Tidbits on February 8, 2011
Bob Jensen at Trinity University

Whereas much of the U.S. is experiencing waves of storms followed by a few days of calm, up here in the mountains we're beginning to wonder if winter is evolving into a steady state of constant snowfall.

Across from our front lawn is a lookout platform with a telescope pointed toward Mt. Lafayette

Here's my snowplow man Lon at work of February 6, 2011

I have to shovel so the power company can read our meter but we don't use the deck stairs in the winter

Here's a shot of our driveway fence and one of our four little snowmen with solar lights

I have to shovel down to find our two mail boxes

She's cold and hungry and lonely this time of year, but we don't invite her inside to cuddle and warm up

World Cup and Olympic Champion Bode Miller now lives in Bretton Woods
But he learned how to ski as a child on Cannon Mountain where his mother was a bookkeeper

Also see Bode Miller --- http://www.trinity.edu/rjensen/tidbits/2008/tidbits080331.htm

This week I made a special photograph file of Set 2 of my Snow Season Favorites

In addition I featured several snow cartoons

What is the name of the Catholic church in nearby Franconia?
Answer (this is true)
Our Lady of Snows


Nearby Ski Slopes (as appearing in a Franconia Notch email message on February 1, 2011)
Ultimate winter sports within the Western White Mountains at 3 of the best areas for all the right reasons, all within 25 minutes of each other where you can view the best and favorite mountains from all sides! Winter snows have never been better (than in 2011), grooming has become an art and the deep base is there for a full season through 3 more months of fabulous winter fun & adventure! Re-discover and experience the uniqueness of each and their proximity to each other. The flavor of each will bring you back again and again because it gets better each time this season, the rarest in a decade! Be part of the moment, the event, the experience and the history!

Most Vertical Challenge is...
Cannon Mountain in Franconia Notch State Park, Franconia, NH; buried in snow unbelievably timed with weekends and vacations. Voted #1 Value in the East by readers of Ski Magazine, also rates high on scenery, diversity of terrain and family learning facilities and trails. Explore Mittersill after 20 idle years and ride the new double. The new Cannon! 2011 - bigger, better, busier - Bring the family to the home of world champions - still! Home of the 1st Ski School in the country, New England Ski Museum, Aerial Tramway, Old Man of the Mountain Memorial site and the recreation trail for snow machining connections to northern trails to Canada!
The Highest is...
 Loon Mountain in Lincoln, NH  with extensive youth programs and a perfect home base for all types of winter sports and activities. Home of the 1st Super Pipe in the East in Loon's Terrain Park, Largest Adventure Center for Kids and families. 3,050 feet to the top. with plentiful lifts and gondola rides. Facilities for ice skating, X-Country skiing, snow tubing and snowshoeing- all the ways to play!
The Largest is...
Bretton Woods Ski Resort at Omni Mt. Washington Resort, Bretton Woods, NH.  Slopes and trails throughout the largest ski area in the east.  The newest adventure, is its canopy tour zip line, open year round so you can soar over snow-crested tree lines and mountain slopes below; a lifetime experience like no other.  The resort is home to group tours and events and offers Adaptive Sports & Recreation program for people of all ages with disabilities.  Very family oriented, Bretton Woods has the largest X-Country trails, with snowshoeing and tubing- only the largest area can accommodate so many programs!

Mt. Washington Summit Conditions – 6:30 AM, Sunday, February 6

Temp Wind Gust W. Chill
7.8°F 303° (NW), 78.0 mph 82.9 mph -24.5°F

The 40 Most Amazing Pictures Of The Blizzaster Of 2011 ---

"A Fearful, Frigid Night On Iconic Chicago Road," NPR, February 2, 2011 ---


Tidbits on February 8, 2011
Bob Jensen

For earlier editions of Tidbits go to http://www.trinity.edu/rjensen/TidbitsDirectory.htm
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 past presentations and lectures --- http://www.trinity.edu/rjensen/resume.htm#Presentations   

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

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

Online Video, Slide Shows, 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

Ed Schultz-Jon Stewart Feud Breaks Out (VIDEO) ---

Honda's New Self-Balancing Scooter --- http://www.youtube.com/watch_popup?v=cuIJRsAuCHQ

A Send Off From the Farm From an Expert on Neurology and Stress (and one of Stanford's very, very best teachers)
"Stanford Class Day Lecture 2009: The Uniqueness of Humans," by Professor Robert Sapolsky, Simoleon Sense, January 20, 2011 ---
This gets better and better as it goes along.

Hotel made entirely from rubbish opens in Madrid --- http://www.bbc.co.uk/news/world-europe-12245311

Infographic:  The Fraud of Bernie Madoff --- http://www.usfst.com/The-Fraud-of-Bernard-Madoff.html

Crisis in Capitalism --- http://www.youtube.com/watch?v=qOP2V_np2c0
Thank you Paul Williams for the heads up.

The Second Verse of the Star Spangled Banner --- http://nation.foxnews.com/culture/2010/06/07/watch-marine-stuns-crowd-tea-party

Bob Hope Christmases with the troops --- http://www.youtube.com/watch?v=L-HeETwJSUc

Iron Mountain Video:  TOP Secret Government Facility (holds Flight 93 evidence) ---

Not Even Past (History from the University of Texas) --- http://www.notevenpast.org/

Ventriloquist without a Dummy --- http://www.boreme.com/boreme/funny-2010/paul-zerdin-ventriloquist-without-dummy-p1.php
Imagine begging a colleague to cover one of your lectures in this manner.

Charity Tilleman-Dick: Singing after a double lung transplant ---

Video: Is This PwC Auditor Your Next American Idol?

A Flying Car --- http://www.eaavideo.org/video.aspx?v=635469588001
Not enough information is given about legal issues.

I'm really not a big fan of video or computer games, but this one from the popular Price is Right television show is both fun and has educational attributes.
Video:  Pay the Rent strategy on The Price is Right --- Click Here

Europe Fly Over --- http://visibleearth.nasa.gov/view_rec.php?id=8893

Minnesota Under Attack From Sharia Law --- http://www.youtube.com/watch?v=W0vItJqpQ8U

PBS Arts: Between the Folds: Eric Joisel, 1956-2010 [origami, paper art] --- http://www.pbs.org/arts/exhibit/between-the-folds/

Felix de la Concha's Portraits in Conversation (audio interviews) --- http://digital.lib.uiowa.edu/felixdelaconcha/

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

Jack Ingram's 2011 HEB Super Bowl Video (Full Length Version) ---

The King's Singers: Four Decades Of Close, Sweet Harmony (complete concert) ---

The Nashville Symphony In Concert (complete concert) ---

First Listen: Joyce DiDonato, 'Diva, Divo' --- http://www.npr.org/2011/01/17/132908108/first-listen-joyce-didonato-diva-divo

Storms And Salvation: 'The Flying Dutchman' (Introduction to this Opera) ---

Birthplace of Country Music --- http://www.birthplaceofcountrymusic.org/

Fake a Fall, Get Rich Quick (CBS Investigates) --- http://www.cbsnews.com/stories/2011/01/22/national/thefeed/main20029273.shtml?tag=mncol;lst;10

St. Luke's Bottle Bank (Letterman) --- http://www.youtube.com/watch?v=16VDa65e3Qw
Also see The Summa on February 5, 2011 --- http://profalbrecht.wordpress.com/2011/02/05/off-topic-blowing-in-the-bottle/

Web outfits like Pandora, Foneshow, Stitcher, and Slacker broadcast portable and mobile content that makes Sirius look overpriced and stodgy ---

TheRadio (my favorite commercial-free online music site) --- http://www.theradio.com/
Slacker (my second-favorite commercial-free online music site) --- http://www.slacker.com/

Gerald Trites likes this international radio site --- http://www.e-radio.gr/
Songza:  Search for a song or band and play the selection --- http://songza.com/
Also try Jango --- http://www.jango.com/?r=342376581
Sometimes this old guy prefers the jukebox era (just let it play through) --- http://www.tropicalglen.com/
And I listen quite often to Soldiers Radio Live --- http://www.army.mil/fieldband/pages/listening/bandstand.html
Also note
U.S. Army Band recordings --- http://bands.army.mil/music/default.asp

Bob Jensen listens to music free online (and no commercials) --- http://www.slacker.com/ 

Photographs and Art

Incredible Pictures from the International Space Station --- http://triggerpit.com/2010/11/22/incredible-pics-nasa-astronaut-wheelock/

The 1940s --- http://oldfortyfives.com/decadeofthe1940s.html

Incredible Picture of F-22A Raptor stealth fighter jets  ---

Arbor Day Foundation (includes tree identification) --- http://www.arborday.org/index.cfm

"The Amazing Steam Engines Of The First Century: An online translation of an ancient text reveals some engineering marvels from antiquity," MIT's Technology Review, January 20, 2011 --- http://www.technologyreview.com/blog/arxiv/26285/?nlid=4034

Steam and Electric Locomotives of the New Haven Railroad --- http://railroads.uconn.edu/locomotives/index.html

Rufus Woods Photographs --- http://digital.lib.cwu.edu/cgi-bin/library?site=localhost&a=p&p=about&c=rufuswoo&l=en&w=utf-8

Berkeley by the Bay --- http://www.technologyreview.com/blog/post.aspx?bid=354&bpid=26342&nlid=4088

Vivian Maier: Her Discovered Work (photography) --- http://vivianmaier.blogspot.com/

Underground Paris from National Geographic --- http://ngm.nationalgeographic.com/2011/02/paris-underground/alvarez-photography?source=email_inside

A Revolution in Wood: The Bresler Collection --- http://americanart.si.edu/exhibitions/archive/2010/bresler/

Weaving Art Museum and Research Institute --- http://www.weavingartmuseum.org/main.html

Transcontinental Railroad Pictures and Exhibits --- http://cprr.org/Museum/Exhibits.html

Europe Fly Over --- http://visibleearth.nasa.gov/view_rec.php?id=8893

Child Labor in America (Photographs) --- http://www.historyplace.com/unitedstates/childlabor/

Historical Oil Spill Information

Bob Jensen's threads on history, literature and art ---

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

"The Amazing Steam Engines Of The First Century: An online translation of an ancient text reveals some engineering marvels from antiquity," MIT's Technology Review, January 20, 2011 --- http://www.technologyreview.com/blog/arxiv/26285/?nlid=4034

National Digital Stewardship Alliance --- http://www.digitalpreservation.gov/ndsa/index.html

Felix de la Concha's Portraits in Conversation (audio interviews) --- http://digital.lib.uiowa.edu/felixdelaconcha/

Kennebec: A Portfolio of Maine Writing --- http://libraries.maine.edu/Kennebec/kennebec.htm

A Literary Map of Maine --- http://pressherald.mainetoday.com/news/literarymap/map.html

The International Center for Research on Women http://www.icrw.org/

American Women's History:  A Research Guide --- http://frank.mtsu.edu/~kmiddlet/history/women.html

Not Even Past (History from the University of Texas) --- http://www.notevenpast.org/

"TED Starts an E-Books Line (of short books)," by Julie Bosman, The New York Times, January 26, 2011 ---

Free Online Textbooks, Videos, and Tutorials --- http://www.trinity.edu/rjensen/ElectronicLiterature.htm#Textbooks
Free Tutorials in Various Disciplines --- http://www.trinity.edu/rjensen/Bookbob2.htm#Tutorials
Edutainment and Learning Games --- http://www.trinity.edu/rjensen/000aaa/thetools.htm#Edutainment
Open Sharing Courses --- http://www.trinity.edu/rjensen/000aaa/updateee.htm#OKI

Now in Another Tidbits Document
Political Quotations on February 8, 2011

Peter G. Peterson Website on Deficit/Debt Solutions ---

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

The faculty senate at the University of Michigan voted overwhelmingly (54-1) on Monday to reject an administration proposal that would allow the university to extend the pre-tenure probationary period to 10 years ---

Hi David and Paul,

I don't think I could vote one way or another on the 10-year tenure probationary period unless I also knew if and how performance expectations changed.

New faculty bring new life to a university. Under the seven-year probationary policy many colleges are now over 70% tenured. I think this is too high, and under a 10-year policy it will probably soon happen that the college will be well over 98% tenured. How unexciting!

Arguments for the 10-year period focus on such things as long delays of the refereeing process in some top journals and the way starting a family (babies) often coincides in situations where couples put off starting families until the completion of a doctoral program and the landing of the first full-time academic faculty job. Arguments also include the need for putting more time into development of courses on the first job and need to experiment with different pedagogies to find the best pedagogy that suits a particular teacher. Another argument is that a new faculty member that comes in with say three years of tenure credit has a bit more time to adjust to a new faculty position in a new town.

P&T committees may, however, be less sympathetic with the above excuses/reasons when the university has extended the probationary period to 10 years. In fact, there may be demands for more refereed journal hits, more hits in the very top research journals, and higher level of performance expectations in teaching.

In fact there may even be some demands for demonstration of research and teaching leadership of newer faculty rather than just expectations while being led by veterans in the department.

One thing is certain in my mind. If extending the probationary period to 10 years results in virtually every candidate getting tenure, the entire tenure granting process becomes dysfunctional to the living university. Here's why! If every candidate gets tenure it's not long before all faculty in the university are tenured. This becomes very dysfunctional to the dynamics of a university that is only very rarely injected with new blood.

New faculty bring new life to a university. Under the seven-year probationary policy many colleges are now over 70% tenured. I think this is even too high, and under a 10-year policy it will probably soon happen that the college will be well over 98% tenured. How unexciting!

Bob Jensen

"Tenure Changes Coming to Brown U.," by Dan Berrett, Inside Higher Ed, February 8, 2011 ---

Brown University's faculty members have approved, in concept, changes in how the institution will reward tenure, including extending the maximum probationary period to eight years from seven.

With 85 percent of the faculty voting in favor of the general thrust of the recommended changes, the 170-30 vote in December represented a stark turnaround from the faculty's previous stance. In October, faculty members bristled at efforts floated by Provost David Kertzer and an ad hoc committee to make tenure -- a process once lauded as exemplary at Brown -- more difficult to earn. The faculty will consider codifying the new rules in a vote later this month.

The changes include extending the length of the first probationary contract from three years to four years, increasing the number of external letters submitted in support of a tenure bid from five to eight, and keeping confidential from tenure candidates a list of external scholars who will evaluate their application (though a minimum of three of these scholars will be drawn from the candidate's list of suggestions).

Continued in article

Bob Jensen's threads on tenure are at various points in

Only 3 Conservatives in 1,000 Got Hired

"Social Psychologists Consider Bias Against Conservatives," Inside Higher Ed, February 8, 2011 ---

The annual meeting of the Society for Personality and Social Psychology this year was dominated by a talk charging that the disciplines represented in the organization may have a bias against conservatives, The New York Times reported. Jonathan Haidt of the University of Virginia made his point by polling the audience of 1,000 scholars and asking by shows of hands how many of them identified themselves in various political ways. He found that about 80 percent called themselves liberals, a few dozen said that they were centrists or libertarians, and only three said they were conservatives. "This is a statistically impossible lack of diversity," Haidt said, given that 40 percent of Americans identify as conservatives. He told the Times that social psychologists are a "tribal-moral community" with values that may hinder research and make them fail to see their hostility toward non-liberals.

Let's hope we continue to keep these low lifes out of the Academy.
Three cheers for political correctness!

Bob Jensen's threads about political correctness in the academy are at

Report: Bomber of Moscow Airport Was an Accounting Student ‘Pumped Full of Drugs’ ---

Jensen Comment
But the lingering questions are the usual questions about where he got the bomb and the training to be a terrorist. Accounting students generally bomb in other ways.

Optimism for America (for a change)
"President Obama Can Make Start-Up America Succeed,"  by Daniel Isenberg, Harvard Business Review Blog, February 2, 2011 --- Click Here

"Minority B-School Faculty Growing—Slowly:  The number of underrepresented minorities on U.S. business school faculties is up, but the PhD Project, which advocates diversity, says it's not nearly enough," Business Week, January 27, 2011 ---

See one of my heroes, Bernie Milano, on Video --- http://www.diversityinc.com/public/3150.cfm

"KPMG Foundation Celebrates 15th Year of Minority Accounting Doctoral Program," SmartPros, August 1, 2009 --- http://accounting.smartpros.com/x67298.xml 

From CNN:  Clark Howard's Informative Advice About Shopping, Financial Planning, and Warnings About Scams ---

Bob Jensen's warnings about scams ---

Bob Jensen's shopping helpers ---

An Ethics Case
This might be a good video to use in an ethics class. It demonstrates how convincing scam artists can become and how they pray on investors by demonstrating their "superior" research. One of the most common tactics of investment analysts and advisers to exaggerate their past records of success.

Stansberry Investment Research --- http://www.stansberryresearch.com/

Video:  A controversial and negative video forecast of a collapse of the U.S. monetary system and rioting in the streets of America ---
Jensen Comment
I linked to the above Stansberry video as food for thought and not because I buy into all of this somewhat self-serving gloom about what the Zimbabwe Theory of Finance will do to bring down the United States.  The end of this video gets a bit too mysterious to me in an effort sell his newsletter. But the early parts of the video are sobering. What the video demonstrates most to me is how sales pitches can be so convincing by scam artists. This might be a good video to use in an ethics class. It demonstrates how convincing scam artists can become and how they pray on investors by demonstrating their "superior" research. One of the most common tactics of investment analysts and advisers to exaggerate their past records of success.


"Catching SEC-Busted Stansberry Research In 4 Blatant Lies & Why Porter Stansberry Is The Real Life Hyman Roth," by Timothy Sykes, October 4, 2010 ---

I’ve previously written about Stansberry Research by exposing their $1.5 million SEC fine and how they use certainly unethical, but-not-always-illegal manipulative language to market their “picks” using sucker-inducing marketing messages like ““This is the kind of situation that can change your life… where a $10,000 stake can allow you to literally quit work, forever.”

Continued in article

Also see http://briandeer.com/vaxgen/stansberry-fraud.htm

Stansberry's defense of the SEC charges against him proving how clever these guys are in the face of adversity ---

Suggested Student Assignment
Assign a debate where students take up both sides of Stansberry's defense and his advice for investing in these troubled economic times.

In some ways the AAA's Issues in Accounting Education did not have such a good year.
The Editor's 2010 Report IAE has two tables of interest. Especially note Table 2 ---

Compare this with the Editor's Report for Accounting Horizons ---

And then compare these with the Editor's Report for The Accounting Review ---

Jensen Comment
I really don't want to make a lengthy comment at this time except to say that it is very sad the accounting researchers do not take more interest in accounting education.

The following history paper seems to be increasingly and sadly relevant today ---

"The New Atheists' Narrow Worldview," by Stephen T. Asma, Chronicle of Higher Education's The Chronicle Review, January 21, 2011 ---

"Washington Wrapup (bad news for Pell Grants and For-Profit Universities and College Earmarks), by Doug Lederman, Inside Higher Ed, February 2, 2011 ---

"Loan-Default Rate at For-Profit Colleges Would Double Under New Formula," by Goldie Blumenstyk, Chronicle of Higher Education, February 4, 2011 ---

"For-Profit Colleges’ Lawsuit Accuses GAO of ‘Malpractice’," by Kelly Field, Chronicle of Higher Education, January 13, 2011 ---

Worst Attributes of Each of the 50 States

Source:  Simoleon Sense, January 30, 2011 --- http://www.simoleonsense.com/

Jensen Comment
I'm not sure I agree with all of this. If "oldest state" means the state with the most old people it would seem that Florida beats out Iowa. And "Identity Check" is more of an attribute of Arizona. And I know nothing about "Bestiality" statistics. And what data supports the surprising outcome for Utah? And I can certainly think of worse things to say about Vermont such as "Sink Hole for Old Hippies." And I assume that "High School Graduation" in Texas means lack thereof.

And the worst thing about Minnesota is certainly not its "tornados." That should be replaced by "Swedes."

But the rest of the outcomes conform to my priors as long as "Robbery" for Illinois includes its 67% tax increase.

MSNBC Leftist Star excitedly falls for a hoax
"Hey Rachel Maddow, I Have a Bridge To Sell You," by Adriane Gonzalez, Jr. Deputy Accountant, February 2, 2011 ---

Dow 12000: More Fun Factoids --- http://blogs.wsj.com/marketbeat/2011/01/26/dow-12000-more-fun-factoids/
Thank you Jim Mahar for the heads up.

"B-School Deans Worth Following On Twitter," by John A. Byrne, Poets and Quants, February 2, 2011 ---

Bob Jensen's links to blogs and social networks ---

Bob Jensen's links to accounting news ---

"Bankruptcy Laws Drive Corporate Default Rates," Stanford Graduate School of Business News," January 2011 ---

Permissive bankruptcy laws, not bad business downturns, seem to be the greatest cause of corporate bond defaults, according to Professor Ilya Strebulaev, co-author of a study that researched 150 years of figures.

