Tidbits Quotations
To Accompany the March 14, 2013 edition of Tidbits
Bob Jensen at Trinity University

My Free Speech Political Quotations and Commentaries Directory and Log ---

The Economist: World in 2013 (Annual summary of world economics trends from The Economist magazine) ---

The USA's National Debt is Now Over $16 trillion and spinning out of control --- http://www.usdebtclock.org/
Who are the major investors in slightly over $11 trillion of that USA National Debt?

"Who Owns the U.S. Treasury Market?"  by Barry Ritholtz, Ritholtz, February 1, 2013 ---
Note the pie charts.

The Great Pretender --- http://www.youtube.com/embed/6Zy297Xgr8Q

The buck stops everywhere else except here.
Author unknown

"Obama's Budget Abdication Breaks 92 Year Tradition," by Mike Flynn, Brietbart, March 12, 2013 ---

Barack Obama certainly enjoys the trappings and perks of the Office of President. The actual job of being President, however, doesn't seem to interest him. His desire to avoid being tied to any specifics of any proposal have caused him to do what no modern President has done. He is the first President since 1921 to abdicate the task of drafting a federal budget to Congress.

Congress established the modern budget process in 1921. Under the terms of the law, the President is required to submit a budget for the federal government no later than the first Monday in February. Obama has only met this statutory deadline once during his Presidency, a record worse than any modern President. Obama has missed the deadline 4 times. Prior to him, all the Presidents back to 1921 together missed the deadline twice.

Pentagon officials recently advised the House Armed Services Committee that the President's budget wouldn't be delivered until April 8th, a 9 week delay that trumps any previous delay. Worse, though, the long delay means that Congress will initiate its own debate on the budget, without input from the Executive Branch.

On Tuesday, Rep. Paul Ryan unveiled the House GOP budget proposal. On Wednesday, Senate Democrats will unveil their first budget proposal in 4 years. By the time Obama gets around to submitted his mandated proposal, Congress will have had almost a month to deliberate on its proposals.

As we've seen throughout his tenure, Obama prefers lofty rhetoric over the day-to-day give-and-take required to enact legislation. He spoke in general, focus-tested, words about ObamaCare, the stimulus, financial services regulation and a host of other issues, while leaving the gritty, horse-trading work to Congress.

After Congress had finished, Obama appeared on the scene, Zelig-like, to put his signature to its work. He probably scheduled the bill-signings around tee times.

One of the central jobs of the Presidency is to manage the Executive Branch. The Office is responsible for making sure federal agencies can meet their mission with the resources available. Obama, however, can't be bothered to report to Congress what resources he believes the government needs to meet its mission.

We were told Obama would be an historic President. I don't think his unprecedented abdication on the budget is what they had in mind.


Even the IPCC and British Meteorological Office now recognize that average global temperatures haven’t budged in almost 17 years. No evidence suggests that sea level rise, storms, droughts or other weather and climate events or trends display any statistically significant difference from what Earth and mankind have experienced over the last 100-plus years.
Paul Driessen --- Click Here

Sequestration will cost 170 million jobs
Maxine Waters, USA Congresswoman since 1990
Citizens for Responsibility and Ethics in Washington (CREW) named Waters to its list of corrupt members of Congress in its 2005, 2006, 2009 and 2011 reports.
That's more than the entire 141 million workers in the United States. In Year 2000 there were 75,247,000 male workers and 65,616,000 workers. Hence sequestration will wipe out the entire USA labor force plus nearly 30 million non-existent workers.
Rep. Walters meant to say an estimated 171,000 jobs which is a 0.0012 proportion of the labor force. The actual number is unknown because on any day our government leaders might agree to raise or lower that number by finally demonstrating leadership and statesmanship at long last.

The 171,000 estimated lost jobs is less than 1.4% of the 12,298,303 currently unemployed workers in the USA ---
Some estimate as high as 700,000 jobs might be lost, but nobody knows the true answer because of confounding impacts of economic growth (the Dow hit an all time high when sequester kicked in) and ways of saving jobs by cutting other fat from the budget (like having Joe Biden take Amtrak from Washington DC to his home in Delaware --- which is faster than his $100,000+ helicopter ride to catch Air Force 2 for a short hop to Delaware.


From the CFO Morning Ledger on March 1, 2013

Barring a bipartisan political miracle, President Obama today will sign an order directing government agencies to begin implementing $85 billion in budget cuts. The cuts aren’t likely to spark a fiscal crisis or government shutdown just yet, the NYT notes, and “the immediate impact on most Americans will be exactly nothing.”

Instead, the actual cash outlays will decline slowly — by about $42 billion in the seven months through September, according to the CBO. Furloughs of civilian workers will probably be the most noticeable element– but they aren’t scheduled to start until early April. And any subsequent hit to spending may not be clear for months, the WSJ’s Sudeep Reddy writes. The impact will also differ from region to region. Communities dependent on defense money will be hit hard. Other regions could be left wondering what the fuss is about as weeks or months pass without a noticeable effect on economic activity.

Meanwhile, some budget experts worry this battle could be damaging for another reason. By focusing on a proportionally small level of spending, the sequester fight is distracting attention from longer-term deficit issues that need to be addressed, write the Journal’s Damian Paletta and Janet Hook. Even cuts that have some bipartisan support, like limiting the growth of future Social Security benefits or ending farm subsidies, have been shelved because of all the brinkmanship. “If they could get this fixed, the economy is poised to take off,” says Bank of America CEO Brian Moynihan.

Read the latest updates on the sequester here. --- http://on.wsj.com/ZOjppW

"Sequester: Not Even a Cut," by John Stossel, Townhall, March 6, 2013 ---

If you're reading this, you've survived the "sequester" cuts!

That may surprise you, since President Obama likened the sequester to taking a "meat cleaver" to government, causing FBI agents to be furloughed, prosecutors to let criminals escape and medical research to grind to a halt!

The media hyped it, too. The NBC Nightly News said, "The sequester could cripple air travel, force firefighter layoffs -- even kick preschoolers out of child care!"

The truth is that the terrifying sequester cuts weren't even cuts. They were merely a small reduction in government's planned increase in spending. A very small reduction.

After a decade, the federal government will simply spend about $4.6 trillion a year instead of $4.5 trillion (in 2012 dollars).

And still members of Congress, Republicans included, look for ways to delay the cuts, like spreading them out over 10 years instead of making any now. Sen. Rand Paul, R-Ky., asked, "If we cannot do this little bit ... how are we ever going to balance the budget?"

Actually, we don't even need to balance the budget. If we just slowed the growth of government to 1 or 2 percent a year, we could grow our way out of unsustainable debt.

Paul recommends freezing hiring of federal workers, staying out of most foreign military conflicts and eliminating four Cabinet-level departments: Housing, Education, Energy and Commerce. Why do we even have a Commerce Department? Commerce just happens. The free market provides housing and energy. Education is funded by states.

Those Cabinet departments don't exist just to help you. The housing budget funds vouchers that give people an incentive not to seek higher-paying jobs, plus advocacy groups and in a few cases even homes for the bureaucrats themselves.

Federal education spending pleases education bureaucrats and teachers unions but doesn't raise kids' test scores. Energy subsidies go to "green" crony capitalists like those who ran Solyndra. The Commerce Department awards taxpayer-funded trips to politically connected CEOs to promote their companies overseas.

We could cut still more departments. I'd start with the departments of Labor and Agriculture. Workers can labor and farmers can farm without federal help.

Continued in article

Blue is Blue
From the TaxProf Blog on March 6, 2013

The Fiscal Times:  The Ten Worst States for U.S. Taxes:

  1. New York
  2. New Jersey
  3. California
  4. Vermont
  5. Rhode Island
  6. Minnesota
  7. North Carolina
  8. Wisconsin
  9. Iowa
  10. Maryland

The left of liberal governor of Vermont claims that his state's welfare generosity motivates Vermonters not to seek employment (at least the kind that does not pay cash under the table in the underground economy) ---

Case Studies in Gaming the Income Tax Laws ---

With global warming, worse coastal storms, and rising oceans is repeated rebuilding of flood zones a good idea?

The government is spending billions to repeatedly rebuild flood zones on our eastern seaboard ---

"Larger Spending Cuts Would Help the Economy:  Countries that stabilized their budgets have averaged $5-$6 of actual spending cuts per dollar of tax hikes," by Michael J. Boskin, The Wall Street Journal, March 4, 2013 ---

President Obama's most recent prescription for economic growth—more government stimulus spending, new social programs, higher taxes on upper-income earners, subsidies for some industries and increased regulation for all of them—is likely to have the same anemic results as in his first administration.

