Tidbits Quotations
To Accompany the April 15, 2011 edition of Tidbits
Bob Jensen at Trinity University

Archive of Tidbits Quotations --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm

If your head is in the oven, and your feet are in the freezer, on average you’re comfortable.
Author unknown
Quoted on April 7, 2011 by Floyd Norris in the context of the European economy ---

“We are still a democracy, but we have moved in my lifetime towards a plutocracy. We do not have a plutocracy, I want to emphasize that, but the distribution of wealth and the influence of wealth have moved in that direction.
Warren Buffet --- http://www.simoleonsense.com/interview-with-warren-buffett-the-u-s-is-moving-toward-plutocracy/

Government Interest Payments Gone Wild ---

Cheap Flights (Irish Music Video) --- http://www.youtube.com/watch?v=HPyl2tOaKxM

Video:  Farewell Sidney Lumet, 1924-2011 --- Click Here

A NYT  article about  Bashar Al-Assad and the political turmoil discusses some good news and bad news regarding the current leader of Syria. Let's hope that he decides that this is his moment in history. It was written by a history professor at Trinity University.

Thank you John Donahue for the heads up.

"The GOP Path to Prosperity Our budget cuts $6.2 trillion in spending from the president's budget over the next 10 years and puts the nation on track to pay off our national debt," by Paul D. Ryan, The Wall Street Journal, April 5, 2011 ---

Congress is currently embroiled in a funding fight over how much to spend on less than one-fifth of the federal budget for the next six months. Whether we cut $33 billion or $61 billion—that is, whether we shave 2% or 4% off of this year's deficit—is important. It's a sign that the election did in fact change the debate in Washington from how much we should spend to how much spending we should cut.

But this morning the new House Republican majority will introduce a budget that moves the debate from billions in spending cuts to trillions. America is facing a defining moment. The threat posed by our monumental debt will damage our country in profound ways, unless we act.

No one person or party is responsible for the looming crisis. Yet the facts are clear: Since President Obama took office, our problems have gotten worse. Major spending increases have failed to deliver promised jobs. The safety net for the poor is coming apart at the seams. Government health and retirement programs are growing at unsustainable rates. The new health-care law is a fiscal train wreck. And a complex, inefficient tax code is holding back American families and businesses.

The president's recent budget proposal would accelerate America's descent into a debt crisis. It doubles debt held by the public by the end of his first term and triples it by 2021. It imposes $1.5 trillion in new taxes, with spending that never falls below 23% of the economy. His budget permanently enlarges the size of government. It offers no reforms to save government health and retirement programs, and no leadership.

Our budget, which we call The Path to Prosperity, is very different. For starters, it cuts $6.2 trillion in spending from the president's budget over the next 10 years, reduces the debt as a percentage of the economy, and puts the nation on a path to actually pay off our national debt. Our proposal brings federal spending to below 20% of gross domestic product (GDP), consistent with the postwar average, and reduces deficits by $4.4 trillion.

A study just released by the Heritage Center for Data Analysis projects that The Path to Prosperity will help create nearly one million new private-sector jobs next year, bring the unemployment rate down to 4% by 2015, and result in 2.5 million additional private-sector jobs in the last year of the decade. It spurs economic growth, with $1.5 trillion in additional real GDP over the decade. According to Heritage's analysis, it would result in $1.1 trillion in higher wages and an average of $1,000 in additional family income each year.

Here are its major components:

• Reducing spending: This budget proposes to bring spending on domestic government agencies to below 2008 levels, and it freezes this category of spending for five years. The savings proposals are numerous, and include reforming agricultural subsidies, shrinking the federal work force through a sensible attrition policy, and accepting Defense Secretary Robert Gates's plan to target inefficiencies at the Pentagon.

Welfare reform: This budget will build upon the historic welfare reforms of the late 1990s by converting the federal share of Medicaid spending into a block grant that lets states create a range of options and gives Medicaid patients access to better care. It proposes similar reforms to the food-stamp program, ending the flawed incentive structure that rewards states for adding to the rolls. Finally, this budget recognizes that the best welfare program is one that ends with a job—it consolidates dozens of duplicative job-training programs into more accessible, accountable career scholarships that will better serve people looking for work.

As we strengthen and improve welfare programs for those who need them, we eliminate welfare for those who don't. Our budget targets corporate welfare, starting by ending the conservatorship of Fannie Mae and Freddie Mac that is costing taxpayers hundreds of billions of dollars. It gets rid of the permanent Wall Street bailout authority that Congress created last year. And it rolls back expensive handouts for uncompetitive sources of energy, calling instead for a free and open marketplace for energy development, innovation and exploration.

Health and retirement security: This budget's reforms will protect health and retirement security. This starts with saving Medicare. The open-ended, blank-check nature of the Medicare subsidy threatens the solvency of this critical program and creates inexcusable levels of waste. This budget takes action where others have ducked. But because government should not force people to reorganize their lives, its reforms will not affect those in or near retirement in any way.

Continued in article

Jensen Comment
Ryan is still being coy about farm subsidies like the absurd subsidy for corn ethanol. Rather than just eliminate most or all subsidies, he resorts to political double speak by saying we must "reform" agricultural subsidies. Read that as meaning that the subsidies will be left in place if it appears that Democrats will gain advantage in the farm region elections.

