Tidbits on July 23, 2009
Bob Jensen

Another sunset in the White Mountains


Thus far there's been no summer since one day in May. But the forecast for
next weekend is for temperatures that may reach 70 degrees up here.
I might even turn on my air conditioner for the second time this summer.

Erika's terribly upset.
When she sees nasty crows/ravens perched around our little pond
She runs to the side door and yells and throws rocks at them
(worse than she yells and throws rocks at me).
But her efforts were in vain.
There are no more sweet-singing frogs in our pond.
The crows/ravens flew off with big green frogs dangling from ugly beaks.
All we have left is over 1,000 tadpole orphans.
Our little pond has a waterfall.
But since it freezes solid in the winter there are no fish.

Below is a picture taken two summers ago.
On the left is my daughter's husband Chuck
Dr. Charles Moody is a microbiology professor at the University of Maine
Erika was wearing a back brace that summer.
To Erika's left is our daughter Lisl Moody.
Lisl teaches biology at Hampden Academy in Maine.
The little guy is our grandson CJ who's great in school, sports, and the guitar
In front is granddaughter Hilary
She's a power swimmer and in condition beyond imagination.
Hillary enrolled in a six-year pharmacy school in Boston
September 2009 begins her first adventure away from home.
I gave the world a break by not being in the picture.

Below is the south wall of our living room.
The fake window only separates the room from an outer hallway
The fireplace has a propane-fed iron stove.
For me wood fireplaces are a pain in the tail.
They're hard to feed, hard to clean, and hard to control for temperature.
Our black iron stove operates off of a thermostat.
But since this stove is surrounded by windows, our solar heat pretty much suffices even on cold days.
Of course we also have a furnace to call upon when needed.
Our other three fireplace stoves are white porcelain.

Below you can envision another season (April) up here.



Just for laughs I will throw in some pictures sent to me that I did not take.

All the Women I Loved Before Slide Show --- Click Here

U.S. Debt/Deficit Clock --- http://www.usdebtclock.org/


Tidbits on July 23, 2009
Bob Jensen

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

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

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

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

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

CPA Examination --- http://en.wikipedia.org/wiki/Cpa_examination

Cool Search Engines That Are Not Google --- http://www.wired.com/epicenter/2009/06/coolsearchengines

World Clock and World Facts --- http://www.poodwaddle.com/worldclock.swf

U.S. Debt/Deficit Clock --- http://www.usdebtclock.org/

Free Residential and Business Telephone Directory (you must listen to an opening advertisement) --- dial 800-FREE411 or 800-373-3411
 Free Online Telephone Directory --- http://snipurl.com/411directory       [www_public-records-now_com] 
 Free online 800 telephone numbers --- http://www.tollfree.att.net/tf.html
 Google Free Business Phone Directory --- 800-goog411
To find names addresses from listed phone numbers, go to www.google.com and read in the phone number without spaces, dashes, or parens

Cool Search Engines That Are Not Google --- http://www.wired.com/epicenter/2009/06/coolsearchengines
Bob Jensen's search helpers --- http://www.trinity.edu/rjensen/Searchh.htm
Education Technology Search --- http://www.trinity.edu/rjensen/000aaa/0000start.htm
Distance Education Search --- http://www.trinity.edu/rjensen/crossborder.htm
Search for Listservs, Blogs, and Social Networks --- http://www.trinity.edu/rjensen/ListservRoles.htm

Bob Jensen's essay on the financial crisis bailout's aftermath and an alphabet soup of appendices can be found at

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

"Microsoft Office to Go Online for Free," Fortune, July 13, 2009 --- Click Here
Also see http://www.technologyreview.com/blog/editors/23838/?nlid=2174
This will not be the full-featured version of Office that you can purchase, but it will compete head on with Google Office.
Free Alternatives to/for MS Office (Word, Excel, PowerPoint, etc.) --- http://www.trinity.edu/rjensen/Bookbob4.htm#MSofficeAlternatives
Also see http://reviews.zdnet.co.uk/software/productivity/0,1000001108,39674807,00.htm

Unfortunately none of the free alternatives to MS Office will have all the new and supposedly wonderful features of the 2010 Version of MS Office
Richard Campbell forwarded this link describing the new features to look forward to with the MS Office 2010 --- http://download.cnet.com/8301-2007_4-10284013-12.html?tag=smallC
Also see http://reviews.zdnet.co.uk/software/productivity/0,1000001108,39674807,00.htm

On May 14, 2006 I retired from Trinity University after a long and wonderful career as an accounting professor in four universities. I was generously granted "Emeritus" status by the Trustees of Trinity University. My wife and I now live in a cottage in the White Mountains of New Hampshire --- http://www.trinity.edu/rjensen/NHcottage/NHcottage.htm

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

Global Incident Map --- http://www.globalincidentmap.com/home.php

If you want to help our badly injured troops, please check out
Valour-IT: Voice-Activated Laptops for Our Injured Troops  --- http://www.valour-it.blogspot.com/

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

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

First Episode of Fawlty Towers --- http://www.youtube.com/watch?v=ADxkviq_WS4 
John Cleese as a Chartered Accountant and Lion Tamer ---
Also see  ---

Bill Gates purchased the rights to lectures by Richard Feynman and has initially made seven of them available free at http://research.microsoft.com/apps/tools/tuva/index.html
The catch is that you must install the Microsoft Silverlight browser add on (at no charge).
Richard Feynman is a very famous physicist --- http://en.wikipedia.org/wiki/Richard_Feynman

Senator Barbara Boxer Accused Of Race-Baiting At Energy Hearing
In fairness it seems he may be baiting her with a lot of "Ma'ams" that irritate her to a fault---
Also available at http://www.youtube.com/watch?v=FE_jGD5nZ6U&feature=player_embedded

Laboratory Technique Videos --- http://www.chem.ualberta.ca/~orglabs/Techniques.html 

American Exceptionalism that Irks the ACLU (from a professor of political science) ---

News Busted (Humor?) --- http://www.thehopeforamerica.com/play.php?id=1454

Inspiration:  Games Versus Teachers
"Creator of 'The Sims' Talks Educational Gaming," Chronicle of Higher Education, July 14, 2009 ---

Introduction to (video) Game Design 2009 --- http://pod.gscept.com/intro2gd2009.xml
Bob Jensen's threads on networked learning simulations --- http://www.trinity.edu/rjensen/000aaa/thetools.htm#Simulation
Bob Jensen's threads on edutainment and learning games --- http://www.trinity.edu/rjensen/000aaa/thetools.htm#Edutainment
Bob Jensen's threads on virtual worlds in education are at http://www.trinity.edu/rjensen/000aaa/thetools.htm#SecondLife

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

Trivia Question
Who preceded Jo Ann Castle as Lawrence Welk's ragtime and boogie woogie piano player?

Big Tiny Little

Some of Jo Ann Castle's Ragtime and Boogie Piano Videos

My what big  hands she has ---

Red Hot Jazz Archive --- http://www.redhotjazz.com/

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

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

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

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

Photographs and Art

Los Angeles County Museum of Art: Art New Media (multimedia) ---  http://www.lacma.org/art/webindex.aspx 

Philadelphia Museum of Art: Conservation --- http://www.philamuseum.org/conservation/

Photo Captures Marine Escaping Enormous Afghan Blast That Killed His Comrades --- http://www.foxnews.com/story/0,2933,532746,00.html?loomia_ow=t0:s0:a16:g4:r4:c0.000000:b-2:z0
The U.S. is not allowed by treaty to use land mines and IED devices that are killing and maiming its soldiers. The U.S. could probably end the Afghan war in a New York minute by mining the mountain trails to Pakistan that serve as logistic lines for the Taliban.

USA Buys Russia’s Su-27 Jets From Ukraine to Find Out Why Our F-15 Is So Bad
The Pentagon purchased two Russian-made Su-27 fighter jets from Ukraine. The United States will reportedly use the Russian jets to train effective counter-operation efforts. The Russian jets are a serious competition for the US F-15 fighters. The jets of Russia’s renowned Sukhoi design bureau proved to be more successful than their US competitors during a number of tests. The Pentagon has been trying to obtain the Russian warplanes, and Ukraine helped the nation do it legally. The news about the deal between the USA and the Air Force of Ukraine appeared on the US-based website Strategypage.com.
Pravda, July 21, 2009 --- http://english.pravda.ru/world/americas/20-07-2009/108253-su27-0

President Obama intended to veto the F-22A until the Senate killed its chances on July 21, 2009
USAF Photo of the Day: An F-22A Raptor--USA's cutting-edge fighter--pops flares over Kadena Air Base ---

Maybe President Obama was correct in threatening to veto the F-22A Raptor
WITH a price tag above $350 million per plane, the F-22 fighter requires at least 30 hours of maintenance for every hour it flies. (Insider scuttlebutt insists it actually needs 60 hours of repairs for every hour it operates.) That's worse than the MG I had back in college. Pilots call high-maintenance aircraft "hangar queens." Well, the F-22's a hangar empress. After three expensive decades in development, the plane meets fewer than one-third of its specified requirements. But defense giant Lockheed Martin's immense clout on the Hill threatens to force you, the taxpayer, to buy still more of these pieces...
Ralph Peters, "CAN'T FLY, WON'T DIE: THE F-22 IS ARMORED IN PORK," New York Post, July 17, 2009 --- http://www.nypost.com/seven/07172009/postopinion/opedcolumnists/cant_fly__wont_die_179681.htm
John McCain called it "costly junk."
The aging and decrepit Senator Byrd returned to the Senate intent on making Byrds fly and F-22s crash --- Click Here
SAY WHAT? Peacenik California Sens. Dianne Feinstein and Barbara Boxer voted for F-22s
This just proves what's most important about defense spending!

Mysterious, Glowing Clouds Appear Across America’s Night Skies --- http://www.wired.com/wiredscience/2009/07/nightclouds/

The Ruins of Detroit --- http://www.white-history.com/hwrdet.htm
But GM is spending $15 billion for a new factory in Brazil

Families desperate to escape the heat grabbed their rubber rings to jostle for space at a local pool in Nanjing, the capital of the Jiangsu Province. --- Click Here

Sorry Whoppie --- Click Here
National Geographic debunks your moon landing fakery allegations --- http://news.nationalgeographic.com/news/2009/07/photogalleries/apollo-moon-landing-hoax-pictures/index.html

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

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

National Book Critics Circle --- http://bookcritics.org/

Online Books Page --- http://digital.library.upenn.edu/books/
From the University of Pennsylvania
Online Books --- http://onlinebooks.library.upenn.edu/

Online-Literature --- http://www.online-literature.com/

About 800 pages of the world's oldest surviving Christian Bible have been pieced together and published on the Internet for the first time, experts in Britain said Monday --- http://www.physorg.com/news166106367.html

Searchable Bible Online --- http://www.biblegateway.com/ 

Quran online --- http://www.quranexplorer.com/

storySouth (showcases top fiction) --- http://www.storysouth.com/

From MIT
Classics Archive

MIT OpenCourseWare: Major European Novels --- http://ocw.mit.edu/OcwWeb/Literature/21L-472Fall-2008/CourseHome/index.htm

Bartleby's Free Online Books --- http://www.bartleby.com/titles/

Public.Resource.Org --- http://public.resource.org/

Lost Titles, Forgotten Rhymes: How to Find a Novel, Short Story, or Poem Without Knowing its Title or Author --- http://www.loc.gov/rr/program/bib/lost/

How do scholars search for academic references? --- http://www.trinity.edu/rjensen/searchh.htm#Scholars


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

There are many, many South Park cartoon episodes on YouTube. However, I could only find the Risky Banks cartoon in the Financial Rounds Blog --- http://financialrounds.blogspot.com/
Scroll down to July 21, 2009 for the Risky Banks video.

New Hampshire uses $350M in stimulus money to create 50 new jobs (not humor?)
New Hampshire has received $ 350 million in economic stimulus money. As a result, according to the radio, NH has created a grand total of 50 (fifty) new jobs, and 34 of THOSE are auditors for the stimulus program!
WTTK-FM, July 14, 2009

This isn’t a recession. This is collapse.
Washington is bluffing that it will not bail out California, and every other state suffering from collapsed revenues and massive job losses. If cuts in police and schools don’t force DC off from its current position, then the math will. Because in many states the aggregate revenue losses and looming cuts to state payrolls will largely render the intended effects of federal stimulus as moot. Frankly, unless Washington prints money and bails out every state that needs capital, including California, federal power will decline amidst this severe economic recession, and the process of a soft American devolution will begin. If you think this idea is outrageous, then you’ve still not come to terms with a core reality of our current situation: the structure of this financial crisis is wholly different than any in our post-war era. This isn’t a recession. This is collapse.
Gregor Macdonald, "Washington's Dilemma: This Isn't a Recession, It's a Collapse," Seeking Alpha, July 14, 2009 ---

Economists Did Not Change With the Times
History is messy and constantly changing, as Ferguson reminds. It depends on institutions, technologies, laws, cultural and religious values, governments, popular beliefs and much more. Model-building and theorizing can sometimes simplify the real world in ways that provide insights. But often, the models' assumptions depart so radically from reality that the conclusions become useless. Someone who studies history becomes humble in the face of the ceaseless changes and capricious mixing of motives. Economists thought they had solved the problem of economic stability. Their tools sufficed to prevent widespread economic collapse, even if they couldn't control every twist in the business cycle. This conceit may have once been true. No more. Markets became more complex; more money crossed national borders; people became complacent. History moved on, but economists didn't.
Robert Samuelson, "Economists Out to Lunch," American Issues Project, July 6, 2009 --- ClickHere

The economics profession is suffering from guilt and rancour. In a recent lecture, Paul Krugman, winner of the Nobel prize in economics in 2008, argued that much of the past 30 yers of macroeconomics was "spectacularly useless at best, andpositively harmful at worst." Barry Eichengree, a prominent American economic historian, says the crisis has "cast into doubt much of what we thought we knew about economics."
"What Went Wrong With Economics?" The Economist, July 18-24, 2009, Page 11.

And if economics, as a braod discipline deserves a robust defence, so does the free-market paradigm. Too many people, especially in Europe, equate mistakes made by economists with a failure of economic liberalism. Their logic seems to be that if economists got things wrong, then politicians will do better. That is a false --- and dangerous --- concluseion.
"What Went Wrong With Economics?" The Economist, July 18-24, 2009, Page 11

"The Obsolete New York Model:  Where a tax-eating majority votes itself a permanent income," by Myron Magnet, New York's Tomorrow, July 2009 --- http://city-journal.org/2009/nytom_taxes.html 
Jensen Comment
This is a great and concise historical piece that zings in famous philosophers and economists. Good work.

Were California a corporation, rather than a state, its officers would be playing tiddlywinks with Bernie Madoff in the federal slammer, having engaged in years of hide-the-pea accounting tricks, under-the-table loans and other gimmicks to cover up the state's perpetual operating deficits.
Dan Walters, "Another Tricky Budget Devised for California," Sacramento Bee, July 21, 2009 --- http://www.sacbee.com/walters/story/2041808.html

On present trends, most of Europe will soon have lower income tax rates than most of America. And now the European Union is stealing another competitive march on Washington, this time on a free trade deal with the world's 13th largest economy, fast-growing South Korea. Last week Brussels and Seoul finished the outline of a new trade agreement, and the two sides will now write up the technical language to codify it. As for the pending U.S.-Korea trade agreement, Congress has done . . . nothing.
"Europe Thumps U.S., Again First lower taxes, now freer trade," The Wall Street Journal, July 20, 2009 --- http://online.wsj.com/article/SB124804400627663427.html

Merrill Lynch had a friend in Hank Paulson, but he was no friend to Bank of America shareholders
The ex-US Treasury Secretary has admitted telling the Bank of America boss he might lose his job if he walked away from a merger from Merrill Lynch. The former US Treasury Secretary says the merger was necessary Hank Paulson warned the bank's chief executive Kenneth Lewis that the Federal Reserve could oust him and the board if the rescue did not proceed. But Mr Paulson insisted that remarks he made were "appropriate". Bank of America bought Merrill during the height of the financial crisis and suffered severe losses.
"Paulson admits bank merger threat," BBC News, July 15, 2009 ---
Jensen Comment
Paulson's claim that his threats were "appropriate" comes as little comfort to Bank of America shareholders who lost their life savings because of the threats.

Thain Pain:  Merrill Lynch Bonuses of Over $1 Million to 696 Executives
Rewarded for making their company so profitable for shareholders? (Barf Alert!)

Merrill Lynch quietly paid out at least one million dollars bonus each to about 700 top executive even when the investment house was bleeding with losses last year, a probe has revealed. They were part of 3.6 billion dollars in the firm's bonus payments in December before the announcement of its fourth quarterly losses and takeover by Bank of America, the investigation by the New York state Attorney General's office showed. "696 individuals received bonuses of one million dollars or more," New York Attorney General Andrew Cuomo said of the Merrill scandal in a letter to a lawmaker heading the House of Representatives financial services committee.
"Merrill bonuses made 696 millionaires: probe," Yahoo News, February 11, 2009 --- http://news.yahoo.com/s/afp/20090211/bs_afp/usbankingjusticeprobecompanymerrillbofa_20090211201133

Taxes Must Increase On Average (for everybody) Nearly 50% to Balance the Federal Budget
(that does not include added taxes for  universal health care and carbon capping legislation trillion dollar costs)
(that does not include added taxes for unbalanced state budgets)
And if you think high taxes are bad, wait until you experience Zimbabwe-like inflation?
"The Real Era of Big Government," by Robert Samuelson, American Issues Project, July 13, 2009 --- Click Here

The question that President Obama ought to be asking -- that we all should be asking -- is this: How big a government do we want? Without anyone much noticing, our national government is on the verge of a permanent expansion that would endure long after the present economic crisis has (presumably) passed and that would exceed anything ever experienced in peacetime. This expansion may not be good for us, but we are not contemplating the adverse consequences or how we might minimize them.

We face an unprecedented collision between Americans' desire for more government services and their almost-equal unwillingness to be taxed. The conflict is obscured and deferred by today's depressed economy, which has given license to all manner of emergency programs, but its dimensions cannot be doubted. A new report from the Congressional Budget Office ("The Long-Term Budget Outlook") makes that crystal clear. The easiest way to measure the size of government is to compare the federal budget to the overall economy, or gross domestic product (GDP). The CBO's estimates are daunting.

For the past half-century, federal spending has averaged about 20 percent of GDP, federal taxes about 18 percent of GDP, and the budget deficit 2 percent of GDP. The CBO's projection for 2020 -- which assumes the economy has returned to "full employment" -- puts spending at 26 percent of GDP, taxes at a bit less than 19 percent of GDP, and a deficit above 7 percent of GDP. Future spending and deficit figures continue to grow.

What this means is that balancing the budget in 2020 would require a tax increase of almost 50 percent from the last half-century's average. Remember, that average was 18 percent of GDP. To get from there to 26 percent of GDP (spending in 2020) would require another 8 percent of GDP in taxes. In today's dollars, that would be about $1.1 trillion, a 44 percent annual tax increase. Even these figures may be optimistic, because CBO's projections for defense and "nondefense discretionary" spending may be unrealistically low. This last category covers much of what government does: environmental regulation, aid to education, highway construction, law enforcement, homeland security.

Whatever the case, the major causes of the budget blowout are well-known: an aging population and rapid increases in health spending. In 2000, Social Security, Medicare and Medicaid -- the main programs providing income and health care for the 65 and over population -- totaled nearly 8 percent of GDP. In 2020, CBO projects that will reach almost 12 percent of GDP. But the deeper source of our predicament is a self-indulgent political culture that avoids a rigorous discussion of government's role.

Everyone favors benefits and opposes burdens (taxes). Republicans want to cut taxes without cutting spending. Democrats want to increase spending without increasing taxes, except on the rich. The differences between the parties are shades of gray. Hardly anyone asks the hard questions of who doesn't need benefits, which programs are expendable and what taxes might cover remaining deficits.

Wrong-Way Health "Reform"
It's hard to know whether President Obama's health care "reform" is naive, hypocritical or simply dishonest. Probably all three. The president keeps saying it's imperative to control runaway health spending. He's right. The trouble is that what's being promoted as health care "reform" almost certainly won't suppress spending and, quite probably, will do the opposite.
Robert Samuelson, "Wrong-Way Health 'Reform'," American Issues Project, June 15, 2009 --- Click Here

Obamacare = $1.5 trillion in new spending plus the administrative costs
If you think government is too big and too costly, wait until Obamacare kicks in. The Congressional Budget Office put the price tag of the House Democrats' health care takeover plans at $1.5 trillion over 10 years. But the CBO's fine print included a telltale caveat: "We have not yet estimated the administrative costs to the federal government of implementing the specified policies, nor have we accounted for all of the proposal's likely effects on spending for other federal programs."
Michelle Malkin, "Inside the Monstrous Obamacare Bureaucracy," Townhall, July 17, 2009 ---
Also see http://www.washingtontimes.com/news/2009/jul/16/cbo-chief-health-bills-would-be-more-costly/print/
Also see "http://www.businessinsider.com/whoops-cbo-slams-pelosicare-no-cost-savings-2009-7,"
Jensen Comment
I just don't understand that, with all her dictatorial powers, House Majority Leader Pelosi cannot make the CBO lie for her.

A hospital that serves thousands of indigent Massachusetts residents sued the state on Wednesday, charging that its costly universal health care law is forcing the hospital to cover too much of the expense of caring for the poor. The hospital, Boston Medical Center, faces a $38 million deficit for the fiscal year ending in September, its first loss in five years. The suit says the hospital will lose more than $100 million next year because the state has lowered Medicaid reimbursement rates and stopped paying Boston Medical “reasonable costs” for treating other poor patients.
Abby Goodnough, "Massachusetts in Suit Over Cost of Universal Care," The New York Times, July 15, 2009 ---

The Ruins of Detroit (photographs) --- http://www.white-history.com/hwrdet.htm
General Motors announced plans to invest $1 billion to develop two new car models in Brazil. The president of GM's operations in Brazil and the Mercosur countries said it is GM's biggest investment since the onset of the global financial crisis. Jaime Ardila says about 50 percent of the money will come directly from GM Brazil while the rest will be borrowed. One new small car and one medium-sized car will be developed at the Gravatai plant in southern Brazil and are expected to be in production by 2012.

"GM Investing $1B in Brazil for New Cars," CBS News, July 15, 2009 --- Click Here
Jensen Comment
It's a good thing U.S. taxpayers provided the money for this investment in Brazil while Detroit crumbles.

Obama's shifty economics
Now President Obama says in The Washington Post that he never envisioned that his stimulus package would afford quick relief to the American economy, but would do so only after it had run its two-year course. But when it was passed, Obama sang a different tune, urgently demanding its enactment to speed relief to a sagging economy. He claimed it would "create or save" 600,000 jobs. Now, even as the economy loses 450,000 jobs each month, he pretends that it is a matter of time until the stimulus kicks in.

"Obama's shifty economics," Jewish World Review, July 16, 200 --- http://www.jewishworldreview.com/0709/morris071609.php3

How not to create new jobs with stimulus funding
Give the funding to the unemployed and discourage new jobs with higher payroll taxes
The U.S. Department of Labor announced Wednesday the release of nearly $60 million in federal stimulus fund for unemployment benefits in Arkansas. The state qualified for the funds after changing state law in March to change the period of time it uses to calculate unemployment benefits. Act 802 of 2009 also authorized the state Department of Labor to use stimulus funds to provide an additional $25 a week to workers receiving unemployment insurance, and it increased the amount of an employee’s salary that businesses must pay unemployment taxes on from $10,000 to $12,000 starting in 2010.
Arkansas News Bureau, July 16, 2009 ---

Actually the phrase "economic stimulus" is an oxymoron.
....a paper written at the University of California Berkeley entitled The Macroeconomic Effects of Tax Changes: Estimates Based on a new Measure of Fiscal Shocks, by Christina D. and David H. Romer (March 2007). (Christina Romer now chairs the president's Council of Economic Advisors). This study found that the tax multiplier is 3, meaning that each dollar rise in taxes will reduce private spending by $3.

Van R. Hoisington and Lacy H. Hunt, "Debt and Inflation," Investors Insight --- http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2009/07/13/debt-and-deflation.aspx#

The link between Fed actions and the economy is far more indirect and complex than the simple conclusion that Federal asset growth equals inflation. The price level and, in fact, real GDP are determined by the intersection of the aggregate demand (AD) and aggregate supply (AS) curves. Or, in economic parlance, for an increase in the Fed's balance sheet to boost the price level, the following conditions must be met:
  1. The money multiplier must be flat or rising;
  2. The velocity of money must be flat or rising; and
  3. The AS or supply curve must be upward sloping.

