To Accompany the March 29, 2012 edition of Tidbits
Bob Jensen at Trinity University
The difference between genius and stupidity is that
genius has its limits.
World Population ---
TED Video: Paul Gilding: The Earth is full --- Click Here
The American Dream versus the China Dream versus the Danish Dream ---
Harvard Professor Contends Racism is Permanent in American ---
Robert Shiller --- http://en.wikipedia.org/wiki/Robert_Shiller
Walt Whitman --- http://en.wikipedia.org/wiki/Walt_Whitman
Myths of Economic Inequality
"Walt Whitman, First Artist of Finance (Part 1)," by Yale Economist Robert Shiller, Bloomberg, March 5, 2012 ---
"Finance Isn’t as Amoral as It Seems (Part 2)," by Yale Economist
Robert Shiller, Bloomberg, March 5, 2012 ---
Don't forget to read the mostly negative comments.
"Don’t Resent the Rich; Fix the Tax Code (Part 3)," by Yale Economist
Robert Shiller, Bloomberg, March 6, 2012 ---
Don't forget to read the mostly negative comments.
"Logic of Finance Can Banish Corruption (Part 4)," by Yale Economist
Robert Shiller, Bloomberg, March 7, 2012 ---
Don't forget to read the mostly negative comments.
Bob Jensen's threads on fraud and corruption --- http://www.trinity.edu/rjensen/Fraud.htm
The American Dream ---
On the Myths of Income Inequality
Part 1 by Yale by Robert Shiller, Arthur M. Okun Professor of Economics at Yale University and is a Fellow at the Yale International Center for Finance
"Walt Whitman, First Artist of Finance (Part 1)," by Robert Shiller, Bloomberg,
March 4, 2012 ---
One of the myths surrounding economic inequality in our society is that high incomes are often the result of selfishness and narrow-mindedness, rather than idealism and humanity. We tend to think that those in careers other than our own are fundamentally different kinds of people.
Personality and character differences are, indeed, somewhat associated with occupation. But we tend to attribute the behavior of others to personality differences far more often than is warranted.
We tend to think of philosophers, artists or poets as the polar opposite of chief executive officers, bankers or businesspeople. But the idea that those involved in business have personalities fundamentally different from those in other walks of life is belied by the fact that many often combine or switch careers. Consider a few examples.
Continued in article
March 23. 2012 reply from Roger Collins
Two of seventeen comments on Robert Shiller's article...
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Peon2012 2 weeks ago
as far as I can tell all this article points out is that koons and hirst are much more financially successful than Whitman and Thoreau. 1) Hirst and Koons can't be considered artists, they are nothing better than con men. 2) during his time on Walden Pond Thoreau did everything he could to avoid transactions with outsiders. Taking one word, from one sentence of his and misconstruing it totally perverts his whole philosophy 3) why has an economics professor chosen a sample size of about 5? What about Tolstoy who sought to give his entire legacy to the people? Rembrant who died penniless? Kerouac, Orwell who endured poverty for their art, Lucian Freud who gambled his money away cos he found it an impediment to painting..
This article is a poorly research justification of the writers' existing beliefs.Written for an audience which wants to hear it.
Frederic Mari in reply to Peon2012 2 weeks ago
I'd be slightly less ferocious and presume that Dr. Shiller's views are more innocent than you do. However, I think that this comment "What about Tolstoy who sought to give his entire legacy to the people? Rembrant who died penniless? Kerouac, Orwell who endured poverty for their art, Lucian Freud who gambled his money away cos he found it an impediment to painting..." is key.
Sure, everyone needs to make a living and I don't actually believe that many people believe "high incomes are often the result of selfishness and narrow-mindedness". High incomes are the result of being in the right place, at the right time with the right tools. And, if you become rich enough, then you can manipulate the marketplace and the laws to be sure that the time, the place and your tools remain connected, for your greater benefit...
Also: "People in the most spiritually minded professions -- those who work in the church, the arts or philanthropy, for example -- are routinely involved in managing financial resources and executing deals and contracts".
I wouldn't think anyone is in any doubt that the church, the arts and NGOs are ideal place for crooks wanting to make a quick buck. You can use the coat of virtue to cover all kinds of financial shenanigans... Not for nothing are successful churches so rich, on average...
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It will be interesting to see Part 2 of this series.
The American Dream ---
A Carnegie-Mellon Professor says the widening gap between the top 1% and the remaining 99% is no proof that capitalism is unjust
"A Look at the Global One Percent: The remarkable similarity in
income distribution across countries over the past century means domestic policy
has less effect than many believe on who gets what," by Allan Meltzer,
The Wall Street Journal, March 9, 2012 ---
While the Occupy Wall Street movement may be waning, the perception of growing income inequality in America is not. For those on the left, the widening gap between the top 1% of earners and the remaining 99% is proof that American capitalism is unjust and should be traded in for an economic model more closely resembling the social democracies of Europe.
But an examination of changes in income distribution over nearly 100 years, not just in the United States but elsewhere in the developed world, does not bear this out. In a 2006 study titled "The Evolution of Top Incomes in an Egalitarian Society," Swedish economists Jesper Roine and Daniel Waldenström compared the income share of the top 1% of earners in seven countries from the early 1900s to 2004. Those countries—the U.S., Sweden, France, Australia, Britain, Canada and the Netherlands—all practice some type of democratic capitalism but also a fair amount of redistribution.
As the nearby chart from the Roine and Waldenström study shows, the share of income for the top 1% in these seven countries generally follows the same trend line. That means domestic policy can't be the principal reason for the current spread between high earners and others. Since the 1980s, that spread has increased in nearly all seven countries. The U.S. and Sweden, countries with very different systems of redistribution, along with the U.K. and Canada show the largest increase in the share of income for the top 1%.
The main reasons for these increases are not hard to find. Adding a few hundred million Chinese and Indians to the world's productive labor force after 1980 slowed the rise in income for workers all over the developed world. That's the most important factor at work. The top 1% gain relatively because they are less affected by the hordes of newly productive workers.
But the top 1% have another advantage. Many of them have unique skills that are difficult to replicate. Our top earners include entrepreneurs, rock stars, professional athletes, surgeons and lawyers. Also included are the managers of large international corporations and, yes, bankers and financiers. (Interestingly, the Occupy movement seldom criticizes athletes or rock stars.)
The most dramatic change shown in the chart is the decline in the top 1% of Swedish earners' share of total income to between 5%-10% in the 1960s from well over 25% in 1903. The Swedish authors explain that drop as mainly due to the decline in real interest rates that lowered incomes of rentiers who depended on interest and dividends. Capitalist development, not income redistribution, brought that change.