Recall: The $825 billion stimulus program did little economic good at a cost of hundreds of thousands of dollars per job, even based on the administration's own inflated job estimates. Cash for Clunkers cost $3 billion merely to shift car sales forward a few months. The PPIP (Public-Private Investment Program for Legacy Assets) to buy toxic assets from the banks to speed lending generated just 3% of the $1 trillion that the program planners anticipated.

And now? Mr. Obama proposes universal preschool ($25 billion per year), "Fix it First" repairs to roads and bridges, plus an infrastructure bank ($50 billion), "Project Rebuild," refurbishing private properties in cities ($15 billion), endless green-energy subsidies, and a big hike in the minimum wage. The president and Senate Democrats also demand that half the spending cuts under sequestration be replaced with higher taxes.

These proposals are ill-considered. The evidence sadly suggests the initial improvement in children's cognitive skills from "Head Start" quickly evaporates. Higher minimum wages increase unemployment among low-skilled workers. A dozen recent studies in peer-reviewed journals, including one by the president's former chief economic adviser Christina Romer, document the negative effects of higher taxes on the economy.

As for adventures in industrial policy, former Obama economic adviser Larry Summers wrote a memo in 2009 about the impending $527 million loan guarantee to Solyndra and other recipients of government largess. "The government is a crappy v.c. [venture capitalist]," he wrote, in what is also the best postmortem. In 2010, Harvard economist Edward Glaeser concluded in the New York Times that infrastructure is poor stimulus because "It is impossible to spend quickly and wisely." Federal infrastructure spending should be dealt with in regular appropriations.

Will more spending today stimulate the economy? Standard Keynesian models that claim a quick boost from higher government spending show the effect quickly turns negative. So the spending needs to be repeated over and over, like a drug, to keep this hypothetical positive effect going. Japan tried that to little effect, starting in the 1990s. It now has the highest debt-to-GDP ratio among the countries of the Organization for Economic Cooperation and Development—and that debt is a prime cause, as well as effect, of Japan's enduring stagnation.

The United States is heading in this wrong direction. Even if the $110 billion in annual sequestration cuts are allowed to take place, the Congressional Budget Office projects that annual federal spending will increase by $2.4 trillion to $5.9 trillion in a decade. The higher debt implied by this spending will eventually crowd out investment, as holdings of government debt replace capital in private portfolios. Lower tangible capital formation means lower real wages in the future.

Since World War II, OECD countries that stabilized their budgets without recession averaged $5-$6 of actual spending cuts per dollar of tax hikes. Examples include the Netherlands in the mid-1990s and Sweden in the mid-2000s. In a paper last year for the Stanford Institute for Economic Policy Research, Stanford's John Cogan and John Taylor, with Volker Wieland and Maik Wolters of Frankfurt, Germany's Goethe University, show that a reduction in federal spending over several years amounting to 3% of GDP—bringing noninterest spending down to pre-financial-crisis levels—will increase short-term GDP.

Why? Because expectations of lower future taxes and debt, and therefore higher incomes, increase private spending. The U.S. reduced spending as a share of GDP by 5% from the mid-1980s to mid-1990s. Canada reduced its spending as share of GDP by 8% in the mid-'90s and 2000s. In both cases, the reductions reinforced a period of strong growth.

An economically "balanced" deficit-reduction program today would mean $5 of actual, not hypothetical, spending cuts per dollar of tax hikes. The fiscal-cliff deal reached on Jan. 1 instead was scored at $1 of spending cuts for every $40 of tax hikes.

Keynesian economists urge a delay on spending cuts on the grounds that they will hurt the struggling economy. Yet at just one-quarter of 1% of GDP this year, $43 billion of this year's sequester cuts in an economy with a GDP of more than $16 trillion is unlikely to be a major macroeconomic event.

Continued delay now leaves a long boom as the only time to control spending. There was some success in doing this in the mid-1990s under President Clinton and a Republican Congress. More commonly the opposite occurs: A boom brings a surge in tax revenues and politicians are anxious to spread the spending far and wide.

In any case, the demand by Mr. Obama and Senate Democrats that any dollar of spending cuts in budget agreements this spring (to fund the government for the rest of the fiscal year and when the debt limit again approaches) be matched by an additional dollar of tax hikes is economically unbalanced in the extreme. Those who are attempting to gradually slow the growth of federal spending while minimizing tax hikes have sound economics on their side.

Mr. Boskin, a professor of economics at Stanford University and senior fellow at the Hoover Institution, chaired the Council of Economic Advisers under President George H.W. Bush. This op-ed is based on the author's testimony last week before the U.S. Congress Joint Economic Committee.

Wasted Stimulus Money on a Korean Company's Fake Chevy Volt Batter Factory --- Click Here

. . .

“An investigation by the U.S. Department of Energy's Office of Inspector General,” reports Mlive.com, “blasted the federal government for negligent oversight and LG Chem for wasteful spending of a $151 million stimulus project to build batteries for electric cars. Despite spending a majority of the money, LG Chem has yet to produce a battery.”

LG Chem’s defense seems to be: “Oh. You mean, we were supposed to WORK for that money, not play video games?”

Wired Magazine says, “LG Chem officials submitted those non-productive labor costs [that is, the costs for playing video games, etc.] for reimbursement because they were ‘unfamiliar with the types of costs that were allowable.’”

Even worse is the $528.7 million cash U.S. government "loan" given to Al Gore to manufacture Fisker luxury electric cars in Finland ---

In July 2012, Fisker shut down all production and hired financial adviser Evercore Partners to find new partners and investors, but in December 2012 Fisker claimed it was not for sale. With government credit lines suspended and no income, company officials have sought further government loans and subsidies, and continued to search for investors, lenders, and buyers, and still hopes to find customers in China, England, and continental Europe.By the end of 2012, the search for funding continued, and Fisker had to cease development of the second model line which was around 90% complete.

. . .

After drawing $193 million, the government froze Fisker's credit line in May 2011 after it was determined that the company had not met milestones set as conditions for the loan and hired Houlihan Lokey to assist in monitoring Fisker's progress. The loan received additional scrutiny for being awarded for the manufacture of luxury vehicles that are too expensive for much of the general public. Fisker investor Ray Lane responded that the issues were being blown out of proportion due to election year politics.

Bob Jensen's Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm

"Mandated Wages and Discrimination," by Walter E. Williams, Townhall, March 6, 2013 ---

Let's work through an example. Suppose 100 yards of fence could be built using one of two techniques. You could hire three low-skilled workers for $15 each, or you could hire one high-skilled worker for $40. Either way, you get the same 100 yards of fence built. If you sought maximum profits, which production technique would you employ? I'm guessing that you'd hire one high-skilled worker and pay him $40 rather than hire three low-skilled workers for $15 each. Your labor costs would be $40 rather than $45.

Suppose the high-skilled worker came into your office and demanded $55 a day. What would be your response? You'd probably tell him to go play in the traffic and hire the three low-skilled workers. After all, hiring the three low-skilled workers for $45, to get the same 100 yards of fence, would be cheaper than the $55 a day now demanded by the high-skilled worker.

The high-skilled worker is not stupid and knows that's exactly what you'd do. He will do a bit of organizing first, convincing decent, caring people that low-skilled workers are being exploited and not earning a living wage and that Congress should enact a minimum wage in the fencing industry of at least $20. After Congress enacts a minimum wage of $20, what then happens to the chances of a high-skilled worker's successfully demanding $55 a day? They go up because he's used the coercive powers of Congress to price his competition out of the market. Because of the minimum wage, it would cost you $60 to use the three low-skilled workers.

The minimum wage not only discriminates against low-skilled workers but also is one of the most effective tools of racists everywhere. Our nation's first minimum wage came in the form of the Davis-Bacon Act of 1931. During the legislative debate over the Davis-Bacon Act, which sets minimum wages on federally financed or assisted construction projects, racist intents were obvious. Rep. John Cochran, D-Mo., supported the bill, saying he had "received numerous complaints in recent months about Southern contractors employing low-paid colored mechanics getting work and bringing the employees from the South." Rep. Miles Allgood, D-Ala., complained: "That contractor has cheap colored labor that he transports, and he puts them in cabins, and it is labor of that sort that is in competition with white labor throughout the country." Rep. William Upshaw, D-Ga., spoke of the "superabundance or large aggregation of Negro labor." American Federation of Labor President William Green said, "Colored labor is being sought to demoralize wage rates." The Davis-Bacon Act, still on the books today, virtually eliminated blacks from federally financed construction projects when it was passed.

During South Africa's apartheid era, the secretary of its avowedly racist Building Workers' Union, Gert Beetge, said, "There is no job reservation left in the building industry, and in the circumstances, I support the rate for the job (minimum wage) as the second-best way of protecting our white artisans." The South African Nursing Council condemned low wages received by black nurses as unfair. Some nurses said they wouldn't accept wage increases until the wages of black nurses were raised. The South African Economic and Wage Commission of 1925 reported that "while definite exclusion of the Natives from the more remunerative fields of employment by law has not been urged upon us, the same result would follow a certain use of the powers of the Wage Board under the Wage Act of 1925, or of other wage-fixing legislation. The method would be to fix a minimum rate for an occupation or craft so high that no Native would be likely to be employed."

