Tidbits on January 20, 2011
Bob Jensen at Trinity University

This week I made a special photograph file of Set 1 of my Snow Season Favorites
http://www.trinity.edu/rjensen/tidbits/Snow/Set01/SnowFavoritesSet01.htm   

In addition I featured several snow cartoons

 This has been a heavy snow year with temperatures slightly above zero most days
I read where global warming brings on more moisture in the air
Hence the world should expect more rain and flooding
And where we live this means more record-setting snow depths
Depths that are often too much for my snow blower to handle
Then I call my snow plow man
Video taken with my cool sunglasses
http://www.cs.trinity.edu/~rjensen/temp/2010JensenSnowPlow.3gp

Below is a shot of the south edge of the parking area behind our cottage

And this is the west edge

 

 

 White Mountain News --- http://www.whitemtnews.com/

 

 

Tidbits on January 20, 2011
Bob Jensen

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

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


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


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

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




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

Putting the Pieces on the International Space Station [Flash Player] ---
http://i.usatoday.net/tech/graphics/iss_timeline/flash.htm

"Rethinking Capitalism," Michael Porter, Harvard Business Review Blog, January 5, 2010 ---  Click Here
http://blogs.hbr.org/video/2011/01/rethinking-capitalism.html?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date

Video:  Neuroeconomist Paul J. Zak on Markets and the "Molecule of Love" ---
http://www.youtube.com/watch?v=gmuOW6qGbx4
Thank you Jagdish for the heads up.

Photogravure [Flash Player] http://www.photogravure.com

David Albrecht ponders the classroom --- http://accountingprofessor.wordpress.com/2011/01/16/icreativity/

Video:  Why Ronald Regan Changed Political Parties --- http://www.jointheteaparty.us/videos/videoRR.html

National Science Foundation: Predicting Seasonal Weather [Flash Player] --- http://www.nsf.gov/news/special_reports/autumnwinter

The Boston Foundation: Multimedia Library --- http://www.tbf.org/UtilityNavigation/MultimediaLibrary/MultimediaLibraryHome.asp

Nature: American Eagle [Flash Player] http://www.pbs.org/wnet/nature/episodes/american-eagle/introduction/4201/

Film Noir Foundation --- http://www.filmnoirfoundation.org/

Fords Made in Brazil (Ford's most advanced assembly plant) --- http://apps.detnews.com/apps/multimedia/player/index.php?id=1189

American Cinema (video) --- http://www.learner.org/resources/series67.html

The Art Institute of Chicago: Education: Online Resources [Quick Time] http://www.artic.edu/aic/visitor_info/podcasts/video/education_videos/

Magnificent Maps [Flash Media Player] --- http://www.bl.uk/magnificentmaps/

American RadioWorks: Testing Teachers (radio broadcast) --- http://americanradioworks.publicradio.org/features/testing_teachers/

American Cinema (video) --- http://www.learner.org/resources/series67.html

Western Silent Films Lobby Card Collection --- http://beinecke.library.yale.edu/digitallibrary/lobbycards.html

Audio (one hour):  Claiming Money is Fiction (yipes! Money is the measuring unit in accounting records and financial statements)
The Invention of Money ---
http://www.thisamericanlife.org/


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

A harmonica in Carnegie Hall --- http://www.wimp.com/harmonicacarnegie/

Eric Johnson: Up Close With A Guitar Virtuoso ---
http://www.npr.org/2011/01/09/132766283/eric-johnson-up-close-with-a-guitar-virtuoso

The Nashville Symphony In Concert (complete concert) ---
http://www.npr.org/2011/01/07/132654102/nashville-symphony-in-concert

The King's Singers: Four Decades Of Close, Sweet Harmony (complete concert) ---
http://www.npr.org/2010/12/23/132228929/the-kings-singers-four-decades-of-close-sweet-harmony

Strife and Salvation: Beethoven's 'Fidelio' (introduction to the opera) ---
http://www.npr.org/2011/01/07/132712125/strife-and-salvation-beethovens-fidelio

How Irish Step Dancing REALLY started !! (in front of the men's room) ---
http://www.youtube.com/watch?v=m0rrLdWLu_0&feature=player_embedded

What is a professor?
http://www.xtranormal.com/watch/7709517/?ref=nf
Thank you Fred Phillips for the heads up.

Web outfits like Pandora, Foneshow, Stitcher, and Slacker broadcast portable and mobile content that makes Sirius look overpriced and stodgy ---
http://www.businessweek.com/technology/content/mar2009/tc20090327_877363.htm?link_position=link2

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

Photogravure [Flash Player] http://www.photogravure.com

America's First Illustrator: Alexander Anderson --- http://digitalgallery.nypl.org/nypldigital/explore/dgexplore.cfm?topic=arts&col_id=221

A page from Snopes on Anna Kostenko --- http://www.snopes.com/photos/arts/kostenko.asp

Dictionary of Art Historians --- http://www.dictionaryofarthistorians.org/

G. William Skinner Map Collection ( maps )--- http://content.lib.washington.edu/skinnerweb/

Magnificent Maps [Flash Media Player] --- http://www.bl.uk/magnificentmaps/

Mural Arts Program --- http://muralarts.org/

Ashfall Fossil Beds State Historical Park --- http://ashfall.unl.edu/

John Day Fossil Beds National Monument --- http://www.nps.gov/features/joda/

The Richard H. Driehaus Museum (Chicago History) --- http://www.driehausmuseum.org/

Chicago History Museum [Flash Player] http://blog.chicagohistory.org/ 

Obsidian Mirror-Travels: Refracting Ancient Mexican Art and Archaeology (Getty Museum) ---
http://www.getty.edu/research/exhibitions_events/exhibitions/obsidian_mirror/index.html

South Florida History in Photographs
The Bob Simms Collection: An Activist's Life and Legacy --- http://scholar.library.miami.edu/bobsimms/ 

The Food Museum --- http://www.foodmuseum.com/

Binding Wounds, Pushing Boundaries: African Americans in Civil War Medicine --- http://www.nlm.nih.gov/exhibition/bindingwounds/index.html

Images from the History of Medicine --- http://www.nlm.nih.gov/hmd/ihm/ 

Photographs of a Zeppelin in flight --- http://home.comcast.net/~bzee1b/Zeppelin/Zeppelin.html
I've linked to this previously, but it's worth a second go

Rare and Beautiful Books in Biology and Medicine
Turning the Pages Online ---
http://archive.nlm.nih.gov/proj/ttp/intro.htm

Ad*Access --- http://library.duke.edu/digitalcollections/adaccess/
The Duke University Libraries has an extensive physical and online collection of advertisements that appeared in magazines and newspapers in the U.S. and Canada from 1911-1955. The Ad*Access collection focuses on advertisements in five main subject areas: Radio, Television, Transportation, Beauty and Hygiene, and World War II.

Bob Jensen's threads on history, literature and art ---
http://www.trinity.edu/rjensen/Bookbob2.htm#History


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

Physics from Hell: How Dante’s Inferno Inspired Galileo’s Physics --- Click Here
http://www.openculture.com/2011/01/physics_from_hell_how_dantes_inferno_inspired_galileos_physics_.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29
Also see
http://danteworlds.laits.utexas.edu/

The Boston Foundation: Multimedia Library --- http://www.tbf.org/UtilityNavigation/MultimediaLibrary/MultimediaLibraryHome.asp

Boston University Libraries: Research Guides --- http://www.bu.edu/library/guides/

Invitation to World Literature --- http://www.learner.org/courses/worldlit/

Dictionary of Art Historians --- http://www.dictionaryofarthistorians.org/

Film Noir Foundation --- http://www.filmnoirfoundation.org/

American Cinema (video) --- http://www.learner.org/resources/series67.html

Charlotte Perkins Gilman's "The Yellow Wall-Paper" is a feminist classic. Scott McLemee looks into the story behind the story.
"Female Complaints," Scott McLemee, Inside Higher Ed, January 11, 2011 ---
http://www.insidehighered.com/views/mclemee/mclemee320

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




Now in Another Tidbits Document
Political Quotations on January 20, 2011
http://www.trinity.edu/rjensen/tidbits/2011/TidbitsQuotations012011.htm         

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




January 19, 2011 message from Jagdish Gangolly

Here are two inspirational stories:

Steve Jobs' 2005 Stanford Commencement Address http://www.youtube.com/watch?v=UF8uR6Z6KLc 

15 Little-known facts about Steve Jobs http://timesofindia.indiatimes.com/tech/itslideshow/7312018.cms 

Jagdish

 


"Making things hard to read 'can boost learning'," by Cordelia Hebblethwaite, BBC News, January 144, 2011 ---
http://www.bbc.co.uk/news/world-11573666

Difficult-to-read fonts make for better learning, according to scientists.

The finding is about to be published in the international journal Cognition.

Researchers at Princeton University employed volunteers to learn made-up information about different types of aliens - and found that those reading harder fonts recalled more when tested 15 minutes later.

They argue that schools could boost results by simply changing the font used in their basic teaching materials. Hard to digest

The 28 volunteers in the Princeton study were given 90 seconds to try to memorise a list of seven features for three different species of alien.

The idea was to re-create the kind of learning in a biology class. Aliens were chosen to be sure that none of the volunteers' prior knowledge interfered with the results.

One group was given the lists in 16-point Arial pure black font, which is generally regarded to be easy and clear to read. Continue reading the main story The alien test An extract from the test used by Princeton University, showing lists of features about made-up aliens in Arial and Comic Sans MS fonts

An extract from the Princeton University test The text at the top is in Arial; the bottom is in Comic Sans MS Volunteers were able to remember more when the information was written in the bottom font, or in the Bodoni MT font

Source: Princeton University

The other had the same information presented in either 12-point Comic Sans MS 75% greyscale font or 12-point Bodoni MT 75% greyscale.

The volunteers were distracted for 15 minutes, and then tested on how much they could remember.

Researchers found that, on average, those given the harder-to-read fonts actually recalled 14% more.

They believe that presenting information in a way that is hard to digest means a person has to concentrate more, and this leads to "deeper processing" and then "better retrieval" afterwards.

It is an example of the positive effects of what scientists call "disfluency".

"Disfluency is just a subjective feeling of difficulty associated with any mental task," explained psychology Prof Daniel Oppenheimer, one of the co-authors of the study.

"So if something is hard to see or hear, it feels disfluent... We'd found that disfluency led people to think harder about things.

"When we found that in the lab, we were very excited, because it has obvious implications for the classroom."

Continued in article

Jensen Comment
I wonder if the same reasoning also applies to content itself in cases and problems. The illustrations in Appendices A and B of the original FAS 133 are notoriously difficult. These illustrations taught be more about accounting for derivative financial instruments and hedging activities more than any other source of my learning of how to account for these complex contracts. Sadly, these illustrations were left out of the FASB's Codification Database. I wonder if it was because they're deemed too difficult.

Truth Time: 
Actually the most valuable learning experience for me was in extending the ten toughest Appendix B examples ---
http://www.cs.trinity.edu/~rjensen/Calgary/CD/FAS133AppendixB/

Even more difficult are the cross currency and benchmark illustrations in the original FAS 138. For example, see the 138Bench folder at
http://www.cs.trinity.edu/~rjensen/Calgary/CD/FAS133OtherExcelFiles/

It was most certainly extremely difficult for me to learn and extend these complicated illustrations. But if I had not studied and extended these difficult examples I would've never learned nearly as much about the wonders of FAS 133 and its extending amendments.

I'm not in favor of simplifying standards and textbooks on the theory that they're too difficult for students. And I'm certainly glad that watering down content is not the guiding principle in medical schools. The students that get left behind maybe should be left behind rather than make it easier to specialize.

You're more respected if you really, really understand very technical content. Learning from watered down sources diminishes this respect unless you one day move into the tough reading, cases, illustrations, and problems. You're respected even more if you can extend this tough material in meaningful ways.


It's interesting that many of the "best" countries are also relatively high in alcoholism disease as well.
The Best Countries of the World
(according to Newsweek Magazine) ---
http://www.newsweek.com/feature/2010/the-world-s-best-countries.html

Jensen Comment
Finland's economy can best be described as a Nordic (Mixed) Model ---
http://en.wikipedia.org/wiki/Nordic_model
There's relatively low corruption, strict property right and contract enforcement, and free trade. At the same time Finland's taxation is among the very highest in the world with a typical Nordic welfare system. Universal education and health care are outstanding. The Finnish language is one of the most difficult in the world, and Finland has not been burdened with immigration and ethnic strife found in most other nations. There are unfunded entitlements, but on a relative scale Finland does not face the entitlements crises of the U.S., Japan, Germany, France, and the U.K. Finland is heavily dependent upon exports and is one of the leading suppliers of electronic goods in Europe.

Success of all the highly-taxed Nordic counties suggests that the United States could live with higher taxation to cover trillion-dollar deficits. Finland is perhaps a better test of the Nordic model than Norway since Norway is blessed with oil wells. Sweden, Norway, and Denmark are now bothered by more ethnic strife than Finland.

Some things that the above rankings do not tell us is the fragility of some economies in the Top 25 shown above. For example, precarious debt levels and deficits are threatening quality of life in Ireland, Spain, France, and Italy. It seems ludicrous to rank solid-Singapore below or even near some of the teetering European economies and the debt-ridden the United States.

Finland's heritage and language are vastly different from its Nordic neighbors. The language and culture are rooted more in Hungary and Baltic regions rather than in blond Arian Germany. My Swedish and Norwegian friends jokingly tell me that Finland really isn't part of Scandinavia.

Alcoholism
Like other nations bordering the Arctic Circle, Finland has a relatively high alcoholism rate, perhaps even higher than its Nordic neighbors. This may also explain why Finland is probably the least tolerant nation in the world in terms of drunk driving. Finland only ranks ninth (85 liters per person and lower than rates in Denmark, Belgium, the U.K., Austria, Australia, Germany, Ireland, and the Czech Republic) in the world in terms of beer consumption, but like Russia the alcoholic beverage of choice in Finland is the mind-numbing vodka ---
http://www.cnbc.com/id/26789471/Top_20_Beer_Drinking_Countries?slide=13

People on the streets of Finland are known for not looking strangers in the eye or even acknowledging strangers passing by. I was informed about this before visiting Finland and later found it to be true. But in their homes they are warm and friendly. English speaking seemed higher to me in Finland than in in other Nordic countries and in continental Europe (Holland is a notable exception).


Can Europe Be Saved?

Spreading Infection:  An interactive chart on the state of Europe's economies ---
http://www.economist.com/blogs/dailychart/2011/01/europes_economies

THE fear that Greece's sovereign-debt crisis might presage similar episodes elsewhere in the euro zone has been borne out. In November, Ireland joined Greece in intensive care, becoming the first euro-zone country to apply for funds from the rescue scheme agreed in May 2010 in concert with the IMF. Sovereign-bond spreads (the extra interest compared with bonds issued by Germany, the safest credit) have risen sharply in other euro-zone countries, notably Portugal, but also in Spain. Promises to tackle budget deficits through public spending cuts and tax increases have offered little reassurance to bondholders, who know that austerity will hold back already-weak GDP growth.

The interactive graphic above (updated January 12th 2011) illustrates some of the problems that the European economy faces. GDP picked up in most countries through 2010 but there were marked differences in performance. Germany was especially sprightly: its economy rose by almost 4% in the year to the third quarter. But GDP in Greece has crashed under the weight of austerity; Ireland has yet to emerge convincingly from a deep recession; and Spain’s economy is barely growing. It is notable that GDP countries outside the euro, such as Britain, Poland and especially Sweden grew at a faster rate than the euro-zone average in the year to the third quarter.

Continued in article

'The Euro Area's Debt Crisis:  Bite the Bullet," The Economist, January 13, 2011 ---
http://www.economist.com/node/17902803

In the first of three articles on the euro zone’s sovereign-debt woes, we present our estimate of the burdens on the currency club’s four most troubled members.

THE euro zone’s strategy for tackling its sovereign-debt crisis is failing. A makeshift scheme was put in place in May to help countries that cannot otherwise borrow at tolerable interest rates. That lowered but did not remove the risk that a country may default for want of short-term funds. But the bond market’s nerves have been shredded again by the likelihood that from 2013, when a permanent bail-out mechanism is due to be in place, it will be easier to restructure an insolvent country’s debts. More worrying still for private investors, this seems set to give official creditors preference over others.

As a result, bail-outs are making private investors less rather than more keen to hold a troubled country’s bonds. As old debts are refinanced and new deficits funded by the European rescue pot and the IMF, the share of such a country’s debt held by official sources will steadily rise. That will leave a shrinking pool of private investors to bear losses if debts are restructured. And the smaller that pool becomes, the larger the loss that each investor will have to accept. Bond purchases by the European Central Bank (ECB) aimed at stabilising markets have further diminished the stock in private hands.

This perverse dynamic argues for a restructuring of insolvent countries’ debts sooner rather than later. But when is a debt burden too heavy to be borne? A first indicator against which to make that judgment is the ratio of gross public debt to GDP. Most rich economies, including the euro area’s most troubled, have large budget deficits and so will be adding to their debts for years. Today’s toll is not so important. What matters is how big the debt burden will be when it stabilises.

Continued in article

Leader: It is time for insolvent euro-zone countries to restructure their debts

Firm demand for Portugal's bonds cannot mask its deep problems

Quantifying the difficulties of Spain’s banking system

An interactive chart on the state of Europe's economies

Our correspondents on what a debt restructuring would mean for the euro zone

Discussion: Is it time for European debt restructuring?

 

Note the Off Balance Sheet Financing, especially in Greece (also like the U.S. Government)
http://www.trinity.edu/rjensen/Theory02.htm#GovernmentalAccounting
"Can Europe Be Saved?" by Paul Krugman, The New York Times, January 12, 2011 ---
http://www.nytimes.com/2011/01/16/magazine/16Europe-t.html?pagewanted=1&_r=1&hpw

THERE’S SOMETHING peculiarly apt about the fact that the current European crisis began in Greece. For Europe’s woes have all the aspects of a classical Greek tragedy, in which a man of noble character is undone by the fatal flaw of hubris.

. . .

The answer, unfortunately, was that currency unions have costs as well as benefits. And the case for a single European currency was much weaker than the case for a single European market — a fact that European leaders chose to ignore.

. . .