The economy and price changes are moving downward because none of these conditions are currently being met; nor, in our judgment, are they likely to be met in the foreseeable future.

Aggregate demand (AD) is planned expenditures for GDP. As defined by the equation of exchange, GDP equals M2 multiplied by the velocity of money (V). M2 equals the monetary base (MB) multiplied by the money multiplier (m). Professors Brunner and Meltzer proved that m is determined by the currency, time, and Treasury deposit ratios, as well as the excess reserve ratio. The money multiplier moves inversely with the currency, Treasury deposit ratios, and excess reserve ratios and positively with the time deposit ratio. For example, if those ratios rise on balance, then m will decline. By algebraic substitution AD(GDP) = MB*V*m. In our present case, the massive increase in the Fed's balance sheet has created a sharp surge in excess reserves, and thus m has fallen.

Obviously the preceding paragraph is as clear as mud. It is included to provide mathematical proof of the complex connection between monetary actions and real world results. The practical and straightforward fact is that GDP has declined in the face of a surge in M2 growth. The labor market equivalent of GDP (aggregate hours worked) has declined at a record rate over the last 18 months, the entire span of the recession (Chart 2). That is, the monetary surge was totally offset by other factors; thus, the recession deepened and inflation was nonexistent.

. . .

Over the next four years, the ratio of U.S. government debt will rise to somewhere between 71% and 80% of GDP, up from 41% at the end of 2008. The 71% figure, which is from the CBO, is probably understated. The CBO figures do not include the debt of Fannie Mae and Freddie Mac (now owned by the U.S. government), and their economic forecasts are probably too optimistic. None of these projections have incorporated the proposed health care bill which would raise the debt ratio considerably. This substantial increase in government spending far exceeds projected rising revenue sources such as the large marginal tax increase that has been suggested by the reversal in 2010 of the 2001 and 2003 tax reductions.

While the federal deficit is expanding, state and local government spending is being reduced and taxes have increased. It is highly unusual that state and local expenditures have actually decreased in current dollars in the past two quarters and, in real terms, spending is lower than a year ago. This is because state and local governments generally do not have the flexibility to incur deficits, yet they face potential deficits of about $121 billion for fiscal 2010. The Center for Budget and Policy Priorities indicates that thus far this year 23 states have imposed tax increases, with another 13 considering them. This is in addition to the ten states that imposed higher taxes or other revenue boosters in late 2007 or 2008. Therefore, the apparent thrust of federal policy is stimulus, while state and local policy is contractionary.

Interestingly, the term "federal stimulus spending" is an oxymoron. Many assume that the act of sending checks from the federal government sector to the private sector helps the economy through so-called spending multipliers. Multipliers take into consideration the second, third, fourth, etc. round effects from an initial change. Thus, multipliers capture the unintended consequences of policy actions. Although the initial spending objectives may be well intended, the ultimate outcome becomes convoluted. Over the past several years, multipliers have been intensively examined by leading economic scholars. Robert Barro of Harvard University calculates in Macroeconomics a Modern Approach (Thomson/Southwestern, 2008, p. 307) that the government expenditure multiplier from 1955 to 2006 was negative .01, not statistically different from 0. The highly respected Italian econometrician Roberto Perotti of Universita' Bocconi and the Centre for Capital Economic Policy Research has also done extensive work on this subject while visiting the fiscal policy division of the ECB. In October 2004, in his Estimating the Effects of Fiscal Policy in OECD Countries, Perotti calculates that the U.S. expenditure multiplier is also close to 0. Thus Barro and Perotti are saying that each $1 increase in government spending reduces private spending by about $1, with no net benefit to GDP. All that is left is a higher level of government debt creating slower economic growth. There may be intermittent periods when government spending will lift the economy, but offsetting episodes will follow. The best available empirical research suggests that the current federal policy of expanding spending will retard, not improve, the performance of business conditions. In addition to spending multipliers, however, there are also tax multipliers.

The most extensive research on tax multipliers is found in a paper written at the University of California Berkeley entitled The Macroeconomic Effects of Tax Changes: Estimates Based on a new Measure of Fiscal Shocks, by Christina D. and David H. Romer (March 2007). (Christina Romer now chairs the president's Council of Economic Advisors). This study found that the tax multiplier is 3, meaning that each dollar rise in taxes will reduce private spending by $3.

Presently, the federal government is increasing spending that in the end may actually retard economic activity, and is also proposing tax increases that will further restrain private sector growth. This policy mix is the same approach that failed in the U.S. from 1929 to 1941 and also failed in Japan over the past two decades, a subject we addressed in our April letter. In other words, fiscal policy is executing a program that is 180 degrees opposite from what it should be to stimulate the economy. How is it possible to get an inflationary cocktail out of deflationary ingredients?

Continued in article

Bob Jensen's threads on the largest swindle in the history of the world --- http://www.trinity.edu/rjensen/2008Bailout.htm

The Congressional Budget Office (CBO) places the net cost of the universal health care bill at $1.5 trillion over ten years
House Democrats have unveiled their new healthcare plan on which the Congressional Budget Office puts a price tag of $1.5 trillion. For $1.5 trillion every American should get his or her own concierge doctor. This is another one of the 1.5 trillion page bills which only lobbyists and insurance company lawyers will read from cover-to-cover. But the major dailies had some of the high points in their Wednesday editions. Actually the bill is only 1,018 pages long so some summer interns will read it, too.
Rich Galen
,"$1.5 Trillion Gives Me Heartburn," Townhall, July 15, 2009 ---

Thirty-four Nobel Laureates on Thursday issued a joint statement calling on Congress to adopt President Obama proposed $150 billion Clean Energy Technology Fund in the climate legislation it is considering. The climate bill approved by the House in June falls far short of this goal, endangering the goal of conducting research on a variety of topics related to climate change, according to the statement. "The stable support this Fund would provide is essential to pay for the research and development needed if the U.S., as well as the developing world, are to achieve their goals in reducing greenhouse gases at an affordable cost," they wrote.
Inside Higher Ed, July 17, 2009 --- http://www.insidehighered.com/news/2009/07/17/qt#203637
Jensen Comment
Of course none of them could possibly be swayed by the cash cow grants that they will be able to tap if this legislation is passed.

Senator Barbara Boxer Accused Of Race-Baiting At Energy Hearing ---
Jensen Comment
Senator Boxer accepts being called "Ma'am" from blacks but not from generals.

We watched the video, and we can see Alford's point. Senator Boxer does come across as condescending, and, weirdly, she doesn't even seem to understand why a he would find it offensive for her to rebut his argument not on the merits but via a racially specific appeal to authority. Yet Alford, by speaking on behalf the National Black Chamber of Commerce, is himself relying on just such a racially specific appeal to authority. We tend to agree with Alford and disagree with Boxer on the subject they were discussing, but the rule of etiquette he invoked--blacks may claim authority on account of their race, but whites may not seek to undermine that authority--put her at an unfair disadvantage, one that was particularly unwarranted given that the topic at hand had nothing to do with race.
James Taranto, The Wall Street Journal Email Newsletter, July 17, 2009
The video is at http://www.youtube.com/watch?v=FE_jGD5nZ6U&

General Electric Licks Its Lips While Drooling Over $200 Billion in Obama Revenue
General Electric Co. (GE) Chief Executive Jeff Immelt said Friday that government stimulus programs were "non-factors" during the first half of 2009, but remains optimistic that they will start gaining traction. Immelt reiterated that GE is well positioned to target up to about $200 billion in revenue from global stimulus efforts, notably in the clean energy, health care and transportation sectors.
Bob Sechler, "GE's Immelt: Stimulus Efforts To Build In 2H," The Wall Street Journal, July 17, 2009 ---

More on the greatest swindles of the world
General Electric, the world's largest industrial company, has quietly become the biggest beneficiary of one of the government's key rescue programs for banks. At the same time, GE has avoided many of the restrictions facing other financial giants getting help from the government.
The company did not initially qualify for the program, under which the government sought to unfreeze credit markets by guaranteeing debt sold by banking firms. But regulators soon loosened the eligibility requirements, in part because of behind-the-scenes appeals from GE. As a result, GE has joined major banks collectively saving billions of dollars by raising money for...

Jeff Gerth and Brady Dennis, "How a Loophole Benefits GE in Bank Rescue Industrial Giant Becomes Top Recipient in Debt-Guarantee Program," The Washington Post, June 29, 2009 ---
Jensen Comment
GE thus becomes the biggest winner under both the TARP and the Cap-and-Trade give away legislation. It is a major producer of wind turbines and other machinery for generating electricity under alternative forms of energy. The government will pay GE billions for this equipment. GE Capital is also "Top Recipient in Debt-Guarantee Program." Sort of makes you wonder why GE's NBC network never criticizes liberal spending in Congress.
Jensen's threads on the bank rescue swindle are at http://www.trinity.edu/rjensen/2008Bailout.htm z
Bob Jensen's fraud updates are at http://www.trinity.edu/rjensen/FraudUpdates.htm

"The (Horrible) Cost of Doing Something," by John Stossel, ABC News 20/20 ---

The Greatest Swindle in the History of the World
"The Greatest Swindle Ever Sold," by Andy Kroll, The Nation, May 26, 2009 ---

It’s not that interesting to watch the Democrats lose touch with America. That’s because the plotline is exactly the same. The party is led by insular liberals from big cities and the coasts, who neither understand nor sympathize with moderates. They have their own cherry-picking pollsters, their own media and activist cocoon, their own plans to lavishly spend borrowed money to buy votes.
David Brooks, "Liberal Suicide March," The New York Times, July 21, 2009 ---

Being Honest About Being Dishonest
Democrats openly admit that most of the stimulus money is going to counties that voted for Obama

A new study released by USA Today also finds that counties that voted for Obama received about twice as much stimulus money per capita as those that voted for McCain. "The stimulus bill is designed to help those who have been hurt by the economic downturn.... Do you see disparity out there in where the money is going? Certainly," a Democratic congressional staffer knowledgeable about the process told FOXNews.com.
John Lott, "ANALYSIS: States Hit Hardest by Recession Get Least Stimulus Money," Fox News, July 19, 2009--- http://www.foxnews.com/story/0,2933,533841,00.html
Jensen Comment
Can you imagine the seismic uproar in the media if McCain had done this with counties that voted for him?

Being Dishonest About Being Dishonest
According to a Des Moines Register report, Sen. Tom Harkin, D-Iowa, wants Congress to use "climate change" legislation to mandate that auto manufacturers fit all new cars to run on a blend of 85 percent ethanol. "We own the automobile companies," Harkin said earlier this week. "Why not? I think that will be an easy one."
WorldNetDaily, July 18, 2009 --- http://www.wnd.com/index.php?fa=PAGE.view&pageId=104380
Jensen Comment
Harkin represents the major corn-growing state of the union. What he fails to mention is that fuel costs will increase more than ten times because virtually all scientists agree that corn ethanol is a total loser as fuel. Firstly it requires too much natural gas to heat the production process. It consumes 60 gallons of water for each gallon of ethanol. Ethanol cannot be shipped through the nation's network of pipelines and will have to be transported in tank cars to every city, town, and village in the United States. What a dumb proposition, but coming from labor's patsy Tom Harkin I'm not surprised. Sugar can ethanol is more efficient as demonstrated in Brazil, but the U.S. cannot produce near enough sugar cane for 85% of the fuel in America and still would face the enormous tanker car transport necessity. The algae option is more promising but a long way off in terms of being viable. Mobil-Exxon is spending nearly a billion dollars on algae research.

"The Ethanol Bubble Pops in Iowa:  More evidence the fuel makes little economic sense," by Max Schulz, The Wall Street Journal, April 18, 2009 ---

Ethanol is also bad for the environment. Science magazine published an article last year by Timothy Searchinger of Princeton University, among others, that concluded that biofuels cause deforestation, which speeds climate change. The National Oceanographic and Atmospheric Administration noted in July 2007 that the ethanol boom rapidly increased the amount of fertilizer polluting the Mississippi River. And this week, University of Minnesota researchers Yi-Wen Chiu, Sangwon Suh and Brian Walseth released a study showing that in California -- a state with a water shortage -- it can take more than 1,000 gallons of water to make one gallon of ethanol. They warned that "energy security is being secured at the expense of water security."

For all the pain ethanol has caused, it displaced a mere 3% of our oil usage last year. Even if we plowed under all other crops and dedicated the country's 300 million acres of cropland to ethanol, James Jordan and James Powell of the Polytechnic University of New York estimate we would displace just 15% of our oil demand with biofuels.

But President Barack Obama, an ethanol fan, is leaving current policy in place and has set $6 billion aside in his stimulus package for federal loan guarantees for companies developing innovative energy technologies, including biofuels. It's part of his push to create "green jobs." Archer Daniels Midland and oil refiner Valero are already scavenging the husks of shuttered ethanol plants, looking for facilities on the cheap. One such facility may be the plant in Dyersville, which is for sale. Before we're through, we'll likely see another ethanol bubble.

"Obama's Energy Policy Driven by Ideology, not Reason," by Tom Borelli, Townhall, April 2009 --- http://townhall.com/columnists/TomBorelli/2009/04/18/obamas_energy_policy_driven_by_ideology,_not_reason


Obama Learns from Keith Olbermann:  Cherry Picking Your Guests from Only Your Own Choir
President Barack Obama last Monday met for the first time with leaders of selected Jewish organizations and leaks from the meeting now make one thing very clear. The only free country in the Middle East no longer has a friend in the leader of the free world. Obama is the most hostile sitting American president in the history of the state of Israel . . . The meeting, however, did not showcase the president's trademark engagement and dialogue routine. Instead, he decided to cherry pick his Jewish audience to include pro-Obama newcomers with little support in the mainstream Jewish world, such as J Street, while blackballing the Zionist Organization of America. The oldest pro-Israel group in the United States, with a Washington office second in size only to the American Israel Public Affairs Committee (AIPAC), was not a voice Obama wanted to hear. This leaves the president willing to engage Iranian President Mahmoud Ahmadinejad but not ZOA President Mort Klein.
Anne Anne Bayefsky, Jerusalem Post, July 19, 2009 ---
Jensen Comment
As long as key Jewish leaders like N.Y. Senator Charles Schumer and Harvard Law Professor Alan Dershowitz worship at the feet of President Obama, our President has little fear of a Jewish backlash in the elections of 2010 or 2012. If key Jewish Democrats should ever rear up against the changing U.S. policies toward Israel, there may be more worries for Obama in forthcoming elections. What's interesting is that conservatives previously railed against the power of Zionists in controlling the liberal U.S. media. But the liberal U.S. media like NBC, CBS, Newsweek, Time, The New York Times, etc. virtually never find fault with initiatives put forth by President Obama. In fact the Obamamercials from MSNBC are becoming sickening. In fairness, I think our President sincerely believes that stomping on Israel and American money will bring Iran, Syria, and Hamas to the peace table. Time will tell. I personally support his efforts to curtail West Bank settlements. Somebody must put a stop to that madness. But in terms of his charisma, he's beginning to feel full of himself and selling out the U.S. economy.

While acquiescing to the demands of its two major shareholders -- Washington and Big Labor -- GM did get concessions of its own. The UAW will allow the company to pay a majority of workers at Orion (in Michigan) lower, "second-tier" wages of $14-$16 an hour with no pension benefits. That will make Orion's wages competitive with the non-union Kia plant in Georgia (which makes SUVs).
Henry Payne, "Will Small Be Beautiful for GM? Michigan's Orion plant has become a symbol of government run amok in the auto industry," The Wall Street Journal, July 18, 2009 --- http://online.wsj.com/article/SB124786970963060453.html
Jensen Comment
But there will be no UAW wage and  pension concessions for Ford Motor Company because Ford did not screw its shareholders/creditors and turn its ownership over to the UAW and Obama.

Wink! Wink! Where are the French peace keepers in Lebanon?
A day after an explosion uncovered a hidden Hizbullah arms cache in southern Lebanon, the IDF's Northern Command estimated that the group had turned hundreds of homes in the area into warehouses to store short- and medium-range Katyusha rockets. The IDF released video footage taken from an Israeli aircraft, showing a home that had exploded on Tuesday in the village of Hirbet Selm - located some 20 kilometers north of the Lebanese border. The roof is seen in the footage with dozens of holes, which IDF ballistic experts said were the size of 122-mm. Katyusha rockets. UNIFIL said that storing the ammunition was a "serious violation" of the UN-brokered ceasefire that ended the Second Lebanon War in 2006.
Yaakoff Katz, Jerusalem Post, July 16, 2009 ---

It could've been worse, They might've been Waterboarded
IRAN hanged some members of a Sunni rebel group in a volatile southeastern area today, but they were put to death in prison and not in public as initially planned, the semi-official Fars News Agency said. Fars had reported yesterday that 14 members of Jundollah (God's soldiers) would be executed in a park in the city of Zahedan, including the brother of its leader Abdolmalek Rigi. But Ebrahim Hamidi, who heads the judiciary in Sistan-Baluchestan province, said today the executions took place in a jail instead and that Rigi's brother would be put to death later in the week. He...
"Insurgents hanged in jail," London Telegraph, July 14, 2009 --- http://www.news.com.au/dailytelegraph/story/0,22049,25781618-5006506,00.html

Double Standard Keith Olbermann
MSNBC's Keith Olbermann says its commendable to wish a Fox News commentator dead and to make jokes about the rape of Sarah Palin's teenage daughter, but it's almost the worst sin imaginable to tastelessly remark about the T-shirt worn by President Obama's daughter.
Noel Sheppard, "Is Making a Racist Remark Worse Than Wishing Someone Dead?" Newsbusters, July 16, 2009 --- http://newsbusters.org/blogs/noel-sheppard/2009/07/16/making-racist-remark-worse-wishing-someone-dead

Ten Cities Who Do Not Want to Provide Refuge to the Homeless
Would you believe San Francisco and Berkeley?

Our city is downright mean. So says the National Law Center on Homelessness and Poverty in a new report called "Homes Not Handcuffs" that tracks the criminalization of homeless people in 273 cities nationwide. San Francisco is ranked seventh, up (down?) from 10th last year. Berkeley ranks 10th. The very meanest cities are Los Angeles; St. Petersburg, Fla.; and Orlando. The rankings were based on the number of anti-homeless laws, how strongly those laws are enforced and the general political climate toward homeless people.
Heather Knight and Rachel Gordon, " San Francisco Chronicle, July 15, 2009 ---

Since it's her House she can do anything she darn well pleases
Monday night Democrats voted to shut down the U.S. House Representatives rather than allow a handful of Republican Congressmen to speak on the floor. What could have been so offensive or frightening about our discourse that Speaker Pelosi felt she had to protect her party by gagging free speech in the House? In fact, we had planned to speak on the lack of transparency of the House since Democrats took control. We had planned to criticize Speaker Pelosi for repeatedly denying Members, the media, and the public to right to read legislation before it was voted on.
Representative John Carter, "Pelosi Censors Republicans," Humane Events, July 16, 2009 ---

It's Official:  Teen sex can be fun
Britain's National Health Service has a message for teens: Sex can be fun. Health officials are trying to change the tone of sex education by urging teachers to emphasize that sexual relations can be healthy and pleasurable instead of simply explaining the mechanics of sex and warning about diseases. The new pamphlet, called "Pleasure," has sparked some opposition from those who believe it encourages promiscuity among teens in a country that already has high rates of teenage pregnancy and sexually transmitted diseases.

Gregory Katz, Yahoo News, July 15, 2009 --- http://news.yahoo.com/s/ap/20090714/ap_on_re_eu/eu_britain_teen_sex_3

James Tarranto of The Wall Street Journal concluded in a July 16, 2009 email newsletter that Judge Sonia Sotomayor was nominated on false pretenses. She's really a right-wing extremist. Liberals may really be frustrated by her decisions for the next 40 years, although there is a wee bit of a chance that she may have lied a mite in the hearings.

On empathy: She repudiated the idea that it has any place in judging, as we noted yesterday.

• On foreign law: She expressed her agreement with Justices Antonin Scalia and Clarence Thomas and said flatly, "Foreign law cannot be used as a holding or a precedent or to bind or to influence the outcome of a legal decision interpreting the Constitution or American law that doesn't direct you to that law."

• On the Second Amendment: She said, "I understand that how important the right to bear arms is to many, many Americans. In fact, one of my godchildren is a member of the NRA. And I have friends who hunt. I understand the individual right fully that the Supreme Court recognized in Heller." As to whether the Second Amendment applies to the states under the incorporation doctrine, she agreed with Justice Scalia that this is an open question.

• On abortion: She declined to endorse Roe v. Wade, offering only the usual dodge that it is "the precedent of the court and settled, in terms of the holding of the court."

• On judicial activism: She said that judges' "imposing policy choices in--or their views of the world or their views of how things should be done" is "improper."

She's practically a new Robert Bork! How is it that someone with such extreme-right-wing-out-of-the-mainstream views seems set to win every Democratic vote in the Senate? Simple. She was nominated by a Democratic president, and everyone assumes--correctly, in all likelihood--that this is a better predictor of how she will vote than the pieties she utters during her confirmation hearings. In fact, if you compare her pieties with those of recent Republican nominees, you'd probably find theirs to be somewhat more "liberal" than hers. That is because the political task of a Supreme Court nominee is to persuade the public to disbelieve the opposition's caricature of the nominee. That means speaking pieties that play against type.

But you know, one thing Mrs. Clinton's learned is how to wait. Things turn on a dime, you wake up in the morning and there's a new headline that changes everything. Sooner or later Mr. Obama is going to get in trouble, sooner or later the trouble will take hold and settle in, and sooner or later she will be the unsullied one who quietly did her duty in spite of the slights to which she's been subjected. And when that happens, she will emerge—reluctantly, painfully—as the Democratic alternative. The one who almost won, who knew—who learned the hard way—that you can't do everything all at once, that it's the economy, stupid. They will look like kids playing with history. Hillary isn't a kid. She's experienced, and has been roughed up by history. Watch. She'll roll right back.
Peggy Noonan, The Wall Street Journal, July 18, 2009 --- http://online.wsj.com/article/SB124777884829553723.html

From one of my favorite Websites on economics and finance
"Will the Democrats' Massive Borrowing and Spending Binge Kill the U.S. Economy?" by Gerard Jackson, Seeking Alpha, July 13, 2009 --- Click Here

Any reasonably intelligent person understands that if the demand for a product increases then (all things being equal, as the economist would say) its price will rise. The same holds in the case of borrowing, except for congressional Democrats. These people seem to think that economics laws are a vicious Republican plot.

Poll figures are now showing that the American public is growing alarmed by the Democrats' utterly reckless fiscal policy. Unfortunately, few people understand just how grave the danger really is. In less than five months Obama increased the national debt by more than $800 million and lumbered the economy with a $1.8 trillion deficit that looks like growing even bigger. (I still get silly emails from Obama cultists who were evidently screaming into their computer monitors: "Bush did!" Pathetic doesn't begin to describe these people). In 2003 Thomas Laubach, the US Federal Reserve’s senior economist, produced New Evidence on the Interest Rate Effects of Budget Deficits and Debt, a paper containing calculations for long-term interest rates based on historical evidence. He concluded that

a percentage point increase in the projected deficit-to-GDP ratio raises the 10-year bond rate expected to prevail five years into the future by 20 to 40 basis points, a typical estimate is about 25 basis points.

As the US deficit has rocketed from 3 percent to 13.5 percent one should therefore expect long-term rates to rise by at least 2.5 percentage points. In addition, he believes that a 1 percent rise in the ratio of debt to GDP will raise future rates by 4 to 5 basis points. It appears that recent movements in long-term rates support Mr Laubach's thesis. The 20-year treasury bill stood at 3.22 percent on 2 February: by the 8 July it had risen to 4.13 percent. It was the same story 10-year treasuries which rose from 2.46 percent on 2 January to 3.33 percent on 8 July while the 30-year mortgage rate had risen to 5.32 percent by 2 July as against 4.78 percent for 2 April. The government's insatiable demand for funds looks very much like it is driving up long-term rates very quickly.

Obama supporters with their fetish for big government can always claim that economic conditions in Japan refute Laubach. Japan has increased its national debt by a colossal amount and yet interest rates remain ridiculously low. These critics overlooked the economist's caveat: All things being equal. Just as the price of the a monetary unit (its purchasing power) is determined by the supply and demand for it, the same holds for all other economic goods. For example, though US car production has dropped car prices have not jumped. Why? Because demand fell.