"Arriving as Pregnant Tourists, Leaving With American Babies," by Jennifer Medina, The New York Times, March 29, 2011 ---

The building inspectors and police officers walked into the small row of connected town houses here knowing something was amiss. Neighbors had complained about noise and a lot of pregnant women coming and going. And when they went into a kitchen they saw a row of clear bassinets holding several infants, with a woman acting as a nurse hovering over them.

“These were not women living in squalor — it was a well taken care of place and clean, but there were a lot of women and babies,” said Clayton Anderson, a city inspector who shut down the house on March 9. “I have never seen anything like this before. We really couldn’t determine the exact number of people living there.”

For the last year, the debate over birthright citizenship has raged across the country, with some political leaders calling for an end to the 14th Amendment, which gives automatic citizenship to any baby born in the United States. Much of the debate has focused on immigrants entering illegally from poor countries in Latin America. But in this case the women were not only relatively wealthy, but also here legally on tourist visas. Most of them, officials say, have already returned to China with their American babies.

Immigration experts say it is impossible to know precisely how widespread “maternity tourism” is. Businesses in China, Mexico and South Korea advertise packages that arrange for doctors, insurance and postpartum care. And the Marmara, a Turkish-owned hotel on the Upper East Side in New York City, has advertised monthlong “baby stays” that come with a stroller.  For the most part, though, the practice has involved individuals. The discovery of the large-scale facility here in the San Gabriel foothills raises questions about whether it was a rare phenomenon or an indication that maternity tourism is entering a new, more institutionalized phase with more hospital-like facilities operating quietly around the country.

Continued in article

From the Crazy Economist Who Wants No Limit on Government Borrowing Supposedly to Get Us Out of the Deficit
That's analogous to digging deeper into the whole to get yourself out of the hole
Eat Drink and Make Merry Without Fiscal Responsibility
The question is how long the Chinese will keep lending for lavish and unrestrained spending by Congress?

""Paul Krugman on Ryan's Budget Plan : Ludicrous and Cruel," by Paul Krugman, The New York Times, April 7, 2011 ---

Many commentators swooned earlier this week after House Republicans, led by the Budget Committee chairman, Paul Ryan, unveiled their budget proposals. They lavished praise on Mr. Ryan, asserting that his plan set a new standard of fiscal seriousness.

Well, they should have waited until people who know how to read budget numbers had a chance to study the proposal. For the G.O.P. plan turns out not to be serious at all. Instead, it’s simultaneously ridiculous and heartless.

How ridiculous is it? Let me count the ways — or rather a few of the ways, because there are more howlers in the plan than I can cover in one column.

First, Republicans have once again gone all in for voodoo economics — the claim, refuted by experience, that tax cuts pay for themselves.

Specifically, the Ryan proposal trumpets the results of an economic projection from the Heritage Foundation, which claims that the plan’s tax cuts would set off a gigantic boom. Indeed, the foundation initially predicted that the G.O.P. plan would bring the unemployment rate down to 2.8 percent — a number we haven’t achieved since the Korean War. After widespread jeering, the unemployment projection vanished from the Heritage Foundation’s Web site, but voodoo still permeates the rest of the analysis.

In particular, the original voodoo proposition — the claim that lower taxes mean higher revenue — is still very much there. The Heritage Foundation projection has large tax cuts actually increasing revenue by almost $600 billion over the next 10 years.

A more sober assessment from the nonpartisan Congressional Budget Office tells a different story. It finds that a large part of the supposed savings from spending cuts would go, not to reduce the deficit, but to pay for tax cuts. In fact, the budget office finds that over the next decade the plan would lead to bigger deficits and more debt than current law.

And about those spending cuts: leave health care on one side for a moment and focus on the rest of the proposal. It turns out that Mr. Ryan and his colleagues are assuming drastic cuts in nonhealth spending without explaining how that is supposed to happen.

How drastic? According to the budget office, which analyzed the plan using assumptions dictated by House Republicans, the proposal calls for spending on items other than Social Security, Medicare and Medicaid — but including defense — to fall from 12 percent of G.D.P. last year to 6 percent of G.D.P. in 2022, and just 3.5 percent of G.D.P. in the long run.

That last number is less than we currently spend on defense alone; it’s not much bigger than federal spending when Calvin Coolidge was president, and the United States, among other things, had only a tiny military establishment. How could such a drastic shrinking of government take place without crippling essential public functions? The plan doesn’t say.

And then there’s the much-ballyhooed proposal to abolish Medicare and replace it with vouchers that can be used to buy private health insurance.

The point here is that privatizing Medicare does nothing, in itself, to limit health-care costs. In fact, it almost surely raises them by adding a layer of middlemen. Yet the House plan assumes that we can cut health-care spending as a percentage of G.D.P. despite an aging population and rising health care costs.

The only way that can happen is if those vouchers are worth much less than the cost of health insurance. In fact, the Congressional Budget Office estimates that by 2030 the value of a voucher would cover only a third of the cost of a private insurance policy equivalent to Medicare as we know it. So the plan would deprive many and probably most seniors of adequate health care.

