

Bob Jensen

June 6, 2006 reply from Ganesh M. Pandit [profgmp@HOTMAIL.COM]

I don't think that this article is trying establish that this is not an accounting fraud...regardless of the title of the article. It is only saying that there were several parties in addition to the accountants who helped this fraud! :)

Ganesh

June 6, 2006 reply from Roger Collins [rcollins@TRU.CA]

Ganesh,

Let's think about this a minute...

It must be obvious from all the media reports that there were "parties in addition to the accountants". Lay was not an accountant; Skilling was not an accountant; Fastow never qualified as a CPA. So, if the Lin & Wu paper is merely stating the obvious, why publish it?

The only obvious answer is that the paper was approved for publication, not as a professional, but a political, statement. As Bob says,

"CPAs are under > tremendous pressure to lobby on behalf of clients to water down Section > 404 of SOX. The NYSSCPA is simply playing along with these clients and > their CPAs."

Think for a moment about how articles are read and interpreted. Most academic articles are published in so-called "academic" journals - to be read by other academics and thereafter consigned to the dust of history. A few establish new theories or lines of enquiry; rather more either mine an already existing line of enquiry or justify themselves in other ways such as maintaining or establishing academic reputations. Dr Johnson famously wrote "No man but a fool ever wrote, except for money" - and the money doesn't have to be a direct flow of cash. There are a few selfless souls who find academic accounting an end in itself, but they are thin on the ground.

Most professional articles are read far more widely. But they are often skimmed or "headlined", with summaries - or less - tossed around for any manner of reasons. Whether it was their intention or not, what L and W have done is to provide ammunition in the defence of a group - accountants - who, as the NYSSCPA and other professional groups, seek to deflect responsibility and accountability when they should be engaging in a much more profound examination of accounting policies, procedures and ethics. Articles such as that by L &W are harvested for sound bites by the profession's apologists and replayed ad infinitum for the benefit of any politician / lobbyist who will lend an ear.And, as Bob says, that comes down to yet more pressure to roll back the one major advance in accountability the accounting world has experienced in a very long time. All in all, its NOT "A Good Thing".

Regards,

Roger

Roger Collins
TRU School of Business PS For anyone curious about the previously-mentioned Mandy Rice-Davis...
http://en.wikipedia.org/wiki/Mandy_Rice-Davies

June 6, 2006 added reply from Roger Collins [rcollins@TRU.CA]

After my last note, I came across this article, reporting on a piece of acdemic research that's in stark contrast to the W & L article...

http://money.cnn.com/2006/05/26/magazines/fortune/colvin_fortune_0612/index.htm 

A quote.... "Then came Sarbanes-Oxley, which required that option grants be reported within two business days. A new paper by Lie and Randall Heron of Indiana University, still unpublished, finds that evidence of backdating virtually disappears after Aug. 29, 2002, when the requirement took effect."

(My apologies if others have posted this previously).

Regards,

Roger

Roger Collins
TRU School of Business

Bob Jensen's threads on proposed reforms are at http://www.trinity.edu/rjensen/FraudProposedReforms.htm

Bob Jensen's Enron Quiz is at http://www.trinity.edu/rjensen/FraudEnronQuiz.htm

Bob Jensen's threads on the Enron, Worldcom, and Andersen meltdowns can be found at http://www.trinity.edu/rjensen/FraudEnron.htm


From The Washington Post on June 8, 2006

Among the world's wealthiest people, what ranking did Forbes Magazine give to Google co-founder Sergey Brin?

A. 7th
B. 16th
C. 31st
D. 49th


"Big Four Firms Face Huge Potential Liability in Global Audits," AccountingWeb, May 22, 2006 --- http://www.accountingweb.com/cgi-bin/item.cgi?id=102172

Fear in the European Union (EU) of the potential collapse of one of the Big Four accounting firms surfaced this week when a briefing document, prepared for members of the EU delegation meeting in Beijing with Chinese officials on accounting and auditing issues, was shown to XFN-Asia. “The audit firms wish to have a limit of their liability, at least to acts for which they can be held directly responsible for. There is a particular fear that the next corporate scandal would reduce the Big Four to Big Three,” it said, according to AFX News Limited.

The audit giants have been lobbying member states for legislation that will limit their liability to shareholder claims. A study currently underway in the EU of the economic consequences of the liability issue will be concluded by September of this year, AFX News says.

“Towards the end of the year, I intend to be in a position to assess the options and decide what can be done,” the position paper said as a proposed response to a question about a collapse of any of the Big Four.

While the Big Four prepare for limited liability in the EU, China, a market in which they are all seeking a larger presence, is subjecting their audits to close examination and at times, public rebuke.

Last week, Ernst & Young (E&Y) was forced to retract data on nonperforming loans in China’s banking sector. E&Y estimated that China’s bank held $900 billion in bad loans, a number it later said was “factually erroneous” and “embarrassing.” But the official Chinese estimate of $164 billion is not accepted by most analysts, the Wall Street Journal says. “There are hidden NPLs there,” Mei Yan, a bank analyst at Moody’s Investor Services told the Journal. She said that Beijing’s estimates were based on a very narrow definition of a bad loan.

Deloitte and Touche has been sued in China for failing to expose falsified accounts in its audits of Guandong Kelon Electrical Holdings Co., AFX News says.

Japan’s Financial Services Agency (FSA) has been inspecting local affiliates of each of the Big Four firms and will issue a report in late June on the strength and independence of the firms, according to the Washington Post. Government officials in Japan, the Post reports, have indicated that they lack confidence in the ability of local Japanese firms to uncover fraud in their clients.

Chuo Aoyama PwC, a local affiliate of Pricewaterhousecoopers (PwC), was banned from auditing for two months by the FSA last week. While PwC said that it would support the affiliate, it announced that it would form a new Japanese auditing firm that will compete with Chuo Aoyama, that it hopes will be running by July, the Post says.

Bob Jensen's threads on the woes of large accounting firms are at http://www.trinity.edu/rjensen/Fraud001.htm#BigFirms


"RevenueRecognition.com Launches Experts and Authors Program," AccountingWeb, May 23, 2006 --- http://www.accountingweb.com/cgi-bin/item.cgi?id=102185

The first installment of RevenueRecognition.com’s “Experts and Authors” program features an excerpt from Miller Revenue Recognition Guide, 2006 by Financial Accounting Standards Board (FASB) Emerging Issues Task Force (EITF) member Ashwinpaul C. Sondhi and Scott A. Taub, acting chief accountant of the U.S. Securities and Exchange Commission (SEC). The program is designed to provide in-depth insight and analysis on critical revenue and compliance related issues.

“Our Experts and Authors program will bring tremendous value to financial professionals who are struggling with today’s complex revenue accounting and compliance guidelines,” Gottfired Sehringer, Executive Editor of RevenueRecognition.com said in a prepared statement announcing the program. “With access to the latest ideas from practitioners and regulators, readers will have a better understanding of how to make important judgments for reporting revenue and managing compliance.”

RevenueRecognition.com is a website dedicated to educating finance professionals on revenue management and related issues. The Experts and Authors program is designed to deliver perspectives from top-notch financial professionals on issues such as: revenue recognition; Sarbanes-Oxley compliance; internal controls; corporate governance/ethics; SEC and FASB guideline compliance; Merger and Acquisition (M&A) issues; contract management; billing and revenue accounting; revenue reporting and forecasting; international revenue accounting; and industry specific revenue challenges.

Bob Jensen's threads on revenue recognition are at http://www.trinity.edu/rjensen/ecommerce/eitf01.htm


Yale Center for the Study of Globalization --- http://www.ycsg.yale.edu/center/index.html


Archive of European Integration (Common Market) --- http://aei.pitt.edu/


U.S. Customs and Border Protection --- http://www.cbp.gov/xp/cgov/home.xml


International Journal of Motorcycle Studies

"Hog Wild!" by Scott McLemee, Inside Higher Ed, May 31, 2006 --- http://www.insidehighered.com/views/2006/05/31/mclemee

Okay, now, see, there are the stereotypes again.... I really should know better — having just discovered a new online publication called the International Journal of Motorcycle Studies. It came to my attention thanks to Political Theory Daily Review, itself an incomparable and altogether indispensable website. (For more on it, see this article.) Four issues of IJMS have appeared so far. The next is due in July.

The title might sound tongue-in-cheek. The contents most assuredly are not. The ratio of substantial, intelligent articles to resume-padding chuff would be creditable for a print-format scholarly journal — let alone one that exists entirely online, available to readers free. I expected numerous citations of Zen and the Art of Motorcycle Maintenance, Robert Pirsig’s quasi-autobiographical novel — in which riding cross-country cures the narrator of the nervous breakdown he suffered as a Ph.D. candidate at the University of Chicago. But such references are mercifully scarce. The reader is more likely to come across an allusion to Donna Haraway’s agenda-setting theoretical work on the cyborg (no longer a sci-fi concept, but rather something like a metaphor for the way we live now, in a world where human beings increasingly become the missing link between monkey and machine).

There is something rather cyborgic about academic/biker hybridity itself. In the contributors’ notes, an author will usually list not only scholarly credentials but also the make of his or her ride.

The emphasis of the journal’s articles, which are peer-reviewed, falls mainly on the social and cultural dimension of motorcycling, rather than its mechanics. Some of the best papers explore the history of bike clubs over the past century.

Or longer, actually. The Federation of American Motorcyclists, formed in 1903, emerged as a umbrella organization to incorporate enthusiasts from already established clubs, according to an interesting (and lovingly researched) study by William L. Dulaney, a visiting assistant professor of communication at Western Carolina University.

Dulaney does not reveal the make of his motorcycle, but he spent 10 years riding with an “outlaw” club. You picture him lecturing with a pool cue in his hand, using it to point to the chalkboard and to menace students (perhaps to their pedagogical benefit).

In this context, however, the term “outlaw” has a particular meaning that does not necessarily connote violence. An outlaw club is simply one that has refused the Foucaultian regime of subjective normalization imposed by the American Motorcyclist Association. They are not (necessarily) criminal — just sensitive to bureaucracy.

By the Great Depression, Dulaney notes, many clubs had embraced the “enduring biker pastime” of “the massive consumption of alcohol and general good-natured debauchery.” (It’s so important to have traditions.) In 1947, the AMA leadership denounced certain exceptionally wild clubs — for example, the Pissed Off Bastards of Bloomington — in the name of the 99 percent of motorcycling enthusiasts who were clean-cut, law-abiding citizens. In defiance, some outlaw clubs accepted the label “one-percenters,” incorporating the symbol “1%” (inscribed within a diamond) into their club logos.

All one-percenters are outlaws. But not all outlaws are one percenters. Nor (archetypal imagery notwithstanding) do cycle clubs primarily attract Y-chromosome Caucasian lumpen roustabouts. The Motor Maids, the first all-female club, received an AMA charter in 1941 (and thus are not outlaws). Now in their 76th year, they still ride. And as another paper notes, there are also fundamentalist Christian clubs, and gay clubs, and ethnicity-based groups like the Ebony Angels and the New York club called the Sons of David. Some biker organizations are serious about maintaining sobriety, just as much as the Hells Angels are committed to avoiding it.

To learn more about the Footnote Gang (or whatever the group was that got IJMS started) I contacted Suzanne Ferriss, one of the managing editors. She is a professor of English at Nova Southeastern University, in Fort Lauderdale, and among other things the co-author of A Handbook of Literary Feminisms (Oxford University Press, 2002).

The timing of the telephone interview seemed appropriate. As Ferriss explained how academic-biker culture acquired its own journal, the distant rumble of Rolling Thunder came in through the window of my study.

It all started about six years ago, Ferriss said, in the wake of a series of panels at regional meetings of the Popular Culture Association. (It might be worth interrupting her narrative to give some background: Founded in the late 1960s, the association predates much of what is now called “cultural studies,” a field that only began to establish itself in American academic life about 20 years ago. The PCA’s own internal culture and outlook have always been far more populist than theoreticist. Not that its members are averse to analysis. But the PCA’s flagship publication, Journal of Popular Culture, tends to resemble a smart fanzine more than it does, say, a special issue of Diacritics devoted to “Six Feet Under.")

Anyway, to continue: People involved in the PCA sessions began working on an edited collection of papers. The volume was accepted by the University of Wisconsin Press, only to become a casualty of budget cuts. (The editors are looking for a new publisher.) But by then a network of scholars interested in motorcycle culture was taking shape.

“We had a list of about 300 people who’d been involved in the PCA panels,” says Ferris, “or who had expressed interest.” A core group of volunteers wanted to work on a journal, and Ferriss’s institution, Nova Southeastern University, was willing to host it online. The editorial board of six scholars reflected the sense that the journal should be international in scope: it had two members each from Britain, Canada, and the United States.

The editorial board also has an honorary member, best known as Sputnik — an activist prominent in the struggle against helmet laws. “The journal doesn’t have a position on that or any other political issue,” Ferriss told me. However, Sputnik’s advisory role lends the whole enterprise “biker cred.” As publisher of Texas Road Warrior Motorcycle Magazine, he is, as the saying goes, an organic intellectual.

IJMS also has an audience in the motorcycle industry itself. For example, it is read by the professional historians who work for particular companies. “We knew this was a subject that had a wider readership,” she said, “and that the journal would not just be of interest to academics.”

The first issue went up in March 2005. Since then, several editors and contributors have also had work in the anthology Harley-Davidson and Philosophy, published this year by Open Court. It’s an interesting collection, if by no means exhaustive. (The papers scarcely more than namecheck Gilles Deleuze, for example, even though his concepts of deterritorialization, nomadology, and “line of flight” seem quite biker-friendly.) But the paper by Bernard E. Rollins, a professor of philosophy and biomedical sciences at Colorado State University, certainly has a great title: “ ‘It’s My Own Damned Head’: Ethics, Freedom, and Helmet Laws.”

Continued in article


P. D. James choices as to the top five mystery novels

"Murder, They Wrote The most riveting crime novels," by P. D. James, The Wall Street Journal, June 3, 2006 --- http://www.opinionjournal.com/weekend/fivebest/?id=110008466 

1. "Tragedy at Law" by Cyril Hare (Harcourt, Brace, 1943).

