Tidbits Quotations
To Accompany the December 8, 2011 edition of Tidbits
Bob Jensen at Trinity University

Where is a good place to start when searching for a U.S. Government Web site?
Answer:  FirstGov at

"Covert Operations: The billionaire brothers who are waging a war against Obama, by Jane Mayer, The New Yorker, August 30, 2010 ---
Thank you Dan Stone for the heads up.

On May 17th, a black-tie audience at the Metropolitan Opera House applauded as a tall, jovial-looking billionaire took the stage. It was the seventieth annual spring gala of American Ballet Theatre, and David H. Koch was being celebrated for his generosity as a member of the board of trustees; he had recently donated $2.5 million toward the company’s upcoming season, and had given many millions before that. Koch received an award while flanked by two of the gala’s co-chairs, Blaine Trump, in a peach-colored gown, and Caroline Kennedy Schlossberg, in emerald green. Kennedy’s mother, Jacqueline Kennedy Onassis, had been a patron of the ballet and, coincidentally, the previous owner of a Fifth Avenue apartment that Koch had bought, in 1995, and then sold, eleven years later, for thirty-two million dollars, having found it too small.

The gala marked the social ascent of Koch, who, at the age of seventy, has become one of the city’s most prominent philanthropists. In 2008, he donated a hundred million dollars to modernize Lincoln Center’s New York State Theatre building, which now bears his name. He has given twenty million to the American Museum of Natural History, whose dinosaur wing is named for him. This spring, after noticing the decrepit state of the fountains outside the Metropolitan Museum of Art, Koch pledged at least ten million dollars for their renovation. He is a trustee of the museum, perhaps the most coveted social prize in the city, and serves on the board of Memorial Sloan-Kettering Cancer Center, where, after he donated more than forty million dollars, an endowed chair and a research center were named for him.

One dignitary was conspicuously absent from the gala: the event’s third honorary co-chair, Michelle Obama. Her office said that a scheduling conflict had prevented her from attending. Yet had the First Lady shared the stage with Koch it might have created an awkward tableau. In Washington, Koch is best known as part of a family that has repeatedly funded stealth attacks on the federal government, and on the Obama Administration in particular.

With his brother Charles, who is seventy-four, David Koch owns virtually all of Koch Industries, a conglomerate, headquartered in Wichita, Kansas, whose annual revenues are estimated to be a hundred billion dollars. The company has grown spectacularly since their father, Fred, died, in 1967, and the brothers took charge. The Kochs operate oil refineries in Alaska, Texas, and Minnesota, and control some four thousand miles of pipeline. Koch Industries owns Brawny paper towels, Dixie cups, Georgia-Pacific lumber, Stainmaster carpet, and Lycra, among other products. Forbes ranks it as the second-largest private company in the country, after Cargill, and its consistent profitability has made David and Charles Koch—who, years ago, bought out two other brothers—among the richest men in America. Their combined fortune of thirty-five billion dollars is exceeded only by those of Bill Gates and Warren Buffett.

Continued in the article

Jensen Comment
And to think that this GOP slate of losers to run against President Obama is the best slate that the Koch money can buy.

"A Political Solution for the Euro? Germany is right to demand that the worst-run nations submit to fiscal discipline in exchange for financial aid," by George Melloan, The Wall Street Journal, November 30, 2011 ---

Markets rebounded Monday on reports that the 17 euro-zone nations are negotiating a plan to impose greater fiscal discipline on deeply indebted states. The partial recovery from last week's market swoon was a recognition that German Chancellor Angela Merkel is right to define Europe's crisis of confidence as primarily a political malaise. Nothing will come right until Europe's southern tier politicians curb their excessive borrowing.

The possible direction of the negotiations was tipped by a leaked German memo proposing a "European Monetary Fund" that would be the core of a "stability union" paving the way for "political union." As a quid pro quo for financial aid, this fund would demand policy reforms in distressed nations to facilitate a work-off of excessive debt. Ms. Merkel, French President Nicolas Sarkozy and the new Italian premier, Mario Monti, are promising that a plan for closer economic and political integration will be submitted at the Dec. 9 European Union summit. If approved, this could be a very big deal.

The Germans, strong backers of further European union, are essentially laying out a choice: Either the governments of its worst-run nation states submit to some form of fiscal discipline, or the monetary union will disintegrate and they will be worse off for it. The bailout funds that have already been granted—to Greece, Ireland and Portugal—have done little to ease the debt crisis because they have produced insufficient reform.