The same holds for Japanese interest rates. They have not been driven up government borrowing because the private demand for loans has virtually collapsed. A similar situation prevailed during the Great Depression. Despite Roosevelt's spending and borrowing interest rates remained low — but so did business borrowing with the result that there was a great deal of capital consumption.

Professor Higgs calculated that from 1930 to 1940 net private investment was minus $3.1 billion. (Robert Higgs, Depression, War, and Cold War, The Independent Institute, 2006, p. 7). Arthur Lewis calculated that from 1929 to 1938 net capital formation plunged by minus 15.2 percent (W. Arthur Lewis, Economic Survey 1919-1939, Unwin University Books, 1970, p. 205). Benjamin M. Anderson estimated that in 1939 there was more than 50 percent slack in the economy. (Benjamin M. Anderson, Economics and the Public Welfare: A Financial and Economic History of the United States 1914-1946, LibertyPress, 1979, pp. 479-48). It ought to be obvious that where a process of capital consumption is underway — as it was in the 1930s — one should expect to see a rise in the average age of plant and equipment. This is precisely what happened as shown by the table below.

So where we have a situation in which extremely low interest rates reign while government borrowing has massively expanded we should expect to find — as in Japan — that the personal demand for loans. particularly by business, has plunged. In other words, critics have been looking at only part of the equation. It just so happens that most critics of Obama's spending mania have also overlooked a vital point — the crucial role that interest rates play in raising or lowering the standard of living.

If the government's fiscal policy imposes high long-term rates on the economy then prospective highly time-consuming projects, the ones that do so much to raise real wage rates, would have to be abandoned. Moreover, existing projects of the same nature would be eventually phased out. This is called capital consumption. What this means is that the quantity of savings necessary to prevent the capital structure from contracting are no longer available. As Hayek observed:

[I]t is quite possible that, after a period of great accumulation of capital and a high rate of saving, he rate of profit and the rate of interest may be higher than they were before — if the rate of saving is insufficient compared with the amount of capital which entrepreneurs have attempted tp form, or if the demand for consumers' goods is too high compared with the supply. And for the same reason the rate of interest and profit may be higher in a rich community with much capital and a high rate of saving than in an otherwise similar community with little capital and a low rate of saving. (Friedrich von Hayek, The Pure Theory of Capital, The University of Chicago Press, 1975, p. 396).

Added to this is Obama's misguided energy policy that amounts to a massive tax on production. Once that is also taken into account one is left looking at economic carnage.

America, what is happening to you?
“One thing seems probable to me,” said Peer Steinbrück, the German finance minister, in September 2008....“the United States will lose its status as the superpower of the global financial system.” You don’t have to strain too hard to see the financial crisis as the death knell for a debt-ridden, overconsuming, and underproducing American empire.
Richard Florida, "How the Crash Will Reshape America," The Atlantic, March 2009 ---

Bob Jensen's threads on pending economic disaster in the U.S. --- http://www.trinity.edu/rjensen/Entitlements.htm

Video tutorial on the President's strategy and the legislative process for passing health reform legislations --- http://www.kaiseredu.org/tutorials/reformprocess/player.html

The major stumbling block, apart from political gaming, is how to finance health care. Clearly, there's a limit to stacking more trillions on the trillions of budget deficits already in place. It's naive to think that any one cohort such as the top 3% of wage earners can pay for health care reform of the masses. Surtaxes on higher income people have enormous adverse impacts on employment opportunities in small business companies, incentives to take financial risks for new ventures, support of charities and colleges, tax cheating, etc. Even worse is that costs of universal health care are being so fraudulently underestimated that even total confiscation of high incomes would only be a drop in the bucket. For example, the massive fraud losses in Medicare will increase 100-fold under universal health care, and these new fraud losses have not been factored into the present cost estimates.

The only sensible solution is to spread the pain of universal health care among virtually all recipients of the health insurance coverage. This means significant increases in taxes for all wage earners at all income levels, much like the cost of health care is spread out in Canada even if total nationalization of health care in the U.S. is not politically feasible at the moment.

Moral Hazards of Precondition Coverage in Employer Health Insurance
My major concern in the proposed universal health insurance legislation is the disastrous proposal that employers must pay for health insurance coverage of preconditions. This presents all sorts of moral hazards and financial risks that will either force employers out of business or force employers to shift to replacing nearly all full-time employees with part-time employees who do not have to be covered in the employer's health insurance plan.

As an illustration of the moral hazard, consider the following scenario. A nurse-mom makes high wages as an excellent, albeit part-time, physician’s assistant. The wages are so high that she now affords to buy private health insurance that will not cover organ transplants. She discovers that one of her children needs a heart transplant. She then switches jobs to a become a minimum wage full-time filing clerk at a small private college in the community just so she can get precondition coverage the heart transplant. The small private college that has its own employee insurance coverage pool is now stuck with having to fund a child’s million dollar heart transplant as a precondition required by law by employers who hire new employees. Even if the college has a major medical kick-in policy, the cost of such a major medical policy will sky rocket when preconditions are required by law to be covered.

Her income as a full-time filing clerk is about a tenth of her income as a part-time physician's assistant. After her child's heart transplant this nurse-mom goes back to being a highly paid part-time physician’s assistant.

Another moral hazard will be when a worker’s family member in any nation has an expensive medical precondition. If the worker sneaks into the U.S., the entire family is eligible for the House version of the universal health care plan ---
Also see http://www.avherald.com/h?article=41a81ef1/0037&opt=4608

 In other words a worker who would not otherwise sneak into the U.S. to become an illegal alien is motivated to do so just for the health insurance coverage of very expensive procedures such as organ transplants and neuro surgeries. The family might then return to their own home country after beating the U.S. health care system.

Actually this scenario is unrealistic because, after the universal health care legislation requires employers to cover preconditions, the local college will probably adopt a new policy of hiring only part-time employees, including faculty, so that the new hires do not have to be covered in the health insurance plan.

Many contracts that write in pre-existing coverage greatly limit the amounts to be paid out for pre-existing conditions relative to conditions arising after the insurance goes into effect. I grant you that it is more of a problem in individual plans but you’ve oversimplified the complications --- http://snipurl.com/preexistingissues  [www_medsave_com]

Title I of HIPAA currently limits restrictions that a group health plan can place on benefits for preexisting conditions. Group health plans may refuse to provide benefits relating to preexisting conditions for a period of 12 months after enrollment in the plan or 18 months in the case of late enrollment. This moral hazard protection will of course all change under the proposed health care legislation.

Do we want to become a nation of part-time workers having to carry multiple jobs?

I would prefer that the government take over all health insurance coverage and seriously tax everybody covered in the system. But if the mess of private and government insurance coverage comes into place, it is extremely important for government to somehow pick up the coverage of expensive preconditions such as organ transplants, AIDs, and severe mental health needs of some family members. To shunt these precondition costs onto employers will destroy full-time career opportunities throughout the land as employers fear the financial risks of preconditions. The repercussions will be enormous.

Below is a message I recently sent out to the AECM listserve.

Hi James,

Health care is politically charged at the moment and should probably be avoided on the AECM. I would like to add that some studies contend that government-administered health insurance will be more expensive in terms of administrative costs per person covered.

"Medicare Administrative Costs Are Higher, Not Lower, Than for Private Insurance," by Robert Book, The Heritage Foundation, June 25, 2009 --- http://www.heritage.org/Research/HealthCare/wm2505.cfm 

It’s probably unfair to compare private versus public health insurance if the two are not direct competitors. For example, private health insurance often, these days, is mostly administering employer-funded insurance that employers keep a close eye on for cost efficiency often by capping such risks as mental health coverage to $10,000 or less. I know of one small university that had seven children of employees who, in less than a year, wiped out the entire multi-million balance set up in a health coverage fund. After that a cap was placed on certain types of coverage. Medical costs for the seven children were shifted to taxpayers.

I’m reminded of the guy whose only reason for committing a felony was to get into a California prison so he could get a “free” heart transplant. Who was really being held up here?

I think the big issue in the short run will focus on preconditions that may soon be required by law to be funded by employers. These leads to real moral hazards.

Medicare covers most people on permanent disability. These persons often have more frequent medical billings that require more costs to administer. My wife has been on permanent disability for over twenty years at a Medicare cost of over $2 million not counting the enormous cost of administering her claims --- http://www.trinity.edu/rjensen/Erika2007.htm 

Erika now has special-alloyed metal from her hips to her neck that costs more than the metal in a Mercedes. I tease her by trying to figure out what I could get on eBay by selling her as scrap. She jokes back that I’m worth zero in the scrap market.

By the way, I disagree with you regarding quality of care at U.S. hospitals and surgeons and home therapy. I can’t think of any other nation where I would want to send her for better care from year-to-year.

If we leave health insurance out of the debate, there is evidence that privatization has led to many innovations and efficiencies in various, but not all, industries. Certainly not much good in the way of innovation tends to come from private or public monopolies that do not have to maintain a competitive edge in terms of effectiveness and efficiency.

Heads of state in other nations are frequently sent to the U.S. for medical treatments that are just not as good in their own nations. The U.S. has advanced medical services more than any other nation. And many poor people have access to the best services, especially people of all ages and income declared permanently disabled that automatically get Medicare coverage. The problem is making the best services available to everybody at price they can afford.

I'm tempted to say that being declared permanently disabled and getting Medicare at a young age is a ticket to heaven. But that's probably going a bit too far. Certainly there's a lot of fraud where people are declared disabled who are not in the least disabled. They simply managed to game the system. Others like Erika live in constant severe pain and have no bowel or bladder control.

One media myth is that that the cost of having to cover preconditions must be picked up by fat cat health insurance companies. Since so many employers are now funding (177 million workers under this 1974 Erisa provision of the law) their own employee health insurance, the employers themselves will have to absorb the expensive precondition costs such as the need for organ transplants. State universities can pass these costs along to their states, but small private universities will have to cover the possibly huge costs with higher tuition and appeals to benefactors. I fully anticipate that some private colleges will go out of business because of changes in the health insurance law.

Certainly employers will move more and more into a part-time labor force because of changes in the health insurance law. This, in turn, will force more and more “ weary workers” with three or four part time jobs into the government’s insurance plan. The tragedy is that they can't get full time jobs because of potential employers would be paying far more on average for workers' family medical coverage, especially with precondition coverage, than for the labor cost per se.

Health care will have to be rationed no matter what --- http://www.nytimes.com/2009/07/19/magazine/19healthcare-t.html?pagewanted=1&em
I'm reminded of a former colleague with advanced bone cancer who was given two hip transplants just weeks before he died. This made no sense to me since he was in more misery after the transplants as he was before the transplants.

In Canada the average Canadian is willing to give half his/her income for a National Health Care Plan. This is the only way to go in the U.S. for either a nationalized health plan or a nationalized insurance plan. The current proposal of taxing less than three percent of the people of for government insurance for the other 97% is absurd.

The most absurd situation is to keep borrowing trillions of dollars and passing the bills along to future generations. That will bankrupt the entire United States. Welcome to Zimbabwe!

It will be painful, but even people earning minimum wage must give up a significant portion of earnings to pay for health care. Illegal immigrants must pay a large portion of their earnings toward health care that is now free to them in emergency rooms. Middle income people must pay about 50% of their total earnings for health care. That’s the only way it will be a sustainable system.

Perhaps 50% won’t even be enough!

We need a better system. I think socialized medicine is the answer with high taxes and no private insurance companies. It will be rough for a while with 30% or higher unemployment for a time due to tax rises, but with Democrats in monopoly control of Congress now is the time to bite the tax bullet.

Taxes Must Increase On Average (for everybody) Nearly 50% to Balance the Federal Budget
(that does not include added taxes for  universal health care and carbon capping legislation trillion dollar costs)
(that does not include added taxes for unbalanced state budgets)
And if you think high taxes are bad, wait until you experience Zimbabwe-like inflation?
"The Real Era of Big Government," by Robert Samuelson, American Issues Project, July 13, 2009 --- Click Here

Bob Jensen

One added worry about moral hazard that is extremely controversial.

Another moral hazard will be when a worker’s family member in any nation has an expensive medical precondition. If the worker sneaks into the U.S., the entire family is eligible for the House version of the universal health care plan ---

In other words a foreign worker who would not otherwise sneak into the U.S. to become an illegal alien is motivated to do so just for the health insurance coverage of very expensive procedures such as organ transplants and neurosurgeries. The family might then return to their own home country after beating the U.S. health care system.

One thing that is not clear to me is how private insurance will survive since, under the proposed House Bill, employers can opt out of providing health insurance for workers by paying an 8% penalty to the government. For virtually all employers this 8% option is by far the cheapest alternative and is much less that virtually all employer insurance benefit programs will cost when pre-condition health needs are factored into the coverage.

I’m beginning to think the 8% parameter in the House Bill is really a blatant bait and switch fraud designed to only obtain passage of the legislation in 2009. After universal health care insurance is mandated the government will in no way be able, at least for the next couple of decades, to administer health insurance for hundreds of millions of worker families plus the families of all unemployed persons plus the illegal immigrants and their families.

The bait and switch will be to increase the 8% employer-penalty parameter dramatically to something like 50% such that, even when paying for precondition coverage, employers have little choice but to cover full-time workers. The adverse externality here, however, is that employers will increasingly shift from full-time to part-time workers where part-time workers have little choice but to enroll in the government insurance plan. Full-time employees will then not be allowed into the government insurance program and are left with zero choice other to enroll in the employer’s plan (which will be funded in most instances by private insurance companies making a profit).

Of course the government will not make a profit on health insurance. It will be quite the opposite because government will have to cover both fraud and tens of millions of unemployed and very low income people who can only get part time jobs. The government plan eventually will add trillions of dollars to deficit spending in spite of what Obama is promising unless covered people at all levels of income share the pain of health care insurance taxation. But a huge increase in taxation for health care may permanently inhibit economic recovery in the United States.

The only answer in the long run will be inferior health care which is all this nation can afford if it wants universal health care in the presence of its $100 trillion unfunded entitlement programs before passing universal health care legislation. We all can expect waiting rooms filled to capacity that spill out into hallways while weary physicians dispense with assembly-line medicine limiting each patient to five minutes. Expensive procedures such as organ transplants and neurosurgeries will be dispensed by lottery so that the system is indeed fair to one and all.

But the system will never be fair to one and all. The rich will simply pay for excellent medical care offshore. Medicine will become a booming business in places like Sweden, France, India, and yes even Cuba.

And in the long run fewer foreigners will be sneaking into the U.S. because the medical system in the U.S. will become too inferior relative to alternatives in their own countries. Then again a foreigner might sneak in just to take a chance on the health care organ transplant and neurosurgery lottery.

The crazy thing is that all of these negatives will not make me vote against some form of universal health care. The current system is just too unjust and inefficient. Perhaps we need to sacrifice quality for quantity at this juncture. But then I only have to worry about all this for two more decades or less. And if need be I can afford a trip to Cuba.

I’m really glad I’m not young any more.

July 20, 2009 message sent to Trinity University on July 20, 2009

I forget who said “there are lies and then there are damned lies.”
Whoever said this is absolutely correct with respect to media coverage of the health care debate that seldom, if ever, mentions the huge adverse impact of the changed rules of the game such as new rules for preconditions and new rules for how big the self-insured insurance pool would have to become to continue self insurance like Trinity presently uses to fund health care coverage.

Everybody at Trinity should read the “Repealing Erisa” article below, because Trinity University still has (I think) Erisa-enabled self insurance with a major medical kick-in. It will virtually impossible for Trinity to continue an Erisa-enabled health plan if the present House Bill is not revised to make it easier to keep such plans. But keeping such plans is probably out of the question anyway because of the risks of frequent and large precondition claims.

In order to keep its present health coverage plan, I think that the universal health care legislation will have to exclude coverage of preconditions (as is the case under Trinity’s present coverage). Secondly, the universal health care legislation would have to encourage rather than discourage Erisa-enabled plans. I don’t think this Congress will save Erisa-enabled plans for organizations the size of Trinity University. It might be possible to save such plans if governmental insurance picks up the precondition claims.

Actually Trinity will be between a rock and a hard place, because going back to coverage by large insurance companies will be much more expensive even if preconditions are excluded. Adding on premium costs for preconditions will make employer medical insurance premiums out of sight. I anticipate a huge migration to part-time employees at Trinity.

An employee at Trinity University asked, in a private response, why doctor shortage is not being raised as a huge issue in the health care debate.

Doctor shortage has been one of the enormous problems encountered in the Massachusetts Universal Health Care Plan initiated by, then, Gov. Romney. People line up in emergency rooms because they cannot find primary care physicians. Another problem is that Boston’s leading hospital is now suing the State because the cost of providing minimal health care to poor people greatly exceeds what the hospital is being paid by the State under the MUHCP.

But doctor shortage is a “no-no” in the health care debate. The legitimate argument is that the poor should have equal opportunity access to the limited supply of doctors. The irony here is that the proposed reduction of fees paid to doctors reimbursed by Medicare (and presumably the forthcoming government insurance fund for others) will drive more doctors out of participating in the plans. This exacerbates the doctor shortage problem. But such fee reductions are necessary as another ruse to cost-justify the proposed universal health care plan.

Unless we bite the bullet and move entirely to a Canadian-style nationalized health care program, anything less will be an absolute disaster.

There’s one factor Trinity University should plan for is the likely impossibility of continuing its self-funded health insurance plan under Erisa. Partly due to required coverage of preconditions, it will be very, very hard for organizations the size of Trinity to fund its own Erisa-allowed claims (backed by a major medical kick-in for enormous claims).

Trinity officials involved in health care alternatives should carefully read the following article:

“Repealing Erisa,” The Wall Street Journal, July 21, 2009

One by one, President Obama’s health-care promises are being exposed by the details of the actual legislation: Costs will explode, not fall; taxes will have to soar to pay for it; and now we are learning that you won’t be able to “keep your health-care plan” either.

The reality is that the House health bill, which the Administration praised to the rafters, will force drastic changes in almost all insurance coverage, including the employer plans that currently work best. About 177 million people—or 62% of those under age 65—get insurance today through their jobs, and while rising costs are a problem, according to every survey most employees are happy with the coverage. A major reason for this relative success is a 1974 federal law known by the acronym Erisa, or the Employee Retirement Income Security Act.

Erisa allows employers that self-insure—that is, those large enough to build their own risk pools and pay benefits directly—to offer uniform plans across state lines. This lets thousands of businesses avoid, for the most part, the costly federal and state regulations on covered treatments, pricing, rate setting and so on. It also gives them flexibility to design insurance to recruit and retain workers in a competitive labor market. Roughly 75% of employer-based coverage is governed by Erisa’s “freedom of purchase” rules.

Goodbye to all that. The House bill says that after a five-year grace period all Erisa insurance offerings will have to win government approval—both by the Department of Labor and a new “health choices commissioner” who will set federal standards for what is an acceptable health plan. This commissar—er, commissioner—can fine employers that don’t comply and even has “suspension of enrollment” powers for plans that he or she has vetoed, until “satisfied that the basis for such determination has been corrected and is not likely to recur.”

In other words, the insurance coverage of 132 million people—the product of enormously complex business and health-care decisions—will now be subject to bureaucratic nanomanagement. If employers don’t meet some still-to-be-defined minimum package, they’ll have to renegotiate thousands of contracts nationwide to Washington’s specifications. The political incentives will of course demand an ever-more generous “minimum” benefit and less cost-sharing, much as many states have driven up prices in the individual insurance market with mandates. Erisa’s pluralistic structure will gradually constrict toward a single national standard.

Yet a computer programming firm, say, and a grocery store chain have very different insurance needs, and in any case may not be able to afford the same kind and level of benefits. Innovation in insurance products will also be subject to political tampering. Likely casualties include the wellness initiatives that give workers financial incentives to take more responsibility for their own health, such as Safeway’s. Some politicians will claim that’s unfair. High-deductible plans with health savings accounts are also out of political favor, therefore certain to go overboard. If you have one of those and like it, too bad.

The new Erisa regime will be especially difficult to meet for businesses that operate with very slim profit margins or have large numbers of part-time or seasonal workers. They may simply “cash out” and surrender 8% of their payroll under the employer-mandate tax. A new analysis by the Lewin Group, prepared for the Heritage Foundation, finds that some 88.1 million people will be shifted out of private employer health insurance under the House bill. If those people preferred their prior plan, well, too bad again.

The largest employers—though not all—may clear the minimum bar, at least at first. But in addition to the “health choices” administrative burden, the cost of labor will rise because the House guts another key section of Erisa. Currently, lawsuits about employee benefits are barred under the law, allowing large employers to avoid the state tort lotteries in disputes over coverage. No longer. As a gratuity to the trial bar, Democrats will now subject businesses to these liabilities in the name of health “reform.”

So when Mr. Obama says that “If you like your health-care plan, you’ll be able to keep your health-care plan, period. No one will take it away, no matter what,” he’s wrong. Period. What he’s not telling the American people is that the government will so dramatically change the rules of the insurance market that employers will find it impossible to maintain their current coverage, and many will drop it altogether. The more we inspect the House bill, the more it looks to be one of the worst pieces of legislation ever introduced in Congress.

Jensen Comment
Jagdish Gangolly later reminded me of "Lies, Damned Lies, and Statistics" in a great article --- http://cancerguide.org/median_not_msg.html

Several people responded with questions or comments about universal health care in Massachusetts (that was enacted in 2006 under the guidance of Governor Mitt Romney) which I will refer to here as MITT. Firstly I would like to note that danger lurks in comparing the MITT with any universal health care plan being proposed at the Federal level. Firstly, none of the 50 states has the power to simply print money to pay its bills, as is being done on a relatively small scale by the U.S. Treasury at the moment to pay for its excesses. Secondly, MITT is not universal in that it is restricted to low income residents of the state. Thirdly, MITT survives heavily on Federal subsidies, whereas nobody will subsidize any Federal health care plan from above, although a small number of wealthy people may one day make benevolent contributions toward universal health care. Thus far Bill Gates and Warren Buffett have been focused more on Africa's health issues such as TB and polio.

An excellent, albeit brief, summary of MITT is provided at http://en.wikipedia.org/wiki/Massachusetts_health_care_reform
Health coverage is very limited in scope and the number of insured has increased substantially. But many uninsured poor people still manage to slip through the cracks.

An enormous problem has been the shortage of primary care physicians such that those with newly-acquired MITT insurance cannot find a primary care doctor. Most specialists refuse to treat patients who are not referred to them by a primary care physician. Hence, there were and are long lines at Emergency Rooms both before and after MITT was enacted even though many in those lines have MITT coverage. The lines could be worse. MITT will not cover many costly procedures.

The MITT program is in deep financial stress at the moment and has had to make cuts in scope of coverage and in amounts paid to doctors and hospitals during the current economic crisis ---
Hospitals complain that the promised coverage is far from sufficient to cover their costs. Some, including the huge Boston General Hospital, are now suing or plan to sue the State to recover some of their losses under MITT.

Under financial stress hospitals in Massachusetts have had to take huge budget cuts. Rather than spread those cuts across the board to all departments, some hospitals have decided to concentrate on dropping the most money-losing departments. You probably can guess the leading candidate for being eliminated --- the obstetrics department.

My neighbor down the road has a second home up here in the White Mountains. However, he still practices cardiology in a Boston suburb. He says that obstetrics departments are leading candidates for elimination, in large measure, because of the high cost of malpractice insurance covering obstetrics services.

Lawyers file cookie-cutter lawsuits against doctors, nurses, and hospitals for every defective baby irrespective of the facts in any given case. The reason is the tendency of sympathetic juries to make multimillion dollar awards to a mother of a defective baby irrespective of the facts in the case. Many juries feel that fat cat insurance companies owe it to the unlucky woman (and her lucky lawyers) who must nurture and raise a severely handicapped child. Juries make such awards even when the doctors, nurses, and hospitals performed perfectly under the circumstances. Paul Newman showed us how to love it when lawyers beat the medical system in favor of the "poor and powerless" in The Verdict --- http://www.youtube.com/watch?v=zVZFlBJftgg

But fat cat insurance companies adjust rates based upon financial risks. The rates became so high for obstetrics that across most of the U.S. (less so in states that cap punitive damages) thousands of gynecologists dropped the obstetrics part of their services. And under MITT in Massachusetts some strained hospitals dropped obstetrics services.