For me there is particular charm in books written before or during World War II, not least because I find myself engrossed in that very different world. In "Tragedy at Law" we travel with a High Court judge, Mr. Justice Barber, as he moves in state from town to town presiding over cases. But someone obviously wishes him dead, and twice he narrowly escapes. The amateur detective is a defending barrister, Francis Pettigrew, once in love with the judge's wife and a man of ability and probity who has never quite achieved success. Author Cyril Hare was himself a judge, and the book provides a fascinating portrayal of the judge in court and of the coterie of people, including barristers, who travel with him. Written with elegance and wit, "Tragedy at Law" is regarded by many lawyers as the best English detective story set in the legal world.

2. "The Franchise Affair" by Josephine Tey (MacMillan, 1949).

"The Franchise Affair" is an unusual detective story in that it contains no murder. It is, however, enthralling from beginning to end. A 15-year-old girl, Betty Kane, who has obviously been assaulted, accuses two eccentric and isolated women, Miss Marion Sharp and her elderly mother, of kidnapping, starving and forcing her to work for them as a servant. Opinion in their small town is outraged, and the two ladies are at risk from the mob as well as the law. The amateur detective, a local solicitor becoming set in his comfortable ways, takes on the challenge of defending the two women. The setting and the people come brilliantly alive and, despite the absence of egregious violence, the tension never slackens.

3. "The Moving Toyshop" by Edmund Crispin (Lippincott, 1946).

Edmund Crispin is one of the few mystery writers able to combine situation comedy and high spirits with detection. "The Moving Toyshop" is set in Oxford--a popular city for mystery writers--and has as its detective an eccentric amateur, Gervase Fen, a professor of English at the university. A murder is discovered in a toyshop, but when the police arrive the shop itself has disappeared. Suspension of disbelief is occasionally needed, but this spirited frolic of a detective story retains its place as one of the most engaging and ingenious mysteries of its age.

4. "Murder Must Advertise" by Dorothy L. Sayers (Harcourt, Brace, 1933).

Dorothy L. Sayers is a writer of the Golden Age still read with pleasure today. One of her most enjoyable novels, and the most credible judged as a mystery, is "Murder Must Advertise," set at Pym's Advertising Agency in London. A copywriter has written to the agency's chief saying that something undesirable is going on in the office, but before he can explain, his body is found at the foot of an iron staircase, his neck broken. Mr. Pym hires a private detective to investigate, and Lord Peter Wimsey, under the pseudonym Mr. Death Bredon, takes a job as copywriter. Before he unravels the mystery, five people will die and Lord Peter will be drawn into a vicious network of blackmail and drug peddling. The novel shows Sayers's virtues of originality, energy and wit. Anyone interested in what it was like to work in an advertising agency in the 1930s has only to read "Murder Must Advertise." Copywriters today may feel that little has changed.

5. "Dissolution" by C.J. Sansom (Viking, 2003).

"Dissolution" has established historian C.J. Sansom as one of the most promising new writers of detective fiction. The book is set in 1537, when England is torn by the Reformation. The terrifying Henry VIII has proclaimed himself Supreme Head of the Church and his power is being enforced by savage new laws and a network of secret informers. A team of commissioners is sent out to investigate the country's monasteries. At one, a commissioner is found dead, his head severed from his body, his murder accompanied by sinister acts of sacrilege. The hero, Matthew Shardlake, a hunchback lawyer, intelligent and incorruptible, is ordered by Thomas Cromwell to uncover the truth. His investigation involves him in treachery and danger, leading him to question everything he believes. The sights, the voices, the very smell of this turbulent age seem to rise from the page.

Ms. James's most recent mystery is "The Lighthouse" (Knopf), published in November.




As a former Guggenheim Fellow, I especially appreciate the following editorial.

"A Noble Virtue Under Siege:  Do Americans still understand the meaning of honor?" by Josiah Bunting III, The Wall Street Journal, June 6, 2006 --- http://www.opinionjournal.com/la/?id=110008477

In our culture of therapy, self-absorption and celebrity, "honor" has very little cachet. An abuse of honor--say, by perpetrating a public fraud or acting duplicitously in private life--is but the occasion for the administration of comforting words of understanding, the application of medicines to assuage lingering anxieties and the invitation to appear on "Oprah," the better to explain the forces that, overwhelming meager resources of conscience and character, impelled a dishonorable act. Next may come an invitation to undertake the labor of a book, more fully to explore and expiate the fall from grace. Closure (as it is called) will then, at last, be obtained.

In short, there is no shame in actions once known as dishonorable, and the virtues that supported honor seem moribund. Chastity and modesty--so important to honor in social relations--are treated as relics from Jane Austen and "Little Women." When a high-school girl defends a sexual encounter on the grounds that an American president said that her particular act was not really sex, both she and her role model are, if not completely forgiven, understood to be, as members of the human family, subject to the same vagaries of uncontrollable temptations as you and I.

Things used to be so different. James Bowman's "Honor: A History" offers a brilliantly astringent accounting for the disappearance of honor as a normative standard of conduct in American society. Mr. Bowman traces the idea of honor from its classical origins to its aristocratic and democratic forms. Along the way, he discusses religious teachings (in Christianity and Islam), philosophical definitions (e.g., Aristotle and Nietzsche) and literary treatments (Arthurian legend, Shakespeare, Hemingway). Throughout, he cites the emblems of honor--or dishonor--in current events and popular culture. Perhaps most pertinent to the present moment, he surveys America's use of honor (and prestige) as causes (and justifications) for going to war, indeed for serving in the armed forces.

As late as the mid-1960s, lest we forget, members of the Kennedy and Johnson administrations prized "toughness" in foreign affairs and considered national honor a principal justification for fighting in Vietnam. There was a need, the architects of foreign policy felt, "to avoid a humiliating U.S. defeat (to our reputation as a guarantor)." What was on the line, Mr. Bowman writes, "was the 'prestige' that was really old-fashioned honor under a different name." Yet the war was not always justified to the American people in such terms, and when Richard Nixon promised "peace with honor," few believed him: Honor was, by then, understood as a slipshod synonym for "this is all we can take. We've done all we reasonably could for our ally."

In the West, the identity of personal with national honor was part of the fighting spirit in World War I, though it nearly sank in the slime of Passchendaele and the Somme. Its last florescence was in World War II, Mr. Bowman observes. And even then, "honor" and "duty" in the stiff, upper-class sense of the terms gave way, during the war, to a democratic ideal: the average guy "just doing a job." For America, this antiheroic theme was part of a national self-definition. "We were still, surely, different from . . . those old-fashioned jingoist or imperialist forebears who had been able to speak unashamedly of honor and its demands."

The rhetoric surrounding war changed over time--in Korea, in Vietnam, in the Balkans and now in Iraq. Governments came to feel, Mr. Bowman argues, that appeals to national honor, prestige and reputation for toughness no longer worked. The Marines may remain determined to keep their honor clean, but no such justification seems to animate the country as a whole in its role in the world. When terrorists took over Fallujah in 2004 and the Marines moved in to take them out, Mr. Bowman remembers a commentator saying: "This isn't about national security anymore: it's about pride and credibility." True enough, but the words were rare and tell-tale. Mr. Bowman notes that only in a post-honor society would such an explanation be necessary: Pride and credibility, he argues, are "commonly used substitutes for the old-fashioned sounding 'honor.' " They imply "jealousy for reputation" and the respect that countries and armies once demanded and expected.

Can honor be resuscitated? As Mr. Bowman notes, "honor is stark and unforgiving," and early-21st-century America does not like stark choices. ("Then it is the brave man chooses / While the coward turns aside," in the words of the old hymn.) "Character," meaning resolution, the persistence in right action whatever its costs, seems a quaint and Victorian crotchet. Citizens feverishly, fitfully, deplore the inadequacies of body armor for their Marines and soldiers; three days later, they have moved on. Did you say 32 Iraqis were blown up this morning, and a soldier killed, north of Baghdad? Shame. Let's see what that does to the president's poll numbers.

How well America understands its enemies' notions of honor--and how prepared the country is, itself, to act honorably--will be tested between now and the fall elections. A failure to understand, though not inevitable, may be writ large in a headline like this one: "Administration Announces Withdrawal of 28,000 American Troops by End of Year." As Vo Nguyen Giap and Ho Chi Minh must have smiled the first time they heard the word "Vietnamize," radical Islamists will rejoice at such a development, irrefutable evidence that America neither understands their own misbegotten notions of honor nor has the will, if it does understand, to act honorably in confronting them.

Mr. Bunting is president of the H.F. Guggenheim Foundation in New York.

 




Forwarded by Paula

I am passing this on to you because it definitely works, and we could all use a little more calmness in our lives.

By following simple advice heard on the Dr. Phil show, you too can find inner peace. Dr. Phil proclaimed, "The way to achieve inner peace is to finish all the things you've started and never finished."

So, I looked around my house to see all the things I started and hadn't finished, and before leaving the house this morning, I finished off a bottle of Merlot, a bottle of White Zinfandel, a bottle of Bailey's Irish Cream, a bottle of Kahlua, a package of Oreos, the remainder of my old Prozac prescription, the rest of the cheesecake, some Doritos and a box of chocolates.

You have no idea how freaking good I feel. Please pass this on to those you feel might be in need of inner peace.




More Tidbits from the Chronicle of Higher Education --- http://www.aldaily.com/

Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm
For earlier editions of New Bookmark s go to http://www.trinity.edu/rjensen/bookurl.htm 
Archives of Tidbits: Tidbits Directory --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm

Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.

International Accounting News (including the U.S.)

AccountingEducation.com and Double Entries --- http://www.accountingeducation.com/
        Upcoming international accounting conferences --- http://www.accountingeducation.com/events/index.cfm
        Thousands of journal abstracts --- http://www.accountingeducation.com/journals/index.cfm
Deloitte's International Accounting News --- http://www.iasplus.com/index.htm
Association of International Accountants --- http://www.aia.org.uk/ 
WebCPA --- http://www.webcpa.com/
FASB --- http://www.fasb.org/
IASB --- http://www.fasb.org/
Others --- http://www.trinity.edu/rjensen/bookbob1.htm

Gerald Trite's great set of links --- http://iago.stfx.ca/people/gtrites/Docs/bookmark.htm 

Richard Torian's Managerial Accounting Information Center --- http://www.informationforaccountants.com/ 

I highly recommend TheFinanceProfessor (an absolutely fabulous and totally free newsletter from a very smart finance professor, Jim Mahar from St. Bonaventure University) --- http://www.financeprofessor.com/ 
Jim's great blog is at http://financeprofessorblog.blogspot.com/

 

Professor Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
Jesse H. Jones Distinguished Professor of Business Administration
Trinity University, San Antonio, TX 78212-7200
Voice: 210-999-7347 Fax: 210-999-8134  Email:  rjensen@trinity.edu  




I recently sent out an "Appeal" for accounting educators, researchers, and practitioners to actively support what I call The Accounting Review (TAR) Diversity Initiative as initiated by American Accounting Association President Judy Rayburn --- http://www.trinity.edu/rjensen/395wpTAR/Web/TAR.htm




Tidbits on June 17, 2006
Bob Jensen

Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm
For earlier editions of New Bookmarks go to http://www.trinity.edu/rjensen/bookurl.htm 
Archives of Tidbits: Tidbits Directory --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm

Bob Jensen's various threads --- http://www.trinity.edu/rjensen/threads.htm
       (Also scroll down to the table at http://www.trinity.edu/rjensen/ )

Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.

Internet News (The News Show) --- http://www.thenewsshow.tv/daily/

Informercial Scams (even those carried on the main TV networks)--- http://www.infomercialscams.com/

Security threats and hoaxes --- http://www.trinity.edu/its/virus/

25 Hottest Urban Legends (hoaxes) --- http://www.snopes.com/info/top25uls.asp 
Hoax Busters --- http://hoaxbusters.ciac.org/ 
Stay up on the latest and the oldest hoaxes --- http://www.snopes.com/

Bob Jensen's home page is at http://www.trinity.edu/rjensen/


Online Video and Audio
In the past I've provided links to various types of music and video available free on the Web. 
I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/music.htm

"CBS Offers Downloads of TV Shows on iTunes," The Washington Post, June 8, 2006 --- Click Here

From NASA
Rocket Science 101  --- http://www.nasa.gov/externalflash/RocketScience101/RocketScience101.html

U.S. Customs and Border Protection --- http://www.cbp.gov/xp/cgov/home.xml

From NPR
Viral Video and the Rise of YouTube --- http://www.npr.org/templates/story/story.php?storyId=5454327

 

Note: Some YouTube posts use language that might be considered objectionable.