Income-redistribution programs that became widespread in the 1960s and 1970s had a much smaller influence than market forces. Between 1960 and 1980, the share going to the top 1% declined, but the decline is modest. The share of the top percentile had been reduced everywhere by 1960. Massive redistributive policies in Sweden did more than elsewhere to lower the top earners' share of total income. Still, the difference in 1980 between Sweden and the U.S. is only about four percentage points. As the chart shows, the top earners in both countries began to increase their share of income in 1980.
The big error made by those on the left is to believe that redistribution permits the 99% or 90% to gain at the expense of top earners. In much current political discussion, this is taken as an unchallenged truth. It should not be. The lasting opportunity for the poor is better jobs produced by investments, many of which are financed by those who earn high incomes. It makes little sense to applaud the contribution to all of us made by the late Steve Jobs while favoring policies that reduce incentives for innovators and investors.
Our system is democratic capitalism. In every national election, the public expresses its preference for taxation and redistribution. It is a democratic choice, not a plot controlled by one's most despised interest group. The much-maligned Congress is unable to pass a budget because it is elected by people who have conflicting ideas about taxes and redistribution. President Obama wants higher tax rates to pay for more redistribution now. The Republicans, recalling Ronald Reagan and Margaret Thatcher and much of the history of democratic capitalist countries, want lower tax rates and less regulation to bring higher growth and to help pay for some of the future health care and pensions promised to an aging population.
Regardless of one's economic philosophy, the public deserves an accurate presentation of the reasons for the change in income distribution. The change is occurring in all the developed countries. The chart shows that policies that redistribute wealth and income have at most a modest effect on income shares. As President John F. Kennedy often said, the better way is "a rising tide that lifts all boats."
Mr. Meltzer, a professor of public policy at the Tepper School, Carnegie Mellon University and a visiting scholar at Stanford University's Hoover Institution, is the author most recently of "Why Capitalism?" just published by Oxford University Press.
"Adam Smith vs. Crony Capitalism: The Scottish philosopher's
suspicions about business people were well-founded," by Sheldon Richman,
Reason Magazine, March 9, 2012 ---
I admit it: I like Adam Smith. His perceptiveness never fails to impress. True, he didn’t foresee the marginal revolution that Carl Menger would launch a century later (with, less significantly in my view, Jevons and Walras), but give the guy a break. The Wealth of Nations is a great piece of work.
One thing I find refreshing in Smith is his wariness of business people. This is something we ought to frequently remind market skeptics. Smith knew the difference between being sympathetic to the competitive economy—which he called the “system of natural liberty”—and being sympathetic to owners of capital (who might well have acquired it by less-than-kosher means, that is, through political privilege). He knew something about business lobbies.
This famous passage from book 1, chapter of Wealth is often quoted by opponents of the free market:
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.
The quote is used to justify antitrust law and other government intervention. But as has often been pointed out in response, Smith had no such policies in mind. We know this because he immediately follows with:
It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.
Government should do nothing to encourage or enable attempts to limit competition. But of course government does that all the time at the behest of business and to the detriment of consumers and workers. Hampering competition raises prices for the former and weakens bargaining power—and therefore lowers wages—for the latter. Those groups would be the prime beneficiaries of freed markets.
That’s not the only time Smith expresses his anti-business sentiment. In the next chapter he discusses the division of income among landlords, workers, and owners of capital. Here Smith and the classicals suffered from their lack of marginal analysis, subjectivism, and thoroughgoing methodological individualism. As Professor Joseph Salerno has written,
Regarding the question concerning the determination of the incomes of the factors of production, the Classical analysis was almost completely worthless because, once again, it was conducted in terms of broad and homogeneous classes, such as “labor” “land” and “capital.” This diverted the Classical theorists from the important task of explaining the market value or actual prices of specific kinds of resources, instead favoring a chimerical search for the principles by which the aggregate income shares of the three classes of factor owners—laborers, landlords and capitalists—are governed. The Classical school’s theory of distribution was thus totally disconnected from its quasi-praxeological theory of price, and focused almost exclusively on the differing objective qualities of land, labor, and capital as the explanation for the division of aggregate income among them. Whereas the core of Classical price and production theory included a sophisticated theory of calculable action, Classical distribution theory crudely focused on the technical qualities of goods alone.
“Narrow the Competition”
Nevertheless, Smith’s chapter contains another perceptive skeptical reference to “those who live by profit.” He writes:
Merchants and master manufacturers are . . . the two classes of people who commonly employ the largest capitals, and who by their wealth draw to themselves the greatest share of the public consideration. As during their whole lives they are engaged in plans and projects, they have frequently more acuteness of understanding than the greater part of country gentlemen. As their thoughts, however, are commonly exercised rather about the interest of their own particular branch of business, than about that of the society, their judgment, even when given with the greatest candour (which it has not been upon every occasion) is much more to be depended upon with regard to the former of those two objects, than with regard to the latter. . . . The interest of the dealers . . . in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens. [Emphasis added.]
Smith harbored no romanticism about those who have long seen rent-seeking as the path to wealth not available in the freed market. In case we didn’t quite get his point, Smith goes on:
"The proposal of any new law or regulation of commerce which comes from this order [that is, 'those who live by profit'], ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it." [Emphasis added.]
Continued in article
The American Dream ---
One reason Mexico has the lowest poverty rate (along with Chile as a free trade country) south of the Rio Grande
A few days ago on the AECM listserv I mentioned that, in spite of all the media hype about drug gang violence in Mexico, the Mexican work force is quite good and competes very well with its neighbors to the south and north. In fact maybe this is why Chrysler is building a huge factory in Mexico to make Fiats to be sold in America. Uncle Sam now owns Chrysler but seems willing to let Chrysler build yet another factory in Mexico.
"Two ways to make a car," The Economist, March 10-16, 2012, pp. 48-49 --- http://www.economist.com/node/21549950
. . .
By throwing open its market under the North American Free-Trade Agreement (NAFTA) with the United States and Canada and a host of other bilateral trade accords, Mexico has become a base from which carmakers export to both halves of the Americas, and worldwide. Volkswagen, for example, makes all its Beetles and Jettas there. Although Nissan produces some vehicles at a Renault plant in Brazil, most of those it sells in Latin America come from two plants in Mexico. In all, 2.1m of the 2.6m vehicles produced in Mexico last year were exported. In this section
By contrast, in Brazil the main aim of public policy has been to push carmakers to build local factories from which to supply the country’s huge domestic market. Only 540,000 of the 3.4m vehicles manufactured in the country last year were exported. Around three-quarters of Brazil’s car exports go to Argentina. Mercosur, to which both countries belong, has long aspired roughly to balance trade in cars and car parts between the two.
. . .