When it comes to corporate defaults, the current recession is, as of now, child's play in comparison not only to the Great Depression, but another little-recalled period: the railroad crisis of 1873–1875.

New research from Stanford shows that over the past 150 years, the U.S. corporate bond market has repeatedly suffered clustered default events. In a surprise finding, the study reveals that default episodes are only weakly related to bad business downturns. Rather, they seem to be a function of permissive bankruptcy laws.

Ilya Strebulaev, associate professor of finance at the Stanford Graduate School of Business and Spence Faculty Scholar for 2010-2011, and three other researchers have developed the first set of data on bond defaults and debt prices reaching back to the 19th century. Their information, much of it hand-collected from historical financial records, has allowed for the first analysis of the relationship between various macroeconomic conditions –– business cycles –– and financial cycles, such as banking crises.

Continued in article

Jensen Comment
Congress tightened the rules against personal bankruptcy laws without sufficiently tightening the corporate bankruptcy laws..

"What Caused the Bubble? Mission accomplished: Phil Angelides succeeds in not upsetting the politicians," by Holman W, Jenkins, Jr., The Wall Street Journal, January 29. 2011 ---

The 2008 financial crisis happened because no one prevented it. Those who might have stopped it didn't. They are to blame.

Greedy bankers, incompetent managers and inattentive regulators created the greatest financial breakdown in nearly a century. Doesn't that make you feel better? After all, how likely is it that some human beings will be greedy at exactly the same time others are incompetent and still others are inattentive?

Oh wait.

You could almost defend the Financial Crisis Inquiry Commission's (FCIC) new report if the question had been who, in hindsight, might have prevented the crisis. Alas, the answer is always going to be the Fed, which has the power to stop just about any macro trend in the financial markets if it really wants to. But the commission was asked to explain why the bubble happened. In that sense, its report doesn't seem even to know what a proper answer might look like, as if presented with the question "What is 2 + 2?" and responding "Toledo" or "feral cat."

The dissenters at least propose answers that might be answers. Peter Wallison focuses on U.S. housing policy, a diagnosis that has the advantage of being actionable.

The other dissent, by Keith Hennessey, Bill Thomas and Douglas Holtz-Eakin, sees 10 causal factors, but emphasizes the pan-global nature of the housing bubble, which it attributes to ungovernable global capital flows.

That is also true, but less actionable.

Let's try our hand at an answer that, like Mr. Wallison's, attempts to be useful.

The Fed will make errors. International capital flows will sometimes be disruptive. Speculators will be attracted to hot markets. Bubbles will be a feature of financial life: Building a bunch of new houses is not necessarily a bad idea; only when too many others do the same does it become a bad idea. On that point, not the least of the commission's failings was its persistent mistaking of effects for causes, such as when banks finally began treating their mortgage portfolios as hot potatoes to be got rid of.

If all that can't be changed, what can? How about the incentives that invited various parties to shovel capital into housing without worrying about the consequences?

The central banks of China, Russia and various Asian and Arab nations knew nothing about U.S. housing. They poured hundreds of billions into it only because Fannie and Freddie were perceived as federally guaranteed and paid a slightly higher yield than U.S. Treasury bonds. (And one of the first U.S. actions in the crisis was to assure China it wouldn't lose money.)

Borrowers in most states are allowed to walk away from their mortgages, surrendering only their downpayments (if any) while dumping their soured housing bets on a bank. Change that even slightly and mortgage brokers and home builders would find it a lot harder to coax people into more house than they can afford.

Mortgage middlemen who don't have "skin in the game" and feckless rating agencies have also been routine targets of blame. But both are basically ticket punchers for large institutions that should have and would have been assessing their own risk, except that their own creditors, including depositors, judged them "too big to fail," creating a milieu where they could prosper without being either transparent or cautious. We haven't even tried to fix this, say by requiring banks to take on a class of debtholder who would agree to be converted to equity in a bailout. Then there'd be at least one sophisticated marketplace demanding assurance that a bank is being run in a safe and sound manner. (Sadly, the commission's report only reinforces the notion that regulators are responsible for keeping your money safe, not you.)

The FCIC Chairman Phil Angelides is not stupid, but he is a politician. His report contains tidbits that will be useful to historians and economists. But it's also a report that "explains" poorly. His highly calculated sound bite, peddled from one interview to the next, that the crisis was "avoidable" is worthless, a nonrevelation. Everything that happens could be said to happen because somebody didn't prevent it. So what? Saying so is saying nothing.

Mr. Angelides has gone around trying to convince audiences that the commission's finding was hard hitting. It wasn't. It was soft hitting. More than any other goal, it strives mainly to say nothing that would actually be inconvenient to Barack Obama, Harry Reid, Barney Frank or even most Republicans in Congress. In that, it succeeded.

Jensen Comment
And then the subprime crisis was followed by the biggest swindle in the history of the world ---

At this point time in 2011 there's only marginal benefit in identifying all the groups like credit agencies and CPA audit firms that violated professionalism leading up to the subprime crisis. The credit agencies, auditors, Wall Street investment banks, Fannie Mae, and Freddie Mack were all just hogs feeding on the trough of bad and good loans originating on Main Streets of every town in the United States.

If the Folks on Main Street that Approved the Mortgage Loans in the First Stage Had to Bear the Bad Debt Risks There Would've Been No Poison to Feed Upon by the Hogs With Their Noses in the Trough Up to and Including Wall Street and Fannie and Freddie.

If the Folks on Main Street that Approved the Mortgage Loans in the First Stage Had to Bear the Bad Debt Risks All Would've Been Avoided
The most interesting question in my mind is what might've prevented the poison (uncollectability) in the real estate loans from being concocted in the first place. What might've prevented it was for those that approved the loans (Main Street banks and mortgage companies in towns throughout the United States) to have to bear all or a big share of the losses when borrowers they approved defaulted.

Instead those lenders that approved the loans easily passed those loans up the system without any responsibility for their reckless approval of the loans in the first place. It's easy to blame Barney Frank for making it easier for poor people to borrow more than they could ever repay. But the fact of the matter is that the original lenders like Countrywide were approving subprime mortgages to high income people that also could not afford their payments once the higher prime rates kicked in under terms of the subprime contracts. If lenders like Countrywide had to bear a major share of the bad debt losses the lenders themselves would've been more responsible about only approving mortgages that had a high probability of not going into default. Instead Countrywide and the other Main Street lenders got off scott free until the real estate bubble finally burst.

And why would a high income couple refinance a fixed rate mortgage with a risky subprime mortgage that they could not afford when the higher rates kicked in down the road? The answer is that the hot real estate market before the crash made that couple greedy. They believed that if they took out a subprime loan with a very low rate of interest temporarily that they could turn over their home for a relatively huge profit and then upgrade to a much nicer mansion on the hill from the profits earned prior to when the subprime rates kicked into higher rates.

When the real estate bubble burst this couple got left holding the bag and received foreclosure notices on the homes that they had gambled away. And the Wall Street investment banks, Fannie, and Freddie got stuck with all the poison that the Main Street banks and mortgage companies had recklessly approved without any risk of recourse for their recklessness.

If the Folks on Main Street that Approved the Mortgage Loans in the First Stage Had to Bear the Bad Debt Risks There Would've Been No Poison to Feed Upon by the Hogs With Their Noses in the Trough Up to and Including Wall Street and Fannie and Freddie.

Bob Jensen's threads on this entire mess are at

"Washington’s Financial Disaster," by Frank Partnoy, The New York Times, January 29, 2011 ---

THE long-awaited Financial Crisis Inquiry Commission report, finally published on Thursday, was supposed to be the economic equivalent of the 9/11 commission report. But instead of a lucid narrative explaining what happened when the economy imploded in 2008, why, and who was to blame, the report is a confusing and contradictory mess, part rehash, part mishmash, as impenetrable as the collateralized debt obligations at the core of the crisis.

The main reason so much time, money and ink were wasted — politics — is apparent just from eyeballing the report, or really the three reports. There is a 410-page volume signed by the commission’s six Democrats, a leaner 10-pronged dissent from three of the four Republicans, and a nearly 100-page dissent-from-the-dissent filed by Peter J. Wallison, a fellow at the American Enterprise Institute. The primary volume contains familiar vignettes on topics like deregulation, excess pay and poor risk management, and is infused with populist rhetoric and an anti-Wall Street tone. The dissent, which explores such root causes as the housing bubble and excess debt, is less lively. And then there is Mr. Wallison’s screed against the government’s subsidizing of mortgage loans.

These documents resemble not an investigative trilogy but a left-leaning essay collection, a right-leaning PowerPoint presentation and a colorful far-right magazine. And the confusion only continued during a press conference on Thursday in which the commissioners had little to show and nothing to tell. There was certainly no Richard Feynman dipping an O ring in ice water to show how the space shuttle Challenger went down.

That we ended up with a political split is not entirely surprising, given the structure and composition of the commission. Congress shackled it by requiring bipartisan approval for subpoenas, yet also appointed strongly partisan figures. It was only a matter of time before the group fractured. When Republicans proposed removing the term “Wall Street” from the report, saying it was too pejorative and imprecise, the peace ended. And the public is still without a full factual account.

For example, most experts say credit ratings and derivatives were central to the crisis. Yet on these issues, the reports are like three blind men feeling different parts of an elephant. The Democrats focused on the credit rating agencies’ conflicts of interest; the Republicans blamed investors for not looking beyond ratings. The Democrats stressed the dangers of deregulated shadow markets; the Republicans blamed contagion, the risk that the failure of one derivatives counterparty could cause the other banks to topple. Mr. Wallison played down both topics. None of these ideas is new. All are incomplete.

Another problem was the commission’s sprawling, ambiguous mission. Congress required that it study 22 topics, but appropriated just $8 million for the job. The pressure to cover this wide turf was intense and led to infighting and resignations. The 19 hearings themselves were unfocused, more theater than investigation.

In the end, the commission was the opposite of Ferdinand Pecora’s famous Congressional investigation in 1933. Pecora’s 10-day inquisition of banking leaders was supposed to be this commission’s exemplar. But Pecora, a former assistant district attorney from New York, was backed by new evidence of widespread fraud and insider dealings, shocking documents that the public had never seen or imagined. His fierce cross-examination of Charles E. Mitchell, the head of National City Bank, Citigroup’s predecessor, put a face on the crisis.

This commission’s investigation was spiritless and sometimes plain wrong. Richard Fuld, the former head of Lehman Brothers, was thrown softballs, like “Can you talk a bit about the risk management practices at Lehman Brothers, and why you didn’t see this coming?” Other bankers were scolded, as when Phil Angelides, the commission’s chairman, admonished Lloyd Blankfein, the chief executive of Goldman Sachs, for practices akin to “selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars.” But he couldn’t back up this rebuke with new evidence.

The report then oversteps the facts in its demonization of Goldman, claiming that Goldman “retained” $2.9 billion of the A.I.G. bailout money as “proprietary trades.” Few dispute that Goldman, on behalf of its clients, took both sides of trades and benefited from the A.I.G. bailout. But a Goldman spokesman told me that the report’s assertion was false and that these trades were neither proprietary nor a windfall. The commission’s staff apparently didn’t consider Goldman’s losing trades with other clients, because they were focused only on deals with A.I.G. If they wanted to tar Mr. Blankfein, they should have gotten their facts right.

Lawmakers would have been wiser to listen to Senator Richard Shelby of Alabama, who in early 2009 proposed a bipartisan investigation by the banking committee. That way seasoned prosecutors could have issued subpoenas, cross-examined witnesses and developed cases. Instead, a few months later, Congress opted for this commission, the last act of which was to coyly recommend a few cases to prosecutors, who already have been accumulating evidence the commissioners have never seen.

There is still hope. Few people remember that the early investigations of the 1929 crash also failed due to political battles and ambiguous missions. Ferdinand Pecora was Congress’s fourth chief counsel, not its first, and he did not complete his work until five years after the crisis. Congress should try again.

Frank Partnoy is a law professor at the University of San Diego and the author of “The Match King: Ivar Kreuger, the Financial Genius Behind a Century of Wall Street Scandals.”

Jensen Comment
Professor Partnoy is one of my all-time fraud fighting heroes. He was at one time an insider in marketing Wall Street financial instrument derivatives products and, while he was one of the bad guys, became conscience-stricken about how the bad guys work. Although his many books are somewhat repetitive, his books are among the best in exposing how the Wall Street investment banks are rotten to the core.

Frank Partnoy has been a a strong advocate of regulation of the derivatives markets even before Enron's energy trading scams came to light. His testimony before the U.S. Senate about Enron's infamous Footnote 16 ---

I quote Professor Partnoy's books frequently in my Timeline of Derivative Financial Instruments Frauds ---

"Learning to Read, Again," by Gary Alan Fine, Chronicle of Higher Education's The Chronicle Review, January 29, 2011 ---

Academics take reading for granted. We learned to read in first grade, and those skills have served us well ever since. Like fish in water, we hardly notice the transparent medium in which we swim.

Writing is a skill that we are continuously taught, a skill that is graded. But reading is different. When academics have trouble understanding texts—and we do—the problem is usually with texts and with our background knowledge, not the act of reading itself. And when we do have a reading problem, we tend to medicalize it as dyslexia, suggesting that proper reading is normal and natural—especially for advanced scholars. That tendency is not particular to higher education, however. After the elementary years, schools pay little attention to the mechanisms of reading. We read as if all texts, even the most complex, were Dick and Jane.

A quarter-century ago, the sociologist Howard S. Becker published a now classic discussion of the challenges of writing in graduate school. In Writing for Social Scientists: How to Start and Finish Your Thesis, Book, or Article (University of Chicago Press, 1986), Becker demonstrated how academics should write. But the question of how academics should read is deeper, since, unlike writing, reading is considered a given. Although the words, syntax, and ideas are more complex, isn't reading in graduate school fundamentally like reading in first grade?

It isn't, of course. Not only is reading Foucault more intellectually challenging than reading Goodnight Moon (although the two have quite a bit in common, both emphasizing omnipresent surveillance), but the application of reading differs. For the most part, earlier reading is an attempt to grasp the meaning of a text so that one can repeat it to an authority, who then judges whether one "got" the ideas. At that level, reading is regurgitation.

In graduate school, reading and the ability to discuss and interpret that reading are simultaneously a means by which a student asserts an academic identity and the basis on which a student can produce new knowledge. And while assignments before graduate school are meant to be read in full, the wise graduate student must learn how to skim in order to manage impossible demands. It is the ability to not read everything—while still reading enough—that represents success in graduate school.

When students arrive at graduate school, they have been reading for nearly 20 years or longer, and they are good at it. But from their first day, they are thrown into a world in which reading has different, contradictory meanings. Becker observed a similar conflict when studying medical students for his canonical ethnography, Boys in White (University of Chicago Press, 1961). Becker recognized that although the students entered classrooms with the goal of learning all that the field of medicine could offer, and all that their instructors required, they soon found that goal impossible to meet. To survive, the successful students were forced to learn tricks of the trade. They learned to become real doctors, not imagined, ideal ones.

A similar process occurs in graduate school. Students who triumphed in college find themselves swimming in a sea of words with no shore in sight. Their task is complicated by the fact that reading contributes to the reputation game that is so essential to graduate education. Incoming students have only a hazy notion of how they stand in comparison with their peers. But they soon find that in the first years of graduate study, being able to discuss the assigned readings is central to that evaluation. One must be informed and engaged in order to be esteemed and rewarded.

Continued in article

Jensen Comment|
By the way, a leading accounting scholar on Michael Foucault is my former doctoral student Ed Arrington who lived in Europe for a while studying Foucault's work first hand. Ed was and still is interested in extending Foucault's doctrine of texts and criticism into the realm of accountancy.

Search the journal Accounting, Organizations and Society for some of Ed's published papers on this topic ---

Our writings always seem more scholarly if we use words that readers have to look up. In some ways this adds value. If there's nothing new in the content of what you write at least the readers learned something new.

Bob Jensen

Reading is educational (from a Trinity University computer science professor)

I was reading a book titled, "Religious Diversity in Ancient Israel and
Judah", edited by Francesca Stavrakopous and John Barton when I came
upon a discussion of whether the Religion of Israel was autochthonous to
the land of Palestine. Not only did I not know what the word
autochthonous meant I did not know how to pronounce it.

It turns out the author was trying to show his command of strange words.
The word means native. For that matter I had a hard time pronouncing one
of the editors names.

Well you read you learn something. Now I have to find a way to use the
word in some productive way. I might ask one of the rodeo riders whether
he is an autochthonous Texan. That would be fun.
Time is but the stream I go a-fishing in. -- Henry David Thoreau
Aaron Konstam telephone: (210) 656-0355 e-mail: akonstam@sbcglobal.net


Illustration of Writing With Awfully Big Words
"Cadillac's Insane, Unnecessary, Awesome Wagon," The Wall Street Journal, January 29, 2011 ---

Let's say you bought this car, a Cadillac CTS-V Sport Wagon, with a 6.2-liter, 556-horsepower Corvette V8, six-speed manual transmission, magnetorheological dampers (I'll get to that), Michelin SP2 gumballs, 15-inch front Brembo brakes with six-pot calipers, and microsuede wrapping on the steering wheel and shifter. Well, first of all, you'd be one strange cat, which is to say, unusual. Notwithstanding any nitro-burning ice-cream trucks or flying boattail Rollses in your neighborhood, this wagon is about as esoteric an automobile as you're likely to find. Statistically speaking, General Motors will sell exactly none of these cars, the Detroit equivalent of Zoroastrianism.

. . .

Like the Corvette ZR1 and the CTS-V Coupe, the wagon is set up on magnetorheological dampers, which use micro-metallic particles in the dampers to vary viscosity according to the car's dynamic sensors. The result is an easy and composed ride in daily driving, and the ease and composure doesn't diminish as you start to throw the car around. The front tires take a huge bite on turn-in, the car barely rolls and then it burrows into a corner like a tick. This car has no bad habits, particularly as you approach the limits of tire adhesion. Like the V-Coupe's, the V-Wagon's stability-control system has a sport map, and once engaged, it makes it hilariously easy to rotate the car under power. This thing is the drifting king of your kid's preschool porte cochere.

From the tuft of its excellent Recaro seats to the melty rubber bits under the tires, the V-Wagon is illicit, overpowering, sexy and a touch scary. If it were boxing gloves it would be banned by the Nevada State Athletic Commission. I recognize to love it is to be played a bit by GM's marketing guys, but I don't even care. The V-Wagon is never boring. That's all I ask.

Instructure Launches To Root Blackboard Out Of Universities --- http://techcrunch.com/2011/01/31/instructure-blackboard-universities-coates/
Jensen Comment
Interestingly the above site uses a graphic on Napoleon's March Into Russia that I've featured for years at my multivariate visualization document.
Visualization of Multivariate Data (including faces) --- http://www.trinity.edu/rjensen/352wpvisual/000datavisualization.htm 

"Upstart Course-Management Provider Goes Open Source," by Josh Keller, Chronicle of Higher Education, January 31, 2011 ---

Instructure, a course-management software company that recently won a large contract in Utah, announced on Tuesday that it would make most of its software platform available for free under an open-source license.

Instructure is one of a wave of new entrants into an increasingly competitive market for learning-management software in higher education. The company’s year-old Canvas platform allows instructors and students to manage course materials, grades, and discussions online.

In offering its basic software for free, the company could offer new competition for Moodle and Sakai, the two main existing open-source platforms. Like commercial arms of those platforms, Instructure intends to make money from colleges by supporting, hosting, and extending its software.

In December, the company won a bid to provide software to a collection of Utah colleges that serve roughly 110,000 students, provoking a lawsuit from a competitor that lost that bid, Desire2Learn. The suit was quickly withdrawn. Instructure says it has signed contracts with a total of 25 colleges.

Josh Coates, Instructure’s chief executive, promoted the platform’s ease of use and its integration with outside services like Facebook and Google Docs. “I don’t consider what we’ve done at Instructure like rocket science,” Mr. Coates said. “But it feels like it because we’re sort of working in the context of the Stone Age.”

Mr. Coates is a tech-industry veteran who started Mozy, an online file-backup start-up that sold for $76-million in 2007. He said he viewed Blackboard, long the dominant platform, as vulnerable because, he said, its software was hopelessly outdated and its patents had been rejected.

To drive home that point, Instructure released a Web video on Tuesday that spoofs Apple Computer’s famous “1984″ advertisement that introduced the Mac. In the new ad, Big Brother is represented by Blackboard in place of IBM.

Mr. Coates minced no words in describing other competitors, either. Desire2Learn is “Blackboard Jr.,” he said; Moodle is “kind of kludgy”; Sakai is “off in left field a little bit.”

Blackboard and Desire2Learn both declined to comment.

Instructure’s officials said they hope its move into open source will help the software gain visibility and convince potential clients that they will not sell to Blackboard. But the open-source platform risks cannibalizing Instructure’s paying customers, and it will require the company to  sustain an active development community around its software.