And that neither should nor will happen. Mr. Ryan and his colleagues can write down whatever numbers they like, but seniors vote. And when they find that their health-care vouchers are grossly inadequate, they’ll demand and get bigger vouchers — wiping out the plan’s supposed savings.

In short, this plan isn’t remotely serious; on the contrary, it’s ludicrous.

And it’s also cruel.

In the past, Mr. Ryan has talked a good game about taking care of those in need. But as the Center on Budget and Policy Priorities points out, of the $4 trillion in spending cuts he proposes over the next decade, two-thirds involve cutting programs that mainly serve low-income Americans. And by repealing last year’s health reform, without any replacement, the plan would also deprive an estimated 34 million nonelderly Americans of health insurance.

So the pundits who praised this proposal when it was released were punked. The G.O.P. budget plan isn’t a good-faith effort to put America’s fiscal house in order; it’s voodoo economics, with an extra dose of fantasy, and a large helping of mean-spiritedness.

Jensen Comment
Of course Professor Krugman has no solution to the uncruel, beneve;emt other than to keep borrowing, borrowing, and ultimately printing money like Zimbabwe. Yeah right! Zimbabwe's economic policies have not been cruel to its people!

Let 'em eat cake!

Bob Jensen's threads on the entitlements disaster ---

You might want to download this excellent article while it's still in front of the NYT's new  paywall

"The Logic of Cutting Corporate Taxes," by UC Berkeley Business Professor Laura D'Andrea Tyson, The New York Times, April April 8, 2011 ---
Full Article --- http://economix.blogs.nytimes.com/2011/04/08/the-logic-of-cutting-corporate-taxes/#more-106953

Corporate taxes –- or rather their absence –- have jumped to the top of the news in recent weeks, even drawing humorous commentary from Jon Stewart and Bill Maher. Many Americans are outraged to learn that some profitable American corporations pay little or no taxes in the United States, especially when corporate profits enjoyed their fastest growth ever in 2010.

Shouldn’t the government raise the corporate tax rate to require corporations to contribute their “fair share” to deficit reduction and to enhance the progressivity of the tax system? The answer is no.

In today’s world of mobile capital, increasing the corporate tax rate would be a bad way to generate revenues for deficit reduction, a bad way to increase the progressivity of the tax code and a bad way to help American workers and their families.

After the 1986 tax overhaul, the United States had one of the lowest corporate tax rates among the advanced industrial countries. Since then, these countries have been slashing their rates both to attract investment by American and other foreign companies and to discourage their own companies from shifting operations and profits to foreign locations offering even lower tax rates.

The resulting “race to the bottom” in corporate tax rates has made the United States a less attractive place for both domestic and foreign investments, and that has encouraged American multinational companies to shift more of their income abroad, in ways permitted by the United States tax code.

The United States now has the highest corporate tax rate of all developed countries –- and is alone in its attempt to impose taxes on the worldwide income of its resident corporations. All other developed countries and most major emerging countries have adopted a territorial system that exempts most foreign income of their resident corporations from taxes.

Continued in article

"Tax Holiday for Overseas Corporate Profits Would Increase Deficits, Fail to Boost the Economy, and Ultimately Shift More Investment and Jobs Overseas," y Chuck Marr and Brian Highsmith, Center for Budget Policy and Priorities," April 8, 2011 ---

Center for Budget Policy and Priorities ---

Two politically conservative groups that oppose the Center on Budget and Policy Priorities's policy positions accuse the group of producing misleading studies.[5][6] These critics focus on what they consider to be fallacious assumptions and inaccurate projections made by the group's analysts. Defenders of the group note that the Center's analyses are based on the work of independent, nonpartisan authorities such as the Congressional Budget Office, the U.S. Census Bureau, and the Government Accountability Office.

"Tax Holiday for Overseas Corporate Profits Would Increase Deficits, Fail to Boost the Economy, and Ultimately Shift More Investment and Jobs Overseas," y Chuck Marr and Brian Highsmith, Center for Budget Policy and Priorities," April 8, 2011 ---

Center for Budget Policy and Priorities ---

Two politically conservative groups that oppose the Center on Budget and Policy Priorities's policy positions accuse the group of producing misleading studies.[5][6] These critics focus on what they consider to be fallacious assumptions and inaccurate projections made by the group's analysts. Defenders of the group note that the Center's analyses are based on the work of independent, nonpartisan authorities such as the Congressional Budget Office, the U.S. Census Bureau, and the Government Accountability Office.

"The Logic of Cutting Corporate Taxes," by UC Berkeley Business Professor Laura D'Andrea Tyson, The New York Times, April April 8, 2011 ---
Full Article --- http://economix.blogs.nytimes.com/2011/04/08/the-logic-of-cutting-corporate-taxes/#more-106953

Jensen Comment
What could President Obama possibly have been thinking when he proposed lowering the corporate tax rates in his State of the Union address on Jan. 25, 2011? This is just a greedy ploy by leftists to induce corporations to bring trillions of off shore dollars back to the United States that are now being hoarded off shore due to the high corporate tax rates on dollars returned to invest in the United States.
What President Obama and his economic advisors are proposing  is to lower corporate tax rates at the same time Congress eliminates complicated corporate tax avoidance schemes that are now allowing multinationals like General Electric to avoid U.S. corporate income taxes altogether. I mean would G.E. rather have a 10% alternative minimum tax that it has to pay or a zero percent rate that currently means no income tax at all?