Health Care Reform Will Indeed Be Universal --- Tort Lawyers Are Fully Covered
This raises the whole issue of costs of malpractice insurance in the entire health system of the United States. Although a few states like Texas have managed to put some restraints on punitive damages, President Obama wants no such restraints placed on the tort system for virtually any legislation under his term of office. Obama is a lawyer, and he can attribute much of his political success to the financial and other support from tort law firms across the land. He owes them and most of our legislators are themselves lawyers. As a result there's virtually zero chance that any restraints will be placed upon the number of malpractice lawsuits and sizes of awards in any universal health care legislation. In fairness the U.S. Congress and some states years ago put some restraints on runaway malpractice claims --- http://www.redorbit.com/news/science/2593/house_passes_medical_malpractice_limits/
But in 2009 in Washington DC there is no sentiment for putting further malpractice insurance cost restraints into the forthcoming universal health care legislation.

In 2009 lawmakers in Washington DC are taking no lessons from malpractice stinginess in the Canadian National Health Plan. Perhaps stinginess is what comes with national health care plans that eliminated private insurance company fat cats.
"Why 98 percent of Canadian Medical Malpractice Victims Never Receive a Penny in Compensation," by John McKiggan ---
Click Here

Containing health-care costs is impossible under the current legal structure. That fact has to be addressed if President Barack Obama is to create an affordable health-care system that is accessible to everyone.
Canada Holds Down Health Care Costs by Not Allowing Tort Lawyers to Exploit the System
Every incentive in the system now is to do more -- that's how doctors get paid and that's how doctors get protected from lawsuits. Billions of dollars are wasted in "defensive medicine." Bureaucracy built up over decades diverts resources from patient care to mindless compliance. Forms are everywhere. The only path to affordable health care is a basic overhaul to realign incentives. The new ideas are out there -- for example, creating a reimbursement model that rewards effective care, and restoring trust in the reliability of justice by creating special health courts. Overhaul, however, requires letting go of the old ways. Congress is perfectly willing to come up with new programs and introduce new taxes to pay for ever-rising health-care costs. But Congress seems unwilling to make hard choices. Like a crash in slow motion, you can see Congress tumbling down toward the lowest common denominator -- a reform package that will do little to contain costs, but will offend the least number of special interests.
Philip K. Howard, "Health Reform Requires Lawsuit Reform:  But tort lawyers are the one special interest Democrats won't offend," The Wall Street Journal, July 15, 2009 --- http://online.wsj.com/article/SB124761995712942601.html

President Blames Doctors for Health Care Costs --- http://townhall.com/columnists/KenKlukowski/2009/07/24/president_blames_doctors_for_health_care_costs
Jensen Comment
Of course the fact that lawyers are the cause of dysfunctional health care insurance costs is never mentioned by our lawyer-loving President Obama.

The following disaster happened in a New York Times interview:
Something that will never be mentioned on MSNBC, Newsweek, The Nation, or again in The New York Times
"Ruth Bader Ginsburg and a Question of Eugenics," by Johah Goldberg, Townhall, July 15, 2009 ---

Here's what Supreme Court Justice Ruth Bader Ginsburg said in Sunday's New York Times Magazine: "Frankly I had thought that at the time (Roe v. Wade) was decided," Ginsburg told her interviewer, Emily Bazelon, "there was concern about population growth and particularly growth in populations that we don't want to have too many of."

The comment, which bizarrely elicited no follow-up from Bazelon or any further coverage from the New York Times -- or any other major news outlet -- was in the context of Medicaid funding for abortion. Ginsburg was surprised when the Supreme Court in 1980 barred taxpayer support for abortions for poor women. After all, if poverty partly described the population you had "too many of," you would want to subsidize it in order to expedite the reduction of unwanted populations.

Left unclear is whether Ginsburg endorses the eugenic motivation she ascribed to the passage of Roe v. Wade or whether she was merely objectively describing it. One senses that if Antonin Scalia had offered such a comment, a Times interviewer would have sought more clarity, particularly on the racial characteristics of these supposedly unwanted populations.

Regardless, Ginsburg's certainly right that abortion has deep roots in the historic effort to "weed out" undesired groups. For instance, Margaret Sanger, the revered feminist and founder of Planned Parenthood, was a racist eugenicist of the first order. Even more perplexing: She's become a champion of "reproductive freedom" even though she proposed a "Code to Stop Overproduction of Children," under which "no woman shall have a legal right to bear a child without a permit." (Poor blacks would have had a particularly hard time getting such licenses from Sanger.)

If Ginsburg does see eugenic culling as a compelling state interest, she'd be in fine company on the court. Oliver Wendell Holmes was a passionate believer in such things. In 1915, Holmes wrote in the Illinois Law Review that the "starting point for an ideal for the law" should be the "coordinated human effort ... to build a race."

In 1927, he wrote a letter to his friend, Harold Laski, telling him, "I ... delivered an opinion upholding the constitutionality of a state law for sterilizing imbeciles the other day -- and felt that I was getting near the first principle of real reform." That was the year he wrote the majority opinion in Buck v. Bell (joined by Louis Brandeis) holding that forcibly sterilizing lower-class women was constitutional. In recent years, openly discussing the notion of eugenic aspects of abortion has become taboo. But as Ginsburg's comments suggest, the taboo hasn't eliminated the idea; it's merely sent it underground.

To be sure, some heterodox liberals speak up. The writer Nicholas von Hoffman has written: "Free, cheap abortion is a policy of social defense. To save ourselves from being murdered in our beds and raped on the streets, we should do everything possible to encourage pregnant women who don't want the baby and will not take care of it to get rid of the thing before it turns into a monster. ..."

Continued in article

Also see http://townhall.com/columnists/MichaelGerson/2009/07/17/ginsburg_and_the_surplus_population

Jensen Comment
Actually abortion has worked in weeding out criminals according to University of Chicago Economics Professor Steven Levitt in his controversial book Freakonomics (a New York Times Best Seller) and even led to a NYT Blog called Freakonomics --- http://en.wikipedia.org/wiki/Freakonomics
The Blog is at http://freakonomics.blogs.nytimes.com/?scp=1-spot&sq=Freakonomics&st=cse
The Blog, however, will probably never mention the above quotation by Judge Ruth Bader Ginzburg.

Did legalized abortion cut crime? --- http://www.isteve.com/abortion.htm

Accounting Majors in Demand
Even when the economy is down, there is room for top students in the profession.   The National Association of Colleges and Employers’ 2009 Student Survey found that, even though students in the class of 2009 were graduating with fewer jobs available, accounting majors are still in high demand. Accounting and engineering graduates were among those majors most likely to have already found jobs.   Accounting majors expect to earn an average starting salary of about $45,000, while engineering grads expect to earn $58,000.
Journal of Accountancy, July 2009 --- http://www.journalofaccountancy.com/Issues/2009/Jul/AccountingMajors.htm

Hot Academic Jobs of the Future
Note that due to shortage of supply of PhD accountants, newly-hired accounting PhDs are generally among the highest paid faculty in their ranks such as newly hired assistant professors of accounting now being paid well over $120,000 for nine-month contracts in major universities. In most instances accounting assistant professors get significantly higher offers than their counterparts in science, humanities, and engineering. They may not do much better than new hires in law schools. Medical schools have such complicated ways of paying faculty, that comparisons of salaries of medical schools with all other disciplines in a university are virtually impossible. For example, medical faculty sometimes get bonuses for clinical services in university hospitals.

A June/July 2009 AACSB report says the shortage of accounting PhDs is getting worse instead of better, particularly as the supply of new PhD graduates in accounting declines while demand for accounting faculty explodes (accounting is probably the only business discipline where demand for graduates has either held steady in corporations or increased in public accounting):
"Doctoral-Level Faculty Numbers Continue to Decline," AACSB, June/July 2009 --- http://www.aacsb.edu/publications/enewsline/datadirect.asp

And yet opportunities for graduates of accounting doctoral programs is totally ignored in the latest article in the Chronicle of Higher Education about the hottest academic jobs of the future. If I were advising a confused undergraduate student who is contemplating a career in academe, I would say look more closely at accounting, including the warts of virtually all accounting doctoral programs --- http://www.trinity.edu/rjensen/theory01.htm#DoctoralPrograms

"Hot Academic Jobs of the Future: Try These Fields," by Lee Roberts, Chronicle of Higher Education, July 10, 2009 --- http://chronicle.com/weekly/v55/i41/41b02201.htm?utm_source=at&utm_medium=en

Bob Jensen's threads on careers are at http://www.trinity.edu/rjensen/bookbob1.htm#careers

"The Fall of Capitalism and the Rise of Islam Conference" in Chicago
A group committed to establishing an international Islamic empire and reportedly linked to Al Qaeda is stepping up its Western recruitment efforts by holding its first official conference in the U.S. Hizb ut-Tahrir is a global Sunni network with reported ties to confessed 9/11 mastermind Khalid Sheikh Mohammed and Al Qaeda in Iraq's onetime leader Abu Musab al-Zarqawi. It has operated discreetly in the U.S. for decades. Now, it is coming out of the shadows and openly hosting a July 19 conference entitled, "The Fall of Capitalism and the Rise of Islam," at a posh Hilton hotel in a suburb... Phares said that Hizb ut-Tahrir, rather than training members to carry out terrorist acts like Al Qaeda, focuses instead on indoctrinating youths between ages of 9 and 18 to absorb the ideology that calls for the formation of an empire — or "khilafah" — that will rule according to Islamic law and condones any means to achieve it, including militant jihad.
"Islamic Supremacist Group Holds First U.S. Conference," Fox News, July 17, 2009 --- http://www.foxnews.com/story/0,2933,533525,00.html?test=latestnews

Two Videos Damning Capitalism: One Stupid, One Smart

Michael Moore cheered the bankruptcy of General Motors and absolutely despises the comeback of General Motors
He has a relatively long list (some lucrative to him) leftist documentaries --- http://en.wikipedia.org/wiki/Michael_Moore
His documentary Sicko got it wrong --- Cuba is not the dream country of equity and quality in health care for the masses
Now he has a new documentary entitled:  Capitalism:  A Love Story

The Stupid Video
"Michael Moore Gets It Wrong," by John Stossel, ABC News, July 11, 2009 --- http://blogs.abcnews.com/johnstossel/2009/07/michael-moore-gets-it-wrong.html

Michael Moore has been working on another documentaryThis time, he’s taking on capitalism:

"The wealthy, at some point, decided they didn't have enough wealth. They wanted more -- a lot more. So they systematically set about to fleece the American people out of their hard-earned money."

How ridiculous is that?  The wealthy, and everyone else, almost always decide that they don’t have enough wealth.  People ask their bosses for raises.  We invest in stocks hoping for bigger returns than Treasury Bonds bring.  “Greed” is a constant.  The beauty of free markets, when government doesn’t meddle in them, is that they turn this greed into a phenomenal force for good.  The way to win big money is to serve your customers well.  Profit-seeking entrepreneurs have given us better products, shorter work days, extended lives, and more opportunities to write the script of our own life.

On Thursday, Moore announced the title of the movie:  Capitalism: A Love Story.

It’s a title I might have picked to make a point opposite of what I assume Moore has in mind.  

Moore also fails to understand is that it was not “capitalism” run amok that caused today’s financial problems.   In reality, it was a combination of ill-conceived government policies and an overzealous Federal Reserve artificially lowering interest rates to fuel a bubble in the housing market.  Then it was government that took money from taxpayers and forced banks to accept it.

Moore ought to understand that, because he makes a good point when he says his movie will be about "the biggest robbery in the history of this country - the massive transfer of U.S. taxpayer money to private financial institutions."

That is indeed robbery.  It sure doesn’t sound like capitalism.

The Smart Video
Better Video Damning "Managerial Capitalism" and It's Free Online ---
Click Here

  • The Greatest Swindle in the History of the World
    "The Greatest Swindle Ever Sold," by Andy Kroll, The Nation, May 26, 2009 ---
    The legislation's guidelines for crafting the rescue plan were clear: the TARP should protect home values and consumer savings, help citizens keep their homes and create jobs. Above all, with the government poised to invest hundreds of billions of taxpayer dollars in various financial institutions, the legislation urged the bailout's architects to maximize returns to the American people.

    That $700 billion bailout has since grown into a more than $12 trillion commitment by the US government and the Federal Reserve. About $1.1 trillion of that is taxpayer money--the TARP money and an additional $400 billion rescue of mortgage companies Fannie Mae and Freddie Mac. The TARP now includes twelve separate programs, and recipients range from megabanks like Citigroup and JPMorgan Chase to automakers Chrysler and General Motors.

    Seven months in, the bailout's impact is unclear. The Treasury Department has used the recent "stress test" results it applied to nineteen of the nation's largest banks to suggest that the worst might be over; yet the International Monetary Fund, as well as economists like New York University professor and economist Nouriel Roubini and New York Times columnist Paul Krugman predict greater losses in US markets, rising unemployment and generally tougher economic times ahead.

    What cannot be disputed, however, is the financial bailout's biggest loser: the American taxpayer. The US government, led by the Treasury Department, has done little, if anything, to maximize returns on its trillion-dollar, taxpayer-funded investment. So far, the bailout has favored rescued financial institutions by subsidizing their losses to the tune of $356 billion, shying away from much-needed management changes and--with the exception of the automakers--letting companies take taxpayer money without a coherent plan for how they might return to viability.

    The bailout's perks have been no less favorable for private investors who are now picking over the economy's still-smoking rubble at the taxpayers' expense. The newer bailout programs rolled out by Treasury Secretary Timothy Geithner give private equity firms, hedge funds and other private investors significant leverage to buy "toxic" or distressed assets, while leaving taxpayers stuck with the lion's share of the risk and potential losses.

    Given the lack of transparency and accountability, don't expect taxpayers to be able to object too much. After all, remarkably little is known about how TARP recipients have used the government aid received. Nonetheless, recent government reports, Congressional testimony and commentaries offer those patient enough to pore over hundreds of pages of material glimpses of just how Wall Street friendly the bailout actually is. Here, then, based on the most definitive data and analyses available, are six of the most blatant and alarming ways taxpayers have been scammed by the government's $1.1-trillion, publicly funded bailout.

    1. By overpaying for its TARP investments, the Treasury Department provided bailout recipients with generous subsidies at the taxpayer's expense.

    When the Treasury Department ditched its initial plan to buy up "toxic" assets and instead invest directly in financial institutions, then-Treasury Secretary Henry Paulson Jr. assured Americans that they'd get a fair deal. "This is an investment, not an expenditure, and there is no reason to expect this program will cost taxpayers anything," he said in October 2008.

    Yet the Congressional Oversight Panel (COP), a five-person group tasked with ensuring that the Treasury Department acts in the public's best interest, concluded in its monthly report for February that the department had significantly overpaid by tens of billions of dollars for its investments. For the ten largest TARP investments made in 2008, totaling $184.2 billion, Treasury received on average only $66 worth of assets for every $100 invested. Based on that shortfall, the panel calculated that Treasury had received only $176 billion in assets for its $254 billion investment, leaving a $78 billion hole in taxpayer pockets.

    Not all investors subsidized the struggling banks so heavily while investing in them. The COP report notes that private investors received much closer to fair market value in investments made at the time of the early TARP transactions. When, for instance, Berkshire Hathaway invested $5 billion in Goldman Sachs in September, the Omaha-based company received securities worth $110 for each $100 invested. And when Mitsubishi invested in Morgan Stanley that same month, it received securities worth $91 for every $100 invested.

    As of May 15, according to the Ethisphere TARP Index, which tracks the government's bailout investments, its various investments had depreciated in value by almost $147.7 billion. In other words, TARP's losses come out to almost $1,300 per American taxpaying household.

    2. As the government has no real oversight over bailout funds, taxpayers remain in the dark about how their money has been used and if it has made any difference.

    While the Treasury Department can make TARP recipients report on just how they spend their government bailout funds, it has chosen not to do so. As a result, it's unclear whether institutions receiving such funds are using that money to increase lending--which would, in turn, boost the economy--or merely to fill in holes in their balance sheets.

    Neil M. Barofsky, the special inspector general for TARP, summed the situation up this way in his office's April quarterly report to Congress: "The American people have a right to know how their tax dollars are being used, particularly as billions of dollars are going to institutions for which banking is certainly not part of the institution's core business and may be little more than a way to gain access to the low-cost capital provided under TARP."

    This lack of transparency makes the bailout process highly susceptible to fraud and corruption. Barofsky's report stated that twenty separate criminal investigations were already underway involving corporate fraud, insider trading and public corruption. He also told the Financial Times that his office was investigating whether banks manipulated their books to secure bailout funds. "I hope we don't find a single bank that's cooked its books to try to get money, but I don't think that's going to be the case."

    Economist Dean Baker, co-director of the Center for Economic and Policy Research in Washington, suggested to TomDispatch in an interview that the opaque and complicated nature of the bailout may not be entirely unintentional, given the difficulties it raises for anyone wanting to follow the trail of taxpayer dollars from the government to the banks. "[Government officials] see this all as a Three Card Monte, moving everything around really quickly so the public won't understand that this really is an elaborate way to subsidize the banks," Baker says, adding that the public "won't realize we gave money away to some of the richest people."

    3. The bailout's newer programs heavily favor the private sector, giving investors an opportunity to earn lucrative profits and leaving taxpayers with most of the risk.

    Under Treasury Secretary Geithner, the Treasury Department has greatly expanded the financial bailout to troubling new programs like the Public-Private Investment Program (PPIP) and the Term Asset-Backed-Securities Loan Facility (TALF). The PPIP, for example, encourages private investors to buy "toxic" or risky assets on the books of struggling banks. Doing so, we're told, will get banks lending again because the burdensome assets won't weigh them down. Unfortunately, the incentives the Treasury Department is offering to get private investors to participate are so generous that the government--and, by extension, American taxpayers--are left with all the downside.

    Joseph Stiglitz, the Nobel-prize winning economist, described the PPIP program in a New York Times op-ed this way:

    Consider an asset that has a 50-50 chance of being worth either zero or $200 in a year's time. The average "value" of the asset is $100. Ignoring interest, this is what the asset would sell for in a competitive market. It is what the asset is 'worth.' Under the plan by Treasury Secretary Timothy Geithner, the government would provide about 92 percent of the money to buy the asset but would stand to receive only 50 percent of any gains, and would absorb almost all of the losses. Some partnership!

    Assume that one of the public-private partnerships the Treasury has promised to create is willing to pay $150 for the asset. That's 50 percent more than its true value, and the bank is more than happy to sell. So the private partner puts up $12, and the government supplies the rest--$12 in "equity" plus $126 in the form of a guaranteed loan.

    If, in a year's time, it turns out that the true value of the asset is zero, the private partner loses the $12, and the government loses $138. If the true value is $200, the government and the private partner split the $74 that's left over after paying back the $126 loan. In that rosy scenario, the private partner more than triples his $12 investment. But the taxpayer, having risked $138, gains a mere $37."

    Worse still, the PPIP can be easily manipulated for private gain. As economist Jeffrey Sachs has described it, a bank with worthless toxic assets on its books could actually set up its own public-private fund to bid on those assets. Since no true bidder would pay for a worthless asset, the bank's public-private fund would win the bid, essentially using government money for the purchase. All the public-private fund would then have to do is quietly declare bankruptcy and disappear, leaving the bank to make off with the government money it received. With the PPIP deals set to begin in the coming months, time will tell whether private investors actually take advantage of the program's flaws in this fashion.

    The Treasury Department's TALF program offers equally enticing possibilities for potential bailout profiteers, providing investors with a chance to double, triple or even quadruple their investments. And like the PPIP, if the deal goes bad, taxpayers absorb most of the losses. "It beats any financing that the private sector could ever come up with," a Wall Street trader commented in a recent Fortune magazine story. "I almost want to say it is irresponsible."

    4. The government has no coherent plan for returning failing financial institutions to profitability and maximizing returns on taxpayers' investments.

    Compare the treatment of the auto industry and the financial sector, and a troubling double standard emerges. As a condition for taking bailout aid, the government required Chrysler and General Motors to present detailed plans on how the companies would return to profitability. Yet the Treasury Department attached minimal conditions to the billions injected into the largest bailed-out financial institutions. Moreover, neither Geithner nor Lawrence Summers, one of President Barack Obama's top economic advisors, nor the president himself has articulated any substantive plan or vision for how the bailout will help these institutions recover and, hopefully, maximize taxpayers' investment returns.

    The Congressional Oversight Panel highlighted the absence of such a comprehensive plan in its January report. Three months into the bailout, the Treasury Department "has not yet explained its strategy," the report stated. "Treasury has identified its goals and announced its programs, but it has not yet explained how the programs chosen constitute a coherent plan to achieve those goals."

    Today, the department's endgame for the bailout still remains vague. Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, wrote in the Financial Times in May that the government's response to the financial meltdown has been "ad hoc, resulting in inequitable outcomes among firms, creditors, and investors." Rather than perpetually prop up banks with endless taxpayer funds, Hoenig suggests, the government should allow banks to fail. Only then, he believes, can crippled financial institutions and systems be fixed. "Because we still have far to go in this crisis, there remains time to define a clear process for resolving large institutional failure. Without one, the consequences will involve a series of short-term events and far more uncertainty for the global economy in the long run."

    The healthier and more profitable bailout recipients are once financial markets rebound, the more taxpayers will earn on their investments. Without a plan, however, banks may limp back to viability while taxpayers lose their investments or even absorb further losses.

    5. The bailout's focus on Wall Street mega-banks ignores smaller banks serving millions of American taxpayers that face an equally uncertain future.

    The government may not have a long-term strategy for its trillion-dollar bailout, but its guiding principle, however misguided, is clear: what's good for Wall Street will be best for the rest of the country.

    On the day the mega-bank stress tests were officially released, another set of stress-test results came out to much less fanfare. In its quarterly report on the health of individual banks and the banking industry as a whole, Institutional Risk Analytics (IRA), a respected financial services organization, found that the stress levels among more than 7,500 FDIC-reporting banks nationwide had risen dramatically. For 1,575 of the banks, net incomes had turned negative due to decreased lending and less risk-taking.

    The conclusion IRA drew was telling: "Our overall observation is that US policy makers may very well have been distracted by focusing on 19 large stress test banks designed to save Wall Street and the world's central bank bondholders, this while a trend is emerging of a going concern viability crash taking shape under the radar." The report concluded with a question: "Has the time come to shift the policy focus away from the things that we love, namely big zombie banks, to tackle things that are truly hurting us?"

    6. The bailout encourages the very behaviors that created the economic crisis in the first place instead of overhauling our broken financial system and helping the individuals most affected by the crisis.

    As Joseph Stiglitz explained in the New York Times, one major cause of the economic crisis was bank overleveraging. "Using relatively little capital of their own," he wrote, banks "borrowed heavily to buy extremely risky real estate assets. In the process, they used overly complex instruments like collateralized debt obligations." Financial institutions engaged in overleveraging in pursuit of the lucrative profits such deals promised--even if those profits came with staggering levels of risk.

    Sound familiar? It should, because in the PPIP and TALF bailout programs the Treasury Department has essentially replicated the very over-leveraged, risky, complex system that got us into this mess in the first place: in other words, the government hopes to repair our financial system by using the flawed practices that caused this crisis.

    Then there are the institutions deemed "too big to fail." These financial giants--among them AIG, Citigroup and Bank of America-- have been kept afloat by billions of dollars in bottomless bailout aid. Yet reinforcing the notion that any institution is "too big to fail" is dangerous to the economy. When a company like AIG grows so large that it becomes "too big to fail," the risk it carries is systemic, meaning failure could drag down the entire economy. The government should force "too big to fail" institutions to slim down to a safer, more modest size; instead, the Treasury Department continues to subsidize these financial giants, reinforcing their place in our economy.

    Of even greater concern is the message the bailout sends to banks and lenders--namely, that the risky investments that crippled the economy are fair game in the future. After all, if banks fail and teeter at the edge of collapse, the government promises to be there with a taxpayer-funded, potentially profitable safety net.

    The handling of the bailout makes at least one thing clear, however. It's not your health that the government is focused on, it's theirs-- the very banks and lenders whose convoluted financial systems provided the underpinnings for staggering salaries and bonuses, while bringing our economy to the brink of another Great Depression.

    Bob Jensen's threads on why the infamous "Bailout" won't work --- http://www.trinity.edu/rjensen/2008Bailout.htm#BailoutStupidity

    "Virtual Medical Training Comes to Second Life," by Erica R. Hendry, Chronicle of Higher Education, July 20, 2009 --- http://chronicle.com/wiredcampus/index.php?id=3890&utm_source=wc&utm_medium=en

    Students have graduated, earned law credit, and held debates on Second Life. Now some universities are using the virtual world to train nurses.