Kenneth C. Green, who directs the Campus Computing Project, said Instructure’s decision would further splinter the open-source choices available to colleges. He said Instructure was part of a “third generation” of learning-management companies that are trying to challenge Blackboard for dominance.

Continued in article

Blog Software Could Be a 'Blackboard Killer'
How to alleviate the overpricing and monopoly behavior of Blackboard course management software

"Colleges Consider Using Blogs Instead of Blackboard:  Professors at CUNY debate the pros and cons after enduring technical problems with the course-management system ," by Jeffrey R. Young, Chronicle of Higher Education, June 5, 2009 --- http://chronicle.com/free/v55/i38/38blogcms.htm?utm_source=at&utm_medium=en
Watch the video at http://chronicle.com/media/video/v55/i38/brightcove/?utm_source=at&utm_medium=en

Bob Jensen's threads on education technology --- http://www.trinity.edu/rjensen/000aaa/0000start.htm

Bob Jensen's threads on the history of course management systems --- http://www.trinity.edu/rjensen/290wp/290wp.htm

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

"Professor of Entrepreneurism Arrested for Mortgage Fraud," Inside Higher Ed, January 31, 2011 ---

State police charged John K. Dunn, a professor of entrepreneurial management at the University of Rhode Island, with three felony counts of obtaining money under false pretenses in connection with an alleged mortgage fraud scheme, the Providence Journal reported. Dunn, who is also a lawyer, turned himself in after the warrant was issued for his arrest, the paper reported. He did not enter a plea and was released on $10,000 personal recognizance pending further court action, according to state police. Dunn is accused of obtaining hundreds of thousands of dollars under false pretenses to buy three different properties in Rhode Island.

Jensen Comment
What are Professor Dunn's possible defenses?

  1. He was investigating how difficult versus easy it is to conduct real estate fraud in Rhode Island and intended to return all the money after his research paper was accepted by a leading law journal.
  2. He wanted to illustrate to his students the the finer points of ethics violations.
  3. He was trying to find housing for the homeless during this exceptionally harsh winter.
  4. He's legally insane. Voices in his head are responsible.
  5. Harry Howe writes:  "Data collection for an accountics paper on self-styled regulatory

Bob Jensen's Fraud Updates are at

"Change.org Petition Calls for Kaplan U. to Be Shut Down," Inside Higher Ed, January 28, 2011 ---

More than 8,500 Change.org members have signed an online petition addressed to the chairman of the Washington Post Company, Donald Graham, calling for a freeze on all Kaplan University admissions until the online university changes how it attracts its students. Shannon Croteau, a mother of three and a former Kaplan student, led the petition drive along with a group of other former students. "They told me they were accredited the same as Ivy League schools were," Croteau said. "They lie and cheat. It has ruined me." The petition title says: "Tell Kaplan and The Washington Post to Stop Cashing In On Low-Income Students." The group is asking for Kaplan to "end unethical business practices," which it deems predatory. The petition also cites the GAO report that investigated 16 for-profit universities and is at the center of debate over whether to regulate the for-profit education sector, and calls for the Washington Post to stop denying "wrong-doing." Post officials could not be reached for a response.

Bob Jensen's threads on distance education are at

I'm really not a big fan of video or computer games, but this one from the popular Price is Right television show is both fun and has educational attributes.

Video:  Pay the Rent strategy on The Price is Right --- Click Here

One Way a Professor Can Become a Felon

"Prof Accused of Billing University for Travel as Consultant," Inside Highe Ed, February 4, 2011 ---

Dov Borovsky, a professor of entomology at the University of Florida, was arrested last week on felony charges of grand theft and fraud based on his expense reimbursement claims, The Gainesville Sun reported. According to authorities, Borovsky took three trips to Malaysia as a consultant to a company based there, was reimbursed by the company for the travel, but also submitted expense forms to the university for travel reimbursement. Borovsky, whom the university has placed on leave, could not be reached for comment.

Bob Jensen's fraud updates are at


On Becoming a Big Frog in a Small Pond

Hi David,

One time a colleague, who was an attorney and not a PhD, asked me a similar question. I advised her to write cases that were both scholarly and field tested on students. Then I said if she could get these published in refereed journals this greatly beat having no publications in refereed journals.

She did write some very good ethics cases and got them published in a refereed law journals and made conference presentations of her cases. She became tenured and is still teaching as a tenured associate professor. Unfortunately, after attaining tenure her case writing productivity declined. Alas, she may eventually retire without ever having attained a full professorship.
In addition to publishing accountics research in education, IAE publishes accounting education cases. Some of these cases were often part of my course assignments and were of great value to me.
There is a highly respected NACRA case research journal that is rigorously refereed, and the NACRA crowd is very active in conferences where they evaluate each others' cases. If your colleagues don't give credit for refereed publications in IAE and NACRA the problem is their ignorance rather than your ignorance ---
Sometimes you have to educate your colleagues and supervisors. The important part of being a scholar is to become known as a valuable frog in the pond of your choosing. The key is that experts in your pond look up to you even if it is a small pond and not one of the great lakes. Do good work as a genuine expert and you will be discovered.

Another piece of advice is that there's still great merit in having double-blind refereed publications on a resume. Web publishing and blog publishing may be your greatest contribution to the outside world, but to get respect as a scholar in the academy there has to be either refereed publication or other comparable evidence of scholarship such as invitations by other universities to make presentations of your scholarship. Generally the two go hand-in-hand. The scholars with long resumes are the most likely scholars to be invited to to speak and conduct CEP programs.

And lastly I cannot stress enough the importance of being looked up to as an expert. One of the real weaknesses of accounting departments as opposed to chemistry, math, and history departments is that those other departments generally have experts in very narrow subsets of their disciplines --- those small ponds.

In college accounting departments we have a huge problem with becoming known as experts in narrow areas of accounting. For example, in a Big Four firm some of the most valued partners are those that are looked up to as genuine experts in narrow areas like insurance accounting, synthetic lease accounting, FIN 48, etc. This type of expertise is not appreciated in college classrooms because the curriculum plan just does not drill down to such narrow areas of expertise.

But professors can be greatly respected for publishing in areas of narrow expertise even though they probably cannot find an outlet for this expertise in a classroom on campus. We just do not offer courses on synthetic leasing. But we can publish cases and empirical research on synthetic leasing to a point where we are admired around the world as synthetic lease experts.

As I mentioned before, one way to challenge a journal editor is to submit a paper in such a narrow area of expertise that the editor cannot find a single college professor to referee the paper. This has happened to me in accounting for derivative financial instruments where the editor had to go to Big Four firms to find experts to referee my paper.

It's sad that Big Four firms have better accounting experts than the academy. Our top accounting researchers are experts on mathematical models and data mining but their expertise is not respected by genuine accounting experts in the Big Four because our professors are not genuine accounting experts. I don't think this is as much of a problem in medical schools, law schools, and engineering schools. But in accounting schools our professors just don't swim around in the small ponds.

More than all the refereed publications that I have in accountics I take pride in being known as a FAS 133 expert. It allows me to stand tall in my profession.

Bob Jensen

"The Dark Side of Creativity- Are Original Thinkers More Dishonest?" by Francesca Gino and Dan Ariely, Simoleon Sense, January 24, 2011 ---

Abstract (Gino & Ariely @ Harvard)
Creativity is a common aspiration for individuals, organizations, and societies. Here, however, we test whether creativity increases dishonesty. We propose that a creative personality and creativity primes promote individuals’ motivation to think outside the box and that this increased motivation leads to unethical behavior. In four studies, we show that participants with creative personalities who scored high on a test measuring divergent thinking tended to cheat more (Study 1); that dispositional creativity is a better predictor of unethical behavior than intelligence (Study 2); and that participants who were primed to think creatively were more likely to behave dishonestly because of their creativity motivation (Study 3) and greater ability to justify their dishonest behavior (Study 4). Finally, a field study constructively replicates these effects and demonstrates that individuals who work in more creative positions are also more morally flexible (Study 5). The results provide evidence for an association between creativity and dishonesty, thus highlighting a dark side of creativity.

Excerpted Conclusion (Gino @ Ariely @ Harvard)
In the current studies, we found a robust relationship between creativity and dishonesty. This research provides a critical first step toward understanding how creative thinking is associated with unethical behavior, two often-discussed ingredients of our complex world. Across five studies, we demonstrated that both a creative personality and creativity primes promote individuals’ motivation to think creatively, such that higher scores on dispositional creativity or exposure to creativity primes lead to an increased motivation to think outside the box. In turn, this increased motivation promotes dishonesty. Our results suggest that there is a link between creativity and rationalization. As Mazar et al. (2008) proposed, the ability of most people to behave dishonestly might be bounded by their ability to cheat and at the same time feel that they are behaving as moral individuals. To the extent that creativity allows people to more easily behave dishonestly and rationalize this behavior, creativity might be a more general driver of this type of dishonesty and play a useful role in understanding unethical behavior.

Jensen Conclusion
At last there is a clue as to why accountics researchers lack creativity. The little bit of accounting in their education probably made them too honest ---

Adults With College Degrees in the United States, by County (27.5% National Average) ---

Jensen Comment
Graphs like this are a little misleading. For example, the graph changes dramatically in the northern part of New Hampshire in what is called The Great North Woods where there are about a million trees per person. The counties having the lowest college degree percentages also tend to have the fewest people in general. This means that that employment opportunities for college graduates are probably zilch in those counties. Of course dense forests have the smallest percentage of college graduates.

A great example of how misleading this graph can become is best illustrated for Maine. The relatively large white-colored parts of Maine are the timberlands owned by timber and paper companies that do not even allow schools and are only taxed for fire protection. That means that there are not even job opportunities for a few school teachers. I suspect this situation also arises in Nevada where there are vast tracks of open land with almost no towns.

Infographic:  The Fraud of Bernie Madoff --- http://www.usfst.com/The-Fraud-of-Bernard-Madoff.html
Thank you Nadine Sabai for the heads up.

Hi Ron,

You can read more about Friehling at

He was never licensed as an auditor and lost his CPA certificate after pleading guilty ---

His sentencing keeps getting postponed and is now scheduled for March 18, 2011 ---

Madofff of course got 150 years and seems to be totally unrepentant. Some criminals just seem to be born without consciences and are incapable of remorse. Of course he's in a comfortable Club Fed where he purportedly somewhat enjoys prison life and sees his loyal wife quite often. I wish he had been sent to a NY state prison like Attica ---
Life would not be so cushy in Club Attica.

You can read quite a lot about Bernie at

Madoff was a prominent philanthropist, but this was largely a ruse to get other rich people to invest in his Ponzi hedge fund. As far as I can tell there's not one thing good about Bernie Madoff that offsets his scheming evil. Well yes, there is one good thing. The evidence against him was so overwhelming that at least he did not prolong his punishment for years in court with the highest priced lawyers in the State of New York. Some of those lawyers could've tied up the case of Attilla the Hun for ten years or more.

My threads on Bernie are at http://www.trinity.edu/rjensen/FraudRotten.htm#Ponzi
Bob Jensen


Bob Jensen's threads on the Madoff Ponzi scheme ---

Fraud Updates

Which Mac Apps Are the Best Selling?
"Developers Share Mac App Store Sales Figures," by Sarah Perez, ReadWriteWeb, January 21, 2011 ---

Ten Employment Trends to Watch in 2011 ---

Jensen Comment
As fuel prices and other travel expenses keep increasing, I think one of the most important trends will be the decline in physical travel when on the job. Technology in communications and telecommuting will probably take over. Note in the above link that job interviews will increasingly be conducted without physical presence.

Distance training and education will soar. And computer translating may become so good that we can even understand online sessions in France, China, Poland, and Finland. Well maybe not Finland since the language is so difficult.

As an aside, the increasingly boring argument that students can cheat more on distance education examinations will no longer be relevant.
Proctors will not even have to sit in the classroom when students are taking examinations onsite. Instead Webcams will be placed overhead that watch each student's every move during an examination. There may even be a camera for each student. Sensitive microphones will even be embedded so that student whispering will be captured.

This begs the question about what things in hotel conferences will be lost when those conferences become more and more virtual. Of course the paid-vacation family vacation aspect of a conference will be lost for those professors who like to pack up spouses and children for vacations, including those on the opposite side of the world, reimbursed heavily by their employers. And those spontaneous sexual affairs will have to be virtual bummers.

Probably the biggest serious loss in hotel conferencing will be the informal networking and, yes, even the tremendous importance of evesdropping. I cannot tell you how much I've learned over the years simply by overhearing something at a conference. I've told this story before on the AECM, but one time I overheard an outgoing TAR editor tell an incoming TAR editor not to send Bob Jensen any manuscripts for refereeing because "Jensen never accepts anything."

This was when I was young and still full of myself. That one overheard bit of information changed my life as a journal referee and even as a professional person. I think that I became a much more empathetic person on such things as promotion and tenure committees. My colleagues the last three universities where I served on the faculty will tell you that I was probably a bit of a softie when it came to personnel evaluations. I don't think I should be described as a softie on paper refereeing but I became much more likely to write very critical comments and then close with "revise and resubmit" rather than "no hope on this one."

I may not have become this type of person if I'd not overheard one TAR editor talking to another TAR editor. Since I'm so good I might've remained full of myself for my entire career.

"Advice for Those New to College Teaching," by David Albrecht, An Accounting Professor Ponders the Classroom, January 24, 2011 ---

I’ve been in the classroom for a long time.  A long, long long, long, long [pause] long time.  A recent e-mail asks if I have advice for someone new to college teaching.  Here it is.

It is easy to over prepare for class because there’s so much content that should be covered.  When first starting out, I prepared pages of detailed notes for each meeting of the class.  Each night I would copy from my notes to the board, and I got through them all in every class.  No one ever thought I was a good teacher.  Lessons learned:

  1. Classes go better when you informally converse with the students and simply explain what you know.
  2. Take no notes to class.  If you are talking along and need detail, have the students volunteer it.
  3. PowerPoint is the modern equivalent of copying pages of notes to the board.  The only thing ever accomplished with PowerPoint is death (as in death of an audience via PowerPoint).

Continued in article

Jensen Comment
I've known David for years and greatly respect his reputation as an enthusiastic and committed accounting teacher known for his sense of humor as well. I don't always agree with David, but I do intend to add the above link to my resources for new faculty noted below.

I would, however, have written a different set of points for my :"lessons learned:"

 Lessons learned:

  1. Classes go better when you informally converse with the students and explain where to find things that you either don't know, haven't yet sorted out in your own mind, and expect students to examine first hand to be able to debate all sides of controversial issues. Focus on context, especially history, surrounding major issues so that students understand how what they're learning fits into a bigger picture.
  2. Bring up an outline on the computer screen, tell students what is to be learned or reinforced in today's class, and  try to inspire students regarding why they should learn the content of class today. For example stress what part of it might reappear in the CPA examination or stress why it may give students a leg up when they're on a new accounting job (e.g., knowing technical things about queries in MS Access or pivot tables in Excel or hedge effectiveness testing in FAS 133). Provide your students, perhaps on Blackboard or Moodle servers, with course notes and videos that they should study before class. Give frequent quizzes to show them you mean business about studying before class. Find how you best get students active in class --- some teachers are great with cases while others are better with questions and answers. I think I would've been a better teacher if I could've resisting giving out answers in class. I just never mastered the best (never-give-out-answers) approach taken by Harvard's top business school teachers.
  3. PowerPoint is the modern equivalent of copying pages of notes to the board. Students should've studied these and other class materials before class and can study again after class. PowerPoint is a communication medium that can be wisely used and badly abused. PowerPoint is terrific for audiences who have not studied in advance such as an audience at a research conference or a CEP workshop. PowerPoint is also great for presenting charts and tables that are relatively easy to read and can be highlighted. Avoid complicated slides and avoid making your college classes a rapid-fire PowerPoint show.
  4. I think classes should vary. Sometimes there might be case discussions. Sometimes there might be PowerPoint lectures. Sometimes classes may be very informal and open ended. I taught in an electronic classroom. I often made students solve problems (often from prior-semester examinations) on their classroom computers or learn how to do things such as analyze financial statements in teams. Sometimes there may be some edutainment games.
  5. Never apologize for selecting some topics where you demand that students become something akin to technical experts. For example, don't just paint a broad picture of relational databases in the first AIS course. Make students learn the software such as MS Access required to create a relational database and make them write their own query scripts to access items in that database. If you're teaching hedge accounting, make students actually write the journal entries for rather complicated cash flow, fair value, and FX hedges. Don't apologize for teaching bookkeeping. It's what we do at all levels of accounting.
  6. Keep in mind that college would be very boring if all its teachers were alike. Some of the best ones aren't even viewed as genuine experts in their disciplines and teach rather superficial content while they truly inspire students for life and help some students with various learning troubles. Other teachers are genuine experts with little interest in or skills for hand holding. Students, sometimes in retrospect years after graduation, generally respect the the various types of teachers that they had in college. There should be many types of diversity in post-secondary education.

My best advice is for new faculty experiment what pedagogy best suits them and their new students. I admire master case professors at Harvard and Stanford, but I never could've pulled it like they pull it off. I admire how some professors like Petrea Sandlin and Don Van Eynde at Trinity University become truly loved by their students, but more often than not I was feared and cursed by most of my students because I generally made them learn that the Devil is in the details.

I was a research professor who just did not have the time to get to know my students to the degree that Petrea and Don got to know their students. I would've liked to be loved more, but I marched to a different drummer. In the end your students will appreciate it if you truly are a technical expert even if you did not make it easy for them.

I think what I accomplished best in 40 years of teaching is to inspire my students to want to become technically deep and suspicious of everything they study.

Differences between "popular teacher"
 versus "master teacher"
 versus "mastery learning"
 versus "master educator"

Bob Jensen's other advice to new faculty --- http://www.trinity.edu/rjensen/000aaa/newfaculty.htm

Setting Prefs for the Mozilla Rich Text Editing Demo --- http://www.mozilla.org/editor/midasdemo/securityprefs.html

I like to see patent buyers who add no value to society other than value to themselves lose in court
"Patent Lawsuit Against U. of Phoenix Is Dismissed," by By Ben Wieder, Chronicle of Higher Education, January 27, 2011 ---

A patent infringement case brought against the University of Phoenix and its parent company, Apollo Group, was dismissed this month by the U.S. District Court in Norfolk, Va.

Digital-Vending Services International asserted in a March 2008 suit that the underlying design of courseware management software at Phoenix and two other for-profit online colleges, Walden University and Capella Education Company, violated three patents held by members of the nonprofit Community and Learning Information Network, represented by Digital-Vending Services.

Walden and its parent company, Laureate Education Inc., and Capella earlier settled separately with Digital-Vending Services, which is based in Washington and whose member network includes patent holders with ties to the education, defense, aerospace, and software industries.

The court said in dismissing the suit against Phoenix that Digital-Vending Services “failed to point to admissible evidence that could support a finding of infringement.”

Bob Jensen's threads on the dreaded DMCA are at

How you can make money from Amazon by not selling a thing other than what you know

"Making Academic Social Networking Pay with Amazon Associates," by Brian Croxall, Chronicle of Higher Education, January 20, 2011 ---

Jensen Comment
I've not tried this and probably will not take advantage of the opportunity even though I refer lots of people to lots of things, a small portion of which might be sold on Amazon. I'm too committed to open sharing for free.

"TED Starts an E-Books Line (of short books)," by Julie Bosman, The New York Times, January 26, 2011 ---

Bob Jensen's threads on eBooks are at

State Support for Higher Education Interactive Graph, Chronicle of Higher Education, January 24, 2011 ---
There are a few surprises here.

"Englisizing The Paper," by The Unknown Professor, Financial Rounds Blog, January 20, 2011 ---

I'm in editing mode. Lately, I've been working with a couple of coauthors who are very, very good theorists. Their game theory/math chops are so much better than mine that I try not to discuss it. In addition, one of them is very connected with the top people in the accounting area (he was the other's chair, which is how we met).

They just dropped about a 40 page current version of a paper we've been working on for quite a while. The logic of the paper flows soundly, and the empirics are solid.

Unfortunately, neither of my coauthors has English as a mother tongue. So, I'm in charge of "Englishizing" the paper.

Oh my!

Jensen Comment
Scenario 1
This raises the issue of defining the difference between an "editor" versus a "co-author." Suppose Physician A and Physician B are both Chinese medical researchers who've written a draft of a very seminal and controversial piece of research in Chinese and then ask English Professor C to "Englisize" the paper as a co-author. Should Professor C really share the Nobel Prize in Medicine?

Scenario 2
Suppose Physician A and Physician B are both Chinese medical researchers who've written a draft of a very seminal and controversial piece of research in Chinese and then ask  Physician C to "Englisize" the paper as a full co-author. Should Professor C really share the Nobel Prize in Medicine?