Moreover, the bailout well is running dry. The European Financial Stability Facility (EFSF), created last year, is clearly underfunded at €440 billion ($587 billion). Having already allotted a third of that to Ireland and Portugal, the facility is certainly not capable of rescuing an Italy or Spain. As for the European Central Bank (ECB), it already is fudging on its legal limitations by buying national debt.

The latest nonstarter put forward by the bailout lobby in Brussels would have the ECB lend money (presumably newly printed) to the International Monetary Fund (IMF), which in turn would package those euros with its own funds for additional European bailouts. This too-clever idea would bypass ECB restrictions on direct loans. More importantly it would transfer most of the bailout risks to non-European IMF members, with the IMF's largest contributor—the United States—assuming the lion's share. If the U.S. Congress buys into this deal, it should be fined for sleepwalking.

Continued in article


"Republicans for the Accounting Cartel:  GOP Members block Sarbox reform for small public companies," The Wall Street Journal, December 2, 2011 ---

How is it that a Republican House that claims to be pro-jobs can't pass a regulatory reform so modest that even President Obama's jobs council endorses it? Part of the answer is that the accounting cartel fighting reform has one of its own in the Republican ranks. A GOP presidential candidate also can't be bothered to show up for a critical vote.

In September we told you about Tennessee Representative Stephen Fincher's plan to relieve small public companies from Sarbanes-Oxley's most burdensome and duplicative accounting rules. "Useless" might be a better description for these rules, after MF Global became the latest company in the Sarbox era to hide catastrophic transactions outside its balance sheet—exactly what the law was supposed to prevent.

On Tuesday night, the House Financial Services Committee had to yank the Fincher reforms from a scheduled Wednesday vote. With all committee Democrats expected to vote against reducing paperwork, the Republicans would need almost all hands to send the measure to the House floor.

But House sources say Michele Bachmann wouldn't return from the campaign trail to vote. Meanwhile, California Republican John Campbell has been leading an effort to water down or kill the Fincher reforms. Mr. Campbell is an accountant carrying water for his former industry colleagues. New Mexico Republican Steve Pearce, who styles himself an opponent of federal regulation, is also blocking reform.

Sarbox was supposed to punish accountants, but like much regulation in practice it guarantees a lucrative business to a cartel dominated by four big firms. The mandate for an external audit on top of the traditional financial audits has helped accounting fees rise as fast as the bureaucratic burden.

Sarbox compliance runs into the billions of dollars annually, and the market for initial public offerings of young companies has never recovered since the law's 2002 enactment. In a report lauded by Mr. Obama, his independent jobs panel recently recommended allowing shareholders in companies below $1 billion in market capitalization to opt out of Sarbox's infamous section 404. Alternatively, the council suggested exempting all new companies from Sarbox compliance for five years after going public.

Continued in article

Jensen Comment
For a few years John Campbell was a CPA with Ernst & Young after receiving a MS in Tax from USC. However, he then moved on to become a successful CEO of an automobile dealership before becoming a Congressional representative from California ---



Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm

Bob Jensen's Tidbits Archives ---

Bob Jensen's Pictures and Stories

Shielding Against Validity Challenges in Plato's Cave ---

·     With a Rejoinder from the 2010 Senior Editor of The Accounting Review (TAR), Steven J. Kachelmeier

·     With Replies in Appendix 4 to Professor Kachemeier by Professors Jagdish Gangolly and Paul Williams

·     With Added Conjectures in Appendix 1 as to Why the Profession of Accountancy Ignores TAR

·     With Suggestions in Appendix 2 for Incorporating Accounting Research into Undergraduate Accounting Courses

Shielding Against Validity Challenges in Plato's Cave  --- http://www.trinity.edu/rjensen/TheoryTAR.htm
By Bob Jensen

What went wrong in accounting/accountics research?  ---

The Sad State of Accountancy Doctoral Programs That Do Not Appeal to Most Accountants ---


Bob Jensen's threads on accounting theory ---

Tom Lehrer on Mathematical Models and Statistics ---

Systemic problems of accountancy (especially the vegetable nutrition paradox) that probably will never be solved ---

Bob Jensen's economic crisis messaging http://www.trinity.edu/rjensen/2008Bailout.htm

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

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