Mexico suffered a big shake-out of its industry when NAFTA came into effect in 1994. A decade ago it saw several hundred thousand jobs in assembly plants go to China. But openness to global competition has made Mexico’s surviving industries highly efficient. Industrial production has grown again in the past two years. Manufacturing’s share of GDP has remained steady at between 17% and 18% since 2003.
In contrast, Brazil’s government sees the country’s domestic market as an asset to be protected. And it sees imports from China, made even cheaper by the strength of the real, as a threat to its industry. “The regional economy has been threatened by predatory competition that has taken hold around the globe,” said Fernando Pimentel, the industry minister, last year. “Developed countries are those that have industry and we’re going to protect our own.”
Yet Brazil’s growing protectionism risks locking in high costs. The country has “a competitiveness problem, not a trade problem,” says Ricardo Mendes of Prospectiva, a consultancy in São Paulo. Manufacturing’s share of GDP has fallen from 17.2% in 2000 to 14.6% in 2011. Falling industrial production was one reason Brazil’s economy grew by just 2.7% last year. The blame lies mainly with high interest rates and other domestic burdens.
Mercosur was supposed to provide a bigger market for Brazilian industry. But Brazil is now locked in a series of trade spats with Argentina, which is even more protectionist. Débora Giorgi, Argentina’s industry minister, and Guido Mantega, Brazil’s finance minister, recently suggested that Mercosur should raise its common external tariff. That will not go down well with Uruguay and Paraguay, the group’s smaller members. But even if it did, it looks like a recipe for industrial decline.
Where is there currently the least amount of grade inflation?
States Graded by Accountability
The Center for Public Integrity, March 2012
"Contest for Funniest New Jersey Joke Has a Winner," by Jonathan Weil, Bloomberg, March 22, 2012 ---
Did you hear the latest joke about New Jersey? A group of investigative journalists this week released a report calling it the least corruptible state in the country. How did that happen?
Easy. We bribed them.
ll kidding aside, this is a state where in 2009 three mayors, two assemblymen and five rabbis were among 44 charged in a single money-laundering and bribery sting by the Federal Bureau of Investigation. One of those mayors, Peter Cammarano, was from Hoboken, where I live. He was sentenced to 24 months in prison. Five years before his arrest, another former Hoboken mayor, Anthony Russo, pleaded guilty to corruption charges. His son now sits on the city council.
In New Jersey, we expect corruption. It’s built into the system. We have 566 municipalities, the most per capita of any state. Local governments tax the citizenry dry, while preserving the opportunities for graft that flow from operating redundant public services. The state legislature likes it this way and always has. Whadayagonnado?
So it was quite a story this week when the Center for Public Integrity, a Washington-based nonprofit, ranked New Jersey as the state with the lowest corruption risk in the U.S. (Local corruption didn’t count, it said. Only “corruption risk” in state government did.) There’s a simple explanation for how the group reached its conclusion, too: Its methodology was awful. Answering Questions
Here’s how the center got the New Jersey data for its nationwide “State Integrity Investigation.” Last year, it hired Colleen O’Dea, a freelance journalist who worked for about 26 years at the Daily Record in Morris County, to answer a list of 330 questions about New Jersey state government. Each called for a numerical score. O’Dea, 49, said she interviewed 26 people for the assignment, five in person. The center paid her $5,000.
The center also hired a former local newspaper editor to review her work. From there, the center provided O’Dea’s responses to another Washington-based nonprofit called Global Integrity. That group fed the answers into an algorithm, said Randy Barrett, a Center for Public Integrity spokesman. The results from the algorithm were used to generate letter grades in 14 categories and an overall score for New Jersey of 87 percent, or a B+.
The center hired reporters for every other state, too, along with “peer reviewers” to read their responses. Each reporter got the same list of queries. The center called this investigative reporting. Really, though, it was just a bunch of people answering questionnaires.
For example, O’Dea gave New Jersey a top score of 100 percent when asked to evaluate this statement: “In practice, the state-run pension funds disclose information about their investment and financial activity in a transparent manner.”
How did she decide that? The questionnaire said to give a high score if such information was available online at little or no cost. Her notes, posted on the center’s website, say she asked someone at the New Jersey State League of Municipalities about this. “Very transparent,” her notes said. The center gave the state an “A” in the category of “state pension-fund management,” based partly on O’Dea’s answer to that question.
Now consider that, in August 2010, New Jersey became the only state ever sued for fraud by the Securities and Exchange Commission. The SEC said the state for years lied to municipal- bond investors about the underfunded condition of its two largest pension plans. New Jersey settled without admitting or denying the agency’s claims. Making a Difference
When I asked O’Dea in a telephone interview if she knew about the SEC lawsuit, she said she didn’t. Later, she e-mailed me to say that she had, in fact, been aware of it, and that “the state has since owned up to the issue.”
Either way, it’s hard to believe New Jersey deserves an A for how it manages its pension funds. Yet for all we know, this grade could have made the difference between finishing No. 1 in the rankings or not. The center ranked Connecticut No. 2 with an overall grade of B, or 86 percent, one point behind New Jersey.
Another example from the survey: “In practice, the state- run pension funds have sufficient staff and resources with which to fulfill their mandate.” O’Dea gave another top score. This time she listed a second source, in addition to the fellow from the league of municipalities: a spokesman at the New Jersey Department of the Treasury. He told her the answer was yes.
And so forth. The center gave New Jersey’s insurance department a B+. One of the inputs was the 100 percent score O’Dea awarded in response to this statement: “In practice, the state insurance commission has a professional, full-time staff.”
Her notes listed two sources: Someone from the Independent Insurance Agents and Brokers of New Jersey, and a spokesman for the New Jersey Department of Banking and Insurance. Both said the statement was true. (Imagine that.) O’Dea said the sources she chose “seemed to logically have knowledge of the question.”
Continued in article
All jokes aside, President Obama's home town is still the most corrupt city in the United States
"Chicago Called Most Corrupt City In Nation," CBS Chicago TV, February
14, 2012 ---
A former Chicago alderman turned political science professor/corruption fighter has found that Chicago is the most corrupt city in the country.
He cites data from the U.S. Department of Justice to prove his case. And, he says, Illinois is third-most corrupt state in the country.
University of Illinois professor Dick Simpson estimates the cost of corruption at $500 million.
It’s essentially a corruption tax on citizens who bear the cost of bad behavior (police brutality, bogus contracts, bribes, theft and ghost pay-rolling to name a few) and the costs needed to prosecute it.
“We first of all, we have a long history,” Simpson said. “The first corruption trial was in 1869 when alderman and county commissioners were convicted of rigging a contract to literally whitewash City Hall.”
Corruption, he said, is intertwined with city politics
“We have had machine politics since the Great Chicago Fire of 1871,” he said. “Machine politics breeds corruption inevitably.”