What does this have to do with the case for or against the euro? Well, when the single European currency was first proposed, an obvious question was whether it would work as well as the dollar does here in America. And the answer, clearly, was no — for exactly the reasons the Ireland-Nevada comparison illustrates. Europe isn’t fiscally integrated: German taxpayers don’t automatically pick up part of the tab for Greek pensions or Irish bank bailouts. And while Europeans have the legal right to move freely in search of jobs, in practice imperfect cultural integration — above all, the lack of a common language — makes workers less geographically mobile than their American counterparts.

. . .

In Greece the story is straightforward: the government behaved irresponsibly, lied about it and got caught. During the years of easy borrowing, Greece’s conservative government ran up a lot of debt — more than it admitted. When the government changed hands in 2009, the accounting fictions came to light; suddenly it was revealed that Greece had both a much bigger deficit and substantially more debt than anyone had realized. Investors, understandably, took flight.

. . .

Toughing it out: Troubled European economies could, conceivably, reassure creditors by showing sufficient willingness to endure pain and thereby avoid either default or devaluation. The role models here are the Baltic nations: Estonia, Lithuania and Latvia. These countries are small and poor by European standards; they want very badly to gain the long-term advantages they believe will accrue from joining the euro and becoming part of a greater Europe. And so they have been willing to endure very harsh fiscal austerity while wages gradually come down in the hope of restoring competitiveness — a process known in Eurospeak as “internal devaluation.”

. . .

In any case, the odds are that the current tough-it-out strategy won’t work even in the narrow sense of avoiding default and devaluation — and the fact that it won’t work will become obvious sooner rather than later. At that point, Europe’s stronger nations will have to make a choice.

It has been 60 years since the Schuman declaration started Europe on the road to greater unity. Until now the journey along that road, however slow, has always been in the right direction. But that will no longer be true if the euro project fails. A failed euro wouldn’t send Europe back to the days of minefields and barbed wire — but it would represent a possibly irreversible blow to hopes of true European federation.

So will Europe’s strong nations let that happen? Or will they accept the responsibility, and possibly the cost, of being their neighbors’ keepers? The whole world is waiting for the answer.

Bob Jensen's threads on entitlements are at
http://www.trinity.edu/rjensen/Entitlements.htm


And the loser is?  You!

"Google yanking H.264 video out of Chrome," by Stephen Shankland, cnet news, January 11, 2011 ---
http://news.cnet.com/8301-17939_109-20028196-2.html?tag=nl.e776
Thanks to David Fordham for the heads up.


Nature versus Nurture
Joe Hoyle's $10 Million Dollar Offer
--- http://joehoyle-teaching.blogspot.com/2011/01/10-million-question.html

Jensen Comment
Joe's logic seems to overlook one criticism that my students repeatedly hit me with in 40 years of teaching. Over and over I heard the complaint that:
"Your course is only one of five courses that I'm taking this semester. I can't devote all my time to getting an A in your course and fail my other four courses. I have projects, examinations, and tons of reading in my other courses. Can't you ease up a lot?"

Of course if somebody gave away $10 million to a student for earning an A in my course the student most likely would totally neglect the other four courses. At resident universities like Trinity University, students must take a minimum number of courses (I think it's now four courses) such that students are not allowed to only take one course except in very unusual circumstances. I think that most students would view three or four F grades as a pretty cheap price for a high probability of getting $10 million if they devoted 16 hours 24/7 toward just getting an A in my course.

It's not clear that even with 16 hours a day 24/7 that all of my students would earn an A grade. Some students are neither efficient nor effective no matter how much time they put into studying. They could, of course, hire quality tutors ten hours a day who could perhaps take up the slack, but I'm not sure this slack is all due to lack of talent on the part of students unless talent is equated with lower ability to concentrate.

I do agree that most my students over 40 years probably could've earned A grades in my courses if they truly worked 16 hours a day in a concentrated effort to earn an A from me. Certainly many of my students earned A grades with a whole lot less time and less effort and no tutors. And I don't think this was all due to nature (talent) relative to effort. Most A-grade students are more efficient and effective with their time apart from their raw talents.

Most of my teaching was in advanced courses such that the weaker, disorganized, and partying students were filtered out before they ever met me. By the time I  met these students they were hell-bent on entry into their accounting careers. Hence I generally did not have to work with unmotivated students, but there were always a few who managed to mess up their lives after three or more years of college. And even my best students still had four other courses where they also wanted A grades.

In our relatively small accounting program at Trinity we did do some things to ease the pressure on students, especially students in the masters program. Instructors tried to coordinate scheduled examinations and project due dates so that students did not get hit with everything being due at once. This was more difficult to coordinate in the undergraduate program.

Over the course of my 40 years of teaching I saw a marked trend of students pressuring me to give higher grades. Forty years ago a C grade was still a passing grade. In today's environment for getting internships, job offers, and admission to graduate school a C grade is tantamount to an F grade. This is the case in most universities. In 1940 the average grade at Harvard was a C grade. Look at Harvard's undergraduate grade distribution in the 21st Century:

The investigation revealed that 91 percent of Harvard's (undergraduate) students graduated cum laude.
Thomas Bartlett and Paula Wasley, "Just Say 'A': Grade Inflation Undergoes Reality Check:  The notion of a decline in standards draws crusaders and skeptics," Chronicle of Higher Education, September 5, 2008 --- http://chronicle.com/weekly/v55/i02/02a00104.htm?utm_source=wb&utm_medium=en

The worst scandal in the history of higher education is grade inflation ---
http://www.trinity.edu/rjensen/assess.htm#GradeInflation

Joe Hoyle better not make any $10 million offers in the 21st Century.


Audio (one hour):  Claiming Money is Fiction (Yipes! Money is the measuring unit in accounting records and financial statements)
The Invention of Money --- http://www.thisamericanlife.org/


Wasteful Pork Barrel Legislation Department (this time in the State of Georgia)

"TLP: Like Shooting Fish in a Pork Barrel," by Adrienne Gonzalez, Jr. Deputy Accountant Blog, January 18, 2011 ---
http://www.jrdeputyaccountant.com/2011/01/tlp-like-shooting-fish-in-pork-barrel.html


An Important Article for Wannabe Statisticians and Other Empirical Researchers

"You Might Already Know This ... ," by Benedict Carey, The New York Times, January 10, 2011 ---
http://www.nytimes.com/2011/01/11/science/11esp.html?_r=1&src=me&ref=general

In recent weeks, editors at a respected psychology journal have been taking heat from fellow scientists for deciding to accept a research report that claims to show the existence of extrasensory perception.

The report, to be published this year in The Journal of Personality and Social Psychology, is not likely to change many minds. And the scientific critiques of the research methods and data analysis of its author, Daryl J. Bem (and the peer reviewers who urged that his paper be accepted), are not winning over many hearts.

Yet the episode has inflamed one of the longest-running debates in science. For decades, some statisticians have argued that the standard technique used to analyze data in much of social science and medicine overstates many study findings — often by a lot. As a result, these experts say, the literature is littered with positive findings that do not pan out: “effective” therapies that are no better than a placebo; slight biases that do not affect behavior; brain-imaging correlations that are meaningless.

By incorporating statistical techniques that are now widely used in other sciences — genetics, economic modeling, even wildlife monitoring — social scientists can correct for such problems, saving themselves (and, ahem, science reporters) time, effort and embarrassment.

“I was delighted that this ESP paper was accepted in a mainstream science journal, because it brought this whole subject up again,” said James Berger, a statistician at Duke University. “I was on a mini-crusade about this 20 years ago and realized that I could devote my entire life to it and never make a dent in the problem.”

In recent weeks, editors at a respected psychology journal have been taking heat from fellow scientists for deciding to accept a research report that claims to show the existence of extrasensory perception.

The report, to be published this year in The Journal of Personality and Social Psychology, is not likely to change many minds. And the scientific critiques of the research methods and data analysis of its author, Daryl J. Bem (and the peer reviewers who urged that his paper be accepted), are not winning over many hearts.

Yet the episode has inflamed one of the longest-running debates in science. For decades, some statisticians have argued that the standard technique used to analyze data in much of social science and medicine overstates many study findings — often by a lot. As a result, these experts say, the literature is littered with positive findings that do not pan out: “effective” therapies that are no better than a placebo; slight biases that do not affect behavior; brain-imaging correlations that are meaningless.

By incorporating statistical techniques that are now widely used in other sciences — genetics, economic modeling, even wildlife monitoring — social scientists can correct for such problems, saving themselves (and, ahem, science reporters) time, effort and embarrassment.

“I was delighted that this ESP paper was accepted in a mainstream science journal, because it brought this whole subject up again,” said James Berger, a statistician at Duke University. “I was on a mini-crusade about this 20 years ago and realized that I could devote my entire life to it and never make a dent in the problem.”

The statistical approach that has dominated the social sciences for almost a century is called significance testing. The idea is straightforward. A finding from any well-designed study — say, a correlation between a personality trait and the risk of depression — is considered “significant” if its probability of occurring by chance is less than 5 percent.

This arbitrary cutoff makes sense when the effect being studied is a large one — for example, when measuring the so-called Stroop effect. This effect predicts that naming the color of a word is faster and more accurate when the word and color match (“red” in red letters) than when they do not (“red” in blue letters), and is very strong in almost everyone.

“But if the true effect of what you are measuring is small,” said Andrew Gelman, a professor of statistics and political science at Columbia University, “then by necessity anything you discover is going to be an overestimate” of that effect.

Consider the following experiment. Suppose there was reason to believe that a coin was slightly weighted toward heads. In a test, the coin comes up heads 527 times out of 1,000.

Is this significant evidence that the coin is weighted?

Classical analysis says yes. With a fair coin, the chances of getting 527 or more heads in 1,000 flips is less than 1 in 20, or 5 percent, the conventional cutoff. To put it another way: the experiment finds evidence of a weighted coin “with 95 percent confidence.”

Yet many statisticians do not buy it. One in 20 is the probability of getting any number of heads above 526 in 1,000 throws. That is, it is the sum of the probability of flipping 527, the probability of flipping 528, 529 and so on.

But the experiment did not find all of the numbers in that range; it found just one — 527. It is thus more accurate, these experts say, to calculate the probability of getting that one number — 527 — if the coin is weighted, and compare it with the probability of getting the same number if the coin is fair.

Statisticians can show that this ratio cannot be higher than about 4 to 1, according to Paul Speckman, a statistician, who, with Jeff Rouder, a psychologist, provided the example. Both are at the University of Missouri and said that the simple experiment represented a rough demonstration of how classical analysis differs from an alternative approach, which emphasizes the importance of comparing the odds of a study finding to something that is known.

The point here, said Dr. Rouder, is that 4-to-1 odds “just aren’t that convincing; it’s not strong evidence.”

And yet classical significance testing “has been saying for at least 80 years that this is strong evidence,” Dr. Speckman said in an e-mail.

The critics have been crying foul for half that time. In the 1960s, a team of statisticians led by Leonard Savage at the University of Michigan showed that the classical approach could overstate the significance of the finding by a factor of 10 or more. By that time, a growing number of statisticians were developing methods based on the ideas of the 18th-century English mathematician Thomas Bayes.

Bayes devised a way to update the probability for a hypothesis as new evidence comes in.

So in evaluating the strength of a given finding, Bayesian (pronounced BAYZ-ee-un) analysis incorporates known probabilities, if available, from outside the study.

It might be called the “Yeah, right” effect. If a study finds that kumquats reduce the risk of heart disease by 90 percent, that a treatment cures alcohol addiction in a week, that sensitive parents are twice as likely to give birth to a girl as to a boy, the Bayesian response matches that of the native skeptic: Yeah, right. The study findings are weighed against what is observable out in the world.

In at least one area of medicine — diagnostic screening tests — researchers already use known probabilities to evaluate new findings. For instance, a new lie-detection test may be 90 percent accurate, correctly flagging 9 out of 10 liars. But if it is given to a population of 100 people already known to include 10 liars, the test is a lot less impressive.

It correctly identifies 9 of the 10 liars and misses one; but it incorrectly identifies 9 of the other 90 as lying. Dividing the so-called true positives (9) by the total number of people the test flagged (18) gives an accuracy rate of 50 percent. The “false positives” and “false negatives” depend on the known rates in the population.

Continued in article

What went wrong with accountics research ---
http://www.trinity.edu/rjensen/Theory01.htm#WhatWentWrong


"MIT Introduces Complete Courses to OpenCourseWare Project," OpenCulture.com, January 13, 2011 ---
http://www.openculture.com/2011/01/mit_opencourseware_introduces_complete_courses.html

This week, MIT’s OpenCourseWare project launched OCW Scholar, a new series of courses “designed for independent learners who have few additional resources available to them.” To date, MIT has given students access to isolated materials from MIT courses. Now, with this new initiative, lifelong learners can work with a more rounded set of resources. OWC Scholar takes video lectures, homework problems, problem solving videos, simulations, readings, etc., and stitches them into a structured curriculum. Perfect for the self-disciplined student.

Below we have listed the first five courses in the OWC Scholar collection. (They’re entirely free.) Fast forward three years and you will find 20 courses online, says MIT. All will be added to our big list of Free Online Courses.

Physics 1: Classical Mechanics
Physics II: Electricity and Magnetism
Introduction to Solid State Chemistry
Single Variable Calculus
Multivariable Calculus

  • Audio & Podcasts

    Business School Podcast Collection – Download MBA Podcasts and other Business Podcasts ---
    http://www.openculture.com/2007/02/business_school.html

    Bob Jensen's threads on the sharing of course materials and videos from various prestigious universities are at
    http://www.trinity.edu/rjensen/000aaa/updateee.htm#OKI


    Video:  Open Education for an Open World
    45-minute Video from the Long-Time President of MIT --- http://18.9.60.136/video/816

    About the Series of Lectures on Complex Systems from MIT ---
    http://esd.mit.edu/resources/brunel.html

    The Brunel Lecture Series on Complex Systems, presented by MIT's Engineering Systems Division (ESD), was made possible by funds assembled and underwritten by Frank P. Davidson, convener of the Channel Tunnel Study Group (1957). It was this group's design, accomplished by agreement with Bechtel Corporation, Brown & Root, Inc. and Morrison-Knudsen Company, Inc. in 1959, that formed the basis of the subsea railway link now in service between England and France.

    Brunel Lectures 2001 – Present:

    The Financial Crisis, the Recession, and America’s Future: A Systemic Perspective (2010)
    by Charles Ferguson
    filmmaker, Inside Job

    Liberty by Design: An Internet Practitioner's Perspective (2009)
    by Alan Davidson
    Director of Goverment Relations and Public Policy for Google
    View on MIT World

    From IT to Cleantech: New Sources of Innovation (2008)
    by Shai Agassi
    Founder and CEO, Better Place
    View on MIT World

    Process Improvement in the Rarified Environment of Academic Medicine (2007)
    by Paul F. Levy
    President and Chief Executive Officer of Beth Israel Deaconess Medical Center
    View on MIT World

    Educating Engineers for 2020 and Beyond (2006)
    by Dr. Charles M. Vest
    President Emeritus and Professor of Mechanical Engineering
    View on MIT World

    The 21st Century is about Engineering, Systems, and Society (2005)
    by Dr. A. Richard Newton
    Dean of the College of Engineering at University of California at Berkeley; Roy W. Carlson Professor of Engineering; Professor of Electrical Engineering and Computer Sciences

    Engineering Engineering Systems (2004)
    by Thomas L. Magnanti
    Institute Professor
    Dean, MIT School of Engineering
    View on MIT World

    The Columbia Tragedy: System-Level Issues for Engineering (2003)
    by Sheila Widnall
    Member, Columbia Accident Investigation Board
    Member, National Women's Hall of Fame
    Institute Professor, Professor of Aeronautics, Astronautics, and Engineering Systems, Engineering Systems Division, Massachusetts Institute of Technology
    View on MIT World

    Living with Catastrophic Terrorism: Can Science and Technology Make the U.S. Safer? (2002)
    by Lewis M. Branscomb
    Co-chair, Committee on Science and Technology for Countering Terrorism, National Research Council and Professor Emeritus, Public Policy and Corporate Management, John F. Kennedy School of Government, Harvard University
    View on MIT World

    Simple Systems and Other Myths (2001)
    by Norman R. Augustine
    Former President, CEO, and Chairman and Current Chairman, Executive Committee, Lockheed Martin Corporatio

     


    The problem is that our students choose very bland, low nourishment diets in our modern day smorgasbord curricula. Their concern is with their grade averages rather than their education. And why not? Grades for students and turf for faculty have become the keys to the kingdom!
    Bob Jensen

    "Are Undergraduates Actually Learning Anything?" by Richard Arum and Josipa Roksa. Chronicle of Higher Education, January 18, 2011 ---
    http://chronicle.com/article/Are-Undergraduates-Actually/125979/

    Drawing on survey responses, transcript data, and results from the Collegiate Learning Assessment (a standardized test taken by students in their first semester and at the end of their second year), Richard Arum and Josipa Roksa concluded that a significant percentage of undergraduates are failing to develop the broad-based skills and knowledge they should be expected to master. Here is an excerpt from Academically Adrift: Limited Learning on College Campuses (University of Chicago Press), their new book based on those findings.

    Continued in article

    "New Book Lays Failure to Learn on Colleges' Doorsteps," by David Glenn, Chronicle of Higher Education, January 18, 2011 ---
    http://chronicle.com/article/New-Book-Lays-Failure-to-Learn/125983/
    On January 19, ABC News used this report to really lambast the ineffectiveness of higher education institutions. Like all empirical research into tough issues, critics will certainly find flaws in this study. But the conclusion cannot be ignored. With grade inflation combined with or caused by teaching evaluation impacts on tenure and performance evaluations, we can hardly attribute the explosion in A and B grades to better learning.

    Our Compassless Colleges: What are students really not learning?
    http://www.trinity.edu/rjensen/HigherEdControversies.htm#Berkowitz

    The Number One Scandal in Higher Education is Grade Inflation ---
    http://www.trinity.edu/rjensen/HigherEdControversies.htm#GradeInflation


    XtraNormal --- http://en.wikipedia.org/wiki/Xtranormal

    Xtranormal is a website which hosts text-to-speech based computer animated videoclips which can be created by any user and uploaded by a downloadable program or created directly online. It has had little online advertising and has spread by word of mouth and by being uploaded to Facebook and other social media sites.One website refers to controversy about an employee from Best Buy being fired for uploading an animated video complaining about customer service.

    The website offers either a free trial program to be downloaded to the computer with a fairly userfriendly interface, though limited to simple animation or creating a video while logged into the website. Popular user-created animations are available to watch.