Whether support for minimum wages is motivated by good or by evil, its effect is to cut off the bottom rungs of the economic ladder for the most disadvantaged worker and lower the cost of discrimination.



"Republicans and Their Faulty Moral Arithmetic:  Conservative values and money issues are worth less than concern for the poor," by Arthur Brooks, The Wall Street Journal, March 3, 2013 ---

In the waning days of the 1992 presidential campaign, President George H.W. Bush trailed Bill Clinton in the polls. The conventional wisdom was that Mr. Bush seemed too aloof from voters struggling economically. At a rally in New Hampshire, the exhausted president started what was probably the fourth campaign speech of the day by reading aloud what may have been handed to him as a stage direction: "Message: I care."

How little things have changed for Republicans in 20 years. There is only one statistic needed to explain the outcome of the 2012 presidential election. An April YouGov.com poll—which mirrored every other poll on the subject—found that only 33% of Americans said that Mitt Romney "cares about people like me." Only 38% said he cared about the poor.

Conservatives rightly complain that this perception was inflamed by President Obama's class-warfare campaign theme. But perception is political reality, and over the decades many Americans have become convinced that conservatives care only about the rich and powerful.

Perhaps it doesn't matter. If Republicans and conservatives double down on the promotion of economic growth, job creation and traditional values, Americans might turn away from softheaded concerns about "caring." Right?

Wrong. As New York University social psychologist Jonathan Haidt has shown in his research on 132,000 Americans, care for the vulnerable is a universal moral concern in the U.S. In his best-selling 2012 book "The Righteous Mind: Why Good People Are Divided by Politics and Religion," Mr. Haidt demonstrated that citizens across the political spectrum place a great importance on taking care of those in need and avoiding harm to the weak. By contrast, moral values such as sexual purity and respect for authority—to which conservative politicians often give greater emphasis—resonate deeply with only a minority of the population. Raw money arguments, e.g., about the dire effects of the country's growing entitlement spending, don't register morally at all.

Conservatives are fighting a losing battle of moral arithmetic. They hand an argument with virtually 100% public support—care for the vulnerable—to progressives, and focus instead on materialistic concerns and minority moral viewpoints.

The irony is maddening. America's poor people have been saddled with generations of disastrous progressive policy results, from welfare-induced dependency to failing schools that continue to trap millions of children.

Meanwhile, the record of free enterprise in improving the lives of the poor both here and abroad is spectacular. According to Columbia University economist Xavier Sala-i-Martin, the percentage of people in the world living on a dollar a day or less—a traditional poverty measure—has fallen by 80% since 1970. This is the greatest antipoverty achievement in world history. That achievement is not the result of philanthropy or foreign aid. It occurred because billions of souls have been able to pull themselves out of poverty thanks to global free trade, property rights, the rule of law and entrepreneurship.

The left talks a big game about helping the bottom half, but its policies are gradually ruining the economy, which will have catastrophic results once the safety net is no longer affordable. Labyrinthine regulations, punitive taxation and wage distortions destroy the ability to create private-sector jobs. Opportunities for Americans on the bottom to better their station in life are being erased.

Some say the solution for conservatives is either to redouble the attacks on big government per se, or give up and try to build a better welfare state. Neither path is correct. Raging against government debt and tax rates that most Americans don't pay gets conservatives nowhere, and it will always be an exercise in futility to compete with liberals on government spending and transfers.

Instead, the answer is to make improving the lives of vulnerable people the primary focus of authentically conservative policies. For example, the core problem with out-of-control entitlements is not that they are costly—it is that the impending insolvency of Social Security and Medicare imperils the social safety net for the neediest citizens. Education innovation and school choice are not needed to fight rapacious unions and bureaucrats—too often the most prominent focus of conservative education concerns—but because poor children and their parents deserve better schools.

Defending a healthy culture of family, community and work does not mean imposing an alien "bourgeois" morality on others. It is to recognize what people need to be happy and successful—and what is most missing today in the lives of too many poor people.

By making the vulnerable a primary focus, conservatives will be better able to confront some common blind spots. Corporate cronyism should be decried as every bit as noxious as statism, because it unfairly rewards the powerful and well-connected at the expense of ordinary citizens. Entrepreneurship should not to be extolled as a path to accumulating wealth but as a celebration of everyday men and women who want to build their own lives, whether they start a business and make a lot of money or not. And conservatives should instinctively welcome the immigrants who want to earn their success in America.

With this moral touchstone, conservative leaders will be able to stand before Americans who are struggling and feel marginalized and say, "We will fight for you and your family, whether you vote for us or not"—and truly mean it. In the end that approach will win. But more important, it is the right thing to do.

Mr. Brooks is president of the American Enterprise Institute and author of "The Road to Freedom" (Basic Books 2012).

"Arizona's Immigration Shift ," by Clint Bolick, The Wall Street Journal, March 6, 2013 ---

Nothing better exemplifies the rapidly changing political terrain over immigration than Arizona's emerging role as a leader for reform.

For the past decade, Arizona led the nation in efforts to thwart illegal immigration, passing a ballot measure limiting benefits to illegal immigrants in 2004, adopting employer sanctions in 2007 and enacting S.B. 1070 in 2010. Immigration eclipsed all other issues and became a litmus test for Republican primary candidates. Sheriff Joe Arpaio of Maricopa County and State Sen. Russell Pearce became national celebrities for their hard-line stands.

Any Republican caught uttering the words "comprehensive immigration reform" was branded a "pro-amnesty" traitor by the party's rank and file. When Sen. John McCain was challenged from the right in the 2010 primary after leading a failed immigration reform effort, he retreated to a "secure the border first" position in which most Arizona Republicans have sought refuge. Sen. Jeff Flake, elected last year, adopted the same approach against a conservative primary challenger despite having built a more moderate record during his years as a congressman.

Yet Mr. McCain and Mr. Flake now are among the leading advocates of comprehensive immigration reform, constituting one-quarter of the Senate's "Gang of Eight" that is trying to forge a bipartisan reform consensus. Arizona's recent past would suggest that they are courting political suicide. The fact that both senators are taking the risk illustrates how suddenly and significantly the immigration debate has changed in Arizona.

The shift began when Mr. Pearce, the author of S.B. 1070, was successfully recalled less than a year after he became state Senate President in 2011. Mr. Pearce attributed his loss to the fact that he faced a single challenger, a moderate Republican who was elected with Democratic support. But when Mr. Pearce sought his old seat in 2012, he was soundly defeated in the Republican primary by a fellow conservative whose main difference with Mr. Pearce was over immigration.

Meanwhile, Sheriff Arpaio eked out a re-election victory with 50.7 percent of the vote, despite dumping $7 million into the county-wide campaign and outspending his little-known Democratic opponent by more than 15 to 1.

Mr. Pearce's loss and Mr. Arpaio's close call made it possible for Republicans to take a more moderate stand on immigration. The growing strength of Hispanic voters made it imperative.

Between 2008 and 2012, fueled largely by hostile immigration policies, Hispanic voter registration increased by 40 percent and voter turnout by 23 percent. Former Surgeon General Richard Carmona came within five points of defeating Mr. Flake for the Senate. Meanwhile, Democrats won all three of the competitive congressional races, taking a 5-4 majority in the House delegation.

Leading Republicans, including conservative Maricopa County Attorney Bill Montgomery, are reaching across the aisle to find common ground on immigration reform at the grassroots level. Meanwhile, Arizona Republicans for the first time in many years elected a state party chairman who did not campaign on a hard-line immigration platform.

Some remain strident on the issue. In a broadside against the Gang of Eight approach, the House Republicans (Trent Franks, Paul Gosar, David Schweikert, and Matt Salmon) wrote, "Only after first securing our borders can we begin to contemplate discussions of additional immigration reform."

But the view of an increasing number of Arizonan Republicans is that the converse is true—comprehensive immigration reform is necessary in order to reduce the incentive to cross the border illegally. The fact that such an insight seems to be taking hold in Arizona, of all places, should give rise to optimism that long-overdue national immigration reform may well be within reach.

Mr. Bolick is litigation director at the Goldwater Institute and co-author with Jeb Bush of "Immigration Wars: Forging an American Solution."

Jensen Comment
Although unions and African Americans have not historically embraced comprehensive immigration reform, they seem to be increasingly joining in the current proposed legislation for such reforms that include increased efforts to restrain illegal immigration. However, there is still some union resistance ---

Zimbabwe printing of cash leads to Zimbabwe-like inflation that now prints $1 billion dollar bills. It takes more than one of these bills to buy one chicken egg.