Richard Sansing forwarded the following link to a more academic study:
"The One-Time Received Dividend Deduction," by Mellissa Redmiles ---

"The Logic of Cutting Corporate Taxes," by UC Berkeley Business Professor Laura D'Andrea Tyson, The New York Times, April April 8, 2011 ---
Full Article --- http://economix.blogs.nytimes.com/2011/04/08/the-logic-of-cutting-corporate-taxes/#more-106953

In any case our President Obama and his economic advisers are pushing for a lower corporate tax rate which is really more of a liberal idea for more jobs than a conservative idea for higher executive compensation. I really think Obama is correct in this argument. Those that want to punish the rich for having outrageous incomes can do so by various means other than having a high corporate tax rate.

Since corporate taxation brings in such a small percentage of government revenue, I've been a long time advocate of doing away with corporate taxation completely coupled with higher personal tax rates and/or (gasp) a VAT tax without all the confounded shelters.

Government Interest Payments Gone Wild ---

Sciarra is trying to patch a hole in a system that everyone agrees is broken. But changing the way New Jersey taxes its residents and funds its schools would require both political parties to agree on a fix and be willing to cooperate enough to move forward. That hasn't happened here for a very long time.
Nancy Solomon, "Which Children Should Get New Jersey's Funding?" NPR, April 10, 2011 ---

"The Internet Tax Mirage Politicians try to drive online commerce—and revenue—out of state," The Wall Street Journal, April 8, 2011 ---

Governor Pat Quinn recently added to his reputation as America's most taxing politician by signing a law applying the state's 6.25% sales tax to Internet purchases made in Illinois. Within hours, Amazon, the online book and merchandise seller, announced it would discontinue using any of its 9,000 Illinois small business affiliates to avoid having to collect the tax. Congratulations, Governor.

The issue of whether and how states should tax Internet sales is back as one of the hottest in state legislatures. Colorado, New York, North Carolina and Rhode Island already impose some version of what has become known as the "Amazon tax," and at least a dozen other deficit-plagued states are advancing similar bills. This political brawl unites liberals with brick-and-mortar retailers, such as Wal-Mart, Best Buy and Target, against taxpayers and such online retailers as Amazon and Overstock. Internet sales reached $165 billion last year and have been growing by nearly 15% annually.

The first issue is whether the Amazon tax is constitutional. New York's law is now being challenged in court as a violation of the Supreme Court's landmark 1992 Quill decision. In that case the High Court ruled that a state cannot impose a tax on a company if it does not have a physical presence in that state.

Continued in article

Disability Entitlements: Being Declared Disabled has More Benefits Than Working
Between the ages of 0 and 200, disability pay and medical payments go on virtually forever
The system is racked with fraud
Cost averages $1,500 annually for each and every taxpayer in the U.S.
"College Enrollment Fell Slightly in 2010," by Catherine Rampell, The New York Times (Economix(, April 9, 2011 ---

In the worst economic times of the 1950s and ’60s, about 9 percent of men in the prime of their working lives (25 to 54 years old) were not working. At the depth of the severe recession in the early 1980s, about 15 percent of prime-age men were not working. Today, more than 18 percent of such men aren’t working.

That’s a depressing statistic: nearly one out of every five men between 25 and 54 is not employed. Yes, some of them are happily retired. Some are going to school. And some are taking care of their children. But most don’t fall into any of these categories. They simply aren’t working. They’re managing to get by some other way.

For growing numbers of these men, the federal disability program is a significant source of support. Disabled workers — men and women — received $115 billion in benefits last year and another $75 billion in medical costs. (Disability recipients become eligible for Medicare two years after starting to receive benefits.) That $190 billion sum is the equivalent of about $1,500 in taxes for each American household.

Yet disability usually goes unlargely uncovered by the media. Lately, it hasn’t. Motoko Rich of The Times and Damian Paletta of The Wall Street Journal have both written richly detailed articles recently.

Continued in article

A Greener World
"Spraying to Make Yards Green ... but With Paint, Not Water," by Marc Lacey, The New York Times, April 8, 2011 ---

Jensen Comment
One of the big problems with this environmental solution is that grass sucks in the evil carbon dioxide and expels the clean oxegon we breathe. Could this eventually come down to a fight between drinking and breathing?


Remember the good old days when it was evil corporations against Hollywood's earth-saving greens?
In those days it was timber barrens pitted against tree huggers saving spotted owls.
Now it's dark greens against light greens!

"Large North Dakota Wind Farm Falls to the Birds," Spectrum, April 6, 2011 ---

Wind power's impact on wildlife has long been a sticking point when it comes to the renewable resource's development. Ever since the Altamont, California turbines went up in the late 1970s, bird kills have been highlighted as the best reason to show some restraint on massive wind farms. Nothing has changed today: most recently, Minnesota-based utility Xcel Energy canceled a contract to build a 150-megawatt wind farm because of concerns over bird impacts.

The wind farm, which was to be built in southeastern North Dakota by enXco Development Corp., would have cost about $400 million and was scheduled to be completed by the end of this year. But two endangered species have scuttled the plan: the whooping crane and the piping plover. Xcel would have had to spend time and money attempting to mitigate any threats to the birds, and apparently those requirements made the project too uncertain to move forward.