    A growing collection of amateur animators use a do-it-yourself Web site called Xtranormal to vent comically about the academic life. And to teach.
    The online animation site they use has become a tool for teaching as well as satire

    "So You Think an English Professor's Life Is a Cartoon," by Mark Parry, Chronicle of Higher Education, January 16, 2011 ---
    http://chronicle.com/article/So-You-Think-an-English/125954/?sid=wc&utm_source=wc&utm_medium=en

    Bob Jensen's threads on Tricks and Tools of the Trade ---
    http://www.trinity.edu/rjensen/000aaa/thetools.htm


    "The Growth of For-Profits," by Scott Jaschik, Inside Higher Ed, January 18, 2011 ---
    http://www.insidehighered.com/news/2011/01/18/carnegie_releases_revised_classifications_of_colleges_and_universities

    Jensen Comment
    The Devil is in the details. Especially note the tables in this article.

    The article does not really deliver on one of the things I worry a lot about --- the growth in cheap shot graduate degrees awarded by for-profit universities, especially at the doctoral level. These universities are very secretive about their admission standards such as GRE and GMAT expectations. Credit for life experience is an instant turn off for me, because all God's children had life experiences.

    These universities are generally quite secretive about their faculty who deliver those degrees. It's difficult to evaluate the research credentials of those faculty. Secondly, most of these doctoral degrees can be earned with fewer years of full-time study and interactions with teaching and research faculty. For example, the average onsite accounting doctoral program takes over five years, most of which is spent on campus interacting with faculty and other doctoral students. Capella offers an accounting doctoral program that can be completed in less than three years and has a curriculum more like a masters program. There is a doctoral thesis at Capella but who signs off on each accounting doctoral thesis? Do graduates of this program publish later on in our accounting research journals? Are these graduates making names for themselves in tenure track positions at major universities?

    I'm a long time advocate of distance education, but I'm suspicious of for-profit university academic standards. If a major research university having AACSB accreditation commences a distance education that the research faculty at that institution deems equivalent to the onsite degree program, them I'm all for expanding degree opportunities for business higher education. But I'm a snob when others adopt such programs, especially at the masters and doctoral levels.

    For Profit Universities in the Gray Zone of Fraud ---
    http://www.trinity.edu/rjensen/HigherEdControversies.htm#ForProfitFraud

    Distance education and training alternatives ---
    http://www.trinity.edu/rjensen/CrossBorder.htm


    "Tax Havens Devastating To National Sovereignty," Southwerk, January 13, 2011 ---
    http://southwerk.wordpress.com/2011/01/13/tax-haven-devastating-to-national-economies/
    Thank you Nadine Sabai for the heads up.

    The blog post is a review of the book, Nicholas Shaxson’s  - Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens 

    Tax havens are the ultimate source of strength for our global elites. Just as European nobles once consolidated their unaccountable powers in fortified castles, to better subjugate and extract tribute from the surrounding peasantry, so financial capital has coalesced in their modern equivalent today: the tax havens. In these fortified nodes of secret, unaccountable political and economic power, financial and criminal interests have come together to capture local political systems and turn the havens into their own private law-making factories, protected against outside interference by the world’s most powerful countries – most especially Britain. Treasure Islands will, for the first time, show the blood and guts of just how they do it.

    The nations of the world are harmed by the evasion of their laws and taxes made possible by tax havens. The tax money is important but more important is the ability to threaten governments to force actions that multinational corporations such as investment banks wish done.

    These escape routes transform the merely powerful into the untouchable. “Don’t tax or regulate us or we will flee offshore!” the financiers cry, and elected politicians around the world crawl on their bellies and capitulate. And so tax havens lead a global race to the bottom to offer deeper secrecy, ever laxer financial regulations, and ever more sophisticated tax loopholes. They have become the silent battering rams of financial deregulation, forcing countries to remove financial regulations, to cut taxes and restraints on the wealthy, and to shift all the risks, costs and taxes onto the backs of the rest of us. In the process democracy unravels and the offshore system pushes ever further onshore. The world’s two most important tax havens today are United States and Britain.

    But the world is not without means to remedy the situation. In the late 1700′s piracy flourished because nations found it advantageous to use them against their enemies. Pirates often employed as privateers fattened the treasury of the nations hiring them and did harm to their enemies.

    But over time, it became obvious that the benefits of piracy were outweighed by the faults.

    So, nations by treaty and policy ran the pirates out of business.

    The United States in concert with the European Union, China and other nations could by agreement make this kind of tax haven impossible to maintain or at the very least difficult.

    It has been a daunting task to motivate the government of the United States to act against the interests of these larger corporations particularly the financial ones, but the future of this nation may well depend on those tax dollars and enforcing the national interest.

    James Pilant

    I wish to thank homophilosophicus for calling my attention to Thriven’s Blog.


    "Worthless Stocks from China"  When a retiree in Texas discovered that some Chinese companies listed in the U.S. are frauds, he unleashed an army of short-sellers," by Dune Lawrence, Business Week, January 11, 2011 ---
    http://www.businessweek.com/magazine/content/11_04/b4212058566865.htm?link_position=link3

    Bird's involvement would evolve from irritation that a company could get away with making a claim that so obviously defies basic business logic to the conviction that many pieces of the Chinese miracle that trade in the U.S. are, in his words, "flat-ass" frauds. And what started as a retiree looking into a company has turned into a dispute that has drawn in other shorts, the Securities and Exchange Commission, auditors, and, according to recent reports, the U.S. House Committee on Financial Services. It has also revealed significant flaws in U.S. markets and how they are regulated. Although the stocks trade on U.S. exchanges, and thus project a sense of having to play by American rules, the assets and the principals of many of the companies reside in China. The companies operate on their terms, leaving injured parties and the SEC powerless. Bird says the carnage is just beginning. "The whole thing has no place to go but to blow up," he says. "That's a rational position for an investor to start with, that every one of these Chinese reverse mergers is a fraud."

    Jensen Comment
    Which once again demonstrates that fraud in financial reporting greatly harms or may totally destroy capitalism. Early on frauds can badly damage the capital raising ability of legitimate Chinese ventures.

    This makes me wonder what proportion of these frauds were audited by affiliates of the Big Four in China. It might make a good student project to see what can be gleaned, if anything, from the audit reports.

    January  15, 2011 reply from Ramesh Fernando

    In reality, the Shanghai and Shenzhen market are nothing but ponzi schemes. The majority of stocks (red chips) are favoured by the Chinese Communist Party (CCP) and have some money pumped into them, when there whole revenue model(with no worry about P&L statements) is based on false estimates. The SEC's equal in China is totally corrupt and led by CCP people. As long as the CCP continues in power in China, I would recommend that no investor put their money there. Much better more liquid and better regulated markets exist in India and other parts of Asia. It's true the SEC is letting this fraud continue but you need many more inspectors at the SEC to watch over all the markets. The Canadian market, especially the natural resources stock like gold excluding Barrick Gold, GoldCorp or Kinross (they are much more legitimate being large companies ) are full of ponzi schemes. I wish the SEC would put pressure on the Ontario Security Commission as well as other provincial securities commissions to regulate all this false reporting.


    "Bridging the Gap to the Microfinance Promise: A Proposal for a Tax-Exempt Microfinance Hybrid Entity," Michelle Scholastica Paul,
    New York University Journal of International Law and Politics, Vol. 42, No. 4, p. 1383, 2010
    SSRN Link --- http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1692769
    Thank you Paul Caron for the heads up.

    Abstract:
    Over three decades after its inception, microfinance continues to hold great promise as a tool for poverty alleviation. Current estimates suggest that there is approximately $300 billion of unmet demand for microfinance. But the high operating costs of microfinance institutions (MFIs) that are passed on to borrowers in the form of high interest rates are a significant roadblock to MFI expansion. This paper proposes that MFI interest rates can be lowered systematically if the high cost of obtaining capital is lowered. High cost of capital increases operating costs which in turn causes MFIs to charge high interest rates on loans to borrowers to pay for the high cost to MFIs of providing the loans. If nonprofit MFIs are permitted to operate as tax-exempt for-profit entities MFIs will be better equipped to attract investor capital thereby lowering their cost of obtaining capital and corresponding operating costs and interest rates. An effective vehicle for achieving this outcome via tax law and corporate regulation would be a hybrid corporate form for social enterprise: an efficient for-profit firm with all the advantages of a nonprofit and none of the drawbacks.

     Jensen Comment
    Perhaps instead of tax exemptions, tax credits could be allowed for a period of time on the basis of number of jobs created or payrolls.


    "Solar Panel Maker Moves Work to China," by Keith Bradsher, The New York Times, January 14, 2011 ---
    http://www.nytimes.com/2011/01/15/business/energy-environment/15solar.html?hpw 

    Aided by at least $43 million in assistance from the government of Massachusetts and an innovative solar energy technology, Evergreen Solar emerged in the last three years as the third-largest maker of solar panels in the United States. Green

    But now the company is closing its main American factory, laying off the 800 workers by the end of March and shifting production to a joint venture with a Chinese company in central China. Evergreen cited the much higher government support available in China.

    The factory closing in Devens, Mass., which Evergreen announced earlier this week, has set off political recriminations and finger-pointing in Massachusetts. And it comes just as President Hu Jintao of China is scheduled for a state visit next week to Washington, where the agenda is likely to include tensions between the United States and China over trade and energy policy.

    The Obama administration has been investigating whether China has violated the free trade rules of the World Trade Organization with its extensive subsidies to the manufacturers of solar panels and other clean energy products.

    While a few types of government subsidies are permitted under international trade agreements, they are not supposed to give special advantages to exports — something that China’s critics accuse it of doing. The Chinese government has strongly denied that any of its clean energy policies have violated W.T.O. rules.

    Although solar energy still accounts for only a tiny fraction of American power production, declining prices and concerns about global warming give solar power a prominent place in United States plans for a clean energy future — even if critics say the federal government is still not doing enough to foster its adoption.

    Beyond the issues of trade and jobs, solar power experts see broader implications. They say that after many years of relying on unstable governments in the Middle East for oil, the United States now looks likely to rely on China to tap energy from the sun.

    Evergreen, in announcing its move to China, was unusually candid about its motives. Michael El-Hillow, the chief executive, said in a statement that his company had decided to close the Massachusetts factory in response to plunging prices for solar panels. World prices have fallen as much as two-thirds in the last three years — including a drop of 10 percent during last year’s fourth quarter alone.

    Continued in article

    "Solar Power Eclipse:  A case study in the failure of green energy subsidies," The Wall Street Journal, January 18, 2011 ---
    http://online.wsj.com/article/SB10001424052748703959104576081991727353356.html#mod=djemEditorialPage_t

    Not long ago, Massachusetts Governor Deval Patrick was calling Evergreen Solar a "symbol" of his state's economic future. Symbolism would appear to be overrated.

    Evergreen announced last week that it is shutting its Massachusetts plant and will lay off 800 workers. That's the same plant Mr. Patrick had state taxpayers fund in 2007 to the tune of $58 million in grants, loans and land and tax incentives—one of the largest investments in a private company in Bay State history. Remind us not to let the Governor pick our stock portfolio.

    The solar company started in 1994 and advertises a "string ribbon" technology that reduces the amount of silicon used in solar panels. Evergreen rode the green energy political bubble through a 2000 IPO, and through news in 2007 that it would build, with state aid, a flagship plant in Devens, Massachusetts.

    A look at the company's finances shows it has lost a cumulative $685 million. The majority of this red ink was on the books prior to Mr. Patrick promising state aid. The company has produced little good news since, including warnings from Nasdaq that it could be delisted, an unproductive debt restructuring, and a string of money-losing quarters. None of this fazed Mr. Patrick, who touted Evergreen as a cornerstone of his strategy to turn Massachusetts into a hub of green energy innovation.

    Evergreen blames its plant closing on competition from subsidized Chinese manufacturers. "Solar manufacturers in China have received considerable government and financial support, and together with their low manufacturing costs, have become price leaders within the industry," says Evergreen President Michael El-Hillow.

    But Evergreen has also been subsidized in the multiple ways that federal and state governments favor solar power. Maybe the problem is Evergreen's business model, or perhaps its decision to locate a plant in a high-cost, union-labor state. Evergreen has long been aware of China's solar manufacturing advantage, waiting until it received the $58 million from Massachusetts to announce it would outsource jobs to a plant it continues to operate in China.

    Bay State taxpayers are now stuck with the losses. Mr. Patrick says he intends to claw back some of that $58 million, but Evergreen says it doesn't owe more than $4 million. Taxpayers will also be thrilled to know the state is so worried about getting a new tenant for the manufacturing site that it may let Evergreen keep its sweetheart $1-a-year lease—allowing the company to sublet it at a profit.

    All of this adds up to one more case study in the perils of politically allocated capital. Like President Obama, Mr. Patrick has advertised the illusion that governments can nurture new companies, even whole new industries, with targeted taxpayer "investments." This is the entire premise of the "clean energy" industry, most of which wouldn't exist without subsidies because it can't compete on a market basis.

    Politicians always seem to show up for the green energy ribbon-cuttings but somehow they manage to miss the plant closings. Evergreen Solar is indeed a "symbol"—of the folly of taxpayer green subsidies.

     


    "Bridging the Gap to the Microfinance Promise: A Proposal for a Tax-Exempt Microfinance Hybrid Entity," Michelle Scholastica Paul,
    New York University Journal of International Law and Politics, Vol. 42, No. 4, p. 1383, 2010
    SSRN Link --- http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1692769
    Thank you Paul Caron for the heads up.

    Abstract:
    Over three decades after its inception, microfinance continues to hold great promise as a tool for poverty alleviation. Current estimates suggest that there is approximately $300 billion of unmet demand for microfinance. But the high operating costs of microfinance institutions (MFIs) that are passed on to borrowers in the form of high interest rates are a significant roadblock to MFI expansion. This paper proposes that MFI interest rates can be lowered systematically if the high cost of obtaining capital is lowered. High cost of capital increases operating costs which in turn causes MFIs to charge high interest rates on loans to borrowers to pay for the high cost to MFIs of providing the loans. If nonprofit MFIs are permitted to operate as tax-exempt for-profit entities MFIs will be better equipped to attract investor capital thereby lowering their cost of obtaining capital and corresponding operating costs and interest rates. An effective vehicle for achieving this outcome via tax law and corporate regulation would be a hybrid corporate form for social enterprise: an efficient for-profit firm with all the advantages of a nonprofit and none of the drawbacks.

     Jensen Comment
    Perhaps instead of tax exemptions, tax credits could be allowed for a period of time on the basis of number of jobs created or payrolls.


    "The Worst Mistakes at This Year's Consumer Electronics Show:  Five devices, services and trends unveiled at this year's CES that seem doomed from the start.," by Christopher Mims, MIT's Technology Review, January 10, 2011 ---
    http://www.technologyreview.com/blog/mimssbits/26252/?nlid=3994


    Hi Ross,

    You can view an outdated tutorial video for a very old version of Camtasia that I captured for my students to years ago to help them when learning Camtasia. ---
    http://www.cs.trinity.edu/~rjensen/video/Tutorials/CamtasiaTutorial.wmv
    Although the newer versions of Camtasia changed screen capturing somewhat, the screen capturing process is almost the same process today as I illustrated in the above video.

    In my viewpoint Camtasia is still the gold standard for video screen capturing although the price is now over $300 for the latest version. As Richard suggested, you might begin with the Jing free version, but for compression you will have to move up to Jing Pro or Camtasia.

    Normally you capture avi files that are easy to edit but are enormous in size. Compression ("producing") saves you over 90% of video file size without serious loss of quality. However, save your initial avi files in case you want to edit the videos later on and re-compress them.

    When I made the above tutorial video I was mostly creating rm Real Media compressions. Later I shifted to wmv compressions since my students mostly used Windows Media Player for playback.

    You can view samples of my Camtasia files at
    http://www.cs.trinity.edu/~rjensen/video/

    One of the better examples of Camtasia capturing is Amy Dunbar's video.
    May 31, 2010 message from Amy Dunbar [Amy.Dunbar@BUSINESS.UCONN.EDU]
    .

    I just finished the first week of a 12-week MSA online tax course at UConn. I put students in groups and I ask them to work fairly lengthy quizzes (homework) independently, putting their answers in an Excel spreadsheet, and then they meet in chats to discuss their differences. When they can’t resolve a question, they invite me into chat. This week a student introduced me to Google docs, and I was swept off my feet by the way this tool could be used in my class. I love it! I created a video on the fly on Thursday to illustrate how to create a spreadsheet and share it with other group members. I may be the last to the party on this tool, but in case some of you aren’t aware of it, I am posting the video.

    http://users.business.uconn.edu/adunbar/videos/GoogleDocs/GoogleDocs.html 
     

    If anyone wants the “quiz” that the students worked, send me an email (not AECM), and I will send you the file.

    Amy

    Amy Dunbar
    University of Connecticut School of Business
    Department of Accounting
    2100 Hillside Road Unit 1041 Storrs, CT 06269-1041  

    amy.dunbar@business.uconn.ed 

     


    Audio Capturing Without a Microphone When Recording Parts of Camtasia videos
    Note that in the video below, the explanation begins 1:10 (70 seconds) into the video at the top of this Camtasia helper page ---
    http://www.techsmith.com/learn/camtas... 
    .
    The above video explains how to record some audio in Camtasia without having to run that audio through a microphone such as when you want to embed part of a YouTube video in your Camtasia video.

    Note that this may not work in Windows XP systems. In days of old some of my my embedded clips of video had poor sound quality due to having to hold my microphone near the speakers. Of course it was possible to edit in avi clips recorded on other capture software, but this was a pain.

    Over the years this has been my major complaint with Camtasia video recording. Windows 7 users can now more easily work around the problem.

    Also note this has never been a problem in Camtasia video recording on a Mac.

    Here's a link that provides other tips on how to improve audio quality in Camtasia videos
    http://download.techsmith.com/camtasiastudio/docs/onlinehelp/enu/700/Get_Great_Sound_with_Camtasia_Studio_7.pdf

    December 7, 2010 message from Mike Curtis

    Mike Curtis, an employee of TechSmith, replied to Audio Without a Microphone in Camtasia Studio?, a question about TechSmith.
    Good news! As someone who had to explain how to "trick" Windows or provide various levels of work-arounds if one wanted to record their system audio (sound from the speakers) I was so excited when CS version 7.0 made it easy. Check out the 1:10 section of this video:
    http://www.techsmith.com/learn/camtas.. 

    If you have Windows XP though, you may still have issues and have to do it "the old way" depending on your sound card.

    Camtasia for Mac also makes it easy to capture system audio.