Scenario 3
Physicians A, B, and C all graduated in the same graduating class at the Stanford University Medical School. Each of them went their separate ways and are now assistant professors in medical schools in Arizona, New Hampshire, and Washington State. All are under pressure to do research. Physician A contacts B and C and proposes that they each complete the first drafts of the research that they've been working on independently. B and C are then to edit and improve the writing of Physician A's draft as full co-authors. A and C are then to edit and improve the writing of Physician B's draft as full co-authors. And so it goes for the three drafts on the theory that the writing of each draft has been improved and that, if only one is accepted by a very prestigious medical journal, all three will get tenure credits for having a hit in a very prestigious medical research journal. If all three papers are accepted they are really in great shape to be awarded tenure.

Scenario 4
Physician A already has a Nobel Prize in Medicine. Physician B is a newly-minted graduate who extends a published paper written Physician A. But as a new and unknown researcher Physician B fears that her work will have difficulty impressing Editor C of a prestigious medical research journal. Physician B contacts Physician A to join her as a full co-author. Editor C is always very impressed with anything that has be authored or co-authored by Physician A.

Gaming for Tenure as an Accounting Professor ---
(with a reply about tenure publication point systems from Linda Kidwell)

"Academic Cheating in the Age of Google:  In high school and college, cheating is an epidemic. To contain it, the author proposes a few simple rules, including an end to the take-home test," by Michael Hartnett. Business Week, January 13, 2011 ---

The students are in their seats, and the test has begun.

And so has the cheating.

BlackBerrys and iPhones need just a couple of taps of the keypad to offer the right answers. It doesn't matter whether the subject is math, social studies, science, English, or a foreign language. Information is available at your fingertips, just as advertised.

Indeed, we have to face a simple fact about students today: As technology has evolved to provide a vast wealth of information at any time, anywhere, cheating has never been easier.

In the good old days, cheating was a simple affair and as a result not too difficult to track down, like the time a girl with limited English skills in one of my high school English classes handed in a terrifically written, sophisticated short story. She copied, word for word, Shirley Jackson's story "Charles," except for changing the title character's name. I guess she thought I wouldn't have a chance hunting down the story once she cleverly renamed her story "Bob." Alas, catching a cheater is not so easy any more.

Smartphone Photos

A few years ago, students would write the answers on the inside labels of water bottles they brought into tests. Today we have students photographing the tests from their phones in an earlier period of the day, so that students in subsequent periods could know the questions before they walk into the classroom.

Now catching the cheaters requires a level of vigilance and research better suited for the corridors of the National Security Agency than the cluttered desk of a humble teacher.

Today, students wouldn't have to rely merely on CliffNotes to provide them with handy, if highly unoriginal, commentaries on Hamlet. They have other choices, including study guides from SparkNotes, PinkMonkey, ClassicNotes, and BookRags, as well as a seemingly endless supply of articles online from both paid and unpaid sources. Just Google "Hamlet Essay," and you'll receive a listing of 1,460,000 results, the first page of which is teeming with free essays.

Sure, you can track down some of the cheaters by typing in an excerpt of their essays on the very same Google search engine to discover the source. And such websites as Turnitin.com, which checks student papers against a massive archive of published and unpublished work for signs of plagiarism, can also be useful. But the available materials are so vast, and the opportunities for students to create hybrid papers so easy, that students are now one step ahead, especially since underground networks of materials are constantly cropping up, concealed from the peering eyes of teachers.

Fonts of Duplicity

Of course, even in this technological age, some students are so lazy they won't even bother to match the font and the type size for one section of an assignment to another, as they indiscriminately cut and paste material from assorted websites. A Spanish teacher I know once told me of a student who handed in an essay she clearly plagiarized from a website. Unfortunately, the girl could not explain why her essay was written in the Catalan language as opposed to Spanish.

Yet, we can't count on incompetence. Many students are so wily and crafty that they've learned to mask their cheating to impressive levels. Some can find answers on handheld devices while looking you straight in the eye or appearing to be in deep, philosophical contemplation; others plagiarize from a dizzying array of sources and cover their trail with vigilance worthy of a CIA operative.

Continued in article

54% of Accounting Students Admit to Cheating
SmartPros, August 31, 2007 --- http://accounting.smartpros.com/x58970.xml

MBAs most likely (among graduate students) to cheat and make their own rules --- http://www.trinity.edu/rjensen/plagiarism.htm#MBAs

January 20, 2011 reply from Jagdish Gangolly


What concerns me more is cheating at the doctoral level. This is important because a proposal and dissertation can not but be take-home.

Cheating on dissertations, in my view, takes two forms: quoting from others' work without attribution, and paraphrasing others' work without attribution. The former is a case of sloppy work or neglkigence, and the latter is a case of a student trying to pass off others' work as his own.

In our program, a few years ago we had a student who directly lifted sentences from published papers in his proposal. In that case it was a foreign student, and the differences in writing style provided clues of cheating. Needless to say he was kicked out of the program with help from our legal counsel.

These students impose unfair penalty on the faculty who have to comb through the vast literature to ensure that there is no cheating.

Jagdish --
Jagdish Gangolly
Department of Informatics College of Computing & Information
State University of New York at Albany
7A, Harriman Campus Road, Suite 220
Albany, NY 12206
Phone: (518) 956-8251, Fax: (518) 956-8247

January 20, 2011 reply from Bob Jensen

Hi Jagdish,

This is why it is so important for faculty to communicate rules of the game in courses and in programs in general. Make students read the College's Student Handbook. Verify that students have read the sections on cheating in a course syllabus. And have a cheating orientation for graduate students early on in the program. .

Time and time again universities face a problem that cheating is viewed differently in many foreign cultures. Also foreign students often have more closely knit support groups where it is sometimes tempting to help each other in unethical ways. .

We had a close personal friend from Germany in the physics doctoral program at a prestigious U.S. university. His fellow doctoral students were all Asian which in and of itself says something about U.S. students where not one student was a U.S. citizen. .

What our German friend complained about is both the clickishness of the Asian students in helping each other out and in what seemed to be a cultural acceptance of cheating among those students in the program. Of course this might've been the other way around if there had been one Asian amidst 12 German or U.S. physics students.

Bob Jensen

Jensen Comment
I became discouraged with take home exams when one of my students paid to outsource taking of the examination to an agent. If the agent had not plagiarized it would've been impossible to catch his boss (the enrolled student). Most of my take home examinations, however, were only a small portion of the grade and the heavily-weighted final examination was not a take-home examination. I think all courses, including online courses, should have a monitored final examination. There are ways of dealing with this in distance education courses ---

Bob Jensen's thread on cheating ---

Special considerations for detection and prevention of online cheating ---

Ideas for Teaching Online --- http://www.trinity.edu/rjensen/000aaa/thetools.htm#Ideas
Also see the helpers for teaching in general at http://www.trinity.edu/rjensen/000aaa/thetools.htm

"Why Finland's schools are the best in the West," by Robert Smol, CBC News (Canada), January 22, 2011 ---

In what's often called the real world, successful businesses are those that encourage their best employees, respond effectively to their clients needs and invest continually in their programs and infrastructure.

But does the same hold true when we talk about public education and substitute students for clients and teachers for employees?

As far as I'm concerned, yes. But don't take my word for it. Just look at Finland.

Over the past decade its public education system has consistently been ranked as one of the best in the world, particularly so among Western democracies, in terms of student success.

Its main qualities? A public education noted for its highly educated teachers, innovative student-centered learning and decentralized management.

In the international student achievement surveys, carried out for the Organization for Economic Cooperation and Development, Finland has almost consistently remained in the top four rankings in all three assessment categories: reading, math and science.

The only exception was the most recent 2009 survey where Finland fell to sixth place in math. But that has more to do with other, in this case Asian, countries upping their scores than the Finns falling behind.

Yes, Canada has fared pretty well, too, in some of these rankings, particularly when you focus on the results from Ontario, B.C. and Alberta.

But another no less important testament to Finland's success is how little the test scores differed among its disparate schools. The results by school were the most consistent among the systems that were studied.

Clearly, Finland's public school system is doing something right and any country interested in improving its own might want to take a serious look.

 Higher standards

One obvious reason for Finland's success is the high educational standards for its teachers.

In Finland, a master's degree is required to be a teacher at any level, including the primary grades.

Global rankings

The Paris-based OECD surveyed the reading, science and math performance of half a million students from more than 70 countries, employing a two-hour pencil-and-paper test. A difference of 40 points is roughly equivalent to a year of schooling.

Here are the top 10 rankings and scores for reading:

Shanghai province (China), 556 Korea, 539 Finland, 536 Hong Kong, 533 Singapore, 526 Canada, 524 New Zealand, 521 Japan, 520 Australia, 515 Netherlands, 508

Here in Ontario, I receive a monetary stipend for my master's degree; in Finland I would have to have that same post-graduate certificate just to be considered for the job.

There, though, the higher requirement is more attainable in that all post-secondary education is tuition free.

Another distinctive hallmark of the Finnish system is the high level of autonomy given to municipal boards and school administrators.

In Finland, schools and courses are primarily organized around the needs and wants of the specific community that they serve.

"The state grant is not divided into specific amounts for salaries, labs, instruments, books or whatever — it is a lump sum and the school authorities can use it as they like," says Reijo Aholainen, a spokesperson for the Finnish ministry of education.

"You have to follow the national core curriculum but how you do it, whether you want more teachers or more computers, is a local decision on the part of the school board." Less time in the classroom

Although they consistently hover near the top of the international rankings, Finnish students overall spend the lowest amount of time actually in the classroom when compared to other OECD countries.

This is especially true for students age 9-11, where the Finns spend 640 hours in class over a school year as opposed to 810 hours on average for the OECD countries.

In Finland there is no formal kindergarten as we know it although pre-primary programs are almost universally attended.

Students in Finland begin their compulsory education in Grade 1 where the usual intake age is seven. This would appear to challenge the belief held by many of my generation that the sooner you start formally teaching kids, the smarter they will become.

What's more, Finland's primary, middle and upper secondary school classes are typically organized in 45-minute blocks, with each one followed by a 15-minute recess.

If these teaching blocks need to be merged, say for high school science labs, then the free time is added to that as well.

Let's put this in a Canadian context. Here in my high school near Toronto, students typically take four 75-minute classes with only five minutes between classes and a 40-minute lunch Certainly not much time to recharge. Consumer choice

Another surprise about the Finnish system, particularly given its high test scores, is that school is only compulsory up to the end of Grade 9.

Not surprisingly, the overwhelming majority of Finnish teens (over 95 per cent) apply to go on to upper-secondary school. But the key word here is apply, which means that the student is making a personal choice to continue learning. In my view, it is foolhardy to force those teens who clearly have no interest in learning to remain in school until they are 18, as we do here in Ontario. Believe me, I know!

But the truly impressive part of the Finnish system is the clear choice of educational streams that students have should they choose to continue on.

Of the more than 95 per cent who stay in school, roughly 38 per cent move on to the separate vocational high schools, which offer a more hands-on, workplace-focused system of instruction, designed to set them up for further post-secondary education in the field of their choice.

Over here, technology or shop courses are often seen, even at the institutional level, as "dumping grounds."

In Finland, on the other hand, non-academically inclined students are, at least from an institutional perspective, given a clear, parallel and respectable educational choice.

Can we (in Canada) duplicate this?

Can we learn some things from Finland? Absolutely! But can we import it and expand it in Canada? I doubt that very much.

For the most part, we are still in survival mode here in Canada when it comes to public education. To think of finding money to expand the system and pay for more highly qualified teachers is the stuff of dreams.

Continued in article

Jensen Comment
Actually New York City schools are better since over 90% students are assigned A mostly A grades by union teachers. How much better can you get when the kids can earn these grades without even attending class?

If a student doesn’t come to school,” he continued, “how can you justify passing that kid?
 Fernanda Santos

"Bronx School’s Top Ranking Stirs Wider Doubts About Rating System," by Fernanda Santos, The New York Times, January 20, 2011 ---

One of the trademarks of New York City’s school accountability system is an equation that assigns every school a letter grade, A through F, based on a numerical score from 1 to 100.

Bronx School’s Top Ranking Stirs Wider Doubts About Rating System By FERNANDA SANTOS Published: January 20, 2011

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One of the trademarks of New York City’s school accountability system is an equation that assigns every school a letter grade, A through F, based on a numerical score from 1 to 100. Enlarge This Image Marcus Yam for The New York Times

Lynn Passarella, facing camera, the principal of the Theater Arts Production Company School, outside the school on Thursday. She declined to comment on the allegations about her school’s grading practices.

A parent pulling up the latest report card for the Theater Arts Production Company School in the Bronx would find that it earned the score of 106.3 (including extra credit).

But that very empiric-sounding number, which was the highest of any high school in the city, is based in part on subjective measures like “academic expectations” and “engagement,” as measured by voluntary parent, teacher and student surveys.

And, according to some teachers at the school, even the more tangible factors in the score — graduation rates and credits earned by students — were not to be taken at face value. The school has a policy that no student who showed up for class should fail, and even some who missed many days of school were still allowed to pass and graduate.

The Department of Education, which revealed on Wednesday that it was investigating grading practices at the school, says that it has a team devoted to analyzing school statistics every year and looking for red flags like abnormal increases in student scores or dropout rates. But a department official said that nothing in its data had raised suspicions about the school, known as Tapco, until a whistle-blower filed a complaint in October.

Still, in a data-driven system where letter grades can determine a school’s fate, one big question looms over the investigation: If the allegations turn out to be true, are they an exception or a sign of a major fault in the school accountability system?

“The D.O.E. has absolutely created a climate for these types of scandals to happen,” Michael Mulgrew, the president of the teachers’ union, said in an interview. “Their culture of ‘measure everything and question nothing a principal tells you’ makes it hard to figure out what’s real and what’s not real inside a school.”

There are many gradations of impropriety, and it is unclear if any of them apply to Tapco, which has about 500 students and also includes a middle school. The school’s teacher handbook states that no student should fail a class if he or she regularly attends, and that students who miss work should be given “multiple opportunities for student success and work revision.”

Current and former teachers at the school said that even students who were regularly absent were given passing grades, in some cases with course credits granted by the principal without a teacher’s knowledge. Some students’ records showed credits for courses the school did not offer.

The investigation over the irregularities at Tapco, which began in October, also include allegations that the school’s principal, Lynn Passarella, manipulated teacher and parent surveys, which represent 10 of the 100 points in a school’s score. Graduation rates, passing rates on Regents exams and earned credits constitute most of the score.

Ms. Passarella declined to comment on the allegations.

A spokesman for the Education Department, Matthew Mittenthal, said: “We take every allegation of misconduct seriously, and hope that the public can reserve judgment until the investigation is complete.”

Sometimes, the analysts who pore over the data uncover serious problems. Last year, the Education Department lowered the overall scores of three high schools. At Jamaica High School in Queens, the department discovered that the school had improperly granted credit to some transfer students. At John F. Kennedy High School in the Bronx and W. H. Maxwell Career and Technical Education High School in Brooklyn, administrators could not provide documentation to explain why some students had left the schools.

Since 2008, at least four principals and assistant principals have been reprimanded — two retired, one served a 30-day unpaid suspension and another paid a $6,500 fine — on charges that included tampering with tests.

Principals can get as much as $25,000 in bonuses if their schools meet or exceed performance targets, and some experts are skeptical that the department’s system of checks and balances is as trustworthy as it should be, particularly when money is at stake.

Tapco’s administrators got a bonus once, for the 2008-9 school year, when the high school’s overall score was 85.8, which earned it an A. (The middle school scored 73.) Ms. Passarella received $7,000, while her assistant principals got $3,500 each, according to the Education Department. (Administrator bonuses for 2009-10 performance have not been doled out.)

“There’s an inherent temptation towards corruption when you create a situation where there are rewards for things like higher test scores or favorable surveys,” said Sol Stern, an education researcher at the Manhattan Institute, a conservative research group. “It’s an invitation to cheating.”

One mother, Cathy Joyner, whose daughter, Sapphire Connor, is a junior, said the school was excellent, adding that “the children are respectful” and that the school was “concentrating on their talents.”

But one teacher, who spoke on condition of anonymity because he said he feared for his job, gave a different account. For teachers who do not do what the principal wants, the teacher said, “it’s difficult to get tenure.”

“If a student doesn’t come to school,” he continued, “how can you justify passing that kid?"

Wow:  97% of Elementary NYC Public Students Get A or B Grades --- There must be higher IQ in the water!
"City Schools May Get Fewer A’s," by Jennifer Medina, The New York Times, January 28, 2010 ---

Michael Mulgrew, the president of the United Federation of Teachers, criticized the decision to reduce the number of schools that receive top grades.

Continued in article

Bob Jensen's threads on assessment are at

Why does WikiLeaks now have a team of "moles" learning how to dig mining tunnels?

Iron Mountain Video:  TOP Secret and Historical Record Government Facility ---

Finance Professor David Ikenberry is the new business school Dean  at University of Colorado at a salary of $425,000 no less ---

Ikenberry, the 50-year-old son of former University of Illinois President Stanley Ikenberry, has been an associate dean in the UI College of Business since 2007. He is also on the boards of First Busey Corp. and Carle Foundation Hospital.

Ikenberry will receive a salary of $425,000 at Colorado – a $350,000 base salary, plus a $75,000 "enhancement" for serving as dean of the graduate school of business, said University of Colorado spokesman Bronson Hilliard.

That's considerably more than his salary at Illinois, which according to the university's "Grey Book" was $225,000 this academic year.

Continued in article

Ikenberry replaces Dennis A. Ahlburg who left Colorado to become President of Trinity University ---

So Says Dilbert
"How to Tax the Rich:  Try giving them perks and privileges (an extra vote?) in return, says 'Dilbert' creator Scott Adams," The Wall Street Journal, January 29, 2011 ---

The president was too polite to mention it during his State of the Union speech on Tuesday, but here's a quick summary of the problem: The U.S. is broke. The hole is too big to plug with cost cutting or economic growth alone. Rich people have money. No one else does. Rich people have enough clout to block higher taxes on themselves, and they will.

Likely outcome: Your next home will be the box that your laser printer came in. I hope that you kept it.

Whenever I feel as if I'm on a path toward certain doom, which happens every time I pay attention to the news, I like to imagine that some lonely genius will come up with a clever solution to save the world. Imagination is a wonderful thing. I don't have much control over the big realities, such as the economy, but I'm an expert at programming my own delusions. I make no apology for that. A well-crafted delusion can be a delicious guilty pleasure. And best of all, it's totally free. As a public service, today I will teach you how to wrap yourself in a warm blanket of imagined solutions for the government's fiscal dilemma.

To begin, assume that as the fiscal meltdown becomes more perilous, everyone will become more flexible and perhaps a bit more open-minded. That seems reasonable enough. A good crisis has a way of changing people. Now imagine that the world needs just one great idea to put things back on the right track. Great ideas have often changed history. It's not hard to imagine it can happen again.

Try to imagine that the idea that saves the country is an entirely new one. It's too much of a stretch to imagine that a stale idea would suddenly become acceptable. In fact, that's the dividing line between imagination and insanity. Only crazy people imagine that bad ideas can suddenly become good if you keep trying them. So let's assume that our imagined solution is a brand new idea. That feels less crazy and more optimistic. Another advantage is that no one has an entrenched view about an idea that has never been heard.

For those of you with healthy egos—and that would be every reader of The Wall Street Journal—you can make this fantasy extra delicious by imagining that you are the person who comes up with the idea that saves the world. I'll show you how to imagine that. I think you'll be surprised at how easy it is.

I spent some time working in the television industry, and I learned a technique that writers use. It's called "the bad version." When you feel that a plot solution exists, but you can't yet imagine it, you describe instead a bad version that has no purpose other than stimulating the other writers to imagine a better version.

Continued in article

A Lesson in the History of Statistics That Has a Lot to Do With Aggregations and Rankings in Accounting Such as P/E Ratio Rankings

"The Flaw of Overall Rankings," by Robert J. Sternberg, Inside Higher Ed, January 24, 2011 ---

Many college administrators are uncomfortable with rankings of colleges and universities, such as those found in U.S. News & World Report. Perhaps they don’t like the idea of measuring the quality of an institution of higher learning, or they don’t like the way the measurements are done. But from a psychological point of view — psychology is my field — there is a more fundamental problem. Overall rankings obscure what is most interesting about an institution. Consider an analogy to the assessment of human intellectual qualities.

In 1904, Charles Spearman, a British psychologist, proposed that quality of mind, at least as characterized by human intelligence, could be summarized as a single attribute, which he referred to as "general ability," or g. His assertion was based on his observation that various tests of quality of mind — for example, verbal, mathematical, spatial — correlated positively with each other, suggesting to him that they were different measures of the same thing, except for the relatively uninteresting aspects of thinking that were wholly particular to each kind of test.