Bird groups and some other environmentalists have focused heavily on the wind turbine impacts; a recent American Bird Conservancy video showed a vulture being struck by a turbine, and there are reportedly hundreds of thousands of bird fatalities each year due to wind power. As Andy Revkin points out at Dot Earth, though, this is actually a fairly low number compared to other manmade structures. If buildings kill hundreds of millions of birds every year, stopping short on wind power entirely because of such concerns might be the wrong move.

Still, Xcel's move to protect two species that are down to only a few individuals in certain areas is commendable. Proper siting and configuration of wind farms can obviously help with this issue as well; the Altamont turbines were small and situated extremely close together. Doing things carefully, in this case, will be better than not doing them at all.

"Scotland's wind farms 'often able only to boil 6,667 kettles'," by John Ross , Scotsman, April 7, 2011 ---

WIND farms are much less efficient than the industry claims, according to new research. A report produced for the conservation charity the John Muir Trust (JMT) says turbines are producing below 10 per cent of capacity for more than a third of the time.

It claims that for extended periods, all the wind turbines in Scotland linked to the National Grid produce less than 20MW of energy - just enough power for 6,667 households to boil their kettles

Helen McDade, JMT's head of policy, said: "This report is a real eye-opener for anyone who's been wondering how much power Scotland is getting from the fleet of wind turbines that have taken over many of our most beautiful hillsides. The answer appears to be, much less than is routinely claimed."

The research was carried out by Caithness-based Stuart Young Consulting, on electricity generated from UK wind farms between November 2008 and December 2010.

The wind industry and government have regularly said turbines will generate on average 30 per cent of their rate capacity over a year.

The study concludes there is an urgent need to re-evaluate the implications of reliance on wind for any significant proportion of our energy requirement.

Scottish Renewables policy director Jenny Hogan said it had no confidence in the figures.

"Yet again the John Muir Trust has commissioned an anti-wind farm campaigner to produce a report about UK onshore wind energy capacity output."

Continued in article

"Norway to Jews: You're Not Welcome Here - Anti-Semitism doesn't even mask itself as anti-Zionism," by Alan Dershowwitz, The Wall Street Journal, March 29, 2011 ---

I recently completed a tour of Norwegian universities, where I spoke about international law as applied to the Israeli-Palestinian conflict. But the tour nearly never happened.

Its sponsor, a Norwegian pro-Israel group, offered to have me lecture without any charge to the three major universities. Norwegian universities generally jump at any opportunity to invite lecturers from elsewhere. When my Harvard colleague Stephen Walt, co-author of "The Israel Lobby," came to Norway, he was immediately invited to present a lecture at the Norwegian University of Science and Technology in Trondheim. Likewise with Ilan Pappe, a demonizer of Israel who teaches at Oxford.

My hosts expected, therefore, that their offer to have me present a different academic perspective on the Israeli-Palestinian conflict would be eagerly accepted. I have written half a dozen books on the subject presenting a centrist view in support of the two-state solution. But the universities refused.

The dean of the law faculty at Bergen University said he would be "honored" to have me present a lecture "on the O.J. Simpson case," as long as I was willing to promise not to mention Israel. An administrator at the Trondheim school said that Israel was too "controversial."

The University of Oslo simply said "no" without offering an excuse. That led one journalist to wonder whether the Norwegian universities believe that I am "not entirely house-trained."

Only once before have I been prevented from lecturing at universities in a country. The other country was Apartheid South Africa.

Despite the faculties' refusals to invite me, I delivered three lectures to packed auditoriums at the invitation of student groups. I received sustained applause both before and after the talks.

It was then that I realized why all this happened. At all of the Norwegian universities, there have been efforts to enact academic and cultural boycotts of Jewish Israeli academics. This boycott is directed against Israel's "occupation" of Palestinian land—but the occupation that the boycott supporters have in mind is not of the West Bank but rather of Israel itself. Here is the first line of their petition: "Since 1948 the state of Israel has occupied Palestinian land . . ."

The administrations of the universities have refused to go along with this form of collective punishment of all Israeli academics, so the formal demand for a boycott failed. But in practice it exists. Jewish pro-Israel speakers are subject to a de facto boycott.

The first boycott signatory was Trond Adresen, a professor at Trondheim. About Jews, he has written: "There is something immensely self-satisfied and self-centered at the tribal mentality that is so prevalent among Jews. . . . [They] as a whole, are characterized by this mentality. . . . It is no less legitimate to say such a thing about Jews in 2008-2009 than it was to make the same point about the Germans around 1938."

This line of talk—directed at Jews, not Israel—is apparently acceptable among many in Norway's elite. Consider former Prime Minister Kare Willock's reaction to President Obama's selection of Rahm Emanuel as his first chief of staff: "It does not look too promising, he has chosen a chief of staff who is Jewish." Mr. Willock didn't know anything about Mr. Emanuel's views—he based his criticism on the sole fact that Mr. Emanuel is a Jew. Perhaps unsurprisingly, fewer than 1,000 Jews live in Norway today.