     


    Rethinking Capitalism

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

    The Harvard Business Review blog is now carrying a video interview with Professor Porter:
    "Rethinking Capitalism," Michael Porter, Harvard Business Review Blog, January 5, 2010 ---  Click Here
    http://blogs.hbr.org/video/2011/01/rethinking-capitalism.html?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date

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

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

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

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

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

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

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

    "Capitalism at a Crossroads," by Umair Haque, Harvard Business Review Blog, January 10, 2011 --- Click Here
    http://blogs.hbr.org/haque/2011/01/capitalism_at_a_crossroads.html?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date

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

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

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

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

    1990 5.3 billion
    1995 5.7 billion
    1999 6 billion

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

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

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

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

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

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

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

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

    The problem of unemployment and underemployment is not a function of how economic resources are allocated (markets versus planning boards). The problem is the "unlimited supply of labor."
    http://en.wikipedia.org/wiki/Arthur_Lewis_(economist)


    "6 Top Smartphone Apps to Improve Teaching, Research, and Your Life:  Academics describe going mobile to plan lectures, keep up with scholarship, and run classes," by Jeffrey R. Young, Chronicle of Higher Education, January 2, 2011 ---
    http://chronicle.com/article/College-20-6-Top-Smartphone/125764/

    Bob Jensen's threads on Tricks and Tools of the Trade ---
    http://www.trinity.edu/rjensen/000aaa/thetools.htm


    "Five books that changed a statistician," Decision Science News --- Click Here
    http://www.decisionsciencenews.com/2011/01/07/five-books-that-changed-a-statistician/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+DecisionScienceNews+%28Decision+Science+News%29

    Jensen Comment
    I've not read a single one of them, but they all look fascinating!


    It ain’t what we don’t know that gives us trouble, it’s what we know that just ain’t so.
    Josh Billings

    Interesting Quotation for Accountics Researchers Who Tend Not to Check for Validity With Replication Efforts

    "On Early Warning Signs," by George Sugihara. December 20, 2010 ---
    http://seedmagazine.com/content/article/on_early_warning_signs/
    Thank you Miguel.

    . . .

    Nonlinear systems, however, are not so well behaved. They can appear stationary for a long while, then without anything changing, they exhibit jumps in variability—so-called “heteroscedasticity.” For example, if one looks at the range of economic variables over the past decade (daily market movements, GDP changes, etc.), one might guess that variability and the universe of possibilities are very modest. This was the modus operandi of normal risk management. As a consequence, the likelihood of some of the large moves we saw in 2008, which happened over so many consecutive days, should have been less than once in the age of the universe.

    Our problem is that the scientific desire to simplify has taken over, something that Einstein warned against when he paraphrased Occam: “Everything should be made as simple as possible, but not simpler.” Thinking of natural and economic systems as essentially stable and decomposable into parts is a good initial hypothesis, current observations and measurements do not support that hypothesis—hence our continual surprise. Just as we like the idea of constancy, we are stubborn to change. The 19th century American humorist Josh Billings, perhaps, put it best: “It ain’t what we don’t know that gives us trouble, it’s what we know that just ain’t so.”

    Continued in article

    574 Shields Against Validity Challenges in Plato's Cave ---
    http://www.trinity.edu/rjensen/TheoryTAR.htm


    Contract Bridge --- http://en.wikipedia.org/wiki/Contract_bridge

    Things Bradf Moss Learned from His Champion Mother
    "How a bridge champ beats the market," Fortune, January 7, 2011 ---
    http://finance.fortune.cnn.com/2011/01/07/how-a-bridge-champ-beats-the-market/
    Also see http://www.simoleonsense.com/how-a-bridge-champ-beats-the-market-awesome/


    Screen Capture Tools for Students to Create Tutorials, Discussions, and Presentations

    January 7, 2011 message from Rick Newmark

    I have been using Camtasia Studio to record my class sessions and to create tutorials for about two years now. Thanks to all of you on this list who have provided great information about various products, especially the practical tips and real-world problems and solutions.

    I decided that creating video tutorials and presentations is a practical skill that my students should learn to help them effectively communicate electronically. I also think this skill will give them a competitive advantage in the work place and help them build their personal brand on the social web.

    The problem with putting Camtasia and/or Adobe Captivate (I have not used it, but some of my friends across campus use it because it has more interactive tools) in the computer labs is the cost and that students would have to pay to put it on their own computers. Also, I want something really simple to use.

    Initially, I found an open-source and free application called CamStudio. However, it only works on PCs and there is a learning curve similar to Camtasia Recorder. Although I have not yet used it, it seems like a good product and there are some Youtube tutorials to help you get started. This seems like the most robust free alternative to Camtasia.

    Then, some additional searching pointed me to several browser-based (no downloads and platform independent) solutions. I found the following solutions: http://screenr.com/, http://www.screenjelly.com/, and http://www.screencast-o-matic.com/. Screenr and Screenjelly are designed to make screencasts for Twitter. Neither one gives you much control. Screenr has a five-minute recording limit, allows you to set the capture area, and allows you to pause and resume. Screenjelly has a three-minute limit and only records the full screen. Screenr requires a Twitter account, but Screenjelly allows you to email the link rather than tweeting it. Both only you to capture audio from your microphone, so if you you need to turn up the volume on your speakers if you also want audio from the computer captured. The clear upsides to these solutions is that they are fast and easy and interface with Twitter. The downside is that they have a short time limit and they do not provide tools for tutorials like highlighting the cursor.

    Fortunately, I found Screencast-O-Matic http://www.screencast-o-matic.com/. It has the following features: no time limit for recordings, pause and resume, set capture area, automatically highlight cursor, visually show left- and right-clicks, visually shows left-button- and right-button-dragging, add comments on the bottom of the screen at different pre-determined times, and allows you to download your screencasts in Mp4, AVI, or FLV formats, allows you to capture video from a webcam, and they will host for free all of your screencasts <= 15-minutes per screencast. I made a sample video and the results are very good. A 2-minute 1366 x 768 video took 10MB (Mp4 format). For $9/year, you can host videos up to 60-minutes long, lose the small watermark at the bottom left of the screen (unobtrusive), and get Camtasia-style editing tools like: zoom, cut out a piece of a clip, split and insert a clip, change speeds, and add transitions. The web site has good tutorials for basic operation and using the advanced tools. I have not yet paid for the pro membership, though I plan on doing so. I’m very excited about getting students and my colleagues to use this tool.

    What I really like is that students can take their screencast and bring it into iMovie or Windows Moviemaker and add screenshots by using the Windows  snipping tool or 7capturehttp://www.7capture.com/. 7capture good for capturing whole windows because it captures the rounded corners on a window, but you need to make sure that the window you want to capture is on top (only captures whole windows, a whole monitor, or your entire desktop). Here is a link to take screen shots on a mac http://graphicssoft.about.com/od/screencapturemac/ht/macscreenshot.htm.

    If your students do not have their own computer and your lab machines do not have Moviemaker, I found a browser-based alternative, JayCut http://jaycut.com/, though I am not impressed by the video image quality. I’m now trying Creaza. It is a suite of online tools, including audio editing, video editing, concept mapping, and making cartoons. I’ll update the list as I try the tools.

    Richard Newmark
    Professor, School of Accounting and Computer Information Systems
    Kenneth W. Monfort College of Business
    2004 Malcolm Baldrige National Quality Award Winner
    University of Northern Colorado
    Campus Box 128, Kepner Hall 2095D
    Greeley, CO 80639
    (970) 351-1213 Office
    (970) 351-1078 fax

    http://PhDuh.com/unc

    January 7, 2011 reply from Bob Jensen

    Hi Rick,

    Thank you for the very informative message. In your updates you might tell us more about video compression, codecs, and playback comparisons of these various alternatives. There are also such added features such as interactive playback and quiz/examination features in such compressions as the swf compression of Shockwave format --- http://en.wikipedia.org/wiki/SWF .

    With so many hours of video, I'm curious about how you archive these files and how you serve them up for students.

    One really helpful feature that I find in Camtasia is the "pause" feature that allows you to pause the recording of a video and then take it up at the exact same point after the pause. One use of this feature is to prepare for the next phase of the video and collect your notes and thoughts for that phase.

    Some other questions you might answer:

    1. Can you record audio internally without having to pass audio through a microphone such as when embedding video clips within a video?
       
    2. Does the recorder have enhancement features similar to those in Camtasia such as mouse highlighting.
       
    3. Can you customize the screen capturing with smaller windows and floating windows that follow the mouse?
       
    4. Can you vary audio and video capture rates so that, when necessary, you can greatly cut back on storage requirements except in cases where higher capture rates improve lip synchronization. High capture rates are less important when you are capturing computer screens such as Excel screens.

    Bob Jensen

    You can view an outdated tutorial video for a very old version of Camtasia that I captured for my students to years ago to help them when learning Camtasia. ---
    http://www.cs.trinity.edu/~rjensen/video/Tutorials/CamtasiaTutorial.wmv
    Although the newer versions of Camtasia changed screen capturing somewhat, the screen capturing process is almost the same process today as I illustrated in the above video.

    In my viewpoint Camtasia is still the gold standard for video screen capturing although the price is now over $300 for the latest version. As Richard suggested, you might begin with the Jing free version, but for compression you will have to move up to Jing Pro or Camtasia.

    Normally you capture avi files that are easy to edit but are enormous in size. Compression ("producing") saves you over 90% of video file size without serious loss of quality. However, save your initial avi files in case you want to edit the videos later on and re-compress them.

    When I made the above tutorial video I was mostly creating rm Real Media compressions. Later I shifted to wmv compressions since my students mostly used Windows Media Player for playback.

    You can view samples of my Camtasia files at
    http://www.cs.trinity.edu/~rjensen/video/

    One of the better examples of Camtasia capturing is Amy Dunbar's video.
    May 31, 2010 message from Amy Dunbar [Amy.Dunbar@BUSINESS.UCONN.EDU]
    .

    I just finished the first week of a 12-week MSA online tax course at UConn. I put students in groups and I ask them to work fairly lengthy quizzes (homework) independently, putting their answers in an Excel spreadsheet, and then they meet in chats to discuss their differences. When they can’t resolve a question, they invite me into chat. This week a student introduced me to Google docs, and I was swept off my feet by the way this tool could be used in my class. I love it! I created a video on the fly on Thursday to illustrate how to create a spreadsheet and share it with other group members. I may be the last to the party on this tool, but in case some of you aren’t aware of it, I am posting the video.

    http://users.business.uconn.edu/adunbar/videos/GoogleDocs/GoogleDocs.html 
     

    If anyone wants the “quiz” that the students worked, send me an email (not AECM), and I will send you the file.

    Amy

    Amy Dunbar
    University of Connecticut School of Business
    Department of Accounting
    2100 Hillside Road Unit 1041 Storrs, CT 06269-1041  

    amy.dunbar@business.uconn.ed 

    January 7, 2010 reply from Richard Campbell

    Techsmith's Jing is free (ad supported) and Jing Pro is almost free ($20 per year) www.jing.com  The Jing files can be imported into Camtasia for editing.

    Techsmith's Hosting service www.screencast.com  is free (limited bandwidth and storage) and Screencast Pro is about $100 per year. Much more st, orage and ad free.

    January 8, 2010 reply from Richard Campbell

    Techsmith has a channel on youtube with a lot of education-focused videos --- http://www.youtube.com/user/ChannelTechSmith 

    Educators get special pricing on Camtasia - around $150 instead of $300 --- http://www.techsmith.com/community/education/ 

    Richard J. Campbell
    mailto:campbell@rio.edu


    Business Week's rankings of MBA Programs for 2010 by Specialty ---
    http://www.businessweek.com/bschools/content/dec2010/bs20101210_568188.htm?link_position=link5

    Jensen Comment
    Note the column for "Accounting" and remember that Business Week is only ranking MBA programs here. MBA programs are not nearly as important to accounting recruiters as undergraduate and masters of accountancy programs.

    Recruiters for accounting firms generally do not seek new auditors from the most prestigious MBA  One reason is accounting firms don't like to pay top MBA rates for new auditors. A second reason is that in many states MBA graduates do not have enough accounting to take the CPA examination unless they were previous accounting majors or took undergraduate courses in accounting in addition to their MBA courses in accounting.

    MBA graduates from prestigious MBA programs have a better chance of being hired by consulting and assurance services divisions of CPA firms. Much depends upon undergraduate specialties as well such as former computer science majors.

    Prestigious MBA programs prefer to admit students with relevant job experience following completion of their undergraduate studies. That job experience, particularly Wall Street experience and interesting foreign assignments may impact CPA firm hiring of MBA graduates.

    For really top MBA graduates CPA firms often face stiff and high-paying competition such as competition from major consulting firms and Wall Street banks and brokerages.

    In this job market MBAs are also increasingly considering working for Uncle Sam where opportunities include joining the FBI, the SEC, the IRS, etc. Accounting graduates sometimes underestimate the opportunities afforded by working for some government agencies. For example, FBI experience can be a great springboard for a career in forensic accounting. Before earning her PhD in tax accounting, Amy Dunbar obtained valuable experience as an FBI agent.


    "Top 10 SEO Tips for New Websites:  Neophyte sites should be realistic in their goals, focus on building trust and crank up the social media campaign," DevX.com, January 4, 2011 ---
    http://www.devx.com/DevX/Article/46214/0/page/1
    Thanks ot Jerry Trites for the heads up.

    Every site needs to attract attention. Since people can only come to your site by typing your URL directly into the browser, come to your site from a link on another site another, or find you via a search engine, the topic of getting traffic from search engines is a very important one. In this article, we'll go over SEO (Search Engine Optimization) strategies that many new sites would do well to follow to grow traffic to their sites.

    Continued in article

    Bob Jensen's sadly neglected threads on e-Business ---
    http://www.trinity.edu/rjensen/ecommerce.htm


    Japan Adopted the Worst Entitlements Practices of the United States (and the same baby boomer mistakes following WW II)

    "The Italy of Asia:  Japan's entitlement dilemmas are a warning to Washington," The Wall Street Journal, January 6, 2011 ---
    http://online.wsj.com/article/SB10001424052748704723104576061332542456172.html#mod=djemEditorialPage_t

    Japanese politics is once again in turmoil, with the government's approval ratings around 20%. Prime Minister Naoto Kan is trying to force out his rival within the Democratic Party of Japan, Ichiro Ozawa, which might boost his own popularity but would probably cause enough defections to destroy a precarious majority. And he has chosen as his New Year initiative an increase in the consumption tax—a hugely unpopular policy that cost him the upper house election last year and would surely harm the economy.

    Looks like it's almost time for another change of leader in Tokyo, which is becoming the Italy of Asia. Whoever it is, he will have to tackle Japan's problems before unpleasant outcomes are forced upon it. Without cuts to entitlements and tax cuts to promote growth, Tokyo will continue turning into Athens.

    Mr. Kan's claims to fiscal rectitude are belied by the draft fiscal 2011 budget released late last month. It calls for another year of near-record addition to a national debt already approaching 200% of GDP. The budget includes $867 billion of spending, though total government revenue amounts to just $501 billion. The budget proposes trimming discretionary spending only marginally, cuts that are overwhelmed by the uncontrolled growth of entitlement programs, which make up 53% of total spending.

    Japan is foundering on the promises made by past generations of politicians that are coming due in a rapidly aging society. These include unfunded pensions and medical care for the elderly. And it will only get worse—2012 is expected to be a watershed year when the biggest wave of baby boomers begins to retire.

    As two lost decades since the bursting of the bubble show, Japan's consensus-based political system seizes up when it comes to allocating societal losses. In the 1990s, that meant that the government encouraged banks to sit on bad loans rather than undergo the kind of cathartic restructuring the U.S. is now undergoing, at least in some parts of the economy. That made Japan appear more stable, but without creative destruction the economy was unable to return to growth. This time the leverage is spread across generations, with the lack of growth making the promises to the old a bigger burden, which in turn makes it impossible to pursue pro-growth policies.

    Payments on the national debt next year are projected at an already substantial $263 billion, but this assumes a payout of no more than 2% on 10-year bonds. Yields may remain well below this level for now, but in recent auctions signs have emerged that investors are losing their appetite for government bonds. The national debt is forecast to exceed household savings in the next year, as retirees continue to spend down savings. As long as growth remains slow, corporations will probably continue to save. But if Tokyo is forced to look abroad for funding, it will have to pay much higher rates.

    That has the potential to blow out the budget in spectacular fashion. With central and local government debt now estimated at over $11 trillion, each one percentage point increase in yields will cost $110 billion. Adding in its unfunded liabilities, Japan has already reached the point at which its debt load will continue to increase regardless of how much it cuts spending or raises taxes.

    In other words, Japan is about to run into the late economist Herb Stein's obvious but oft-overlooked law, which states that if something cannot continue it won't. The crunch is coming in one form or another.

    Continued in article

    "Japan finds there is more to life than growth," by David Pilling, Financial Times, January 5, 2010 ---
    http://www.ft.com/cms/s/0/6152b9ca-1904-11e0-9c12-00144feab49a.html#axzz1AXhZ0GXk
    Thank you Dan Stone for the heads up.

    . . .  High suicide rates, a subdued role for women and, indeed, the answers that Japanese themselves provide to questionnaires about their happiness, do not speak of a nation entirely at ease with itself in the 21st century. It is also possible that Japan is living on borrowed time. Public debt is among the highest in the world – though, significantly, almost none of it is owed to foreigners – and a younger, poorer-paid generation will struggle to build up the fat savings on which the country is now comfortably slumbering.

    If the business of a state is to project economic vigour, then Japan is failing badly. But if it is to keep its citizens employed, safe, economically comfortable and living longer lives, it is not making such a terrible hash of things.