Spearman’s view was eventually challenged. By 1938, an American psychologist, Louis Thurstone, suggested that Spearman’s view was an oversimplification — that the more variegated qualities actually were important in their own right. Thurstone labeled qualities such as verbal ability, mathematical ability, and spatial ability as "primary mental abilities." For example, you might care more about verbal ability for an English major or future journalist or novelist, more about mathematical ability for a finance major or future accountant or actuary, and more about spatial ability for an engineering major or future civil engineer or air-traffic controller. It might be nice to have an air-traffic controller with a good command of the English language, but in the end, what passengers and airport officials likely most care about is whether the controller can visualize the trajectories of airplanes in a way that prevents their infringing on each other’s airspace, so long as the controller can communicate this information to pilots.

Spearman and Thurstone got into a bitter argument over which of their theories was correct. But as often happens in science, the two theorists represented a Hegelian thesis and antithesis in a dialectical argument. What was needed was a synthesis.

The argument was largely resolved in 1993 when American psychologist John B. Carroll built on previous work and showed that general and more specific qualities of mind could be understood hierarchically, with general ability at the top, so-called "primary mental abilities" beneath them, and still more specific abilities beneath those. Carroll’s hierarchical theory is widely accepted today, although certainly not by everyone. There is still some dispute about just how general "general" ability is. For example, psychological theorists such as Howard Gardner and I have suggested that "general ability" may not, in fact, be as general as some have claimed. For example, so-called "general ability" might be more useful in predicting performance of a pupil in primary school than in predicting performance of a pianist, plumber, politician, or poet. In college admissions, "general ability" would correspond loosely to a composite ACT or summed SAT score.

If we now return to institutional assessments, we see that roughly the same logic can be applied to assessments of the quality of colleges and universities. At some general level, colleges and universities near the top of the U.S. News ratings, such as Harvard and Yale Universities, probably excel in some meaningful way over those institutions near the bottom of such rankings, just as people with higher composite ACTs have certain academic skills that are more developed than those in people with lower composite ACTs. But such global assessments miss the qualities that make institutional differences, like individual differences, interesting. They actually can fool people into missing what is most important in distinguishing entities, whether individuals or institutions. For example, the University of California at Los Angeles and the University of Virginia, tied for the second rank among public universities in recent U.S. News ratings, would provide very different experiences to undergraduates (as anyone who has visited UCLA and UVA likely would notice). They differ in the roles of undergraduate versus graduate students, social traditions, and, of course, campus ambiance, among other things.

There is no definitive list of the analogues to the primary mental abilities for institutions of higher learning. But administrators pretty much know what some of the major ones are: quality of research, quality of teaching, quality of extracurricular programs, quality of leadership development, amount of attention individual students receive, effectiveness with which the institution is led, and so on. These differential primary qualities matter greatly in institutions, just as they do in individuals. At the individual level, employers conduct interviews in large part because they realize that job applicants can score high on tests of cognitive ability and yet have poor or, in some cases, sorely deficient social and emotional skills. Similarly, the financial crisis of 2008 was in part the result of the work of people with impressive quantitative skills who nevertheless lacked common sense and an ethical compass. Those selecting an institution of higher learning at which to study or work need to do the same kinds of "job interviews."

When students (or faculty or staff, for that matter) select an institution of higher learning, overall rankings may obscure the information individuals most need to make an informed choice. Some of the best research institutions in the country show relatively little concern with teaching and some of the best teaching institutions put only modest emphasis on research. Of course, there are institutions that care about both and even those that care about neither (so long as they meet their projected bottom line). If one were to select an institution solely on overall quality, one would miss these important differences and many others, such as size, view of undergraduate versus graduate versus professional students, kind of campus life, role of religion on campus, salience of athletics on campus, availability of particular degree programs, pride in traditions, and so forth. In the case of my own institution, Oklahoma State University, the rankings would not take into account its fidelity to its land-grant mission of serving the state of Oklahoma, the nation, and the world.

Continued in article

Jensen Comment
This has a great deal to do with the vegetable problem of aggregation at http://www.trinity.edu/rjensen/FraudConclusion.htm#BadNews

What Went Wrong With Accountics Research --- http://www.trinity.edu/rjensen/Theory01.htm#WhatWentWrong

Bob Jensen's threads on rankings controversies --- http://www.trinity.edu/rjensen/HigherEdControversies.htm#BusinessSchoolRankings

"Why Some Elite Colleges Give Away Courses Online," by Marc Parry, Chronicle of Higher Education, January 19, 2011 ---

Foundations and universities have spent a fortune producing freely available online course materials. This week a new book, Unlocking the Gates (Princeton University Press), takes stock of that movement by focusing on some of its most high-profile players and their online successes and failures.

The author, Taylor Walsh, is a research analyst with Ithaka S+R, the research division of the nonprofit Ithaka consulting group, which supported the project together with the William and Flora Hewlett Foundation. The Chronicle asked Ms. Walsh to discuss what she had learned about the online ventures of MIT, Yale, Carnegie Mellon, and other universities.

Interview continued in article

Jensen Comment
I'm a long-term persistent advocate of open sharing of knowledge. But don't be confused by the phrase "give away courses online." That does not equate to "give away college credits online." The prestigious universities that share parts of courses or all of courses, including lecture videos and teaching notes, are not grading users of those materials and giving away transcript credits. Those materials are available for self-study and for use by faculty in other colleges.

In my opinion one of the main reasons these prestigious universities like MIT give so much away is truly altruistic and perhaps a bit snobbish in that these universities feel they can fill in knowledge gaps and aid instructors of other colleges. There is also a feeling that if eager students study these course materials in advance of actually taking the courses for credit that they will better understand the courses that are eventually taken.

Lastly there is an element of "knowledge for knowledge sake." If a retired accounting professor really wants to study history or literature just for the hell of it, these open sharing courses are terrific.

Note that various prestigious universities now have free channels on YouTube.

Bob Jensen's threads on open sharing courses are at

The pace setter in this was and still is MIT.

Examples of Bob Jensen's open sharing materials can be found at the following links:




"A Model of Consistency in Communication," by JD Schram (Stanford University), Harvard Business Review Blog, January 19, 2011 ---
Thank you Scott Bonacker for the heads up.

Interesting Interactive eBook Business Model for Authors Without Publishers (this service is not free)

January 19, 2011 message from Richard Campbell

Daniel Park has written books on prior versions of Camtasia Studio. He intended to write a conventional book with the same publisher. However the publisher declined - stating that market economics and the contraction in the computer book market . Just look at the shelf-space devoted to computer books at Borders and Barnes and Noble.

So he decided to go the ebook route using www.dnaml.com  ebook  reader as the vehicle to facilitate this.

So, if you want to buy the downloadable book - I recommend installing the free reader from the above web site first. Then go to Daniel's web site - www.dappertext.com  to download the first 200 pages which is free, and you can buy the rest of the book if you like.

I find the business model interesting - see the quote from Daniel.


January 20, 2011 message from Robert Bruce Walker

Here is a link to a review of a book that is attracting a lot of attention called ‘Why the West Rules – for Now’ (Ian Morris).

The review begins, intriguingly, with a discussion of Joseph Needham. Needham, an English scientist (suffering incidentally from what Asian girls I know call ‘yellow fever’), who tried to work out why Chinese science failed relative to the West. Needham thought it had something to do with the philosophy / religion of China.

Morris believes that the cause of relative power is geographical. The Foreign Affairs reviewer thinks it is more about organization. He singles out the concept of ‘company’ as being a significant factor. In other words the pooling of resources, starting with the Italian bankers, is the crucial difference.

This is what I believe made the difference and companies cannot exist without accounting. I have seen some material on Chinese book-keeping in the 19th century and it seemed to lack double entry.

Whilst I would not wish to align myself with Sombart and his fallacy, there is something in the proposition that accounting is a significant factor in economic success. Conversely, its failure is a factor in economic crisis or decline.


Bob Jensen's threads on accounting history are at

Computer Labs Being Lifted into the Clouds

"The Invisible Computer Lab," by Steve Kolowich, Inside Higher Ed, January 20, 2011 ---

Colleges experimenting with 'virtual computing labs' say the cloud-based hubs are cheaper, more flexible, and poised to take over.

Bob Jensen's threads on education technology are at

How much of the OBSF blame falls on the accounting profession?

"Public Pension Hygiene Act:  The first reform step is exposing the true size of the funding hole," The Wall Street Journal, January 22, 2011 ---

We're so accustomed to misnamed legislation like the Employee Free Choice Act (card check) that it's hard to believe that a welcome proposal called the Public Employee Pension Transparency Act describes what it actually purports to do. To wit, prohibit public pension bailouts by the federal government and expose the $3.5 trillion of unfunded public pension liabilities that local and state governments have obscured.

Most state and local governments currently use their own estimated rate of return on their investments to discount their liabilities. By projecting unrealistically high rates of return, states minimize their unfunded liabilities, at least on paper. Lower unfunded liabilities in turn allow them to reduce how much they and public employees must contribute to their pension funds. Inflated investment assumptions are one reason that public pension funds are unfunded to the tune of $3.5 trillion.

Public pensions typically assume an 8% annual return on average, but over the past five years state pension funds with more than $5 billion in assets have earned only 4.5%. Taxpayers must make up the difference between what the funds earn and what they need to pay retirees. For Californians that is roughly $5 billion this year.

Local taxpayers are already seeing their services whacked and taxes raised to fill these pension holes. University of California students will have to pony up 8% more next year for tuition to offset an expected $500 million in state budget cuts. Illinois residents will soon pay 67% more in income taxes, but taxpayers won't feel the full brunt for another decade when the funds begin running out of money. When Chicago's pension fund goes dry around 2019, over half of the city's revenue will be dedicated to pensions.

In the 1950s and 1960s, many private employers obscured their liabilities the way governments are doing today, though they didn't have a public backstop. Many funds went broke. In 1974 Congress established minimum funding requirements and penalized companies that underfunded pensions. The law also required companies to report and discount their liabilities using a more conservative rate of return.

These changes exploded liabilities and prompted many companies to switch from defined-benefit plans to defined-contribution plans like 401(k)s. While a majority of private workers now have defined-contribution plans, defined-benefit plans remain the norm in government.

Enter the Public Employee Pension Transparency Act, which is sponsored by House Republicans Devin Nunes and Darrell Issa of California and Wisconsin's Paul Ryan. Their bill would encourage governments to switch to defined-contribution plans by revealing the true magnitude of their unfunded liabilities. States and municipalities would have to report their liabilities to the U.S. Treasury using their own rosy investment forecasts as well as a more realistic Treasury bond rate (to be determined by a formula).

This data would make clear how much taxpayers potentially owe and increase pressure on lawmakers to fix their plans. For instance, Illinois estimated in 2009 that it had a roughly $85 billion unfunded liability. Using a Treasury discount rate, that unfunded liability balloons to $167 billion.

Out of respect for state sovereignty, the federal government shouldn't and can't tell local governments how to run or fund their pensions. But the bill doesn't do so and it also doesn't force states to fund their plans using a lower discount rate. States don't even have to comply with the law, though they would forego their ability to sell federally subsidized, tax-exempt bonds if they don't.

The bill may not persuade states like Illinois and California to revamp their pensions, but it will reveal how broken they are—and that's a start.

Bob Jensen's threads on the sad state of government accounting and accountability ---

From The Wall Street Journal Accounting Weekly Review on July 10, 2009

Public Pensions Cook the Books
by Andrew G. Biggs
The Wall Street Journal

Jul 06, 2009
Click here to view the full article on WSJ.com

TOPICS: Advanced Financial Accounting, Financial Accounting Standards Board, Governmental Accounting, Market-Value Approach, Pension Accounting

SUMMARY: As Mr. Biggs, a resident scholar at the American Enterprise Institute, puts it, "public employee pension plans are plagued by overgenerous benefits, chronic underfunding, and now trillion dollar stock-market losses. Based on their preferred accounting methods...these plans are underfunded nationally by around $310 billion. [But] the numbers are worse using market valuation methods...which discount benefit liabilities at lower interest rates...."

CLASSROOM APPLICATION: Introducing the importance of interest rate assumptions, and the accounting itself, for pension plans can be accomplished with this article.

1. (Introductory) Summarize the accounting for pension plans, including the process for determining pension liabilities, the funded status of a pension plan, pension expense, the use of a discount rate, the use of an expected rate of return. You may base your answer on the process used by corporations rather than governmental entities.

2. (Advanced) Based on the discussion in the article, what is the difference between accounting for pension plans by U.S. corporations following FASB requirements and governmental entities following GASB guidance?

3. (Introductory) What did the administrators of the Montana Public Employees' Retirement Board and the Montana Teachers' Retirement System include in their advertisements to hire new actuaries?

4. (Advanced) What is the concern with using the "expected return" on plan assets as the rate to discount future benefits rather than using a low, risk free rate of return for this calculation? In your answer, comment on the author's statement that "future benefits are considered to be riskless" and the impact that assessment should have on the choice of a discount rate.

5. (Advanced) What is the response by public pension officers regarding differences between their plans and those of corporate entities? How do they argue this leads to differences in required accounting? Do you agree or disagree with this position? Support your assessment.

Reviewed By: Judy Beckman, University of Rhode Island


"Public Pensions Cook the Books:  Some plans want to hide the truth from taxpayers," by Andrew Biggs, The Wall Street Journal, July 6, 2009 --- http://online.wsj.com/article/SB124683573382697889.html

Here's a dilemma: You manage a public employee pension plan and your actuary tells you it is significantly underfunded. You don't want to raise contributions. Cutting benefits is out of the question. To be honest, you'd really rather not even admit there's a problem, lest taxpayers get upset.

What to do? For the administrators of two Montana pension plans, the answer is obvious: Get a new actuary. Or at least that's the essence of the managers' recent solicitations for actuarial services, which warn that actuaries who favor reporting the full market value of pension liabilities probably shouldn't bother applying.

Public employee pension plans are plagued by overgenerous benefits, chronic underfunding, and now trillion dollar stock-market losses. Based on their preferred accounting methods -- which discount future liabilities based on high but uncertain returns projected for investments -- these plans are underfunded nationally by around $310 billion.

The numbers are worse using market valuation methods (the methods private-sector plans must use), which discount benefit liabilities at lower interest rates to reflect the chance that the expected returns won't be realized. Using that method, University of Chicago economists Robert Novy-Marx and Joshua Rauh calculate that, even prior to the market collapse, public pensions were actually short by nearly $2 trillion. That's nearly $87,000 per plan participant. With employee benefits guaranteed by law and sometimes even by state constitutions, it's likely these gargantuan shortfalls will have to be borne by unsuspecting taxpayers.

Some public pension administrators have a strategy, though: Keep taxpayers unsuspecting. The Montana Public Employees' Retirement Board and the Montana Teachers' Retirement System declare in a recent solicitation for actuarial services that "If the Primary Actuary or the Actuarial Firm supports [market valuation] for public pension plans, their proposal may be disqualified from further consideration."

Scott Miller, legal counsel of the Montana Public Employees Board, was more straightforward: "The point is we aren't interested in bringing in an actuary to pressure the board to adopt market value of liabilities theory."

While corporate pension funds are required by law to use low, risk-adjusted discount rates to calculate the market value of their liabilities, public employee pensions are not. However, financial economists are united in believing that market-based techniques for valuing private sector investments should also be applied to public pensions.

Because the power of compound interest is so strong, discounting future benefit costs using a pension plan's high expected return rather than a low riskless return can significantly reduce the plan's measured funding shortfall. But it does so only by ignoring risk. The expected return implies only the "expectation" -- meaning, at least a 50% chance, not a guarantee -- that the plan's assets will be sufficient to meet its liabilities. But when future benefits are considered to be riskless by plan participants and have been ruled to be so by state courts, a 51% chance that the returns will actually be there when they are needed hardly constitutes full funding.

Public pension administrators argue that government plans fundamentally differ from private sector pensions, since the government cannot go out of business. Even so, the only true advantage public pensions have over private plans is the ability to raise taxes. But as the Congressional Budget Office has pointed out in 2004, "The government does not have a capacity to bear risk on its own" -- rather, government merely redistributes risk between taxpayers and beneficiaries, present and future.

Market valuation makes the costs of these potential tax increases explicit, while the public pension administrators' approach, which obscures the possibility that the investment returns won't achieve their goals, leaves taxpayers in the dark.

For these reasons, the Public Interest Committee of the American Academy of Actuaries recently stated, "it is in the public interest for retirement plans to disclose consistent measures of the economic value of plan assets and liabilities in order to provide the benefits promised by plan sponsors."

Nevertheless, the National Association of State Retirement Administrators, an umbrella group representing government employee pension funds, effectively wants other public plans to take the same low road that the two Montana plans want to take. It argues against reporting the market valuation of pension shortfalls. But the association's objections seem less against market valuation itself than against the fact that higher reported underfunding "could encourage public sector plan sponsors to abandon their traditional pension plans in lieu of defined contribution plans."

The Government Accounting Standards Board, which sets guidelines for public pension reporting, does not currently call for reporting the market value of public pension liabilities. The board announced last year a review of its position regarding market valuation but says the review may not be completed until 2013.

This is too long for state taxpayers to wait to find out how many trillions they owe.

Bob Jensen's threads on the sad state of government accounting and accountability ---

Benford's Law: How a mathematical phenomenon can help CPAs uncover fraud and other irregularities

A century-old observation about the distribution of significant digits is now being used to detect fraud.
Thanks to Miguel for the heads up on January 22, 2011--- http://www.simoleonsense.com/benfords-law-difficulty-of-faking-data/

"The Difficulty of Faking Data," tpHill.net ---
http://www.tphill.net/publications/BENFORD PAPERS/difficultyOfFakingData1999.pdf

From Jensen's Archives --- http://www.trinity.edu/rjensen/Theory02.htm
Benford's Law:  It's interesting to read the "Silly" comments that follow the article.

"Benford's Law And A Theory of Everything:  A new relationship between Benford's Law and the statistics of fundamental physics may hint at a deeper theory of everything," MIT's Technology Review. May 7, 2010 ---

In 1938, the physicist Frank Benford made an extraordinary discovery about numbers. He found that in many lists of numbers drawn from real data, the leading digit is far more likely to be a 1 than a 9. In fact, the distribution of first digits follows a logarithmic law. So the first digit is likely to be 1 about 30 per cent of time while the number 9 appears only five per cent of the time.

That's an unsettling and counterintuitive discovery. Why aren't numbers evenly distributed in such lists? One answer is that if numbers have this type of distribution then it must be scale invariant. So switching a data set measured in inches to one measured in centimetres should not change the distribution. If that's the case, then the only form such a distribution can take is logarithmic.

But while this is a powerful argument, it does nothing to explan the existence of the distribution in the first place.

Then there is the fact that Benford Law seems to apply only to certain types of data. Physicists have found that it crops up in an amazing variety of data sets. Here are just a few: the areas of lakes, the lengths of rivers, the physical constants, stock market indices, file sizes in a personal computer and so on.

However, there are many data sets that do not follow Benford's law, such as lottery and telephone numbers.

What's the difference between these data sets that makes Benford's law apply or not? It's hard to escape the feeling that something deeper must be going on.

Today, Lijing Shao and Bo-Qiang Ma at Peking University in China provide a new insight into the nature of Benford's law. They examine how Benford's law applies to three kinds of statistical distributions widely used in physics.

These are: the Boltzmann-Gibbs distribution which is a probability measure used to describe the distribution of the states of a system; the Fermi-Dirac distribution which is a measure of the energies of single particles that obey the Pauli exclusion principle (ie fermions); and finally the Bose-Einstein distribution, a measure of the energies of single particles that do not obey the Pauli exclusion principle (ie bosons).

Lijing and Bo-Qiang say that the Boltzmann-Gibbs and Fermi-Dirac distributions distributions both fluctuate in a periodic manner around the Benford distribution with respect to the temperature of the system. The Bose Einstein distribution, on the other hand, conforms to benford's Law exactly whatever the temperature is.

What to make of this discovery? Lijing and Bo-Qiang say that logarithmic distributions are a general feature of statistical physics and so "might be a more fundamental principle behind the complexity of the nature".

That's an intriguing idea. Could it be that Benford's law hints at some kind underlying theory that governs the nature of many physical systems? Perhaps.

But what then of data sets that do not conform to Benford's law? Any decent explanation will need to explain why some data sets follow the law and others don't and it seems that Lijing and Bo-Qiang are as far as ever from this.

It's interesting to read the "Silly" comments that follow the article.

"I've Got Your Number:  How a mathematical phenomenon can help CPAs uncover fraud and other irregularities," by Mark J. Nigrini, Journal of Accountancy, May 1999 --- http://www.journalofaccountancy.com/Issues/1999/May/nigrini.htm

Top of Form




BENFORD'S LAW PROVIDES A DATA analysis method that can help alert CPAs to possible errors, potential fraud, manipulative biases, costly processing inefficiencies or other irregularities.