Fed Buyback in "Quantitative Easing" = Zimbabwe-Style Printing of Dollars to Pay Government Bills Without Taxing or Borrowing

Bernanke declared he will continue printing trainloads of cash until the unemployment rate falls below 6.5%. That might take forever plus one day as manufacturing and service robot technology explodes across the USA.

This policy really discourages saving in less risky investments like long-term bank CDs now paying way less than one percent per year

This policy is truly a tax on senior citizens who counted on living, at least in part, on the interest income of their investments. Due to the Fed's Quantitative Easing there is virtually no interest income on safe investments. Thus we have really taxed the savings of senior citizens and forced them to burn up savings capital in their retirement years.

Pension funds like TIAA will have to become less generous in providing retirement annuities to college employees who are hesitant to take on more fluctuating risk in annual retirement incomes that accompany stock market and real estate alternatives having more financial risk.

From the CFO Morning Ledger on February 26, 2013

Ben Bernanke isn’t budging in his support for continued bond buying. “Keeping long-term interest rates low has helped spark a recovery in the housing market and has led to increased sales and production of automobiles and other durable goods,” he said in his semiannual report to Congress yesterday.

Mr. Bernanke faced some hostile questioning from the Senate Banking Committee – particularly from Sen. Bob Corker (R., Tenn.), who told the Fed chief that his easy-money policies were sparking a global currency war and creating “faux” stock-market wealth. He also accused Mr. Bernanke of “throwing seniors under the bus” by pushing down interest rates and reducing their returns on savings. Mr. Bernanke was pretty perturbed by those comments, the WSJ’s Jon Hilsenrath notes. He shot back by pointing out that his record of keeping inflation low and stable is better than that of any Fed chairman since World War II. Today, Mr. Bernanke delivers the same remarks to the House Financial Services Committee, where he’s likely to get raked over the coals by other critics.

As we noted yesterday, low rates have played a big part in the pension woes companies are facing these days. But the low-rate environment also offers opportunities for companies to borrow cheaply and use the proceeds to make investments or return cash to shareholders. Home Depot Chief Financial Officer Carol Tomé — who also sits on the board of directors of the Atlanta Fed told CFOJ’s Maxwell Murphy that her company may borrow up to $4 billion to nearly double its expected 2013 share repurchases. So long as the after-tax cost of any new debt is less than the yield on Home Depot stock, a debt-fueled buyback is “just a good trade,” she said.

Jensen Comment
Bernanke declared he will continue printing trainloads of cash until the unemployment rate falls below 6.5%. That might take forever plus one day as manufacturing and service robot technology explodes across the USA.

This policy really discourages saving in less risky investments like bank CDs now baying way less than one percent per year.

This policy is truly a tax on senior citizens who counted on living, at least in part, on the interest income of their investments. Due to the Fed's Quantitative Easing there is virtually not interest income on investments. Thus we have really taxed the savings of senior citizens and forced them to burn up their capital in their retirement years.

Pension funds like TIAA will have to become less generous in providing retirement annuities to college employees who are hesitant to take on more fluctuating risk in annual retirement incomes that accompany stock market and real estate alternatives having more financial risk. I was lucky enough to acquire my TIAA lifetime annuities before these deals commenced to sower.

Zimbabwe printing of cash leads to Zimbabwe-like inflation that now prints $1 billion dollar bills. It takes more than one of these bills to buy one chicken egg. I suspect I will only live long enough to see the price of one egg in the U.S. soar to $100. I don't want to be young again.

Advice from The Washington Post's Barry Ritholz for Dealing With Quantitative Easing (February 27, 2013) ---

Yesterday’s testimony by Fed chair Ben Bernanke makes it clear that QE is here to stay for the foreseeable future. Rather than tilt at windmills, you need to accept this fact, and adjust accordingly.

Here are a few of the things that you should be doing in response to zero interest rate policy:

Refinance your home, locking in a 30 year fixed rate (if you can afford a 15 year fixed, do that). This is a no brainer and the best way to take  advantage of zero rates for most families.

Shorten the duration of your bond holdings. Rates will go up eventually, so those 10 year durations and longer should be 7 years max.

Buy or Lease a new car. (Ben wants you to) assuming you can afford to

Evaluate your risk assets:  Since the March 2009 lows, stocks are up over 100%. If you participated in most or all of this, congrats.  If you completely missed a move where equities doubled, you need to think about why. Perhaps its time to make suitable changes.

Anticipate and plan for the next correction: Monday’s 2% whackage should have made you think about what the next 10-20% move down will be like. What should your response be? What is it more likely to be? Anticipating panic decision-making in advance helps you avoid the worst of it.

Reduce/renegotiate any outstanding consumer debt. This is the worst sort of debt, used to pay for depreciating baubles. IUf you must, refinance it at lower rates.

• Are you a trader or an investor? Make the appropriate palns for your own timeline.  Traders don’t hold losers after their prices drop; Investors don’t flit in and out of markets.

Remember, review the emergency procedures in the card (seatback in front of you) when you are on the ground — not after an engine flames out at 30,000 feet.


"TBP Guide to Car Leasing & Buying," by Barry Ritholtz, Ritholtz Blog, February 26, 2013 ---

Jensen Caution
In the good old days when savings like CDs paid worthwhile interest rates, there was a better argument for leasing so that you could put your savings to work helping to make the lease payments. Thanks to the Fed's Quantitative Easing program you now make virtually nothing on your safe investments like bank CDs.. Hence, there may be more incentive to buy a car rather than lease. However, in the 21st Century, leasing deals have become much more attractive largely because dealers can borrow money a next to nothing interest.

Hence, it pays to look at the above TBP Guide before making a lease versus buy decision.

However, Bob Jensen is generally against buying or leasing a new car. Only once in my life did I buy a new car, and that was because of the Cash for Clunkers deal offered to me by the government. I think many people buy new cars when gently used cars are a better personal financing deal. I only recommend new cars for people who drive lots and lots or men who want to show off for the women.

Quantitative Easing:  Ben Bernanke Versus an Overwhelming Majority of Economists
"Economists increasingly wary of Fed's stimulus policy," by Don Lee, Los Angeles Times, March 4, 2013 ---

Even as top Federal Reserve officials continue to defend their economic stimulus, a growing number of industry and academic economists view the Fed's policy now as too aggressive -- with two-thirds of those recently surveyed saying the central bank should terminate its controversial bond-buying program this year.

The survey, of 196 members of the National Assn. for Business Economics, found that a slim majority of them consider the central bank's monetary policy as "about right." But 44% of them said the Fed's policy was "too stimulative." That is up from just 26% who gave that response in September.

The marked shift in attitude reflects the increasing concerns inside the Fed as well, in the wake of the central bank's decision in December to keep buying a total of $85 billion in Treasury and mortgage-backed securities monthly in a bid to lower long-term interest rates to boost spending and investment.

The survey was released Monday as the association held its annual economic conference at which the Fed's vice chairman, Janet Yellen, laid out a case for the central bank's expansive monetary policy.

Yellen, in an address to the group meeting in Washington, D.C., said the policy was justified given the nation's still-troubled labor market, with high unemployment and underemployment, and the outlook for continued subdued inflation.

She said she did not see indications that the Fed's massive bond purchases had impaired the operations of financial markets. Nor was there "persuasive evidence" that the Fed's easy-money policies had led to excessive risk-taking that was creating asset bubbles, she said, echoing remarks that Fed Chairman Ben S. Bernanke made last week in congressional testimony.

"At present, I view the balance of risks as still calling for a highly accommodative monetary policy to support a stronger recovery and more rapid growth in employment," Yellen, considered a leading candidate to succeed Bernanke as chairman, said in her prepared remarks.

Many in the audience listening to her speech would agree that the Fed's bond purchases have been effective in stimulating the economy; in fact, about two-thirds of the association's members surveyed said so. Still, a similar two-thirds wanted the Fed to end the bond purchases some time in 2013, which would be earlier than what many investors see as the termination date.

Fed policymakers have not said explicitly when they would stop the asset purchases, which many economists also fear will spark runaway inflation down the road. What the Fed committee has pledged is that it will continue the bond buying until there has been a "substantial improvement" in the outlook for the job market.

Volcker: Fed Shouldn’t Wait Too Long to Unwind Stimulus (read that stop printing trillions of dollars to pay government's bills) ---

"Obama's Pelosi II Strategy The Washington Post reveals the real second-term priority," The Wall Street Journal, March 4, 2013 ---
http://online.wsj.com/article/SB10001424127887323494504578340562616234822.html?mod=djemEditorialPage_h .