    Continued in article

    Bob Jensen's threads on entitlements are at
    http://www.trinity.edu/rjensen/Entitlements.htm


    Some confusing aspects of Japanese Culture

    I find the Japanese culture in general very confusing. Education K-12 is very intense and very competitive. Then, when many of the chosen best students get into college, it often turns into undergraduate years of heavy partying. It is much more difficult to get into a Japanese college than to graduate from it --- http://snipurl.com/japanesestudentpartying 

    Another confusing and somewhat humorous (to me) aspect of Japanese culture is that women have their own special subway/train cars because Japanese men are so prone to copping feels --- http://en.wikipedia.org/wiki/Women-only_passenger_car 


    Texas A&M Case on Computing the Cost of Professors and Academic Programs
    Somebody at Texas A&M has rushed in where angels fear to tread

    On November 5, 2010 I shared the "Texas A&M Case on Computing the Cost of Professors and Academic Programs" with the AECM and the AAA Commons as well as posting it to my Website at
    http://www.trinity.edu/rjensen/Theory02.htm#ManagementAccounting

    For some reason the The Wall Street Journal has seen fit to renew interest in this case in a January 10, 2011 editorial (keep in mind that the WSJ has a different Editor for the Editorial Page vis-a-vis the rest of the newspaper):
    "Grading the Ivory Towers:  Texas A&M shocks the professoriate with cost-benefit analysis," The Wall Street Journal, January 10, 2011 ---
    http://online.wsj.com/article/SB10001424052748703860104575508052117098986.html#mod=djemEditorialPage_t

    There's a memorable scene in the movie "Ghostbusters" when Dan Akroyd says in horror to Bill Murray after they lose their jobs at a university: "I've worked in the private sector. They expect results."

    The same can't always be said of universities, where costs are rising faster even than health care. Now, a growing number of states are demanding that their taxpayer-funded universities show evidence of improvement in student performance. Perhaps the most aggressive school is Texas A&M, which is trying to measure professor productivity and performance. Given the reaction from some in the faculty lounges, you'd think Texas had banned football.

    Since 1978 college costs have risen by more than tenfold, about three times the rate of inflation, according to an American Enterprise Institute study. Four years of college now cost as much as $200,000 at some private institutions, making this perhaps the only industry in America that has recorded negative productivity gains. In 2009 tuitions rose by 6%, four times overall prices. With rising tuition comes rising indebtedness, and for the first time student loan debt of $850 billion now exceeds credit card debt of $830 billion. State subsidies keep rising but are swallowed up in higher university costs and thus haven't lowered tuitions.

    Professors' salaries and benefits make up about 60% to 70% of university noncapital costs. So Texas A&M is starting to ask such basic questions as: Is that psychology or engineering professor worth his $125,000 salary?

    The school is trying to answer this question by applying a cost-benefit analysis of how much each professor earns in salary per student taught. The school also uses such metrics of value added as research dollars brought in by a professor and student evaluations of how well a teacher performs in a classroom. For high-achieving professors, the new pay-for-performance standards offer bonuses of up to $10,000 a year.

    The academic reaction to the plan has been furious. Nationally, the American Association of University Professors (AAUP) calls the system of "balancing revenues and costs" both "simplistic and very dangerous." Peter Hugill, a professor of geology and the head of the AAUP chapter at Texas A&M, has denounced the new analysis as "a weapon" to hang over the head of professors that is making "Texas a laughing stock." The faculty is pressuring the university to lower the bonuses to $1,500 and spread the money to more teachers.

    Frank Ashley, the vice president for academic affairs at A&M, replies that the reforms are about accountability: "We're being held accountable for the money the state gives us, and we want to show that we're not throwing the money away."

    What a concept. Given that Texas faces a $12 billion deficit and every year writes a nine-figure check to Texas A&M (and to the University of Texas), taxpayers deserve more transparency and cost containment. A pay system that requires middle and lower income families to take on enormous debt to subsidize universities is unfair.

    No doubt the Texas A&M system is a work in progress and will be tweaked as it gains experience in evaluating its professors' classroom performance and contributions to the university. Perhaps the professors would reply that too many students think they're on a subsidized, four-year party. But we hope the school's regents persist with this effort and that the reformers succeed in their efforts to spread pay-for-performance accountability to other public universities.

     


    "Can Bookstores Survive? Prospects and Consequences," by Richard Posner, Becker-Posner Blog, January 9, 2011 ---
    http://www.becker-posner-blog.com/2011/01/can-bookstores-survive-prospects-and-consequencesposner.html

    Two of the largest bookstore chains—Barnes & Noble and Borders—are in danger of being forced into bankruptcy; their plight raises the broader question of whether bookstores will survive in any significant number, and, if not, what the consequences will be.

    There are two clear threats, both Internet-related, to the bookstore. The newest is the e-book, in which the contents of a book are transmitted over the Internet to an electronic reader owned by the book’s buyer. No bookstore is involved. Slightly older is the sale, as opposed to the delivery, of a book online; Amazon is the principal seller in this market. No bookstore is involved unless Amazon doesn’t have the book in inventory; in that event the customer is referred by Amazon to a bookstore that has the book and will sell it online and deliver it to the buyer; the purchase is made through Amazon. Most of the books that Amazon and the other online booksellers don’t carry in stock are out of print, and bookstores that stock such books tend to be small (though there are some exceptions), because the market for such books is tiny.

    A possible third threat is diminished appetite for books. I haven’t been able to find good statistics on annual sales of books in the United States (and anyway “books” is an extremely heterogeneous product category), but it would seem that the amount of entertainment and instruction available online is so great that online substitution for reading books must have reduced the demand for them. At the same time, however, the demand for books should be stimulated by the fall in cost when books are bought online, cutting out the middleman—the bookstore—a point to which I’ll return shortly.

    It seems inevitable that the number of books sold through bookstores will plummet. Books bought through bookstores are more costly not only in price (to cover the costs of the bookstore), but also in customers’ time—the time required to travel to and from the bookstore, find the book one wants to buy, and complete the purchase (which takes more time than an online purchase). The only offsetting advantages of the bookstore are the opportunity it provides for browsing and the fact that the customer can see and handle the book before buying it. But these advantages are offset to a considerable extent (doubtless more than offset, for many customers) by the use by online sellers of artificial-intelligence programs to recommend books to their customers, by the much vaster inventory of an online seller like Amazon, by ease of search, by the reader reviews that the seller presents, and by the seller’s ability to allow customers to look inside the online book before ordering it, much as if he were leafing through a printed book in a bookstore.

    It is true that Amazon’s book-recommendation program is primitive, and is no substitute for browsing in a well-stocked bookstore, but it will improve; one can foresee the day when customers will furnish (and Amazon store) comprehensive information about their age, sex, education, occupation, and reading tastes, which Amazon will use to create an initial list of recommended purchases, which it will refine as it receives orders from the customer plus supplementary information from the customer as the customer’s tastes and interests change.

    At present fewer than 30 percent of all books are bought online (either in hard copy or as an e-book), but I have seen an estimate that this figure will grow to 75 percent within a few years. Very few bookstores will have enough customers to survive if bookstore sales fall from 70 percent to 25 percent of all book sales, except those bookstores specializing in out of print books—whose customers will largely be online. In time, moreover, with more and more publishing electronic, there will be fewer and fewer “out of print” books.

    The substitution of online for bookstore distribution of books will provide a substantial social saving and, as I said, increase the demand for books by reducing their retail price. As for the effect on publishers and authors of books, there is concern that it will be adverse, but that seems unlikely. A seller tries to minimize his cost of distribution, just as he tries to minimize his other costs; the publisher is the ultimate seller, and the bookstore part of the chain of distribution. But there is an important, and potentially relevant, exception, and that is where a distributor provides point-of-sale services that increase the demand for the product. This is the rationale for resale price maintenance: manufacturers of some goods place a floor under the retail price of the goods, thus deliberately increasing the retailers’ margin, but hoping by doing so to induce them to engage in nonprice competition that will increase the demand for the goods. Bookstore staffs, by decisions they make concerning choice and display of books to carry, and by making purchasing suggestions to customers, can, in principle, increase the demand for books. But these services cannot guarantee the survival of many bookstores, because unless the services are valued by a greater margin than seems realistic to expect, there will be too few customers to defray the bookstore’s fixed costs at acceptable prices.

    The question then becomes whether the loss of point-of-sale services that bookstores provide will hurt publishers (and therefore authors, whose prosperity is linked to that of publishers) more than it will help them by reducing their distribution costs. That too is doubtful. As technology continues its forward march, online booksellers will find it increasingly feasible to duplicate and indeed improve on the point-of-sale services that bookstores offer. Bookstores will decline, and perhaps vanish when the current older generation, consisting of people habituated to printed books (as to printed newspapers), dies off. Yet this may well represent genuine economic progress, just as department stores and supermarkets represent progress though they cause the demise of countless small retailers.

    Texas A&M Case on Computing the Cost of Professors and Academic Programs

    Jensen Comment
    In an advanced Cost/Managerial Accounting course this assignment could have two parts. First assign the case below. Then assign student teams to write a case on how to compute the cost of a given course, graduate in a given program, or a comparison of a the cost of a distance education section versus an onsite section of a given course taught by a tenured faculty member teaching three courses in general as well as conducting research, performing internal service, and performing external service in his/her discipline.

    From The Wall Street Journal Accounting Weekly Review on November 5, 2010

    Putting a Price on Professors
    by: Stephanie Simon and Stephanie Banchero
    Oct 23, 2010
    Click here to view the full article on WSJ.com



    TOPICS: Contribution Margin, Cost Management, Managerial Accounting


    SUMMARY: The article describes a contribution margin review at Texas A&M University drilled all the way down to the faculty member level. Also described are review systems in place in California, Indiana, Minnesota, Michigan, Ohio and other locations.
    CLASSROOM APPLICATION: Managerial concepts of efficiency, contribution margin, cost management, and the managerial dashboard in university settings are discussed in this article.


    QUESTIONS:
    1. (Introductory) Summarize the reporting on Texas A&M University's Academic Financial Data Compilation. Would you describe this as putting a "price" on professors or would you use some other wording? Explain.

    2. (Introductory) What is the difference between operational efficiency and "academic efficiency"?

    3. (Advanced) Review the table entitled "Controversial Numbers: Cash Flow at Texas A&M." Why do you think that Chemistry, History, and English Departments are more likely to generate positive cash flows than are Oceanography, Physics and Astronomy, and Aerospace Engineering?

    4. (Introductory) What source of funding for academics is excluded from the table review in answer to question 3 above? How do you think that funding source might change the scenario shown in the table?

    5. (Advanced) On what managerial accounting technique do you think Minnesota's state college system has modeled its method of assessing campuses' performance?

    6. (Advanced) Refer to the related article. A large part of cost increases in university education stem from dormitories, exercise facilities, and other building amenities on campuses. What is your reaction to this parent's statement that universities have "acquiesced to the kids' desire to go to school at luxury resorts"?

    Reviewed By: Judy Beckman, University of Rhode Island

    RELATED ARTICLES:
    Letters to the Editor: What Is It That We Want Our Universities to Be?
    by Hank Wohltjen, David Roll, Jane S. Shaw, Edward Stephens
    Oct 30, 2010
    Page: A16

    "Putting a Price on Professors," by Stephanie Simon and Stephanie Banchero, The Wall Street Journal, October 23, 2010 ---
    http://online.wsj.com/article/SB10001424052748703735804575536322093520994.html?mod=djem_jiewr_AC_domainid

    Carol Johnson took the podium of a lecture hall one recent morning to walk 79 students enrolled in an introductory biology course through diffusion, osmosis and the phospholipid bilayer of cell membranes.

    A senior lecturer, Ms. Johnson has taught this class for years. Only recently, though, have administrators sought to quantify whether she is giving the taxpayers of Texas their money's worth.

    A 265-page spreadsheet, released last month by the chancellor of the Texas A&M University system, amounted to a profit-and-loss statement for each faculty member, weighing annual salary against students taught, tuition generated, and research grants obtained.

    Ms. Johnson came out very much in the black; in the period analyzed—fiscal year 2009—she netted the public university $279,617. Some of her colleagues weren't nearly so profitable. Newly hired assistant professor Charles Criscione, for instance, spent much of the year setting up a lab to research parasite genetics and ended up $45,305 in the red.

    The balance sheet sparked an immediate uproar from faculty, who called it misleading, simplistic and crass—not to mention, riddled with errors. But the move here comes amid a national drive, backed by some on both the left and the right, to assess more rigorously what, exactly, public universities are doing with their students—and their tax dollars.

    As budget pressures mount, legislators and governors are increasingly demanding data proving that money given to colleges is well spent. States spend about 11% of their general-fund budgets subsidizing higher education. That totaled more than $78 billion in fiscal year 2008, according to the National Association of State Budget Officers.

    The movement is driven as well by dismal educational statistics. Just over half of all freshmen entering four-year public colleges will earn a degree from that institution within six years, according to the U.S. Department of Education.

    And among those with diplomas, just 31% could pass the most recent national prose literacy test, given in 2003; that's down from 40% a decade earlier, the department says.

    "For years and years, universities got away with, 'Trust us—it'll be worth it,'" said F. King Alexander, president of California State University at Long Beach.

    But no more: "Every conversation we have with these institutions now revolves around productivity," says Jason Bearce, associate commissioner for higher education in Indiana. He tells administrators it's not enough to find efficiencies in their operations; they must seek "academic efficiency" as well, graduating more students more quickly and with more demonstrable skills. The National Governors Association echoes that mantra; it just formed a commission focused on improving productivity in higher education.

    This new emphasis has raised hackles in academia. Some professors express deep concern that the focus on serving student "customers" and delivering value to taxpayers will turn public colleges into factories. They worry that it will upend the essential nature of a university, where the Milton scholar who teaches a senior seminar to five English majors is valued as much as the engineering professor who lands a million-dollar research grant.

    And they fear too much tinkering will destroy an educational system that, despite its acknowledged flaws, remains the envy of much of the world. "It's a reflection of a much more corporate model of running a university, and it's getting away from the idea of the university as public good," says John Curtis, research director for the American Association of University Professors.

    Efforts to remake higher education generally fall into two categories. In some states, including Ohio and Indiana, public officials have ordered a new approach to funding, based not on how many students enroll but on what they accomplish.

    Continued in article

    Jensen Comment
    This case is one of the most difficult cases that managerial and cost accountants will ever face. It deals with ugly problems where joint and indirect costs are mind-boggling. For example, when producing mathematics graduates in undergraduate and graduate programs, the mathematics department plays an even bigger role in providing mathematics courses for other majors and minors on campus. Furthermore, the mathematics faculty provides resources for internal service to administration, external service to the mathematics profession and the community, applied research, basic research, and on and on and on. Faculty resources thus become joint product resources.

    Furthermore costing faculty time is not exactly the same as costing the time of a worker that adds a bumper to each car in an assembly line. While at home in bed going to sleep or awakening in bed a mathematics professor might hit upon a Eureka moment where time spent is more valuable than the whole previous lifetime of that professor spent in working on campus. How do to factor in hours spent in bed in CVP analysis and Cost-Benefit analysis? Work sampling and time-motion studies used in factory systems just will not work well in academic systems.

    In Cost-Profit-Volume analysis the multi-product CPV model is incomprehensible without making a totally unrealistic assumption that "sales mix" parameters are constant for changing levels of volume. Without this assumption for many "products" the solution to the CPV model blows our minds.

    Another really complicating factor in CVP and C-B analysis are semi-fixed costs that are constant over a certain time frame (such as a semester or a year for adjunct  employees) but variable over a longer horizon. Of course over a very long horizon all fixed costs become variable, but this generally destroys the benefit of a CVP analysis in the first place. One problem is that faculty come in non-tenured adjunct, non-tenured tenure-track, and tenured varieties.

    To complicate matters the sources of revenues in a university are complicated and interactive. Revenues come from tuition, state support (if any), gifts and endowment earnings, research grants, services such as surgeries in the medical school, etc. Allocation of these revenues among divisions and departments is generally quite arbitrary.

    I could go on and on about why I would never attempt to do CVP or C-B research for one of the largest universities of the world. But somebody at Texas A&M has rushed in where angels fear to tread.

    Bob Jensen's threads on managerial and cost accounting are at
    http://www.trinity.edu/rjensen/Theory02.htm#ManagementAccounting 

    Bob Jensen's threads on higher education controversies are at
    http://www.trinity.edu/rjensen/HigherEdControversies.htm


     

    "Traditional Bookstores are Doomed," by Nobel Laureate Gary Becker, Becker-Posner Blog, January 9, 2011 ---
    http://www.becker-posner-blog.com/2011/01/can-bookstores-survive-prospects-and-consequencesposner.html

    The traditional bookstore is doomed by e-readers and online sales of hard copy books. I use the word “doomed” in the same sense that online digital sales of movies and music have doomed movie rental stores, movie theatres, and stores that sell albums of music. Doomed does not mean that these stores will quickly, or ever fully, disappear, but that they have received deadly blows from Internet competition.

    Joseph Schumpeter, an outstanding economist in the first half of the 20th century, originated the term “creative destruction” to describe new technologies and other forms of new competition that wreak havoc on older and established industries. The process is creative because it provides consumers and producers with more effective ways of satisfying their wants. The process is at the same time destructive because it greatly reduces the value of services and products provided by older industries.

    Extreme examples of creative destruction from the 20th century include the complete substitution of cars for horses and buggies, movies with speaking for silent movies, and computers for typewriters. Less extreme are the large reduction in clerical and secretarial staffs caused by the development of computers and the Web, and the sizable reduction in demand for milk and eggs induced by better information on the health value of low cholesterol diets.

    A similar creative destruction process began for bookstores with Amazon’s development of online book sales that offered huge inventories of books, convenience of purchase, speedy deliveries, online reviews of books, and various other services that made it more efficient and often cheaper to buy books online rather than in bookstores. Sales of books online started slowly, but they have accelerated as consumers became more familiar with the process of buying books (and other goods) online. I first started using Amazon at my summer home since it is not near any bookstore. Discovering the convenience of buying books online, I now buy online all year, although I still enjoy visiting bookstores.

    Effective online readers, like Amazon’s Kindle, and Apple’s iPad, are only a few years old, but they have become big hits since they can be used both to purchase books online, and to read books in digital form. Hundreds of books can be stored digitally in a single Reader that weighs less than a couple of pounds. They are especially valuable when traveling, but are useful when reading in bed or eating, and also with traditional reading when seated on a comfortable chair. They are particularly useful for individuals with weak eyesight since print size can be easily adjusted. This is why digital readers will appeal eventually even more to older persons than to others, although mainly younger persons are the ones who so far have bought digital readers because old persons are less familiar with digitalization.

    I do not expect bookstores to rapidly disappear the way the production of silent movies virtually ceased once talking movies were created. However, I do expect an accelerating decline in the number of bookstores as many close down due to bankruptcy and excessive losses. Some bookstores will continue to exist to cater to men and women who like to browse among physical copies of books, and because some owners of bookstores get great pleasure out of selling and being surrounded by books. Many bookstores that survive are likely to combine selling hard copy books with that of other products. For example, university bookstores usually also sell clothing that have the university logo, computers, greeting cards, snacks and coffee, and other goods that cater to students and faculty. Other surviving bookstores might combine selling of hard copy books in physical facilities with online sales of hard copy books, and online sales of digital books.