    Virtual medical training is nothing new — medical students have used CD-ROM’s and other interactive programs to practice diagnosis for years. And MyCaseSpace, a virtual medical-training program created by a professor at the University of Central Florida, will allow professors to create simulated cases to test students at Central Florida’s College of Medicine this fall.

    What makes the Second Life approach different, according to an article in Discover magazine, is its ability to call on real-life participants, giving students access to professors or volunteers who act as patients, as well as a range of medical experts who teach or practice at colleges and universities across the country.

    Students can interact with the patients and doctors, order tests, diagnose problems, and recommend treatment, according to the article.

    For example, a professor at San Jose State University created a Heart Murmur Sim, which uses real cardiac sounds to train students to listen to a patient’s chest — called a cardiac auscultation exam — and identify heart murmurs, the article said.

    Another program is the Nursing Education Simulation, created earlier this year by a nursing instructor in Washington. The program requires students to wear a headset with a display, like pilots use, to “monitor” and “use” defibrillators, IV pumps, and medication to treat a computer-generated patient who is experiencing certain symptoms.

    While no studies have emerged about the benefits of using Second Life to train medical students, it offers a richer set of resources, with lower costs, than training in a physical, simulated operating room, said John Lester, an education and health-care market developer at Linden Lab, the company that created Second Life.

    “If there’s an expert in Brussels who is a specialist in a procedure that I want to teach my students, I can bring him or her into the virtual space to train them,” Mr. Lester said in the article. “Moving around in the physical world is expensive and the biggest obstacle in medical training.”

    Jensen Comment
    The University of Central Florida in mentioned above. At UCF our Second Life expert in accounting education is Steve Hornik --- http://www.bus.ucf.edu/shornik/

    Second Life Video Tutorials --- http://wiki.secondlife.com/wiki/Video_Tutorials

    Bob Jensen's threads on virtual reality learning and Second Life are at http://www.trinity.edu/rjensen/000aaa/thetools.htm#SecondLife

    Blackboard Learns of Many Serious Customer Gripes
    At an open "listening session" with top executives of Blackboard here Wednesday at the company's annual conference, college officials expressed frustration with many of the system's fundamental characteristics. At times, the meeting seemed to turn into a communal gripe session, with complaints ranging from the system's discussion forum application, to the improved -- but still lacking -- user support, to the training materials for faculty members. Participants' concerns were often greeted with nods of agreement and outright applause from their peers as they spoke of their frustrations with the system.
    Ben Eisen, "A Gripe Session at Blackboard," Inside Higher Ed, July 16, 2009 --- http://www.insidehighered.com/news/2009/07/16/blackboard

    Bob Jensen's threads on the frustrating Blackboard monopoly and its claim to rights to virtually all distance education ---  http://www.trinity.edu/rjensen/Blackboard.htm
    Jensen Comment
    Blackboard should've never been allowed by anti-trust officials to buy out WebCT. Nor should it have been granted the vague patent that worries the whole distance education world.

    STMs = Science, Technical, Medical Top Academic Journals
    HSSs = Humanities, Social Science Top Academic Journals

    Is the acceptance rate among STMs higher of lower than HSSs?
    Is the acceptance rate higher or lower in The Accounting Review relative to STMs and HSSs?
    Is the cost per article higher or lower in STMs than in HSSs?
    Will eliminating hard copy publishing significantly reduce the costs of leading journal publishing?

    "Humanities Journals Cost Much More to Publish Than Science Periodicals," by Jennifer Howard, Chronicle of Higher Education, July 20, 2009 ---

    It costs more than three times as much to publish an article in a humanities or social-science journal as it does to publish one in a science, technical, or medical, or STM, journal, and the prevailing model used by many publishers of STM journals will not work for their humanities and social-sciences counterparts. Those are some of the eye-opening conclusions released today in a report on an in-depth study of eight flagship journals in the humanities and social sciences.

    The report, "The Future of Scholarly Journals Publishing Among Social Science and Humanities Associations," was conducted by Mary Waltham, an independent publishing consultant, at the request of a committee organized by the National Humanities Alliance in 2007. The panel was charged with trying to understand how the rapid evolution of scholarly communication, particularly the rise of open access, will affect the alliance's members, many of which are scholarly societies that rely on traditional subscription models to run their publishing operations. "It was high time we did our homework," said William E. Davis, chairman of the committee and executive director of the American Anthropological Association.

    With money from a grant by the Andrew W. Mellon Foundation, the patron saint of many recent attempts to diagnose and remedy what ails scholarly publishing, Ms. Waltham took a close look at the data for flagship journals from eight leading societies for the years 2005 to 2007. The participating associations included Mr. Davis's group, the American Academy of Religion, the American Economic Association, the American Historical Association, the American Political Science Association, the American Sociological Association, the American Statistical Association, and the Modern Language Association.

    If eight journals don't sound like much of a sample, consider that the group includes some of the most prominent publications in major humanities and social-sciences disciplines: The American Historical Review and the American Political Science Review, for instance.

    Even learned-society publishers in the humanities and social sciences may be taken aback by just how expensive it is to publish an article in their fields. It cost an average of $9,994 in 2007 to publish an article in one of the eight journals analyzed, compared with an average of $2,670 for STM journal articles.

    Difference in Acceptance Rates

    That STM figure comes from a study done by Ms. Waltham in 2005 of publishing models that learned societies used for science and medical journals. According to the new report, humanities and social-sciences articles tend to be longer and to have a lower acceptance rate. The average article length in the eight journals surveyed is 19 pages; the STM average is 12 pages. Acceptance rates are much lower on the humanities and social-sciences side; the eight journals in question accepted about 11 percent of the articles submitted to them, while their STM counterparts' acceptance rate hovered around 42 percent.

    All of that adds up to "significantly higher costs per peer-reviewed, published article" for humanities and social-sciences journals, the committee concluded in an overview released with the report.

    "The cost per article of publishing in the humanities and social sciences appears to be almost four times the cost of publishing in the STM field," Mr. Davis said in an interview. "That creates a very different dynamic for figuring out models to support our programs."

    One model not likely to provide that support is the "author-pays" approach, in which scholars come up with money to help journals cover the costs of publishing their articles. That template works well enough in STM fields, in which grant money is easier to come by—not the case in the chronically underfunded fields covered by the study. "Authors in the STM field have ways of financing the publication of their articles that authors in the humanities and social sciences simply do not have," Mr. Davis told The Chronicle.

    The committee also drew attention to a finding that peer-reviewed research made up about 62 percent of what the eight journals published in 2007. The remaining 38 percent consisted of "other scholarly content," including book reviews. That content is "as vital to the system of scholarly communication" in the humanities and social sciences as peer-reviewed articles are, the committee said.

    Such material does not come cheap, though; it must still be commissioned, edited, and put into production. It cost an average of $313,612 per journal in 2007, the study found. Under the author-pays model, Mr. Davis asked, who foots the bill for that type of content?

    The study also appears to undermine the notion that doing away with print "would make the open-access model financial viable," the panel noted. So-called first-copy costs—"collecting, reviewing, editing, and developing content"—added up to about 47 percent of the total outlay among the eight journals studied. Abolishing print versions of the journals would reduce costs, the study found, but not enough. "Even if people were willing to give up print" in fields such as his, Mr. Davis said, "I still don't know how to finance my publishing program without some similar source as I'm now getting from my subscriber base."

    Does that mean that the scholarly associations that participated in the study reject the idea of open access? Not at all, Mr. Davis said. Instead, the findings are "pointing us away from author-pays open access" toward figuring out what other open-access models could work for humanities and social-sciences journals. That's the next step. Will learned societies that publish such journals figure out how to take that step? "We will," Mr. Davis said, "because we have to."

    The National Humanities Alliance will post the report on its Web site as soon as possible, Mr. Davis said.

    Jensen Comment
    No mention is made of the impacts of rising postal rates on global subscriptions. When I was on the Executive Committee of the American Accounting Association in the 1980s, rising postal rates for sending our three leading journals to all members was eating away at our budgets. This combined with declining membership gave rise to dues increases. In later years the AAA introduced alternatives where members could choose which journals they wanted and whether they wanted to pay the added cost for a mailed hard copy edition of each journal. Even though the AAA now has an option for choosing only electronic versions downloaded over the Internet, it still incurs the cost of hard copy publishing. The AAA does not rip off libraries with dual subscription pricing like many leading academic journals are ripping off libraries.

    The acceptance rate of The Accounting Review annually ranges between 11% and 20% --- http://www.publishnotperish.org/module2/documents/Cabellssample.pdf
    Some of the other AAA journals occasionally have lower acceptance rates, but I think this is partly due to occasional authors naively thinking they might have a better chance of getting an article published in one of the the other journals.

    TAR acceptance rates would be lower if editors factored in the papers that they send back with excuses for not even having the submissions refereed. Sometimes the submissions are not deemed appropriate for TAR and should not always be viewed as rejections in the same sense that a refereed paper has been rejected. Sometimes the editor deems them too stupid to referee.

    Bob Jensen's threads on open source learning are at

    Barf:  Stupid and Naive SMU Decision to Take Computers Out of Classrooms

    "When Computers Leave Classrooms, So Does Boredom," by Jeffrey R. Young, Chronicle of Higher Education, July 24, 2009 --- http://chronicle.com/free/v55/i42/42a00103.htm?utm_source=at&utm_medium=en

    College leaders usually brag about their tech-filled "smart" classrooms, but a dean at Southern Methodist University is proudly removing computers from lecture halls. José A. Bowen, dean of the Meadows School of the Arts, has challenged his colleagues to "teach naked" — by which he means, sans machines.

    More than anything else, Mr. Bowen wants to discourage professors from using PowerPoint, because they often lean on the slide-display program as a crutch rather using it as a creative tool. Class time should be reserved for discussion, he contends, especially now that students can download lectures online and find libraries of information on the Web. When students reflect on their college years later in life, they're going to remember challenging debates and talks with their professors. Lively interactions are what teaching is all about, he says, but those give-and-takes are discouraged by preset collections of slides.

    He's not the only one raising questions about PowerPoint, which on many campuses is the state of the art in classroom teaching. A study published in the April issue of British Educational Research Journal found that 59 percent of students in a new survey reported that at least half of their lectures were boring, and that PowerPoint was one of the dullest methods they saw. The survey consisted of 211 students at a university in England and was conducted by researchers at the University of Central Lancashire.

    Students in the survey gave low marks not just to PowerPoint, but also to all kinds of computer-assisted classroom activities, even interactive exercises in computer labs. "The least boring teaching methods were found to be seminars, practical sessions, and group discussions," said the report. In other words, tech-free classrooms were the most engaging.

    It's worth pointing out that PowerPoint presentations are generally better than many older classroom technologies, like slate chalkboards or overhead transparencies filled with hand-scrawled notes that students struggled to decipher. So computers have probably led to a slight improvement in teaching. But technology has hardly revolutionized the classroom experience for most college students, despite millions of dollars in investment and early predictions that going digital would force professors to rethink their lectures and would herald a pedagogical renaissance.

    Mr. Bowen is part of a group of college leaders who haven't given up on that dream of shaking up college instruction. Even though he is taking computers out of classrooms, he's not anti-technology. He just thinks they should be used differently — upending the traditional lecture model in the process.

    Here's the kicker, though: The biggest resistance to Mr. Bowen's ideas has come from students, some of whom have groused about taking a more active role during those 50-minute class periods. The lecture model is pretty comfortable for both students and professors, after all, and so fundamental change may be even harder than it initially seems, whether or not laptops, iPods, or other cool gadgets are thrown into the mix.

    No Power in PowerPoint

    Mr. Bowen delivers his pitch about "teaching naked" with the energy and confidence of a seasoned performer, which makes sense when you learn he has been on stage as a jazz musician for some 30 years. The administrator sported a suit jacket over a dark T-shirt while giving a recent talk about his approach at a conference on "Emerging Technology Applications for Online Learning" put on by the Sloan Consortium, a nonprofit group that encourages technology use in education.

    Although he made a philosophical argument about the best way to engage students, he grounded it in his own classroom experiences using podcasts and video games about jazz history that he helped produce. He did not use PowerPoint, but he did use his laptop to show off one of his games, which lets students pick famous jazz musicians to play in a fictional supergroup.

    His philosophy is that the information delivery common in today's classroom lectures should be recorded and delivered to students as podcasts or online videos before class sessions. To make sure students tune in, he gives them short online multiple-choice tests.

    So what's left to do during class once you've delivered your lecture? Introduce issues of debate within the discipline and get the students to weigh in based on the knowledge they have from those lecture podcasts, Mr. Bowen says. "If you say to a student, We have this problem in Mayan archaeology: We don't know if the answer is A or B. We used to all think it was A, now we think it's B. If the lecture is 'Here's the answer, it's B,' that's not very interesting. But if the student believes they can contribute, they're a whole lot more motivated to enter the discourse, and to enter the discipline."

    In short, don't be boring.

    To help encourage his teaching theories, when Mr. Bowen arrived at Southern Methodist three years ago to become dean of its arts school, he decided to make some structural changes in 20 or so main classrooms.

    He says most of those classrooms had two computers (a Mac and a PC), a DVD player, a VCR, and a tape deck, along with "one of those complicated control panels where you need a Ph.D. to figure it out."

    Last summer Mr. Bowen had most of that gear removed — though he left in projectors so that professors could plug in their laptops and do PowerPoint presentations, if they must. He also took out the old desks and replaced them with tables and chairs that professors could move around to allow students to work in groups more easily.

    One reason for the changes was financial. The classroom computers were old and needed an upgrade when Mr. Bowen arrived, so ditching them instead saved money. Plus, the move cut support costs — the school was able to eliminate one staff position for a technician who responded to calls from professors about the classroom systems.

    To encourage the kind of technology use Mr. Bowen did want, the school gave every professor a laptop and set up support so they could create their own podcasts and videos.

    Some professors have complained about lugging their laptops to class, but others have jumped in with both feet.

    One of the fans is Maria A. Dixon, an assistant professor of applied communication. She's made podcasts for her course on "Critical Scholarship in Communication" that feature interviews she recorded with experts in the field. "Before, I was always complaining that I never had time to go in-depth and talk with my students," she says. "Now they come in actually much more informed about a subject than they would have if they had been assigned a reading."

    Kevin Heffernan, an associate professor in the school's division of cinema and television, has also created podcast lectures — essentially narrated PowerPoint slide shows — for students to watch before class. During class he shows movie clips from his laptop and has students discuss them based on the background lectures.

    "I don't have to explain to them how film censorship in America changed in 1968" during his class session on Midnight Cowboy, says Mr. Heffernan. "They have that information from the online podcast."

    Student Resistance

    Most students seem more attentive now, he says, though a few have been thrown off by the new system.

    "Strangely enough, the people who are most resistant to this model are the students, who are used to being spoon-fed material that is going to be quote unquote on the test," says Mr. Heffernan. "Students have been socialized to view the educational process as essentially passive. The only way we're going to stop that is by radically refiguring the classroom in precisely the way José wants to do it."

    Ms. Dixon has seen similar reactions. "If you've spent years not speaking, you're going to be ticked off" when you are asked to participate, she says. "We have to move past that resistance."

    The same sequence of events occurred at Miami University, in Ohio, where Mr. Bowen worked before coming to Southern Methodist, and which pioneered some of the same teaching strategies.

    "Initial response is generally negative until students start to understand and see how they learn under this new system," says Glenn Platt, a professor of marketing at Miami who has published academic papers about the approach, which he calls the "inverted classroom." "The first response from students is typically, 'I paid for a college education and you're not going to lecture?'"

    Whatever griping students do about being asked to participate in class, though, it's better than the boredom induced by a PowerPoint lecture, say fans of the new approach.

    Continued in article

    Jensen Comment
    I consider the SMU decision to remove computers from lecture halls to be totally naive and dysfunctional. An analogy would be to block off the Interstate highway system because Interstate driving is boring and passengers cannot see the interesting towns and villages the same way drivers in 1935 could see the sights on the old Lincoln Highway.

    What is naive is to assume one style lecture hall fits all.
    Instructors can lecture in an electronic classroom without allowing the computers to be turned on and without using the computer in the front of the classroom. Instructors in a computerless classroom, however, cannot have a computer demonstration.

    I cannot imagine teaching an Accounting Information Systems Course and Relational Database Systems without computer demonstrations in the front of a classroom. I cannot imaging engaging students on how to apply financial functions in Excel to solve a bond yield amortization problem or any other problem using discounted cash flows. For certain types of subject matter having students practice on the computer at various points in the lecture can have significant impacts on better learning. I found this out in my last two decades of teaching in electronic classrooms.

    Does Dean Bowen honestly think that students do not benefit in certain lectures when an instructor takes them out live to a Website such as YouTube or maybe even performs a demonstration on how to more effectively use a search engine? Does Dean Bowen think that accounting students cannot benefit when an instructor takes them live into the FASB's Codification database?

    Does Dean Bowen honestly think that Professor X's teaching evaluations will increase without the aid of computer alternatives in a lecture hall? If Professor X put students to sleep with computer demonstrations, then Professor X is going to get sounder sleep by "teaching naked."

    Use of computers in an electronic classroom is a way of engaging students to learn more on their own while being guided by the instructor. This is not an ideal pedagogy for all subject matter or all instructor styles or all student learning styles, but it is an alternative that is demonstrably better in many, many instances.

    If Dean Bowen really wanted to encourage instructors to experiment with less use of computers in the classroom, then he should think of creative incentives to have his faculty experiment with alternative ways to use electronic classrooms. He should not, however, tear up the Interstate highways because he personally likes to drive through small town USA.

    July 20, 2009 reply from Harry Howe, SUNY Geneseo [howeh@GENESEO.EDU]

  • Hi Bob.

     It may be significant that Bowen is dean of a school of arts - while agreeing 100% with your points on teaching AIS and calculations that can be illustrated with Excel, ppt lectures are arguably less appropriate for literature & humanities.  I wouldn't go so far as banning the machines - there are always interesting and on-point visual supplements for any course of inquiry - but pushing faculty away from using slide lectures as a crutch is probably sound policy more often than not.

    Edward Tufte is not a fan of ppt:



    July 20, 2009 reply from Bob Jensen

    Hi Harry,

    Luddites like Dean Bowen equate electronic classrooms with PowerPoint. That's truly naïve.

    Your observations are appealing to a point, but virtually all lecturers in literally any discipline these days might find value Website modules inserted into a lecture, especially some of the great learning modules and humor modules in YouTube.

    The point is that lecturers do not have to use computers in a classroom if they choose not to do so or are paid $100 by Dean Bowen for each lecture in which they "stand naked." But this does not justify pulling the computers out of lecture halls just to force faculty to "stand naked."

    Some of my humanities colleagues at Trinity University make much more use of the electronic classrooms than the many of our business department faculty who never saw much need for requesting electronic classrooms on campus.

    Across town (San Antonio) when UTSA built a magnificent new business school building with state-of-the-art and varied electronic classrooms, there were many complaints by business faculty that those classrooms did not have overhead (transparency) projectors from the old classrooms.

    Meanwhile many of the humanities instructors at UTSA were drooling over the business school's new classrooms. An example of such a classroom is a central classroom where all students can sit surrounded by pods where students could break out in teams. An instructor could monitor each pod and interact with the pod computers. What a great team learning facility.

    For years I've preached against PowerPoint lecturing day in and day out, but electronic classrooms are so much more versatile than PowerPoint technology. A lot of my usage was to demo Excel and MS Access applications. Students would then practice what I demonstrated since each one sat in front of a networked computer that I could monitor from the front of the classroom and even interact with on my keyboard.

    I also used the electronic classroom very often to show short video modules on especially technical illustrations such as how to value interest rate swaps using a Bloomberg Terminal.

    Thanks Harry,

    Bob Jensen

    Bob Jensen's threads on education technology are at

    Big Brother Really is Watching:  Amazon can sneak into your Kindle and erase your books
    Owners of Amazon's Kindle electronic book reader have received a nasty surprise, after discovering that copies of books by George Orwell had been deleted from their gadgets without their knowledge. The books - downloaded from Amazon.com by American Kindle users - were remotely deleted after what the US company says was a request by the publisher, MobileReference.com. Amazon refunded the cost of the books, but told affected customers they could no longer read the books and that the titles were "no longer available for purchase". "Although a rarity, publishers can decide to pull their content from the Kindle store,"
    Bobbie Johnson, "Amazon Kindle users surprised by 'Big Brother' move," The Guardian, July 17, 2009 --- http://www.guardian.co.uk/technology/2009/jul/17/amazon-kindle-1984

    1984 (free) by George Orwell --- http://www.newspeakdictionary.com/books/1984.html

    Animal Farm (free) by George Orwell --- http://www.newspeakdictionary.com/books/animal.htm 

    Free electronic books --- http://www.trinity.edu/rjensen/ElectronicLiterature.htm

    Bob Jensen's threads on electronic book reading devices are at http://www.trinity.edu/rjensen/ebooks.htm

    Some interesting sites from Business Week

    1. Education Reform by BusinessWeek

    The phrase "Education Reform" should be the clickable link http://bx.businessweek.com/education-reform/ The text following - "by BusinessWeek" - should be plain text (not the clickable link).

    2. Economic Recovery by BusinessWeek

    The phrase "Economic Recovery" should be the clickable link http://bx.businessweek.com/economic-recovery/ The text - "by BusinessWeek" - should be plain text (not the clickable link). 

    3.  Unemployment by BusinessWeek

    The phrase “Unemployment” should be the clickable link http://bx.businessweek.com/unemployment/ The text following - “by BusinessWeek” - should be plain text (not the clickable link). 

    President Obama's American Graduation Initiative
    Some states and schools are rigging achievement tests to get more money and deceive the public

    Will future college graduates in President Obama's home town be able to read and divide 37/13?

    But they will be college "graduates" if community colleges lower standards like their K-12 counterparts.

    From the Creative Commons on July 15, 2009 --- http://creativecommons.org/weblog/entry/15818

  • President Obama announced yesterday the American Graduation Initiative, a twelve billion dollar plan to reform U.S. community colleges. The initiative calls for five million additional community college graduates by 2020, and plans that “increase the effectiveness and impact of community colleges, raise graduation rates, modernize facilities, and create new online learning opportunities” to aid this goal.

    A significant component of the initiative is the plan to “create a new online skills laboratory.” From the fact sheet,

    “Online educational software has the potential to help students learn more in less time than they would with traditional classroom instruction alone. Interactive software can tailor instruction to individual students like human tutors do, while simulations and multimedia software offer experiential learning. Online instruction can also be a powerful tool for extending learning opportunities to rural areas or working adults who need to fit their coursework around families and jobs. New open online courses will create new routes for students to gain knowledge, skills and credentials. They will be developed by teams of experts in content knowledge, pedagogy, and technology and made available for modification, adaptation and sharing. The Departments of Defense, Education, and Labor will work together to make the courses freely available through one or more community colleges and the Defense Department’s distributed learning network, explore ways to award academic credit based upon achievement rather than class hours, and rigorously evaluate the results.”

    It is important to note here the difference between “open” and simply accessible “online”. Truly open resources for education are clearly designated as such with a standard license that allows not only access, but the freedoms to share, adapt, remix, or redistribute those resources. The educational materials that make up the new open online courses for this initiative should be open in this manner, especially since they will result from a government plan. We are excited about this initiative and hope the license for its educational materials will allow all of these freedoms. Catherine Casserly, formerly in charge of open educational resources at the William and Flora Hewlett Foundation (now at the Carnegie Foundation for the Advancement of Teaching), writes,

    “Today at Macomb College, President Barack Obama announced a proposal to commit $50 million for the development of open online courses for community colleges as part of the American Graduation Initiative: Stronger American Skills through Community Colleges. As proposed, the courses will be freely available for use as is and for adaption as appropriate for targeted student populations. The materials will carry a Creative Commons license.”

    You can read the official announcement at the White House site on their blog and visit the briefing room for the full fact sheet.

    Jensen Comment
    Given the troublesome fact that 80% of U.S. college graduates seeking jobs could not find jobs requiring college degrees, there is much more needed that getting more students in the U.S. to graduate form college.

    July 15, 2009 reply from AMY HAAS [haasfive@MSN.COM]

    Excuse me for bringing up an often overlooked point, but getting students into community colleges is easy. Getting them to do the college level work needed to graduate is not! As a instructor at an urban community college for more than 16 years I find that they typical community college student lacks study skills and or the motivation to succeed. They will come to class but getting them do actually work outside the classroom, even with tons of online resources available is often like "pulling teeth". They do not make the time for it.