Simpson says Hong Kong and Sydney were two similarly corrupt cities that managed to change their ways. He says Chicago can too, but it will take decades.
He’ll be presenting his work before the new Chicago Ethics Task Force meeting tomorrow at City Hall.
University of Illinois at Chicago Report
on Massive Political Corruption in Chicago
"Chicago Is a 'Dark Pool Of Political Corruption'," Judicial Watch, February 22, 2010 ---
A major U.S. city long known as a hotbed of pay-to-play politics infested with clout and patronage has seen nearly 150 employees, politicians and contractors get convicted of corruption in the last five decades.
Chicago has long been distinguished for its pandemic of public corruption, but actual cumulative figures have never been offered like this. The astounding information is featured in a lengthy report published by one of Illinois’s biggest public universities.
Cook County, the nation’s second largest, has been a “dark pool of political corruption” for more than a century, according to the informative study conducted by the University of Illinois at Chicago, the city’s largest public college. The report offers a detailed history of corruption in the Windy City beginning in 1869 when county commissioners were imprisoned for rigging a contract to paint City Hall.
It’s downhill from there, with a plethora of political scandals that include 31 Chicago alderman convicted of crimes in the last 36 years and more than 140 convicted since 1970. The scams involve bribes, payoffs, padded contracts, ghost employees and whole sale subversion of the judicial system, according to the report.
Elected officials at the highest levels of city, county and state government—including prominent judges—were the perpetrators and they worked in various government locales, including the assessor’s office, the county sheriff, treasurer and the President’s Office of Employment and Training. The last to fall was renowned political bully Isaac Carothers, who just a few weeks ago pleaded guilty to federal bribery and tax charges.
In the last few years alone several dozen officials have been convicted and more than 30 indicted for taking bribes, shaking down companies for political contributions and rigging hiring. Among the convictions were fraud, violating court orders against using politics as a basis for hiring city workers and the disappearance of 840 truckloads of asphalt earmarked for city jobs.
A few months ago the city’s largest newspaper revealed that Chicago aldermen keep a secret, taxpayer-funded pot of cash (about $1.3 million) to pay family members, campaign workers and political allies for a variety of questionable jobs. The covert account has been utilized for decades by Chicago lawmakers but has escaped public scrutiny because it’s kept under wraps.
Judicial Watch has extensively investigated Chicago corruption, most recently the conflicted ties of top White House officials to the city, including Barack and Michelle Obama as well as top administration officials like Chief of Staff Rahm Emanual and Senior Advisor David Axelrod. In November Judicial Watch sued Chicago Mayor Richard Daley's office to obtain records related to the president’s failed bid to bring the Olympics to the city.
The best-run state is Wyoming. The worst-run state is California Most of the Top Ten best-run states have relatively low populations. Small seems to be better in terms of state government efficiency, although social programs and cold weather in those states tend to repel welfare and Medicaid recipients from around the nation. It's difficult to draw liberal versus conservative explanations for best-run states since liberal states of Vermont and Minnesota are mixed in the Top Ten along with the conservative states of Wyoming, Utah, and the two Dakota states.
Minnesota has the least debt per capita, but the union-run state of Massachusetts has the most debt per capita. This is somewhat interesting because both Minnesota and Massachusetts are viewed as liberal states (more so in the days of Hubert Humphrey and Walter Mondale). The relatively conservative southern states tend to be below the median on state debt per capita. The western states are more variable. I accuse Taxachusetts of being union-run in part because Boston refuses to allow Wal-Mart stores until Wal-Mart becomes unionized.
When it comes to debt per capita there is less denominator effect than I suspected beforehand, although small populations become a huge factor behind the high debt loads per capita in Alaska, Rhode Island, and Delaware. Alaska can also afford a higher debt load because of vast untapped natural resources.
I watched two very liberal commentators from Boston on television last night arguing that more debt load in Taxachusetts to support increased spending for social programs was a good investment of that state's economy. This seems to be questionable given where Taxachusetts already stands in relation to debt per capita.
Bob Jensen's threads on state taxation are
You have to scroll down to find the state tax comparisons.
Bob Jensen's threads on the
sad state of governmental accounting are at
Bob Jensen's threads on political
corruption are at
Bob Jensen's Fraud Updates are at
With all the media focus on Governor Walker's recall challenge (funded my labor unions across the nation) in Wisconsin, less attention is given to states where there's somewhat more harmony with unions and voters.
Sometimes what it takes is Democratic Party leaders to achieve fiscal sanity (California excepted) because labor unions are tied so close to the Democratic Party.
"The Democrat Who Took on the Unions: Rhode Island's treasurer
Gina Raimondo talks about how she persuaded the voting public, labor
rank-and-file and a liberal legislature to pass the most far-reaching pension
reform in decades," by Allysia Finley, The Wall Street Journal, March 23,
So this is Gina Raimondo? The state treasurer who single-handedly overhauled Rhode Island's pension system and has unions screaming bloody murder? I had imagined her a bit, well, bigger. If not larger than life like New Jersey Gov. Chris Christie, then at least life-size. Ms. Raimondo couldn't be much taller than five feet, which may have caused some to underestimate her. That isn't the only thing that may have surprised people.
The former venture capitalist is a Democrat, which means that she believes in government as a force for good. But "a government that doesn't work is in no one's interest," she says. "Budgets that don't balance, public programs that aren't funded, pension funds that are running out of money, schools that aren't funded—How does that help anyone? I don't really care if you're a Republican or Democrat or you want to fight about the size of government. How about a government that just works? Put your tax dollar in and get a return out the other end."
Yes, that would be nice. Unfortunately, public pensions all over the country are gobbling up more and more taxpayer money and producing nothing in return but huge deficits. It's not even certain whether employees in their 20s and 30s will retire with a pension, since many state and municipal pension systems are projected to run dry in the next two to three decades.
That included Rhode Island's system until last year, when Ms. Raimondo drove perhaps the boldest pension reform of the last decade through the state's Democratic-controlled General Assembly. The new law shifts all workers from defined-benefit pensions into hybrid plans, which include a modest annuity and a defined-contribution component. It also increases the retirement age to 67 from 62 for all workers and suspends cost-of-living adjustments for retirees until the pension system, which is only about 50% funded, reaches a more healthy state.
Several states have increased the retirement age or created a new tier of benefits for future workers, but reforms that only affect not-yet-hired employees don't save much money. A lot of "people say we've done pension reform when all they've done is tweaked something," Ms. Raimondo points out. "This problem will not go away, and I don't know what people are thinking. By the nature of the problem, it gets bigger and harder the longer you wait."
