Tidbits Quotations
To Accompany the November 13, 2012 edition of Tidbits
Bob Jensen at Trinity University

My Political Quotations and Commentaries Directory and Log ---

Russia skewers US election as undemocratic, ‘the worst in the world’
Julian Pecquet --- http://thehill.com/blogs/global-affairs/russia/265689-russia-skewers-us-election-as-undemocratic-the-worst-in-the-world 
We can only dream of having better elections modeled after those in Russia.

President Obama must have run a great campaign considering the tremendous numbers he put up in numerous big cities. Over in Philadelphia, he was lucky enough to get 90% percent turnout in some districts with over 99% of the vote.
"What Luck! Obama Won Dozens of Cleveland Districts with 100% of the Vote" ---

Across Philadelphia, GOP poll inspectors were forcibly (and illegally) removed from polling locations. Coincidentally (or not), Mr. Obama received "astronomical" numbers in those very same regions, including locations where he received "over 99%" of the vote.
"Fraud in PA: Obama Got Over 99% of Vote at Polls Where GOP Inspectors were Removed; Turnout Somehow "30%" Above Gov't Numbers," ---

247,713 votes cast among 175,554 registered voters

Colorado Counties Have More Voters Than People ---

Charles Darwin, who died, in 1882, received 4,000 write-in votes in Georgia ---
To add insult to injury, Darwin was a British citizen.

Outlawed are food donations to homeless shelters because NYC can’t assess their salt, fat and fiber content
CBS Report on March 19, 2012:  Outlawed are food donations to homeless shelters because the city can’t assess their salt, fat and fiber content.
NYC just does not have enough inspectors to read the contents labels on cans and bottles.
I don't know if this ban was relaxed after Hurricane Sandy hit NYC, but I doubt it.

Half of Romney Supporters Just Want to See MSNBC's Chris Matthews Cry Like a Baby
David Letterman
Putting the squeeze on Hardball.

US Spends as Much in Iraq Now as During Combat Operations ---
I don't know that there were ever any promises of  declared "peace" being cheaper than declared war.

We need a really big war or natural disaster for significant surges in employment
If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months
Nobel Laureate and Princeton Keynesian Paul Krugman
U.S. Economy Needs Space Aliens ---

But Romney lost and Obama won. The limits of their power have been cruelly exposed, and the reelected president now owes them nothing. Did I mention that Elizabeth Warren is going to the Senate — a Senate that will be substantially more progressive and less Wall Street friendly than before?
Nobel Laureate and Princeton Keynesian Paul Krugman

"Post-Sandy rebuilding boost for US economy," by Ed Crooks, Financial Times, November 4, 2012 ---

The storm that ravaged the north-east coast of the US last week will hit economic growth in the final quarter of 2012 but will boost it in the first half of next year, company executives and economists say, creating some positive momentum for the winner of this week’s presidential election.

Continued in article

Notice too that to the extent that social issues played in this election, they played in favor of Democrats. Gods, guns, and gays didn’t swing voters into supporting corporate interests; instead, human dignity for women swung votes the other way.
Paul Krugman, "The Real Real America," November 8, 2012 ---

The Most Powerful Man in America
"How Nate Silver Won the 2012 Presidential Election," by Dorie Clark, Harvard Business Review Blog, November 7, 2012 --- Click Here

Jensen Comment
I wonder what Nate's predictions are regarding when drug dealers will take full control of Afghanistan?

I think the probability is 100% since whatever side wins in Afghanistan the country will be run by drug dealers with ignorant wives.

The situation is that many of Nate Silver’s attackers don’t really know what the hell they are talking about. Unfortunately, this gives them something in common with many of Nate Silver’s defenders, who greet any objection to his standing or methods with cries of 'Are you against SCIENCE?
Nobody is Perfect, Including Nate Silver --- http://en.wikipedia.org/wiki/Nate_Silver#Criticism

In January 2010, journalist and blogger Colby Cosh wrote that "I hope, though I doubt, that Nate Silver’s performance during the stretch drive of the Massachusetts special Senate election will finally lead to him being downgraded from 'All-seeing HAL-9000-esque quantitative wizard' to 'Just another guy with a computer'....Silver, with his revolutionary disregard for everything but the polling numbers, was still arguing as late as Thursday afternoon that Coakley was the clear favourite; he changed his mind at midnight that evening and acknowledged that Scott Brown had a puncher’s chance."[128]

In November 2012, Cosh wrote " The situation is that many of Nate Silver’s attackers don’t really know what the hell they are talking about. Unfortunately, this gives them something in common with many of Nate Silver’s defenders, who greet any objection to his standing or methods with cries of 'Are you against SCIENCE? Are you against MAAATH?' If science and math are things you do appreciate and favour, I would ask you to resist the temptation to embody them in some particular person. Silver has had more than enough embarrassing faceplants in his life as an analyst that this should be obvious".[129] Writing about Silver’s presidential election model, Cosh said "When it comes to prestige, it stands about where PECOTA was in 2006. Like PECOTA, it has a plethora of vulnerable moving parts. Like PECOTA, it is proprietary and irreproducible. That last feature makes it unwise to use Silver’s model as a straw stand-in for “science”, as if the model had been fully specified in a peer-reviewed journal".[130]

Writing at The Huffington Post, Geoffrey Dunn said, "Silver's commitment to a quantitative, value-free approach to the living, breathing universe--not only in politics, but in sports, entertainment, even dating--with an emphasis on numbers can be troubling, to the point of absurdity, when the answers have nothing to do with statistical equations...Here's a guy who's never been centrally involved in a national election, whose political acumen comes from a calculator, and, who, I am willing to bet (and I haven't seen the numbers) has never organized a precinct in his life, much less walked one, pontificating about the dynamics in the electoral processes as if he actually understood them."[131]

A lot of criticism during the 2012 elections came from political conservatives who sought to discredit Silver's election projections as politically biased against the Republican candidate for President, Mitt Romney. For example, Silver was accused of applying a double standard to his treatment of Rasmussen Reports polls. From Mendy Finkel writing in Daily Caller: "Dating back to his blogging days at FiveThirtyEight.com, Silver has been on a mission to discredit Rasmussen’s polls, which Silver views as biased in favor of Republican candidates. What’s more, Silver has allowed his Rasmussen obsession to influence his supposedly objective statistical analysis." Finkel wrote, "To Silver, the most pressing issue after the 2010 midterm elections was Rasmussen’s polling performance. Never mind that Silver himself was off in his forecasting — unsurprisingly, in the Democrats’ favor — or that plenty of other reputable polling organizations, such as CNN and Gallup, performed no better than Rasmussen. No, to Silver the world needed to be immediately alerted to Rasmussen’s alleged bias." Fenkel writes that "Silver rigged his entire pollster ratings for the sole purpose of lowering Rasmussen’s rank."[132][133]

In October 2012, Josh Jordan wrote in National Review that "While there is nothing wrong with trying to make sense of the polls, it should be noted that Nate Silver is openly rooting for Obama, and it shows in the way he forecasts the election." Jordan says that Silver conducts "the type of analysis that walks a very thin line between forecasting and cheerleading. When you weight a poll based on what you think of the pollster and the results and not based on what is actually inside the poll (party sampling, changes in favorability, job approval, etc), it can make for forecasts that mirror what you hope will happen rather than what’s most likely to happen."[134]

Some critics rose in defense of political punditry.[135] For example, in an October 2012 article entitled "Nate Silver: One-term celebrity?" Dylan Byers of Politico wrote, "For all the confidence Silver puts in his predictions, he often gives the impression of hedging. Which, given all the variables involved in a presidential election, isn't surprising. For this reason and others — and this may shock the coffee-drinking NPR types of Seattle, San Francisco and Madison, Wis. — more than a few political pundits and reporters, including some of his own colleagues, believe Silver is highly overrated."[136] Byers also quoted this comment by Joe Scarborough on MSNBC's "Morning Joe": "Nate Silver says this is a 73.6 percent chance that the president is going to win? Nobody in that campaign thinks they have a 73 percent chance -- they think they have a 50.1 percent chance of winning. And you talk to the Romney people, it's the same thing," Scarborough said. "Both sides understand that it is close, and it could go either way. And anybody that thinks that this race is anything but a toss-up right now is such an ideologue, they should be kept away from typewriters, computers, laptops and microphones for the next 10 days, because they're jokes".

Washington Post journalist (and political scientist) Ezra Klein wrote: "There are good criticisms to make of Silver’s model, not the least of which is that, while Silver is almost tediously detailed about what’s going on in the model, he won’t give out the code, and without the code, we can’t say with certainty how the model works."[137] However, comparing Silver's 2012 electoral vote forecasts with those of several other poll aggregators, Klein wrote, "It’s important to be clear about this: If Silver’s model is hugely wrong — if all the models are hugely wrong, and the betting markets are hugely wrong — it’s because the polls are wrong. Silver’s model is, at this point, little more than a sophisticated form of poll aggregation." Furthermore, according to Klein, "What you’re seeing is that Silver’s forecast isn’t an outlier. In fact, it’s actually quite a bit friendlier to Romney’s chances than the other models, and only a little more bullish on Obama than the betting markets".[138]

In October 2012, political science professor Samuel L. Popkin of the University of California, San Diego, evaluated Silver's electoral projections as follows:[139]

We're heading into the last week of a tight presidential campaign, and polls are coming in too fast to count. Partisans everywhere are desperate for omens. But at moments like these, it's people who care most intensely that the "right outcome" occur who run a high risk of getting it wrong—picking out positive polls for comfort, or panicking over an unusual and unexpected result they don’t like.

Fortunately, our most prominent number cruncher has been giving us the straight story instead of capitalizing on this anxiety. In 2008, Nate Silver correctly predicted the results of all 35 Senate races and the presidential results in 49 out of 50 states. Since then, his website, fivethirtyeight.com (now central to The New York Times’s political coverage), has become an essential source of rigorous, objective analysis of voter surveys to predict the Electoral College outcome of presidential campaigns.

On November 1, 2012, in response to the on-air criticism by Joe Scarborough about Silver's and other projections of an electoral lead by Barack Obama, Silver sent the following tweet on Twitter:

.@JoeNBC: If you think it's a toss-up, let's bet. If Obama wins, you donate $1,000 to the American Red Cross. If Romney wins, I do.