    The decline of bookstores, theatres, laundries, and other retail industries with physical facilities illustrates a trend that runs counter to older ideas about the effects of economic development. The process of development has been presumed to cause a substitution of market activities for home production. For example, households in poor rural societies have not only grown their own food, but also made much of their clothing, washed their clothes, baked their bread, and cooked from scratch their other food. As countries underwent economic growth, many of these productive activities left the home and migrated to the marketplace. Factory-made clothing was substituted for clothing made at home, and bakeries and laundries developed to make bread and sweets, and to wash, clean, and dry clothes.

    Further technological developments,however, such as small motors used in home washing and drying machines, and small machines that cooked bread easily at home, shifted many activities back into the home, and thereby saved on time and energy spent in the shopping process. The online digital revolution is a further major step in this trend of returning activities to the home. Time and effort are saved, for example, when instead of going to movie theatres, consumers both order and download films online to be viewed at “home”, either on television sets, or increasingly on computers.

    From this perspective, what is happening to bookstores is not unusual. “Books” are still read at “home”, but increasingly they are also purchased at home, and not only in hard copy form. Digital books are a true revolution, but their effects on bookstores are only a small part of a broader technological development that has brought important activities into the home.

    Teaching Case on Bad Debts

    Borders to Ask Publishers to Agree to Longer IOUs
    by: Jeffrey A Trachtenberg
    Jan 05, 2011
    Click here to view the full article on WSJ.com
     

    TOPICS: Accounting, Bad Debts

    SUMMARY: "Borders Group Inc. ...has stopped writing checks to key suppliers [and] is expected to ask publishers...to push back the due dates on bills as it works out a refinancing plan...." Competitor Barnes & Noble Inc. and others question the fairness of the possible change in terms by publishers for just one customer.

    CLASSROOM APPLICATION: The article is useful to introduce the concept of payment terms in covering accounts receivable and accounts payable in any level of accounting class.

    QUESTIONS: 
    1. (Introductory) Based on your reading of the article, what are the account terms offered by publishers to customers such as Borders Books and Barnes & Noble?

    2. (Introductory) Why is Borders is trying to renegotiate the terms with publishers? What incentive does a publisher have to enter into these negotiations?

    3. (Advanced) What is the form of receivable for the publishers, and payable for Borders, likely to be entered into if the publishers agree to alter terms of their accounts receivable from Borders?

    4. (Advanced) Why should Barnes & Noble consider these negotiations potentially unfair?

    Jensen Comment
    One question to pose to students is how much value added Borders provides relative to the lower prices (possibly) and ease of finding books from such book sources such as Amazon, Barnes & Noble, Google, etc.

    Another question is how do Borders' IOUs differ from IOUs being doled out to vendors supplying the states of Illionis, California, and others. The CBS Sixty Minues show featured some of the many vendors of the State of Illinois who are now mostly receiving IOUs instead of paymnets unless they can demonstrate exceptional hardship caused by delayed payments.

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


    Structurally Unbalanced: Cyclical and Structural Deficits in California and the Intermountain West ---  http://www.brookings.edu/papers/2011/0105_state_budgets.aspx


    "New Hit to Strapped States:  Borrowing Costs Up as Bond Flops; Refinancing Crunch Nears," by Michael Corkery and Ianthe Jeanne Dugan, The Wall Street Journal, January 14, 2011 ---
    http://online.wsj.com/article/SB10001424052748704307404576080322679942138.html?mod=ITP_pageone_0

    With the market for municipal bonds tumbling, cities, hospitals, schools and other public borrowers are scrambling to refinance tens of billions of dollars of debt this year, another sign that the once-safe market is under duress.

    The muni bond market was hit with the latest wave of bad news Thursday, prompting a selloff that sent the market to its lowest level since the financial crisis. A New Jersey agency was forced to cut the size of a bond issue by about 40% because of mediocre demand, and pay a higher rate than expected. And mutual fund giant Vanguard Group shelved plans for three new muni bond funds, citing market turmoil.

    "We believe that this delay is prudent given the high level of volatility in the municipal bond market," said Rebecca Katz, spokeswoman for the nation's biggest fund company.

    The market has fallen every day this week, and investors have been net sellers of their holdings in municipal-bond mutual funds for nine straight weeks, according to fund tracker Lipper FMI.

    Yields on 30-year triple-A rated general obligation bonds shot higher to 5.01% on Thursday, reflecting a spike in perceived risk, according to Thomson Reuters Municipal Market Data. The last time those bonds yielded 5% was Jan. 30, 2009, during the financial crisis.

    Amid the selloff, public borrowers such as states and utilities face a wave of refinancing stemming from deals cut mostly during the crisis. The deals involved letters of credit from banks that were designed to keep financing costs down for government entities in need of cash.

    Though the financing deals can be meant to last decades, the letters of credit underpinning them are expiring sooner. That could force the borrowers in many cases to pay higher interest rates or seek guarantees at higher costs. For the weakest borrowers, new guarantees may not be available and refinancing too costly. There are about $109 billion worth of letters of credit and similar backstops expiring this year, according to Bank of America Merrill Lynch. Some $53 billion in letters of credit alone is expiring this year, according to Thomson Reuters.

    "Municipalities may be hard-pressed to come up with this money or refinance this debt," said Eric Friedland, a municipal analyst at Fitch Ratings. The ratings firm is scouring to identify risks among weaker municipalities that are seeking to renew these deals, and says it could downgrade some.

    The rollover rush stems from the credit crisis that roiled the U.S. in 2008. Municipalities had issued so-called auction-rate securities, instruments whose rates reset at weekly auctions. Amid the credit crunch, buyers at these auctions vanished.

    Many municipalities scrambled to convert the debt into other instruments, including variable-rate demand obligations, which are long-term bonds with interest rates that reset periodically. For a fee, big banks guaranteed many of these deals.

    These so-called letters of credit from banks typically only last two or three years, leaving municipalities to refinance the deals or obtain a new guarantee. The issuers expected to easily renew the letters of credit.

    But many of these letters of credit have become much more expensive and scarce, state officials say, leaving them with little choice but to try to refinance at a time when the broader muni market is under pressure.

    The short-term squeeze is unusual in the $2.9 trillion municipal bond market. Most debt is paid back over decades. And state and local governments generally don't need to borrow money to fund their daily operations. The long-term nature of the market is a key reason why most experts don't see the problems with state and local government debt spiraling into another financial crisis. Analysts say that many large states and cities with good credit ratings have been able to roll over deals well ahead of their expiration.

    But there are parts of the market where short-term cash crunches could emerge, leading municipalities to potentially default on their debts. The risks could spill over to banks that backed bonds with the letters of credit.

    "This is one area of risk the market hasn't focused on," said Frederick Cannon, a banking analyst at Keefe, Bruyette & Woods. Mr. Cannon says it is difficult to determine banks' exact exposure to such deals because they don't typically report them in their financial statements.

    Continued in article

    Structurally Unbalanced: Cyclical and Structural Deficits in California and the Intermountain West ---  http://www.brookings.edu/papers/2011/0105_state_budgets.aspx

    So what's causing the downswing of the muni bond market?
    Watch the CBS Sixty Minutes video
    "States Budgets:  A Day of Reckoning ---
    http://www.cbsnews.com/video/watch/?id=7166293n&tag=cbsnewsMainColumnArea.9


    Questions
    Although all 50 states are in deep financial troubles, what state is in the worst shape at the moment and is unable to pay its bills?
    Hint: The state in deepest trouble is not California, although California is in dire straights!

    How did accountants hide the pending disasters?

    Watch the Video
    This module on 60 Minutes on December 19 was one of the most worrisome episodes I've ever watched
    It appears that a huge number of cities and towns and some states will default on bonds within12 months from now
    "State Budgets: The Day of Reckoning Steve Kroft Reports On The Growing Financial Woes States Are Facing," CBS Sixty Minutes, December 19, 2010 ---
    http://www.cbsnews.com/stories/2010/12/19/60minutes/main7166220.shtml

    The problem with that, according to Wall Street analyst Meredith Whitney, is that no one really knows how deep the holes are. She and her staff spent two years and thousands of man hours trying to analyze the financial condition of the 15 largest states. She wanted to find out if they would be able to pay back the money they've borrowed and what kind of risk they pose to the $3 trillion municipal bond market, where state and local governments go to finance their schools, highways, and other projects.

    "How accurate is the financial information that's public on the states? And municipalities," Kroft asked.

    "The lack of transparency with the state disclosure is the worst I have ever seen," Whitney said. "Ultimately we have to use what's publicly available data and a lot of it is as old as June 2008. So that's before the financial collapse in the fall of 2008."

    Whitney believes the states will find a way to honor their debts, but she's afraid some local governments which depend on their state for a third of their revenues will get squeezed as the states are forced to tighten their belts. She's convinced that some cities and counties will be unable to meet their obligations to municipal bond holders who financed their debt. Earlier this year, the state of Pennsylvania had to rescue the city of Harrisburg, its capital, from defaulting on hundreds of millions of dollars in debt for an incinerator project.

    "There's not a doubt in my mind that you will see a spate of municipal bond defaults," Whitney predicted.

    Asked how many is a "spate," Whitney said, "You could see 50 sizeable defaults. Fifty to 100 sizeable defaults. More. This will amount to hundreds of billions of dollars' worth of defaults."

    Municipal bonds have long been considered to be among the safest investments, bought by small investors saving for retirement, and held in huge numbers by big banks. Even a few defaults could affect the entire market. Right now the big bond rating agencies like Standard & Poor's and Moody's, who got everything wrong in the housing collapse, say there's no cause for concern, but Meredith Whitney doesn't believe it.

    "When individual investors look to people that are supposed to know better, they're patted on the head and told, 'It's not something you need to worry about.' It'll be something to worry about within the next 12 months," she said.

    No one is talking about it now, but the big test will come this spring. That's when $160 billion in federal stimulus money, that has helped states and local governments limp through the great recession, will run out.

    The states are going to need some more cash and will almost certainly ask for another bailout. Only this time there are no guarantees that Washington will ride to the rescue.

    Continued in article

    Also see the Becker-Posner Blog ---
    http://www.becker-posner-blog.com/2010/12/the-dismal-state-of-long-term-state-and-local-government-finance-becker.html

    The Government' Recipe for Off-Budget Debt
    "US Government 'hiding true amount of debt'," by Gregory Bresiger, news,com ---
    http://www.news.com.au/business/breaking-news/us-government-hiding-true-amount-of-debt/story-e6frfkur-1225926567256#ixzz106MjZzOz 

    Bob Jensen's threads on the economic crisis ---
    http://www.trinity.edu/rjensen/2008Bailout.htm

    The Sad State of Government Accounting and Accountability ---
    http://www.trinity.edu/rjensen/theory02.htm#GovernmentalAccounting


    Question
    What is Cournot Equilibrium and will the Big Four accounting firms be reduced to the equilibrium Big Three?

    Paul Williams Argues That the Invisible Hand Never Had Much Grip in the First Place
    "When Did the Invisible Hand Lose Its Grip?" by Chris Meyer & Julia Kirby, Harvard Business Review Blog, January 13, 2011 --- Click Here
    http://blogs.hbr.org/hbr/meyer-kirby/2011/01/when-did-the-invisible-hand-lo.html?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date

    We aren't the first to see that the world has changed and free market competition no longer produces benefits as if by an invisible hand. Historian Alfred Chandler described the change convincingly in his book The Visible Hand. Writing in the 1970s, Chandler described the growth of large industrial organizations in the early 20th century. Their emergence, he observed, marked a major new era in capitalism, dividing its history into two phases. Before 1850 there was the market economy, in which many players, engaged in something plausibly resembling perfect competition, collectively met demand without any grand plan to do so. After 1850, the markedly different system that he called managerial capitalism emerged.

    One way to understand the difference is to reflect on the most basic definition of an economy: it allocates resources to fulfill desires. Beyond that, the rest is up for grabs. The difference between Chandler's two eras was in the mechanism by which that allocation happened. Under managerial capitalism, overall production was no longer driven by market mechanisms; it was decided on by skilled managers in large companies. The invisible hand was replaced by a visible one, belonging to a John D. Rockefeller or Andrew Carnegie, operating deliberately and with sufficient power and intent to change the shape of markets.

    The change Chandler describes actually began as far back as the industrial revolution, because that basically invented market power. Before mass production, no organization had achieved or could achieve the kind of scale the industrial revolution enabled. In the beer industry, for example, it created the capabilities to brew huge batches and ship beer over long distances — creating the so-called "shipping" breweries that ultimately dominated an industry that was once nothing but microbrew.

    Today it is almost wholly the visible hand that rocks the economy. Massive firms do not respond to consumption dynamics so much as they shape them. They have the means to manufacture demand as well as to serve it.

    So here's the question: if competition is no longer atomized, but is now titanic, does that mean that markets are no longer truly competitive?

    We would say so. We think when power is concentrated in the hands of the few, the game gets friendlier on some level. Consider that when there are 500 of us in some setting all pursuing our own agendas, it's very difficult to get a consensus on anything. But when there are just a few of us, we can come to some kind of agreement.

    Let's say that happens, however implicitly (and we do not claim that it is more than implicit ... except sometimes). What would the agreement be? It seems clear that not one of those few bloated players would be pounding the table for the establishment of a more competitive marketplace. Individually, they are committed to thwarting that.
    That might sound like an outrageous statement, but it isn't at all. If you are a reader of management literature, as evidently you are, you cannot have failed to encounter the phrase "sustainable competitive advantage." This is what all managers in all firms aspire to — it is the holy grail that lies at the end of the search for excellence, and the promise of Michael Porter's teachings. Its point is simple: that a firm does best when it finds some way not only to prevail in the current market with its current offering, but also to ensure that its advantage is not purely temporary.

    Sustainable competitive advantage, in other words, is the tying of the Invisible Hand. In Adam Smith's world, whenever a producer responded to a market opportunity with a uniquely valuable proposition to buyers, it had the ability to enjoy excess profits. But immediately, those excess profits would be spotted and coveted by other producers, who would rush in with rival offerings. Faced with multiple options, buyers would look for value differentials through lower pricing, and the profits would rapidly be competed away. This, to a firm, is a horror to be avoided: a buyer's market. The entire enterprise of management has been to find a way around it.

    To underscore the point: The invisible hand is the enemy of sustainable competitive advantage — and any firm trying to gain a sustainable competitive advantage is an enemy of the invisible hand.

    When oligopolistic conditions exist, therefore, where it is possible for a few major players to implicitly agree on how business will be done, the agreement that is arrived at looks nothing like constant, fierce competition. Rather, it's in all the leaders' interests to maintain a stable market and profitable prices. Oligopoly permits mutual understanding to develop, and then, because that understanding supports premium profits, the players have an incentive to maintain the oligopoly. Fat cats just don't fight like alley cats.

    Okay, perhaps we should retract that last sentence, because we can already feel the cats' backs getting up. That very phrase "fat cats" was after all a lightning rod for the business community when Barack Obama used it. "I did not run for office to be helping out a bunch of, you know, fat-cat bankers on Wall Street," he told CBS's 60 Minutes in mid December 2009. In the year following, his administration was broadly accused of being hostile to business, not only by its political rivals but by thoughtful executives like GE's Jeff Immelt.

    But we're leaving it in, because it's important to recognize when a knee-jerk response is happening, and when that reflex needs to be called out, challenged, and changed. Please think about this with a mind unclouded by what you think your politics are: it is not a necessity to be on board with business interests to be a defender of free markets. In fact, as we've been describing, the two are deeply at odds.

    There is undeniably a common attitude in America that to be pro-free market is to be pro-business, and vice versa. Routinely we see defenders of American values reflexively taking the side of corporations in policy disputes. But it's important to understand that, while in the abstract corporate leaders are defenders of free markets, when it comes to their own competitive settings, they would much rather sit well above the fray.

    Sometimes it's hard to understand what self-described advocates of the free market do believe in since they so often defend the rights of the company that already has market power to do whatever it can to strengthen its position further. This is a point we really feel strongly about: we give huge market power to large corporations under the banner of free competition, when in fact what they are engaging in is not competition. It is pseudo competition.

    Jensen Comment
    When the monopoly of the regulated AT&T Bell System was broken up into Baby Bells there was great hope for competition and innovation in the Baby Bell system. But the Baby Bells afterwards coagulated into a virtual monopoly called AT&T, which seems to be the natural trend in many industries having economies of scale unless trust busters vigorously enforce anti-trust laws (which is seldom the case). What saved the U.S. consumers somewhat was the advent of wireless cell phone communications and the explosive growth of the Internet that allowed new entrants into the communications industry and also restrained the giant Communications Industry Union.

    Unfortunately the many competitors in the cell phone industry are now being driven out by an oligopoly of big smart giants and who compete as oligopolists and not capitalists. Oligopoly competition generally coagulates into the Cournot equilibrium magic number of three that can hardly be called capitalist competition. 

    Cournot Equilibrium --- http://en.wikipedia.org/wiki/Cournot_equilibrium


    Federal Reserve System --- http://en.wikipedia.org/wiki/Federal_Reserve_System

    Question
    Teaching Case: How well do your students understand the Fed?
    As we move into more fair value accounting, interest rate hedge accounting, and financial risk reporting, accounting students need to know more about the Fed?

    Fed's Net Soars on Crisis-Era Holdings
    by: Maya Jackson Randall
    Jan 11, 2011
    Click here to view the full article on WSJ.com
     

    TOPICS: Investments, Net Income, Net Profit, Treasury Department

    SUMMARY: "The Federal Reserve's net income surged to $80.9 billion in 2010, largely due to a boost in earnings from securities it acquired during the financial crisis and its aftermath, according to preliminary unaudited results the central bank released Monday. Most of that income will go back to the U.S. treasury, as....the Fed will transfer a record $78.4 billion to the Treasury Department....a 65% increase over the $47.4 billion the Fed paid the Treasury in 2009....The increase was due primarily to increased interest income earned on securities holdings during 2010,' the Fed said in a statement."

    CLASSROOM APPLICATION: The article is useful for students to understand that accounting for investments applies beyond companies in a for-profit environment and that the recorded profits on investments influence remittances into our U.S. Treasury department.

    QUESTIONS: 
    1. (Introductory) What is the Federal Reserve System? What are its member (district) banks? (Hint: you may access this information on the Federal Reserve System's web page at http://www.federalreserve.gov/pubs/frseries/frseri2.htm)

    2. (Advanced) Why is the income that the Federal Reserve has earned on securities it acquired during the financial crisis so notable?