* Star Trek Cribs
* Don Rickles Roasted on The Dean Martin Show
* Trailer Parody of Stanley Kubrick's The Shining
* Crispin Glover on Letterman
* Hip-Hop Highlight -- Newcleus: 'Jam On It'
* Intro to The Muppet Show


Free music downloads --- http://www.trinity.edu/rjensen/music.htm

In the past I've provided links to various types of music and video available free on the Web. 
I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/music.htm

Reintroduced from Janie
It's hard to kiss the lips that chew your ass out all day long --- http://jbreck.com/itsshardtokiss.html
(Click on the play button in the upper left corner)

New from Janie (try to hold still while listening to this one)
Boot Scootin Boogie --- http://jbreck.com/bootscootinboogie.html

New from Janie (a great Elvis fan)
The Presley Four --- http://mjbreck.com/elvisthepresleyfour.html
(Click the play button in the upper left)

New from Janie and Joan Buchanan West
Elvis tribute  --- http://mjbreck.com/ephedidnthaveto.html

New from Janie and Joan Buchanan West
Elvis tribute  --- http://mjbreck.com/epwhoisthisman.html

From NPR
Living in Tehrangeles: L.A.'s Iranian Community ---
http://www.npr.org/templates/story/story.php?storyId=5459468


Photographs and Art

Storm Sky --- http://www.tinyvices.com/storms.html

From the Baker Library at the Harvard Business School
Coin & Conscience: Popular Views of Money, Credit and Speculation --- http://www.library.hbs.edu/hc/cc/

Botanic Gardens: Using Biodiversity to improve human well-being ---  http://www.bgci.org/files/Worldwide/Wellbeing/Presspack/wellbeing.pdf

Eyewitness to History --- http://www.eyewitnesstohistory.com/

Flower Power Your Table --- http://www.npr.org/templates/story/story.php?storyId=5455396

Catching the Flu: A Photo Essay --- http://www.technologyreview.com/read_article.aspx?id=16834&ch=biotech

Where are the lights of the earth --- http://antwrp.gsfc.nasa.gov/apod/image/0011/earthlights_dmsp_big.jpg
 


Online Books, Poems, References, and Other Literature
In the past I've provided links to various types electronic literature available free on the Web. 
I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/ElectronicLiterature.htm

Classic Short Stories --- http://www.classicshorts.com/

The Adventure of the Copper Beeches by Arthur Conan Doyle (1859-1930) --- Click Here

The Adventure of the Abbey Grange by Arthur Conan Doyle (1859-1930) --- Click Here

A Modest Proposal by Jonathan Swift (1667-1745) --- Click Here

The History and Geography of Inventions --- http://www.krysstal.com/inventions.html

Classical Studies Resources --- http://classicalstudy.luckycontent.com/

Knowing Poe --- http://knowingpoe.thinkport.org/default_flash.asp




They also understand that the really rich won't pay the (inheritance) tax anyway because they hire lawyers to avoid it.
"Taxes Everlasting:  Why the superrich don't mind the death tax," The Wall Street Journal, June 8, 2006 --- http://www.opinionjournal.com/editorial/feature.html?id=110008487

The true value of a human being is determined by his ability to attain liberation from himself.
Albert Einstein (1879-1955) --- http://en.wikipedia.org/wiki/Albert_Einstein

Over the past year or so, the British cultural historians Lisa Jardine and Annie Watkins conducted two surveys designed to pin down a consensus on novels that had "changed reader's lives." First, they interviewed 400 women, most of them involved in the arts, media, and university life. "Absolutely every woman we spoke to had her favourite," they reported recently in Britain's Guardian newspaper. Beyond the enthusiasm evinced by the interviewees, Jardine and Watkins were struck by the wide range of responses: . . . "The men's list was all angst and Orwell. Sort of puberty reading," Jardine cheekily told the Sydney Morning Herald. "We found that men do not regard books as a constant companion to their life's journey, as consolers or guides, as women do... They read novels a bit like they read photography manuals."
Nick Gillespie, "What's Your Favorite Novel? A recent survey of men's and women's favorite books points to a more fundamental question—and a fascinating answer," Reason Magazine, June 9, 2006 --- http://www.reason.com/links/links060906.shtml
 

What can (college) athletes do to protect their image? For starters, they should cultivate a positive one off the field. Some athletes have recently lived together off campus in their senior years and used their residences for all-campus parties. The potential for alcohol poisoning, date rape, and disruption to neighbors is very real if these parties go unmonitored. In addition, it is critical that individuals take responsibility for their actions and monitor the behavior of their peers. There are many aspects to being on a team for better and for worse. Finally, one way to monitor image is not to splash photos of questionable conduct over Facebook.com. This is not to say “misbehave, just as long as you keep it quiet.” Avoiding poor conduct is most important, but posting shameless photos is simply dumb.
David Tuttle --- http://www.trinity.edu/departments/student_affairs/student_conduct/2006report.htm

Gore's credibility is damaged early in the film when he tells the audience that, by simply looking at Antarctic ice cores with the naked eye, one can see when the American Clean Air Act was passed. Dr. Ian Clark, professor of Earth Sciences at the University of Ottawa (U of O) responds, "This is pure fantasy unless the reporter is able to detect parts per billion changes to chemicals in ice." Air over the United States doesn't even circulate to the Antarctic before mixing with most of the northern, then the southern, hemisphere air, and this process takes decades. Clark explains that even far more significant events, such as the settling of dust arising from the scouring of continental shelves at the end of ice ages, are undetectable in ice cores by an untrained eye.
Tom Harris, "The gods are laughing," National Post in Canada, June 7, 2006 --- http://www.canada.com/nationalpost/financialpost/story.html?id=d0235a70-33f1-45b3-803b-829b1b3542ef&

What Schumer doesn't understand is that these are the very areas for which citizens of his own state (NY) have been leaving in droves to relocate. That's why Atlanta, with nearly five million residents, is home to the Centers for Disease Control, the world's busiest airport and the largest telecommunications infrastructure in the nation. And it's no secret now that Atlanta, home to the tallest building in the nation outside of New York or Chicago -- right behind New York's Chrysler Building -- was considered a major target following 9/11. Throw in CNN's headquarters being located in Atlanta, and I think there's a fairly good reason, beyond peanuts, to bring this area up to speed with those cities that have, to now, enjoyed the lion's share of urban security funds.
Matt Towery, "Revenge of the peanut farmers," Townhall, June 8, 2006 --- Click Here

Tom Robinson had long wondered about his family tree. He never suspected its roots might lie in the Mongolian steppe. The Florida accountant knew his great-great-grandfather came to America from England -- but beyond that the trail went cold. So he turned to "bioarchaeology" to test his DNA. He was in for a surprise. According to a British geneticist who pioneered the research, Robinson appears to be a direct descendant of Genghis Khan, the Mongol warrior. Some scientists say that claim goes too far, though few doubt Robinson's DNA reveals a direct genetic link to Mongolia.
"Descended from Genghis Khan? DNA test tantalizes a Florida accountant," PhysOrg, June 7, 2006 --- http://physorg.com/news68906418.html
Jensen Comment
If all this is true, Tom Robinson is not especially unique. The Gehghis Khan purported was very horny and has over 16 million direct decedents --- http://snipurl.com/FertileMale

A letter from Hotels.com to its customers said E&Y "was taking additional steps to protect the confidentiality of its data" by encrypting the customer data. A Hotels.com spokesperson said it doesn't appear that the laptop was the target of the car break-in or that credit cards had been used inappropriately. This is at least the third reported case of E&Y laptop theft that occurred in February. On Feb. 9, E&Y auditors left a secured room in a Miami hotel conference room for lunch and came back to find their laptops missing. Security footage shows two men entering and leaving the room within the one-minute delay of the auto-lock door. On Feb. 13, E&Y sent a letter to Bay Area clients warning that their Social Security numbers and other personal data were on a laptop stolen from an employee's locked car. The sensitive data was password-protected, according to the accounting firm.
"Another E&Y Laptop Stolen," SmartPros, June 7, 2006 --- http://accounting.smartpros.com/x53391.xml

 




Great Minds in Management:  The Process of Theory Development --- http://www.trinity.edu/rjensen//theory/00overview/GreatMinds.htm

In April 2006 I commenced reading a heavy book entitled Great Minds in Management:  The Process of Theory Development, Edited by Ken G. Smith and Michael A. Hitt (Oxford Press, 2006).

The essays are somewhat personalized in terms of how theory development is perceived by each author and how these perceptions changed over time.

In Tidbits I will share some of the key quotations as I proceed through this book. The book is somewhat heavy going, so it will take some time to add selected quotations to the list of quotations at http://www.trinity.edu/rjensen//theory/00overview/GreatMinds.htm 

Developing Resource Dependence Theory: How Theory is Affected by its Environment

JEFFREY PFEFFER

PG. #453 & 454
PFEFFER 21.5 THE POLITICS OF THEORY IN THE SOCIAL SCIENCES

There are, I believe, many misconceptions about theory and theory development in the organization and social sciences, particularly on the part of younger scholars.  In concluding this discussion of the development and evolution of resource dependence theory, it is useful to both review these beliefs and see how they play out in understanding the growth and development of resource dependence.

The first, most strongly held, and possibly most harmful mistaken belief is that theories succeed or fail, prevail or fall into disuse, primarily, and some would maintain exclusively, on the basis of their ability to explain or predict the behavior that is the focus of the theory.  Moreover, there is a belief that a theory's success in prediction and explanation is particularly important in explaining its success if there are competitive theories covering the same dependent variables.  This belief is erroneous in at least two ways.

First of all, as argued elsewhere (Ferraro, Pfeffer, and Sutton, 2005), theories may create the environment they predict, thereby becoming true by construction rather than because they were originally veridical with the world they sought to explain.  To the extent people believe in a particular theory, they may create institutional arrangements based on the theory that thereby bring the theory into reality through these practices and institutional structures.  To the extent people hold a theory as true, they will act on the basis of the theory and expect others to act on that basis also, creating a normative environment in which it becomes difficult to not behave on the basis of the theory because to do so would violate some implicit or explicit expectations for behavior.  And to the extent that people adhere to a theory and therefore use language derived from and consistent with the theory, the theory can become true because language primes both what we see and how we apprehend the world around us, so that talking using the terminology of a particular theory also makes the theory become true.

Second, the philosophy of science notwithstanding, theories are quite capable of surviving disconfirming evidence.  Behavioral decision theory and its numerous empirical tests have shown that many of the most fundamental axioms of choice and decision that underlie economics are demonstrably false (e.g., Bazerman, forthcoming), but economics is scarcely withering away.  Nor are the specific portions of economic theory predicated on assumptions that have been shown to be false necessarily any less believed or used.  A similar situation is true in finance, where assumptions of capital market efficiency and the instantaneous diffusion of relevant information, so that a security's market price presumably incorporates all relevant information available at the time, have withstood numerous empirical and theoretical attacks.  To take a case closer to organization studies, the reliance on and belief in the efficacy of extrinsic incentives and monetary rewards persists not only in the lay community but in the scholarly literature as well.  So, Heath's (1999) insightful study of what he terms an extrinsic incentives bias is as relevant to the domain of scholars as it is to practicing managers and lay people.

What this means for resource dependence theory is that to the extent that claims that it is virtually dead (Carroll, 2002) are true and that it has been subsumed by transactions cost theory, this state of affairs may say less than one might expect about the comparative empirical success or theoretical coherence of transactions cost theory.  As David and Han (2004: 39) summarized in their review of sixty-three articles empirically examining transaction cost economics, "we...found considerable disagreement on how to operationalize some of TCE's central constructs and propositions, and relatively low levels of empirical support in other core areas."  Instead, the comment about the relative position of resource dependence and transactions cost theory may say more about the politics of social science and the fact that power is currently out of vogue and efficiency and environmental determinism such as that propounded by population ecology and other perspectives reifying an impersonal environment, with all of their conservative implications, is currently more in favor.


"Management needs fewer fads, more reflection," Stanford Magazine, May/June 2006 --- http://www.stanfordalumni.org/news/magazine/2006/mayjun/dept/management.html

Jeffrey Pfeffer, PhD ’72, and Robert I. Sutton would like to foment a little revolution—one in which leaders in business and the world at large base their decisions on facts and logic, not ideology, hunches, management fads or poorly understood experience. Pfeffer, the Thomas D. Dee II Professor of Organizational Behavior, and Sutton, a professor of management science and engineering and, by courtesy, of organizational behavior in the Graduate School of Business, are the authors of Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-Based Management (Harvard Business School Press, 2006). STANFORD asked them about bringing more reason to organizational life.

What’s some of the total nonsense that occurs in companies?

Sutton: Probably the biggest single problem for human decision making is that when people have ingrained beliefs, they will put a much higher bar for evidence for things they don’t believe than for things they do believe. Confirmation-seeking bias, I think, is what social psychologists call it. Organizations can have amazingly good evidence, but it has no effect on the decisions they make if it conflicts with their ideology.

Do you have a favorite unsupported belief?

Pfeffer: One would be stock options. There are more than 200 studies that show no evidence that there is a relationship between the amount of equity senior executives have and a company’s financial performance. . . . Just as you would never bet on a point spread on a football game because it encourages bad behavior, you should not reward people for increasing the spread in an expectations market.

Overreliance on financial incentives of all sorts drives all kinds of counterproductive behavior.

Evidence-based management derives from evidence-based medicine. Explain what kind of decision making we’re talking about.

Continued in interview
 




Many scientists, notably anthropologist, on government grants oppose open access publishing
At first glance, it seems that the research world is united against the Federal Research Public Access Act. Scholarly associations are lining up to express their anger over the bill, which would have federal agencies require grant recipients to publish their research papers — online and free — within six months of their publication elsewhere. Dozens of scholarly groups have joined in two letters — one organized by the Association of American Publishers and one by the Federation of American Societies for Experimental Biology. To look at the signatories (and the tones of the letters), it would appear that there’s a wide consensus that the legislation is bad for research. The cancer researchers are against it. The education researchers are against it. The biologists are against it. The ornithologists are against it. The anthropologists are against it. All of these groups are joining to warn that the bill could undermine the quality and economic viability of scholarly publishing.
Scott Jaschik, "In Whose Interest?" Inside Higher Ed, June 15, 2006 --- http://www.insidehighered.com/news/2006/06/15/open

Bob Jensen's threads on scholarly research publication fraud are at http://www.trinity.edu/rjensen/FraudReporting.htm#ScholarlyJournals


How to find what students are thinking and how they are socializing
The answer given by Shawn McGuirk, director of judicial affairs, mediation and education at Fitchburg State College, in Massachusetts, was that, if institutions want to know what the kids are doing these days, they’ll want to know what they’re doing on Facebook. The good, and the bad. In a Magna Publications Web seminar for student affairs staff members Wednesday, McGuirk said that colleges should use Facebook faux pas as teachable moments whenever possible, rather than embracing Facebook as policy or law enforcement tool.
David Epstein, "The Many Faces of Facebook," Inside Higher Ed, June 15, 2006 --- http://www.insidehighered.com/news/2006/06/15/facebook


Cheap Drinking Water from the Ocean
A water desalination system using carbon nanotube-based membranes could significantly reduce the cost of purifying water from the ocean. The technology could potentially provide a solution to water shortages both in the United States, where populations are expected to soar in areas with few freshwater sources, and worldwide, where a lack of clean water is a major cause of disease.
Aditi Risbud, "Cheap Drinking Water from the Ocean:  Carbon nanotube-based membranes will dramatically cut the cost of desalination," MIT's Technology Review, June 12, 2006 --- Click Here


Free from the Huron Consulting Group (Registration Required) --- http://www.huronconsultinggroup.com/

Effort Reporting Technology for Higher Education ---
http://www.huronconsultinggroup.com/uploadedFiles/ECRT_email.pdf


Question
What's the newest outsourcing trend in student cheating?
This could not possibly happen in the United States (Ha! Ha!)