The problem was particularly acute in Rhode Island since there are more retirees collecting pensions than workers paying into the system. Plus, as Ms. Raimondo says, "it's a small state with not a lot of growth, an expensive cost structure in government, and it's not a good combination." Making the state even more expensive by raising taxes would have caused many Rhode Islanders to leave. When the now-bankrupt town of Central Falls raised property taxes to finance worker pensions, many residents fled, sending the city into a tailspin.
Because there has been little legislative or public support for raising taxes, the Ocean State has been cutting public services to pay its pension bills. A few years ago Ms. Raimondo read "an article in the paper about libraries closing and public bus service being cut nights, weekends and holidays, and I just thought it doesn't have to be this way." The story made her consider a bid for treasurer.
In the last 15 years, Ms. Raimondo, who is 40 and the mother of two children, has helped found two venture-capital firms, Village Ventures and Point Judith Capital. She was a Rhodes Scholar at Oxford and has a bachelor's in economics from Harvard and law degree from Yale. Still, serving as treasurer of the smallest state in the country probably wouldn't be the next career step for someone with such impressive credentials and ambition.
Continued in article
But the public unions are still pushing their burdens on taxpayers
"Public Unions Send Medical Bills to Taxpayers," by Jason Polan, Bloomberg, March 15, 2012 ---
The U.S. public pension mess, with its $2 trillion to $3 trillion in unfunded liabilities, is such a volcano of gloom that it takes a potentially bigger problem to turn our eyes away from it.
Turn your attention instead to the size of the taxpayer- backed health-care obligations for public employees.
“Frankly, if you want to look at a truly scary set of unfunded liabilities, health care for retirees is a better choice than pensions,” said California Treasurer Bill Lockyer in an October speech meant to play down the pension crisis.
Not that Lockyer or his Democratic and union allies want to reduce any benefits that are at the heart of the problem. In their view, the real scourge is “pension envy” or perhaps “health-care envy” -- the failure of the private sector to keep up with government-benefit levels.
States and localities make their own decisions on how to finance these health-care policies. Far more government employees than private workers receive health and dental care -- and those plans cost more, require lower employee contributions and provide more comprehensive coverage.
Such generosity comes at a cost to taxpayers and municipal budgets, especially given the “promise now, pay later” approach of officials. As a recent Bloomberg News article noted, while most public pension plans are 75 percent funded, the figure for health-care plans is only 4 percent nationwide. So unlike pensions, governments are setting aside little money in advance to pay for their future obligations. Courts Back Unions
Public-sector unions and their allies have foiled even modest efforts to scale back pensions, and the courts have done the rest. Now the unions are gearing up to fight changes in health-care plans, as well -- an issue that has reared its head after Stockton, California, announced that it was possibly headed toward a Chapter 9 bankruptcy driven by $417 million in liabilities caused by an absurdly generous lifetime medical plan.
The unions’ job is considerably easier thanks to a California Supreme Court decision in November that will make it as hard to change health-care benefits as it is to deal with pensions.
It’s not that leaders in California, which is in the deepest public-employee-related fiscal hole, don’t understand the scope of the problem. Controller John Chiang released a report in February that acknowledges a $62.1 billion unfunded health-care liability.
“California should pay $4.7 billion in 2011-12 to pay for present and future retiree health benefits,” according to Chiang’s office. “In the 2011-12 budget act, the state provided $1.71 billion to only cover current retirees’ health and dental benefits.”
With pensions, government employers and employees contribute a percentage of income into retirement funds. The liabilities depend on how well the funds perform, with higher estimated rates of return leading to a lower predicted debt and vice versa. But as Bloomberg News reported, “States haven’t financed almost 96 percent of the $627.4 billion they were projected to owe for future retiree benefits in 2010.” They try to pay these health-care costs as they go.
Few governments have the excess cash available to prepay these already promised benefits. But often there are straightforward ways to solve the problem. In 2006, Orange County cut its $1.4 billion health-care liability, in a model effort touted not just by the Republican board of supervisors but by the union representing county workers. The union said the deal demonstrated its willingness to help fix the system. Reforms Overturned
Retirees had been placed in the same medical pool as current workers. Because retirees are older, their health-care costs are higher, so the county was subsidizing the rates for retirees. The county separated the pool, raised the monthly contributions paid by retirees and reduced the unfunded liability by $815 million. But the retirees’ group sued the county and took the case to the state Supreme Court, which ruled in a way that has made it far easier to challenge cutbacks of these benefits.
Continued in article
U.S. Government Still Pays Two Civil War Pensions (boy are these guys
Thank you Bruce Gunning for the heads up.
Bob Jensen's threads on the sad state of pension accounting ---
Bob Jensen's threads on the sad state of governmental accounting ---
"Feds Pay $10 Million for $50 Light Bulb: The spectacular failure of
a federal plan to create cheap, green lighting," by Katherine Mangu-Ward,
Reason Magazine, March 9, 2012 ---
In 2007, when Congress passed legislation that would gradually ban old school incandescent light bulbs, they added a carrot to the pile of sticks: A $10 million dollar prize to encourage the development of a cheap, green, domestic light bulb to replace the dearly departed Edison model.
Five years later, that bulb is coming to a hardware store near you. It will cost you 50 bucks. It also fails to meet many of the original prize specifications. The winner, Dutch electronics company Philips, was the one and only entrant, suggesting that the prize failed to stimulate widespread additional private spending on R&D. The portion of the LED bulb made in America is less than initially envisioned. And the guidelines for pricing were utterly ignored: The goal was $22 price tag in the first year, falling rapidly to $8 by year three.
Meanwhile, a lot has happened in those five years. Americans are (perhaps grudgingly) adopting new light bulb technologies; experimenting with CFLs, halogens, and LEDs. The florescence of options was partially due to the fact that the relevant technologies reached a natural tipping point, partially due to the increasing cost of energy, and partially a response to the impending ban. (The end of the 100-watt incandescent was targeted for this year, with lesser wattages slated to fall victim on subsequent New Year’s Days.) In other words, in the time that elapsed between conception and delivery the prize has become perfectly irrelevant.
The “L Prize” fiasco is a reminder that while prizes can be a wildly successful way to stimulate interest and investment in a particular problem—think of the X Prize—the way they are structured matters. A lot.
In this case, the prize was a first-past-the-post arrangement. So electronics giant Philips, which also makes a Chinese-manufactured version of the same product for half the cost, quickly fiddled with the specs and figured out a way to make some of the chips in San Jose—all jobs that will go to American citizens, no doubt—and do the assembly in Wisconsin. Two other companies had announced their intention to join the fray, General Electric and Lighting Science Group, when the Department of Energy abruptly declared a winner.
"We are pleased to be the only one who has submitted anything," chief executive of Philips Lighting North America Zia Eftekhar told National Geographic. "Even though I'm unbelievably happy we won, it's still good to challenge the entire industry to move the technology forward."