    Amy Haas

    July 15 reply from Flowers, Carol [cflowers@OCC.CCCD.EDU]

    I am in agreement with Amy. This piece that Bob published implies to me that EVERYONE should have a college education. I think that is the problem with education. This mentality creates, once again, entitlement, not motivation. Society has taken the motivation that individuals once had, away. Why work for it when it, when it can be given to you! There is an old adage................you can lead a horse to water, but.......................................!!!

    I see this as more tax dollars going to waste. I have robust epacks and online classes, and do students take advantage of it.....some do, most "don't have the time" -- they are attempting to carry full loads at two schools and work a full time job. Maybe, we should be funding time management and realistic expectations programs.

    The two examples I had this Easter, were doing poorly -- one was carrying two full time jobs and a full school load; the other, two full time school loads and 1 1/2 work load . Both felt I was requiring too much and should drop my standards because of their poor time management. I worked full time and carried 12 units (no social life).............why not more units or work, because I wanted to be successful. If school takes longer than 4 years to complete, so be it. I received no help. My family couldn't afford it, so I realized if I wanted it I had to do it myself. I think many of us can tell the same story and don't feel it diminished but enhanced our motivation.

    July 15, 2009 reply from Patricia Doherty [pdoherty@BU.EDU]

  • The "time" factor is another issue entirely, I think. Many of my students (at a 4-year private university) also have jobs, ranging from 10-hour work study to fill time or nearly so, to afford our astronomical tuition. That's become life. Should there be more options for them? Yes, I think so. Many of them are very motivated - one of my summer term students is working full time while attending school ... and has a 4.0 GPA! Her mom is a single parent with limited means, so she has to help because she wants to be at this school. My own adult daughter is back in school. Her financial aid is not full tuition. She also works nearly full time - and remains on the Dean's List. I am meantime trying to figure out this year where my husband and I will find the money to meet the rest of the tuition, because I don't want her to have to drop out. So I completely understand students who are pressed for time because of work obligations. But the ones who really want to be there find a way to use the resources available to them to succeed. For the others, the lack of time to use what you provide is an excuse, nothing more. They need to find a better reason for not doing well.

    July 15, 2009 reply from Ed Scribner [escribne@NMSU.EDU]

  • Amy et al.,

    I kind of like Zucker’s article that I may have mentioned before:



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

    Some states are rigging achievement tests to get more money and deceive the public
    Will future college graduates in President Obama's home town be able to read and divide 37/13?
    But they will be college "graduates" if community colleges lower standards like their K-12 counterparts.

    "Second City Ruse:  How states like Illinois rig school tests to hype phony achievement," The Wall Street Journal, July 18, 2009 --- http://online.wsj.com/article/SB124786847585659969.html#mod=djemEditorialPage

  • When President Obama chose Arne Duncan to lead the Education Department, he cited Mr. Duncan's success as head of Chicago's public school system from 2001 to 2008. But a new education study suggests that those academic gains aren't what they seemed. The study also helps explain why big-city education reform is unlikely to occur without school choice.

    Mr. Obama noted in December that "in just seven years, Arne's boosted elementary test scores here in Chicago from 38% of students meeting the standard to 67%" and that "the dropout rate has gone down every year he's been in charge." But according to "Still Left Behind," a report by the Civic Committee of the Commercial Club of Chicago, a majority of Chicago public school students still drop out or fail to graduate with their class. Moreover, "recent dramatic gains in the reported number of CPS elementary students who meet standards on state assessments appear to be due to changes in the tests . . . rather than real improvements in student learning."

    Our point here isn't to pick on Mr. Duncan, but to illuminate the ease with which tests can give the illusion of achievement. Under the 2001 No Child Left Behind law, states must test annually in grades 3 through 8 and achieve 100% proficiency by 2014. But the law gives states wide latitude to craft their own exams and to define math and reading proficiency. So state tests vary widely in rigor, and some have lowered passing scores and made other changes that give a false impression of academic success.

    The new Chicago report explains that most of the improvement in elementary test scores came after the Illinois Standards Achievement Test was altered in 2006 to comply with NCLB. "State and local school officials knew that the new test and procedures made it easier for students throughout the state -- and throughout Chicago -- to obtain higher marks," says the report.

    Chicago students fared much worse on national exams that weren't designed by state officials. On the 2007 state test, for example, 71% of Chicago's 8th graders met or exceeded state standards in math, up from 32% in 2005. But results from the National Assessment of Educational Progress exam, a federal standardized test sponsored by the Department of Education, show that only 13% of the city's 8th graders were proficient in math in 2007. While that was better than 11% in 2005, it wasn't close to the 39 percentage-point increase reflected on the Illinois state exam.

    In Mr. Duncan's defense, he wasn't responsible for the new lower standards, which were authorized by state education officials. In 2006, he responded to a Chicago Tribune editorial headlined, "An 'A' for Everybody!" by noting (correctly) that "this is the test the state provided; this is the state standard our students were asked to meet." But this doesn't change the fact that by defining proficiency downward, states are setting up children to fail in high school and college. We should add that we've praised New York City test results that the Thomas B. Fordham Institute also claims are inflated, but we still favor mayoral control of New York's schools as a way to break through the bureaucracy and drive more charter schools.

    And speaking of charters, the Chicago study says they "provide one bright spot in the generally disappointing performance of Chicago's public schools." The city has 30 charters with 67 campuses serving 30,000 students out of a total public school population of 408,000. Another 13,000 kids are on wait lists because the charters are at capacity, and it's no mystery why. Last year 91% of charter elementary schools and 88% of charter high schools had a higher percentage of students meeting or exceeding state standards than the neighborhood schools that the students otherwise would have attended.

    Similar results have been observed from Los Angeles to Houston to Harlem. The same kids with the same backgrounds tend to do better in charter schools, though they typically receive less per-pupil funding than traditional public schools. In May, the state legislature voted to increase the cap on Chicago charter schools to 70 from 30, though Illinois Governor Pat Quinn has yet to sign the bill.

    Chicago Mayor Richard Daley deserves credit for hiring Mr. Duncan, a charter proponent. But in deference to teachers unions that oppose school choice, Mr. Daley stayed mostly silent during the debate over the charter cap. That's regrettable, because it's becoming clear that Chicago's claim of reform success among noncharter schools is phony.

    Bob Jensen's threads on assessment are at

    Bob Jensen's threads on higher education controversies are at


  • Some Jokes Aren't So Funny:  Leave it to a lawyer to try to weasel out of a promised reward
    A Florida attorney, Cheney Mason, made the mistake of offering a million dollars on a TV show to anyone who could prove that his client, Nelson Ivan Serrano, was able to travel across two states and kill four people in the time that prosecutors had alleged. Having a lot of free time, South Texas College of Law graduate Dustin Kolodziej decided to take Mason up on his dare. Dustin traveled the route prosecutors say Serrano took, completed the trip under the time allowed, and videotaped the whole process. He is now suing Mason in the federal district court — because the attorney doesn't want to pay, saying that his statement was just a joke.
    "Lawyer Offers $1M For Proof His Client Could Have Done It; Oops," Slashdot, July 16, 2009 ---

    By analogy, this is why corporations selling securities to the public are required to have independent audits

    From MIT
    "NY AG: Facelift firm placed bogus online reviews," MIT's Technology Review, July 14, 2009 --- http://www.technologyreview.com/wire/23011/?nlid=2182

    The online journal gave a chatty account of a problem-free face lift. "You will never regret it," the patient wrote.

    But the seemingly satisfied customer actually was an employee of the firm behind the Lifestyle Lift, writing as part of a company campaign to plant plugs for the procedure online, state Attorney General Andrew Cuomo said in announcing a $300,000 settlement with the company Tuesday.

    His office said the settlement appeared to be one of the first to address so-called astroturf marketing, or creating a bogus grassroots buzz about a product.

    Troy, Mich.-based Lifestyle Lift Inc. said its informational material now accurately reflects actual patients' comments and is clearly labeled as coming from the company.

    "We want to be acknowledged as a model of integrity and accuracy," company President Gordon Quick said in a statement.

    Widely advertised through television infomercials as a relatively quick and inexpensive form of face lift, the Lifestyle Lift has been performed on more than 100,000 people since 2001, according to the company. It's affiliated with a network of doctors in New York and 21 other states.

    The company has aggressively guarded its online reputation. In 2007, it sued an Arizona man who maintained a consumer-oriented Web site that included criticisms of Lifestyle Lift, saying the site's use of the procedure's name infringed on the company's trademark and amounted to false advertising. A federal judge in Michigan dismissed the case last year, saying the site was commentary protected by the First Amendment.

    But Lifestyle Lift also came up with another new way to fight back: Having staffers post glowing reviews, comments and testimonials that appeared to come from clients.

    "I need you to devote the day to doing more postings on the Web as a satisfied client," employees were told in one internal e-mail, according to the attorney general's office. Another internal message directed a worker to "put your wig and skirt on and tell them about the great experience you had."

    The disguised workers did that and more, sometimes pushing to get message boards to remove critical posts and even setting up pro-Lifestyle Lift Web sites that masqueraded as independent views, Cuomo's office said. The postings dated back to early 2007, the attorney general's office said.

    One such site featured a detailed "journal," stretching from a first consultation to two months after the procedure, and included photos and an exhortation to "GO FOR IT." Another supposed first-person account came complete with the names of the writer's children.

    "This company's attempt to generate business by duping consumers was cynical, manipulative and illegal," Cuomo said in a release. He said the tactics violated consumer protection laws.

    Lifestyle Lift said Tuesday the disputed endorsements were "representative of" real patients' comments but acknowledged they weren't rendered verbatim or labeled as coming from the company.

    The company, which said it has since changed management, will pay the state $300,000 in penalties and costs. The settlement came as the attorney general's office investigated the company's practices, without any litigation in court.

    The Federal Trade Commission is working on revising its nearly 30-year-old guidelines on the use of testimonials and endorsements to reflect the growth of online marketing. The review comes amid heightened attention to the role blogs and Internet comments can now play in a product's fortunes.

    In the meantime, the American Advertising Federation, an industry group, has its own guidelines specifying that testimonials "shall be limited to those of competent witnesses who are reflecting a real and honest opinion or experience."

    "We think the consumer has the right to know that an advertisement is an advertisement," spokesman Clark Rector said.

    Bob Jensen's threads on professionalism in auditing are at

    CPA auditors will undoubtedly be drawn into the Calpers lawsuit because of the way auditors went along with absurd underestimations of bad debt and loan loss reserves. For claims that auditors knew these reserves were badly underestimated see the citations at http://www.trinity.edu/rjensen/2008Bailout.htm#AuditFirms

    "Calpers Sues Over Ratings of Securities," by Leslie Wayne, The New York Times, July 14, 2009 --- http://www.nytimes.com/2009/07/15/business/15calpers.html

    The nation’s largest public pension fund has filed suit in California state court in connection with $1 billion in losses that it says were caused by “wildly inaccurate” credit ratings from the three leading ratings agencies.

    The suit from the California Public Employees Retirement System, or Calpers, a public fund known for its shareholder activism, is the latest sign of renewed scrutiny over the role that credit ratings agencies played in providing positive reports about risky securities issued during the subprime boom that have lost nearly all of their value.

    The lawsuit, filed late last week in California Superior Court in San Francisco, is focused on a form of debt called structured investment vehicles, highly complex packages of securities made up of a variety of assets, including subprime mortgages. Calpers bought $1.3 billion of them in 2006; they collapsed in 2007 and 2008.

    Calpers maintains that in giving these packages of securities the agencies’ highest credit rating, the three top ratings agencies — Moody’s Investors Service, Standard & Poor’s and Fitch — “made negligent misrepresentation” to the pension fund, which provides retirement benefits to 1.6 million public employees in California.

    The AAA ratings given by the agencies “proved to be wildly inaccurate and unreasonably high,” according to the suit, which also said that the methods used by the rating agencies to assess these packages of securities “were seriously flawed in conception and incompetently applied.”

    Calpers is seeking damages, but did not specify an amount. Steven Weiss, a spokesman for McGraw Hill, the parent company of Standard and Poor’s, said the company could not comment until it had been served and seen the complaint. Moody’s and Fitch did not respond to a request for comment.

    As the Obama administration considers an overhaul of the financial regulatory system, credit rating agencies have come in for their share of the blame in the recent market collapse. Critics contend that, rather than being watchdogs, the agencies stamped high ratings on many securities linked to subprime mortgages and other forms of risky debt.

    Their approval helped fuel a boom on Wall Street, which issued billions of dollars in these securities to investors who were unaware of their inherent risk. Lawmakers have conducted hearings and debated whether to impose stricter regulations on the agencies.

    While the lawsuit is not the first against the credit rating agencies, some of which face litigation not only from investors in the securities they rated but from their own shareholders, too, it does lay out how an investor as sophisticated as Calpers, which has $173 billion in assets, could be led astray.

    The security packages were so opaque that only the hedge funds that put them together — Sigma S.I.V. and Cheyne Capital Management in London, and Stanfield Capital Partners in New York — and the ratings agencies knew what the packages contained. Information about the securities in these packages was considered proprietary and not provided to the investors who bought them.

    Calpers also criticized what contends are conflicts of interest by the rating agencies, which are paid by the companies issuing the securities — an arrangement that has come under fire as a disincentive for the agencies to be vigilant on behalf of investors.

    In the case of these structured investment vehicles, the agencies went one step further: All three received lucrative fees for helping to structure the deals and then issued ratings on the deals they helped create.

    Calpers said that the three agencies were “actively involved” in the creation of the Cheyne, Stanfield and Sigma securitized packages that they then gave their top credit ratings. Fees received by the ratings agencies for helping to construct these packages would typically range from $300,000 to $500,000 and up to $1 million for each deal.

    These fees were on top of the revenue generated by the agencies for their more traditional work of issuing credit ratings, which in the case of complex securities like structured investment vehicles generated higher fees than for rating simpler securities.

    “The ratings agencies no longer played a passive role but would help the arrangers structure their deals so that they could rate them as highly as possible,” according to the Calpers suit.

    The suit also contends that the ratings agencies continued to publicly promote structured investment vehicles even while beginning to downgrade them. Ten days after Moody’s had downgraded some securitized packages in 2007, it issued a report titled “Structured Investment Vehicles: An Oasis of Calm in the Subprime Maelstrom.”

    Where were the auditors?

    From The Wall Street Journal Accounting Weekly Review on July 16, 2009

    SEC Chief Targets the Credit Raters
    by Sarah N. Lynch
    The Wall Street Journal

    Jul 16, 2009
    Click here to view the full article on WSJ.com

    TOPICS: SEC, Securities and Exchange Commission

    SUMMARY: This review covers two articles on the shake-up at the SEC following the global financial crisis. The first article discusses SEC Chief Commissioner Mary Schapiro's statements about requiring liability on credit rating agencies to improve work quality. The second discusses one of her staff stepping down, Lori Richards, head of the SEC examinations division, in the wake of the Madoff scandal.

    CLASSROOM APPLICATION: Introducing the work of credit rating agencies, SEC responsibilities, and current leadership in this governmental organization can be done with this article.

    1. (Introductory) What do Moody's Investors Service and Standard & Poor's Corporation do? How do they earn money at providing these services?

    2. (Advanced) How did the work of credit rating agencies play a role in the global financial crisis?

    3. (Advanced) What is meant by the head of the SEC, Mary Schapiro, proposing "liability standards" to encourage higher quality work on the part of credit-rating firms?

    4. (Introductory) Refer to the second related article. What major changes have occurred already at the SEC under Ms. Schapiro's leadership?

    Reviewed By: Judy Beckman, University of Rhode Island

    Good Financial Information Matters More Than Ever
    by Robert J. Shiller
    Oct 09, 2008
    Page: A17

    Key Official to Exit SEC as Shake-Up Continues
    by Kara Scannell
    Jul 10, 2009
    Online Exclusive


    Bob Jensen's threads on the bad behavior of credit ratings agencies see

    Where were the auditors?

    One Feature of the Proposed Regulation of OTC Derivatives is Insane
    OTC Derivatives Should Be Regulated in Some Respects, But They Should Never Be Standardized

    PwC Notes one of the main reasons (shown in read) at Click Here

  • Why should the right balance be struck when it comes to regulating OTC derivatives?

    Some OTC derivatives have been criticized for contributing to the financial crisis. But new proposals may affect how all derivatives are traded and designed.

    Most financial derivatives have been safely and prudently used over the years by thousands of companies seeking to manage specific risks.

    OTC derivatives are privately negotiated because they are often highly customized. They enable businesses to offset nearly any fi nancial risk exposure, including foreign exchange, interest rate, and commodity price risks.

    Proposals to standardize terms for all OTC derivatives could inadvertently limit the ability of companies to fully manage their risks.

    Jensen Comment
    The reason that it would "limit the ability of companies to fully manage their risks" is that OTC derivatives are currently very popular hedging contracts because it is often possible over-the-counter to write customized hedging contracts that exactly match (in mirror form) the terms of a hedged item contract or forecasted transaction such that the hedge becomes perfectly effective over the life of the hedge.

    If companies have to hedge with standardized contracts such as futures and options contracts traded on organized exchange markets it's either impossible or very difficult to obtain a perfectly matched and effective hedge. For example, corn futures are traded in contracts of 25,000 bushels for a given grade of corn. If Frito Lay wants to hedge a forecasted transaction to purchase 237,000 bushels of corn, it can only perfectly hedge 225,000 bu. with five futures contracts or 250,000 bu. with six futures contracts. Hence it's impossible to perfectly hedge 237,000 bu. with standardized contracts.

    However, if Frito Lay wants to perfectly hedge 237,000 bu. of corn it can presently enter into one OTC forward contract for 237,000 bu. or an OTC options contract for 237,000 bu. If the hedged item is eventually purchased in the same geographic region as the hedging contract (such as Chicago), the hedge should be perfectly effective at all points in time during the contracted hedging period.

    If the hedging contract is written in terms of a Chicago market and the corn is eventually purchased in a Minneapolis market, then their may be slight hedging ineffectiveness (due mainly to transportation cost differences between the two markets), but there is absolutely no mismatch due to quantity (notional) differences.

    Why is customization so important from the standpoint of accounting and auditing?
    Under FAS 133 and IAS 39, hedge accounting relief is available only to the extent hedges are deemed effective. The ineffective portion of value changes in the hedging contracts must be posted to current earnings, thereby increasing the volatility of earnings for unrealized value changes of the hedging contracts.

    If new regulations requiring standardization of OTC derivatives, then the regulations themselves may dictate that many or most hedging contacts are, at least in part, ineffective. As a result reported earnings will needlessly fluctuate to a greater extent due to the regulations rather than because of economic substance. Dumb! Dumb! Dumb!

    In particular, students may want to refer to the hedge accounting ineffectiveness testing Appendix B Example 7 beginning in Paragraph 144 of FAS 133 and Appendix A Example 7 beginning in Paragraph 93 of FAS 133. Bob Jensen's extensions and spreadsheet analysis of the Paragraph 144 illustration are available in Excel worksheet file 133ex07a.xls listed at http://www.cs.trinity.edu/~rjensen/
    Sadly, the FASB left both of these examples, along with the other outstanding Appendix A and B examples out of its sparse handling of accounting for derivative financial instruments in its Codification Database.

    In particular, Examples 1 thru 10 in Appendix B of FAS 133 are the best places that I know of to learn about hedge accounting and effectiveness testing. My extended analysis of each example can be found in the 133ex01a.xls thru 133ex10a.xls Excel workbooks at http://www.cs.trinity.edu/~rjensen/ 
    My students focused heavily on those ten examples to learn about hedge accounting. They also learned from my videos 133ex05a.wmv and 133ex08a.wmv files listed at http://www.cs.trinity.edu/~rjensen/video/acct5341/

    Teaching Cases:  Hedge Accounting Scenario 1 versus Scenario 2
    Two Teaching Cases Involving Southwest Airlines, Hedging, and Hedge Accounting Controversies ---

    Six in 10 companies plan to skip Windows 7: survey
    Six in 10 companies in a survey plan to skip the purchase of Microsoft Corp's Windows 7 computer operating system, many of them to pinch pennies and others over concern about compatibility with their existing applications. Windows 7 will be released October 22, but has already garnered good reviews, in contrast to its disappointing current version, Windows Vista.
    Reuters via The Washington Post, July 13, 2009 ---
    Jensen Comment
    I find this surprising since Windows Vista has ever so many reported problems that Windows 7 claims to overcome. Either Windows 7 is predicted to add more problems than Vista or six out of ten companies are, like me, still on old Windows XP.

    July 13, 2009 reply from David Fordham, James Madison University [fordhadr@JMU.EDU]

    Bob et al:


    it could be that this is another of those faulty survey reports so prevalent these days whose "conclusions" are screwed up by the popular press headlines. My personal take on this is that this was one of those surveys who offered a standard but nonsensical multiple-choice question such as: "Does your company presently: (a) plan to deploy windows 7 by June 2010, (b) plan to deploy Windows 7 by December 2010, (c) plan to deploy Windows 7 by December 2011, or (d) have no plans to deploy Windows 7.

    The respondents of course work for companies which have not yet decided when to deploy Windows 7, so they naturally choose the corresponding answer (d), but the newspaper, again naturally, runs a headline which claims that they will never deploy Windows 7 -- because this headline will sell more papers than the headline "6 out of 10 companies don't know when they will deploy Windows 7 because it still isn't certain when Windows 7 will become available".

    This is a common "flaw" of many, if not most, -- if not practically all -- surveys I've seen reported in newspapers: "not presently having plans to deploy it" is not the same as *planning to skip it*, a nuance seemingly lost on newspaper editors, headline writers, and reporters.

    David Fordham

    The Dangling Man (Isaac Rosenfeld)
    The writer "will have to play,” said Rosenfeld, “the role that is not a role; to be the living man, the one left alone at three o’clock in the morning, when it’s always the dark night of the soul; to be the man whom one encounters when there is no longer any uniform to wear… to be the man who is naked, who is alone, and the man who pretty much of the time is afraid: the man who sees himself as he really is in this flesh and in these bones and in these feelings, in these impulses, in these emotions; the man who confronts himself in his dreams and his reveries; the man who sees himself walking across the street, thinking there but for the grace of God go I, or in his envy: there but for God’s disdain of me I could have gone…. He has to see the light and the truth that can be seen even in our phony and artificial age.” . . . Saul Bellow recalled that his friend, who did graduate work in philosophy at New York University in the early 1940s, had abandoned that path when he discovered Herman Melville. After reading Moby Dick, logical positivism seemed too blinkered a take on the world. Rosenfeld turned into an intellectual equivalent of Bartleby the Scrivner, saying, “I would prefer not to,” over and over, as the years slipped past. This was not a good way to live. But then what is? The question is not rhetorical but real -- the kind that is waiting at three o’clock in the morning.
    Scott McLemee, The Dangling Man (Isaac Rosenfeld)," Inside Higher Ed, July 15, 2009 --- http://www.insidehighered.com/views/mclemee/mclemee250

    Lessons from Katrina:  How to milk the tit of Yankee taxpayers

    "Honore: Ex-La. governor halted hospital reopening," by Cain Burdeau, Google News, July 15, 2009 --- http://www.google.com/hostednews/ap/article/ALeqM5hGU2Oagz2xa9B-Kt7PrecSEM8hcAD99EE5B00 

  • Weeks after Hurricane Katrina slammed New Orleans and worsened the medical plight of the city's poor, then-Gov. Kathleen Blanco said the publicly run Charity Hospital would not reopen, even though the military had scrubbed the building to medical-ready standards, the retired Army general who oversaw the work said.

    In a recent interview with The Associated Press, Lt. Gen. Russel Honore said Blanco told him in late September 2005 the 20-story building that served the region's poor residents would not reopen.

    "'Ma'am, we got the hospital clean, my people report ... if you want to use it,'" Honore recalled telling Blanco. "Her reply to me: 'Well general, we're not going to open it, we're working on a different plan.'"

    Honore's revelation raises questions of whether state officials used Katrina as an excuse to leverage federal financing for a new public hospital.

    It comes as state and federal officials continue squabbling over how badly the hospital was really damaged and how much federal recovery funding should be allocated to it.

    The state wants $492 million for a new hospital to replace the Depression-era building as part of a proposed $1.2 billion medical complex. The Federal Emergency Management Agency has offered $150 million for repairs. The dispute is on appeal at FEMA headquarters.

    Blanco said she could not remember the conversation with Honore. She said she didn't know the military had scrubbed Charity until she was contacted by the AP.

    But she said Honore's comments struck her as out of context. "I would not have made that statement because I would not have the first idea of having other plans for Charity at that moment," Blanco said.