Answer
In a unique twist to outsourcing from Britain to India, students in British universities have been paying computer professionals in India to complete their course assignments for a fee. The newly recognised trend, operating mainly through the Internet, has been dubbed as "contract plagiarism" by British academics who have tracked such malpractices. It is more in vogue among students enrolled in IT courses in British universities.
"British students outsourcing assignments to India," The Times of India, June 14, 2006 --- Click Here

June 15, 2006 reply from Richard Campbell [campbell@RIO.EDU]

Actually it is very easy to outsource using www.elance.com - This is a subdivision of ebay - You can arrange for long distance accounting help, software design and creation and many other areas. A service vendor can set up shop depending on area of specialty. A tech-heavy specialty like software design would pay a higher "rent" than a German translator. A prospective buyer of services would request bids and within hours receive bids.

The prospective buyer would see the quality ratings of the service providers.

Richard J. Campbell
School of Business
218 N. College Ave.
University of Rio Grande
Rio Grande, OH 45674

http://faculty.rio.edu/campbell

 

Bob Jensen's threads on cheating are at http://www.trinity.edu/rjensen/plagiarism.htm

Another Question
If students are outsourcing their assignments, where are they spending their time?

University of Chicago Cocktail Parties for Educational Purposes: Don't get drunk or hit on the women
On Friday afternoon at the University of Chicago's Graduate School of Business, students are streaming towards their weekly dinner with deans and fellow classmates -- all 500 of them. This is just one of the GSB's many social events throughout the year. They include corporate-sponsored cocktail hours, formal dinners, mock receptions, and theme parties. While these gatherings may sound like fun, they also serve a weighty purpose -- getting students a good job. In fact, for those outside B-school, the experience may sound like a little too much fun. After all, this is school, not a vacation. But there's a lot to be learned from the socializing. It's an opportunity to network and scope out your B-school buddies — and competitors." Careers are a focal point of student socializing and networking," says Stacey Kole, deputy dean of Chicago's full-time MBA program.
"The Art of the Schmooze," Business Week, June 12, 2006 --- Click Here


Bob Jensen's a worried owner of a Jeep Grand Cherokee
The attorney general is calling for a federal investigation into potentially fatal problems with Jeep Grand Cherokees. This comes just months after a freak accident at a Hamden car wash killed a 52-year-old man. A Jeep Grand Cherokee went out of control and mowed down the man. It is called "jeep sudden acceleration," and apparently it happens when a Grand Cherokee is shifted from neutral to drive. Doug Newman, the owner of Newman's Connecticut Car Wash says he's seen it before -- at least four times, "The incidents I know of with this problem all occur at the exit end of the car wash. Upon starting the car, the car immediately red lines, goes to 2800 - 3000 RPMs, at the same time you're putting the car in gear it takes off." Problems with sudden acceleration have also been reported at places like drive up ATMs. Daimler Chrysler, which makes Jeep, does not acknowledge there is a problem. The company says they did several studies that concluded "driver error is the only plausible explanation for sudden acceleration."
"Attorney general calls for investigation into Jeep Grand Cherokees," WTNH, June 13, 2006 ---  http://www.wtnh.com/Global/story.asp?S=5022450


Howard Dean Having it Both Ways to Lure Voters on Both Sides:
Troops should leave Iraq, but troops should also stay in Iraq

"Brown Dents Dean: With Dems, 'Don't Know What I'm Voting For'," Newsbusters, June 13, 2006 --- http://newsbusters.org/node/5851

"That's not Jack Murtha's position. It was widely misquoted in the press. What Jack Murtha says is we need a redeployment of our troops. That some of the troops need to come home in the next six months. Others should be redeployed in the region (Iraq) to maintain the capacity to fight terror where it exists both inside and outside Iraq."

Brown then hit Dean with the apparently irreconciliable positions of the two top House Dem leaders, displayed here. She followed that by zinging Dean thusly:

"I got to tell you. If I'm a voter, come November and you want me to vote Democrat, I still don't know what I'm voting for."

Continued in article


Question
Is Canada torturing its arrested terrorism suspects?

Answer (Probably not, but these claims are part of a worldwide effort to dupe the press. Watch for false terrorist accusations to be recklessly reported in Time Magazine, Newsweek, The New York Times and The Washington Post)
Terrorism experts said yesterday torture claims made by some of the 17 suspects arrested in Toronto in connection with alleged bomb plots are consistent with a familiar pattern. "What we have seen is that this is pretty much standard operating procedure for [accused terrorists] to make these kinds of complaints," said Tom Quiggin of the Centre of Excellence for National Security in Singapore. During court hearings on Monday, several men arrested for what police describe as an Ontario terror plot claimed prison guards had tortured them. A jihadist training manual seized by police in Britain instructs captured terrorists...
Stewart Bell, "Suspects' torture claims predictable, experts say," Canada's National Post, June 14, 2006 --- http://www.canada.com/nationalpost/news/story.html?id=e59a54a4-b316-4704-898c-6974d230ba50

Also see http://townhall.com/opinion/columns/joelmowbray/2006/06/14/201166.html


EBay signs up 200 millionth member
EBay Inc. has now registered 200 million users of its online auction services, which would make it the fifth-largest country in the world if its members could form one nation, its CEO said on Tuesday.
"EBay signs up 200 millionth member," Reuters, June 13, 2006 --- Click Here

LAS VEGAS EBay's big buying binge was the talk of its fifth annual user convention here this week, which pulled 15,000 sellers from around the world eager to learn what the Internet auction giant plans to do next. While eBay Inc. is showing signs of a middle-age crisis, with slowing growth and a sliding stock price, company executives seemed almost giddy as they outlined plans to use their recent acquisitions to move beyond auctions -- into communications, advertising and financial services.
"An Older, Wiser EBay, Growing Patiently," by Leslie Walker, The Washington Post, June 15, 2006, Page D01 ---
Click Here
 


New Poet Laureate of the United States
Donald Hall will be named poet laureate of the United States today (June 14), The New York Times reported. The positionwhich operates through the Library of Congress — is designed to promote awareness of poetry.
Inside Higher Ed, June 14, 2006 --- http://www.insidehighered.com/news/2006/06/14/qt

Bob Jensen's links to online poetry are at http://www.trinity.edu/rjensen/ElectronicLiterature.htm


Turn Left at the Presbyterian Church
A growing number of Presbyterians are engaged in a battle for the future of the Presbyterian Church (USA). Over the past two years, this denomination -- my denomination -- has taken a turn toward radicalism that threatens to tarnish a once-proud institution. At issue is the Presbyterian Church's decision in 2004 "to initiate a process of phased, selective divestment in multinational corporations operating in Israel." The fallout was immediate, painful and damaging. Not only are a handful of church leaders taking positions that are highly unpopular in the pews, they are doing so with heavy-handed, top-down measures, actions that run contrary to long-honored traditions. Not surprisingly, the church is experiencing problems with declining membership and dwindling financial support -- due in large part to widespread frustration over the direction the leadership has taken. Instead of developing policies to unite us, the leadership is sowing seeds for further defections by large numbers.
"Turn Left at the Presbyterian Church," by Jim Roberts,  The Wall Street Journal, June 15, 2006; Page A14 --- http://online.wsj.com/article/SB115033656216580816.html?mod=opinion&ojcontent=otep

June 15, 2006 reply from a religion professor and ordained minister in the Presbyterian church

Thanks, Bob.

This debate about divestment has been going on for a couple of years now. I think it is grossly misleading to cast it in terms either of a "right/left" controversy or simply of a struggle for power within the Presbyterian Church. The most recent issue of The Presbyterian Outlook has several very good articles about divestment, representing different points of view. The Church has not done any divestment. Moreover, as I understand it, the targets of any such divestment would be limited to corporations that assist in the Israeli occupation of Palestinian territory and/or in the construction of the "wall."

But Not Necessarily at the Local Level
Presbyterian Church dismisses UT professor

Old News
I don't believe in God. I don't believe Jesus Christ was the son of a God that I don't believe in, nor do I believe Jesus rose from the dead to ascend to a heaven that I don't believe exists. Given these positions, this year I did the only thing that seemed sensible: I formally joined a Christian church. Standing before the congregation of St. Andrew's Presbyterian Church in Austin, Texas, I affirmed that I (1) endorsed the core principles in Christ's teaching; (2) intended to work to deepen my understanding and practice of the universal love at the heart of those principles; and (3) pledged to be a responsible member of the church and the larger community.
"Why I Am a Christian (Sort Of)," by Robert W. Jensen, AlterNet. March 10, 2006 --- http://www.alternet.org/story/33236/

June 12 Update
"Presbyterian church dismisses UT professor," by Andy St. Jean, The Daily Texan --- Click Here

UT journalism associate professor Robert Jensen has found himself at the center of many debates. This time, the conflict lies over his religious beliefs and membership in a local church.

The Presbyterian church he has been attending since last December was reprimanded Friday for admitting him as a member.

St. Andrew's Presbyterian Church was told by the Mission Presbytery, the regional governing body of 157 Presbyterian churches in South and Central Texas, that the acceptance of Jensen into membership was "irregular." Furthermore, it was "void" because Jensen has said in the past he doesn't believe in God.

"I believe God is a name we give to the mystery of the world that we don't understand," Jensen said.

In a March article that appeared on several Web sites and the Houston Chronicle, Jensen wrote a piece entitled "Why I am a Christian (Sort of)," in which his first line reads, "I don't believe in God."

St. Andrew's was directed to move Jensen from the active roll to the "baptized" roll, making him a non-voting member of the church. St. Andrew's is also ordered to work with representatives to come up with an appropriate process for receiving members in the future. The church may re-examine Jensen's membership after these changes are implemented.

"The whole issue turns on the fact that the Book of Order's only requirement is that a person believe in Jesus as their Lord and Savior," said Terry Nelson, stated clerk of Mission Presbytery. The Book of Order is equivalent to the Presbyterian Church's constitution.

After the decision was rendered, the presbytery motioned to wait 45 days before applying the ruling.

This period will hopefully allow people to cool off after a fierce debate that had both sides using the church's law to make their point, Nelson said.

"I have never seen a presbytery where the stated clerk was put on the spot to know the rules in the Book of Order so much, because every attempt to get around or to abide by the rules was being made," Nelson said.

The Rev. Jim Rigby, pastor of St. Andrew's Presbyterian Church, knew not everyone agreed with the decision to accept Jensen.

"Some people said, 'We want your head on a platter,'" Rigby said. "Jensen's membership was the perfect opportunity to come after us and take out a liberal church."

While on the surface the debate seems to concern Jensen's membership, there is a lot more to the argument, Rigby said.

"Can a modern mind be included in the church, or must we use medieval verbage?" Rigby said. "We are doing this for our children's children. If we don't address the times, we are going to lose a lot of people."

The vote, which may nullify his membership in the church, has nothing to do with whether or not he will still attend the church, Jensen said.

"If my membership is eventually declared null and void, I would still go," Jensen said. "The congregation at St. Andrew's has been very supportive and caring."

June 12, 2006 reply from Jason Hardin [Jason.Hardin@Trinity.edu]

I would tend to see such an “unvitation” to membership as a good thing, a relief from a cumbersome social commitment.  For some of us, one of the nicest benefits of godlessness is the absence of Sunday-morning obligations.  

 Said Bart Simpson with a shrug of his shoulders upon his family’s joining the Movementarians, “Church, cult. Cult, church. So we get bored somewhere else every Sunday.”

Just my $0.02

The saga of Robert W. Jensen's Evil Empire diatribe is summarized by Robert E. Jensen at http://www.trinity.edu/rjensen/hypocrisyEvilEmpire.htm


Another Snapshot of Congressional Ethics (that infamous oxymoron)
The Congressional debate over "earmarks" continues, and not in a way that makes the GOP majority look good. This week the Members are pushing through another 1,500 special spending projects, even as the controversy has engulfed California's Jerry Lewis, who as House Appropriations Chairman is earmarker in chief. Federal investigators are examining whether Mr. Lewis abused his position by steering earmarks to his political friends and former employees. In one case, the Justice Department is investigating whether defense industry lobbyists were urged to contribute money to a political action committee run by Mr. Lewis's stepdaughter, with a good portion of the money used for her own salary.
"Earmarker in Chief." The Wall Street Journal,  June 15, 2006; Page A14 --- http://online.wsj.com/article/SB115033555119580784.html?mod=opinion&ojcontent=otep
 


"Revamping the Web Browser:  Surfing the Web has meant using much the same technology for years. Now startups are working on new ways to navigate the Net," by Wade Roush, MIT's Technology Review, June 12, 2006 --- Click Here

Browster, for example, offers a free add-on for Internet Explorer and the Mozilla Foundation's open-source Firefox browser that's a simpler alternative to using the "Back" button. The Palo Alto, CA, company lets people viewing a Web page, say, a list of Google search results, see what lies beyond the hyperlinks simply by placing the mouse over those links -- without having to click on them or open a new window.

Meanwhile, companies like San Francisco-based Flock are developing entirely new browsers designed from the beginning to facilitate now-common social activities, such as blogging, RSS-based news reading, and photo sharing.

The new technologies promise to help Web browsers catch up with the Web itself -- which is bursting with material contributed by users themselves. "The Web today is very different from the Web of the '90s, which was very much a one-to-many experience," says Peter Andrews, a senior software engineer at Flock and the lead builder of Sage, an open-source extension for Firefox that speeds up the process of scanning through RSS feeds. "Now you have a growing community of producers building a many-to-many Web -- and browsers should integrate the functionality to support that."