The wager grew to $2,000. Responding to the wager on the same day, The New York Times public editor Margaret Sullivan wrote, "whatever the motivation behind it, the wager offer is a bad idea – giving ammunition to the critics who want to paint Mr. Silver as a partisan who is trying to sway the outcome. It's also inappropriate for a Times journalist, which is how Mr. Silver is seen by the public even though he’s not a regular staff member."[140] One day later, Sullivan wrote another post titled "The Times’s Washington Bureau Chief, and Legions of Others, in Defense of Nate Silver,"[141] in which she stuck by her criticism of the wager, but also wrote, inter alia: "First off, I want to state clearly that I see nothing in Mr. Silver’s writing that suggests his work has partisan motivations. I also will repeat that those who choose to equate probability and a close political race are wildly missing the point. To use everyone’s favorite new word, they are innumerate".[142]

As Silver's book was about to appear in print, climate scientist Michael E. Mann wrote in The Huffington Post, "I was rather crestfallen earlier this summer when I finally got a peek at a review copy of The Signal and the Noise: Why So Many Predictions Fail -- but Some Don't. It's not that Nate revealed himself to be a climate change denier; He accepts that human-caused climate change is real, and that it represents a challenge and potential threat. But he falls victim to a fallacy that has become all too common among those who view the issue through the prism of economics rather than science. Nate conflates problems of prediction in the realm of human behavior -- where there are no fundamental governing 'laws' and any "predictions" are potentially laden with subjective and untestable assumptions -- with problems such as climate change, which are governed by laws of physics, like the greenhouse effect, that are true whether or not you choose to believe them."[143]

Silver responded to Mann on the same day with the following tweet on Twitter:

Mann attributes me as endorsing a number of premises that the book actually refutes.[144]

Mann responded as follows on Twitter:

@fivethirtyeight Nate, I touch on this in piece. U refute things in 1 place, but then reinforce them later, making it hard to read U.

Jensen Comment
I would've been more impressed if Nate Silver had predicted a Romney win when Romney actually won confirming Nate's prediction.

Predicting an Obama Electoral College win (as opposed to the popular vote) seems to have been a no-brainer even before the election.

Hi again Tom,

CBS Sixty Minutes on November 11, 2012 had an interesting module noting that with 20 million people in the U.S. unemployed or underemployed there are 3 million jobs that are chronically unfilled because of a shortage of skilled labor --- Click Here

Sometimes these skills require college education, but in most cases the jobs require only technical training by workers who will then be dedicated to their craft. An example, is a dashboard mechanic who sometimes now commands $100 per hour. New vehicles are terribly complicated behind the dashboard.

Three million open jobs in U.S., but who's qualified?

The balance of power in Washington didn't change this week as President Obama and most members of Congress kept their jobs. They'll go back to work and face an unemployment problem that also hasn't changed very much. Every month since January 2009, more than 20 million Americans have been either out of work or underemployed. Yet despite that staggering number, there are more than three million job openings in the U.S. Just in manufacturing, there are as many as 500,000 jobs that aren't being filled because employers say they can't find qualified workers.

It's called "the skills gap." How could that be, we wondered, at a time like this with so many people out of work? No place is the question more pressing than in Nevada. The state with the highest unemployment rate in the country. A place where there are jobs waiting to be filled.

Karl Hutter: Yeah, we hear way too much about the United States manufacturing, we don't manufacture anything anymore. Not true. Not true.

Byron Pitts: Sure, it's Mexico, it's in China--

Karl Hutter: Yeah, yeah, that all went to China, that all went to Mexico. Not true, whatsoever.

Karl Hutter is the new chief operating officer of Click Bond in Carson City, Nev., a company his parents started in 1969.

Karl Hutter: We're still technically a small business, but we're growing quickly.

Byron Pitts: So, you're hiring?

Karl Hutter: We are hiring. We're hiring and we need to find good people. And that's really what the challenge is these days.

Three hundred and twenty-five people work at Click Bond, making fasteners that hold cables, panels and pretty much everything else inside today's planes, ships and trains. Their customers include the Defense Department. The F-35 has 30,000 Click Bond fasteners.

The workhorses in this factory may look old, but they're computer controlled machines that make precision parts, accurate to a thousandth of an inch; the thickness of a piece of paper. Click Bond needs employees who can program the computers, operate the machines, fix them and then check to make sure the results are up to spec.

Ryan Costella: If you look at the real significant human achievements in this country a lot of them have to do with manufacturing or making something.

Ryan Costella is head of Strategic Initiatives at Click Bond. That's another way of saying he's looking ahead to both opportunities and problems facing the company.

Byron Pitts: Sure. So the skill gap, is it across the board? Is it at all levels? Or is it the entry level?

Ryan Costella: I would honestly say it's probably an entry level problem. It's those basic skill sets. Show up on time, you know, read, write, do math, problem solve. I can't tell you how many people even coming out of higher ed with degrees who can't put a sentence together without a major grammatical error. It's a problem. If you can't do the resume properly to get the job, you can't come work for us. We're in the business of making fasteners that hold systems together that protect people in the air when they're flying. We're in the business of perfection. .

Costella says Click Bond ran into trouble when it expanded production and went to buy these machines from a factory in Watertown, Conn. The company didn't have enough skilled labor back home in Nevada to run them, so it bought the entire factory just to get the qualified employees and kept the plant running in Connecticut.

[Conn. worker: You just have to be careful that you don't hit the side.]

Nationwide, manufacturers say the lack of skilled workers is the reason for hundreds of thousands of unfilled jobs; a number Ryan Costella says is about to get bigger.

Continued at


Jensen Comment
Today I had conversations with two skilled small business owners. One is a a very skilled carpenter building a sunroom on my neighbor's house. The other is a woman who is building a retaining wall around one of my flower gardens. Both are very skilled at their craft.

I asked each one of them why they don't hire at least one laborer to help them in these in their businesses. Both replied that they were sick and tired of hiring workers who were unreliable about showing up for work and not good workers when they did show up from work. There are various reasons lousy workers, but even up here drug and alcohol abuse is one of the most common problems among men and women laborers.

I think those of us who grew up in the 1950s and 1960s are just not aware how many of those 20 million unemployed really are not good workers. And yes I do know that many of them are good workers who cannot find work suited for their skills and geographic preferences.

Geographic preferences are an issue. For example, some rural teachers and other workers who are laid off refuse to take on the living costs, crime risks, traffic congestion, and other drawbacks of moving to large cities, especially if the work compensation in urban settings is relatively low given the costs of moving to and living in urban areas. Instead they prefer to draw unemployment compensation followed by odd jobs and/or living on spousal income.

The Power of Women in New Hampshire
All former and future Congressional Representatives and Senators sent by New Hampshire to Washington DC are female.

In addition the new Governor, Maggie Hassan, is a woman. She will carry on the liberal Democratic Party traditions established by Governor Lynch over the past eight years. By the way Governor Lynch is also a former Dean of the Harvard Business School.

I'm actually bragging about all of this since it is great not to live in a "Good Old Boys" state.
I'm truly not upset in a about living in a "Not Any Boys" state.

I'm also pleased that all the women in power have pledged no income taxes or sales taxes for New Hampshire in spite of their progressive biases. We may not be  celebrating their electoral successes if they had not made such no-tax pledges for NH. However, I suspect that the new women, all Democrats, from NH going to Washington DC will rubber stamp all of President Obama's initiatives, including increased Federal income taxes. Maybe that's a good thing to sock it to the rich for the sake of greater income equality for the United States.

Political national-level candidates with roots (mostly non-tenured)  in higher education did not do so well in the 2012 election,

There were two such Republican candidates, one who won and the other who lost.

There were seven Democratic Party candidates, four who lost and three who won.

One of academic winners claims to be independent, but many voters in Maine consider him to be a liberal candidate. Angus King from Bowdoin College, running as an independent, defeated the Democratic Candidate Cynthia Dill who is also tied to higher education as a Southern Maine Community College instructor

"How Candidates With Ties to Higher Education Fared in the Election," by Alina Mogilyanskaya and Michael Stratford, Chronicle of Higher Education, November 7, 2012 --- Click Here

Jensen Comment
Given the political activism (by usually much less than half the faculty) on virtually all college campuses, I'm a little surprised that more academics do not put their money where their mouth is in such matters. The Academy is very generous to tenured faculty who choose to serve in some elective or appointed capacity in government. Most colleges and universities allow such faculty to return to their tenure slots, even after years of being away from the campus.

There are most likely a higher proportion of professors and contract instructors who run for office at the state and local levels that are not full-time jobs.

Many of us agree with Keynesians Paul Krugman and Alan Blinder that there are some benefits to massive government spending at the start of a severe economic crash. But the trouble with most Keynesians these days is that they don't know when to stop. There's now a perpetual excuse that the economy is just too fragile to stop printing money to pay government's bills. Confiscating the wealth of the 1% won't make a dent in the weak economy. And hence the money presses just keep rolling and rolling until one morning you wake up and guess what? You're in Zimbabwe that is now printing million dollar bills, two of which it takes to by one chicken egg.

In the media, Peter Schiff is the best-known financial analyst who publically predicted the economic collapse of 2008 long before it happened, including his predictions of the bursting of the real estate bubble. He did not, however, make as many millions on his predictions as several others who quietly gambled on the crash. Some of those heavily leveraged winnings, however, might've been due more to luck than the deep analysis of Peter Schiff ---

I might note that "Quantitative Easing" QE1-QE3 in the U.S. is short hand for when the Fed cranks up printing presses for money so the U.S. Government can pay its bills without having to either tax or borrow. Sounds like a good idea since these have been trillions of dollars that do not add to the trillion-dollar deficit or National Debt or rile taxpayers ---

I might also note that I personally think the government is now lying about inflation since with a wave of the magic wand it took fuel, food, and other consumer items out of the calculation of inflation. The current calculation of inflation is also distorted by the crash in the housing market that does not reflect the rising costs of materials going into new and rebuilt homes. For your students, when you want to illustrate how to lie with statistics show them how inflation is calculated by the government.

"When Infinite Inflation Isn't Enough," by Peter Schiff, Townhall, November 9, 2012 ---

If no one seems to care that the Titanic is filling with water, why not drill another hole in it? That seems to be the M.O. of the Bernanke Federal Reserve. After the announcement of QE3 (also dubbed "QE Infinity") created yet another round of media chatter about a recovery, the Fed's Open Market Committee has decided to push infinity a little bit further. The latest move involves the rolling over of long-term Treasuries purchased as part of Operation Twist, thereby more than doubling QE3 to a monthly influx of $85 billion in phony money starting in December. I call it "QE3 Plus" - now with more inflation!

Inflation By Any Other Name

In case you've lost track of all the different ways the Fed has connived to distort the economy, here's a refresher on Operation Twist: the Fed sells Treasury notes with maturity dates of three years or less, and uses the cash to buy long-term Treasury bonds. This "twisting" of its portfolio is supposed to bring down long-term interest rates to make the US economy appear stronger and inflation appear lower than is actually the case.

The Fed claims operation twist is inflation-neutral as the size of its balance sheet remains constant. However, the process continues to send false signals to market participants, who can now borrow more cheaply to fund long-term projects for which there is no legitimate support. I said it last year when Operation Twist was announced, and I'll continue to say it: low interests rates are part of the problem, not the solution.