A PHYSICIST AT GE RESEARCH LABORATORIES in the 1920s, Frank Benford found that numbers with low first digits occurred more frequently in the world and calculated the expected frequencies of the digits in tabulated data.

CPAs CAN USE BENFORD'S DISCOVERY in business applications ranging from accounts payable to Y2K problems. In addition, subset tests identify small lists of serious anomalies in large data sets, making an analysis more manageable.

DIGITAL ANALYSIS IS WELL SUITED to finding errors and irregularities in large data sets when auditors need computer assisted technologies to direct their attention to anomalies.

MARK J. NIGRINI, CA (SA), PhD, MBA, is an assistant professor at the Edwin L. Cox School of Business, Southern Methodist University, Dallas, and a Research Fellow at the Ernst & Young Center for Auditing Research and Advanced Technology, University of Kansas, Lawrence.

Bob Jensen's threads on accounting theory are at

"Bing is Copying Your Clicks, Not Google's Results: Google's results can be accessed because Bing is snooping on IE users," by Tom Simonite, MIT's Technology Review, February 2, 2011 ---

Jensen Comment
But IE users are using billions of Google searches. If we ignore price differentials is this a bit like getting almost new goods in yard sales that recently passed through retail dealers. Bing makes money for Microsoft from advertising. Seems like Microsoft is indirectly getting a free service from Google whether Microsoft will admit it or not.

See http://googleblog.blogspot.com/2011/02/microsofts-bing-uses-google-search.html

While nasty little kids are driving their "fat, ugly, and molesting" teachers to give up the ghost because of networked and often false insults, their older brothers, sisters, parents, and misfits (many of whom are foreign enemies) are bent on overthrowing government regimes. No regime is immune from the instabilities caused by technologies that have great benefits to societies along with emerging costs that we'd not anticipated.

Anarchists have never had it so good!

Is this something George Orwell failed to anticipate or is it something that will ultimately bring on the evils of Big Brother?

Twittering an evil dictator sounds like a great thing until we discover that a nation may forever be thrown into instability and hunger by these little "tweets." Twittering may bring wealth and prosperity to Egypt in this decade, but don't count on it doing so for all the world in the 21st Century.

"Stability's End:  Technologies with goofy names like Twitter and Facebook are replacing political stability with a state of permanent instability," by Daniel Henninger, The Wall Street Journal, February 3, 2011 ---

'Stability" has been the goal of civilized foreign policy since the dawn of the Cold War and arguably since the Congress of Vienna, which posited a framework for international relations in 1815. Stability, whose virtues are many, has had a worthy run. It's done.

Stability is done as we have known it, at least until political leadership evolves a better understanding than they have shown during the events in Egypt of the permanently unstable world they've tumbled into. The man who pitched the curators of national stability into their current shocked state—evident this week in the streets of Cairo and before that in the capital of Tunisia and before that in the U.S.'s November elections—is William Shockley.

Shockley, a physicist, co- invented the transistor. The transistor replaced the vacuum tube as the central component of all electronic devices. The transistor enabled Twitter, Apple, Facebook, Microsoft, an ocean of apps and the unending storm of information that blows all of us, including politicians, here and there like leaves. Why would anyone think it possible in such a world for a Hosni Mubarak to maintain stability with the methods he's used since 1981?

The point here is not to argue again that information and communication technology (ICT) has caused another colorful "revolution." Nor is it to overstate the power of these technologies to enable democratic reform.

My point is merely to describe what is going on in front of our faces: This new, exponentially expanding world of information technologies is now creating permanent instability inside formerly stable political arrangements.

This stuff disrupts everything it touches. It overturned the entire music industry, and now it is doing the same to established political systems.

Here is how it works. In 2007, Egypt sentenced a blogger named Kareem Amer to four years in prison for insulting the president. Ten years ago, Mr. Amer would have simply disappeared, like all the others. So what if his family and 15 friends grumbled? Stability.

Not now. Instead, Mr. Amer became an icon of regime repression. What changed? Instead of 15 friends whispering over coffee in a café, 15,000 can talk to each other all day and every day via Internet cafés about who's getting tortured. According to the Open Net Initiative's helpful country profiles, some one million Egyptian households have broadband access, often sharing lines.

Think what this means at the crudest level: Huge swaths of any wired population exist in a state of engagement. Instability. Before, stifled populations were mostly sullen. Now, all the time, they're in mental motion.

Even if the Mubarak thugs somehow disperse the people in the street, they'll return some day because there is no effective way to cap their ability to share grievances on a massive scale. Egypt earlier pulled the plug on its entire Internet. So what? No nation will turn it off forever.

The Egyptian government itself has been responsible for expanding ICT, even making cheap computers available. Tunisia's autocrats wired their own nation, with some 1.7 million Internet users in a population of 10.2 million.

Continued in article

February 4, 2011 reply from David Fordham

Bob, what's old is apparently new again.

Either that, or author Henninger is completely ignorant of history. I agree with Henninger in general. But it's not new. The same exact argument he makes about transistorized technology can be leveled against Gutenberg (and just as deservedly) hundreds of years ago. Anyone who's been to Europe is aware of the instability which devastated that highly-civilized society after the invention of the printing press made it possible for radical new ideas to get into the hands of a wide (and generally unthinking, relatively uneducated, unenlightened, and catastrophically impatient) audience. Instead of peaceful discussion, conferencing, give-and-take, diplomacy, and other less destructive avenues of change, which admittedly take time and are not as immediately effective, the widespread dispersal of "any man's" ideas -- happening without regard to the origin, merits, or value of those ideas-- resulted in the very instability Henninger is describing.

Riots, mob violence, millions of deaths, wanton destruction of wealth (ruination of the fruit of human labor) on an unprecedented scale, complete destruction of priceless antiquities, disappearance of what we today call "civil rights", nations appearing, nations disappearing, leaders rising and falling, polarization of the population... all of this and more can trace its origins to the widespread dissemination of ideas which upset the status quo -- new concepts being put to an unprepared populace.

Much has also been written about the impact of the printing press on the American independence movement, which the English still call "the uprising" or "the revolt".

I'm sure Shockley would be honored to have the results of his work compared with Gutenberg. (Alas, Shockley is often demonized because "he called it as he saw it" after extensive research in genetics and human behavior.) This is why I'm not a big fan of complete democracy in the presence of irresponsible "journalism", whether on paper or on a cell phone screen. As Scar says in the movie the Lion King,.... (click here http://www.youtube.com/watch?v=lfSea_Q4WXg ... 15 seconds.)

So I disagree with the use of the word "new" when Henninger says his point is to "describe what is going on... the "new" exponentially-expanding world of information technologies is creating permanent instability ..." No. The exponentially expanding world of information technologies dates from the invention of writing, and political instability is not "created by" technology. (tip of the hat and wink to David Coy.) It is created by people who utilize the technology in a particular way, usually a very ignorant, short-sighted, and often self-serving way, without realizing the long-term effect their action has on the human institutions. Today's journalists, commentators, "pundits", and yes, even some of us old graybeard denizens of the academy (like yours truly) often spout off ideas which, simply due to the reach of the technology, like Gutenberg's, will cause others to reach conclusions, judgments, opinions, attitudes, etc. which the originator hadn't stopped to think about, and if the originator had, probably would not have promulgated in the first place.

The author of an old book called Ecclesiastes says there is a time (and place) for everything. This implies that there is an inappropriate time and place. I believe it.

Read some articles about the iconoclasts, the resulting counter-reformation, the inquisitions, and other results of Gutenberg's invention to see what we're in for if our journalists (and social networkers) aren't careful. Perhaps one might begin to appreciate some of my acidity, rancor, and contempt for so much of today's "news". I've been there and although I haven't "done that", I have seen its effects, and it isn't pretty.

Bottom line: I agree entirely and completely with Henninger's take on instability, and the widespread dispersal of communication leading to instability. But this is not new.

David Fordham

Video:  Scar's surrounded by idiots --- https://mail.google.com/a/trinity.edu/#inbox/12decc30470f9b36

New Devices for Downloading (offloading plus re-formatting) from the Web Instead of Having to Read Material on the Web

"The Web Is Now the Last Place You Should Read Anything: Reading on the Web has never been a very satisfying experience--new tools mark the beginning of its end," by Christopher Mims, MIT's Technology Review, January 21, 2011 ---

If browsing the web on a traditional PC is a satisfying experience, why did Apple just have a record fourth quarter in which it sold 7.33 million iPads? Of course, not everyone's a fan of even the iPad's somewhat bloated form factor, which is why Kindles and iPhones have also posted record sales figures too.

Now, the inevitable is happening: Developers have figured out how to instantaneously migrate the material we would normally read on the web onto these eminently more portable and--dare I say it--more book-like devices. Previously I've covered Instapaper, one service that accomplishes this feat, and while it has its adherents, it has one major weakness on the Amazon Kindle, arguably the most-book like (and least webby) reader out there: getting material onto a Kindle via Instapaper requires waiting for the service to deliver a bundle of stories, something that only happens at user-determined intervals.

Now, however, there's no need to wait: users of the Google Chrome web browser can install an extension that instantly formats a story to the Kindle and sends it to the device for "off-line" reading. It's functionally identical to the "Chrome to iPhone" extension that does the same thing for any iOS device -- i.e. iPhone, iPod Touch or iPad.

Clones for Android devices and tablets will inevitably follow. What does this mean for reading on the web?

It means that soon, there won't be any reason to read anything but the shortest material on a computer screen. The same screen that is the one place that is, in terms of ergonomics, eye strain and even how well we retain the material we're reading, demonstrably the worst possible place to read anything. Tablet devices are an implicit acknowledgement of this shortcoming, but the fact remains that we spend most of our day finding information on our computers. As tools that transmit that information, intact, to other, more paper-like devices proliferate, the act of reading that information will become uncoupled from the act of finding it.

And that's all to the better--who doesn't find the act of reading, rather than simply scanning, material on a computer screen to be antithetical to the act of comprehension? This can only raise the bar for material transmitted on the web: already content creators are noticing that longer and more-in depth pieces do better on the web--exactly the sort best consumed anywhere but a computer screen.

Bob Jensen's threads on electronic books are at

"The Great Fannie and Freddie Rip-Off:  The GSEs' common shareholders need to organize and make their voices heard in Congress," by Ralph Nadar, The Wall Street Journal, January 26, 2011 ---

For decades Fannie and Freddie behaved like other large, publicly held financial corporations. They were profit-seeking companies, listed on the New York Stock Exchange (NYSE). They displayed an unfettered drive for greater sales, profits, executive bonuses and stock options for the top brass. Their shareholders received dividends and rising stock values.

These so-called government sponsored enterprises (GSEs) dominated the secondary mortgage market. The implied government backstop slightly lowered their borrowing costs in return for a poorly enforced obligation to facilitate a mortgage market for lower-income home buyers. Otherwise, the GSE moniker meant little, since everybody knew that, like Citigroup, Goldman Sachs and other Wall Street giants, Washington viewed them as "too big to fail."

With the onset of the subprime mortgage collapse, Fannie and Freddie went down with the rest of the financial industry. The federal government moved into high bailout gear during the latter half of 2008 with three distinct rescue models for Wall Street and Detroit.

One model provided capital and credit lines to Bank of America, Citigroup, Morgan Stanley, J.P. Morgan Chase and AIG, leaving their shareholders beaten down but intact to start recovering value.

The second model dispatched General Motors into a well-orchestrated, stunningly quick bankruptcy process. While the bankruptcy court treated the common shareholders like flotsam and jetsam, GM emerged well subsidized and tax-privileged with a clean balance sheet under temporary ownership by the U.S. and Canadian governments and the United Auto Workers.

The third model placed Fannie and Freddie under an indeterminate conservatorship scheme that kept but abused its common shareholders, who had already lost up to 99% of their investment. Neither vanquished nor given an opportunity to recover, the institutional and individual shareholders are trapped in limbo.

Here is how the scheme congealed. In return for providing an open credit line, the government received warrants to buy up to 79.9% of the GSEs' common stock for $0.00001 per share. The government's share stayed under 80% to avoid forcing the liabilities of these two behemoths onto the government's books. Treasury achieved this by having the common shareholders nominally own the other 20%.

Here's the rub: The zombie common shareholders have no rights or remedies against Fannie and Freddie, both operationally active companies, or their regulator—the Federal Housing Finance Agency. FHFA ordered the Fannie and Freddie boards and executives to suspend communications with shareholders and abolish the annual stockholders meeting.

In 2008, then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke told Fannie and Freddie investors that the companies "are adequately capitalized." Moreover, another regulator, the Office of Federal Housing Enterprise Oversight (Ofheo), assured investors—including many mutual funds, pension trusts and small banks—of the soundness of their investment.

Fannie Mae's then-Senior Vice President Chuck Greener, backed by his then-CEO Daniel Mudd, said, "We are maintaining a strong capital base, building reserves for credit losses and generating solid reserves as our business continues to serve the market." That was on July 11, 2008.

These former officials (both have since left Fannie Mae) should have known better. On Sept. 8, 2008, when Treasury announced the conservatorship, the GSEs' common stock dropped to pennies and the shareholders realized they were misled.

Such statements by private executives controlling a publicly traded corporation should have prompted a Securities and Exchange Commission investigation. Such was the betrayal of trust of investors who were told for years that putting their money in these GSEs was second only to investing in Treasury bonds.

Still, some faithful shareholders, including me, held on, believing that they might have a chance to recover something—as did their counterparts in Citigroup, AIG and the rest of the rescued.

Then came the cruelest and most unnecessary diktat of all. On June 16, 2010, the FHFA directed Fannie and Freddie to delist their common and preferred stock from the NYSE. The exchange did not demand this move. True, Fannie had dropped slightly below the $1 per share threshold stipulated by NYSE rules, but the Big Board is quite flexible with time either to get back over $1 or to allow companies to offer a reverse stock split. Freddie was comfortably over the $1 level. Why delist with one irresponsible stroke of the government's pen and destroy billions of dollars of remaining shareholder value? This move took the shares down to the range of 30 cents, chasing away many institutional holders.

Continued in article

Bob Jensen's Fraud Updates are at ---

Bob Jensen's threads on bailout frauds are at

Rethinking Capitalism

If Harvard University Business School faculty took a vote regarding who was their most valuable faculty member my guess without doubt would be that the winner would be economist Michael Porter. Apart from being a fine colleague and great teacher, he's probably Harvard's most popular consultant and author of books and many articles in the Harvard Business Review --- http://en.wikipedia.org/wiki/Michael_Porter

The Harvard Business Review blog is now carrying a video interview with Professor Porter:
"Rethinking Capitalism," Michael Porter, Harvard Business Review Blog, January 5, 2010 ---  Click Here

I could not help trying to think how Porter's interview might've compared with the same interview being conducted on the late Milton Friedman. In my estimation, Michael Porter cannot hold a candle in comparison with Milton Friedman whose "Free to Choose" PBS series in the 1970s is a classic that lives today as even more relevant since many of his dire predictions and warnings about entitlements are now coming true ---

Let me give you a concrete example. My new Dell 64-bit Studio Laptop computer had a nagging hardware problem in that it would always start to warm up and then die out about 90% of the time. It would sometimes take me 30 minutes to finally get the startup to hold fast. My product consultant at Dell forwarded me to Dell's Tech Support Team in India. A technician with very precise English guided me through a series of tests that took over 30 minutes. He then took over my computer such that, while sitting in the White Mountains of New Hampshire, I could watch him move my mouse and download something.

In the end he set me up with a superb repair technician who, ten days later, arrived from Boston with a box of parts. The repair technician was very good, but it took him about two hours in my basement plus the drive time (over three hours each way) from Boston. He earns about $100 per hour so it does not take a rocket scientist to conclude that, with the cost of parts and labor, Dell really lost money on the revenue from my laptop (including the $350 price of a three-year onsite warranty for parts and labor).

My Interview Question for Professors Friedman and Porter
"Assuming that tech support teams of identical quality and customer satisfaction (I was certainly satisfied with my Dell tech team) can be established in India or Texas, should Dell be socially responsible by creating jobs in Texas and avoid India even if the Texas tech team costs ten times as much for each minute of service rendered?"

Anticipated Answer from Professor Friedman
"By all means outsource to India under those circumstances. The responsibility of a corporation is to maximize returns to owners while operating within the law. The only condition for using the more expensive alternative would be if the law required domestic labor. But that would be counterproductive because requiring domestic labor in the technology sector under the doctrine of protectionism would lead to protectionism retaliations in foreign markets such that as many or more jobs would be lost in the U.S. agricultural and export services sectors if the economy."

Anticipated Answer from Professor Porter
I think Dell should develop green-colored computers that run on solar power and radiation from fluorescent lights. This is a new market that could create new jobs in the United States and have multiplier effects on manufacturers of the component parts as well as bringing more profits from shareholder.

Then in whisper after the interview is over: "Off the record, Dell should always seek the lowest price alternatives subject to quality control standards and standards of customer satisfaction."

The Dismal Labor Theories of Arthur Lewis
One of the best places to begin, in my opinion, on the dismal future prospects of jobs and wages is in the writings of Arthur Lewis --- http://en.wikipedia.org/wiki/Arthur_Lewis_(economist)  .

Even Karl Marx attributed much of the cause of unemployment to overpopulation. Arthur Lewis provides a rather clear theory that the wage rates in industrialized nations will always remain low because of the "unlimited supply" of global subsistence-level labor. Laziness has little to to with the major problem of unemployment. It has more to do with the oversupply of labor coupled in modern times with vastly improved communication and transportation systems.

World Population Growth Year Population
      1 200 million
1000 275 million
1500 450 million
1650 500 million
1750 700 million
1804 1 billion
1850 1.2 billion

1900 1.6 billion
1927 2 billion
1950 2.55 billion
1955 2.8 billion

1990 5.3 billion
1995 5.7 billion
1999 6 billion

2006 6.5 billion
2009 6.8 billion
2011 7 billion 2025 8 billion
2050 9.4 billion

In 1954, when Lewis wrote his most famous theory, there were nearly 2.8 billion people back in the wonderful 1950s (when I was literally enjoying every moment of high school). Now we're living in a world of over 7 billion where jobs are easily transported to India, Indonesia, Africa, Mexico and all other points south of the Rio Grande.

We will soon have technology capable of assembling automobiles with one worker who turns the factory switch on or off. It's analogous to the evolution of replacing 5,000 1940 telephone switchboard operators in Cleveland with automated switchboards. All this is taking place while the world population more than doubled between 1950 and 1990. There's one highly automated factory in China that now produces over a third of the foot socks sold in the world.

When I was a kid, a farm family in Iowa could make a good living on 80 acres of land. That same family probably cannot make good living on less than 240 acres of land in Iowa and even 240 acres is too small for the farming capacities of modern farming machinery designed to work 2,000 or more acres of land with one or two farmers.

Now we are witnessing the decline of the newspaper and magazine industry due to an explosion of faster and more innovative ways of communicating local and global news.

The problem becomes ever more acute as we keep producing more people faster than jobs for those people. There are a few positive signs such as the fact that the rate of growth in population is slowing even if the growth itself is still upward.

Poverty is caused by teens and adults who are too ambitious in producing children relative to the finite resources of this planet. Of course there are many ways we can support population growth by better utilizing and preserving the most crucial resources like fish in the sea.

I think Arthur Lewis was correct about the true causes of unemployment and poverty --- the problem is too many of us creating an unlimited supply of labor.

The problem of unemployment and underemployment is not a function of how economic resources are allocated (markets versus planning boards). The problem is the "unlimited supply of labor."

Yale economist Robert Shiller argues that rising inequality in the US was a major cause of the recent crisis, and little is being done to address it. He chooses books that give insight into human nature

"Robert Shiller on Human Traits Essential to Capitalism," by Robert Shiller (Yale), The Browser, January 2011 ---

"Striking it Richer: The Evolution of Top Incomes in the United States (Updated with 2008 estimates)," by Emmanuel Saez, July 17, 2010 ---
Thank you Jagdish Gangolly for the heads up.

History of Quantitative Finance
"Four features in appreciation of the life and work of Benoit Mandelbrot," Simoleon Sense, February 3, 2011 ---

"Merrill Traded On Client Data: SEC," by Jean Eaglesham, Dan Fitzpatrick, and Randall Smith, The Wall Street Journal, January 26, 2011 ---

On the fifth floor of Merrill Lynch & Co.'s headquarters at the World Financial Center in lower Manhattan, a small team of traders who bought and sold securities with the firm's own money for two years were close enough to see the computer screens of traders taking orders from clients and overhear their phone calls.

The Securities and Exchange Commission said Tuesday that the proprietary-trading desk, which traded electronic messages with its nearby counterparts, was illegally spoon-fed information about what Merrill's clients were doing, and then copied an unspecified number of trades between 2003 and 2005. Merrill also encouraged market-making traders to generate and share "trading ideas" with the proprietary-trading desk, according to the SEC.