Of course, new versions of the most popular Web browsers come along regularly. Microsoft released Internet Explorer 7 Beta 2 on April 24; Mozilla upgraded Firefox to version 1.5.0.4 on June 1. But while each release includes a few more bells and whistles -- IE7 allows tabbed browsing in imitation of Firefox, for example -- the basics of Web browsing haven't really changed since the University of Illinois's National Center for Supercomputing Applications created the first browser, Mosaic, in 1994.

Searchers move about the Web by left-clicking on hyperlinks. The browser responds to each click by opening a new page in the same window or, if the user chooses, a new tab or window. Returning to a previously viewed page -- such as a list of search results -- means either clicking the "back" button or switching tabs or windows.

This tried-and-true procedure works well enough, and has become so familiar that it feels preordained. But is it the best way? Is there room for change? Scott Milener thinks so. He and a friend, Wendell Brown, stumbled onto that subject while having lunch one day in 2004. "I asked Wendell, 'Have you noticed how much we hit the back button every day?' And he pushed me on the question. Of course the napkins started coming out, and we invented what Browster is today."

Once a user has installed the Browster plugin, placing the mouse's pointer over any hyperlink on a page causes a small icon to pop up. Hovering over that icon with the pointer makes a new "window" appear on top of the current page, showing the page to which the hyperlink connects.


Modern Day Arsenic and Old Lace
Ms. Rutterschmidt, 73, and another woman, Helen Golay, 75, pleaded not guilty last week to federal charges of mail fraud and submitting false insurance applications. According to the authorities, the two women extended helping hands to two homeless men, getting them off the streets and putting them up in apartments, while at the same time plotting their deaths. Posing as aunts, fiancées or cousins, they took out numerous life insurance policies on the men, Paul Vados and Kenneth McDavid, with themselves as the beneficiaries, collecting over $2.2 million after the men died in separate hit-and-run traffic cases, the authorities said.
Cindy Chang, "Two Elderly Women Suspected as Femmes Fatales in Insurance Fraud Scheme," The New York Times, June 12, 2006 --- http://www.nytimes.com/2006/06/12/us/12grannies.html


Amazing Wartime Facts from WWII --- http://www.5ad.org/AmazingFacts.htm


"Calculator Dependence," by William Kohl, The Irascible Professor, June 7, 2006 ---
http://irascibleprofessor.com/comments-06-07-06.htm

The student I have been paired with is deficient in math.  Mentors are not tutors but they can give tutorial help if it is called for.  After learning how deficient my student was in math, I decided to spend some time tutoring him.  He is in an Algebra I class that had been studying second order equations.  I obtained a copy of a test he had missed.  One of the first problems was:

 y = x2 + 5,  if the constant 5 is changed to 1, the curve

 a. does not move
 b. shifts 1 unit up
 c. shifts 1 unit down
 d. shifts 4 units up
 e. shifts 4 units down


I said, "What would you do to find the answer?"  He said, "I have to get my calculator."  I said, "Why?"  He said, "I need it to work the problem."

I said, "Couldn't we just think about the problem first?  Even though it may seem hard, (as it probably did to him), perhaps we can start by finding a simpler problem inside this difficult problem."

. . .

What I am seeing seems to be that dependence on the calculator has short circuited the learning of math and the development of analytical skills. Most students who take high school algebra are not going to be scientists, mathematicians or engineers. These skills are the most important things they should take from their math courses. The computational and analytical skills learned in math often can be applied to a host of everyday problems in business, personal finance, etc.

Another effect of calculator dependence is that many younger people are not comfortable with numbers. In my generation we learned to do simple arithmetic (addition and multiplication) problems in our heads, and more complex ones with pencil and paper. We can do a quick calculation to check a price in the supermarket or to figure the tip on a restaurant bill without having to reach for a calculator.

Today, many elementary school educators believe that the ready availability of calculators has made learning elementary arithmetic skills like addition and multiplication unnecessary. Working problems without a calculator, in my view, helps students to develop those important analytical skills. Calculators certainly have their place, and they are essential for some problems. However, students who have developed good basic arithmetic and analytical skills can master just about any calculator in a few hours. Perhaps if we delayed the introduction of calculators, our students would learn math better.


Algebra Tutorials
Purplemath --- http://www.purplemath.com/index.htm

Mathematics Help Central --- http://www.mathematicshelpcentral.com/ 

Bob Jensen's math bookmarks --- http://www.trinity.edu/rjensen/Bookbob2.htm#050421Mathematics


English Tutorials (included "Ask-a-Teacher option)
UsingEnglish.com --- http://www.usingenglish.com/

Writing Center Resources from Princeton University --- 
http://webware.princeton.edu/sites/writing/Writing_Center/WCWritingResources.htm

Writing Center Resources from Purdue University  ---
http://owl.english.purdue.edu/

Bob Jensen's writing helpers are at http://www.trinity.edu/rjensen/Bookbob3.htm#Dictionaries


Technology Helpers from Smart Stops on the Web, Journal of Accountancy, June 2006 --- http://www.aicpa.org/pubs/jofa/jun2006/news_web.htm

TECHNOLOGY SITES
Open a New Window
www.annoyances.org

CPAs looking for Microsoft Windows troubleshooting advice can get articles, discussion forums and links to detailed guidance here. Users can find out the difference between various Windows versions, see a road map of their operating systems, learn how to customize their PCs and improve their performance and reduce e-clutter. Take a break from the high-tech talk with the Humor section to read “The Night Before Startup.”

Get a Checkup
www.pcpitstop.com

If your computer acts like it has gremlins in it, sign up for a free account at this Web site and get to the heart of the matter. Run privacy and virus scans and download software to optimize your PC’s performance. Visitors can find out the five user behaviors on which spyware companies prey and get a monthly newsletter with PC performance tips.

IT FYI
www.techletters.com

CPAs looking to maximize their computer’s performance can subscribe to one of four free e-newsletters at this home page.

www.officeletter.com: The Office Letter is devoted to the Microsoft Office suite. It offers tricks, tools and techniques for Access, Excel, Outlook, PowerPoint and Word.

www.boyce.us/newsletter: Jim Boyce Software Tips and Tricks concentrates on Windows and Office applications with helpful hints on such subjects as how to back up or move Outlook Express from one computer to another.

www.karenware.com: Karen’s Power Tools newsletter offers plain-language explanations for technical questions, such as what to do when backup-disk data go bad and a discussion on error-detection strategies.

www.mikeslist.com/current.htm: Mike’s List, subtitled “The Silly Con Valley Report,” takes a tongue-in-cheek approach to technology with news on Apple and iPods and the “Lists o’ the Week,” which include Mike’s picks for gadgets to get, including a combination computer mouse and phone, or “gotta forget” ones, such as a laptop bag made of simulated human skin.

One Step Beyond
http://malektips.com

Find free help, hints and tips here on digital cameras and photo processing, audio players, printers and scanners. Learn how to remove adware and spyware from your computer, sign your e-mails and recover deleted messages. Go to the index of links for start-up business resources, such as how to accept credit card payments online, and get graphics to spice up your desktop publishing. Sign up for free e-mail notices for the latest PC tips on applications from Adobe Reader to WinZip.

Bob Jensen's technology bookmarks are at http://www.trinity.edu/rjensen/Bookbob4.htm


IRS Laptop Lost With Data on 291 People
Given the likelihood of lost luggage on airlines (especially with valuable contents), what's more stupid than checking your laptop before a flight?

An Internal Revenue Service employee lost an agency laptop early last month that contained sensitive personal information on 291 workers and job applicants, a spokesman said yesterday. The IRS's Terry L. Lemons said the employee checked the laptop as luggage aboard a commercial flight while traveling to a job fair and never saw it again. The computer contained unencrypted names, birth dates, Social Security numbers and fingerprints of the employees and applicants, Lemons said. Slightly more than 100 of the people affected were IRS employees, he said. No tax return information was in the laptop, he said.
Christopher Lee, "IRS Laptop Lost With Data on 291 People," The Washington Post, June 8, 2006 --- Click Here
Jensen Comment
Although many fewer people are victimized relative to the huge VA breach, the extent of personal data loss for each person is immensely more serious in the IRS loss.


"Laptop Security, Part 2:  Tips on protecting your data, should fate--or a criminal--separate you and your notebook," by James A. Martin, PC World via The Washington Post, June 9. 2006 --- Click Here

My guess is that your notebook is worth several thousand dollars. I'd also guess that the data stored on it is worth much, much more--and that you'd be entering a world of woe if your notebook were stolen or lost.

Last week I offered tips on how to protect and physically secure your notebook when you're out of the office. This week, I've got tips on protecting your data, should fate--or a criminal--separate you and your notebook.

Windows XP gives you the option of requiring a user password to log on. Though certainly far from bulletproof, a relatively complex password provides more protection than none at all.

A complex password includes upper- and lowercase letters, numbers, and one or more special characters. For example, suppose your name is Pat. You wouldn't use "Pat" as your password, would you? (You would? My, aren't we feeling lucky?) A better password would be something not easily identified with you.

The more complex your password, the more difficult it is to crack--and, potentially, for you to remember. Don't make your password so complex you can't remember it. Or, if you must store your passwords, keep them somewhere safe. Some software programs for PCs and PDAs give you the ability to manage and secure passwords. One example: DataViz's Passwords Plus ($30), which lets you manage and secure passwords on your notebook as well as your Palm OS PDA.

To create a password for your account in Windows XP, go into Control Panel, then open User Accounts. Select the account you want to protect with a password and click the "Create a password" button.

For more about passwords, read Scott Dunn's June " Windows Tips ."

Some laptops now come equipped with biometric fingerprint scanners, as an alternative or enhancement to Windows password-protection. For more on this, see number 3, below.

Another option is to encrypt any files on your notebook that contain sensitive data, such as customer Social Security numbers. (Of course, as I said last week, it's best not to place any sensitive data on a mobile system.)

In essence, encryption scrambles data into code that only an authorized user can access. However, encrypting files, or your entire drive, can be time-consuming, slow system performance, and increase the likelihood you'll lose access to the data.

Windows XP Professional (but not XP Home) includes an option that lets you encrypt files on an NTFS-formatted hard drive. After encrypting a file, you can open it just as you would any file or folder. However, someone who gains unauthorized access to your computer cannot open any encrypted files or folders.

To encrypt a folder in Windows XP Professional, right-click it in Windows Explorer, choose Properties, click Advanced, select the "Encrypt contents to secure data" check box, and click OK twice. In the Confirm Attribute Changes dialog box, do one of the following: To encrypt only the folder, click "Apply changes to this folder only," and click OK; to encrypt the folder contents as well as the folder, click "Apply changes to this folder, subfolders, and files," and click OK.

Continued in article

Bob Jensen's threads on computing and network security are at http://www.trinity.edu/rjensen/ecommerce/000start.htm#SpecialSection


A Subtle Fraud in Journal Rankings

From Jim Mahar's blog on June 5, 2006 --- http://financeprofessorblog.blogspot.com/

Academic Journal Ranking Manipulations

The Unknown Professor has a fascinating post today about how Journal Rankings may be manipulated.

Two longish look-ins:
 
"In today's Wall Street Journal (online subscription required) Sharon Begley provides a rare look into the world of academic journal rankings. She describes some of the ways that scientific journals manipulate their "impact factors"."
 
and later describing his/her (I would imagine people know, but I won't out anything) own experiences (I would add to his below comment by saying I would be surprised if anyone who has published a few papers has not had the reference coaching happen now and then).
"One [way] is to ask authors to include additional citations to other pieces in the journal. I've seen this tactic used several times (both on my pieces and on those of colleagues). Typically, once a piece is either accepted or in the "last round", the editor might "suggest" other articles in the same journal which might possibly be cited. In one case, the editor gave a colleague of mine a list of eight possible citations (which would have increased the total citations in the author's bibliography by almost 50%). However, this doesn't happen as much as you'd think, because I use my bibliography as one of the criteria I use in deciding which journal to submit a piece to: if I cite a good number of articles from a particular journal, it's probably a good fit for the piece"

"Science Journals Artfully Try To Boost Their Rankings," by Sharon Begley, The Wall Street Journal, June 5, 2006, Page B1 --- http://online.wsj.com/article/SB114946859930671119.html

John B. West has had his share of requests, suggestions and demands from the scientific journals where he submits his research papers, but this one stopped him cold.

Dr. West, the Distinguished Professor of Medicine and Physiology at the University of California, San Diego, School of Medicine, is one of the world's leading authorities on respiratory physiology and was a member of Sir Edmund Hillary's 1960 expedition to the Himalayas. After he submitted a paper on the design of the human lung to the American Journal of Respiratory and Critical Care Medicine, an editor emailed him that the paper was basically fine. There was just one thing: Dr. West should cite more studies that had appeared in the respiratory journal.

If that seems like a surprising request, in the world of scientific publishing it no longer is. Scientists and editors say scientific journals increasingly are manipulating rankings -- called "impact factors" -- that are based on how often papers they publish are cited by other researchers.

"I was appalled," says Dr. West of the request. "This was a clear abuse of the system because they were trying to rig their impact factor."

Just as television shows have Nielsen ratings and colleges have the U.S. News rankings, science journals have impact factors. Now there is mounting concern that attempts to manipulate impact factors are harming scientific research.

Conceived 40 years ago, impact factors are essentially a grading system of how important the papers a journal publishes are. "Importance" is measured by how many other papers cite it, indicating that the discoveries, methodologies or insights it describes are advancing science.

Impact factors are calculated annually for some 5,900 science journals by Thomson Scientific, part of the Thomson Corp., of Stamford, Conn. Numbers less than 2 are considered low. Top journals, such as the Journal of the American Medical Association, score in the double digits. Researchers and editors say manipulating the score is more common among smaller, newer journals, which struggle for visibility against more established rivals.