    Honore suggested that money, not medical judgment, was at the heart of the decision.

    "This is about business, man," Honore said. "This is about rich people making more money. This is not about providing health care."

    Keith Twitchell, president of the good-government Committee for a Better New Orleans/Metropolitan Area Committee, said "anything he (Honore) says must be given credence," but it seemed improbable that state officials hatched long-term plans so quickly.

    "Two, three weeks after Katrina, it's hard to imagine anyone at the state level was thinking, 'Oh, boy, this is our chance to shut down Charity,'" Twitchell said.

    Charity's closing forced needy residents to turn to the few overcrowded, private hospitals still operating, which financially stressed them.

    FEMA also spent more than $90 million to open temporary facilities, including a hospital in a shopping mall.

    In documents filed with FEMA, the state said a damage assessment was done at Charity within the first two weeks after Katrina. Citing floodwater in the basement, wind damage to the roof, widespread mold and human and medical waste, they claimed the hospital was destroyed.

    Blanco said she was told Charity was contaminated because the air conditioning and heating systems flooded and "affected the core operations of the entire building."

    She said she relied on the advice of Jerry Jones, director of State Facility Planning and Control, an office that oversees public buildings. Jones did not return repeated telephone calls seeking comment.

    When the 82nd Airborne Division arrived in the ravaged city in early September 2005, Charity was identified as key. It was in the center of town and provided a lot of people care, said the division's commander, Gen. William Caldwell.

    About 150 soldiers and a team of medical professionals worked to get the hospital running, Caldwell said.

    Meanwhile, a German military team's pumps sucked water out of the basement. Air sampling found no contamination — a concern, considering the flooding and bodies in the flooded morgue, Caldwell said.

    Caldwell recalled telling Honore the hospital was nearly ready to receive patients. "We were actually thinking of having a ribbon-cutting ceremony, give a thumbs up and turn it over to the health care professionals," Caldwell said.

    But then, Caldwell said a decision came to stop the cleanup.

    Dr. James Moises, a former Charity emergency room doctor who helped clean the hospital after Katrina, said Charity was made useable, and the medical staff was eager to see it back in use.

    Moises said state officials used Katrina as an excuse to close Charity and ask FEMA for the money to build a new medical complex. Moises said: "It was their orchestrated plan. It was, 'How can we manipulate the disaster for institutional gains?'"

    Analyzing Apple:  How Accountants Think
    (Since more often than not prices of shares instantly reflect (impound) public information, this is not necessarily a recommendation to immediately  invest in Apple Corp.)

    "How to predict Apple’s gross margins," July 18, 2009 ---

    Apple’s (AAPL) fiscal third quarter earnings are due out Tuesday, July 21, and once again the Street is focused on the big numbers — revenues, earnings and units sold for the Mac, iPhone and iPod.

    But savvy analysts will be paying closer attention to the number that is the best measure of a firm’s profitibilty: gross margin, expressed as the ratio of profits to revenues. Or

    (Revenue – Cost of sales) / Revenue

    Apple’s gross margins, which have averaged 34.8% over the past eight quarters, are the envy of the industry. Dell’s (DELL) first quarter GM, by contrast, was 17.6% and the company warned Wall Street last week that it is expecting a “modest decline” next quarter.

    In its April earnings call, Apple low-balled its guidance numbers as usual, forecasting a sharp drop in gross margins over the next 6 months. Specifically, it warned analysts to expect no better than 33% in Q3 and “about 30%” in Q4.

    But Turley Muller, for one, doesn’t buy those numbers, and he should know.

    Muller, who publishes a blog called Financial Alchemist, is one of a small group of amateur analysts who track Apple closely and publish quarterly estimates that are as good as — and often better than — the professionals’. In fact Muller’s earnings estimates for Q2 were the best of the lot, missing the actual results by just one penny (see here.)

    For Q3, he’s expecting Apple to report earnings of $1.35 per share on revenue of $8.3 billion — far higher than the Street’s consensus ($1.16 on $8.16 billion).

    Why the discrepancy?

    “Again the story appears to be gross margin,” he writes. “Just like last quarter, when Apple blew out the GM number with 36.4% (just as I had predicted) this quarter’s GM (3Q) should be roughly the same as last quarter.

    The secret, he says, is in the profitability of the iPhone, “which is through the roof.”

    “Apple tries to deflect that,” he says, but the evidence is right there, buried in a chart he found in Apple’s SEC filings (see below). It shows Apple’s schedule for deferred costs and revenue for the iPhone and Apple TV, which for legal reasons are spread out over 24 months rather than being recorded at the time of sale. Because Apple TV revenue is so small relative to the iPhone, this chart is a pretty good proxy for the iPhone alone.

    This is complicated stuff, but the bottom line, as Muller points out, is that iPhone profitability has been rising to the point where gross margins on the device are over 50%.

    Continued in article

    Bob Jensen's investment helpers are at http://www.trinity.edu/rjensen/bookbob1.htm#InvestmentHelpers

    Garbage Research in Stock Pricing Correlations and Equity Premiums
    Seriously that smelly kind of garbage you pay to have hauled away

    A new measure of consumption -- garbage -- is more volatile and more correlated with stocks than the standard measure, NIPA consumption expenditure. A garbage-based CCAPM matches the U.S. equity premium with relative risk aversion of 17 versus 81 and evades the joint equity premium-risk-free rate puzzle. These results carry through to European data. In a cross section of size, value, and industry portfolios, garbage growth is priced and drives out NIPA expenditure growth.
    Alexi Savov, University of Chicago Booth School of Business. "Asset Pricing with Garbage, SSRN, February 17, 2009 ---

    This is a little like the historic 0.63 correlation between stork nests and birth rates --- http://www.jstor.org/pss/2983064

    Video:  Nassim Taleb Talks About The Book “Dancing With Chance” ---
    Also see http://www.cnbc.com/id/31706523

    Bob Jensen's threads on the EMH are at http://www.trinity.edu/rjensen/theory01.htm#EMH

    NYC Invests $1 million in Old-Style Typewriters
    (now looking for a deal in buggy whips and Cadillac fender fins)|

    When we look upon the typewriter, we tend to think of it as a somewhat romantic, antiquated technology for the English major in us to write that great mystery novel we've been toying with -- not something we'd imagine anyone would still be using in a professional setting. Unfortunately for New York's boys in blue, that's exactly the situation they find themselves in. According to NY Post, the city has plunked down $982,269 in a contract with New Jersey-based Swintec to provide thousands of new manual electric typewriters bound for NYPD offices over the next three years, with another $99,570 going to a company for maintaining the current lineup. While arrest reports have thankfully gone the way of computers, property and evidence vouchers continue to be written up out the old fashioned way, with officers complaining about having to seek out ribbons when they (often) run dry. In some way, it's kind of funny... but mostly, it's just sad.
    Ross Miller, "NYC keeps ahead of the curve, invests $1 million into typewriters," Engadget, July 14, 2009 ---

    Jensen Comment
    Even if instant printing is desired, this investment is absurd. Whenever an error is made, the typist must haul up a bottle of white-out or an ink erasure. And it's only possible to digitally store typed pages as pictures at about 10,000 times the cost of computer text storage. Also scanning stored photographs is very difficult and monumentally ineffective compared with computer text storage. I think some NYC official must have a girl "friend" who works for or owns Swintec.
    Maybe the NYC Police Dept is trying to encourage officers to write Sam Spade novels.

    July 16, 2009 reply from Peters, James M [jpeters@NMHU.EDU]

    Sorry to be a cranky old man, but this sort of story usually sets me off. The implication is that NYC made a stupid decision; typical of governments. However, I would bet money that if you knew all the details and their rationale, you would find that it was a logical, and probably low cost, solution to a problem they faced even if it seems stupid on the surface. Of course, these sorts of stories only fuel the public's (in my opinion, miss) perception that governments are stupid and inefficiently run.

    Let me cite a concrete example from my personal history of much bigger proportions. When I was at CMU, I was on a PhD committee of a major in the air force who did his thesis on the procurement efficiency of the defense department. Most of your eyes are probably starting to roll as you think about all the $1,000 toilet seat purchases you have read about. The student pursued the science in two ways: archival data on actual purchases and qualitative review of news stories covering things like purchasing $1,000 toilet seats. Without boring you with the details, in every case where he reviewed a popular press article, he found that the article was highly deceptive or just plain wrong and either the item covered was never purchased or it was purchased as part of a contract where the government actually saved the tax payers money by paying a high price on one or two items in exchange for much lower prices on the bulk of the items in the contract. When he reviewed the archival data, he compared common items the defense department purchases with for-profit firms. He excluded specialized equipment for which there was no private sector comparable item (like recorders in fighter jets that are similar to standard recorders, but must be hardened). His results were that the defense department's prices were 18% lower than the best private sector purchaser. His conclusion was that, stories aside, the defense department has a very efficient and effective purchase process that saves the taxpayers a bundle over private sector purchasing departments.

    I appreciate that there is a ton of details behind his research, but, as a member of his committee, I can verify that his methods were sound and his conclusions well supported.

    Now the punch line, he was never able to publish any of his results because the secretary of the air force blocked it. He was still an active duty officer and had to follow orders. Why would the secretary of the air force block publication of solid piece of research that placed the defense department is such a positive light? Because he was a George H.W. Bush appointee who wanted to discredit the "bureaucrats" so that he could push his outsourcing agenda.

    This is a true story for which I have first hand evidence, but it happens all the time and, in my opinion, is a large part of why Americans have such a negative impression of government, much, in not most, of which is not deserved.

    In America, governments have become such a fun punching bag and we all tend to pile on, but it has serious social policy implications. For example, the debate on health care reform includes scare tactics designed to eliminate any possibility of a government run health insurance program. Statements like "Do you want a bureaucrat between you and your doctor?" However, I have about a half a dozen bureaucrats between my doctor and me now, most of whom are being paid to find ways to deny me treatment. Hard data show that private health insurance companies spend over 20% of their revenues on overhead and administration while the Medicare program only spends 3% on overhead. Simple stated, the hard data show that private health insurance companies are much more wasteful and inefficient that public ones, but you would never know that from the popular press articles.

    Sad that the truth gets lost in all the fun poked at our public servants.

    Jim Peters

    July 16, 2009 reply from Bob Jensen

    Hi Jim, 

    Thanks. It's nice to have some new voices on the AECM.

    I think it would be an interesting course project for a student team in NYC to write a case on this particular business decision in the NYC Police Department. Why did they go for electric manual typewriters in place of cheaper refurbished computers?

    Those $1,000 toilet seats for government contracting result from overhead that the government agreed to pay one way or another. If a customer went to Wal-Mart and purchased $12.95 toilet seats the overhead would just be buried somewhere else such that the government may actually waste that $12.95 added cost for each Wal-Mart toilet seat. The issue should instead be back flushed up the chain to see why the overhead itself is a legitimate charge under the contract. The fact that overhead was arbitrarily allocated between toilet seats, toilets, sinks, tubs, floors, vanities, and light fixtures is irrelevant.

    As far as manual electric typewriters go, it's hard to envision a benefit-cost justification relative to alternatives today now that refurbished computers (not necessarily laptops) and printers are so cheap. I remember having my thesis typed with six carbons where the last copy was pretty difficult to read. Also every time my typist made a mistake, she had to make the correction on each of the seven copies --- slow, slow, slow and messy, messy, messy. Stanford did not accept purple mimeograph copies.

    I racked my brain on what could justify the expenditure of $1 million for new manual typewriters in 2009. One possibility is that nursing home across the street. Aged secretaries that never did learn computers might each pop a couple of Celebrex tablets and type 60 wpm for the Police Department as a public service.

    It's hard for me to believe that a new electric manual typewriter costs less than a refurbished PC that can probably be purchased less than $50 bucks each complete with a working small-screen monitor. One cheap, cheap printer can serve multiple computers.

    As far as tech service goes, it's probably harder to find a typewriter repair technician these days than it is to find a clockmaker who can repair your antique Swiss watch. But since the Police Department also uses computers, it must already have service arrangements for computers. Hence having to add a service arrangement for typewriters seems like an unnecessary expense.

    Another reason for typewriters is security. To my knowledge there was never a typewriter virus. However, there are subtle security problems with typewriters. Each key on a typewriter is a little like a fingerprint such that messages can and often were traced back by police to the typewriter that typed a key piece of evidence such as an extortion message.

    There also is risk of "shadow memory" of a typewriter. Computers have shadow memory. When a user erases a criminal message on a computer, techies can often examine the hard drive and recover erased messages. The same thing can happen on a typewriter.

    I apologize for repeating a message that I share previously on the AECM about an incident in a university where I worked. When our Department changed from typewriters to computers, we kept two of our old IBM Selectric typewriters --- http://en.wikipedia.org/wiki/IBM_Selectric_typewriter

    One of the typewriters was kept in our office for purposes of typing addresses on envelopes, which at the time was easier on a typewriter than it was on our computers since printers were not as versatile in the early days. The other typewriter was stored in a closet. One of our professors, Professor X, received permission to take that typewriter to his home where he typed most of his research papers and private correspondence.

    One year we extended an offer to a woman, Professor Y, to become a tenure track assistant professor of auditing. Before accepting our offer she received a threatening message that bad things would happen to her if she accepted our offer. The Campus Police investigated every computer in our office. Since I was a friend of Professor X, the police asked me to go to his house and retrieve the borrowed typewriter.

    An investigation of the type-key ball of that typewriter indicated that that typewriter was not used to type the threatening message. However, the police went a step further looking for the typewriter's shadow message. IBM Selectric typewriters have a relatively large ribbon cartridge. When that ribbon was backed up the police found the threatening message on the ribbon. Professor X had replaced the type-key ball but neglected to replace the ribbon as well.

    Professor Y joined our faculty, and when confronted with the ribbon of evidence, Professor X resigned.

    Hence, typewriters have shadow memory somewhat like computers.

    Bob Jensen

    July 17, 2009 reply from

  • Here's a comment from http://tech.yahoo.com/blogs/patterson/54529/nyc-invests-nearly-1m-intypewriters/



    .....That's the scoop from the New York Post, which found out that the City of New York signed a three-year, $982,269 contract last year with Swintec, a New Jersey office equipment firm that specializes in … you guessed it: manual and electric typewriters. The city also plans on spending tens of thousands more in maintenance fees.


    ....New York City cops are stuck using typewriters—electric, if they're lucky—to pound out property and evidence vouchers on

    (incredibly) carbon-paper forms, which are pulled apart to create duplicates. (Other documents, such as arrest reports, have long since been computerized, the Post notes.)


    .... it's not fair to blame the cops themselves for burning precious time tapping out paper reports in triplicate; after all, they're just dealing with the outdated equipment they've been given. "It's very inconvenient—you have to find ink, you have to find this, find that,"

    one officer told CNN.


    ...And as far as the NYPD is concerned, we're not just talking about replacing aging typewriters with spiffy new computers; the real cost lies in replacing paper-based filing systems (in this case, for property and evidence vouchers, for starters) with new, digital ones.


    Doing so saves time and money in the long run, but the initial outlay is always steep—and good luck snagging the funding from New York's dysfunctional state senate, which can barely be bothered to keep the NYC subway running.




    So the real story is perhaps about the capital cost of the systems change  and the reluctance of the politicians to pay for it (no votes in police computer systems)....

    Jensen Comment
    But millions of people generate tax return forms on their computers and file their taxes with software that fills in these forms. Why can't the NYPD buy refurbished computers that will generate the evidence forms and fill them out in triplicate for hard copy filing?

    "BOUNDED RATIONALITY," by Bryan D. Jones,  Department of Political Science, University of Washington, Seattle, Washington, Annu. Rev. Polit. Sci. 1999. 2:297–321 --- http://www.princeton.edu/~smeunier/JonesBounded1.pdf

    Video 3:  Yale's Robert Shiller (slightly over one hour of video lecture)
    Behavioral Finance: The Role of Psychology --- http://www.youtube.com/watch?v=0ZLNbxWH8Lc

    Nobelist Daniel Kahneman On Behavioral Economics

    Simoleon Sense

    Video: "Nobelist Daniel Kahneman On Behavioral Economics (Awesome)!" Simoleon Sense, June 5, 2009 ---

    Introduction (Via Fora.Tv)

    Nobel Prize-winning psychologist Daniel Kahneman addresses the Georgetown class of 2009 about the merits of behavioral economics.

    He deconstructs the assumption that people always act rationally, and explains how to promote rational decisions in an irrational world.

    Topics Covered:

    1. The Economic Definition Of Rationality

    2. Emphasis on Rationality in Modern Economic Theory

    3. Examples of Irrational Behavior (watch this part)

    4. How to encourage rational decisions

    Speaker Background (Via Fora.Tv)

    Daniel Kahneman - Daniel Kahneman is Eugene Higgins Professor of Psychology and Professor of Public Affairs Emeritus at Princeton University. He was educated at The Hebrew University in Jerusalem and obtained his PhD in Berkeley. He taught at The Hebrew University, at the University of British Columbia and at Berkeley, and joined the Princeton faculty in 1994, retiring in 2007. He is best known for his contributions, with his late colleague Amos Tversky, to the psychology of judgment and decision making, which inspired the development of behavioral economics in general, and of behavioral finance in particular. This work earned Kahneman the Nobel Prize in Economics in 2002 and many other honors

    "SEC Charges Four With Fraud," by Kathy Shwiff, The Wall Street Journal, July 15, 2009 --- http://online.wsj.com/article/SB124751046687234157.html#mod=todays_us_money_and_investing

    The Securities and Exchange Commission charged Seattle securities lawyer David Otto, three other individuals and two companies with conducting a fraudulent "pump-and-dump" scheme in which they secretly unloaded more than $1 million in "penny stocks" of a company touting a nonexistent antiaging product.

    The complaint says the defendants violated antifraud and other provisions of federal securities laws. The SEC is seeking disgorgement and financial penalties.

    The agency said misleading news releases and Web profiles touting beverages and nutritional supplements pushed the stock price of Seattle-based MitoPharm up more than four times to above $2.30 although MitoPharm's products were in the developmental stage. Two key products didn't exist, according to the complaint.

    The SEC said Mr. Otto sold his shares for more than $1 million while Houston-based stock promoter Charles Bingham generated proceeds of $300,000 before heavy selling caused the price to fall to a nickel by November 2007.

    The SEC's complaint, filed in federal court in Seattle, charges Mr. Otto, associate Todd Van Siclen of Seattle, Mr. Bingham and his company, Wall Street PR Inc., along with MitoPharm and its chief executive, Pak Peter Cheung of Vancouver.

    Mr. Otto's attorney, Jeff Coopersmith said Mr. Otto committed no intentional violation of securities law. Mr. Bingham's attorney, Ronald Kaufman, said his client is as much a victim as any other shareholder. Mr. Bingham said his firm lost money on the work it did for MitoPharm, adding he had no way of knowing the products, which were being manufactured in China, weren't as described. The other defendants couldn't be reached for comment.

    Bob Jensen's threads on securities frauds are at

    New York's Pretty Young Things Are Turning to Crime
    Robin Katz is a "sexy 25-year-old financial planner working at Chase's Midtown headquarters," according to the New York Post, who allegedly ripped off a client to the tune of $110,000 so she could spend it "shopping" and "going out." Katz is a graduate of Smith College, and to judge by her Facebook friends—who hail from Yale, Harvard, Wellesley, Princeton, the Phillips Exeter Academy, etc.—she is pretty firmly ensconced in the ranks of America's elite youth. She certainly seemed pedigreed and trustworthy enough for her clients to entrust her with hundreds of thousands of dollars. Mistake!
    John Cook, Gawker.com, July 21, 2009 --- Click Here

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

    "Megapost & Collection-Edward Chancellor: Author of, Devil Take The Hindmost," Simoleon Sense, July 14, 2009 --- http://www.simoleonsense.com/edward-chancellor/

    (Disclosure most these articles are free but several require payment…I recommend paying to read them.

    1. The Seven Pillars Of Folly - By Edward Chancellor -
    Click Here To Read The Article
    - Excerpt Below

    The oil exporters of the Persian Gulf are flush with cash. Some of that money is going towards acquiring P&O, the British shipping concern, thus sparking off the heated controversy over foreign control of U.S. ports. This has led people to worry that Arab petrodollars might be scared away from the U.S. In fact, unlike during the last oil boom of the late 1970s, relatively little of the current Arab oil surplus has been directly invested in U.S. assets or even deposited in the international banking system. This time much of the oil money has remained at home where a classic speculative mania is now being played out.

    2. Inefficient Markets - Corporate Eugenics - By Edward Chancellor -
    Click Here To Read The Article -
    Excerpt Below

    It is becoming clear that corruption at Enron was not confined to the higher echelons, but was widespread throughout the firm. This corruption appears to have been engendered by a combination of overly-demanding profits targets and management’s practice of weeding out supposedly “underachieving” employees. Such practices have become commonplace among America’s top companies. In Enron’s case it seems that the crooks cooked up the profits, while the honest objectors were let go.

    3. Look Out This Crunch Is Serious - By Edward Chancellor -
    Click Here To Read The Article
    - Excerpt Below

    Incipient panic has reigned in U.S. financial markets over the past couple of weeks, and no wonder. Some hedge funds have blown up, the country’s second-largest mortgage lender has come close to collapse and stocks have fallen. On Friday, the Federal Reserve Bank lowered a key interest rate to help calm things down.

    4. Ponzi Nation - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    Credit has grown rapidly in recent years. This expansion has come in many forms, from home mortgages to newfangled structured products created by clever financial engineers. There are, broadly speaking, two views about these developments. The conventional wisdom — held by most economists and denizens of Wall Street — is optimistic. Higher rates of credit growth and increasing levels of leverage, they maintain, are reasonable in light of increasing economic stability.  An opposing view — held by a miscellaneous bunch, including some notable investors and Wall Street observers — holds that the massive buildup of debt augurs ill. Drawing on the work of a little-known, deceased economist named Hyman Minsky, the pessimists contend that the recent calm has induced people to take on too much risk. “Stability is unstable,” this group says, quoting Minsky.

    5. Ponzi Nation Topples - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    On August 14, David Viniar, the chief financial officer of Goldman, Sachs & Co., struggled to explain why two hedge funds managed by his firm had suffered severe losses during the first few hectic days of the month. He came up with the rationale that the markets had been hit by a rare “25 standard deviation event.” In other words, an occurrence so rare that a person living since the dawn of time would be lucky to have witnessed it. The comment was, of course, far-fetched. History shows that financial crises are as inevitable as death and taxes.

    6. Stabilizing an Unstable Economy: What Would Minsky Do? - By Edward Chancellor -
    Click Here To Read The Article
    - Excerpt Below

    A year or so ago, the work of the late economist Hyman Minsky was known to only a small band of devoted followers. All that has changed since the onset of the current financial crisis. Today, Minsky’s financial instability hypothesis — the notion that economic stability encourages behavior on Wall Street and beyond that renders the financial system increasingly fragile — is attracting far more attention. Yet Minsky was interested not only in the buildup to a crisis but also in how depressions could be avoided and what measures were necessary to prevent future crises from occurring.

    7. When the Credit Crunch Comes to Main Street - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    Three centuries ago, the novelist and sometime tradesman Daniel Defoe described what happened when credit collapses: “If private Credit falls off, the Stock, the Trade, and, by Consequence, the Wealth of the Nation decays.” Modern economists tend to be more sanguine. As long as prices remain stable and the financial system continues to function, they see little lasting damage to the economy from a credit bust.

    8. Spiraling Losses: Lloyd’s Unheeded Lessons - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    In the recent years the business of lending has converged with that of insurance: Banks can insure the loans they make against default; securitization, which allows for risk to be divided up and parceled out, borrows much from traditional insurance practices; credit-risk models emulate actuarial calculations; and the risk premiums on loans aren’t much different from the policy premiums charged by conventional insurers.Insurance, like lending, is a highly cyclical business. When premiums are high and losses low, capital flows into insurance. But over time competition drives down policy rates. Premiums decline to the point where they are insufficient to cover liabilities. A crisis occurs that can only be resolved through losses and capital contraction.

    9. Model Failure - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    The Current Credit Crunch  is the first in which mathematical models have played an important role. Common flaws in risk models link the failure of rating agencies to predict the level of defaults on subprime mortgages, the freezing up of the market for complex debt securities and problems at several dozen hedge funds and a handful of banks, including the U.K.’s Northern Rock. We handed over the job of assessing financial risk to mathematicians and physicists — and they failed.