Interventions Are Never Neutral

Just as the Fed used its interest-rate-fixing power to make dot-coms and then housing appear to be viable long-term investments, they are now using QE3 Plus to conceal the fiscal cliff facing the US government in the near future.

As the Fed extends the average maturity of its portfolio, it is locking in the inflation created in the wake of the '08 credit crisis. Back then, we were promised that the Fed would unwind this new cash infusion when the time was right. Longer maturities lower the quality and liquidity of the Fed's balance sheet, making the promised "soft landing" that much harder to achieve.

The Fed cannot keep printing indefinitely without consumer prices going wild. In many ways, this has already begun. Take a look at the gas pump or the cost of a hamburger. If the Fed ever hopes to control these prices, the day will inevitably come when the Fed needs to sell its portfolio of long-term bonds. While short-term paper can be easily sold or even allowed to mature even in tough economic conditions, long-term bonds will have to be sold at a steep discount, which will have devastating effects across the yield curve.
It won't be an even trade of slightly lower interest rates now for slightly higher rates in the future. Meanwhile, in the intervening time, the government and private sectors will have made a bunch of additional wasteful spending. When are Bernanke & Co. going to decide is the right time to prove that the United States is fundamentally insolvent? Clearly this plan lays down an even stronger incentive to continue suppressing interest rates until a mega-crisis forces their hands. 

Also, when interest rates rise - the increase made even sharper by the Fed's selling - the Fed will incur huge losses on its portfolio, which, thanks to a new federal law, will become a direct obligation of the US Treasury, i.e. you, the taxpayer! 

Of course, the Fed refuses to accept this reality. Even though a painful correction is necessary, nobody in power wants it to happen while they're in the driver's seat. So Bernanke will stick with his well-rehearsed lines: the money will flow until there is "substantial improvement" in unemployment.

Does Bernanke Even Believe It?

Even Bernanke must have a hunch that there isn't going to be any "substantial improvement" in the near term. I suggested before QE3 was announced that a new round of stimulus might be Bernanke's way of securing his job, but recent speculation is that he may step down when his current term as Fed Chairman expires. Perhaps he is cleverer than I thought. He'll be leaving a brick on the accelerator of an economy careening towards a fiscal cliff, and bailing before it goes over the edge. Whoever takes his place will have to pick up the pieces and accept the blame for the crisis that Bernanke and his predecessor inflamed.

Don't Gamble Your Savings on Politics

For investors looking to find a safe haven for their money, QE3 Plus is a strong signal that the price of gold and silver are a long way from their peaks. Gold hit an eleven-month high at the beginning of October after the announcement of QE3, but the response to the Fed's latest meeting was lackluster. When the Fed officially announces its commitment to QE3 Plus in December, I wouldn't be surprised to see a much bigger rally. For that matter, many are keeping an eye on the election outcome before making a move on precious metals.

Continued in article

Jensen Comment
Many of us agree with Keynesians Paul Krugman and Alan Blinder that there are some benefits to massive government spending at the start of a severe economic crash. But the trouble with most Keynesians these days is that they don't know when to stop. There's now a perpetual excuse that the economy is just too fragile to stop printing money to pay government's bills. Confiscating the wealth of the 1% won't make a dent in the weak economy. And hence the money presses just keep rolling and rolling until one morning you wake up and guess what? You're in Zimbabwe that is now printing million dollar bills, two of which it takes to by one chicken egg.

"The UK's Most Disturbing Number: Total Unfunded Pension Obligations = 321% Of GDP," by Tyler Derden, Zero Hedge, November 12, 2012 ---
Can Illinois and California be far behind?

"Is Britain the Next Greece? The U.K. debt plight is worse than the worst. And there’s nothing that politicians or John Maynard Keynes can do about it," by Andrew Sawers, cfo.com, November 7, 2012 ---

The great economist John Maynard Keynes is a much-misunderstood man. More than that, Keynes himself didn’t understand how international economies work, and he took far too optimistic a view about the ambitions of those in government. The result? Highly indebted countries are pursuing to their detriment what they mistakenly believe to be Keynesian policies.

That’s the argument recently put forward by Guy Fraser-Sampson, a former investment manager at the largest sovereign wealth fund in the world, the Abu Dhabi Investment Authority, and now an investment and economics consultant who teaches at Cass Business School in London.

Speaking at the recent Finance Directors’ Forum, Fraser-Sampson told an audience of CFOs and other senior business executives that “there is a deep and instinctive view that something has gone horribly wrong. A lot of people are very frustrated that they know something has gone wrong but are not really sure how or why or when.”

Fraser-Sampson said that since the Second World War, politicians have been adopting what he called a “bastard Keynesian” model. Keynes himself took the view that, in times of recession, governments should, indeed, intervene in the economy by running budget deficits: “They should boost public spending and that public spending will lift the economy out of recession,” Fraser-Sampson explained.

But what most people apparently don’t know is that Keynes called such deficits “abnormal spending.”

Such spending isn’t something “he envisaged governments doing all the time. It was something he envisaged them doing occasionally. As soon as good times returned, they would make good that money by running a surplus in the good years,” said Fraser-Sampson.

But what nation can actually do that? In the United Kingdom, he said, a structural surplus has been recorded only five times since 1945, “and if you talk about a real surplus — a surplus that actually reduces the amount of public debt outstanding — that’s only happened once: right at the very end of the [1979–1990] Thatcher era.”

Keynes, said Fraser-Sampson, “was a warm, wonderful generous human being and he made the classic mistake of believing that everyone else was the same as he was. He thought politicians were essentially fine, good, upstanding public-spirited people who went into public office for the good that they could do for the country, and that it was perfectly OK to trust them with running a budget deficit. As we’ve seen, he was tragically misguided.”

The world Keynes inhabited was quite different in other ways, too. It was a world of fixed exchange rates, and where most currencies were linked at least indirectly to gold. It was also a world in which there just wasn’t anywhere near as much reliance on international trade as there is today. “Keynes, himself, in [his major work] The General Theory, quite candidly admits that he doesn’t know how to model the effect of international trade — and therefore he’s left it out.”

Where all of this leads to is that a fundamental plank of Keynes’s theory starts to fall apart. He developed the idea of the income multiplier: money spent becomes income in someone else’s hands; he then spends some of that income, which in turn becomes income for others, and so on. But, said Fraser-Sampson, research suggests that in open, international economies where there are floating exchange rates and the burden of net debt is greater than 60% of GDP, the income multiplier is actually negative over the medium term.

What does this mean? “If you are a heavily indebted government in a modern environment and you try to spend your way out of recession, you will actually make things worse rather than better,” Fraser-Sampson said.

That doesn’t prevent many from trying. Look at the euro zone, he said: “We see lots of phony growth that’s been pumped in, and now the day of reckoning is at hand. You have to have very dramatic economic contraction such as you’re seeing in Greece and soon in Spain to try to squeeze all that out [of] the system.”

Continued in article

Jensen Comment
It's just not true that there's nothing the U.K. can do about its debt. The U.K., unlike Greece, can simply print more money to pay its bills following the lead of the Weimar Republic, Zimbabwe, and the Federal Reserve of the United States under Bernanke. If a country prints its own currency there's really no longer a need to tax or borrow.

Here's how the U.S. printed over $2 trillion with the Fed's Quantitative Easing program ---
Countries still trying to tax or borrow are just ignorant of Quantitative Easing.

Question for Your Students
Why will a cut in the corporate tax rate hurt rather than help many corporations?

"Tax Twist: At Some Firms, Cutting Corporate Rates May Cost Billions," by Michael Rapoport, The Wall Street Journal, November 8, 2012 ---

What Uncle Sam has given to the earnings of companies like Citigroup Inc., C -0.35% American International Group Inc. AIG -0.73% and Ford Motor Co., F 0.00% he soon might take away.

President Barack Obama has said, most recently during last month's presidential debates, that the 35% U.S. corporate tax rate should be cut. That would mean lower tax bills for many companies. But it also could prompt large write-downs by Citigroup, AIG, Ford and other companies that hold piles of "deferred tax assets," or DTAs.

After posting big losses, these companies have tax credits and deductions they can use to defray future tax bills, thus providing a boost to earnings.

But a tax-rate reduction means some of those credits and deductions, counted as assets on the balance sheet, would be worth less, since lower tax bills would mean fewer opportunities to use them before they expire. That would force the companies to write down their value, resulting in charges against earnings.

Citigroup, for instance, acknowledged during its recent third-quarter earnings conference call that a cut in the tax rate could lead to a DTA-related charge of $4 billion to $5 billion against earnings. Lockheed Martin Corp. LMT +0.26% said in its latest quarterly report that a write-down of its DTAs was possible.

Any write-down also would reduce a company's "tangible book value," the sum it could realize by selling its assets in a fire sale. That could further weigh on banks' stock prices. Most large banks already trade at a discount to tangible book value because of investor concerns about their growth prospects and wariness of reported asset values.

"Investors are focused on tangible book value," said Mike Mayo, a CLSA Securities banking analyst who criticized Citigroup's accounting and asked about the possibility of a write-down on Citigroup's recent earnings call.

Companies other than Citigroup haven't disclosed the size of possible write-downs from a tax cut. "I think this is going to be pretty much a surprise" to investors, said Robert Willens, a tax and accounting expert.

Some companies have enormous piles of these assets. Citigroup has $53.3 billion, the most of any U.S. company. Ford has $12.9 billion.

But those numbers would be reduced under Mr. Obama's proposal to cut the corporate rate to 28% with an added break for manufacturers. The proposal would require congressional action.

Continued in article


Apple paid 1.9% income tax on $36.8 billion in 2012 (fiscal-year) profits outside the U.S., down from the 2.5% paid in 2011 ---

Virtually all those iPhones are made in China, and Macs are made in such places as tax-friendly Ireland. In order not to rile Congress too much, some parts are expensively made in the United States.

A Socialist President Faces the Reality of High Business Taxation
"France Announces Cut in Payroll Taxes for Businesses," by David Jolly, The New York Times, November 6, 2012 ---

"Hurricanes and Human Choice Sandy was terrible, but we're currently in a relative hurricane 'drought.' Connecting energy policy and disasters makes little scientific sense," by Roger Pielke Jr., The Wall Street Journal, October 31, 2012 ---

Hurricane Sandy left in its path some impressive statistics. Its central pressure was the lowest ever recorded for a storm north of North Carolina, breaking a record set by the devastating "Long Island Express" hurricane of 1938. Along the East Coast, Sandy led to more than 50 deaths, left millions without power and caused an estimated $20 billion or more in damage.

But to call Sandy a harbinger of a "new normal," in which unprecedented weather events cause unprecedented destruction, would be wrong. This historic storm should remind us that planet Earth is a dangerous place, where extreme events are commonplace and disasters are to be expected. In the proper context, Sandy is less an example of how bad things can get than a reminder that they could be much worse.