Old Washington hands have been scratching their heads about the start of President Obama's second term, with its aggressive liberal priorities and attacks on Republicans. Whatever happened to governing? Well, the answer arrived this weekend as the Washington Post reported that Mr. Obama's real plan for the next two years is returning Nancy Pelosi as House Speaker in 2014.

"The goal is to flip the Republican-held House back to Democratic control, allowing Obama to push forward with a progressive agenda on gun control, immigration, climate change and the economy during his final two years in office, according to congressional Democrats, strategists and others familiar with Obama's thinking," reports the Post, which is hardly hostile to the President.

The article says that shortly after finishing his speech on Election Night last year, Mr. Obama called Mrs. Pelosi and Steve Israel, who runs the Democratic House re-election campaign, to discuss 2014. The strategy fits Mr. Obama's unprecedented new effort to raise $50 million in $500,000 chunks to fund Organizing for Action (OFA), which will spend millions in GOP-held districts. Mr. Israel says he met in January with Jim Messina, Mr. Obama's 2012 campaign manager who now runs OFA, to discuss the 2014 races.

White House press secretary Jay Carney pushed back against the article on Monday, saying 2014 is "not a focus" for Mr. Obama. But that looks like an attempt at damage control after the Post blew the White House's cover. Mr. Obama has to appear to want bipartisan deals even as he prepares the ground for blaming Republicans in 2014 when those efforts fail.

This is already clear on the budget, as Mr. Obama insists on a second tax increase that Republicans can't accept. We're also increasingly worried about White House sabotage on immigration reform, as it pushes the bill left on a guest-worker program and enforcement. Mr. Obama is doing exactly what you'd expect if he doesn't want a deal and plans to use the issue to drive minority turnout in 2014.

It's important to understand how extraordinary this is. Presidents typically try to secure major bipartisan deals in their fifth or sixth years, before their political capital ebbs. That's what Bill Clinton and Ronald Reagan did, and George W. Bush tried on Social Security. Mr. Obama seems to think he can use the next two years mainly to set up a Pelosi House that would let him finish his last two years with a liberal bang.

The next time you hear Mr. Obama, House Democrats or one of their media acolytes talk about GOP "obstructionism," refer them to the Washington Post article that shows what they really intend for the current Congress. Bipartisan failure is their strategy.

"Politicians have fallen off the Civility Cliff and need to be Sequestered:  The Lost Art of Civility," by Accounting Professor Steven Mintz, Ethics Sage, March 4, 2013 ---

"EU Chiefs Tell Italy There’s No Alternative to Austerity," by James G. Neuger, Bloomberg, February 26, 2013 ---

European Union leaders piled pressure on Italy’s rival factions to form a unity government committed to budget rigor after a deadlocked election stirred fears of an quagmire that would re-ignite the euro debt crisis.

In a message that resonated in Rome, EU President Herman Van Rompuy warned in Tallinn, Estonia, that backsliding on budget discipline and economic reforms would shatter market confidence in the 17-nation currency union’s crisis management.

Continued in article

Jensen Comment
I don't know whether to file this under Italian humor or economics or the Mafia. I think humor is a better file when it comes to Italians.

"Slavery used to teach Math in NYC Schools:  Slavery Examples Raise Insensitivity to new Highs (or lows)," by Accounting Professor Steven Mintz, Ethics Sage, February 25, 2013 ---

. . . but with the current allocation of corn to ethanol and animal production, we end up with an estimated 3 million calories of food per acre per year, mainly as dairy and meat products, enough to sustain only three people per acre. That is lower than the average delivery of food calories from farms in Bangladesh, Egypt and Vietnam
"It’s Time to Rethink America’s Corn System:  Only a tiny fraction of corn grown in the U.S. directly feeds the nation’s people, and most of that is from unhealthy, high-fructose corn syrup," by Jonathan Foley, Scientific American, March 5, 2013 ---

Nothing dominates the American landscape like corn.

Sprawling across the Midwest and Great Plains, the American Corn Belt is a massive thing. You can drive from central Pennsylvania all the way to western Nebraska, a trip of nearly 1,500 miles, and witness it in all its glory. No other American crop can match the sheer size of corn.

So why do we, as a nation, grow so much corn?

The main reason is that corn is such a productive and versatile crop, responding to investments in research, breeding and promotion. It has incredibly high yields compared with most other U.S. crops, and it grows nearly anywhere in the country, especially thriving in the Midwest and Great Plains. Plus, it can be turned into a staggering array of products. Corn can be used for food as corn flour, cornmeal, hominy, grits or sweet corn. It can be used as animal feed to help fatten our hogs, chickens and cattle. And it can be turned into ethanol, high-fructose corn syrup or even bio-based plastics.

No wonder we grow so much of the stuff.

But it is important to distinguish corn the crop from corn the system. As a crop, corn is highly productive, flexible and successful. It has been a pillar of American agriculture for decades, and there is no doubt that it will be a crucial part of American agriculture in the future. However, many are beginning to question corn as a system: how it dominates American agriculture compared with other farming systems; how in America it is used primarily for ethanol, animal feed and high-fructose corn syrup; how it consumes natural resources; and how it receives preferential treatment from our government.

The current corn system is not a good thing for America for four major reasons.

The American corn system is inefficient at feeding people. Most people would agree that the primary goal of agriculture should be feeding people. While other goals—especially producing income, creating jobs and fostering rural development—are critically important too, the ultimate success of any agricultural system should be measured in part by how well it delivers food to a growing population. After all, feeding people is why agriculture exists in the first place.

Although U.S. corn is a highly productive crop, with typical yields between 140 and 160 bushels per acre, the resulting delivery of food by the corn system is far lower. Today’s corn crop is mainly used for biofuels (roughly 40 percent of U.S. corn is used for ethanol) and as animal feed (roughly 36 percent of U.S. corn, plus distillers grains left over from ethanol production, is fed to cattle, pigs and chickens). Much of the rest is exported. Only a tiny fraction of the national corn crop is directly used for food for Americans, much of that for high-fructose corn syrup.

Yes, the corn fed to animals does produce valuable food to people, mainly in the form of dairy and meat products, but only after suffering major losses of calories and protein along the way. For corn-fed animals, the efficiency of converting grain to meat and dairy calories ranges from roughly 3 percent to 40 percent, depending on the animal production system in question. What this all means is that little of the corn crop actually ends up feeding American people. It’s just math. The average Iowa cornfield has the potential to deliver more than 15 million calories per acre each year (enough to sustain 14 people per acre, with a 3,000 calorie-per-day diet, if we ate all of the corn ourselves), but with the current allocation of corn to ethanol and animal production, we end up with an estimated 3 million calories of food per acre per year, mainly as dairy and meat products, enough to sustain only three people per acre. That is lower than the average delivery of food calories from farms in Bangladesh, Egypt and Vietnam.

Only a tiny fraction of corn grown in the U.S. directly feeds the nation’s people, and most of that is from unhealthy, high-fructose corn syrup

In short, the corn crop is highly productive, but the corn system is aligned to feed cars and animals instead of feeding people.

There are a number of ways to improve the delivery of food from the nation’s corn system. First and foremost, shifting corn away from biofuels would generate more food for the world, lower demand for grain, lessen commodity price pressures, and reduce the burden on consumers around the world. Furthermore, eating less corn-fed meat, or shifting corn toward more efficient dairy, poultry, pork and grass-fed beef systems, would allow us to get more food from each bushel of corn. And diversifying the Corn Belt into a wider mix of agricultural systems, including other crops and grass-fed animal operations, could produce substantially more food—and a more diverse and nutritious diet— than the current system.

The corn system uses a large amount of natural resources. Even though it does not deliver as much food as comparable systems around the globe, the American corn system continues to use a large proportion of our country’s natural resources.

In the U.S., corn uses more land than any other crop, spanning some 97 million acres— an area roughly the size of California. U.S. corn also consumes a large amount of our freshwater resources, including an estimated 5.6 cubic miles per year of irrigation water withdrawn from America’s rivers and aquifers. And fertilizer use for corn is massive: over 5.6 million tons of nitrogen is applied to corn each year through chemical fertilizers, along with nearly a million tons of nitrogen from manure. Much of this fertilizer, along with large amounts of soil, washes into the nation’s lakes, rivers and coastal oceans, polluting waters and damaging ecosystems along the way. The dead zone in the Gulf of Mexico is the largest, and most iconic, example of this.

And the resources devoted to growing corn are increasing dramatically. Between 2006 and 2011, the amount of cropland devoted to growing corn in America increased by more than 13 million acres, mainly in response to rising corn prices and the increasing demand for ethanol. Most of these new corn acres came from farms, including those that were growing wheat (which lost 2.9 million acres), oats (1.7 million acres lost), sorghum (1 million acres lost), barley, alfalfa, sunflower and other crops. That leaves us with a less diverse American agricultural landscape, with even more land devoted to corn monocultures. And according to a recent study published in the Proceedings of the National Academy of Sciences, roughly 1.3 million acres of grassland and prairie were converted to corn and other uses in the western Corn Belt between 2006 and 2011, presenting a threat to the waterways, wetlands and species that reside there.