Continued in article
Bob Jensen's threads on the sad state of governmental accounting and
"California Refuses to Fix Public-Sector Pensions Golden State lawmakers
close their eyes and pretend the looming pension crisis doesn't exist," by
Steven Greenhut, Reason Magazine, March 9, 2012 ---
Let's tax the rich, but please do not gore my ox.
For every tax action there's a reaction!
If town, county, state, and school district bonds become taxable it will clobber those government institutions and the local taxpayers that must make up the difference for higher interest expenses. Much of the difference will be made up by increases in property taxes and rents (when property taxes are passed on to renters).
If home mortgage interest is no longer deductable it could be the death knell for an already very, very sick real estate market.
If energy credits and deductions are eliminated it will destroy the alternative-energy market. One of my closest friend up here just invested $8,000 in a solar panel that heats his hot water tank. He carefully worked out the costs and returns (savings) on this investment and concluded that if it were not for the tax rebate this investment would be totally stupid because payback takes so many decades.
And then there's President Obama's proposal to limit charity deductions. When the dust settles this will be a controversial transfer from charities and non-tor profit organizations (like colleges, universities, and churches) to the federal government.
"Less charity and more taxes, please," by Scott Walter,
Philanthropy Daily, March 6, 2012 ---
For the fourth time, the President has proposed limiting charitable deductions. The proposal has received little notice from the mainstream press, though the nonprofit world continues to object. (See Charitable Deduction Central, provided by the Alliance for Charitable Reform.)
Michael Barone, Washington wiseman and co-author of The Almanac of American Politics, sees a connection between the desire to cut into charitable giving and another presidential desire, namely, raising taxes:
The clearly intended result would be a massive transfer of money from the voluntary sector of society into government.
Fewer citizens’ dollars would flow into either private charities or private investments. Instead, the central government would pick and choose who receives those dollars and for what purposes. It’s “increasingly apparent,” writes Joanne Florino of the Triad Foundation,
that attacks on the charitable deduction are based on the beliefs that the government knows how to spend money better than private citizens, that the public sector can pick winners and losers in the charitable sector, and that monolithic solutions trump diversity and experimentation. If we choose to go down this rocky and treacherous path, we send a clear message to our country that a strong civil society isn’t really that important….
And not only dollars are at stake, Barone adds. The same Government First philosophy also brings America the
mandate that voluntary-sector organizations must buy health insurance that finances procedures their leaders consider deeply immoral. Centralized government will decide what’s moral, and you’ll be forced to pay for it.
Barone warns that
Alexis de Tocqueville in the 1830s identified the voluntary sector as a unique feature of American democracy, one that gave it strength and character. He compared it positively with his own France, where centralized government stifled initiative and innovation.
The country must now choose between those who want “to make this country more like Tocqueville’s France,” and those “who want to keep it more like Tocqueville’s America.”
Tocqueville famously praised our nation in Democracy in America. Less often read are his criticisms of his beloved France, both before and after its bloody Revolution. In The Old Regime and the Revolution, Tocqueville described how a ravenous central government drained the life from civil society and suffocated the charitable impulse:
The government of the old regime had already taken away from the French any possibility, or desire, of helping one another. When the Revolution happened, one would have searched most of France in vain for ten men who had the habit of acting in common….
Contemplating his unbalanced homeland, Tocqueville gave the same warning as Barone:
our quarrel is not about the value of freedom per se, but stems from our opinion of our fellow men … a man’s admiration of absolute government is proportionate to the contempt he feels for those around him.
FOOTNOTE: The director of the White House Office of Social Innovation attempted to justify its latest charitable deduction proposal here. Rick Cohen of Nonprofit Quarterly has a helpful response; he observes that the director’s justification “doesn’t address why the proposal has failed four times before this, or why the nonprofit sector [whose leaders mostly voted for Obama] seems so adamantly opposed to a tax proposal that he and his White House colleagues believe has such inconsequential impacts on charitable giving.”
But the question remains on how best to greatly reduce the massive budget deficits projected for the future if something drastic is not done.
Wind farm --- http://en.wikipedia.org/wiki/Wind_farm
Of course most environmental activists originally scoffed at early warnings of industry that this would happen because ... er ... these were warnings posted the evil oil oil and electric utility industries.
What this illustrates to researchers in environmental (social) accounting is the virtually insurmountable difficulty of putting costs on externalities. How do we put a value on the 2,000th golden eagle in California? How about the 20th California Condor? How do we do a cost benefit analysis of job losses caused by dependency on oil imports. How do we evaluate the cost benefits of building huge destructive wind farms all over the United States versus not having built a single new oil refinery in the United States in the last 30 years.
Hydraulic Fracturing ---
How do accounting researchers do a cost benefit analysis of the really serious and unknown risks of fracking versus the risks of wind farms that are belatedly becoming all too known? The systemic problems become magnified by all the interactive factors such as interactions of energy costs/risks with the economy and warfare and terrorism.
"Windmills vs. Birds About 70 golden eagles are killed every year by
turbines at California's Altamont Pass, reports the LA Times," by Robert
Bryce, The Wall Street Journal, March 8m 2012 ---
For years, the wind energy industry has had a license to kill golden eagles and lots of other migratory birds. It's not an official license, mind you.
But as the bird carcasses pile up—two more dead golden eagles were recently found at the Pine Tree wind project in Southern California's Kern County, bringing the number of eagle carcasses at that site to eight—the wind industry's unofficial license to kill wildlife is finally getting some serious scrutiny.
Some 77 organizations—led by the American Bird Conservancy, Cornell Laboratory of Ornithology, Endangered Species Coalition and numerous chapters of the Audubon Society—are petitioning the U.S. Fish and Wildlife Service to toughen the rules for the siting, permitting and operation of large-scale wind projects.
It's about time. Over the past two decades, the federal government has prosecuted hundreds of cases against oil and gas producers and electricity producers for violating some of America's oldest wildlife-protection laws: the Migratory Bird Treaty Act and Eagle Protection Act.
But the Obama administration—like the Bush administration before it—has never prosecuted the wind industry despite myriad examples of widespread, unpermitted bird kills by turbines. A violation of either law can result in a fine of up to $250,000 and imprisonment for two years.
The renewed focus on bird kills is coming at a bad time for the wind industry, which is being hammered by low natural-gas prices and a Congress unwilling to extend the 2.2 cents per-kilowatt-hour production tax credit that has fueled the industry's growth in recent years.
Last June, the Los Angeles Times reported that about 70 golden eagles are being killed per year by the wind turbines at Altamont Pass, about 20 miles east of Oakland, Calif. A 2008 study funded by the Alameda County Community Development Agency estimated that about 2,400 raptors, including burrowing owls, American kestrels, and red-tailed hawks—as well as about 7,500 other birds, nearly all of which are protected under the Migratory Bird Treaty Act—are being killed every year by the turbines at Altamont.