In studying hurricanes, we can make rough comparisons over time by adjusting past losses to account for inflation and the growth of coastal communities. If Sandy causes $20 billion in damage (in 2012 dollars), it would rank as the 17th most damaging hurricane or tropical storm (out of 242) to hit the U.S. since 1900—a significant event, but not close to the top 10. The Great Miami Hurricane of 1926 tops the list (according to estimates by the catastrophe-insurance provider ICAT), as it would cause $180 billion in damage if it were to strike today. Hurricane Katrina ranks fourth at $85 billion.

To put things into even starker perspective, consider that from August 1954 through August 1955, the East Coast saw three different storms make landfall—Carol, Hazel and Diane—that in 2012 each would have caused about twice as much damage as Sandy.

While it's hardly mentioned in the media, the U.S. is currently in an extended and intense hurricane "drought." The last Category 3 or stronger storm to make landfall was Wilma in 2005. The more than seven years since then is the longest such span in over a century.

Flood damage has decreased as a proportion of the economy since reliable records were first kept by the National Weather Service in the 1930s, and there is no evidence of increasing extreme river floods. Historic tornado damage (adjusted for changing levels of development) has decreased since 1950, paralleling a dramatic reduction in casualties. Although the tragic impacts of tornadoes in 2011 (including 553 confirmed deaths) were comparable only to those of 1953 and 1964, such tornado impacts were far more common in the first half of the 20th century.

The United Nations Intergovernmental Panel on Climate Change reports that drought in America's central plains has decreased in recent decades. And even when extensive drought occurs, we fare better. For example, the widespread 2012 drought was about 10% as costly to the U.S. economy as the multiyear 1988-89 drought, indicating greater resiliency of American agriculture.

There is therefore reason to believe we are living in an extended period of relatively good fortune with respect to disasters. A recurrence of the 1906 San Francisco earthquake today, for example, could cause more than $300 billion in damage and thousands of lives, according to a study I co-published in 2009.

So how can today's disasters, even if less physically powerful than previous ones, have such staggering financial costs? One reason: There are more people and more wealth in harm's way. Partly this is due to local land-use policies, partly to incentives such as government-subsidized insurance, but mostly to the simple fact that people like being on the coast and near rivers.

Even so, with respect to disasters we really do make our own luck. The relatively low number of casualties caused by Sandy is a testament to the success story that is the U.S. National Weather Service and parallel efforts of those who emphasize preparedness and emergency response in the public and private sectors. Everyone in the disaster-management community deserves thanks; the mitigation of the impacts from natural disasters has been a true national success story of the past century.


But continued success isn't guaranteed. The bungled response and tragic consequences associated with Hurricane Katrina tell us what can happen when we let our guard down.

And there are indications that we are setting the stage for making future disasters worse. For instance, a U.S. polar-satellite program crucial to weather forecasting has been described by the administrator of the federal agency that oversees it—the National Oceanic and Atmospheric Administration—as a "dysfunctional program that had become a national embarrassment due to chronic management problems." The lack of effective presidential and congressional oversight of this program over more than a decade can be blamed on both Republicans and Democrats. The program's mishandling may mean a gap in satellite coverage and a possible degradation in forecasts.

Another danger: Public discussion of disasters risks being taken over by the climate lobby and its allies, who exploit every extreme event to argue for action on energy policy. In New York this week, Gov. Andrew Cuomo declared: "I think at this point it is undeniable but that we have a higher frequency of these extreme weather situations and we're going to have to deal with it." New York Mayor Michael Bloomberg spoke similarly.

Humans do affect the climate system, and it is indeed important to take action on energy policy—but to connect energy policy and disasters makes little scientific or policy sense. There are no signs that human-caused climate change has increased the toll of recent disasters, as even the most recent extreme-event report of the Intergovernmental Panel on Climate Change finds. And even under the assumptions of the IPCC, changes to energy policies wouldn't have a discernible impact on future disasters for the better part of a century or more.

The only strategies that will help us effectively prepare for future disasters are those that have succeeded in the past: strategic land use, structural protection, and effective forecasts, warnings and evacuations. That is the real lesson of Sandy. 

Mr. Pielke is a professor of environmental studies and a fellow of the Cooperative Institute for Research in Environmental Sciences at the University of Colorado.

Sandy and 100 Years of Hurricanes (before the brunt of Sandy came ashore), Bloomberg Business Week, October 29, 2012 ---

Also see video at http://www.ctvnews.ca/world/scientists-say-it-s-unfair-to-blame-climate-change-for-sandy-1.1017753

When I see all those Sandy-victims complaining about FEMA on TV, I wonder if they haven't applied for their $30,000 payments for alternative housing. Perhaps they're just afraid of losing what what's left of their homes and contents.

I do understand that in almost any part of the U.S. there's a genuine risk of being vandalized if victims leave what's left of their home and home contents when they move to hotels and apartments elsewhere using housing payments from FEMA. It was so refreshing to see that after the Japanese tsunami disaster there was virtually no looting of vacant homes and homeowner property. Why do we have such a criminal culture that exploits disaster victims?

In addition to FEMA Flood Insurance FEMA provides substantial assistance to disaster victims who were not insured ---

Other FEMA grants and assistance programs ---

How the Federal Government takes care of many property owners (for of business property and homes) following natural disasters?
"Sandy-Struck Companies Can Seek FEMA Buyouts:  Business owners with heavy damage located in flood plains may want to consider an option that has worked for homeowners," by Caroline McDonald,  CFO.com, November 6, 2012 ---

Homeowners with homes devastated by superstorm Sandy can take advantage of a decades-old FEMA grant program that buys damaged property in flood-ravaged areas. Yet although corporate executives and business owners may not know it, their companies may be eligible too.

FEMA’s Hazard Mitigation Grant Program (HMGP) indeed may be the way to go, rather than pursuing insurance claims under the National Flood Insurance Program. The HMGP is commonly called a “buyout” program because a mix of federal and other funds are used to buy the damaged property from the home or business owner, demolish it, and return the land to its natural state.

That takes the damaged structure out of the flood plain and eliminates the risk of future personal injury or property damage. The property owner can take the money from the sale, use it to pay off the mortgage, and relocate elsewhere—usually on higher ground. (According to Title 44 of the Code of Federal Regulations, a flood plain is "any land area susceptible to being inundated by water from any source.)

Marshall Gilinsky, an insurance-recovery attorney at Anderson, Kill, & Olick who represented some Vermont homeowners after Hurricane Irene, says the program may be a good option for businesses of all sizes that suffered extensive damage from Sandy and are located in a flood plain.

“I don’t know historically how many businesses have availed themselves of it. But I bet there will be a number of businesses for whom this might be their best option from an economic perspective,” he says, adding that it is a “business judgment. It all comes down to the relocation and the displacement associated with that.”

Businesses that have relatively low limits of coverage under their flood insurance policies – coverage inadequate to the task of rebuilding – may find it a viable solution. The key is whether the damaged structure qualifies, Gilinsky says. The simplest determinations are whether the property is located in a flood plain, and that the cost to repair or replace the existing damage is at least 50% of the pre-storm fair market value of the structure.

After Hurricane Irene, he says, he worked with homeowners having difficulty collecting in full on their flood insurance policies, and looking at homes badly damaged by flood. Moreover, the flood recovery from the National Flood Insurance Program would have left them with a house that they were unable to repair to the extent they would have liked. The grant option, on the other hand, afforded them a way to buy a new house in a better location, he says.

Small or large businesses alike may qualify under this standard, depending on the extent of the damage, he adds. In general, the worse the damage is, the more likely it is that the business owner will want to relocate and qualify.

For those businesses that want to use the HMGP to relocate, another consideration may be the time it takes to get the grant money. “It has been over a year since Irene and grant money is only now on the verge of being disbursed,” the lawyer says. Business owners interested in pursuing the option must approach officials of the town where the company is located, because it's the town or city, rather than the business owner that applies for the grant.

To apply, the business owner fills out a grant application with the town or city, which signs off on the plan. The town buys the property from the owner, pays for the transaction using grant money—which tends to be 75% from FEMA and 25% from matching, non-government grants, such as community development grants. The town then agrees not to rebuild on the property. Transaction costs, including site investigations for hazardous materials and demolition and closing fees are included in the grant money.

Jensen Comment
It occurs to me that this is somewhat of a problem for condo owners. Suppose there are 30 condos in a destroyed building. Presumably there's a majority rule regarding disaster buyouts unless there's a contract to the contrary. Hence a minority number of condo owners may be forced into or out of a buyout contrary to their personal interests.

Note the clause:
That takes the damaged structure out of the flood plain and eliminates the risk of future personal injury or property damage

The fact that this happens so seldom for vacation home owners that keep rebuilding after each and every hurricane indicates that they may be hard core refusniks when it comes to FEMA buyouts.

Labor unions and construction companies must despise these buyouts.

If these questions wasted your time, blame me since I just made them up watching the sun set on the White Mountains (that are now powdered with white snow that looks pink at sunset.
Bob Jensen


"In Disaster Relief, Bigger Government Isn't Always Better:  FEMA spent $878 million on prefabricated homes after Hurricane Katrina. Thousands were left to rot," by Michael Tanner, The Wall Street Journal, November 2, 2012 ---

Jensen Comment
I disagree with writers like Tanner that each of the 50 states should take over responsibility for disaster relief. That in itself is a disaster if the states have to raise their own funding from taxation or borrowing. It's better to have the Federal government pay for FEMA disaster relief since the Federal government under Bernanke learned out to simply crank up the money printing presses to generate revenue without have to tax or borrow. When the government prints trillions of dollars to help pay its bills there's no reason to become efficient about a spending discipline. Bring on the greenbacks with the blessings of Keynesian theorists Paul Krugman and Alan Blinder.

What's most important for future generations is to stop rebuilding in high risk flooding zones. If you believe the global warming scientists the ocean levels are going to rise two feet in a few decades and storms will be more ferocious (even if we're presently in what oceanic scientists call a drought of hurricanes relative to years past). Should we really rebuild all those houses on the outer banks of New Jersey and North Carolina and rebuild their beaches time and time again? When will we learn to turn lowlands into wild wetlands once again? Is cost-efficient to rebuild all of Staten Island or New Orleans with ever-higher dikes?

Instead we should use Staten Island more efficiently --- as a landfill for New York and New Jersey trash. If done properly, in 100 years Staten Island will be a mountain where we can safely build luxury condos with fabulous views of hurricanes down below. I'm serious here. Bangor, Maine and many other towns are building what I consider to be outstanding mountains built on landfills. As soon as there is an efficient way to capture the underground methane these mountains will one day be outstanding building sites and ski resorts.

"Ten years too late, it’s good riddance to wind farms – one of the most dangerous delusions of our age," by Christopher Booker, Daily Mail (U.K.), October 30, 2012 ---

The significance of yesterday’s shock announcement by our Energy Minister John Hayes that the Government plans to put a firm limit on the building of any more onshore windfarms is hard to exaggerate.