    3. (Introductory) What does the Federal Reserve do with the income it earns?

    4. (Advanced) What does the author mean by the statement that "the Fed super-sized its balance sheet..."?

    5. (Advanced) How is it possible that "the Fed could still lose money on the holdings" that currently are producing record profits? In your answer, consider and describe the accounting for investments under U.S. generally accepted accounting principles.

    6. (Introductory) What will happen if the Fed ends up losing on the remaining assets it holds from the steps it took during the financial crisis?
     

    Reviewed By: Judy Beckman, University of Rhode Island

    "Fed's Net Soars on Crisis-Era Holdings," by: Maya Jackson Randall, The Wall Street Journal, January11, 2011
    http://online.wsj.com/article/SB10001424052748704458204576074111716303734.html?mod=djem_jiewr_AC_domainid

    The Federal Reserve's net income surged to $80.9 billion in 2010, largely due to a boost in earnings from securities it acquired during the financial crisis and its aftermath, according to preliminary unaudited results the central bank released Monday.

    Most of that income will go back to the U.S. Treasury, as is the Fed's custom. The Fed will transfer a record $78.4 billion to the Treasury Department, including income earned from interest on bonds issued by the Treasury itself. It marks a 65% increase over the $47.4 billion the Fed paid the Treasury in 2009.

    Fed officials said the bulk of the payments have already been distributed to Treasury. "The increase was due primarily to increased interest income earned on securities holdings during 2010," the Fed said in a statement.

    During the financial crisis, the Fed super-sized its balance sheet by creating a slew of unprecedented, emergency programs through which it bought securities and debts and lent to banks and other firms. The Fed has been criticized for taking too many risks with taxpayer money and putting itself in a position to rack up big losses.

    So far, the Fed's lending and credit programs look like a profitable effort. "I think from a purely fiscal point of view…this is most likely to be beneficial, not harmful, to the government's financial position," Federal Reserve Chairman Ben Bernanke said at a Capitol Hill hearing last week. "Our cost of funds is very low, so the interest that we are receiving, we are remitting back to the Treasury."

    One can view the payments returned to Treasury on interest from Treasury bonds as "interest that the Treasury didn't have to pay the Chinese," he added.

    The Fed's assets increased from less than $900 billion before the financial crisis to more than $2.4 trillion today. The Fed could still lose money on the holdings.

    For instance, if inflation rises and the central bank needs to push interest rates higher, its own cost of funding would rise and it could be forced to sell long-term government bonds at a loss. If that were to happen, the Fed's remittances to the government would drop, or possibly halt for some time. Central bank officials play down the risk.

    The Fed said the estimated 2010 net income was derived primarily from $76.2 billion in income from mortgage bonds and Treasury debt. In 2009, it earned $48.8 billion from securities holdings, Fed officials said on a conference call with reporters Monday.

    The Fed said $7.1 billion in income came from limited liability companies created during the financial crisis for different rescues, including one holding commercial paper loans made by the Fed and another holding assets from Bear Stearns. Another $2.1 billion in interest income came from credit extended to American International Group (AIG); $1.3 billion of dividends on preferred interests in AIA Aurora LLC and ALICO Holdings LLC; and $800 million in interest income on loans extended under the Term Asset-Backed Securities Loan Facility and loans to depository institutions.

     


    "Derivatives Rules on ICE:  Wasn't Dodd-Frank supposed to reduce systemic risk?" The Wall Street Journal, January 7, 2011 ---
    http://online.wsj.com/article/SB10001424052748704694004576019851275439150.html#mod=djemEditorialPage_t

    Two years ago we warned against concentrating all of the risks in the credit-default swap (CDS) market inside a clearinghouse called ICE Trust. Now it appears that even the managers of ICE Trust are coming around to our point of view. A few days before Christmas, this largest of CDS clearinghouses quietly withdrew its federal application to be . . . a CDS clearinghouse.

    Astounding as it may seem, the frenzied rule-making ordered by the new Dodd-Frank law is sowing concern and confusion even among the law's beneficiaries. The ICE Trust example is particularly instructive. Clearinghouses operate in many financial markets and often serve a useful purpose. Specifically, they stand behind every trade so that the two parties to a transaction don't have to trust each other to make good on the deal.

    A clearinghouse collects money from all participants as a cost of membership and also collects margin based on particular trades. The margin collected and the contributions from members create a pot of money available in case a member, or members, default on their obligations to the clearinghouse. On the chance that defaults are much larger than anticipated, all members also agree to provide emergency capital if the clearinghouse is in distress.

    Though it must follow the guidance of a regulator, a clearinghouse must nonetheless be adept at setting appropriate margin each day. That isn't easy to do with many thinly traded CDS contracts, and it must also be very careful to admit for membership only sound firms that are unlikely to default and capable of providing assistance in times of stress.

    In other words, clearing arrangements do not eliminate risks; they transfer them from the two trading parties to the clearinghouse. But the Obama Administration and the authors of Dodd-Frank claimed to believe two things that aren't true: that the structure of the derivatives market—as opposed to housing or monetary policies—was a root cause of the financial crisis, and that clearinghouses would eliminate risk from derivatives.

    Truth be told, at least one of the bill's authors understood that derivatives clearinghouses would not magically eliminate risk, and that those risks might someday swamp a clearinghouse. Last May, we noted that Senator Chris Dodd had added language providing clearinghouses with emergency access to the Federal Reserve's discount window. The language stuck and the Democrats' so-called reform of Wall Street fulfilled the dream of every high-roller in the swaps market: taxpayer-backed derivatives trading.

    Dodd-Frank empowered regulators to tear up the plumbing of this market while forcing much of the trading into these taxpayer-backed clearinghouses. ICE Trust, born in 2008 at the behest of Timothy Geithner's Federal Reserve Bank of New York, seemed poised to be among the biggest winners. Having already cleared more than $14 trillion in CDS trades under the old regime operated by the Fed, ICE planned to seek immediate approval from its new regulator, the Commodity Futures Trading Commission.

    But two weeks ago, ICE rescinded its application to the CFTC. The company would only say that "given the significant changes proposed to the commission regulations" for derivatives-clearing organizations, it decided to wait until it is required to come under CFTC jurisdiction later this year.

    An immediate seal of approval from the commission would have allowed ICE to seek many new customers, so why would this company want to leave money on the table?

    Probably because ICE would have had to admit weaker members into its clearinghouse. CFTC's new rules allow clearing members to have less capital than they are required to hold under ICE's existing rules. Even with taxpayer-backing, ICE really doesn't want to fail. But wait. Wasn't the point of this whole regulatory adventure supposed to be about reducing systemic risk?

    That's certainly how it was sold when Congress was debating the bill last year, flawed as the argument might have been. But now, vested with new authority to remake the market, CFTC Chairman Gary Gensler has veered into a kind of consumer-protection role, with industrial companies in the Fortune 500 among the consumers. The theory goes like this: If Mr. Gensler can elevate more financial firms into clearinghouse membership, he will break the dominance of the large Wall Street banks, and this will provide lower prices to those industrial consumers when they buy derivatives to hedge their business risks.

    It's striking how few of these industrial consumers are demanding Mr. Gensler's protection, and most Americans probably assume they're capable of protecting themselves. But Americans have reason to wonder what any of this has to do with avoiding the next financial crisis.

    Reducing the power of too-big-to-fail banks sounds good to us. But taking away their taxpayer backing is the way to start, rather than admitting more financial companies into the subsidy club.

    Bob Jensen's timeline of derivative financial instrument scandals is at
    http://www.trinity.edu/rjensen/FraudRotten.htm#DerivativesFrauds


    Ketz Me If You Can
    "Triumph of Banking," by J. Edward Ketz, SmartPros, January 2011 ---
    http://accounting.smartpros.com/x71113.xml

    My, how the year 2010 ended with a bang! First, Attorney General Andrew Cuomo initiated a fraud suit against Ernst & Young, and then the Financial Accounting Foundation named Leslie Seidman as the chair of the FASB. These events culminate a return to power and prestige for the investment banking industry, and we should salute the triumph of banking.

    Banks have not been so fortunate during the previous five to ten years, when history was not so kind to them. But the industry has fought back virulently both in direct and covert ways. They employed the bully pulpit to argue the points they wished to advance, they courted members of Congress and the White House, and they issued innuendo after innuendo. And the battlefield shows their victory and the spoils they have earned.

    Recent troubles were in a sense triggered by the CDO racketeering by the banking industry during the last five to ten years, though I suppose I should be more genteel and call it the collapse of the CDO business and the real estate market. More accurately, the mayhem goes back at least to the days of Enron, when the bankers had to minimize the damage caused by their enabling Lay and Skilling and their underlings to commit accounting and securities frauds. Of course, it included many other corporations, but part of the public relations battle was to focus the dysfunctions exclusively on Enron, which allowed bankers and corporate managers to claim it was just a few bad apples.

    Even with Enron it was a battle, but the industry mostly kept the casualties to a few fines and court settlements. It is a minor miracle that the executives at Merrill Lynch avoided prison, especially given the fraud involving the Nigerian barges.

    More recently, when bankers were at the verge of swallowing poison of their own making, they convinced members of Congress and the White House that this was a societal problem, thus it would be just and fair to rescue the banks from economic collapse because it would help the common man. Amazingly the populace accepted such drivel and Washington assisted them with massive bailouts. Such wealth transfers from the middle class to the rich are unparalleled in history.

    It is instructive that the banking industry was able to convince many that the difficulties were actually systemic problems. The beauty of this positioning is that it absolved the banks from most of the blame for the catastrophe. Further, it is important to notice that the bankers were able to push most of the flotsam and jetsam onto Lehman Brothers alone, similar to their interpretation of the events of 2001-2002. By focusing exclusively on Lehman Brothers, the spokesmen for the banks could assert that the industry’s contribution to the 2008 downfall was limited to a few bad apples at this one institution.

    But, the bankers really showed their agility when public opinion opposed the granting of colossal bonuses to top managers. The industry first got cheap loans from the government as well as the ability to unload so-called “toxic” assets as the idiots at the Fed paid top dollar for the junk. Then the industry quickly paid off its debts to the federal government, so the poor executives could enjoy the millions in bonuses.

    Amid this posturing, some politicians wanted to make sure the banks were solvent and devised stress tests to evaluate the banks. The industry again displayed amazing dexterity by manipulating the regulators so that they devised feeble stress tests that Lehman Brothers could pass even after its bankruptcy. These felicitous results calmed the public by relieving any fears that the banks were weak and illiquid. Even if they were.

    Bankers clamored against fair value accounting, claiming that it was behind the 2008 collapse. That this is untrue is hardly important. That the banks were gung ho in favor of fair value accounting almost a decade ago when fair value gains added substantially to the banks’ income statement seems a curiosity lost on many observers. Bankers reversed their position only when the gains turned into losses, and they have been zealously against fair value accounting ever since. The work paid off when the FASB on April 2, 2009 caved in to the demands of bankers and allowed them favorable treatments to minimize any losses on their “toxic” assets.

    And in this turmoil, it is remarkable that banks have avoided any significant regulation of derivatives. The CDOs that got us into this mess have been absolved by the priests within the bank industry and their minions in Washington. Of course, it helps to have the Treasury Secretary and the Fed Chairman in your back pockets.

    Continued in article

    Jensen Comment
    I join my friend Frank Partnoy in singing a loud chorus for more regulation of derivatives ---
    http://www.trinity.edu/rjensen/FraudRotten.htm#DerivativesFrauds


    Ethical Archives
    Principally, problems arise when collections are seen as windfalls and brain bling, rather than social and cultural responsibilities.

    "So where, exactly, is Martin Luther King’s stuff?" by Cynthia Haven, The Book Haven Blog, Stanford University, January 17, 2011 ---
    http://bookhaven.stanford.edu/

    Happy birthday, Martin Luther King Jr. But where’s all your stuff?

    The answer is a complicated one, and “a cautionary tale,” according to Elena Danielson, author of The Ethical Archivist and sometime contributor to the Book Haven.

    Principally, problems arise when collections are seen as windfalls and brain bling, rather than social and cultural responsibilities.

    Here’s Elena’s story: MLK got his PhD from Boston University and met his future wife Coretta in Boston. The transfer of his papers to Boston University began “by an exchange of letters, a once-common practice.” King intended to make a loan or deposit, that would evolve into a gift. The terms were never finalized.

    After his assassination in 1968, the family established the King Center in Atlanta. Most pre-1961 are in Boston; most post-1961 papers are in Atlanta.

    The problem is, Boston University isn’t a hotspot for academic research on civil rights. Its special collection is famous for collector the papers of Hollywood figures, who jostle with King on its website.

    That’s not all, of course: hundreds of letters and bits of paper are all over the country, many held privately. For example, Harry Belafonte had several major King documents. He tried to sell them at public auction in 2008, but withdrew them under protest.

    Coretta King tried to get Boston’s papers back, beginning in 1987. Could a lawsuit be far behind? James O’Toole, an expert archives witness, recommended consolidating the collection in Atlanta, and testified that at least one item had been lost in Boston, and that the university had not provided the appropriate levels of professional care.

    Boston University won the case. “The decision was narrowly based on property law that treated archives as objects, no different from a dispute over the ownership of furniture,” Elena writes.

    The situation worsened with Coretta King’s death in 2006. The estate put a large collection of King papers up for auction at Sotheby’s – “The commodification of the King legacy directly threatened its integrity,” Elena writes. Public outcry resulted in a $32 million fund to keep the papers in Atlanta, housed at Morehouse College.

    Believe it or not, this tangled story has kind of a happy ending. There was another strand of activity: In 1985, Coretta King asked Clayborne Carson of Stanford to edit King’s papers for publication. The multi-volume edition brings together the scattered texts for researchers – volume 1 came out in 1992, and several more have been published since (14 in all are planned).

    Continued in article


    From the Scout Report on January 7, 2011

    Freebase http://www.freebase.com/ 

    Do you like open data? Do you like visual representations? If so then you should give Freebase a look. With Freebase, visitors can use all types of publicly available data to create "entities" which will be connected and manipulated into a graph format. Freebase has access to about 13 million entities, so interested parties have a tremendous amount of material to choose from. Visitors can use the material on the homepage to see what previous users have done with this data. This version is compatible with all operating systems, including those running Linux.


    SlideRocket --- http://www.sliderocket.com/ 

    As this is a New Year, there will be a need for new presentations. SlideRocket makes pesky presentation troubles go away, as you can access PowerPoint presentations from any locations, collaborate with colleagues around the world, and also integrate dynamic data, charts, and graphs quite seamlessly. Some of the more advanced features are only available via the pay versions of the product, but the free version is easy and engaging. This version is compatible with all operating systems, including Linux.


    In difficult economic times, cities ask nonprofits for voluntary contributions Strapped Cities Hit Nonprofits With Feeds http://online.wsj.com/article/SB10001424052748703548604576038080723678202.html?mod=WSJ_hp_LEFTTopStories 

    City to ask more from nonprofits
    http://www.boston.com/news/local/massachusetts/articles/2010/12/22/city_to_ask_more_from_nonprofits/?rss_id=Boston.com+--+Local+news 

    Princeton: University will provide township a $500K gift http://www.centraljersey.com/articles/2011/01/03/the_princeton_packet/news/doc4d2270475d056711196808.txt 

    Nonprofits shouldn't be a revenue source
    http://www.journaltimes.com/news/opinion/editorial/article_b52dc2e6-1793-11e0-859c-001cc4c03286.html 

    Balancing Budgets http://www.watertowndailytimes.com/article/20101228/OPINION01/312289981 

    Commentary: The Burden of Tax-Exempt Property http://www.njpp.org/com_dkoped.html


    From the Scout Report on January 14, 2011

    Poll Builder  --- http://chnm.gmu.edu/tools/polls/ 

    Created by Dan Cohen for George Mason University's Center for History and New Media, this helpful application will allow users to create polls that they can embed in their web pages. Visitors can get started by choosing a background color, and then go ahead and create a poll with up to 5 possible responses. It's not a very flashy program, but it gets the job done, and it is compatible with all operating systems, including Linux.


    Photo Grabbr 1.44 --- http://www.malarkeysoftware.com/projects_PhotoGrabbr.html 

    Created by Andrew Tedstone, Photo Grabbr is a fine way to download photo sets of note from Flickr accounts. If you are the type of person that wants to take a closer glimpse at landscapes of Mongolia, family gatherings in Moldova, or trips to Monrovia, you'll want to give this handy application a look. This version is compatible with computers running Mac OS X 10.4 and newer.

     


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

    "Wikipedia Comes of Age," by Casper Grathwohl, Chronicle of Higher Education's Chronicle Review, January 7, 2011 ---
    http://chronicle.com/article/Wikipedia-Comes-of-Age/125899/?sid=cr&utm_source=cr&utm_medium=en

    The key challenge for the scholarly community, in which I include academic publishers such as Oxford University Press, is to work actively with Wikipedia to strengthen its role in "pre-research." We need to build stronger links from its entries to more advanced resources that have been created and maintained by the academy.

    It is not an easy task to overcome the prejudices against Wikipedia in academic circles, but accomplishing that will serve us all and solidify an important new layer of knowledge in the online-information ecosystem. Wikipedia's first decade was marked by its meteoric rise. Let's mark its second decade by its integration into the formal research process.

    Continued in article

    Casper Grathwohl is vice president and publisher of digital and reference content for Oxford University Press.