A pernicious double standard is at work here. And it riles Eric Glitzenstein, a Washington, D.C.-based lawyer who wrote the petition to the U.S. Fish and Wildlife Service. He told me, "It's absolutely clear that there's been a mandate from the top" echelons of the federal government not to prosecute the wind industry for violating wildlife laws.
Mr. Glitzenstein comes to this issue from the left. Before forming his own law firm, he worked for Public Citizen, an organization created by Ralph Nader. When it comes to wind energy, he says, "Many environmental groups have been claiming that too few people are paying attention to the science of climate change, but some of those same groups are ignoring the science that shows wind energy's negative impacts on bird and bat populations."
That willful ignorance may be ending. The Center for Biological Diversity, the Sierra Club and Defenders of Wildlife recently filed a lawsuit against officials in Kern County, Calif., in an effort to block the construction of two proposed wind projects—North Sky River and Jawbone—due to concerns about their impact on local bird populations. The groups oppose the projects because of their proximity to the deadly Pine Tree facility, which the Fish and Wildlife Service believes is killing 1,595 birds, or about 12 birds per megawatt of installed capacity, per year.
The only time a public entity has pressured the wind industry for killing birds occurred in 2010, when California brokered a $2.5 million settlement with NextEra Energy Resources for bird kills at Altamont. The lawyer on that case: former attorney general and current Gov. Jerry Brown, who's now pushing the state to get 33% of its electricity from renewables by 2020.
Bats are getting whacked, too. The Pennsylvania Game Commission estimates that wind turbines killed more than 10,000 bats in the state in 2010.
Despite the toll that wind turbines are taking on wildlife, the wind industry wants to keep its get-out-of-jail-free card. Last May, the Fish and Wildlife Service proposed new guidelines for wind-turbine installations. But the American Wind Energy Association quickly panned the proposed rules as "unworkable."
Continued in article
The Green Mountains of Vermont were historically named correctly since Vermont is currently the most "green" (environmentally) conscious state in the union. I frequently tune into a PBS political events show produced in Burlington. The subject is most often environmentalism. The majority of Vermonters cannot wait to shut down the State's Vermont Yankee nuclear power plant due to environmental hazards. Vermont quickly moved into Wind farm construction only to, belatedly, now consider a ban on new wind farms. Solar energy has great potential combined with enormous problems of becoming cost effective. At the momen Vermont seems to be dead set against new coal, oil, gas, wind, and nuclear power sources.
What I sense is that Vermont has adopted Scarlet's long-term planning
Gone With the Wind ---
"I won't think about that now, I'll think about that tomorrow."
After all, tomorrow is another day --- http://www.youtube.com/watch?v=R-OoIvgtuzs
The Amish are exempt from the entire health care reform law.
Catholics are not exempt.
"Amish, Ok. Catholics, No," by Maryann Walsh, Rhode Island Catholic
Conference, March 9, 2012 ---
The Amish are exempt from the entire health care reform law. So are members of Medi-Share, a program of Christian Care Ministry. Yet, when the Catholic Church asks for a religious exemption from just one regulation issued under the law – the mandate that all employers, including religious institutions, must pay for sterilization and contraceptives, including abortion-inducing drugs – the Administration balks.
The government respects the First Amendment that guarantees the right to freely exercise one’s religious beliefs, but only to a point. In the health care law it picks and chooses which beliefs it respects. The Amish do not believe in insurance, and the government understands. Christian Care Ministry believes people should form a religious community and pay medical bills for one another, and the government says okay. Yet when the Catholic Church opposes being forced to pay for services that violate its beliefs, the Administration says “tough.”
What is so special about this mandate that it cannot be touched? It was added after Congress passed the health care law and offers no exemption for religious charitable or educational institutions. It will not accept Catholic charities and schools as “religious enough” unless they hire only Catholics, serve only Catholics, have the narrow tax exempt status granted to houses of worship, and teach religion as their purpose. Amazingly, this mandate has more force than the overall health care law. In fact recent regulations allow states to decide which “essential health benefits” to require in health plans, such as hospitalization, prescription drugs and pediatric services. At the same time, all insurance plans must include the objectionable services mentioned above. Here federal law trumps state law and threatens to fine into submission institutions that dare oppose it. The going rate is at least $100 per day per employee.
What has the government got against the Catholic Church? Has it forgotten the contributions the church has made to the poor and needy for centuries?
Catholic elementary and secondary schools provide the only real alternative to public schools in many parts of the nation. Catholic colleges offer outstanding education, be it at the university or the community college. The contribution has a long history, back to 1789 when Georgetown University was founded by the Jesuits. Yet under the health care law, if these schools and colleges wish to remain faithful to their religious principles the government will fine them into submission. There’s a thank-you note.
Many Catholic hospitals were founded by religious orders of women, and today one out of six persons seeking hospital care in the United States goes to a Catholic hospital. Until now, religious background of the patient has not been an issue. “Where does it hurt?” is the first question, not “Where is your baptismal certificate?” This approach threatens to deny hospitals any real protection as “religious employers” under the new rule. Yet their Catholicity means many of these hospitals have an added benefit. At Providence Hospital in Washington, DC, for example, patients not only get medical care, they can get clothing too if they need it. It comes through the Ladies of Charity, an auxiliary of the Daughters of Charity who founded the hospital in 1861. Catholic social service agencies, including adoption and foster care agencies, parish food banks, and soup kitchens, meet human concerns. Services depend on need, not creed. Church sponsorship means the services have a little extra, be they volunteers from parishes, financial donations through diocesan appeals, or the dedication that comes from working for God as well as paycheck.
Continued in article
"How the Chevy Volt Is Like ObamaCare," by Merrill Mathews, Forbes,
March 9, 2012 ---
March is an important month in the ongoing saga of President Obama’s abject policy failures. First, Chevrolet announced that it would temporarily cease production of the president’s much-touted car for the green economy, the Chevy Volt. Second, the U.S. Supreme Court will hear the state-led challenge to the president’s health care legislation. And while “ObamaCar” and ObamaCare may seem like unrelated topics, in this case they have at least three elements in common.
Both were sold as a key to creating jobs and economic growth. Only last year the president predicted that there would be 1 million electric cars on U.S. roads by 2015—just three years away. And New York Senator Chuck Schumer doubled down on that economic vision: “We need a business model based on cars of the future, and we already know what that future is: the plug-in hybrid electric car.”
Similarly, Obama defended his takeover of the health care system by proclaiming, “We must lay a new foundation for future growth and prosperity, and a key pillar of a new foundation is health insurance reform.” Speaker Nancy Pelosi saw health reform as a jobs factory: “In its life [health care reform] will create 4 million jobs, 400,000 jobs almost immediately.”