On the face of it, this promises to be the beginning of an end to one of the greatest and most dangerous political delusions of our time.

For years now, the plan to cover hundreds of square miles of the British countryside with ever more wind turbines has been the centrepiece of Britain’s energy policy — and one supported by all three major political parties.

Back in 2008, when Prime Minister Gordon Brown announced his wish to see the country spend £100 billion on windfarms, the only response from the Tory leader David Cameron was to say that he should have done it sooner.

It was the only way, they all agreed, Britain could meet our commitment to the EU that, by 2020, we must produce nearly a third of our electricity from ‘renewables’ — with the largest part provided by tens of thousands more wind turbines.

Yet now, out of the blue, has come this announcement by the Coalition Energy Minister that from now on there is to be a moratorium on building onshore turbines other than those for which consent has already been given. Bonanza

What made this even more piquant was the fact that Mr Hayes chose to drop this bombshell just hours before attending a conference in Glasgow staged by RenewableUK, the professional lobby group for Britain’s wind industry.

These are the very people who for years have been making fortunes out of the greatest public subsidy bonanza of modern times. Now Mr Hayes is to stop their gravy train in its tracks.

It will give them the biggest shock of their professional lives.

The ramifications of such a policy U-turn stretch in all directions, not least to Brussels, where our EU colleagues won’t be taken in for a moment by Mr Hayes’s disingenuous claim that Britain doesn’t need more onshore windfarms because we are now on course to meet our ‘renewables’ target without them.

But nowhere will this announcement be greeted with more delirious surprise than in all those hundreds of communities across the land where outraged local protest groups have formed in ever greater numbers to fight the onward march of what they see as the greatest threat to Britain’s countryside for centuries.

Continued in article


"MSNBC really is more partisan than Fox, according to Pew study: How does Comcast allow such wretched bias in presidential coverage?" by David Zurawik, The Baltimore Sun, November 2, 2012 ---

In writing about the Pew study released today, I was struck by the big story of how negative coverage on several levels of presidential politics had become.

I think this is big trouble for democracy, especially the hostile level of discourse in social media. And that it's something the media need to address collectively after the election.

But here's one of several fascinating smaller findings of the study that are kind of stunning -- even if they seem obvious and ho-hum to some of my more jaded, postmodern, aren't-we-cleverly-ironic colleagues:

ON MSNBC, the ratio of negative to positive stories on GOP candidate Mitt Romney was 71 to 3.

That's not a news channel. That's a propaganda machine, and owner Comcast should probably change Phil Griffin's title from president to high minister of information, or something equally befitting the work of a party propaganist hack in a totalitarian regime. You wonder how mainstream news organizations allow their reporters and correspondents to appear in such a cauldron of bias.

I thought show host Sean Hannity of Fox News defined party propagandist. But while his channel was bad, it wasn't as bad-boy biased as MSNBC.

The ratio of negative to positive stories in Fox's coverage of President Obama was 46 to 6.

Check out the full Pew study here. It's a good one, and there is much food for thought in its findings as we approach the end of an election cycle marked by poor media performance.


Ann Coulter --- http://en.wikipedia.org/wiki/Ann_Coulter

Michael Moore --- http://en.wikipedia.org/wiki/Michael_Moore

I'm not a huge Ann Coulter fan, and I seriously do not recall ever quoting her on the AECM or on my Website. However, the article below illustrates another way progressives on campus in the past are silencing conservative voices on campus. It's not just that the conservatism speakers that are being silenced, it's a message to conservative students that they should not be advocating conservatism.

It's OK to invite Michael Moore but not Ann Coulter.

It's not so much that both Coulter and Moore often violate the principles of good scholarship. The point is why is Moore so easily invited by liberal students on campus and Coulter repelled so often by faculty and administration on college campuses?

"A Different Ann Coulter Debate," by Scott Jaschik, Inside Higher Ed, November 12, 2012 ---

Bob Jensen's threads on liberal biases in the media and academe ---

CRS officials then pulled the report from its website. In a Sept. 28 email to a Republican Senate staffer, CRS deputy director Colleen Shogan wrote that "I decided to remove the Hungerford report from the CRS website for now." She added that she had given Mr. Hungerford's manager, Don Marples, "a list of concerns I would want addressed in a future version" and that "in particular, I want a better, more robust defense of the methodology in the paper."

"Congressional Research Hit Job Democrats politicize a supposedly nonpartisan think tank.," The Wall Street Journal, November 1, 2012 ---

The Congressional Research Service is supposed to be a nonpartisan research tool for the House and Senate, but like so many institutions in Washington it is now being hijacked for partisan ends. The dispute concerns a highly politicized CRS tax study that Democrats have been trying to use as a cudgel against Mitt Romney.

The tax study just happened to appear on the CRS website in September in the heat of the Presidential tax debate. Author Thomas Hungerford purported to show that 65 years of changes in "top tax rates have had little association with saving, investment or productivity growth." The timing couldn't have been better for President Obama, and the usual liberal media suspects picked it up. So did New York Senator Chuck Schumer, who used it in a speech to attack tax reform.

Mr. Hungerford tells us the study wasn't requested by a Member of Congress, so perhaps it was his idea. You won't be surprised to learn that Mr. Hungerford has donated to the Obama campaign and Senate Democrats and worked as an economist at the White House budget office under Bill Clinton.

Republicans understandably objected to this partisan exercise, especially because the study has statistical design flaws and ignores multiple peer-reviewed studies that have found a significant relationship between cuts in tax rates and the pace of capital formation, investment and economic growth.

CRS officials then pulled the report from its website. In a Sept. 28 email to a Republican Senate staffer, CRS deputy director Colleen Shogan wrote that "I decided to remove the Hungerford report from the CRS website for now." She added that she had given Mr. Hungerford's manager, Don Marples, "a list of concerns I would want addressed in a future version" and that "in particular, I want a better, more robust defense of the methodology in the paper."

Now Senate Democrats are trying to portray Mr. Hungerford as a victim of censorship due to GOP pressure, and Thursday they got an impressionable Jimmy Olson at the New York Times to buy the spin. The reality is that sometime after we called Mr. Hungerford, he or someone else at CRS talked to Senate Democrats, who decided to give the study one more propaganda run before Election Day.

CRS spokeswoman Janine D'Addario told us Thursday that "To my knowledge, CRS has never taken out of circulation a study based solely on comments from Members of Congress or a Congressional committee" and that "this one wasn't."

This episode is nonetheless a significant blot on the CRS reputation for unbiased research. We're not sure why Congress needs a research operation when it already has a budget office, a tax committee and thousands of staff, but it surely doesn't need one that acts like an arm of the Democratic Party.

What is the difference between education and indoctrination? 

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

Indoctrination --- http://en.wikipedia.org/wiki/Indoctrination
Where many voices of education are silenced

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

"Noam Chomsky Spells Out the Purpose of Education," by Josh Jones, Open Culture, November 2012 ---

E + ducere: “To lead or draw out.” The etymological Latin roots of “education.” According to a former Jesuit professor of mine, the fundamental sense of the word is to draw others out of “darkness,” into a “more magnanimous view” (he’d say, his arms spread wide). As inspirational as this speech was to a seminar group of budding higher educators, it failed to specify the means by which this might be done, or the reason. Lacking a Jesuit sense of mission, I had to figure out for myself what the “darkness” was, what to lead people towards, and why. It turned out to be simpler than I thought, in some respects, since I concluded that it wasn’t my job to decide these things, but rather to present points of view, a collection of methods—an intellectual toolkit, so to speak—and an enthusiastic model. Then get out of the way. That’s all an educator can, and should do, in my humble opinion. Anything more is not education, it’s indoctrination. Seemed simple enough to me at first. If only it were so. Few things, in fact, are more contentious (Google the term “assault on education,” for example).

What is the difference between education and indoctrination? This debate rages back hundreds, thousands, of years, and will rage thousands more into the future. Every major philosopher has had one answer or another, from Plato to Locke, Hegel and Rousseau to Dewey. Continuing in that venerable tradition, linguist, political activist, and academic generalist extraordinaire Noam Chomsky, one of our most consistently compelling public intellectuals, has a lot to say in the video above and elsewhere about education.

First, Chomsky defines his view of education in an Enlightenment sense, in which the “highest goal in life is to inquire and create. The purpose of education from that point of view is just to help people to learn on their own. It’s you the learner who is going to achieve in the course of education and it’s really up to you to determine how you’re going to master and use it.” An essential part of this kind of education is fostering the impulse to challenge authority, think critically, and create alternatives to well-worn models. This is the pedagogy I ended up adopting, and as a college instructor in the humanities, it’s one I rarely have to justify.

Chomsky defines the opposing concept of education as indoctrination, under which he subsumes vocational training, perhaps the most benign form. Under this model, “People have the idea that, from childhood, young people have to be placed into a framework where they’re going to follow orders. This is often quite explicit.” (One of the entries in the Oxford English Dictionary defines education as “the training of an animal,” a sense perhaps not too distinct from what Chomsky means). For Chomsky, this model of education imposes “a debt which traps students, young people, into a life of conformity. That’s the exact opposite of what traditionally comes out of the Enlightenment.” In the contest between these two definitions—Athens vs. Sparta, one might say—is the question that plagues educational reformers at the primary and secondary levels: “Do you train for passing tests or do you train for creative inquiry?”

Chomsky goes on to discuss the technological changes in education occurring now, the focus of innumerable discussions and debates about not only the purpose of education, but also the proper methods (a subject this site is deeply invested in), including the current unease over the shift to online over traditional classroom ed or the value of a traditional degree versus a certificate. Chomsky’s view is that technology is “basically neutral,” like a hammer that can build a house or “crush someone’s skull.” The difference is the frame of reference under which one uses the tool. Again, massively contentious subject, and too much to cover here, but I’ll let Chomsky explain. Whatever you think of his politics, his erudition and experience as a researcher and educator make his views on the subject well worth considering.

Josh Jones is a doctoral candidate in English at Fordham University and a co-founder and former managing editor of Guernica / A Magazine of Arts and Politics.

Bob Jensen's threads on the liberal bias of the major media and higher education ---

Bob Jensen's threads on higher education controversies ---

"Dirty money cost China $3.8 trillion 2000-2011: report," Reuters, October 25, 2012 ---

WASHINGTON, Oct 25 (TrustLaw) - China has lost $3.79 trillion over the past decade in money smuggled out of the country, a massive amount that could weaken its economy and create instability, according to a new report.

And the outflow - much of it from corruption, crime or tax evasion - is accelerating. China lost $472 billion in 2011, equivalent to 8.3 percent of its gross domestic product, up from $204.7 billion in 2000, Global Financial Integrity, a research and advocacy group that campaigns to limit illegal flows, said in a report on Thursday.

"The magnitude of illicit money flowing out of China is astonishing," said GFI director Raymond Baker. "There is no other developing or emerging country that comes even close to suffering as much in illicit financial flows."