    10. Crisis Hazards - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    The governor of the Bank of England has come under fire from all sides. First, at the onset of this summer’s credit crunch, he made himself unpopular by being less accommodating than his peers in Europe and the U.S. Then, after King agreed to provide emergency funding to the stricken Northern Rock, Britain’s fifth-largest mortgage lender was,he was accused of fostering moral hazard. This assistance inadvertently sparked the first bank run in England in over a century

    11. Devil’s Dictionary - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    Roughly A Century Ago- the American writer Ambrose Bierce compiled The Devil’s Dictionary. In his celebrated lexicon, Bierce displayed a profound understanding of finance, which he defined as “the art or science of managing revenues and resources for the best advantage of the manager.” …Although Wall Street’s ethos has not changed since Bierce’s time, it is time to update and enlarge the Devil’s Dictionary of…

    12. Part 2 Of Devil’s Dictionary of Finance - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    M * Mark-to-model: The use of a mathematical model to value complex securities. “The combination of precise formulas with highly imprecise assumptions can be used to establish practically any value one wishes” (Benjamin Graham). Useful to investors who wish to delay the recognition of a loss. See CDOs.

    Master limited partnership: A clever corporate structure favored by private equity and hedge funds for going public. Provides investors with few governance safeguards while allowing asset managers to avoid paying corporate taxes on their earnings.

    13. The Case For Crash - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    Never before in recent  history have the prospects for investors appeared so dismal. This statement may seem absurd. After all, economies around the world appear more stable than ever. Stock markets aren’t so evidently buoyed by irrational exuberance as they were in the late 1990s. Furthermore, the alternative-assets revolution has greatly expanded the range of potential investments. But that’s no comfort when just about every major asset class is perilously overvalued.

    14. A Very Private Matter - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    A letter from Stephen Schwarzman, chairman and chief executive, regarding the proposed buyout of Blackstone Group June 1, 2012 The Blackstone Group 345 Park Avenue New York, NY 10154 Dear Shareholders: I am, together with funds managed by our Þrm, pleased to propose to acquire, for a purchase price of $15 in cash per unit, all of the Þrm’s outstanding common units, representing limited partners’ interests in Blackstone Group L.P. (the “Group”). We are also offering to purchase the Chinese government’s minority stake on the same terms. Our proposal provides a substantial premium to the current price for all of the Group’s common unit holders.

    Structural Flaws- By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    When banks discovered how to securitize loans, they inadvertently created a sexy alternative investment. Looking for an asset that isn’t correlated to the stock market? Then invest in mezzanine tranches of collateralized debt obligations. Or better still, give your money to a credit hedge fund that promises to produce double-digit returns. Rampant demand for structured securities has been a boon to bankers, homeowners and private equity firms. It has also led to the mispricing of credit risk. But participants in this brave new world of finance have little cause to worry about that. Last year some $304 billion of collateralized debt obligations were issued in the U.S., according to Credit Suisse. That represents a 58 percent increase over the previous year.

    16. Shaky Foundations - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    Pension funds are looKing for investments that will perform even when the stock market is doing badly. They also want long-lived assets to match the payments they must make in years to come. Inflation-protected government bonds, especially those with long durations, fit the bill. The trouble is that yields on such bonds have declined dramatically in recent years.

    17. Fixated on Friedman - By Edward Chancellor - C
    lick Here To Read The Article
    - Excerpt Below

    The severity of the credit crunch has taken the world’s central bankers by surprise. But they might have foreseen it had they not been intellectually enslaved by the ideas of the recently-deceased über-economist, Milton Friedman.

    18. A Sucker’s Rally- By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    Some argue that the stock market downturn was too shallow

    19. Misplaced US Optimism - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    Two months ago, the stock market was telling us that deflation was on the way and that the US economy would be leading the world into a global recession. Since then the market has staged a strong rebound and people are feeling more optimistic again. My feeling, however, is that the excesses of the late 1990s bubble have only partly been dealt with and that until they have properly worked their way out of the system, the real recovery will remain elusive.

    20. A Golden Age - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    Over the last 30 years, we have witnessed runaway inflation, a variety of speculative bubbles and a succession of currency crises. Is there no way to escape this mayhem, which spreads its misery from the day-labourers of Buenos Aires to the pensioners of New York? In fact, one solution offers itself; an idea so unpopular that only a handful of cranks nowadays even dare consider it. In order to rid the global economy of its chronic instability, we must return to our golden fetters.

    21. Corporate Crisis By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    Don’t blame the scandals  After the string of corporate scandals in the US, the public is blaming the destruction of trillions of dollars of “shareholder value” on the malfeasance of top management. This is misguided.

    22. Perverse Incentives - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    Shareholder value and stock options for senior managers have ruled big business since the 1990s. But they have led to costly mistakes and endless scandals

    23. Daniel Defoe On RailTrack - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    In last month’s Prospect, Richard Lambert, the former editor of the Financial Times, asked why the press had failed to see Enron coming. He acknowledges that part of the failure lies in the mood of the times. Unfortunately, he does not go far enough. It was, after all, a TMT (technology, media and telecoms) boom, and the Financial Times was at the heart of it. Just over two years ago, Pearson, owner of the FT, was applauded by the market for raising hundreds of millions of pounds to invest in internet ventures: FT.com was soon followed by FT Marketwatch.com, FTyourmoney.com, and so on.

    24. A Bad Time For Pundits - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    Bad year for forecasters  Like Christmas trees, economic forecasts should be discarded early in the new year. Anyone who retains a forecast too long will find it wilting more rapidly than an ageing spruce. At times of heightened economic uncertainty, such as we have recently been living through, forecasts have even shorter sell-by dates.

    25. City Slackers - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    When foreign financiers stripped London of its snob class, the money woke up. But to stay slick, the city needs to regain an old honour system

    26.  Alan’s Bubble - By Edward Chancellor - C
    lick Here To Read The Article
    - Excerpt Below

    Alan Greenspan, the second most powerful man in the US, adheres to the “radical capitalist” of Ayn Rand. But by following rather than leading the markets he has created a bubble

    27. Millenial Market - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    The stock market was unperturbed and the Dow Jones Industrial Average closed a point up on the day of the attack, at 88.63. However, the economy was suffering from the post-war slump and over the next 12 months shares lost half their value. No one was ever prosecuted for the “outrage,” as it became known, although many suspicious-looking foreigners were arrested in the months and years that followed. As time passed people’s fears waned, and soon the great bull market arrived. On the ninth anniversary of the bombing, the Dow Jones stood at 372, up more…

    28. Tacit collusion - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    Prisoner’s dilemma at Sotheby’s  Alfred Taubman, the majority shareholder and former chairman of Sotheby’s, was recently sent to prison for his part in a conspiracy to fix prices with rival auctioneer, Christie’s. Sotheby’s former chief executive, Diana “DeDe” Brooks, was also convicted. The trial judge accused the two of many failings, including arrogance, greed and deceit. From a business perspective, their real crime was stupidity.

    29. Housing blarney - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    House prices and the planners  House prices are overvalued, say the experts. At least, that’s what they said last year. In the last 12 months, however, the average price of a British home has risen by a further 18 per cent. This doesn’t mean that the housing bears were wrong. Rather, it is a reflection on the inefficiency of the housing market, which in this country might have been designed specifically to provide an endless cycle of booms and busts.

    30. Lessons Of Depression - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    In a recently published book, Rethinking the Great Depression, economic historian Gene Smiley catalogues the errors of both the Federal Reserve and federal government during the 1930s. In July 1931, the Fed raised interest rates in order to fulfill its obligations under the gold standard (despite the fact that Britain had already abandoned it). Five years later, prompted by fears of inflation, the Fed doubled the reserve requirements of its member banks. Both of these actions were followed by a severe contraction of the money supply, which induced a further collapse of the stock market and economy.

    31. Technology & Path Dependency - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    Does the best technology always win out? Some economists say no. They have argued in recent years that chance often plays a decisive role in the adoption of technologies and that advantage normally goes to the first-movers in a new market. During the bull market, such views were widely accepted and served to hype the tech bubble. In more sober times, the same claims are receiving the scepticism they deserve.

    32. The Croupier Takes Too Much - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    The greatest problem facing equity investors today is not the bear market or the weakness of the global economy. Nor has it anything to do with the possibility of war, high levels of corporate and consumer indebtedness, or any of the other problems one reads about regularly in the business pages. The real problem is the low levels of expected returns for most stock market investors. This is due primarily to the high levels of fees extracted by a bloated and parasitic financial services industry. Charlie Munger, the right-hand man of Warren Buffett, refers to these fees as the “croupier’s take.” Let us attempt to gauge its size.

    33. Shares have been in a bear market for years. We just haven’t noticed until now - By Edward Chancellor -
    Click Here To Read The Article - Excerpt Below

    Bear markets are naturally unpopular: people dislike seeing their investments go up in smoke. They are also misunderstood. It is commonly believed that bear markets are short-lived, ending after a few unpleasant months. That’s true of little bears, but great bears can hang around for a decade or more. They are characterised by the savage crushing of investors’ hopes. Most commentators argue that British and US investors hadn’t until very recently experienced such a market for more than quarter of a century. Actually, we are already some years into one.

    Plus The Entire Collection Of Edward Chancellor Articles On BreakingViews

    Bob Jensen's threads on the economic crisis are at

    From the Scout Report on July 17, 2009

    TheWorld Browser --- http://www.ioage.com/ 

    In a world with increasingly diverse options for wandering around the Internet, TheWorld Browser offers a visually stimulating change from some of the more staid browsers. This version has some rather nice tool options for blocking ads and also features built-in mouse gestures to move around pages a bit more smoothly. Additionally, this version also contains such commonly found features as a "favorites" list and a download history device. This version is compatible with computers running Windows XP or Vista.

    CheckUp 2.5 --- http://www.app4mac.com/ 

    If you're concerned about the care and feeding of your Mac, you may want to check out this handy application. CheckUp 2.5, which is a multipurpose maintenance utility designed to monitor CPU usage, disk drive activity, and network adaptors. Users of this application can view detailed information about all running processes, and also tweak the application to remind them when certain conditions are met as regards to a specific resource. This version is compatible with computers running Mac OS X 10.5 and this is a trial version that can be used at no charge for thirty days.


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

    The Global Book Project --- http://globaltext.terry.uga.edu/books

    The Global Text Project is further along at this point than I had envisioned.

    Another open text project is as follows:

    Community College Open-Textbook Project G
    Especially note the open sharing sources being used

    The Community College Open Textbook Project begins this week with a member meeting in California," by Catherine Rampell, Chronicle of Higher Education, April 29, 2008 --- Click Here

    At the meeting, representatives of institutions around the country will start reviewing open-textbook models for “quality, usability, accessibility, and sustainability,” according to a news release. They will initially review four providers of free online educational resources: Connexions, run by Rice University; Flat World Knowledge, a commercial digital-textbook publisher that will begin offering free textbooks online next year; the University of California’s UC College Prep Online, which offers Advanced Placement and other courses online; and the Community College Consortium for Open Educational Resources, which was founded by the Foothill-De Anza Community College District and the League for Innovation in the Community College.

    The open-textbook project was paid for by a $530,000 grant to the Foothill-De Anza Community College District from the William and Flora Hewlett Foundation.


    Bob Jensen's threads on open sharing are at http://www.trinity.edu/rjensen/000aaa/updateee.htm#OKI

    Education Tutorials

    World Clock and World Facts --- http://www.poodwaddle.com/worldclock.swf

    Edmond J. Safra Foundation Center for Ethics at Harvard University --- http://www.ethics.harvard.edu/

    Understanding Records and Archives: Principles and Practices ---

    Inspiration:  Games Versus Teachers
    "Creator of 'The Sims' Talks Educational Gaming," Chronicle of Higher Education, July 14, 2009 ---
    Introduction to (video) Game Design 2009 --- http://pod.gscept.com/intro2gd2009.xml
    Bob Jensen's threads on networked learning simulations --- http://www.trinity.edu/rjensen/000aaa/thetools.htm#Simulation
    Bob Jensen's threads on edutainment and learning games --- http://www.trinity.edu/rjensen/000aaa/thetools.htm#Edutainment
    Bob Jensen's threads on virtual worlds in education are at http://www.trinity.edu/rjensen/000aaa/thetools.htm#SecondLife

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

    Engineering, Science, and Medicine Tutorials

    Laboratory Technique Videos --- http://www.chem.ualberta.ca/~orglabs/Techniques.html 

    The Agnes Chamberlin Digital Collection (Botony) ---  http://chamberlin.library.utoronto.ca/

    Magnetic Resonance Online Texts --- http://www.ebyte.it/library/refs/MROnlineTexts.html

    Bill Gates purchased the rights to lectures by Richard Feynman and has initially made seven of them available free at http://research.microsoft.com/apps/tools/tuva/index.html
    The catch is that you must install the Microsoft Silverlight browser add on (at no charge).
    Richard Feynman is a very famous physicist --- http://en.wikipedia.org/wiki/Richard_Feynman

    MedlinePlus: Diets --- http://www.nlm.nih.gov/medlineplus/diets.html

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

    Social Science and Economics Tutorials

    Devolution --- http://en.wikipedia.org/wiki/Devolution
    BBC Special Reports: Devolution Decade

    Psychotherapy Networker --- http://www.psychotherapynetworker.org/ 

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

    Law and Legal Studies

    Edmond J. Safra Foundation Center for Ethics at Harvard University --- http://www.ethics.harvard.edu/

    Ethics Updates --- http://ethics.sandiego.edu/

    Understanding Records and Archives: Principles and Practices ---

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

    Math Tutorials

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

    History Tutorials

    Los Angeles County Museum of Art: Art New Media (multimedia) ---  http://www.lacma.org/art/webindex.aspx 

    Philadelphia Museum of Art: Conservation --- http://www.philamuseum.org/conservation/

    History of Multiple Topics From War to Cooking
    Virginia Tech: Special Collections' Digitized Manuscripts --- http://spec.lib.vt.edu/mss/pdf/index.html 

    American History
    DuBoisopedia --- http://www.library.umass.edu/spcoll/duboisopedia/doku.php 

    Bill Gates purchased the rights to lectures by Richard Feynman and has initially made seven of them available free at http://research.microsoft.com/apps/tools/tuva/index.html
    The catch is that you must install the Microsoft Silverlight browser add on (at no charge).
    Richard Feynman is a very famous physicist --- http://en.wikipedia.org/wiki/Richard_Feynman

    Understanding Records and Archives: Principles and Practices ---

    Devolution --- http://en.wikipedia.org/wiki/Devolution
    BBC Special Reports: Devolution Decade

    National Book Critics Circle --- http://bookcritics.org/

    Caldwell Lighting: Shedding Light on New York --- http://www.sil.si.edu/DigitalCollections/Caldwell/

    "The Obsolete New York Model:  Where a tax-eating majority votes itself a permanent income," by Myron Magnet, New York's Tomorrow, July 2009 --- http://city-journal.org/2009/nytom_taxes.html 
    Jensen Comment
    This is a great and concise historical piece that zings in famous philosophers and economists. Good work.

    From the Scout Report on July 17, 2009

    Debates about the content and focus of United States history courses continue on in Texas The Culture Wars' New Front: U.S. History Classes in Texas http://online.wsj.com/article/SB124753078523935615.html 

    Board of Education may face controversy over new curriculum http://www.beaumontenterprise.com/news/local/50619491.html 

    Curriculum debate marred by ideologues http://www.dallasnews.com/sharedcontent/dws/dn/localnews/columnists/jfloyd/stories/071409dnmetfloyd.3d10b0e.html 

    Texas Education Agency: Social Studies Expert Reviewers [pdf] http://ritter.tea.state.tx.us/teks/social/experts.html 

    Smithsonian Source: Resources for Teaching American History [Flash Player, pdf] http://www.smithsoniansource.org/ 

    TeachingAmericanHistory [iTunes, Real Player] http://teachingamericanhistory.org/

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

    Language Tutorials

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

    Music Tutorials

    UCSC Electronic Music Studios: Technical Essays

    Red Hot Jazz Archive --- http://www.redhotjazz.com/

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

    Writing Tutorials

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

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

    World Clock and Medical Facts --- http://www.poodwaddle.com/worldclock.swf

    Radiation Sickness Cure Can't Come Too Soon for the People of Israel

    "Cure for radiation sickness found?"  Ronen Bergman, Israel News, July 17, 2009 ---

    Exclusive: Dramatic discovery by Jewish-American scientists could change world; anti-radiation medication proves effective, safe in tests. Further experiments to be fast tracked, FDA approval possible within 1-2 years

    Medication that can protect humans against nuclear radiation has been developed by Jewish-American scientists in cooperation with a researcher and investors from Israel. The full story behind the dramatic discovery will be published in Yedioth Ahronoth's weekend edition.

    The ground-breaking medication, developed by Professor Andrei Gudkov – Chief Scientific Officer at Cleveland BioLabs - may have far-reaching implications on the balance of power in the world, as states capable of providing their citizens with protection against radiation will enjoy a significant strategic advantage vis-à-vis their rivals.

    For Israel, the discovery marks a particularly dramatic development that could deeply affect the main issue on the defense establishment's agenda: Protection against a nuclear attack by Iran or against "dirty bomb" attacks by terror groups.

    Gudkov's discovery may also have immense implications for cancer patients by enabling doctors to better protect patients against radiation. Should the new medication enable cancer patients to be treated with more powerful radiation, our ability to fight the disease could greatly improve.

    Dramatic test results The process that led up to the medical innovation dates back to 2003, when Professor Gudkov came up with the idea of using protein produced in bacteria found in the intestine to protect cells from radiation.

    . . .

    The experiment's results were dramatic: 70% of the monkeys that did not receive the cure died, while the ones that survived suffered from the various maladies associated with lethal nuclear radiation. However, the group that did receive the anti-radiation shot saw almost all monkeys survive, most of them without any side-effects. The tests showed that injecting the medication between 24 hours before the exposure to 72 hours following the exposure achieves similar results.

    Another test on humans, who were given the drug without being exposed to radiation, showed that the medication does not have side-effects and is safe. Prof. Gudkov's company now needs to expand the safety tests, a process expected to be completed by mid-2010 via a shortened test track approved for bio-defense drugs. Should experiments continue at the current rate, the medication is estimated to be approved for use by the FDA within a year or two.

    Continued in article

    MedlinePlus: Diets --- http://www.nlm.nih.gov/medlineplus/diets.html

    Psychotherapy Networker --- http://www.psychotherapynetworker.org/ 

    Forwarded by Auntie Bev

    Nothing like a good Bible story to make your day.

    How Adam Got Eve

    Adam was hanging around the garden of Eden feeling very lonely.

    So, God asked him, 'What's wrong with you?'

    Adam said he didn't have anyone to talk to.

    God said that He was going to make Adam a companion and that it would be a woman.

    He said, 'This pretty lady will gather food for you, she will cook for you, and when you discover clothing, she will wash them for you

    She will always agree with every decision you make and she will not nag you, and will always be the first to admit she was wrong when you've had a disagreement.

    She will praise you!

    She will bear your children and never ask you to get up in the middle of the night to take care of them.

    'She will NEVER have a headache and will freely give you love and passion whenever you need it.'

    Adam asked God, 'What will a woman like this cost?'

    'An arm and a leg.'

    Then Adam asked, 'What can I get for just a rib

    Of course the rest is history............!!!!


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

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

    World Clock and World Facts --- http://www.poodwaddle.com/worldclock.swf

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

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

    Three Finance Blogs

    Jim Mahar's FinanceProfessor Blog --- http://financeprofessorblog.blogspot.com/
    FinancialRounds Blog --- http://financialrounds.blogspot.com/
    Karen Alpert's FinancialMusings (Australia) --- http://financemusings.blogspot.com/

    Some Accounting Blogs

    Paul Pacter's IAS Plus (International Accounting) --- http://www.iasplus.com/index.htm
    International Association of Accountants News --- http://www.aia.org.uk/
    AccountingEducation.com and Double Entries --- http://www.accountingeducation.com/
    Gerald Trites'eBusiness and XBRL Blogs --- http://www.zorba.ca/
    AccountingWeb --- http://www.accountingweb.com/   
    SmartPros --- http://www.smartpros.com/

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

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

    The Master List of Free Online College Courses --- http://universitiesandcolleges.org/

    Shared Open Courseware (OCW) from Around the World: OKI, MIT, Rice, Berkeley, Yale, and Other Sharing Universities --- http://www.trinity.edu/rjensen/000aaa/updateee.htm#OKI

    Free Textbooks and Cases --- http://www.trinity.edu/rjensen/ElectronicLiterature.htm#Textbooks

    Free Mathematics and Statistics Tutorials --- http://www.trinity.edu/rjensen/Bookbob2.htm#050421Mathematics

    Free Science and Medicine Tutorials --- http://www.trinity.edu/rjensen/Bookbob2.htm#Science

    Free Social Science and Philosophy Tutorials --- http://www.trinity.edu/rjensen/Bookbob2.htm#Social

    Free Education Discipline Tutorials --- http://www.trinity.edu/rjensen/Bookbob2.htm

    Teaching Materials (especially video) from PBS

    Teacher Source:  Arts and Literature --- http://www.pbs.org/teachersource/arts_lit.htm

    Teacher Source:  Health & Fitness --- http://www.pbs.org/teachersource/health.htm

    Teacher Source: Math --- http://www.pbs.org/teachersource/math.htm

    Teacher Source:  Science --- http://www.pbs.org/teachersource/sci_tech.htm

    Teacher Source:  PreK2 --- http://www.pbs.org/teachersource/prek2.htm

    Teacher Source:  Library Media ---  http://www.pbs.org/teachersource/library.htm

    Free Education and Research Videos from Harvard University --- http://athome.harvard.edu/archive/archive.asp

    VYOM eBooks Directory --- http://www.vyomebooks.com/

    From Princeton Online
    The Incredible Art Department --- http://www.princetonol.com/groups/iad/

    Online Mathematics Textbooks --- http://www.math.gatech.edu/~cain/textbooks/onlinebooks.html 

    National Library of Virtual Manipulatives --- http://enlvm.usu.edu/ma/nav/doc/intro.jsp

    Moodle  --- http://moodle.org/ 

    The word moodle is an acronym for "modular object-oriented dynamic learning environment", which is quite a mouthful. The Scout Report stated the following about Moodle 1.7. It is a tremendously helpful opens-source e-learning platform. With Moodle, educators can create a wide range of online courses with features that include forums, quizzes, blogs, wikis, chat rooms, and surveys. On the Moodle website, visitors can also learn about other features and read about recent updates to the program. This application is compatible with computers running Windows 98 and newer or Mac OS X and newer.

    Some of Bob Jensen's Tutorials

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

    Accountancy Discussion ListServs:

    For an elaboration on the reasons you should join a ListServ (usually for free) go to   http://www.trinity.edu/rjensen/ListServRoles.htm
    AECM (Educators)  http://pacioli.loyola.edu/aecm/ 
    AECM is an email Listserv list which provides a forum for discussions of all hardware and software which can be useful in any way for accounting education at the college/university level. Hardware includes all platforms and peripherals. Software includes spreadsheets, practice sets, multimedia authoring and presentation packages, data base programs, tax packages, World Wide Web applications, etc

    Roles of a ListServ --- http://www.trinity.edu/rjensen/ListServRoles.htm

    CPAS-L (Practitioners) http://pacioli.loyola.edu/cpas-l/ 
    CPAS-L provides a forum for discussions of all aspects of the practice of accounting. It provides an unmoderated environment where issues, questions, comments, ideas, etc. related to accounting can be freely discussed. Members are welcome to take an active role by posting to CPAS-L or an inactive role by just monitoring the list. You qualify for a free subscription if you are either a CPA or a professional accountant in public accounting, private industry, government or education. Others will be denied access.
    Yahoo (Practitioners)  http://groups.yahoo.com/group/xyztalk
    This forum is for CPAs to discuss the activities of the AICPA. This can be anything  from the CPA2BIZ portal to the XYZ initiative or anything else that relates to the AICPA.
    AccountantsWorld  http://accountantsworld.com/forums/default.asp?scope=1 
    This site hosts various discussion groups on such topics as accounting software, consulting, financial planning, fixed assets, payroll, human resources, profit on the Internet, and taxation.
    Business Valuation Group BusValGroup-subscribe@topica.com 
    This discussion group is headed by Randy Schostag [RSchostag@BUSVALGROUP.COM

    Many useful accounting sites (scroll down) --- http://www.iasplus.com/links/links.htm


    Professor Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
    190 Sunset Hill Road
    Sugar Hill, NH 03586
    Phone:  603-823-8482 
    Email:  rjensen@trinity.edu