Continued in article

"Students Who Get It!" by John Stossel, Townhall, March 30, 2011 ---

I went to Princeton in 1969, where they taught me that government could solve the world's problems. Put the smartest people in a room, give them enough taxpayer money, and they will fix most everything. During those years, I heard nothing about an alternative.

How things have changed!

I recently spent time with several hundred college-aged people at a Students for Liberty conference in Washington, D.C. Here were hundreds of students who actually understand that government creates many of the problems, and freedom -- personal and economic liberty -- makes things better.

I appeared at the conference along with David Boaz of the Cato Institute. Here are some highlights.

Karina Zannat, a student at American University in Washington, D.C., said, "A lot of my professors seem to think that even when politicians spend money in seemingly wasteful ways, we should be OK with it because every dollar spent is one dollar that goes toward income for an American citizen."

This is a common canard known as the "broken window" fallacy. The 19th-century French free-market writer Frederic Bastiat exposed it with the story of a boy who breaks a shop window, prompting some townspeople to look at the bright side: fixing the window will stimulate economic activity in the town. The fallacy, of course, is that had the window not been broken, the shopkeeper would have spent the money in more productive ways.

People often commit this fallacy -- have a look at what's being written in the wake of Japan's tsunami.

Meg Patrick of George Mason University asked about the Austrian business cycle theory. How delightful to meet a student interested in that! This is Ludwig von Mises and F.A. Hayek's argument that when government inflates the money supply and holds down interest rates to create an economic boom, a bust, or recession, must follow because the prosperity is built on an artificial foundation.

Meg wanted to know if "the injection of fiscal stimulus into the economy (after the bust) disrupts the signals necessary to fix the current problem."

To which I replied: Sure does. The market is signaling that certain changes are needed, but stimulus spending interferes with those signals. If businesses are not allowed to fail, we don't get the market feedback we need.

David Boaz added: "If you get drunk, you have a hangover. I'm sure some of you have tried the theory: just keep drinking. But you can't keep drinking forever."

Continued in article

"Obama’s Union-Friendly, Feel-Good Approach to Education." by Kyle Olson, Townhall, March 30, 2011 ---

  • The Obama administration, principally the president and Education Secretary Arne Duncan, are now routinely making public statements which are leading to one conclusion: instead of fixing American education, we should dumb down the standards.

    According to the Associated Press, President Obama “is pushing a rewrite of the nation’s education law that would ease some of its rigid measurement tools” and wants “a test that ‘everybody agrees makes sense’ and administer it in less pressure-packed atmospheres, potentially every few years instead of annually.”

    The article goes on to say that Obama wants to move away from proficiency goals in math, science and reading, in favor of the ambiguous and amorphous goals of student readiness for college and career.

    Obama’s new focus comes on the heels of a New York Times report that 80% of American public schools could be labeled as failing under the standards of No Child Left Behind.

    Put another way: the standards under NCLB have revealed that the American public education system is full of cancer. Instead of treating the cancer, Obama wants to change the test, as if ignoring the MRI somehow makes the cancer go away.

    So instead of implementing sweeping policies to correct the illness, Obama is suggesting that we just stop testing to pretend it doesn’t exist.

    If Obama were serious about curing the disease, one of the best things he could do is to ensure that there is a quality teacher in every classroom in America. Of course, that would mean getting rid teacher tenure and scrapping seniority rules that favor burned-out teachers over ambitious and innovative young teachers.

    That means standing up to the teacher unions. For a while, it looked like Obama would get tough with the unions, but not anymore. With a shaky economy and three wars, it looks like Obama’s re-election is in serious jeopardy. He needs all hands on deck – thus the new union-friendly education message.

    Obama’s new direction will certainly make the unionized adults happy. They’ve hated NCLB from the get-go.

    And the unions will love Obama’s talk about using criteria other than standardized testing in evaluating schools.

    He doesn’t get specific, of course, but I bet I can fill in the gaps. If testing is too harsh, perhaps we can judge students and schools based on how hard they try or who can come up with the most heart-wrenching excuse for failure or how big the dog was that ate their homework.

    Continued in article

    "Department of Injustice," by Walter E. Williams, Townhall, March 30. 2011 ---

    One of the requirements to become a Dayton, Ohio police officer is to successfully pass the city's two-part written examination. Applicants must correctly answer 57 of 86 questions on the first part (66 percent) and 73 of 102 (72 percent) on the second part. Dayton's Civil Service Board reported that 490 candidates passed the November 2010 written test, 57 of whom were black. About 231 of the roughly 1,100 test takers were black.

    The U.S. Department of Justice, led by Attorney General Eric Holder, rejected the results of Dayton's Civil Service examination because not enough blacks passed. The DOJ has ordered the city to lower the passing score. The lowered passing grade requires candidates to answer 50 of 86 (58 percent) questions correctly on the first part and 64 of 102 (63 percent) of questions on the second. The DOJ-approved scoring policy requires potential police officers to earn the equivalent of an "F" on the first part and a "D" on the second. Based on the DOJ-imposed passing scores, a total of 748 people, 258 more than before, were reported passing the exam. Unreported was just how many of the 258 are black.

    Keith Lander, chairman of the Dayton chapter of the Southern Christian Leadership Conference, and Dayton NAACP president Derrick Foward condemned the DOJ actions.