Merrill, acquired by Bank of America Corp. in 2009, agreed to pay $10 million to settle the accusations, which also included charging institutional investors undisclosed trading fees. Merrill neither admitted nor denied wrongdoing.

Such enforcement cases are rare, and the Merrill settlement is likely to fuel longstanding suspicions among many investors that Wall Street firms tap the continuous flow of orders from customers for their own benefit. Securities firms are lobbying U.S. regulators over the wording of the "Volcker rule," part of last year's Dodd-Frank financial law that is expected to force banks to wind down or sell their proprietary-trading desks.

In a statement, Bank of America said the "matter involved issues from 2002 to 2007 at Merrill Lynch." The proprietary-trading desk, which had one to three employees and authority to trade more than $1 billion of Merrill's capital, was shut down in 2005 "for business reasons" after the SEC began investigating, according to people familiar with the situation.

The employees involved in the trading no longer work at Bank of America, these people said.

Bank of America said Merrill has "adopted a number of policy changes to ensure separation of proprietary and other trading and to address the SEC's concerns."

Merrill Lynch also voluntarily implemented enhanced training and supervision to improve the principal-trading processes at the securities firm.

The SEC accused Merrill of numerous regulatory breakdowns, ranging from supervision failures to cheating customers.

"One of our goals in a case like this is to make sure that the problems we find are fixed going forward," said Scott Friestad, an associate director in the SEC's enforcement division. The Merrill case is "one of the few times that the [SEC] has ever charged a large Wall Street firm with misconduct involving the activities of a proprietary-trading desk."

The traders involved in the matter weren't identified in documents released by the SEC. People familiar with the situation said the proprietary traders, who worked on what Merrill called its Equity Strategy Desk, were led by Robert H. May.

Mr. May was among four traders from Bank of America hired last week by boutique-trading firm First New York Securities Inc.

Mr. May couldn't be reached to comment. Neil Bloomgarden, who reported to Mr. May, now works at Morgan Stanley. He and the firm declined to comment.

Bank of America hasn't announced plans to shut down or sell its remaining proprietary-trading desk.

As a result of the investigation, though, the company has physically separated such traders from the rest of the trading floor. Merrill also separates client orders from other trades to eliminate any mingling with positions taken by market makers who buy and sell on behalf of clients.

The SEC cited four examples in which Merrill traders on the proprietary-trading desk bought or sold shares within minutes of a similar order for a customer, according to the agency. Customers of Merrill were assured by the firm that information about their orders would be kept confidential, and the company's code of ethics requires employees to "not discuss the business affairs of any client with any other person, except on a strict need-to-know-basis," the SEC said Tuesday. The number of trades detailed by the SEC was small.

In September 2003, an unidentified institutional client placed an order to sell about 40,000 shares of Teva Pharmaceutical Industries Ltd., according to the SEC filing. Three minutes later, a market-making trader "sent an instant message to an ESD trader informing him about the trade," the filing said. The proprietary trader then sold 10,000 shares in the company for Merrill's own account.

"[I] always like to do what the smart guys are doing," one Merrill proprietary trader wrote in an electronic message, according to the SEC filing.

Continued in article

Jensen Comment
Do a word search for "Merrill" and count the many times Merrill Lynch has engaged in securities fraud (and actually this is just an ad hoc sampling in Bob Jensen's archives). Merrill really was rotten to the core.

"Under the Microscope: Microfinance's Latest Growing Pains,"  Knowledge@Wharton,  February 2, 2011 ---

The most recent crisis to hit microfinance began in India's southern state of Andhra Pradesh, where allegations of widespread over-indebtedness, heavy-handed collection tactics and borrower suicides have stirred a national debate about regulating the industry.

In October, the state government slapped restrictions on microfinance institutions that crippled lending and sent collection rates plummeting along with the share price of SKS Microfinance, India's largest for-profit microlender. On January 19, the Malegam Committee Report, released by the Reserve Bank of India, recommended a range of new regulations for India's microfinance institutions, including interest rate caps, loan limits and income ceilings for borrowers. Some observers welcomed the news; doomsayers predicted a credit crunch and industry collapse.

While it is too early to tell how the sector will respond, the crisis in Andhra Pradesh has sparked heated debate and soul-searching throughout the world's microfinance community. During a recent program for microfinance leaders at Wharton's Aresty Institute of Executive Education, discussion turned repeatedly to questions of over-indebtedness, rapid industry growth, and the fine line between profits and purpose.

Continued in article

"The iPad Now Can Take Command of Computers," by Walter S. Mossberg, The Wall Street Journal, January 20, 2011 ---

It has long been possible to control one PC or Mac from another, legally and with permission. Though the process can be tricky to set up, companies often use it as a maintenance and training tool, and some consumers use it to help others solve computer problems, or to reach back to their home or office machines while on the road to access information.

But what about remotely controlling a PC or Mac from the newest category of digital device, a multitouch tablet? Well, it turns out there are apps for that.

Such apps have been around on super-smart phones like the iPhone for years, but phone screens are so small that using them to open and operate programs and folders on a Mac or PC is very frustrating, at least to me. The iPad, with its roomy 10-inch screen, is a different story. It actually has the real estate to make the process much more practical.

I've been testing a couple of these apps on my iPad, using them to remotely control Windows PCs and Macs at my home and office. In fact, I'm typing this paragraph in Microsoft Word on a Mac remotely from the iPad.

My conclusion is that these apps do work, but even on the large iPad screen, they're too clumsy and confusing to use on a regular basis, mostly because touch-screen tablets aren't a great match for the way traditional computers—designed for a mouse and a physical keyboard—work. Also, the apps have some functional limitations, and they are heavily dependent on the speed of the network or Internet connection, which can make them slow at demanding things like video.

For my tests, I selected two apps squarely aimed at average consumers. One is called LogMeIn Ignition, and is the iPad and iPhone incarnation of a longstanding computer-to-computer remote-control product called LogMeIn. The other is called iTeleport. It has been around, under various names, since the early days of the iPhone, and now comes in an iPad edition as well.

Both apps get around the complexity of setup by installing a special free program on the computer you wish to control that talks to the iPad app. The apps can see and control all the computers on which you have installed companion programs. I found setup easy and the connections generally reliable and fast enough, except for video.

But the big drawback to these products is that they are clumsy in controlling the target computer. Each allows two basic methods for this. In one, your finger moves the computer's mouse cursor and you click the virtual mouse by tapping. In the other, you can directly tap on things on the remote screen. In my view, LogMeIn was better at the first method and iTeleport was better at the second. But I found both clumsy and tedious in both programs, especially when I tried to combine controlling the remote computer with the frequent need to use touch to move the image of the screen around the iPad's display.

Continued in article

Bob Jensen's technology bookmarks are at

"University of Georgia Coach Sentenced for Not Reporting Income From Camps," by Paul Caron, Tax Professor Blog, February 5, 2011 ---

Former University of Georgia cheerleading coach Marilou Braswell on Friday was ordered by U.S. District Court Chief Judge C. Ashley Royal to pay $90,900 in restitution for not filing income tax returns from the money she received from cheerleading camps in 2003 and 2004 and sentenced to serve five years probation. She earned $27,641 in 2003 and $22,143 in 2004 in salary from the university and collected $708,278 and $538,005 from the cheerleading camps in those years. The camp tuition included housing in university dormitories, food in university dining halls and practice time in the university coliseum, but the university had to threaten to sue her to recover more than $300,000 for unpaid expenses associated with the camps. Ms. Braswell was fired after a Jewish cheerleader complained that her chances of making the team were hurt because she didn't participate in Bible studies and pregame prayers.  (Atlanta Journal-Constitution, Associated Press.)

Bob Jensen's Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm

From the Scout Report on January 21, 2011

JayCut 2.2 --- http://jaycut.com/ 

Do you want to edit your videos? But you say you don't have any video editing software? Never fear, as JayCut is here. With JayCut visitors can sign up for free and create their own voice-overs, work with slow-motion effects, and even throw in a green screen or two for dramatic affect. This version is compatible with Windows 2000 and newer.

Google Voice --- http://www.google.com/googlevoice/about.html 

Google Voice is just one of the many projects that the folks at Google have been working on, and if you need to communicate across a variety of formats and phones, this service is quite good. Visitors can use the Google Voice device to make phone calls from their Gmail account, create personalized greetings, share voicemails, block callers, and also call internationally. A series of videos on their site explains each feature, and this version is compatible with all operating systems.

Wikipedia celebrates its 10th year and looks to the future At 10, highlighting Wikipedia's past and future

Wikipedia-an unplanned miracle

In praise of Wikipedia

Wikipedia Comes of Age http://chronicle.com/article/Wikipedia-Comes-of-Age/125899/ 

The State of Wikipedia http://www.thestateofwikipedia.com/ 

Wikipedia-Wikipedia http://en.wikipedia.org/wiki/Wikipedia

From the Scout Report on January 28, 2011

SurveyMonkey --- http://www.surveymonkey.com/ 

Simple and straightforward in its design, SurveyMonkey is quite a valuable for anyone looking to make an online survey. Utilizing the free version here, visitors can create short surveys that use a number of question types and formats. Also, users can collect some basic data on respondents and save it for later use and consultation. This version is compatible with computers running all operating systems.

TweetDeck --- http://www.tweetdeck.com 

For those people who like to tweet, the TweetDeck application is quite a find. With this application, users can truly "tweet like a pro", as they will be able to customize their Twitter experience by creating groups, saved searches, and automatic updates. It is billed as "air traffic for Twitter", and that's a fairly apt description of this powerful tool. This version is compatible with all operating systems.

Hotel made out of trash draws a crowd in Madrid Madrid hotel is just rubbish

BBC News-Hotel made entirely from rubbish opens in Madrid

Madrid's Beach Garbage Hotel Constructed to Protest World's Dirty Oceans

'Garbage Warrior' Turns Trash Into Green-Built Houses

International Tourism Trade Fair http://www.ifema.es/ferias/fitur/default_i.html 

Ocean Conservancy: International Coastal Cleanup

Free online textbooks, cases, and tutorials in accounting, finance, economics, and statistics --- http://www.trinity.edu/rjensen/ElectronicLiterature.htm#Textbooks

Education Tutorials

A Send Off From the Farm From an Expert on Neurology and Stress (and one of Stanford's very, very best teachers)
"Stanford Class Day Lecture 2009: The Uniqueness of Humans," by Professor Robert Sapolsky, Simoleon Sense, January 20, 2011 ---
This gets better and better as it goes along.

GrantCraft [to help designers of grants and agencies awarding grants] --- http://www.grantcraft.org/

National Digital Stewardship Alliance --- http://www.digitalpreservation.gov/ndsa/index.html

Bob Jensen's threads on general education tutorials are at http://www.trinity.edu/rjensen/Bookbob2.htm#EducationResearch

Engineering, Science, and Medicine Tutorials

"The Amazing Steam Engines Of The First Century: An online translation of an ancient text reveals some engineering marvels from antiquity," MIT's Technology Review, January 20, 2011 --- http://www.technologyreview.com/blog/arxiv/26285/?nlid=4034

Arbor Day Foundation (includes tree identification) --- http://www.arborday.org/index.cfm

Hotel made entirely from rubbish opens in Madrid --- http://www.bbc.co.uk/news/world-europe-122453

Science360: Chemistry --- http://science360.gov/topic/Chemistry/

Introduction to Chemistry --- http://dl.clackamas.cc.or.us/ch104-00/index.htm

Bringing food chemistry to life --- http://blogs.oregonstate.edu/deliciousnessw09/

ChemPod --- http://www.nature.com/chemistry/podcast.html 

Chemistry: A Molecular Approach --- http://wps.prenhall.com/esm_tro_chemistry_1/ 

GrantCraft [to help designers of grants and agencies awarding grants] --- http://www.grantcraft.org/

The University of Georgia Cooperative Extension [food science] http://www.caes.uga.edu/extension/

National Center for Home Food Preservation --- http://www.uga.edu/nchfp/

Bob Jensen's threads on free online science, engineering, and medicine tutorials are at --- http://www.trinity.edu/rjensen/Bookbob2.htm#Science

Social Science and Economics Tutorials

"Reducing Gun Violence: Results from an Intervention in East Los Angeles --- http://www.rand.org/pubs/monograph_reports/MR1764-1.html

The International Center for Research on Women http://www.icrw.org/

Although you may not be so interested in medical statistics today, you might be interested in some advances in visualizing data
"Video: Ted Talk – Visualizing the medical data explosion," Simoleon Sense, January 20, 2011

Bob Jensen's threads on multivariate data visualization are at

A Send Off From the Farm From an Expert on Neurology and Stress (and one of Stanford's very, very best teachers)
"Stanford Class Day Lecture 2009: The Uniqueness of Humans," by Professor Robert Sapolsky, Simoleon Sense, January 20, 2011 ---
This gets better and better as it goes along.

U.S. Department of Labor Compliance Assistance --- http://www.dol.gov/compliance/index.htm

Child Labor in America (Photographs) --- http://www.historyplace.com/unitedstates/childlabor/

World Bank: Open Development --- http://www.worldbank.org/open/

World Bank: News & Broadcast [iTunes, pdf]  --- http://www.worldbank.org/news

World Bank: Global Challenges --- http://www.worldbank.org/sixthemes

A Culture of Poverty

Reconsidering the 'Culture of Poverty'

Dairy and the US Congress --- http://cdi.uvm.edu/collections/getCollection.xql?pid=dairy&title=Dairy and the US Congress

Historical Oil Spill Information

The United States and Pakistan's Quest for the Bomb --- http://www.gwu.edu/~nsarchiv/nukevault/ebb333

GrantCraft [to help designers of grants and agencies awarding grants] --- http://www.grantcraft.org/

Constitution Daily --- http://blog.constitutioncenter.org/

The Constitution Project --- http://www.constitutionproject.org/ 

Bob Jensen's threads on Economics, Anthropology, Social Sciences, and Philosophy tutorials are at http://www.trinity.edu/rjensen/Bookbob2.htm#Social

Law and Legal Studies

U.S. Department of Labor Compliance Assistance --- http://www.dol.gov/compliance/index.htm

Child Labor in America (Photographs) --- http://www.historyplace.com/unitedstates/childlabor/

The International Center for Research on Women http://www.icrw.org/

American Women's History:  A Research Guide --- http://frank.mtsu.edu/~kmiddlet/history/women.html

Constitution Daily --- http://blog.constitutioncenter.org/

The Constitution Project --- http://www.constitutionproject.org/

Dairy and the US Congress --- http://cdi.uvm.edu/collections/getCollection.xql?pid=dairy&title=Dairy and the US Congress

Bob Jensen's threads on law and legal studies are at http://www.trinity.edu/rjensen/Bookbob2.htm#Law

Math Tutorials

Bob Jensen's threads on free online mathematics tutorials are at http://www.trinity.edu/rjensen/Bookbob2.htm#050421Mathematics

If you think the winning scratch lottery numbers are random, think again.
"Jonah Lehrer: The Genius Who Cracked The Scratch Lottery!" Simoleon Sense, February 1, 2011 ---

As a trained statistician with degrees from MIT and Stanford University, Srivastava was intrigued by the technical problem posed by the lottery ticket. In fact, it reminded him a lot of his day job, which involves consulting for mining and oil companies. A typical assignment for Srivastava goes like this: A mining company has multiple samples from a potential gold mine. Each sample gives a different estimate of the amount of mineral underground. “My job is to make sense of those results,” he says. “The numbers might seem random, as if the gold has just been scattered, but they’re actually not random at all. There are fundamental geologic forces that created those numbers. If I know the forces, I can decipher the samples. I can figure out how much gold is underground.”

Srivastava realized that the same logic could be applied to the lottery. The apparent randomness of the scratch ticket was just a facade, a mathematical lie. And this meant that the lottery system might actually be solvable, just like those mining samples. “At the time, I had no intention of cracking the tickets,” he says. He was just curious about the algorithm that produced the numbers. Walking back from the gas station with the chips and coffee he’d bought with his winnings, he turned the problem over in his mind. By the time he reached the office, he was confident that he knew how the software might work, how it could precisely control the number of winners while still appearing random. “It wasn’t that hard,” Srivastava says. “I do the same kind of math all day long.”

Jensen Comment
I don't think this analysis applies to drawing lotteries if the the drawings are honest. There are rare instances of drawing frauds like the time a lottery official put varying-sized drops of paint on the bouncing balls.

I never play scratch lotteries for a number of reasons. One of these reasons is that I visualize geniuses inventing scanners that store employees can use to read the numbers. Also it seems that it would be easier to overcome internal controls over scratch ticket manufacture vis-a-vis public drawings of winning numbers.

History Tutorials

National Digital Stewardship Alliance --- http://www.digitalpreservation.gov/ndsa/index.html

Iron Mountain Video:  TOP Secret Government Facility (holds Flight 93 evidence) ---

Not Even Past (History from the University of Texas) --- http://www.notevenpast.org/

Constitution Daily --- http://blog.constitutioncenter.org/

Birthplace of Country Music --- http://www.birthplaceofcountrymusic.org/

Vivian Maier: Her Discovered Work (photography) --- http://vivianmaier.blogspot.com/

A Song for the Horse Nation (history of Native American horses) --- http://www.nmai.si.edu/exhibitions/horsenation/

PBS Arts: Between the Folds: Eric Joisel, 1956-2010 [origami, paper art] --- http://www.pbs.org/arts/exhibit/between-the-folds/

"The Amazing Steam Engines Of The First Century: An online translation of an ancient text reveals some engineering marvels from antiquity," MIT's Technology Review, January 20, 2011 --- http://www.technologyreview.com/blog/arxiv/26285/?nlid=4034

Rufus Woods Photographs --- http://digital.lib.cwu.edu/cgi-bin/library?site=localhost&a=p&p=about&c=rufuswoo&l=en&w=utf-8

State of Siege: Mississippi Whites and the Civil Rights Movement --- http://americanradioworks.publicradio.org/features/mississippi/

Kennebec: A Portfolio of Maine Writing --- http://libraries.maine.edu/Kennebec/kennebec.htm

A Literary Map of Maine --- http://pressherald.mainetoday.com/news/literarymap/map.html

Steam and Electric Locomotives of the New Haven Railroad --- http://railroads.uconn.edu/locomotives/index.html

A Revolution in Wood: The Bresler Collection --- http://americanart.si.edu/exhibitions/archive/2010/bresler/

Charleston Earthquake 1886 --- http://www.sc.edu/library/digital/collections/quake.html

Transcontinental Railroad Pictures and Exhibits --- http://cprr.org/Museum/Exhibits.html

Utah State History --- http://history.utah.gov/

Utah Digital Newspapers --- http://digitalnewspapers.org/

American Women's History:  A Research Guide --- http://frank.mtsu.edu/~kmiddlet/history/women.html

The International Center for Research on Women http://www.icrw.org/

Historical Oil Spill Information

The United States and Pakistan's Quest for the Bomb --- http://www.gwu.edu/~nsarchiv/nukevault/ebb333

Felix de la Concha's Portraits in Conversation (audio interviews) --- http://digital.lib.uiowa.edu/felixdelaconcha/

History of Quantitative Finance
"Four features in appreciation of the life and work of Benoit Mandelbrot," Simoleon Sense, February 3, 2011 ---


Bob Jensen's threads on history tutorials are at http://www.trinity.edu/rjensen/Bookbob2.htm#History
Also see http://www.trinity.edu/rjensen/ElectronicLiterature.htm  

Language Tutorials

Bob Jensen's links to language tutorials are at http://www.trinity.edu/rjensen/Bookbob2.htm#Languages

Music Tutorials

Birthplace of Country Music --- http://www.birthplaceofcountrymusic.org/

Bob Jensen's threads on free music tutorials are at

Bob Jensen's threads on music performances ---

Writing Tutorials

Kennebec: A Portfolio of Maine Writing --- http://libraries.maine.edu/Kennebec/kennebec.htm

Illustration of Writing With Awfully Big Words
"Cadillac's Insane, Unnecessary, Awesome Wagon," The Wall Street Journal, January 29, 2011 ---

Let's say you bought this car, a Cadillac CTS-V Sport Wagon, with a 6.2-liter, 556-horsepower Corvette V8, six-speed manual transmission, magnetorheological dampers (I'll get to that), Michelin SP2 gumballs, 15-inch front Brembo brakes with six-pot calipers, and microsuede wrapping on the steering wheel and shifter. Well, first of all, you'd be one strange cat, which is to say, unusual. Notwithstanding any nitro-burning ice-cream trucks or flying boattail Rollses in your neighborhood, this wagon is about as esoteric an automobile as you're likely to find. Statistically speaking, General Motors will sell exactly none of these cars, the Detroit equivalent of Zoroastrianism.

. . .