Thomson Scientific is set to release the latest impact factors this month. Thomson has long advocated that journal editors respect the integrity of the rankings. "The energy that's put into efforts to game the system would be better spent publishing excellent papers," says Jim Testa, director of editorial development at the company.

Impact factors matter to publishers' bottom lines because librarians rely on them to make purchasing decisions. Annual subscriptions to some journals can cost upwards of $10,000.

The result, says Martin Frank, executive director of the American Physiological Society, which publishes 14 journals, is that "we have become whores to the impact factor." He adds that his society doesn't engage in these practices.

Journals can manipulate impact factors with legitimate editorial decisions. One strategy is to publish many review articles, says Vicki Cohn, managing editor of Mary Ann Liebert Inc., a closely held New Rochelle, N.Y., company that publishes 59 journals. Reviews don't report new results but instead summarize recent findings in a field. Since it is easier for scientists to cite one review than the dozens of studies that it summarizes, reviews get a lot of citations, raising a journal's impact score.

"Journal editors know how to increase their impact factor legitimately," says Ms. Cohn. "But there is growing suspicion that journals are using nefarious means to pump it up."

One questionable tactic is to ask authors to cite papers the journal already has published, as happened to UCSD's Dr. West, who says that he has great respect for the journal and its editors despite this episode. He declined the request, and the journal published his paper anyway, in March.

Richard Albert, the deputy editor of the American Journal of Respiratory and Critical Care Medicine, says that the request goes out to every scientist who submits a paper. "It's boilerplate, a form letter," he says. The letter has been in use for many years, according to Dr. Albert, who says he has always opposed the inclusion of the passage but was overruled by the journal's former editor.

Journals also can resort to "best-of" features, such as running annual summaries of their most notable papers. When Artificial Organs did this in 2005, all 145 citations were to other Artificial Organs papers. Editor Paul Malchesky says the feature was conceived "as a service to the readership. It was not my intention to affect our impact factor. In terms of how we run our operation, I don't base that on impact factor."

Self-citation can go too far. In 2005, Thomson Scientific dropped the World Journal of Gastroenterology from its rankings because 85% of the citations it published were to its own papers and because few other journals cited it. Editors of the journal, which is based in Beijing, did not answer emails requesting comment.

Journals can limit citations to papers published by competitors, keeping the rivals' impact factors down. An analysis of citations in the Journal of Telemedicine and Telecare shows very few citations of papers in a competitor, Telemedicine and e-Health, "while we cited them liberally," says editor Rashid Bashshur, director of telemedicine at the University of Michigan, Ann Arbor.

Richard Wootton, editor of JTT, says that he believes it's true that his journal cites its competitor less frequently than Dr. Bashshur's journal cites JTT, "but it doesn't seem to me that there is a sinister explanation." Dr. Wootton adds that "when we edit a paper...we sometimes ask authors to ensure that the relevant literature is cited." But "I can state unequivocally that we do not attempt to manipulate the JTT's impact factor. For a start, I wouldn't know how to."

Scientists and publishers worry that the cult of the impact factor is skewing the direction of research. One concern, says Mary Ann Liebert, president and chief executive of her publishing company, is that scientists may jump on research bandwagons, because journals prefer popular, mainstream topics, and eschew less-popular approaches for fear that only a lesser-tier journal will take their papers. When scientists are discouraged from pursuing unpopular ideas, finding the correct explanation of a phenomenon or a disease takes longer.

"If you look at journals that have a high impact factor, they tend to be trendy," says immunologist David Woodland of the nonprofit Trudeau Institute, of Saranac Lake, N.Y., and the incoming editor of Viral Immunology. He recalls one journal that accepted immunology papers only if they focused on the development of thymus cells, a once-hot topic. "It's hard to get into them if you're ahead of the curve."

As examples of that, Ms. Liebert cites early research on AIDS, gene therapy and psychopharmacology, all of which had trouble finding homes in established journals. "How much that relates to impact factor is hard to know," she says. "But editors and publishers both know that papers related to cutting-edge and perhaps obscure research are not going to be highly cited."

Another concern is that impact factors, since they measure only how many times other scientists cite a paper, say nothing about whether journals publish studies that lead to something useful. As a result, there is pressure to publish studies that appeal to an academic audience oriented toward basic research.

Journals' "questionable" steps to raise their impact factors "affect the public," Ms. Liebert says. "Ultimately, funding is allocated to scientists and topics perceived to be of the greatest importance. If impact factor is being manipulated, then scientists and studies that seem important will be funded perhaps at the expense of those that seem less important."

Bob Jensen's threads on academic journal publisher ripoffs are at http://www.trinity.edu/rjensen/FraudReporting.htm#ScholarlyJournals


Why Indonesia remains relatively lenient on terror
Wherever he is, Osama bin Laden must be smiling. Next week, Abu Bakar Bashir -- the al Qaeda-linked cleric known as Southeast Asia's "emir of jihad" -- is expected to walk free from a Jakarta jail. It's all perfectly legal. Mr. Bashir has served his time, and his terrorist organization, Jemaah Islamiya (JI), isn't banned in Indonesia. Clearly, it's time to ask why the world's most populous Muslim country remains relatively lenient on terror, when the threat is so real . . . In exchange for gaining the political support of PKS and others like it for legislative initiatives -- such as last year's painful slashing of fuel-price subsidies -- the president sometimes turns a blind eye when conservative Islamic ideas rear their ugly head. Other times, former President Abdurrahman Wahid recently told us, Mr. Yudhoyono "lacks courage."
"Jakarta's Jihadist," The Wall Street Journal, June 8, 2006 --- Click Here


Racism on the Rise in Germany:  Ugly resurgence of racism with prowling violent gangs
"There are areas in Brandenburg and other parts of the East," Mr. Heye said, "where dark-skinned foreigners might not make it out alive." Just a couple of weeks ago, an Ethiopian-born engineer in Potsdam had his skull smashed at a bus stop when he got into a shouting match with two youngsters. The refugee organization Afrikarat, meanwhile, has promised to provide football fans from abroad with a map of "no-go areas." While Mr. Heye was at first shouted down by local politicians from all major parties for gross exaggeration, the annual criminal statistics published the very next day confirmed the basic trend: Violent hate crimes were up 24% in 2005 -- to 1,034 from 832 -- and continued to be most prevalent in the East. If you adjust for the lower number of immigrants in, say, rural Mecklenburg-Vorpommern, a foreign-looking person is about 25 times as likely to be assaulted in the East as in the West, says University of Hannover criminologist Christian Pfeifer.
Mriam Lau, "No-Go Germany," The Wall Street Journal, June 8, 2006 --- Click Here


Bringing Data Back From the Dead
But there are less-expensive alternatives, including some of the consumer software and services we tested. In some cases, the results surprised us. Norton SystemWorks ($70, http://www.symantec.com ), for example, attempts to repair hard drives while they are failing. But Norton writes to the damaged drive, which can actually worsen the problem and can make future data recovery efforts more time consuming and costly. Disk Doctor, an application built into SystemWorks, reported that it had repaired many clusters on one of our test drives, but when it was done the drive would no longer boot.
David Greenberg, "Bringing Data Back From the Dead," The Washington Post, June 4, 2006 --- Click Here
 

Clean Sweep of Your Hard Drive
How do I delete my deleted files on a computer so that they can't be recovered by anyone else?

"How to Wipe a Hard Drive Clean ," by Walter S. Mossberg, The Wall Street Journal, April 6, 2006; Page B4 --- http://online.wsj.com/article/mossberg_mailbox.html

Q: The community where I live has a one-month period (April this year) where you can dispose of your old computers. I have several old PCs around the house, but want to clean out the hard drives. Can you recommend a good program that can clean sensitive data off a hard drive?

A: There are a number of such "file wiper" programs, which permanently delete files so that they can't be recovered. Some are free, but the one I recommend is called Window Washer and costs $30 from Webroot Software Inc. It can be purchased at Webroot.com and elsewhere. The program, which also performs other tasks, has a file-wiping function called "bleaching." It can be used multiple times.

For Windows systems start with --- http://www.microsoft.com/athome/moredone/cleansweep.mspx

Then perhaps take a look at http://www.fileedge.com/get/clean-sweep/

Then look at http://www.fileedge.com/Cat/Security-Privacy/Other/Wash-n-Sweep-ev.html

Bob Jensen's technology bookmarks are at


"Study: Web is the No. 1 media," by Candace Lombardi, The New York Times, June 6, 2006 --- Click Here

Web media is the dominant at-work media and No. 2 in the home, according to a new report from the Online Publishers Association.

The Web also ranked as the No. 1 daytime media.

A research project, conducted by Ball State University's Center for Media Design, tracked the media use of 350 people every 15 seconds. The subjects represented each gender, about equally, across three age groups: 18 to 34, 35 to 49 and 50-plus. The people were monitored by another person for approximately 13 hours, or 80 percent of their waking day.

"Someone actually came into their homes and workplaces and had a handheld computer, every 15 seconds registering their media consumption and life activities," Pam Horan, president of the Online Publishers Association (OPA), told CNET News.com.

According to Horan, this is the first type of study of its kind. Previously, consumers were monitored for media usage by phone survey or diary method.

Not surprisingly, newspaper use peaked in the morning; that print media was consumed by 17 percent of the subjects between 8 a.m. and 11 a.m. When this media was combined with Web consumption, the potential reach for advertisers climbed to 44 percent. During the same morning period, the number of consumers using magazines jumped from 7 percent to 39 percent, and from 44 percent to 62 percent for television.

"The point is that there is an incremental reach that someone can gain by putting together a multimedia campaign," Horan said.

A conservative estimate from the study says 17 percent of overall media is consumed via the Internet, and Horan notes that other researchers like Forrester have placed that number even higher.

The OPA-commissioned study also used census data to determine the spending habits of its 350 monitored subjects. Web dominant consumers' retail spending averaged $26,450, while the TV-dominant group's spending averaged $21,401.

Yet, studies have shown that only about 8 percent of advertising goes to the Internet, Horan said.

"I hear more and more from marketers that they have shifted their business to be more responsive and realign. There is an active movement by traditional advertisers to be able to explore platform strategies," Horan said. She believes that research studies are attracting the attention of advertisers and media buyers and may result in a faster shift in advertising dollars to match the actual statistics of consumer media usage.

Others agree.

Continued in article


"Google to introduce spreadsheet in latest shot at Microsoft," PhysOrg, June 6, 2006 --- http://physorg.com/news68789101.html

Google Inc. will introduce a spreadsheet program Tuesday (June 8), continuing the Internet search leader's expansion into territory long dominated by Microsoft Corp.

Although it's still considered a work in progress, Google's online spreadsheet will offer consumers and businesses a free alternative to Microsoft's Excel application _ a product typically sold as part of the Office software suite that has been a steady moneymaker for years.

To avoid swamping the company's computers, Google's spreadsheet initially will be distributed to a limited audience. Google also wants more time to smooth out any possible kinks and develop more features, said Jonathan Rochelle, the product manager of the new application.

The Mountain View, Calif.-based company planned to begin accepting sign-ups for the spreadsheet at 9 a.m. EDT Tuesday through the ''labs'' section of its Web site. Rochelle wouldn't specify how many people will be granted access to the spreadsheet application.

Google's spreadsheet isn't as sophisticated as Excel. For instance, the Google spreadsheet won't create charts or provide a menu of controls that can be summoned by clicking on a computer mouse's right-hand button.

Rochelle said the program's main goal is to make it easier for family, friends or co-workers to gain access to the same spreadsheet from different computers at different times, enabling a group of authorized users to add and edit data without having to e-mail attachments back and forth.

Continued in article

Also see http://www.technologyreview.com/read_article.aspx?id=16967


Questions and answers related to adjustments to prior-period financial statements

From IAS Plus on June 10, 2006 --- http://www.iasplus.com/index.htm

The US Public Company Accounting Oversight Board has published a series of staff questions and answers related to adjustments to prior-period financial statements audited by a predecessor auditor. Prior period adjustments may be required, for instance, for discontinued operations, retrospective application of a change in accounting principle, or the correction of an error in prior-period financial statements. If the prior-period financial statements that require adjustments were audited by a predecessor auditor, which auditor, the predecessor or the successor, should audit the adjustments to prior-period financial statements?

Click to Download the PCAOB Q&A (PDF 60k).


"Web 2.0 Has Corporate America Spinning," Robert Hof, Business Week, June 5, 2006 --- Click Here
Or click here --- http://snipurl.com/Web2Here

Silicon Valley loves its buzzwords, and there's none more popular today than Web 2.0. Unless you're a diehard techie, though, good luck figuring out what it means. Web 2.0 technologies bear strange names like wikis, blogs, RSS, AJAX, and mashups. And the startups hawking them -- Renkoo, Gahbunga, Ning, Squidoo -- sound like Star Wars characters George Lucas left on the cutting-room floor.

But behind the peculiarities, Web 2.0 portends a real sea change on the Internet. If there's one thing they have in common, it's what they're not. Web 2.0 sites are not online places to visit so much as services to get something done -- usually with other people. From Yahoo!'s (YHOO) photo-sharing site Flickr and the group-edited online reference source Wikipedia to the teen hangout MySpace, and even search giant Google (GOOG), they all virtually demand active participation and social interaction (see BW Online, 9/26/05, "It's A Whole New Web"). If these Web 2.0 folks weren't so geeky, they might call it the Live Web.

And though these Web 2.0 services have succeeded in luring millions of consumers to their shores, they haven't had much to offer the vast world of business. Until now. Slowly but surely they're scaling corporate walls. "All these things that are thought to be consumer services are coming into the enterprise," says Ray Lane, former Oracle
(ORCL) president and now a general partner at the venture capital firm Kleiner Perkins Caufield & Byers (see BW Online, 6/5/06, "A VC's View of Web 2.0").

CORPORATE BLOGGERS.  For all its appeal to the young and the wired, Web 2.0 may end up making its greatest impact in business. And that could usher in more changes in corporations, already in the throes of such tech-driven transformations as globalization and outsourcing. Indeed, what some are calling Enterprise 2.0 could flatten a raft of organizational boundaries -- between managers and employees and between the company and its partners and customers. Says Don Tapscott, CEO of the Toronto tech think tank New Paradigm and co-author of The Naked Corporation: "It's the biggest change in the organization of the corporation in a century."