Well, that economic wave of the future can wave goodbye. Green energy isn’t creating jobs and boosting the economy. Indeed, many green energy companies are cutting back, laying off or closing down—even with billions of dollars in taxpayer subsidies.
Meanwhile, oil and gas production—the left’s biggest nightmare—is resurgent, and the U.S. is once again becoming a global leader in energy production. Several state economies are booming because of the energy explosion, with low unemployment and high wages—everything the president promised from the green economy, but has failed to deliver.
However, left unrepealed the health care law probably will create jobs—government jobs! Thousands of new government employees will be added to the federal payroll to manage the millions of people put in the government-run Medicaid program, and IRS agents to ensure Americans are buying ObamaCare, or slap them with a penalty if they don’t.
The government has heavily subsidized both. Neither Obama’s green energy or universal health care visions would work without pumping in billions of taxpayer dollars—and they probably won’t work even with the subsidies.
The administration has created an $80 billion clean-energy investment program to subsidize green companies—$5 billion just for electric cars—many of which, as the Washington Post recently reported, also happen to be big Obama donors. And did I mention bonuses? ABC News reports that Beacon Power Corp. of Massachusetts “paid cash bonuses of $259,285 to three executives in part due to progress made on the $43 million energy loan … Last October, Beacon Power filed for Chapter 11 bankruptcy.”
Hmmm, so our taxes paid big bonuses based in part on executives’ success in siphoning off our taxes from the Obama administration.
But green energy subsidies are chump change when it comes to the federal dollars Obama will pour down the health care drain. Official figures calculated a cost of about $1 trillion over 10 years, both from new taxes and robbing from Medicare. But if you can find a federal official who tells the truth, such as Medicare Chief Actuary Richard Foster, you’ll discover that Democrats way underestimated the costs.
Continued in article
"The Year Solar Goes Bankrupt," by John Ransom, Townhall, March
Get ready for a new round of green bankruptcies, as Europe trims back subsidies for solar companies and taxpayers lose their appetite for subsidizing green power.
“The mini-bubble resulting from the rush to cash in on solar subsidies in European and U.S. markets is ending, as feed-in tariffs drop in Europe while loan guarantee and tax credit programs tighten up in the U.S.,” says a new report from Bank of America Merrill Lynch according to CNBC.com.
Germany is dialing back subsidies for solar this month by 29 percent with subsequent decreases each month, according to Bloomberg.com.
Rasmussen has recently released a survey of voters that show a diminishing number of voters support subsidizing the production of the Chevy Volt.
Only 29 percent of likely voters agree with Obama’s latest proposal to include a $10,000 subsidy in the federal budget to support the purchase of every electric vehicle.
Continued in article
Many buyers of electric cars like the Chevy Volt often overlook is that if gasoline hit $10 a gallon the price of electricity used to charge a Chevy Volt will also soar, and states will commence to find ways to tax Volt owners for road repair (because of lost road taxes as gas pumps). There's no free lunch as far as electric cars are concerned.
The Chevy Volt is also a huge disappointment in many respects. It's so heavy that it gets lousy gas mileage when the batteries run down. And those batteries run down after after 25-50 miles depending upon such things as hills and temperature. It's battery range is even less than 25 miles during the winter where I live in these mountains. And it has a notoriously bad heater forcing passengers to wear their long johns in wintertime.
It's taken for granted that the Chevy Volt is not a cost-effective net energy saver at the present time. But what about the more popular Toyota Prius? ABC News just did a module on the payback of the added price to get the Prius hybrid option. On average, ABC reported it takes 17 years of driving to pay back the hybrid's additional price.
And those energy credits and deductions on houses and cars account for much of the reason that 49.5% of the U.S. taxpayers pay zero income taxes or demand net refunds.
February 24, 2012 reply from John Brozovsky
. . .
On a second note that has been carried in this thread. Two years ago I would have qualified as one of the people that paid no federal income tax. Plenty of other federal, state and local taxes due to a healthy accounting faculty salary but not federal income tax. I adjusted my behavior in a manner consistent with what the government ‘wanted’ to promote. I put in a geothermal system in my house which carried a 30% tax credit effectively wiping out my tax liability. While I do not think the government should be promoting social agenda with the tax code, I will certainly adjust to make use of it when it does.
Can you lower income taxes for people who don't pay any income taxes?
Note that about half the taxpayers in the United States do not pay any income taxes.
Of course. You can increase their refunds that their already receiving before you "lower" their taxes.
"Can you cut taxes for people who don't pay taxes?" Des Moines
Register, February 07, 2012 ---
The answer is yes if they pay not tax and collect refunds for things like energy credits.
Case Studies in Gaming the Income Tax Laws ---
Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm
Tidbits Archives ---
Jensen's Pictures and Stories
Summary of Major Accounting Scandals --- http://en.wikipedia.org/wiki/Accounting_scandals
Bob Jensen's threads on such scandals:
Bob Jensen's threads on audit firm litigation and negligence ---
Current and past editions of my
newsletter called Fraud Updates ---
Enron --- http://www.trinity.edu/rjensen/FraudEnron.htm
Rotten to the Core --- http://www.trinity.edu/rjensen/FraudRotten.htm
American History of Fraud --- http://www.trinity.edu/rjensen/FraudAmericanHistory.htm
Bob Jensen's fraud
Bob Jensen's threads on
auditor professionalism and independence are at
Bob Jensen's threads on
corporate governance are at
Against Validity Challenges in Plato's Cave ---
· With a Rejoinder from the 2010 Senior Editor of The Accounting Review (TAR), Steven J. Kachelmeier
· With Replies in Appendix 4 to Professor Kachemeier by Professors Jagdish Gangolly and Paul Williams
· With Added Conjectures in Appendix 1 as to Why the Profession of Accountancy Ignores TAR
· With Suggestions in Appendix 2 for Incorporating Accounting Research into Undergraduate Accounting Courses
Against Validity Challenges in Plato's Cave ---
By Bob Jensen
wrong in accounting/accountics research? ---
The Sad State of Accountancy Doctoral Programs That Do Not Appeal to Most
AN ANALYSIS OF THE EVOLUTION OF RESEARCH CONTRIBUTIONS BY THE ACCOUNTING REVIEW:
Bob Jensen's threads on accounting theory
Tom Lehrer on Mathematical Models and Statistics
Systemic problems of accountancy (especially the vegetable nutrition paradox)
that probably will never be solved
Bob Jensen's economic crisis messaging http://www.trinity.edu/rjensen/2008Bailout.htm
Bob Jensen's threads --- http://www.trinity.edu/rjensen/threads.htm
Bob Jensen's Home Page --- http://www.trinity.edu/rjensen/