The lost funds between 2000 and 2011 significantly exceeded the amount of money flowing into China as foreign direct investment. The International Monetary Fund calculated FDI inflows at roughly $310 billion between 1998 and 2011.

Illicit capital flows rob a government of tax revenues and potential investment funds. Capital flight on this scale can be politically destabilizing by allowing the rich to get richer through tax evasion, GFI said.

China has a low level of tax collection given the size of its economy, according to the IMF. Beijing has recognized that corruption and bribery is a significant problem, an issue brought into sharp focus recently by the Bo Xilai scandal. The country has announced a major crackdown as it prepares for its once in a decade leadership transition.

GFI calculates how much money leaks out of a country unchecked by analyzing discrepancies in data filed with the IMF on import and export prices between trade partners and calculating discrepancies in a country's balance sheet.

The developing world overall lost $903 billion in illicit outflows in 2009, with China, Mexico, Russia and Saudi Arabia in that order showing the largest losses, it said.

Trade mispricing was the major method of smuggling money out of China, accounting for 86.2 percent of lost funds, the GFI report found. This scheme involves importers reporting inflated prices for goods or services purchased. The payments are transferred out and the excess amounts are deposited into overseas bank accounts.

Trade mispricing is most common for nuclear reactors, boilers, machinery and electrical equipment, the report said.

The bulk of the money ends up in tax havens - on average, 52.4 percent between 2005 and 2011. Much of this money eventually makes its way back to China as foreign direct investment for a double hit to the economy.

FDI benefits from special tax breaks and subsidies, essentially setting up an elaborate form of money laundering for Chinese businesses, GFI added.

Jensen Comment
Would this be as serious in the U.S. under the Ben Bernanke/PaulKrugman/AlanBlinder Keynesian Theory of Economics where, like Zimbabwe, we just print trillions of more dollars at virtually zero cost?

"Cliff Confusions," by Paul Krugman, The New York Times, October 29, 2012 ---

While I have access, let me point you to an excellent post by Suzy Khimm making a point I should have made: the only reason to worry about the fiscal cliff is if you’re a Keynesian, who thinks that bringing down the budget deficit when the economy is already depressed makes the depression deeper. And the same logic actually says that we should not just avoid spending cuts, we should raise spending right now.

What Khimm doesn’t mention is that a lot of the Very Serious People don’t seem to get that. As Jon Chait pointed out, finance bigwigs published an utterly ludicrous letter claiming that the risk from the fiscal cliff is that interest rates might spike — which is completely off base. The only way I can make sense of that letter is cognitive dissonance — they’re so wedded to the notion that the danger is that the invisible bond vigilantes will scare off the confidence fairy that they can’t admit, even to themselves, that what’s really worrying them right now is straight Keynesian concerns.

And the supposed deficit hawks, who should be celebrating the prospect of such a big move in their direction, aren’t. Why? As Khimm suggests, this isn’t the deficit reduction they wanted — it was supposed to involve hurting the working class, not raising tax rates at the top (which were supposed to be cut!).

Jensen Comment
I wonder if Professor Krugman continues to support this unlimited Keynesian spending for Greece --- a nation that cannot seem to enforce its own tax laws and would have almost no government spending discipline without externally-imposed austerity pressures from the EU?

The Keynesian spending approach of unrestrained spending is more worrisome for nations and states (like Illinois and California) that have almost no government spending disciplines unless such disciplines are applied from the outside. Both California and Illinois have very nearly the highest tax rates in the United States. How high can they keep going up and up and up to support progressive spending in those states and their unfunded public pension funds? The problem is that Greece, Illinois, and California cannot print their own currencies.

There's no such spending restraint under the Bernanke/Krugman/Blinder Keynesian Theory of Economics for nations like the U.S. and China that can crank up the currency printing presses.

And more good news for China
"Jeep, an Obama favorite, looks to shift production to China," Washington Examiner, October 25, 2012 ---

. . .

Well it appears that the taxpayer bailed-out Chrysler is looking back and now considering cutting costs by shifting production of all Jeeps to China, which has a strong desire for Jeeps.

In a Bloomberg interview, Jeep's president said the automaker plans to restore Jeep production in China, suspended in 2009, and is considering making all Jeeps in China. "Fiat SpA, majority owner of Chrysler Group LLC, plans to return Jeep output to China and may eventually make all of its models in that country, according to the head of both automakers' operations in the region," reported the business wire service.

Mike Manley, chief operating officer of Fiat and Chrysler in Asia and president of the Jeep brand, told Bloomberg, "We're reviewing the opportunities within existing capacity" as well as "should we be localizing the entire Jeep portfolio or some of the Jeep portfolio" to China.

Chrysler builds Jeep SUV models at plants in Michigan, Illinois and Ohio. Manley said the firm is in talks with China's Guangzhou Automobile Group Co.


Surprise Victory of Business Over Government
Canadian "Supreme Court backs Glaxo in transfer-pricing dispute," by Jeff Gray, Globe and Mail, October 18, 2012 ---

The Supreme Court of Canada has sided with GlaxoSmithKline PLC in a lengthy tax fight the drug giant has been waging with the federal government, in a ruling that some say expands the ability of multinationals to use a technique known as “transfer pricing” to shift profits outside of Canada’s borders.

The court, weighing in for the first time on transfer pricing, handed a defeat to the Canada Revenue Agency in its battle with Glaxo over the way multinationals account for the profits they report to Canada’s taxman and those they send to other, often lower-tax, jurisdictions.

Queen’s University law professor Art Cockfield said Thursday’s ruling could embolden companies that use transfer pricing: “They can take a more aggressive stance, and create these sorts of structures that shift profits to countries like tax havens.”

But Prof. Cockfield and other tax law experts also acknowledge that the decision largely reinforces practices already used by multinationals, while beating back a CRA attempt to much more narrowly interpret the rules.

“This does not give taxpayers carte blanche, at all,” said Claire Kennedy, a tax lawyer with Bennett Jones LLP in Toronto. “... It’s not as though it’s creating a huge opening in terms of transfer pricing.”

Multinationals with local subsidiaries that sell their imported products in Canada must set a price, for tax purposes, that the subsidiary pays its parent for those goods. If the multinational wants to move more of its profits out of Canada, it can increase this “transfer price” that it charges its own subsidiary.

But according to tax laws in Canada and other countries, the prices subsidiaries pay must be equal to the “reasonable” cost an arm’s-length business would pay. At the centre of the Glaxo fight was just how this should be defined.

From 1990 to 1993, the Canadian subsidiary of British-based Glaxo Group Ltd. told Ottawa it had paid a Swiss affiliate $1,512 and $1,651 a kilogram for the ingredient ranitidine, which it packaged as the stomach ulcer drug Zantac.

That price was five times the cost paid by generic producers for the same drug. This difference attracted Ottawa’s attention, and it reassessed the company for $51-million in unpaid taxes, starting a complex and lengthy legal battle. Glaxo beat back the reassessment at the Federal Court of Appeal, and the government took it before the Supreme Court in January.

Glaxo argued the price made business sense, since it was dictated by a licensing agreement that gave its Canadian subsidiary access to all of its other drugs and the right to sell brand-name Zantac for a much higher price. The local subsidiary was still making, and declaring, a 60-per-cent profit margin, the company said.

But lawyers for the Canadian government argued that tax laws mean only the comparable generic price should be taken into account.

In a unanimous decision, the Supreme Court disagreed, saying other factors, such as licensing agreements, should be considered when determining a reasonable arm’s- length price. But it declined Glaxo’s request to actually decide whether the price its Canadian subsidiary paid was fair, referring that question back to the Tax Court of Canada.

Continued in article

Forwarded by Dr. Wolf

Obama Fires Top Admiral For Advocating Libyan Rescue?

  • Posted by Harry Riley on October 29, 2012 at 6:23pmObama Fires Top Admiral For Advocating Libyan Rescue?


By Mort Amsel (Reporter)

According to this report, yesterday (27 October) Obama ordered the immediate removal of Rear Admiral Charles M. Gaouette from his command of the powerful Carrier Strike Group Three (CSG-3) currently located in the Middle East .

CSG-3 is one of five US Navy carrier strike groups currently assigned to the US Pacific Fleet. US Navy carrier strike groups are employed in a variety of roles, which involve gaining and maintaining sea control and projecting power ashore, as well as projecting naval airpower ashore.

The aircraft carrier USS John C. Stennis (CVN-74) is the strike group’s current flagship, and as of 2012, other units assigned to Carrier Strike Group Three include Carrier Air Wing Nine; the guided-missile cruisers USS Mobile Bay (CG-53) and USS Antietam (CG-54); and the ships of Destroyer Squadron 21, the guided-missile destroyers USS Wayne E. Meyer (DDG-108), USS Dewey (DDG-105), USS Kidd (DDG-100), and USS Milius (DDG-69).

US news reports on Obama’s unprecedented firing of a powerful US Navy Commander during wartime state that Admiral Gaouette’s removal was for “allegations of inappropriate leadership judgment” that arose during the strike group’s deployment to the Middle East .

This GRU report, however, states that Admiral Gaouette’s firing by President Obama was due to this strike force commander disobeying orders when he ordered his forces on 11 September to “assist and provide intelligence for” American military forces ordered into action by US Army General Carter Ham, who was then the commander of the United States Africa Command (AFRICOM), against terrorist forces attacking the American Consulate in Benghazi, Libya.

General Ham had been in command of the initial 2011 US-NATO military intervention in Libya who, like Admiral Gaouette, was fired by Obama. And as we can, in part, read from US military insider accounts of this growing internal conflict between the White House and US Military leaders:

“The information I heard today was that General [Carter] Ham as head of Africom received the same e-mails the White House received requesting help/support as the attack was taking place. General Ham immediately had a rapid response unit ready and communicated to the Pentagon that he had a unit ready.

General Ham then received the order to stand down. His response was to screw it, he was going to help anyhow. Within 30 seconds to a minute after making the move to respond, his second in command apprehended General Ham and told him that he was now relieved of his command.”


"ObamaCare's Costs to the Working Class Perverse incentives will make part-time work more attractive than a better-paying full-time job," by David Gamage (UC Berkeley), The Wall Street Journal, October 30, 2012 ---

It is time to move past the debate over whether ObamaCare was a good or a bad idea. I count myself as an ObamaCare supporter, but this doesn't blind me to the law's flaws. Regardless of who wins the presidential election, bipartisan compromise will be necessary to reform health care in a constructive way.

The most important provisions of ObamaCare are scheduled to take effect in 2014. I have been researching ObamaCare and assisting with its implementation, and have come to this realization: Without further reforms, the law will create unnecessary costs for working-class Americans.

Consider a low-income American supporting a family of four deciding whether to take a part-time job that pays $36,000 a year or a full-time job that pays $42,000 a year. According to my research, accepting the higher-paying job could result in the family losing over $10,000 a year in health-care subsidies.