Early signs of the shift abound. Walt Disney
(DIS), investment bank Dresdner Kleinwort Wasserstein, and scores of other companies use wikis, or group-editable Web pages, to turbo-charge collaboration. Other firms are using button-down social-networking services such as LinkedIn and Visible Path to dig up sales leads and hiring prospects from the collective contacts of colleagues. Corporate blogging is becoming nearly a cliché, as executives from Sun Microsystems (SUNW) chief executive Jonathan Schwartz to General Motors (GM) Vice-Chairman Bob Lutz post on their own blogs to communicate directly with customers.

Just as the personal computer sneaked its way into companies through the back door, so it's going with Web 2.0 services. When Rod Smith, IBM's
(IBM) vice-president for emerging Internet technologies, told the information technology chief at Royal Bank of Scotland about wikis last year, the exec shook his head and said the bank didn't use them. But when Smith looked at the other participants in the meeting, 30 of them were nodding their heads. They use wikis indeed. "Enterprises have been ringing our phones off the hook to ask us about Web 2.0," says Smith.

ONE GIANT COMPUTER.  Also just like the PC, Web 2.0's essential appeal is empowerment. Increasing computer power, nearly ubiquitous high-speed Internet connections, and ever-easier Web 2.0 services give users unprecedented power to do it themselves. It doesn't hurt that many of these services are free, supported by ads, or at their most expensive still cost less than cable. "All the powerful trends in technology have been do-it-yourself," notes Joe Kraus, CEO of wiki supplier JotSpot.

In essence, these services are coalescing into one giant computer that almost anyone can use, from anywhere in the world. When you do a Google search, for instance, you're actually setting in motion an array of programs and databases distributed around the globe on computer hard drives. Not only that, people who tap services such as MySpace, eBay
(EBAY), and the Internet phone service Skype actually are improving the tools by the very act of using them. MySpace, for instance, becomes more useful with each new contact or piece of content added.

The collective actions, contacts, and talent of people using services such as MySpace, eBay, and Skype essentially improve those services constantly
(see BW Online, 6/20/05, "The Power Of Us"). "We're shifting from a presentation medium to a programming platform," says Tapscott. "Every time we go on these sites, we're programming the Web."

PROBLEM SOLVING.  Not surprisingly, a lot of executives remain skeptical. For some, it's hard to imagine the same technology that spawns a racy MySpace page also yielding a new corporate collaboration service. "There's a big cultural difference between the Web 2.0 people and the IT department," notes consultant John Hagel, author of several books on technology and business. More than that, information technology managers naturally don't want people using these services willy-nilly, because they're often not secure from hackers or rivals.

Nonetheless, the notions behind Web 2.0 clearly hold great potential for businesses -- and peril for those that ignore them. Potentially, these Web 2.0 services could help solve some vexing problems for corporations that current software and online services have yet to tackle.

For one, companies are struggling to overcome problems with current online communications, whether it's e-mail spam or the costs of maintaining company intranets that few employees use. So they're now starting to experiment with a growing array of collaborative services, such as wikis. Says Ross Mayfield, CEO of the corporate wiki firm Socialtext: "Now, most everybody I talk to knows what Wikipedia is -- and it's not a stretch for them to imagine a company Wikipedia."

MORE FLEXIBLE.  And not just imagine -- Dresdner Kleinwort Wasserstein, for instance, uses a Socialtext wiki instead of e-mail to create meeting agendas and post training videos for new hires. Six months after launching it, traffic on the 2,000-page wiki, used by a quarter of the bank's workforce, already has surpassed that of the company's intranet
(see BW Online, 11/24/05, "E-Mail Is So Five Minutes Ago").

Corporations also are balking at installing big, multimillion dollar software programs that can take years to roll out -- and then aren't flexible enough to adapt to new business needs. "They're clunky and awkward and don't encourage participation," grumbles Dion Hinchcliffe, chief technology officer of Washington, D.C. tech consultant Sphere of Influence.

That's why companies are warming to the idea of opening their information-technology systems to do-it-yourselfers. And they spy an intriguing way to do that with what are known as mash-ups, or combinations of simple Web 2.0 services with each other into a new service
(see BW Online, 7/25/05, "Mix, Match, and Mutate"). The big advantage: They can be done very quickly with existing Web services.

BUSINESS NETWORKS.  IBM, for instance, last year helped the U.S. Chamber of Commerce Center for Corporate Citizenship mash together a one-stop shop for people displaced by Hurricane Katrina to find jobs. People type into one box the kind of job they're seeking, and the site searches more than 1,000 job boards, then shows their location on a Google Map. "This [mashups] could be a way to provide solutions to customers within hours instead of months," says IBM's Smith.

Companies are starting to take a page from MySpace, Facebook, and other social-networking services. The reason: As appealing as that social aspect is for teens and anyone else who wants to stay in closer touch with friends, it's even more useful in business. After all, businesses in one sense are social networks formed to make or sell something.

So it's no surprise that corporate-oriented social networks are gaining a toehold. LinkedIn, an online service for people to post career profiles and find prospective employees, is the recruiting tool of choice for a number of companies. "In 2003, people thought of us as a weird form of social networking," notes LinkedIn CEO Reid Hoffman. "Now, people are saying, 'Oh, I get it, it's a business tool.'"
(see BW Online, 4/10/06, "How LinkedIn Broke Through").

STAYING YOUNG.  Despite all the activity so far, it's still early days for this phenomenon some techies (who can't help themselves) call Enterprise 2.0. For now, the key challenge for executives is learning about the vast array of Web 2.0 services. And that requires more than simply checking in with the premier Web 2.0 blog, TechCrunch (see BW Online, 6/2/06, "Tip Sheet: Harnessing Web 2.0").

Where to start? Watch what kids are doing. If they use e-mail at all, it's a distant fourth to instant messaging, personal blogs, and the social networking sites, because they're much easier to use for what matters to them: staying in touch with friends. Companies need to provide more compelling ways for this highly connected bunch as they move into the workforce, bringing their valuable contacts in tow. "Young people are not going to go to companies where they can't use these new tools," says Lane. "They'll say, 'Why would I want to work here?'"

It's also critical for executives to try out these services themselves: Create a MySpace page. Open a Flickr account and upload a few photos. Write a Wikipedia entry. Create a mashup at Ning.com. "The essence of Web 2.0 is experimentation, so they should try things out," says venture capitalist Peter Rip of Leapfrog Ventures, an investor in several Web 2.0 startups.

FREE P.R.  Then there's blogging. It's worthwhile to spend considerable time reading some popular blogs, which you can find at
Technorati.com, to get a feel for how online conversation works. Only then should execs try their hand at blogging -- and perhaps first inside their companies before going public. Thick skin is a requirement, since the "blogosphere" can be brutal on anything that sounds like spin.

But the payoff can be substantial, if hard to quantify. Genial Microsoft
(MSFT) blogger Robert Scoble, for instance, is credited by many Redmond watchers with doing more to improve the company's image than millions of dollars in public relations. In no small part that's because he has shown a willingness to criticize his company at times.

Continued in article


When cows can fly Louisiana politics will be honorable
Rep. William Jefferson, D-New Orleans, said Tuesday that there is "an honorable explanation" for the damaging scenario being painted by the federal government in the federal bribery probe targeting him, and he again denied breaking any laws. Jefferson declined to discuss specifics of the 15-month investigation that has yielded two guilty pleas amid allegations that the congressman accepted hundreds of thousands of dollars in bribes. Jefferson has not been charged and would not speculate on whether he thought an indictment was coming from the northern Virginia grand jury investigating him. In a wide-ranging interview late Tuesday in his congressional office, the site last month of an unprecedented FBI search, Jefferson said he has no intention of stepping down and reiterated his plan to seek a ninth term in November.
Bill Walsh and Bruce Alpert, "Jefferson promises he has 'an honorable explanation'":  He says he'll seek re-election this year," The Times-Picayune, June 7, 2006, ---
http://www.nola.com/news/t-p/washington/index.ssf?/base/news-1/114966136294780.xml&coll=1


"Safe Drivers and Road Rage: The Good and Bad of American Driving Habits," AccountingWeb, May 31, 2006 --- http://www.accountingweb.com/cgi-bin/item.cgi?id=102207

Two recent surveys offer insight into Americans’ driving habits, both good and bad. The 2006 Allstate America’s Best Drivers Report and AutoVantage’s first annual In the Driver’s Seat Road Rage Survey reveal different sides of one of the fundamental characteristics of American life: driving.

Allstate America’s Best Drivers Report

This report ranks the best drivers in the 200 largest cities across the United States. The best drivers were those who were less likely than the national average to have an accident. To determine where cities ranked on the list, Allstate researchers analyzed company data to determine the likelihood drivers in those cities would experience a vehicle collision.

“The Allstate America’s Best Driver’s Report elevates the country’s discussion on safe driving. Our hope is that each year the Allstate report helps facilitate an ongoing dialogue that saves lives,” George Ruebenson, Allstate’s senior vice president for claims service, said in a prepared statement.

According to the 2006 Best Drivers Report, the cities with the best drivers are:
 

  1. Sioux Falls, S.D., drivers are 30.2 percent less likely to have an accident, going an average of 14.3 years between collisions
     
  2. Fort Collins, Colo., drivers are 24.0 percent less likely to have an accident, going 13.2 years between collisions
     
  3. Cedar Rapids, Iowa, drivers are also 24.0 percent less likely to have an accident, going 13.2 years between collisions
     
  4. Huntsville, Ala., drivers are 21.6 percent less likely to have an accident, going 12.8 years between collisions
     
  5. Chattanooga, Tenn., drivers are 21.2 percent less likely to have an accident, going 12.7 years between collisions
     
  6. Knoxville, Tenn., drivers are 20.7 percent less likely to have an accident, going 12.6 years between collisions
     
  7. Des Moines, Iowa, drivers are 20.6 percent less likely to have an accident, also going 12.6 years between collisions
     
  8. Milwaukee, Wisc., drivers are 20.0 percent less likely to have an accident, going 12.5 years between collisions
     
  9. Colorado Springs, Colo., drivers are 19.0 percent less likely to have an accident, going 12.3 years between collisions
     
  10. Warren, Mich., drivers are 18.9 percent less likely to have accident, also going 12.3 years between collisions.

For the second consecutive year, Phoenix had the safest drivers among cities with more than 1 million residents. Drivers in Phoenix can expect to go 9.7 years between collisions, slightly more frequently than the national average. Phoenix is also listed as the second least courteous city by the In the Driver’s Seat Road Rage survey.

In the Driver’s Seat Road Rage Survey

“Road rage has unfortunately too often become a way of life, both on and off the track,” NASCAR driving legend and AutoVantage spokesman Bobby Hamilton said in a prepared statement. “More and more, in cities across America, people are acting out their frustrations with dangerous results. It’s bad for professional drivers and everyday drivers alike.”

The least courteous cities or those having the worst road rage, according to the AutoVantage survey, are:
 

The cities with the least road rage and therefore the most courteous cities are:
 

Other key findings from the AutoVantage survey include:
 

“This new study focuses on important attitudes and habits of drivers on the open road nationwide,” Brad Eggleston, vice president of AutoVantage, said in a prepared statement. “This groundbreaking research is an important tool to help educate and influence safer driving habits throughout the United States.”

According to Traffic Facts, a publication of the National Highway Traffic Safety Administration, more crashes occur on Saturdays than any other day of the week. Sundays ranks second and Fridays came in third. In addition, most collisions happen between 3 and 6 p.m.. The period between 6 and 9 p.m. ranked second, while the period from 9 p.m. to midnight finishes third. The fewest crashes occur between midnight and 3 a.m..


From the Scout Report on June 9, 2006

OpenNet Initiative --- http://www.opennetinitiative.org/ 

A number of organizations are actively concerned with monitoring the ways in which various governments have attempted to limit or restrict access to the Internet, and the OpenNet Initiative is one such group. Drawing on a collaborative partnership with four academic institutions (including the University of Toronto and Harvard Law School), the group’s aim is “to excavate, expose and analyze filtering and surveillance practices in a credible and non-partisan fashion.” On their homepage, visitors will have access to a number of their research publications, case studies, their blog, and a selection of external links of note. Some of their more recent research papers include their investigation into the extent to which the Republic of Yemen controls the information environment of their citizens as well as similar efforts in Myanmar. Overall, the site will be of great interest to those with an interest in cyberlaw and related fields.


Tate Papers http://www.tate.org.uk/research/tateresearch/tatepapers/ 

Art museums often publish a journal, which includes papers primarily based on research about their specific collections. Since 2004, the Tate has been publishing its version online, as the Tate Papers. The tag-line on the Web site promises that the journal will “cover a wide range of subjects: artists, works of art and archives in Tate's collection, art theory, visual culture, conservation and museology.” A quick browse of the available papers shows that they do indeed live up to this claim. For example, a visitor can read an article on the difficulties of conserving the work of Joseph Beuys, an artist who often used organic materials that are bound to decompose (such as fat and wool), but who made contradictory statements regarding his willingness to allow his work to self-destruct. In the same issue (Autumn 2005) a visitor can read a much more traditional article researching the history and attribution of Thomas Gainsborough's 1781 portrait of Marie Jean Augustin Vestris, which passed from the hands of private collectors to the National Gallery in 1888, and has belonged to the Tate since 1955.


StudioLine Photo Basic 3.4.13 http://www.studioline.biz/EN/products/overview-photo-basic/default.htm 

Summer is upon us, and it is certainly a time to make a visual record of family gatherings, trips to the Atlas Mountains, or other such occasions. StudioLine Photo Basic 3.4.13 is a good way to organize such photographic memories, as users can sort their images into albums and folders, and also utilize some of their 30 image tools to modify their existing images. These tools can assist with exposure problems and the seemingly omnipresent specter of red-eye. This version is compatible with computers running Windows 98 and newer.