Looking at these land, water, fertilizer and soil costs together, you could argue that the corn system uses more natural resources than any other agricultural system in America, while providing only modest benefits in food. It’s a dubious trade-off—depleting natural resources to deliver relatively little food and nutrition to the world. But it doesn’t need to be that way. Innovative farmers are exploring other methods for growing corn, including better conventional, organic, biotech and conservation farming methods that can dramatically reduce chemical inputs, water use, soil losses and impacts on wildlife. We should encourage American farmers to continue these improvements.

The corn system is highly vulnerable to shocks. Although a large monoculture dominating much of the country with a single cropping system might be an efficient and profitable way to grow corn at an industrial scale, there is a price to being so big, with so little diversity. Given enough time, most massive monocultures fail, often spectacularly. And with today’s high demand and low grain stocks, corn prices are very volatile, driving spikes in the price of commodities around the world. Under these conditions, a single disaster, disease, pest or economic downturn could cause a major disturbance in the corn system.

Continued in article

Stereotyped as "naughty," boys quickly learn that they are thought of as dumber and more trouble than girls. And that has consequences.
Glenn Harlan Reynolds, USA Today, February 23, 2013 ---

February 27, 2013 blog posting by University of Wisconsin Law Professor Ann Althouse ---

If schoolteachers were overwhelmingly male and girls were suffering as a result..."

"... there would be a national outcry and Title IX-style gender equity legislation would be touted."

We expect males to solve their own problems. There's no tradition of helping and help-seeking as there is with females. Ironically, that tradition of helping females is patronizing and paternalistic. Whether it's good for government to serve female interests like that or not, it's hard to transfer that nurturing attention onto boys. Is portraying boys as victims good for boys? It's especially problematic if you are going to disparage the female teachers:
It seems that teachers -- overwhelmingly female -- just might be prejudiced against boys and it's hurting their grades.
Might be...

By the way, the egregious example of prejudice against boys that I've seen came from a male teacher. It was exactly the kind of stereotyping of boyish behavior that the author of the linked article — Instapundit — is talking about.

Make no mistake: I think there is a problem with boys in school. But what is the solution?

Here's a hypothetical I made up for discussing the problem in my law school constitutional law class. In a place I call Gendertopia, where policy is based scientific research indicating that there are male and female gendered learning styles, there's a plan for 2 high schools, both of which will receive equal resources. The male-style school will have labs, contests, aggressive sports, and strict discipline from the teachers. Music class is all about using
Apple Logic Pro 9. The female model school has group projects and mutual tutoring, positive reinforcement and self-esteem, yoga and dance classes, and — for music — a strings program. Violins, violas, and cellos are distributed.

Do you like my solution? (Don't assume all the boys go to one school and all the girls go to the other school.)


Jensen Comment
According to a recent blog by Paul Carone. Ann Alhouse has the most visited blog of all law professors who have blogs. Whether coming from the right or coming from the left, Ann always calls it strongly as she feels.

"Woodward-Sperling Flap May Turn Tide," by Deborah J. Saunders, Townhall, March 3, 2013 --- Click Here

There is a rule in Politics 2013 that's evident in the flap about a White House aide's maybe threatening or not threatening Washington Post veteran reporter Bob Woodward. The rule: The more superficial the brouhaha the bigger its impact.

What public figures say is more important than what they do, because cable TV and political blogs can cover a mud fight more cheaply and more easily than they can a real story.

Quick synopsis: Woodward has reported doggedly on the White House's role in putting "sequester" cuts -- $85 billion this year -- in the 2011 Budget Control Act. Last week, as Woodward was writing that President Barack Obama was moving the goal post in negotiations on those cuts, a White House aide yelled at him on the phone for a half-hour, Woodward says. Economic adviser Gene Sperling later sent him an email to apologize for raising his voice. Sperling also wrote, "I think you will regret staking out that claim."

The White House says no threat was intended. I believe that. I also see why Woodward might perceive the exchanges as a threat -- not to harm him physically but to deny him access. Without access, Woodward cannot write best-selling books.

Why am I writing about what Ron Fournier, National Journal editor-in-chief, described as "a silly distraction to a major problem" -- Washington's failure to lead under a budget deadline? Because this could be a turning point -- the moment when the White House press corps starts pushing back.

As Fournier wrote, the Woodward flap is indicative of the "increasingly toxic relationship between media and government." Things have gotten so ugly that in the midst of the Woodward flap, Fournier put an anonymous White House source on notice that if he continued to send him emails filled with "vulgarity, abusive language" and you'll-regret-it talk, Fournier would feel free to print said missives with attribution.

It would be nice if a more substantive dispute than the White House's treatment of Woodward sparked this mild rebellion. Think Benghazi. Yet there is a substantive dispute behind the fluffy fight.

As Politico reported, the White House "has, with great success, fudged the facts. The administration has convinced a majority of the country that Republicans are more to blame by emphasizing that Republicans voted for the plan. Which they did -- after Obama conceived it."

In an October presidential debate, Obama claimed that "the sequester is not something that I've proposed. It is something that Congress has proposed. It will not happen." PolitiFact rated that claim "mostly false." Obamaland's misinformation cookie is crumbling.

Continued in article

"Jury convicts former Detroit mayor Kilpatrick on corruption charges," Fox News, March 11, 2013 ---

Former Detroit Mayor Kwame Kilpatrick was convicted Monday of corruption charges, ensuring a return to prison for a man once among the nation's youngest big-city leaders.

Jurors convicted Kilpatrick of a raft of crimes, including a racketeering conspiracy charge. He was portrayed during a five-month trial as an unscrupulous politician who took bribes, rigged contracts and lived far beyond his means while in office until fall 2008.

Prosecutors said Kilpatrick ran a "private profit machine" out of Detroit's City Hall. The government presented evidence to show he got a share of the spoils after ensuring that Bobby Ferguson's excavating company was awarded millions in work from the water department.

Business owners said they were forced to hire Ferguson as a subcontractor or risk losing city contracts. Separately, fundraiser Emma Bell said she gave Kilpatrick more than $200,000 as his personal cut of political donations, pulling cash from her bra during private meetings. A high-ranking aide, Derrick Miller, told jurors that he often was the middle man, passing bribes from others.

Internal Revenue Service agents said Kilpatrick spent $840,000 beyond his mayoral salary.

Ferguson, Kilpatrick's pal, was also convicted of a racketeering conspiracy charge. The jury could not reach a verdict on the same charge for Kilpatrick's father, Bernard Kilpatrick, but convicted him of submitting a false tax return.

Kwame Kilpatrick, who now lives near Dallas, declined to testify. He has long denied any wrongdoing, and defense attorney James Thomas told jurors that his client often was showered with cash gifts from city workers and political supporters during holidays and birthdays.

The government said Kilpatrick abused the Civic Fund, a nonprofit fund he created to help distressed Detroit residents. There was evidence that it was used for yoga lessons, camps for his kids, golf clubs and travel.

Kilpatrick, 42, was elected in 2001 at age 31. He resigned in 2008 and pleaded guilty to obstruction of justice in a different scandal involving sexually explicit text messages and an extramarital affair with his chief of staff.

The Democrat spent 14 months in prison for violating probation in that case after a judge said he failed to report assets that could be put toward his $1 million restitution to Detroit.

Voters booted his mother, Carolyn Cheeks Kilpatrick, from Congress in 2010, partly because of a negative perception of her due to her son's troubles.

Bob Jensen's Fraud Updates are at

March 4, 2013 message from Roger Collins

Rivetting - and chilling - account of a care control system
breakdown.Its in the UK  but could easily happen here. I sent this to a
colleague in our School of Nursing yesterday - this evening she's
suggested that we run a joint Nursing/School of Business seminar on the





Note - I found  the .pdf files to be troublesome to save; you may have
to specify that the file should be opened with Adobe Reader and then
save - but they repay the effort.

Two quotes from the Chairman of the Public Inquiry, which began in 2010
 and cost around $20 million

"This is a story of appalling and unnecessary suffering of hundreds of
people.  They were failed by a system which ignored the warning signs
and put
corporate self interest and cost control ahead of patients and their
safety. I  have today made 290 recommendations designed to change this
culture and
make sure that patients come first.