    Mr. Lander said, "Lowering the test score is insulting to black people," adding, "The DOJ is creating the perception that black people are dumb by lowering the score. It's not accomplishing anything."

    Mr. Foward agreed and said, "The NAACP does not support individuals failing a test and then having the opportunity to be gainfully employed," adding, "If you lower the score for any group of people, you're not getting the best qualified people for the job."

    I am pleased by the positions taken by Messrs. Lander and Foward. It is truly insulting to suggest that black people cannot meet the same standards as white people and somehow justice requires lower standards. Black performance on Dayton's Civil Service exam is really a message about fraudulent high school diplomas that many black students receive.

    Continued in article

    This plea deal is being ignored by the liberal press
    "ACORN Pleads Guilty to Voter Registration Fraud in Nevada." by Eric Shawn, Fox News, April 6, 2011 ---

    The Pot Calling the "Do No Evil" Kettle Black
    "Microsoft's Antitrust Turnabout:  Now it's calling Google a monopolist," The Wall Street Journal, April 2, 2011 ---

    Invoking Romeo and Juliet's Mercutio seems like the most natural response to Microsoft's complaint to the European Commission over Google's allegedly anticompetitive behavior—a plague on the houses of Gates-Ballmer and Page-Brin would be well deserved. Even Brad Smith, Microsoft's long-time general counsel, was compelled to call attention to the "irony"—his word—of Microsoft's calling in the Commission to investigate the search giant.

    Microsoft, after all, suffered more than perhaps any other at the hands of Brussels's antitrust cops, and the company knows full well how difficult it is to run a business in the fast-moving tech space with regulators rummaging through your virtual file cabinets for evidence of ill-intent.

    Not that Google is above playing pin-the-regulator-on-the-rival, either. It milked the net neutrality crusade for as long as it was useful in keeping Internet service providers at bay. And four years ago Google filed a brief in court arguing that Microsoft's Vista operating system violated the Redmond, Washington company's consent decree stemming from the Justice Department's interminable case against the software maker.

    It's hard to believe now, but Microsoft's decade of Brussels purgatory began with a complaint that Microsoft's Media Player was illegally bundled with the Windows operating system. The European Commission made the world safe for competition again by ordering Microsoft to sell a version of Windows in Europe without a media player. This all seemed very important to the antitrust gnomes at the time, which goes to show why bureaucrats shouldn't design software. In the midst of that brouhaha, iTunes came along and made all that huffing about "lock-in" and "network effects" look like the self-serving rationalization of the antitrust guild that some of us said it was at the time.

    Now it's Microsoft's turn, and its complaint shows that it has also learned to speak regulator-ese. According to Mr. Smith, Google's sins include: denying competitors the ability to index YouTube's cache of laughing-baby videos (although a nonscientific sampling of Microsoft's Bing search results suggests that Microsoft has nevertheless indexed some pretty obscure YouTube clips); restricting advertisers' ability to copy their search campaigns to competitors' sites; and locking in large European websites to the exclusive use of Google search boxes.

    Continued in article

    "Blinking on Fan and Fred:  Republicans miss a chance to put the toxic twins out of business," The Wall Street Journal, March 31, 2011 ---

  • Democrats like to paint House Republicans as "extreme" ideologues held captive by the Tea Party. But after reviewing the House GOP's new plan to reform the housing market, we wish the Tea Party had grabbed a few more hostages.

    On Tuesday Republicans on the House Financial Services Committee introduced eight bills to reform Fannie Mae and Freddie Mac, the government-created mortgage giants at the heart of the financial crisis. These toxic twins have already gobbled up $156 billion of taxpayer money. But not one of the eight bills would shut down Fannie or Freddie—even on a delayed fuse.

    You could argue that the House GOP has rolled out a less aggressive reform plan than one of the options recently floated by Treasury Secretary Timothy Geithner. Yes, the same Secretary Geithner who quietly gave Fan and Fred an unlimited call on taxpayer cash on Christmas Eve of 2009. Can he really be among the Beltway's boldest voices for reform only five months after a bailout-weary electorate turned the House over to Republicans?

    Those Republicans seem to have decided that fundamental reform isn't possible with a Democratic Senate. At least that's the charitable view. Another is that Financial Services Chairman Spencer Bachus, a longtime friend of the mortgage twins, still can't liberate himself from the housing lobby that wants Fan and Fred to rise again. Whatever the reasons, taxpayers hoping for a clean break from Washington's housing folly are being offered merely incremental enhancements.

    This is not to say that the incremental moves aren't positive. They would represent a great first step if this wasn't a once-in-a-Congressional-career chance to slay these beasts before they live to start another financial crisis. History shows that, once the memories of 2008 begin to fade, Fan and Fred will be extremely persuasive in convincing politicians that allowing them to grow is a boon to homeowners.

    For now, the Republican plan would begin to cut them down to size. Texas Representative Jeb Hensarling's bill would reduce the size of the mortgage portfolios held by Fannie and Freddie over five years. Each of these "government-sponsored enterprises" would be limited to holding $700 billion in mortgages in year one and no more than $250 billion by year five.

    These loans and pools of loans that Fan and Fred own outright are a key source of risk. But remember that the much larger potential liabilities are all of the mortgages owned by others but guaranteed by Fan and Fred, and therefore by taxpayers. Fan and Fred could continue issuing those guarantees indefinitely.