NetVeda Safety. Net 3.62 http://www.netveda.com/consumer/safetynet.htm 

The idea behind the NetVeda Safety Net application is a simple one: to allow users to control access to certain websites on their computer and to maintain firewall protection in the process. Users of the application can define user access based on the time of day and for content, if they so desire. As might be expected, the application also contains privacy controls that block the sending of personal information and that can also generate activity reports. This version is compatible with all computers running Windows 95 and newer.


Organic Food Links

Increased interest in ‘going organic’ welcomed by some, raises eyebrows of others The Green Invasion http://www.usnews.com/usnews/health/articles/060612/12organic.htm 

Organic farming grows industrial edge http://www.fortwayne.com/mld/journalgazette/business/14744188.htm 

Mass Natural http://www.nytimes.com/2006/06/04/magazine/04wwln_lede.html 

Bad food Britain: Why are we scared of real food? http://www.dailymail.co.uk/pages/live/articles/health/healthmain.html?in_article_id=389321&in_page_id=1774 

International Federation of Organic Agriculture Movements http://www.ifoam.org/ 

Local Harvest http://www.localharvest.org/ 

The Food of the Gods http://etext.library.adelaide.edu.au/w/wells/hg/food/


Updates from WebMD --- http://www.webmd.com/

Latest Headlines on June 9, 2006

Latest Headlines on June 12, 2006


Poison ivy to grow more noxious as Earth warms ---
http://www.mercurynews.com/mld/mercurynews/news/14697360.htm


Grandma May Truly Become Miss Piggy:  Scientists hope to cure Alzheimer's with piglet clones
Scientists working in Denmark said on Friday they planned to use piglets they had cloned in their search for a cure for Alzheimer's disease.
PhysOrg, June 8, 2006 --- http://physorg.com/news69077612.html


"New Drugs Might Benefit Diabetics:  Pfizer's, Merck's Medicines Break Ground in Treatment Of Type 1, 2 Forms of Disease," by Jennifer Corbett Dooren, The Wall Street Journal, June 12, 2006; Page B5 --- http://online.wsj.com/article/SB115007339741277468.html?mod=todays_us_marketplace

Company-funded studies unveiled over the weekend at the American Diabetes Association's annual meeting suggested a pair of innovative drugs could benefit diabetics.

Several studies suggest Merck & Co.'s proposed drug Januvia, for Type 2 diabetes, was effective at lowering a measure of blood sugar without significant side effects. Januvia is awaiting approval from the Food and Drug Administration to treat Type 2 diabetes, which is more common than Type 1. Januvia is a drug known as a DPP-4 inhibitor, and if approved would likely be the first in a new class of diabetes medicines. Novartis AG has a similar drug, Galvus, also awaiting FDA approval.

Separately, new data from studies of Pfizer Inc.'s inhaled form of insulin, Exubera, showed the product lowered or maintained blood sugar without serious side effects. Pfizer's Exubera is the first needle-free form of insulin and is set to hit the market next month. Insulin is required to treat Type 1 diabetes and more severe forms of Type 2 diabetes. Exubera could replace daily short-acting insulin injections but wouldn't replace long-acting insulin.

Continued in article


Erotic images elicit strong response from brain
A new study suggests the brain is quickly turned on and "tuned in" when a person views erotic images. Researchers at Washington University School of Medicine in St. Louis measured brainwave activity of 264 women as they viewed a series of 55 color slides that contained various scenes from water skiers to snarling dogs to partially-clad couples in sensual poses. What they found may seem like a "no brainer." When study volunteers viewed erotic pictures, their brains produced electrical responses that were stronger than those elicited by other material that was viewed, no matter how pleasant or disturbing the other material may have been. This difference in brainwave response emerged very quickly, suggesting that different neural circuits may be involved in the processing of erotic images.
"Erotic images elicit strong response from brain," PhysOrg, June 9, 2006 --- http://www.physorg.com/news69083681.html


Man Meets Woman, Man Thinks Sex?
When a man and woman meet for the first time, men may be more likely to think about sex -- or at least more likely to admit it. That's the core finding of a study in June's issue of Psychology of Women Quarterly.
Miranda Hitti, "Man Meets Woman, Man Thinks Sex?" WebMD, June 9, 2006 --- http://www.webmd.com/content/article/123/115123


ABC News: Hospital Has Legionnaires' Disease Cases
Legionnaires' disease have been diagnosed among patients and visitors at a San Antonio hospital, and health officials suspect the facility is the source of the outbreak. Among those diagnosed at North Central Baptist Hospital, three have died. But health officials said they already were ill and they didn't know how much of a factor Legionnaire's disease played in the deaths.
"ABC News: Hospital Has Legionnaires' Disease Cases," ABC News, June 15, 2006 --- http://abcnews.go.com/US/wireStory?id=2078246  


Car Ads Keep Selling Sex,
While many car advertisements today focus on families and young consumers, many companies continue to play to their physically mature but adolescently-minded male base.
A page by
"Sylvia" at CarSpace.com (the social networking site from Edmunds.com) contrasts ads from the 1970's and today, and things haven't change much.
John Gartner, "Car Ads Keep Selling Sex," Wired News, June 9, 2006 --- http://wiredblogs.tripod.com/cars/

Check out this 1970 Dodge Charger ad on YouTube, which depicts women as bubble-headed playthings who swoon all over a nebbish guy because of his wheels. And then watch the contemporary Dodge Durango ad that wasn't aired because of it's phallic references. Yup, car advertisers love to make the pitch all about getting laid.

Although not about sex, the Toyota Vios ad is a clever ripoff ad about the tempetation of cars.


In his new short story collection In Persuasion Nation, absurdist extraordinaire George Saunders offers a surreal depiction of the destruction of individuality through consumer mega-culture

"Boxed In," by Vince Passaro, The Nation, June 26, 2006 --- http://www.thenation.com/doc/20060626/passaro

If you are a new reader of George Saunders, the first thing you ought to know is that Saunders is the funniest writer in America, more likely to make you laugh in public, if that's where you're reading his books, than any writer since P.G. Wodehouse. The competition--David Sedaris, Tom Wolfe, Christopher Buckley--isn't even close.

It is easy, therefore, to pigeonhole Saunders, to think of him largely as a wit and an absurdist extraordinaire. This would be to miss his point. Saunders's laughs are a cover, a diversion, beneath which reside some profoundly serious intentions regarding the morality of how we live and the power of love and immanent death to transform us into vastly better creatures than we could otherwise hope to be. These are the biggest intentions an artist can have.

Among younger writers these days, Saunders has many imitators. He often writes with great wit and affection about working-class people and the situations of nonsensical hardship they face. With so few writers left in the United States qualified (and willing) to cover this terrain, Saunders ends up attracting some disciples simply along class lines. But class is not his main concern. His main concerns are much harder to pin down--unlike writers who often can be successfully imitated, say Ann Beattie or Raymond Carver, Saunders does not work in the mainstream tradition of North American short fiction, nor does he have a simple style, though it may sometimes appear so. His sensibility, always a close relative of style, is exclusively his own, sophisticated, daring and politically unusual, to the degree that one can't really imitate him unless one believes what he believes--everything he does is in service of an immovably unique worldview. In this as in several other ways, Saunders reminds me of Flannery O'Connor, which is to say he is a radical, and only a small number of people who really understand the convictions behind his work--the caustic humor that, pulled back, reveals a scouring contempt for consumer society and modern life, as well as a deep and specifically religious eagerness for transcendent meaning--would choose to embrace them.


No agreement or even negotiation with the Arabs until they accepted that Zionism was invincible
As I write, Israel is faced with a democratically elected Hamas government, the legacy of its own brute military policies toward the Palestinians. Behind Hamas's statement that it will not recognize Israel--for which it is isolated and financially starved--we can ironically detect the shade, and perfectly logical consequence, of the ethos of Jabotinsky, who famously ended his 1923 essay "The Iron Wall": "The only path to an agreement in the future is an absolute refusal of any attempts at an agreement now." There could be no agreement or even negotiation with the Arabs until they accepted that Zionism was invincible. For Jabotinsky inflexibility was political doctrine.
"The Zionist Imagination," by Jacqueline Rose, The Nation, June 26, 2006 --- http://www.thenation.com/doc/20060626/rose


June 1, 2006 message from James L. Morrison [jlm@nova.edu]

The June/July 2006 issue of Innovate (www.innovateonline.info) offers a range of practical ideas for using new technologies in classrooms as well as ways to avoid common pitfalls caused by technology. This is a one-time mailing to you; if you wish to receive future announcements of new issues and our webcast schedules, please take advantage of our free subscription at http://innovateonline.info/index.php?view=subscribe

We open with Sir John Daniel and Paul West&rsquo;s exploration of how the digital dividends of technology can be used to overcome the digital divide for impoverished nations worldwide. They examine the challenges of bringing higher education to developing nations and advocate open educational resources as a potential solution to the problem.
(See
http://www.innovateonline.info/index.php?view=article&id=252 )

Our next three articles address specific ways in which instructors have used the digital dividends available to them in teaching. Ulises Mejias describes a graduate seminar he taught on the affordances of social software--software that allows for information exchange, collaboration, and ease of communication. His students used the software while learning about it and critiquing it, illustrating well the learning opportunities afforded by this category of technology.
(See
http://www.innovateonline.info/index.php?view=article&id=260 )

S. Pixy Ferris and Hilary Wilder examine wikis, one example of social software, as a way to bridge the distance between students and teachers.

Adopting the linguistic theory of Walter J. Ong, they see teachers as part of a print paradigm of learning, whereas they propose that students are increasingly a part of a secondary-oral paradigm characterized by certain attributes of both oral-based cultures and print-based cultures. Wikis, they argue, can be a pedagogical bridge between these two educational positions.
(See
http://www.innovateonline.info/index.php?view=article&id=258 )

Craig Smith focuses on chat, a common way for online instructors to replace classroom discussion. He provides a protocol to keep discussions focused and productive, helping teachers realize the potential usefulness of an easily accessible technological tool. (See http://www.innovateonline.info/index.php?view=article&id=246 )

Technology also presents some problems in the classroom. The easy availability of apparently anonymous information on the Internet blurs definitions of plagiarism. While tools such as electronic plagiarism detectors have become more common, Eleanour Snow argues that they are not enough. She advocates online tutorials as an easy and effective way of teaching students about plagiarism, and offers examples and links to tutorials for teachers eager to begin the process of educating themselves and their students.
(See
http://www.innovateonline.info/index.php?view=article&id=306 )

Howard Pitler also sees a need to make copyright guidelines clear, but argues that copyrights should be more flexible. He offers guidance about how copyright works and describes Creative Commons, a Web site that provides writers and artists a way to select the rights that they want to reserve and make it clear to others exactly what they are allowed to reproduce and alter.
(See
http://www.innovateonline.info/index.php?view=article&id=251 )

Another difficulty inherent in the digital age is the notorious attrition rate in online education. While noting that drop rates for online courses should not necessarily be equated with lack of success, David Diaz and Ryan Cartnal acknowledge that reducing attrition in such courses should still be on educators' agendas. In addressing this issue they examine the impact of term length on attrition rates, advocating a shorter length to enable time-strapped students to complete the course more efficiently. (See

http://www.innovateonline.info/index.php?view=article&id=196 )

Please forward this announcement to appropriate mailing lists and to colleagues who want to use IT tools to advance their work. Ask your organizational librarian to link to Innovate in their resource section for open-access e-journals.

Thanks!

Jim

James L Morrison
Editor-in-Chief, Innovate

http://www.innovateonline.info
Professor Emeritus of Educational Leadership UNC-Chapel Hill http://horizon.unc.edu


"Sex-Ed Resources," by Elizabeth Bernstein, The Wall Street Journal, June 15, 2006; Page D2 --- http://online.wsj.com/article/SB115032944307080646.html?mod=todays_us_personal_journal

Should four-year-olds learn the facts of life?

An increasing number of parents are dealing with sex education at home -- often long before it comes up in the classroom. And now, parents can turn to a wave of books and videos to help address the subject with small kids, some even as young as four.

"The trick is to find out from the kid what they really want to know," says Dr. Charles Shubin, who teaches pediatrics at Johns Hopkins University and the University of Maryland. He recommends that parents choose sex-ed materials that are age-appropriate and that they review all books and videos carefully before showing them to their children. Here are some resources:

Book: "But How'd I Get in There in the First Place?" by Deborah M. Roffman
Price/Publisher: $14 (paperback); Perseus Publishing
Comment: Ms. Roffman -- who teaches sex education at schools in Baltimore -- thinks parents shouldn't always wait until a child asks to bring up the topic of sex. Published in 2002 and aimed at parents of children under seven years old, her book gives straight-forward advice.

Book: "Everything You Never Wanted Your Kids to Know about Sex (But Were Afraid They'd Ask)" by Justin Richardson, M.D., and Mark A. Schuster, M.D., Ph.D.
Price/Publisher: $14.95 (paperback); Three Rivers Press
Comment: This book explains in depth a child's sexual development, the emotions a parent may experience as a child changes and how to talk to the child about sex. Topics include nudity at home, a child's sexual orientation, abstinence and dealing with sexually active adolescents.

Book: "It's Not the Stork" by Robie H. Harris
Price/Publisher: $16.99; Candlewick Press
Comment: "It's Not the Stork," which will be published next month, is aimed at kids as young as four years old. Many parents will like this book's direct approach, but some may feel it offers too much too soon.

Book: "Where Did I Come From?" by Peter Mayle
Price/Publisher: $9.95 (paperback); Kensington Publishing
Comment: Originally published in 1973, more than two million copies of this sex-ed book have been sold in the U.S. The cartoon-style drawings are child-friendly, if a bit cheesy. In one, a sperm wears a top hat.

DVDs: "The Birds, the Bees, and Me"
Price/Publisher: $19.95; National Training Organization for Child Care Providers
Comment: These 20-minute DVD videos -- there's one aimed at girls and one aimed at boys -- use cartoons, diagrams and college-age narrators in an attempt to make young children comfortable wi