Moreover, by switching low-income employees to part-time positions, rather than offering them health insurance, an employer will be able to save over $3,000 a year by avoiding ObamaCare's employer-mandate penalties. Without further reforms, many employers and employees will jointly benefit if employers make low-income employees part-timers rather than offering them health insurance. The losers will be taxpayers, who will need to fund the subsidies that these employees will be eligible for.

These perverse incentives won't be as extreme for employees with higher incomes, for dual-income families, or for single employees. For instance, a worker supporting a family of four deciding between a job paying $54,000 a year without health insurance and a job paying $72,000 a year with insurance would lose only about $7,000 in annual subsidies by accepting the higher-paying job. And a single employee deciding between those two jobs wouldn't lose any subsidies by accepting the higher-paying job. Nevertheless, many employers will face incentives not to offer health insurance to lower-income employees so those employees can qualify for federal health-care subsidies under ObamaCare.

For employees whose only job option comes with health insurance, ObamaCare's new subsidies may also create penalties for marriage and incentives for divorce. Under rules proposed by the Treasury Department, if an employer offers health insurance for which the cost of self-only coverage is affordable to an individual employee, that employee's entire family will be disqualified from receiving the new federal subsidies.

Consider a couple with children in which one of the parents earns most of the family's income. If the couple marries, the family would lose thousands of dollars of subsidies that could otherwise be used to pay for health insurance for the children and the lower-income spouse. If the couple is already married, divorce may be their only option for obtaining affordable insurance for their children and the lower-income parent.

We cannot predict with confidence how these perverse incentives will affect the behavior of individuals or employers. In Massachusetts, which in 2006 enacted reforms similar to ObamaCare, most employers have continued to offer subsidized health insurance, although there is some (mostly anecdotal) evidence of employees moving to part-time positions.

Yet ObamaCare's subsidies and penalties are sufficiently different that it is unclear how much we can learn from Massachusetts. Individuals and employers may change behavior gradually over time as they learn about the incentives created by new reforms. Even if these perverse incentives affect only a limited number of individuals, lawmakers should still strive to mitigate them through further reforms.

In light of these flaws, many Republicans want to repeal the law and replace it with something new. But what? There is near-universal agreement that the individual health-insurance market is dysfunctional. Americans who don't have the option of employer-sponsored insurance typically face excessively high costs in the individual market. And Americans with pre-existing conditions often have no realistic options in the individual market even if they are willing to pay far more than what insurance costs on the employer-sponsored market.

ObamaCare's subsidies, along with the new individual and employer mandates, are designed to fix the problems in the individual market. Assuming that key provisions of ObamaCare do take effect in 2014, insurance on the individual market should no longer cost dramatically more than in the employer-sponsored market. And Americans with pre-existing conditions will be able to buy health insurance on the same terms as other Americans.

There are alternatives that might also address the problems of the individual market. But realistic approaches must either embrace the direct government provision of health care (true "socialized medicine") or rely on government subsidies to make private insurance affordable. Hence, whether we want to "repeal and replace" ObamaCare, or "improve ObamaCare through further reforms," is merely a question of semantics.

Addressing the perverse incentives will also mean tackling a defect in health-care policy left intact by ObamaCare: By far the largest federal subsidies currently available for health insurance are the tax exclusions for employer-sponsored coverage. ObamaCare didn't end these subsidies, and their cost will be much greater than ObamaCare's new subsidies.

Conservative and liberal economists have long criticized the tax exclusions for employer-sponsored coverage on the grounds that they drive up health spending and provide far more tax benefit for higher-income than for lower-income taxpayers. Sen. John McCain proposed replacing these subsidies with better-designed tax credits when he ran for president in 2008. Yet ObamaCare failed to reform these older subsidies for employer-sponsored insurance.


ObamaCare's perverse incentives result mainly from creating a mismatch between the subsidies for individual health insurance and those for employer-sponsored insurance. Beginning in 2014, lower-income Americans will be eligible for far greater subsidies if they aren't offered employer-sponsored coverage, qualifying them for the new subsidies available for individual insurance. In contrast, higher-income taxpayers will be eligible for far greater subsidies if they get employer-sponsored coverage.

To resolve these perverse incentives, we should adopt a variation of Sen. McCain's proposals and replace the tax exclusions for employer coverage with tax credits. To the extent possible, we should provide the same subsidies for employer-based insurance as for individual insurance.

ObamaCare is far from perfect. Yet there was widespread agreement that the health-care system before ObamaCare needed reform. If Republicans and Democrats will work together, they can build a system better than either ObamaCare or what we had before. Partisan warfare should not stand in the way of improving health care for all Americans.

Mr. Gamage is an assistant professor of law at the University of California at Berkeley. During the academic years 2010-12, he worked at the Treasury Department on the implementation of the tax provisions of health-care reform. The views expressed here are his own and are unconnected to the Treasury Department.

Ann Coulter --- http://en.wikipedia.org/wiki/Ann_Coulter

Michael Moore --- http://en.wikipedia.org/wiki/Michael_Moore

I'm not a huge Ann Coulter fan, and I seriously do not recall ever quoting her on the AECM or on my Website. However, the article below illustrates another way progressives on campus in the past are silencing conservative voices on campus. It's not just that the conservatism speakers that are being silenced, it's a message to conservative students that they should not be advocating conservatism.

It's OK to invite Michael Moore but not Ann Coulter.

It's not so much that both Coulter and Moore often violate the principles of good scholarship. The point is why is Moore so easily invited by liberal students on campus and Coulter repelled so often by faculty and administration on college campuses?

"A Different Ann Coulter Debate," by Scott Jaschik, Inside Higher Ed, November 12, 2012 ---

"Moving Further to the Left," by Scott Jaschik, Inside Higher Ed, October 24, 2012 ---

Academics, on average, lean to the left. A survey being released today suggests that they are moving even more in that direction.


Among full-time faculty members at four-year colleges and universities, the percentage identifying as "far left" or liberal has increased notably in the last three years, while the percentage identifying in three other political categories has declined. The data come from the University of California at Los Angeles Higher Education Research Institute, which surveys faculty members nationwide every three years on a range of attitudes.


Here are the data for the new survey and the prior survey:

  2010-11 2007-8
Far left 12.4% 8.8%
Liberal 50.3% 47.0%
Middle of the road 25.4% 28.4%
Conservative 11.5% 15.2%
Far right 0.4% 0.7%


Gauging how gradual or abrupt this shift is complicated because of changes in the UCLA survey's methodology; before 2007-8, the survey included community college faculty members, who have been excluded since. But for those years, examining only four-year college and university faculty members, the numbers are similar to those of 2007-8. Going back further, one can see an evolution away from the center.


In the 1998-9 survey, more than 35 percent of faculty members identified themselves as middle of the road, and less than half (47.5 percent) identified as liberal or far left. In the new data, 62.7 percent identify as liberal or far left. (Most surveys that have included community college faculty members have found them to inhabit political space to the right of faculty members at four-year institutions.)


The new data differ from some recent studies by groups other than the UCLA center that have found that professors (while more likely to lean left than right) in fact were doing so from more of a centrist position. A major study in 2007, for example, found that professors were more likely to be centrist than liberal, and that many on the left identified themselves as "slightly liberal." (That study and the new one use different scales, making exact comparisons impossible.)


In looking at the new data, there is notable variation by sector. Private research universities are the most left-leaning, with 16.2 percent of faculty members identifying as far left, and 0.1 percent as far right. (If one combines far left and liberal, however, private, four-year, non-religious colleges top private universities, 58.6 percent to 57.7 percent.) The largest conservative contingent can be found at religious, non-Roman Catholic four-year colleges, where 23.0 percent identify as conservative and another 0.6 percent say that they are far right.


Professors' Political Identification, 2010-11, by Sector

  Far left Liberal Middle of the Road Conservative Far right
Public universities 13.3% 52.4% 24.7% 9.2% 0.3%
Private universities 16.2% 51.5% 22.3% 9.8% 0.1%
Public, 4-year colleges 8.8% 47.1% 28.7% 14.7% 0.7%
Private, 4-year, nonsectarian 14.0% 54.6% 22.6% 8.6% 0.3%
Private, 4-year, Catholic 7.8% 48.0% 30.7% 13.3% 0.3%
Private, 4-year, other religious 7.4% 40.0% 29.1% 23.0% 0.6%


The study found some differences by gender, with women further to the left than men. Among women, 12.6 percent identified as far left and 54.9 percent as liberal. Among men, the figures were 12.2 percent and 47.2 percent, respectively.


When it comes to the three tenure-track ranks, assistant professors were the most likely to be far left, but full professors were more likely than others to be liberal.


Professors' Political Identification, 2010-11, by Tenure Rank

  Far left Liberal Middle of the Road Conservative Far right
Full professors 11.8% 54.9% 23.4% 9.7% 0.2%
Associate professors 13.8% 50.4% 24.0% 11.5% 0.4%
Assistant professors 13.9% 48.7% 25.9% 11.2% 0.4%


So what do these data mean?


Sylvia Hurtado, professor of education at UCLA and director of the Higher Education Research Institute, said that she didn't know what to make of the surge to the left by faculty members. She said that she suspects age may be a factor, as the full-time professoriate is aging, but said that this is just a theory. Hurtado said that these figures always attract a lot of attention, but she thinks that the emphasis may be misplaced because of a series of studies showing no evidence that left-leaning faculty members are somehow shifting the views of their students or enforcing any kind of political requirement.

Continued in article

"Noam Chomsky Spells Out the Purpose of Education," by Josh Jones, Open Culture, November 2012 ---

Bob Jensen's threads on liberal biases in the media and academe ---

"Political Correctness Run Amok: Some Private Sector Contestants for the U.S. vs U.K. Stupidity Contest," by Daniel J. Mitchell, Townhall, November 4, 2012 --- Click Here

I’ve had some fun on this blog by comparing moronic government policies in the United States and United Kingdom.

In my never-ending search for cheap laughs and juvenile entertainment, I’ve ever turned this into a contest to see which nation has more pathetic and useless bureaucrats.

The United Kingdom has some very strong contestants.

As a patriotic American, I’m proud to say that we’re giving the Brits a run for their money. As you can see, the United States is filled with equally stupid and clueless government officials.

Continued in article

Jensen Comment
A few of the above are not such bad ideas. On some beaches perhaps life vests should be required for anybody planting both feet in the water.

Licensing bums may be a good idea if constitutional rights are ignored.

And why not require sunscreen at summer camps?

What's wrong with Ole or Sven or Lena for a dangerous Navy Seal operation? Yeah, I know that they're losers whereas Geronimo was a fierce and brave Indian  Native American chief.

The Rhode Island boy's defense might be that the added soldiers were part of President Obama's plan for increasing the size of the force at war. IT's PC if President Obama supports it.