    Bob Jensen's search helpers are at
    http://www.trinity.edu/rjensen/Searchh.htm


    Coupon Saver --- http://www.couponsaver.org/


    Education Tutorials

    The Art Institute of Chicago: Education: Online Resources [Quick Time] http://www.artic.edu/aic/visitor_info/podcasts/video/education_videos/

    Dictionary of Art Historians --- http://www.dictionaryofarthistorians.org/

    American RadioWorks: Testing Teachers (radio broadcast) --- http://americanradioworks.publicradio.org/features/testing_teachers/

    Invitation to World Literature --- http://www.learner.org/courses/worldlit/

    Schools That Work [Ethiopia] http://www.edutopia.org/schools-that-work

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


    Engineering, Science, and Medicine Tutorials

    MarineBio --- http://marinebio.org/

    "The Singularity and economic history," by Steve Hsu, MIT's Technology Review, January 4, 2011 ---
    http://www.technologyreview.com/blog/post.aspx?bid=354&bpid=26223&nlid=3972

    National Science Foundation: Predicting Seasonal Weather [Flash Player] --- http://www.nsf.gov/news/special_reports/autumnwinter

    Global Canopy Programme (geology and climate) --- http://www.globalcanopy.org/

    Nature: American Eagle [Flash Player] http://www.pbs.org/wnet/nature/episodes/american-eagle/introduction/4201/

    Ashfall Fossil Beds State Historical Park --- http://ashfall.unl.edu/

    John Day Fossil Beds National Monument --- http://www.nps.gov/features/joda/

    Birth Defects Research For Children --- http://www.birthdefects.org/

    The Stuttering Foundation --- http://www.stutteringhelp.org/Default.aspx?tabid=839

    Binding Wounds, Pushing Boundaries: African Americans in Civil War Medicine --- http://www.nlm.nih.gov/exhibition/bindingwounds/index.html

    Images from the History of Medicine --- http://www.nlm.nih.gov/hmd/ihm/ 

    Rare and Beautiful Books in Biology and Medicine
    Turning the Pages Online --- http://archive.nlm.nih.gov/proj/ttp/intro.htm

    The Food Museum --- http://www.foodmuseum.com/

    Food Timeline --- http://www.foodtimeline.org/index.html

    Ad*Access --- http://library.duke.edu/digitalcollections/adaccess/
    The Duke University Libraries has an extensive physical and online collection of advertisements that appeared in magazines and newspapers in the U.S. and Canada from 1911-1955. The Ad*Access collection focuses on advertisements in five main subject areas: Radio, Television, Transportation, Beauty and Hygiene, and World War II.

    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

    Video:  Neuroeconomist Paul J. Zak on Markets and the "Molecule of Love" ---
    http://www.youtube.com/watch?v=gmuOW6qGbx4

    Media Awareness Network --- http://www.media-awareness.ca/english/index.cfm

    Maynard Institute for Journalism Education --- http://www.maynardije.org/
    Project for Excellence in Journalism: Analysis: Our Studies --- http://www.journalism.org/research_and_analysis/Studies

    The Media Institute --- http://www.mediainstitute.org/

    The Knight Center For Digital Media Entrepreneurship --- http://www.startupmedia.org

    The Boston Foundation: Multimedia Library --- http://www.tbf.org/UtilityNavigation/MultimediaLibrary/MultimediaLibraryHome.asp

    Boston University Libraries: Research Guides --- http://www.bu.edu/library/guides/

    Audio (one hour):  Claiming Money is Fiction (Yipes! Money is the measuring unit in accounting records and financial statements)
    The Invention of Money --- http://www.thisamericanlife.org/

    Charlotte Perkins Gilman's "The Yellow Wall-Paper" is a feminist classic. Scott McLemee looks into the story behind the story.
    "Female Complaints," Scott McLemee, Inside Higher Ed, January 11, 2011 ---
    http://www.insidehighered.com/views/mclemee/mclemee320

    "Women and Repayment in Microfinance," by Roy Mersland , Bert D'Espallier, and Isabelle Guérin, SSRN, January 11, 2011 ---
    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1711396

    Abstract:     
    This paper analyzes gender-differences with respect to microfinance repayment-rates using a large global dataset covering 350 Microfinance Institutions (MFIs) in 70 countries. The results indicate that more women clients is associated with lower portfolio-at-risk, lower write-offs, and lower credit-loss provisions, ceteris paribus. These findings confirm common believes that women in general are a better credit-risk for MFIs. Interaction effects reveal that the effect is stronger for NGOs, individual-based lenders, ‘finance plus’-providers and regulated MFIs. This indicates that two types of MFIs benefit more than others from focussing on women: First, those MFIs that develop hands-on, women-friendly procedures tailored to individual women’s need, and Second, those MFIs that apply coercive enforcement methods to which women are more responsive.

    Charles Ferguson via MIT World (H/T Jesse's Cafe Americain).
    "Video: The Financial Crisis, the Recession, and the American Political Economy: A Systemic Perspective," by Nadine Sabai, Sleight of Hand, January 13, 2011 ---
    http://sleightfraud.blogspot.com/2011/01/video-financial-crisis-recession-and.html

    Ferguson finds galling both government apathy in regulating and in prosecuting high-end white collar crime, but perceives the reason: a financial services industry that “as it rapidly consolidated and concentrated became the dominant source not only of corporate profits but campaign contributions and political funding in the U.S.” Evidence for unrestrained financial power lies in the fact that the government response to the crisis has been engineered by Wall Street insiders intent on shoring up firms too big to fail. Ferguson cites as well “corruption of the economics discipline,” the rising role of money in politics, and the increasing concentration of wealth in the hands of a few.

    The dominance of a single industry constitutes a deep change and danger for America, believes Ferguson. The nation “has evolved a political duopoly where two political parties agree on things related to finance and money.” Without a political structure immune to such influence, Ferguson sees little likelihood of challenging the interests of the financial giants.

    Bob Jensen's Rotten to the Core threads for bankers are at
    http://www.trinity.edu/rjensen/FraudRotten.htm#InvestmentBanking

    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

    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

    America's First Illustrator: Alexander Anderson --- http://digitalgallery.nypl.org/nypldigital/explore/dgexplore.cfm?topic=arts&col_id=221

    Dictionary of Art Historians --- http://www.dictionaryofarthistorians.org/

    Media Awareness Network --- http://www.media-awareness.ca/english/index.cfm

    Obsidian Mirror-Travels: Refracting Ancient Mexican Art and Archaeology (Getty Museum) ---
    http://www.getty.edu/research/exhibitions_events/exhibitions/obsidian_mirror/index.html

    Film Noir Foundation --- http://www.filmnoirfoundation.org/

    American Cinema (video) --- http://www.learner.org/resources/series67.html

    Photogravure [Flash Player] http://www.photogravure.com

    Western Silent Films Lobby Card Collection --- http://beinecke.library.yale.edu/digitallibrary/lobbycards.html

    G. William Skinner Map Collection ( maps )--- http://content.lib.washington.edu/skinnerweb/

    Magnificent Maps [Flash Media Player] --- http://www.bl.uk/magnificentmaps/

    Mural Arts Program --- http://muralarts.org/

    Rammer Jammer (humorous University of Alabama campus life magazine since 1924) ---
    http://content.lib.ua.edu/cdm4/results.php?CISOOP1=exact&CISOBOX1=Rammer Jammer&CISOFIELD1=relatig&CISOROOT=all&t=s

    University of Alabama Digital Collections (including agriculture history) ---  http://content.lib.ua.edu/cdm4/about.php

    Invitation to World Literature --- http://www.learner.org/courses/worldlit/

    The Richard H. Driehaus Museum (Chicago History) --- http://www.driehausmuseum.org/

    Chicago History Museum [Flash Player] http://blog.chicagohistory.org/ 

    South Florida History in Photographs
    The Bob Simms Collection: An Activist's Life and Legacy --- http://scholar.library.miami.edu/bobsimms/ 

    The Food Museum --- http://www.foodmuseum.com/

    Food Timeline --- http://www.foodtimeline.org/index.html

    Ad*Access --- http://library.duke.edu/digitalcollections/adaccess/
    The Duke University Libraries has an extensive physical and online collection of advertisements that appeared in magazines and newspapers in the U.S. and Canada from 1911-1955. The Ad*Access collection focuses on advertisements in five main subject areas: Radio, Television, Transportation, Beauty and Hygiene, and World War II.

    Charlotte Perkins Gilman's "The Yellow Wall-Paper" is a feminist classic. Scott McLemee looks into the story behind the story.
    "Female Complaints," Scott McLemee, Inside Higher Ed, January 11, 2011 ---
    http://www.insidehighered.com/views/mclemee/mclemee320

    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

    Dictionary of Art Historians --- http://www.dictionaryofarthistorians.org/

    The Art Institute of Chicago: Education: Online Resources [Quick Time] http://www.artic.edu/aic/visitor_info/podcasts/video/education_videos/

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


    Music Tutorials

    From the Scout Report on January 14, 2011

    200,000 historic recordings are making their way to the Library of Congress Library of Congress Gets Huge Recording Archive [Free registration may be required] http://www.nytimes.com/2011/01/10/arts/music/10masters.html?src=twrhp 

    Universal Music Donating 200K Master Recordings to Library of Congress
    http://www.hollywoodreporter.com/news/universal-music-donating-200k-master-69817  

    A Digital Library Race, and Playing Catch-Up [Free registration may be required]
    http://www.nytimes.com/2011/01/09/business/09stream.html?src=busln 

    Performing Arts Encyclopedia http://www.loc.gov/performingarts/ 

    Music for the Nation http://memory.loc.gov/ammem/mussmhtml/mussmhome.html 

    Omaha Indian Music http://memory.loc.gov/ammem/omhhtml/omhhome.html

     

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

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


    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/

    January 7, 2011

    January 9, 2011

    January 10, 2011

    January 11, 2010

    January 12, 2011

    January 13, 2011

    January 14, 2011

    January 15, 2011

    January 16, 2011

    January 18, 2011

    January 19, 2011


    Birth Defects Research For Children --- http://www.birthdefects.org/

    The Stuttering Foundation --- http://www.stutteringhelp.org/Default.aspx?tabid=839


    Gabrielle Giffords' Brain Injury: FAQ ---
    http://www.webmd.com/brain/news/20110109/gabrielle-giffords-brain-injury-faq


    Questions about "The Odds"
    What are the slot machine odds in casinos?
    What casino games have better odds than slot machines?
    CBS Answers on January 9, 2011 --- http://www.cbsnews.com/8301-504803_162-20027777-10391709.html?tag=contentMain;contentBody

    Questions about "The Zone"
    Why do some slot machine addicts get angry when they are interrupted in "The Zone" by winning a jackpot?
    Why are slot machines preferred by some addicts that know slots offer the worst odds in the casinos?

    Lesley Stahl reports on the proliferation of gambling to 38 states and its main attraction, the slot machine, newer versions of which some scientists believe may addict their players. By the way, on "The T" means a suburban train in and out of Boston.

    This is now among my favorite Sixty Minutes segments!
    "Slot Machines: The Big Gamble," CBS Sixty Minutes, January 9, 2011 ---
    http://www.cbsnews.com/video/watch/?id=7228424n&tag=contentMain;cbsCarousel
    Also see http://www.cbsnews.com/stories/2011/01/07/60minutes/main7223329.shtml

    Jensen Comment
    Until I became stranded in Bangor, Maine on December 26 during one of the worst snow blizzards of the decade, I was not even aware that Bangor (where I lived for a decade years ago) even had a a casino to accompany its horse racing. Erika and I were stranded in the truly beautiful seven-story Hollywood Slots Hotel in Bangor while our car was tucked safely out of the snow storm in a huge new parking garage.

    Even though we stayed in this hotel for three nights I really did not enter the casino part of the hotel. Hence I don't really know if I could become addicted to "The Zone" that is connected to brain chemical addictions. I don't think I could become an addict to slot machines, but who knows? The brain is a very mysterious part of our bodies.


     




    Forwarded by Cousin Dick

    St. Patrick's Day

    The reason the Irish celebrate St. Patrick's Day is because this is when St. Patrick drove the Norwegians out of Ireland.

    It seems that some centuries ago, many Norwegians came to Ireland to escape the bitterness of the Norwegian winter. Ireland was having a famine at the time, and food was scarce. The Norwegians were eating almost all the fish caught in the area, leaving the Irish with nothing to eat but potatoes. St. Patrick, taking matters into his own hands, as most Irishmen do, decided the Norwegians had to go.

    Secretly, he organized the Irish IRATRION (Irish Republican Army to Rid Ireland of Norwegians). Irish members of IRATRION passed a law in Ireland that prohibited merchants from selling ice boxes or ice to the Norwegians, in hopes that their fish would spoil. This would force the Norwegians to flee to a colder climate where their fish would keep.

    Well, the fish spoiled, all right, but the Norwegians, as every one knows today, thrive on spoiled fish. So, faced with failure, the desperate Irishmen sneaked into the Norwegian fish storage caves in the dead of night and sprinkled the rotten fish with lye, hoping to poison the Norwegian invaders.

    But, as everyone knows, the Norwegians thought this only added to the flavor of the fish, and they liked it so much they decided to call it "lutefisk", which is Norwegian for "luscious fish".

    Matters became even worse for the Irishmen when the Norwegians started taking over the Irish potato crop and making something called "lefse".

    Poor St. Patrick was at his wit's end, and finally on March 17th, he blew his top and told all the Norwegians to "GO TO HELL". So they all got in their boats and emigrated to Wisconsin or Minnesota---- the only other paradise on earth where smelly fish, old potatoes and plenty of cold weather can be found in abundance.


    Forwarded by Paula

    A paraprosdokian sentence consists of two parts (sometimes three) where the first is a figure of speech and the second an intriguing variation of the first. They're used typically for humorous or dramatic effect.  Enjoy these! 
      
    Never argue with an idiot.  He'll drag you down to his level and beat you with experience. 
      
    Going to church doesn't make you a Christian any more than standing in a garage makes you a car. 
      
    The last thing I want to do is hurt you.  But it's still on the list. 
      
    If I agreed with you we'd both be wrong. 
      
    We never really grow up, we only learn how to act in public. 
      
    Knowledge is knowing a tomato is a fruit; Wisdom is not putting it in a fruit salad. 
     
     
    The early bird might get the worm, but the second mouse gets the cheese. 
      
    How is it one careless match can start a forest fire, but it takes a whole box to start a campfire? 
      
    Dolphins are so smart that within a few weeks of captivity, they can train people to stand at the edge of a pool and throw fish. 
      
    I didn't say it was your fault, I said I was blaming you. 
      
    Women will never be equal to men till they can walk down the street with a bald head and a beer gut and still think they're sexy. 
      
    A clear conscience is usually the sign of a bad memory. 
      
    You don't need a parachute to skydive, but you do need one to skydive again. 
      
    The voices in my head may be fake, but they have good ideas! 
      
    Hospitality is making your guests feel like they're at home, even if you wish they were. 
      
    I scream the same way whether I'm about to be eaten by a shark or seaweed touches my foot. 
      
    Some cause happiness wherever they go, others whenever they go. 
      
    There's a fine line between cuddling and holding someone down so they can't get away. 
      
    You're never too old to learn something stupid. 

    Where there's a will, I want to be in it.  

     "I belong to no organized party. I am a Democrat." — Will Rogers

     "I've had a perfectly wonderful evening, but this wasn't it." — Groucho Marx

     "Time flies like an arrow; fruit flies like a banana." — Groucho Marx

    "I want to die peacefully in my sleep like my father, not screaming and terrified like his passengers." — Bob Monkhouse

    "A modest man, who has much to be modest about." — Winston Churchill (of Clement Atlee)

    "If you are going through hell, keep going." — Winston Churchill

    "I haven't slept for ten days, because that would be too long." — Mitch Hedberg

    "Take my wife—please." — Henny Youngman

    " It has been said that democracy is the worst form of government except all the others that have been tried." Winston Churchill

    "You can always count on Americans to do the right thing - after they've tried everything else." Winston Churchill


    Forwarded by Eileen

    Year to date statistics on airport screenings from the Department of Homeland Security

    Terrorist Plots Discovered .......... 0
    Transvestites ........................... 133
    Hernias ................................. 1,485
    Hemorrhoid Cases ............... 3,172
    Enlarged Prostates ............... 8,249
    Breast Implants ................... 59,350
    Natural Blondes ........................... 3

     




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

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

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

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

    What went wrong in accounting/accountics research?  ---
    http://www.trinity.edu/rjensen/theory01.htm#WhatWentWrong

    The Sad State of Accountancy Doctoral Programs That Do Not Appeal to Most Accountants ---
    http://www.trinity.edu/rjensen/theory01.htm#DoctoralPrograms

    AN ANALYSIS OF THE EVOLUTION OF RESEARCH CONTRIBUTIONS BY THE ACCOUNTING REVIEW: 1926-2005 ---
    http://www.trinity.edu/rjensen/395wpTAR/Web/TAR395wp.htm#_msocom_1

    Bob Jensen's threads on accounting theory ---
    http://www.trinity.edu/rjensen/theory01.htm

    Tom Lehrer on Mathematical Models and Statistics ---
    http://www.youtube.com/watch?v=gfZWyUXn3So

    Systemic problems of accountancy (especially the vegetable nutrition paradox) that probably will never be solved ---
    http://www.trinity.edu/rjensen/FraudConclusion.htm#BadNews

     

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

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

    Free (updated) Basic Accounting Textbook --- search for Hoyle at
    http://www.trinity.edu/rjensen/ElectronicLiterature.htm#Textbooks

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

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

    Accounting News, Blogs, Listservs, and Social Networking ---
    http://www.trinity.edu/rjensen/AccountingNews.htm

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

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

    Some of Bob Jensen's Tutorials

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

    Accountancy Discussion ListServs:

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

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

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

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

     

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

    Some Accounting History Sites

    Bob Jensen's Accounting History in a Nutshell and Links --- http://www.trinity.edu/rjensen/theory01.htm#AccountingHistory
     

    Accounting History Libraries at the University of Mississippi (Ole Miss) --- http://www.olemiss.edu/depts/accountancy/libraries.html
    The above libraries include international accounting history.
    The above libraries include film and video historical collections.

    MAAW Knowledge Portal for Management and Accounting --- http://maaw.info/

    Academy of Accounting Historians and the Accounting Historians Journal ---
    http://www.accounting.rutgers.edu/raw/aah/

    Sage Accounting History --- http://ach.sagepub.com/cgi/pdf_extract/11/3/269

    A nice timeline on the development of U.S. standards and the evolution of thinking about the income statement versus the balance sheet is provided at:
    "The Evolution of U.S. GAAP: The Political Forces Behind Professional Standards (1930-1973)," by Stephen A. Zeff, CPA Journal, January 2005 --- http://www.nysscpa.org/cpajournal/2005/105/infocus/p18.htm
    Part II covering years 1974-2003 published in February 2005 --- http://www.nysscpa.org/cpajournal/2005/205/index.htm 

    A nice timeline of accounting history --- http://www.docstoc.com/docs/2187711/A-HISTORY-OF-ACCOUNTING

    From Texas A&M University
    Accounting History Outline --- http://acct.tamu.edu/giroux/history.html

    Bob Jensen's timeline of derivative financial instruments and hedge accounting ---
    http://www.trinity.edu/rjensen/FraudRotten.htm#DerivativesFrauds

    History of Fraud in America --- http://www.trinity.edu/rjensen/415wp/AmericanHistoryOfFraud.htm
    Also see http://www.trinity.edu/rjensen/Fraud.htm

     

     

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