    Californian Ed Royce's bill would abolish Fan and Fred's affordable housing goals. Former Fannie Mae executive Ed Pinto has shown how increases in these goals mandated by the Clinton and Bush Administrations led to catastrophic declines in the quality of underwriting at the companies. Mr. Royce said this week that as a result Fan and Fred had purchased more than $1 trillion in "junk loans" from the likes of Countrywide Financial, and his bill would also reduce taxpayer risk.

    A third bill, by Texan Randy Neugebauer, would direct federal regulators to slowly raise the fees Fan and Fred charge to guarantee mortgages against default. The idea is to gradually price this insurance in line with Fan and Fed's private competitors. This could be significant, if taxpayers can count on regulators to execute the policy.

    Another useful reform is New Jersey Representative Scott Garrett's plan to strip Fan and Fred's exemption from new mortgage rules mandated by the Dodd-Frank law. The Obama Administration this week rolled out new risk-retention rules, but they affect only private issuers of mortgage-backed securities. Absent reform, this will freeze in place the dominant share of the mortgage market now enjoyed by Fannie, Freddie and the Federal Housing Administration.

    Continued in article

  • "Save a Forest: Print Your Emails:  It's okay to use paper. Trees are renewable, recyclable and sustainable," by Chuck Leavell and Carlton Owen, The Wall Street Journal, March 31, 2011 ---

    Chuck's email tagline reads: "Notice: It's OK to print this email. Paper is a biodegradable, renewable, sustainable product made from trees. Growing and harvesting trees provides jobs for millions of Americans. Working forests are good for the environment and provide clean air and water, wildlife habitat and carbon storage. Thanks to improved forest management, we have more trees in America today than we had 100 years ago."

    Now, understand that we don't advocate wanton waste of paper or any other material, but avoiding the print option does absolutely nothing to save the planet or forests. More forests are dying of insect infestation and disease or being paved over across this country right now than could be converted to an email print-out in a thousand years.

    Paper is good. Around 105 A.D., man discovered that paper traveled and transcribed better than stone; it became the renewable medium of choice. Frankly, the human eye can only stare at a computer screen for so long.

    We appreciate and applaud people who are sensitive to environmental issues. We both love forests and are avid environmentalists. But we are going to continue to print out those necessary emails without guilt.

    Honest, it's okay to print. Trees are renewable, recyclable and sustainable.


    Jensen Comment
    The paper companies are the largest single landowners in Maine, New Hampshire, and Vermont --- owning millions of acres of mostly conifer forests used for making paper pulp. I view paper manufacturing as good for the environment since bad types of forest removal is typically forestalled as long as the paper companies can harvest and replant the timber.

    Think of the air we breathe. Much of the oxygen in that air was generated by our forests. Then think of how we are depleting the oxygen when we ravage our forests.

    Sadly the last paper mill in New Hampshire closed its doors as the world transitions to electronic books, eReader newspapers, and PDF legal documents stored only in hard drives. Some efforts are being made to revive the paper mill in Gorham, but similar closings have taken place in other paper mills around the world.

    My wife actually had tears in her eyes when she informed me this year that JC Penney (pronounced Zjjock Penaaayyy) was dropping its big catalog. She still has a bit of a stub left on the finger she uses to dial 1-800.

    We might naively hope that these vast forests will be replanted with beautiful hardwood trees for fine furniture, but the fact of the matter is that hardwood trees are too slow growing to be a profitable replacement of the fir, pine, and spruce forests used in paper making. Meanwhile the rain forests in the tropics are being ravaged for hardwood furniture.

    Softwood trees can be replanted for home building, but new and better materials are replacing much of the wood in home building, especially materials that are more fire and termite resistant.

    Hence, I encourage printing computer documents since this helps to save the forests that transform our harmful carbon dioxide into wonderful oxygen in a photosynthesis process that went on for millions of years before animal forms of life commenced on this beautiful planet.

    Fortunately, there's not been technology to replace the paper tissue rolls beside our commodes even if the commode sitters are now holding Kindles and iPads while they do their bathroom business. Fortunately we've not yet completely wiped out the paper industry that still provides much of the oxygen we breathe.

    Contrary to folklore, Iowa farmers did not use corn cobs in their outhouses. I'm not lying when I say that on our family farm we tore out pages of Sears Catalogs stored in the outhouse. People don't believe me these days when I tell them we did not use toilet paper on the farm, but I'm telling truth about this part of my childhood. I mentioned to you before that, as a young boy, I tore out the women's underwear pages and hid them in the hay loft of the barn. This was long before there were such things as Playboy Magazines. I guess Hugh Hefner doesn't get enough credit for his part in providing the air we breathe.

    I am for socialism, disarmament, and, ultimately, for abolishing the state itself... I seek the social ownership of property, the abolition of the propertied class, and the sole control of those who produce wealth. Communism is the goal.
    Alex Baldwin, Founder of the ACLU

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

    Return to the Tidbits Archives ---


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

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

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

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

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

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

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

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


    Bob Jensen's threads on accounting theory ---

    Tom Lehrer on Mathematical Models and Statistics ---

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

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

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

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