And women should passively tolerate being raped instead of threatening would be rapists with a knife or gun.

And Garfield should not have been taken from the pet store by that totally incompetent dope named John.

And why shouldn't there be a requirement to hire people incompetent for the job? Somebody has to hire them. Oops, I didn't mean they should fly my plane or drive my bus or fix my car's engine or teach my grandchildren.

Let's give nursing home residents jobs instead of beds.

It really is unfair to pay brain surgeons more than symphony percussionists and high school softball coaches.

Why shouldn't we rid our prisons for inmates who promise to behave for the rest of their lives?

If anybody can join the U.S. Congress without a license, why must we license our teachers, truck drivers, pharmacists, plumbers, pilots, nurses, and medical doctors?

What's really wrong with requiring models to have full figures and big feet?

A Health Cost Savings Idea from Two Tuck Graduate School of Business Professors at Dartmouth
"Quality Health Care at 3% of the Cost," by Vijay Govindarajan and Anant Sundaram, Harvard Business Review Blog, November 2, 2012 --- Click Here

Every so often, good ideas to lower health care costs in the US will come from unlikely sources.

Consider organ transplants. Approximately 30% of the world's 100,000 transplants performed annually are done in the US. Nine out of 10 of these involve kidney, liver, or pancreas.

One important problem in organ transplantation is the immune system's adverse reaction to foreign objects, leading to organ rejection. Transplant nephrologists use induction therapy to deal with this problem. In this therapy, the physician introduces antibodies (typically, polyclonal as opposed to monoclonal) into the patient's system to help suppress rejection.

The most common process in the US involves induction using polyclonal antibodies derived from rabbits. In a typical kidney transplant, for example, therapy using rabbit-derived antibodies costs up to $20,000 per patient.

Yet, evidence — from a team of nephrologists led by Dr. K. S. Nayak at Lazarus Hospitals in Hyderabad, India — shows that use of an equine-derived antibody can lower this cost to $600 to $800 per patient. This cost reduction is achieved by using a product made by an Indian company, Bharat Serums & Vaccines Ltd., and switching to a carefully-managed protocol that administers the equine-derived antibody in a single dose, as opposed to a multiple-dose protocol common in the US. (A smaller dose is given just prior to surgery since it aborts the initiation of rejection, and predisposes the patient to fewer post-surgical infections.) This approach has now been adopted in many developing countries.

In published research, Dr. Nayak and his team show that success rates from the use of such a single-dose, equine-derived, $600- $800 induction therapy are no different from those from the $20,000 procedure. If adopted across the 30,000 transplants in the US, this protocol could conceivably save hundreds of millions of US health care dollars, annually.

Interestingly, product development and testing of the equine-based product was originally done decades ago by researchers at the University of Minnesota, but use of the antibody failed to get FDA approval and its production stopped in 1994.

This raises two nettlesome questions. First, why did it take a team from emerging markets to adopt this US innovation? Second, why do cost-saving innovations like these fail to get adopted in the US health care system?

Our take on the question of why this was first adopted in an emerging market and not in the US? Contrast per capita incomes in the US and India: The average American earns $50,000 per year, while the average Indian earns one-thirtieth of that. Indeed, incomes of the majority of Indians lie below that already-low average. Add to that a lack of social safety nets or health insurance. Such severe economic constraints can, counter-intuitively, be an advantage in the innovation game. Why? Health care providers in countries like India are forced to push the price-performance paradigm. They are pressed to offer quality care at an ultra-low price.

But what might explain the US health care system's inability to adopt and widely diffuse such low-cost solutions? Is it the incentives inherent in a fee-for-service system that compensates providers based on quantity rather than quality of services? Is it the delinking of the consumption of health care from price signals — i.e., providing a service to those who almost never have to see a bill, let alone pay for it out-of-pocket? Is it the way in which we train medical professionals, training that places no emphasis on cost of care?

How can high quality-low cost innovations be adopted in the US? What needs to change?


Jensen Comment
The above article illustrates how to mislead with aggregations. The above article claims about 30% of the 100,000 global transplants are performed in the U.S. However, if we delete the relatively simple kidney transplants from the aggregation the proportion for the U.S. skyrockets, especially in terms of the much more complicated heart and heart-liver transplants ---

One of my good friends (an attorney) in Bangor, Maine has lived with a heart transplant for over 30 years and is still doing very well in his retirement years. I wonder how long he would've lived on the less expensive equine-derived antibody therapy? One of the problems with major new cost cutting innovations in the area of organ transplantation is that survival studies take many years.

The article does not mention the fact that Texas is prospering with the simple cost saving idea of passing a constitutional amendment to cap punitive damage awards in the State of Texas. The major heart transplantation center in Houston benefits greatly from the resulting decline in malpractice insurance.

A major problem with transplantation is the shortage of donors having genetic matches with patients awaiting transplants. This makes kidneys less of a problem since a relative can donate a kidney and still live on with a full and happy life. But awaiting a heart transplant often becomes futile. I think there should be some kind of government program to significantly reward people while living for agreeing to donate organs immediately after death. Perhaps there could also be a program to reward their estates, although this presents some moral hazards of terminating Uncle Joe before his time.

Bob Jensen's threads on health care ---

"Health-Care Law Spurs a Shift to Part-Time Workers," by By Julie Jargon, Louise Radnofsky, and Alsexantra Berzon, The Wall Street Journal, November 4, 2012 ---

Some low-wage employers are moving toward hiring part-time workers instead of full-time ones to mitigate the health-care overhaul's requirement that large companies provide health insurance for full-time workers or pay a fee.

Several restaurants, hotels and retailers have started or are preparing to limit schedules of hourly workers to below 30 hours a week. That is the threshold at which large employers in 2014 would have to offer workers a minimum level of insurance or pay a penalty starting at $2,000 for each worker.

The shift is one of the first significant steps by employers to avoid requirements under the health-care law, and whether the trend continues hinges on Tuesday's election results. Republican presidential nominee Mitt Romney has pledged to overturn the Affordable Care Act, although he would face obstacles doing so.

President Barack Obama is set to push ahead with implementing the 2010 law if he is re-elected.

Pillar Hotels & Resorts this summer began to focus more on hiring part-time workers among its 5,500 employees, after the Supreme Court upheld the health-care overhaul, said Chief Executive Chris Russell. The company has 210 franchise hotels, under the Sheraton, Fairfield Inns, Hampton Inns and Holiday Inns brands.

"The tendency is to say, 'Let me fill this position with a 40-hour-a-week employee.' "Mr. Russell said. "I think we have to think differently."

Pillar offers health insurance to employees who work 32 hours a week or more, but only half take it, and Mr. Russell wants to limit his exposure to rising health-care costs. He said he planned to pursue new segments of the population, such as senior citizens, to find workers willing to accept part-time employment.

He described the shift as a "cultural change" toward hiring more part-timers and not a prohibition against hiring full-timers.

CKE Restaurants Inc., parent of the Carl's Jr. and Hardee's burger chains, began two months ago to hire part-time workers to replace full-time employees who left, said Andy Puzder, CEO of the Carpinteria, Calif., company. CKE, which is owned by private-equity firm Apollo Management LP, APO -3.31% offers limited-benefit plans to all restaurant employees, but the federal government won't allow those policies to be sold starting in 2014 because of low caps on payouts. Mr. Puzder said he has advised Mr. Romney's campaign on economic issues in an unpaid capacity.

Home retailer Anna's Linens Inc. is considering cutting hours for some full-time employees to avoid the insurance mandate if the health-care law isn't repealed, said CEO Alan Gladstone.

Mr. Gladstone said the costs of providing coverage to all 1,100 sales associates who work at least 30 hours a week would be prohibitive, although he was weighing alternative options, such as raising prices.

The Costa Mesa, Calif., company currently offers benefits to workers who put in at least 32 hours a week.

Supporters of the health-care overhaul said most large employers already covered workers voluntarily, and requiring others to do so or pay a penalty was important to level the playing field between businesses.

A spokeswoman for the Department of Health and Human Services said the administration didn't believe the law would substantially affect employment, citing the Massachusetts health-care overhaul signed by then-Gov. Romney in 2006.

"Consistent with the experience in Massachusetts and projections of the Congressional Budget Office, the health-care law will improve the affordability of health care while not significantly impacting the labor market," spokeswoman Erin Shields Britt said in a written statement. "This law will decrease costs, strengthen our businesses and make it easier for employers to provide coverage to their workers." Administration officials declined to answer further questions.

Companies in industries that already offer full benefits have indicated that they weren't planning major changes around the law. Several employers with hourly workforces, including Marriott International Inc. MAR -0.73% hotels, the Costco Wholesale Corp. COST -1.04% warehouse chain and the Panera Bread Co. PNRA -0.01% restaurant chain also said they had no plans to change employee hours in response to the law.

But benefits consultants said most retail and hotel clients have explored shifting toward part-time workers.

Those industries are less likely to offer health coverage now, and if they do, the plans typically are too skimpy to meet the minimum-coverage requirements.

"They've all considered it," Matthew Stevenson, a workforce-strategy principal at Mercer. In a July survey, 32% of retail and hospitality company respondents told the consulting firm that they were likely to reduce the number of employees working 30 hours a week or more.

Consultants have warned that companies that use more part-time labor risk productivity losses from high staff turnover and lower morale. Laurence Geller, who until last week was CEO of Strategic Hotels & Resorts Inc., BEE +0.36% said he weighed moving toward part-time workers but decided against risking that highly trained staff at his high-end hotels would go elsewhere. The company owns hotels bearing the Four Seasons, Fairmont and Ritz-Carlton names.

The insurance mandate applies to companies with the equivalent of 50 or more full-time workers, a calculation based on the number of people employed by the company and an average of hours they work in a week. Companies are adjusting schedules now because they will have to review employment rolls for up to a year in advance to determine which workers will be deemed full-time under the law.

A company will have to pay a penalty of $2,000 for every such worker, after the first 30, if it doesn't offer qualifying health coverage. If a company offers health insurance but the coverage is deemed sparse or unaffordable, the company must pay $3,000 for every worker who gets a federal tax subsidy to purchase coverage as an individual.

Continued in article

Adding Pain to Misery in Medicare Funding of the Future
"The Dementia Plague:  As the world's population of older people rapidly grows in the coming years, Alzheimer's and other forms of dementia will become a health-care disaster," by Stephen S. Hall, MIT's Technology Review, October 5, 2012 --- Click Here

Bob Jensen's threads on health care ---

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

Bob Jensen's Tidbits Archives ---

Bob Jensen's Pictures and Stories

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 conclusions ---

Bob Jensen's threads on auditor professionalism and independence are at

Bob Jensen's threads on corporate governance are at


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

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

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

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

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

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

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

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


Bob Jensen's threads on accounting theory ---

Tom Lehrer on Mathematical Models and Statistics ---

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

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

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

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