There was a lack of care, compassion, humanity and leadership. The
most basic standards of care were not observed, and fundamental rights
to dignity were not respected. Elderly and vulnerable patients were left
unwashed, unfed and without fluids. They were deprived of dignity and
respect. Some patients had to relieve themselves in their beds when they
offered no help to get to the bathroom. Some were left in excrement
stained sheets and beds. They had to endure filthy conditions in their
wards. There were incidents of callous treatment by ward staff. Patients
who could not eat or drink without help did not receive it. Medicines
were prescribed but not given. The accident and emergency department as
well as some wards had insufficient staff to deliver safe and effective
care. Patients were discharged without proper  regard for their welfare.


Roger Collins
Associate Professor
TRU School of Business & Economics

Non-profit hospital --- http://en.wikipedia.org/wiki/Non-profit_hospital
About 62% of the hospitals related medical care facilities are deemed to be non-profit. The rest include government hospitals (20 percent) and for-profit hospitals (18 percent.

Last night (March 4, 2013) on MSNBC  Stephen Brill explained how non-profit hospitals are becoming criminal rackets
Watch Stephen Brill being interviewed by Jon Stewart on The Daily Show ---
On MSNBC Brill pointed out that Obamacare will exacerbate the problem largely because of the concessions it made to the medical and pharmaceutical lobbies throwing out money by the millions in Washington DC in order to take control of the Affordable Care Act..

The so-called non-profit hospitals pay no taxes, including not paying local property taxes that would be borne by for-profit hospitals. The fact that they are called "non-profit" sounds terrific to the voting public and even patients. They were and still are efficient when the non-profit organizations such as churches that run them are committed more to care than executive salaries and other rackets. The problem is that the churches and other legitimate charities that own hospitals have been selling them to less-legitimate non-profit organizations and in some cases even local communities who are not as vigilant about such things as executive compensation of hospital administrators and doctors who run these hospitals.

The racket typically begins with the aging of an order of nuns who own and manage a non-profit hospital. Unlike Catholic priests who are taken care of by the Church when they retire, Catholic nuns must fen for themselves. In some cases the only thing of value to care for them in retirement is their hospital. Sometimes they sell the hospital for other uses like an order of nuns sold its hospital to Arthur Andersen accounting firm years ago to turn the buildings and grounds into a training center for accountants in St. Charles, Illinois.

In other cases, however, dubious "organizations" are buying up the hospitals to operate more unethically than most any for-profit organization you can think of short of being the Mafia (in same cases it may even be the Mafia). It reminds me of the city of Bell in California where the city council simply granted themselves and the city's city manager and police chief hundreds of thousands in salaries while being accountable to nobody but themselves ---

"Wow of the Week: Big-money nonprofit hospitals get roasted in Brill’s TIME piece," by Deanna Pogorelc, MedCityNews, February 23, 2013 ---

Initially, it might seem that Steven Brill’s expose’ in the March 4 issue of TIME is dredging up some of same issues we’re used to hearing about healthcare – that the U.S. spends more than any other nation but doesn’t deliver better outcomes, and that patients have no idea what they’re buying or how much it’s going to cost them.

But read beyond the headline and the first few paragraphs and you’ll find a real gem in Brill’s overarching theme that even today’s connected and engaged patients are still relatively powerless in the framework of care that the healthcare industry has built. Technological advancements are making healthcare more expensive, he argues, and the industry has riled people up so much about who is and who should be footing the bill for medical care that it’s distracted people away from the real question we should be asking — Why are the bills so high?

Brill, a writer and the founder of CourtTV and American Lawyer magazine, undertook a seven-month investigation in which he went line-by-line through the medical bills of eight patients who had received various kinds of care, from cancer treatment to a visit to the emergency department, some with and some without insurance.

In the bills that patients received, Brill found that they were being charged ludicrous amounts for things that cost hospitals dollars and cents, like gauze pads, blankets used during surgery, and generic household drugs. Whereas Medicare would only reimburse MD Anderson Cancer Center around $20 for a chest X-ray, for example, the hospital billed an under-insured patient $283.

And apparently, there’s no standard process behind markups on hospital services. Brill points to the chargemaster as the culprit. It’s an internal list hospitals keep of the thousands of items they charge for, but after he asked several different hospitals’ administrators how they determined the prices on that list, he determined that “there seems to be no process, no rationale, behind the core document that is the basis for hundreds of billions of dollars in health care bills.”

The hospital’s hard-nosed approach pays off. Although it is officially a nonprofit unit of the University of Texas, MD Anderson has revenue that exceeds the cost of the world-class care it provides by so much that its operating profit for the fiscal year 2010, the most recent annual report it filed with the U.S. Department of Health and Human Services, was $531million.

The profit margins of these huge nonprofit hospitals is feeding the problem by enabling them to gobble up physician practices and smaller hospitals in their areas, leaving patients with fewer choices and insurers with less power to negotiate prices. Not to mention the six- and seven-figure salaries top hospital executives are being paid.

Obamacare, he says, won’t fix these problems. Rather, Brill suggests lowering the age for Medicare eligibility.

As currently constituted, Obamacare is going to require people like Janice S. to get private insurance coverage and will subsidize those who can’t afford it. But the cost of that private insurance – and therefore those subsidies – will be much higher than if the same people were enrolled in Medicare at an earlier age. That’s because Medicare buys health care services at much lower rates than any insurance company. Thus the best way both to lower the deficit and to help save money for people like Janice S. would seem to be to bring her and other near seniors into the Medicare system before they reach 65. They could be required to pay premiums based on their incomes, with the poor paying low premiums and the better off paying what they might have paid a private insurer. Those who can afford it might also be required to pay a higher proportion of their bills – say, 25% or 30% – rather than the 20% they’re now required to pay for outpatient bills.

Meanwhile, adding younger people like Janice S. would lower the overall cost per beneficiary to Medicare and help cut its deficit still more, because younger members are likelier to be healthier.

He makes mention of a single-payer system but focuses his proposed solution instead on tightening anti-trust laws for hospitals, taxing the profits of so-called nonprofit hospitals, outlawing the chargemaster and pushing for tort reform, so that doctors don’t have to “order a CT scan whenever someone in the emergency room says the word head,” as one hospital administrator put it.


The Health Care Market is Not a Market --- It's Becoming More of a Fraud

"Video:  Inside ‘Bitter Pill’: Steven Brill Discusses His TIME Cover Story," Time Magazine, February 22, 2013 ---

Simple lab work done during a few days in the hospital can cost more than a car. A trip to the emergency room for chest pains that turn out to be indigestion brings a bill that can exceed the price of a semester at college. When we debate health care policy in America, we seem to jump right to the issue of who should pay the bills, blowing past what should be the first question: Why exactly are the bills so high?

Steven Brill spent seven months analyzing hundreds of bill from hospitals, doctors, and drug companies and medical equipment manufacturers to find out who is setting such high prices and pocketing the biggest profits. What he discovered, outlined in detail in the cover story of the new issue of TIME, will radically change the way you think about our medical institutions:

· Hospitals arbitrarily set prices based on a mysterious internal list known as the “chargemaster.” These prices vary from hospital to hospital and are often ten times the actual cost of an item. Insurance companies and Medicare pay discounted prices, but don’t have enough leverage to bring fees down anywhere close to actual costs. While other countries restrain drug prices, in the United States federal law actually restricts the single biggest buyer—Medicare—from even trying to negotiate the price of drugs.

· Tax-exempt “nonprofit” hospitals are the most profitable businesses and largest employers in their regions, often presided over by the most richly compensated executives.

· Cancer treatment—at some of the most renowned centers such as Sloan-Kettering and M.D. Anderson—has some of the industry’s highest profit margins. Cancer drugs in particular are hugely profitable. For example, Sloan-Kettering charges $4615 for a immune-deficiency drug named Flebogamma. Medicare cuts Sloan-Kettering’s charge to $2123, still way above what the hospital paid for it, an estimated $1400.

· Patients can hire medical billing advocates who help people read their bills and try to reduce them. “The hospitals all know the bills are fiction, or at least only a place to start the discussion, so you bargain with them,” says Katalin Goencz, a former appeals coordinator in a hospital billing department who now works as an advocate in Stamford, CT.

Brill concludes:

The health care market is not a market at all.
It’s a crapshoot. Everyone fares differently based on circumstances they can neither control nor predict. They may have no insurance. They may have insurance, but their employer chooses their insurance plan and it may have a payout limit or not cover a drug or treatment they need. They may or may not be old enough to be on Medicare or, given the different standards of the 50 states, be poor enough to be on Medicaid. If they’re not protected by Medicare or protected only partially by private insurance with high co-pays, they have little visibility into pricing, let alone control of it. They have little choice of hospitals or the services they are billed for, even if they somehow knew the prices before they got billed for the services. They have no idea what their bills mean, and those who maintain the chargemasters couldn’t explain them if they wanted to. How much of the bills they end up paying may depend on the generosity of the hospital or on whether they happen to get the help of a billing advocate. They have no choice of the drugs that they have to buy or the lab tests or CT scans that they have to get, and they would not know what to do if they did have a choice. They are powerless buyers in a sellers’ market where the only consistent fact is the profit of the sellers.