Like the Corvette ZR1 and the CTS-V Coupe, the wagon is set up on magnetorheological dampers, which use micro-metallic particles in the dampers to vary viscosity according to the car's dynamic sensors. The result is an easy and composed ride in daily driving, and the ease and composure doesn't diminish as you start to throw the car around. The front tires take a huge bite on turn-in, the car barely rolls and then it burrows into a corner like a tick. This car has no bad habits, particularly as you approach the limits of tire adhesion. Like the V-Coupe's, the V-Wagon's stability-control system has a sport map, and once engaged, it makes it hilariously easy to rotate the car under power. This thing is the drifting king of your kid's preschool porte cochere.

From the tuft of its excellent Recaro seats to the melty rubber bits under the tires, the V-Wagon is illicit, overpowering, sexy and a touch scary. If it were boxing gloves it would be banned by the Nevada State Athletic Commission. I recognize to love it is to be played a bit by GM's marketing guys, but I don't even care. The V-Wagon is never boring. That's all I ask.


Bob Jensen's helpers for writers are at http://www.trinity.edu/rjensen/Bookbob3.htm#Dictionaries

Updates from WebMD --- http://www.webmd.com/

January 20, 2011

January 21, 2011

January 22, 2011

January 25, 2011

January 26, 2011

January 27, 2011

January 28, 2011

January 29, 2011

January 31, 2011

February 1, 2011

February 2, 2011

February 3, 2011

February 5, 2011

February 5, 2011

Alzheimer's Color Test (not humor)--- http://www.humorsphere.com/fun/8787/colortest.swf 

"Protein Is Found to Boost Memory," by Shirley S. Wang, The Wall Street Journal, January 27, 2011 ---

The hunt for a substance that can improve memory took a promising turn Wednesday, as researchers said they had found a method that appears to reduce forgetting in rats.

According to a study published in the journal Nature, scientists from Mount Sinai School of Medicine in New York showed for the first time that a molecule that occurs naturally in the human brain during memory formation appeared to help rats enhance the strength and duration of some types of memories.

Researchers said that when the substance—known as IGF-II, a protein-like molecule important for cell growth and development as well as tissue repair—was blocked from the brain, the rats didn't remember what they had learned.

The findings are notable in part because they showed improvement in an area of memory known as declarative memory—the ability to remember places, facts and things. Declarative memory is affected in Alzheimer's disease and other forms of dementia, and researchers have long sought ways to improve or preserve it.

It is too early to say whether IGF-II will be useful in humans, but the substance may hold more promise than molecules that have been studied up to now, according to Elizabeth Phelps, a cognitive neuroscientist at New York University who studies human learning and memory. Dr. Phelps, who wasn't involved in the study, called the Nature research "rigorous" and thoroughly conducted.

One advantage of IGF-II is that it can cross the blood-brain barrier, so it could potentially be administered through the bloodstream or as a vapor through the nose, rather than injected directly into the brain. And because it exists in the body already, it's unlikely to be toxic.

However, researchers will watch for unwanted effects on other cells in the body, said Cristina Alberini, a neuroscience professor at Mount Sinai and the senior author of the paper.

Certain proteins and molecules are needed to build and strengthen connections between nerve cells in the brain to form new long-term memories, and IGF-II appears to be one of those molecules. But more research is needed, according to Dr. Alberini.

"The more we know, the more we're going to uncover what are the steps that make memory strong," she said. "Then we'll get ideas for other [molecular] targets."


Video:  The Aaron Rodgers Story (that features a lot of Brett Favre in early part of the video while Rodgers watched from the bench) ---

It doesn't matter which team you are cheering for tonight, but I think the Super Bowl will have more meaning if you know a bit about Green Bay's great quarterback. My former boss and mentor, Don Edwards, forwarded this to me. Over the years Don has seen some great football players come and go at Michigan State, Minnesota, and Georgia. This is the only message, however, that Don has sent to me about a football player.

Bob Jensen

Forwarded by James Don Edwards

This is written by a sports anchor from Fox 6 in Milwaukee.

"Save Me a Spot"
This job affords me some incredible opportunities. Being a member of the FOX 6 Sports team means I've been able to witness and report on events and people that many can only admire from a distance. I never take these situations for granted and sincerely appreciate being involved in whatever capacity each permits.

Monday marked just the most recent case as I had the unparalleled privilege to be a part of Aaron Rodgers charity event to benefit the MACC Fund, a charity towards eradicating childhood cancer and blood disorders.

Scattered throughout the crowd of rabid Packers aficionados, were the people who I consider the event's real MVPs. They are the families who've been forced to deal with one of life's toughest sentences – the loss of a child.

Those who sprung for the tickets were not disappointed. In a world where many athletes regurgitate canned and rehearsed responses, the Packers quarterback was refreshingly candid. Aaron addressed a number of topics with in-depth, honest reaction - even some that if reprinted and mass distributed might raise some eyebrows.

Aaron stressed the importance of availability and accountability. In his opinion, it is a player's responsibility to attend all of the team activities as they are all intended to better the team as a whole. And then, similarly, he addressed the importance of taking the heat/criticism when one falls short of expectations and duties.

He is never nervous to take the field. Aaron is supremely confident in the preparation he's put in during the week leading up to Sunday's match up. The way the 2009 season ended was disappointing but his self-confidence was not affected by the outcome. One of the toughest realizations was that that combination of players would never take the field together again. He likened the team to a family and admitted that conflict can and does occasionally exist but they try to handle such situations with maturity and civility.

He talked music and his love for tunes at a young age revealing that his mom used to sing and play lullabies and country music when he was a child. Aaron's record label Suspended Sunrise is a product of this passion but also a contingency plan for life after football. His favorite song is Ben Harper's 'Forever' and he's envious of John Mayer's guitar skills though not his tabloid reputation. He appreciated my affinity for Keith Urban but gave the audience a thumbs-down when I mentioned fellow country crooner Kenny Chesney.

His favorite book is The Bible and he tries to read it every day not just when life's challenges and struggles surface.

His favorite movie is The Princess Bride which he admits he's caught flack for but says he and his childhood friends can recite every line from the film and it is simply a great story.

Rodgers' answers to questions on this night were certainly admirable. And I honestly didn't think I could respect Aaron more. But I was wrong.

My friend, the father of that young girl who passed, was there that night. He was one of several attendees brought up on stage where he caught a football thrown by the quarterback of the Green Bay Packers.

He asked Aaron to sign the football he'd caught. He wondered if he'd make it out to his daughter. It isn't shocking that Rodgers obliged. What caught me off guard was the dedication he made. It wasn't until after Aaron left that I first saw the autograph... and the simple yet sweet message that brought tears to this father's eyes:

"To Cheri the angel. Save me a spot. - Aaron Rodgers"

I hope that Packers fans realize how lucky they are to have such an upstanding young man leading their team on the field every weekend. I hope they appreciate the challenges that were thrust upon him and acknowledge the maturity with which he handled them. I hope they stand behind the kid and respect him not only for his incredible talent but for his intelligence and honesty, poise and compassion.

My job has afforded me the chance to watch Aaron Rodgers play football for the last few seasons. But I am truly thankful for the opportunity to see the other side of this impressive young man. And pass on some of what I witnessed to you.

The Internet was invented in 1969 and used various protocols (such as FTP) for transmission of messages and data for about 20 years before the World Wide Web's HTML protocol was invented ---

@ = "about?"
A Bit of Media History when Katie Couric cracks her knuckles
Here's a Today Show video segment demonstrating how some leading figures of the media were not yet informed about the Internet 25 years after it was invented and five years after the WWW was invented ---

Forwarded by Eileen

Terrorist Alerts by John Cleese (from Monty Python)

The English are feeling the pinch in relation to recent terrorist threats and have therefore raised their security level from "Miffed" to "Peeved." Soon, though, security levels may be raised yet again to "Irritated" or even "A Bit Cross." The English have not been "A Bit Cross" since the blitz in 1940 when tea supplies nearly ran out. Terrorists have been re-categorized from "Tiresome" to "A Bloody Nuisance." The last time the British issued a "Bloody Nuisance" warning level was in 1588, when threatened by the Spanish Armada.

The Scots have raised their threat level from "Pissed Off" to "Let's get the Bastards." They don't have any other levels. This is the reason they have been used on the front line of the British army for the last 300 years.

The French government announced yesterday that it has raised its terror alert level from "Run" to "Hide." The only two higher levels in France are “Collaborate" and "Surrender." The rise was precipitated by a recent fire that destroyed France’s white flag factory, effectively paralyzing the country's military capability.

Italy has increased the alert level from "Shout loudly and excitedly" to "Elaborate Military Posturing." Two more levels remain: "Ineffective Combat Operations" and "Change Sides."

The Germans have increased their alert state from "Disdainful Arrogance" to "Dress in Uniform and Sing Marching Songs." They also have two higher levels: "Invade a Neighbor" and "Lose."

Belgians, on the other hand, are all on holiday as usual; the only threat they are worried about is NATO pulling out of Brussels.

The Spanish are all excited to see their new submarines ready to deploy. These beautifully designed subs have glass bottoms so the new Spanish navy can get a really good look at the old Spanish navy.

Forwarded by Paula

Question: If you could live forever, would you and why?

Answer: "I would not live forever, because we should not live forever, because if we were supposed to live forever, then we would live forever, but we cannot live forever, which is why I would not live forever,"

--Miss Alabama in the 1994 Miss USA contest.


"Whenever I watch TV and see those poor starving kids all over the world, I can't help but cry. I mean I'd love to be skinny like that, but not with all those flies and death and stuff."

--Mariah Carey


"Smoking kills. If you're killed, you've lost a very important part of your life,"

-- Brooke Shields, during an interview to become spokesperson for federal anti-smoking campaign


"I've never had major knee surgery on any other part of my body,"

--Winston Bennett, University of Kentucky basketball forward.


"Outside of the killings, Washington has one of the lowest crime rates in the country,"

--Mayor Marion Barry, Washington , DC . ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

"That lowdown scoundrel deserves to be kicked to death by a jackass, and I'm just the one to do it,"

--A congressional candidate in Texas .


"Half this game is ninety percent mental."

--Philadelphia Phillies manager, Danny Ozark


"It isn't pollution that's harming the environment. It's the impurities in our air and water that are doing it.."

--Al Gore, Vice President


"I love California . I practically grew up in Phoenix "

-- Dan Quayle


"We've got to pause and ask ourselves: How much clean air do we need?"

--Lee Iacocca


"The word "genius" isn't applicable in football. A genius is a guy like Norman Einstein."

--Joe Theisman, NFL football quarterback & sports analyst.


"We don't necessarily discriminate. We simply exclude certain types of people."

-- Colonel Gerald Wellman, ROTC Instructor.


"Your food stamps will be stopped effective March 1992 because we received notice that you passed away. May God bless you. You may reapply if there is a change in your circumstances."

--Department of Social Services, Greenville , South Carolina


"Traditionally, most of Australia 's imports come from overseas."

--Keppel Enderbery


"If somebody has a bad heart, they can plug this jack in at night as they go to bed and it will monitor their heart throughout the night. And the next morning, when they wake up dead, there'll be a record."

--Mark S. Fowler, FCC Chairman

Forwarded by Maureen

86-year Old Lady's Letter to Bank

Shown below, is an actual letter that was sent to a bank by an 86 year old woman. The bank manager thought it amusing enough to have it published in the New York Times.

Dear Sir:

I am writing to thank you for bouncing my check with which I endeavored to pay my plumber last month. By my calculations, three nanoseconds must have elapsed between his presenting the check and the arrival in my account of the funds needed to honor it..

I refer, of course, to the automatic monthly deposit of my entire pension, an arrangement which, I admit, has been in place for only eight years.

You are to be commended for seizing that brief window of opportunity, and also for debiting my account $30 by way of penalty for the inconvenience caused to your bank.

My thankfulness springs from the manner in which this incident has caused me to rethink my errant financial ways. I noticed that whereas I personally answer your telephone calls and letters, --- when I try to contact you, I am confronted by the impersonal, overcharging, pre-recorded, faceless entity which your bank has become.

>From now on, I, like you, choose only to deal with a flesh-and-blood person.

My mortgage and loan repayments will therefore and hereafter no longer be automatic, but will arrive at your bank, by check, addressed personally and confidentially to an employee at your bank whom you must nominate.

Be aware that it is an offence under the Postal Act for any other person to open such an envelope.

Please find attached an Application Contact which I require your chosen employee to complete.

I am sorry it runs to eight pages, but in order that I know as much about him or her as your bank knows about me, there is no alternative.

Please note that all copies of his or her medical history must be countersigned by a Notary Public, and the mandatory details of his/her financial situation (income, debts, assets and liabilities) must be accompanied by documented proof.

In due course, at MY convenience, I will issue your employee with a PIN number which he/she must quote in dealings with me.

I regret that it cannot be shorter than 28 digits but, again, I have modeled it on the number of button presses required of me to access my account balance on your phone bank service.

As they say, imitation is the sincerest form of flattery.

Let me level the playing field even further.

When you call me, press buttons as follows:


#1. To make an appointment to see me

#2. To query a missing payment.

#3. To transfer the call to my living room in case I am there.

#4 To transfer the call to my bedroom in case I am sleeping

#5. To transfer the call to my toilet in case I am attending to nature.

#6. To transfer the call to my mobile phone if I am not at home

#7. To leave a message on my computer, a password to access my computer is required.

Password will be communicated to you at a later date to that Authorized Contact mentioned earlier.

#8. To return to the main menu and to listen to options 1 through 7.

#9. To make a general complaint or inquiry.

The contact will then be put on hold, pending the attention of my automated answering service.

#10. This is a second reminder to press* for English.

While this may, on occasion, involve a lengthy wait, uplifting music will play for the duration of the call.

Regrettably, but again following your example, I must also levy an establishment fee to cover the setting up of this new arrangement.

May I wish you a happy, if ever so slightly less prosperous New Year?

Your Humble Client

And remember: Don't make old People mad.

We don't like being old in the first place, so it doesn't take much to piss us off.

Forwarded by Paula

Men Are Just Happier People  


·        If Laura, Kate and Sarah go out for lunch, they will call each other Laura, Kate and Sarah.

·        If Larry, Dave and John go out, they will affectionately refer to each other as Fat Boy, Dickhead and Shit for Brains.


·        When the bill arrives, Larry, Dave and John will each throw in $20, even though it's only for $32.50.  None of them will have anything smaller and none will actually admit they want change back.

·        When the girls get their bill, out come the pocket calculators.


·        A man will pay $2 for a $1 item he needs.

·        A woman will pay $1 for a $2 item that she doesn't need but it's on sale.


·        A man has six items in his bathroom: toothbrush and toothpaste, shaving cream, razor, a bar of soap, and a towel.

·        The average number of items in the typical woman's bathroom is 337.  A man would not be able to identify more than 20 of these items.


·        A woman has the last word in any argument.

·        Anything a man says after that is the beginning of a new argument.


·        A woman worries about the future until she gets a husband.

·        A man never worries about the future until he gets a wife.


·        A successful man is one who makes more money than his wife can spend.

·        A successful woman is one who can find such a man.


·        A woman marries a man expecting he will change, but he doesn't.

·        A man marries a woman expecting that she won't change, but she does.


·        A woman will dress up to go shopping, water the plants, empty the trash, answer the phone, read a book, and get the mail.

·        A man will dress up for weddings and funerals.


·        Men wake up as good-looking as they went to bed.

·        Women somehow deteriorate during the night.


·        Ah, children.  A woman knows all about her children.  She knows about dentist appointments and romances, best friends, favorite foods, secret fears and hopes and dreams.

·        A man is vaguely aware of some short people living in the house.


A married man should forget his mistakes.  There's no use in two people remembering the same thing!


Tidbits Archives --- 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/

Find a College
College Atlas --- http://www.collegeatlas.org/
Among other things the above site provides acceptance rate percentages
Online Distance Education Training and Education --- http://www.trinity.edu/rjensen/Crossborder.htm
For-Profit Universities Operating in the Gray Zone of Fraud  (College, Inc.) --- http://www.trinity.edu/rjensen/HigherEdControversies.htm#ForProfitFraud

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

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 ---


World Clock --- http://www.peterussell.com/Odds/WorldClock.php
Facts about the earth in real time --- http://www.worldometers.info/

Interesting Online Clock and Calendar --- http://home.tiscali.nl/annejan/swf/timeline.swf
Time by Time Zones --- http://timeticker.com/
Projected Population Growth (it's out of control) --- http://geography.about.com/od/obtainpopulationdata/a/worldpopulation.htm
         Also see http://users.rcn.com/jkimball.ma.ultranet/BiologyPages/P/Populations.html
Facts about population growth (video) --- http://www.youtube.com/watch?v=pMcfrLYDm2U
Projected U.S. Population Growth --- http://www.carryingcapacity.org/projections75.html
Real time meter of the U.S. cost of the war in Iraq --- http://www.costofwar.com/ 
Enter you zip code to get Census Bureau comparisons --- http://zipskinny.com/
Sure wish there'd be a little good news today.

Free (updated) Basic Accounting Textbook --- search for Hoyle at

CPA Examination --- http://en.wikipedia.org/wiki/Cpa_examination
Free CPA Examination Review Course Courtesy of Joe Hoyle --- http://cpareviewforfree.com/

Rick Lillie's education, learning, and technology blog is at http://iaed.wordpress.com/

Accounting News, Blogs, Listservs, and Social Networking ---

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

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

Some of Bob Jensen's Tutorials

Accounting program news items for colleges are posted at http://www.accountingweb.com/news/college_news.html
Sometimes the news items provide links to teaching resources for accounting educators.
Any college may post a news item.

Accountancy Discussion ListServs:

For an elaboration on the reasons you should join a ListServ (usually for free) go to   http://www.trinity.edu/rjensen/ListServRoles.htm
AECM (Educators)  http://pacioli.loyola.edu/aecm/ 
AECM is an email Listserv list which provides a forum for discussions of all hardware and software which can be useful in any way for accounting education at the college/university level. Hardware includes all platforms and peripherals. Software includes spreadsheets, practice sets, multimedia authoring and presentation packages, data base programs, tax packages, World Wide Web applications, etc

Roles of a ListServ --- http://www.trinity.edu/rjensen/ListServRoles.htm

CPAS-L (Practitioners) http://pacioli.loyola.edu/cpas-l/ 
CPAS-L provides a forum for discussions of all aspects of the practice of accounting. It provides an unmoderated environment where issues, questions, comments, ideas, etc. related to accounting can be freely discussed. Members are welcome to take an active role by posting to CPAS-L or an inactive role by just monitoring the list. You qualify for a free subscription if you are either a CPA or a professional accountant in public accounting, private industry, government or education. Others will be denied access.
Yahoo (Practitioners)  http://groups.yahoo.com/group/xyztalk
This forum is for CPAs to discuss the activities of the AICPA. This can be anything  from the CPA2BIZ portal to the XYZ initiative or anything else that relates to the AICPA.
AccountantsWorld  http://accountantsworld.com/forums/default.asp?scope=1 
This site hosts various discussion groups on such topics as accounting software, consulting, financial planning, fixed assets, payroll, human resources, profit on the Internet, and taxation.
Business Valuation Group BusValGroup-subscribe@topica.com 
This discussion group is headed by Randy Schostag [RSchostag@BUSVALGROUP.COM

Many useful accounting sites (scroll down) --- http://www.iasplus.com/links/links.htm


Bob Jensen's Sort-of 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

Some Accounting History Sites

Bob Jensen's Accounting History in a Nutshell and Links --- http://www.trinity.edu/rjensen/theory01.htm#AccountingHistory

Accounting History Libraries at the University of Mississippi (Ole Miss) --- http://www.olemiss.edu/depts/accountancy/libraries.html
The above libraries include international accounting history.
The above libraries include film and video historical collections.

MAAW Knowledge Portal for Management and Accounting --- http://maaw.info/

Academy of Accounting Historians and the Accounting Historians Journal ---

Sage Accounting History --- http://ach.sagepub.com/cgi/pdf_extract/11/3/269

A nice timeline on the development of U.S. standards and the evolution of thinking about the income statement versus the balance sheet is provided at:
"The Evolution of U.S. GAAP: The Political Forces Behind Professional Standards (1930-1973)," by Stephen A. Zeff, CPA Journal, January 2005 --- http://www.nysscpa.org/cpajournal/2005/105/infocus/p18.htm
Part II covering years 1974-2003 published in February 2005 --- http://www.nysscpa.org/cpajournal/2005/205/index.htm 

A nice timeline of accounting history --- http://www.docstoc.com/docs/2187711/A-HISTORY-OF-ACCOUNTING

From Texas A&M University
Accounting History Outline --- http://acct.tamu.edu/giroux/history.html

Bob Jensen's timeline of derivative financial instruments and hedge accounting ---

History of Fraud in America --- http://www.trinity.edu/rjensen/415wp/AmericanHistoryOfFraud.htm
Also see http://www.trinity.edu/rjensen/Fraud.htm



Professor Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
190 Sunset Hill Road
Sugar Hill, NH 03586
Phone:  603-823-8482 
Email:  rjensen@trinity.edu