"Bitter Pill:  Why Medical Bills Are Killing Us," Time Magazine Cover Story, March 4, 2013, pp. 16-65 (a very long article)  ---

"Yes, Hospital Pricing Is Insane, But Why? Time magazine issues a 24,000-word memo on what we already knew," by Holman Jenkins Jr., The Wall Street Journal, March 1, 2013 ---

Without diminishing the epic scope of Steven Brill's Time magazine piece about the U.S. health care system, he reiterates in lengthy detail perversities that are already well known, without offering a single useful insight on how it go that way, and even less on how to fix it.

Yet Mr. Brill, founder of CourtTV and American Lawyer magazine, author of books on terrorism and education, has written the longest piece in Time's history—24,000 words—so attention must be paid.

That health-care costs are inflated compared to what they would be in a reasonably transparent, competitive market (a point Mr. Brill never clearly makes) won't be a revelation. That hospitals allocate their costs to various items on their bills and price lists in ways that are opaque and arbitrary is not a new discovery either.

He finds it shocking that a hospital charging $1,791 a night won't throw in the generic Tylenol for free (instead charging $1.50 each). But this is to commit the reification fallacy of thinking there is some organic relationship between what a hospital charges for a particular item and what that item costs in the first place.

He dwells on the irrationality of hospitals charging their highest prices to their poorest customers, those without insurance. But he's also aware that these customers often pay little or nothing of what they are charged and hospitals reallocate the cost to the bills of other patients. He even notes that a hospital might collect as little as 18% of what it bills.

He vaguely gets that hospital price lists are memos for the file, to be drawn out and waved as a reference in negotiations with their real customers, the big health-care insurers, Medicaid, Medicare and other large payers.

The deals hammered out with these customers tend naturally to gravitate toward round numbers, leaving a hospital free to allocate its costs and profits to specific items however it wants. Mr. Brill may be offended that certain "non-profit" hospitals appear to be highly profitable. He probably wouldn't be happier, though, if they diverted their surplus revenues into even higher salaries and more gleamingly superfluous facilities.

"What is so different about the medical ecosystem that causes technology advances to drive bills up instead of down?" Mr. Brill asks. But his question is rhetorical since he doesn't exhibit much urge to understand why the system behaves as it does, treating its nature as a given.

In fact, what he describes—big institutions dictating care and assigning prices in ways that make no sense to an outsider—is exactly what you get in a system that insulates consumers from the cost of their health care.

Your time might be better spent reading Duke University's Clark Havighurst in a brilliant 2002 article that describes the regulatory, legal and tax subsidies that deprive consumers of both the incentive and opportunity to demand value from medical providers. Americans end up with a "Hobson's choice: either coverage for 'Cadillac' care or no health coverage at all."

"The market failure most responsible for economic inefficiency in the health-care sector is not consumers' ignorance about the quality of care," Mr. Havighurst writes, "but rather their ignorance of the cost of care, which ensures that neither the choices they make in the marketplace nor the opinions they express in the political process reveal their true preferences."

You might turn next to an equally fabulous 2001 article by Berkeley economist James C. Robinson, who shows how the "pernicious" doctrine that health care is different—that consumers must shut up, do as they're told and be prepared to write a blank check—is used to "justify every inefficiency, idiosyncrasy, and interest-serving institution in the health care industry."

Hospitals, insurers and other institutions involved in health care may battle over available dollars, but they also share an interest in increasing the nation's resources being diverted into health care—which is exactly what happens when costs are hidden from those who pay them.

Continued in article

Jensen Comment
Over a year ago Erika's Medicare-Anthem summary of charges for the month included an $11,376 charge for out patient surgery that was mistakenly billed to her account. We called our doctor who did the procedure in the hospital. Our doctor responded not to bother her or the hospital --- since Medicare-Anthem paid the entire bill it would not matter.

This bothered us since the woman (I assume it was a woman) may not have been eligible for Medicare-Anthem. So I phoned Medicare. Medicare said not to bother them and advised us to contact the hospital where the procedure took place. Any corrections should be made by the hospital and the doctor.

So I called the hospital's accounting office. They asked that I send in a copy of the Medicare-Anthem report. I hand-delivered the report to the the hospital accounting office --- which is miles from the hospital.

Over the ensuing year we waited for a corrected Medicare-Anthem report. Nothing! So I did a follow up visit to the hospital's accounting office. The feedback was that since Medicare-Anthem paid the bill there was no need to waste time correcting this item.

I keep thinking that some woman not eligible for Medicare got a windfall gain here. Who cares if it was Medicare-Anthem that got screwed?

Erika and I changed to a doctor that we like better. But we cannot change hospitals.

Moral of the Story
If the third party insurer gets billed mistakenly or pays too much nobody cares, least of all the doctors and hospitals who got reimbursed.

Bob Jensen's threads on health care are at

Who is telling a lie?

Steven Brill wrote a long cover story for Time Magazine, In that story he describes having his team examine eight very complicated hospital bills from different hospitals. In every case they found that the bills were laced with errors and overcharges in favor of the hospital and possible frauds.
Bitter Pill:  Why Medical Bills Are Killing Us," Time Magazine Cover Story, March 4, 2013, pp. 16-65 (a very long article)  ---

The following week Stamford Hospital CEO Brian G. Grissler replied as shown, in part, below. Steven Brill's reply to Grissler, Time Magazine, March 18, 2013, Page 2.

Brian G. Grissler
". . . Brill refused to share the patient's name or the complete bill, so we are unable to answer those questions . . . "

Steven Brill Responds
"Stamford Hospital was shown the bill and never disputed its authenticity. I made clear in the article the hospital settled for cutting its bill entirely in half."

Jensen Comment
There are four possibilities behind this dispute:

  1. Brian Grissler could be lying through his teeth.

  2. Brian Grissler may not have thoroughly investigated the ultimate resolution of this bill by his staff.

  3. Steven Brill could be lying through his teeth.

  4. Steven Brill and Brian Grissler may not be discussing the same bill (although Brill claims he only picked one bill to examine from Stamford Hospital).

My vote is that Answer 1 above is probably the correct answer, but we most likely will never know.

From Paul Caron's TaxProf Blog on March 8, 2013

ObamaCare Tax Increases Are Double Original Estimate

Following up on Tuesday's post, House Holds Hearing Today on The Tax-Related Provisions in the President’s Health Care Law: Tax Foundation, Obamacare Tax Increases Will Impact Us All:

The Joint Committee on Taxation recently released a 96 page report on the tax provisions associated with Affordable Care Act. The report describes the 21 tax increases included in Obamacare, totaling $1.058 trillion – a steep increase from initial assessment. The summer 2012 estimate is nearly twice the $569 billion estimate produced at the time of the passage of the law in March 2010. ...


Provision  2010 Estimate, 2010-2019, $billion 2012 Estimate, 2013-2022, $billion
0.9% payroll tax on wages and self-employment income and 3.8% t tax on dividends, capital gains, and other investment income for taxpayers earning over $200,000 (singles) / $250,000 (married) 210.2 317.7
“Cadillac tax” on high-cost plans * 32 111
Employer mandate * 52 106
Annual tax on health insurance providers * 60.1 101.7
Individual mandate * 17 55
Annual tax on drug manufacturers/importers * 27 34.2
2.3% excise tax on medical device manufacturers/importers*  20 29.1
Limit FSAs in cafeteria plans * 13 24
Raise 7.5% AGI floor on medical expense deduction to 10% * 15.2 18.7
Deny eligibility of “black liquor” for cellulosic biofuel producer credit  23.6 15.5
Codify economic substance doctrine 4.5 5.3
Increase penalty for nonqualified HSA distributions * 1.4 4.5
Impose limitations on the use of HSAs, FSAs, HRAs, and Archer MSAs to purchase over-the-counter medicines * 5.0  4
Impose fee on insured and self-insured health plans; patient-centered outcomes research trust fund * 2.6 3.8
Eliminate deduction for expenses allocable to Medicare Part D subsidy 4.5 3.1
Impose 10% tax on tanning services * 2.7 1.5
Limit deduction for compensation to officers, employees, directors, and service providers of certain health insurance providers 0.6  0.8
Modify section 833 treatment of certain health organizations 0.4 0.4
Other Revenue Effects 60.3 222**
Additional requirements for section 501(c)(3) hospitals Negligible Negligible
Employer W-2 reporting of value of health benefits Negligible Negligible
Total Gross Tax Increase: 569.2 1,058.3
* Provision targets households earning less than $250,000.

** Includes CBO’s $216.0 billion estimate for “Associated Effects of Coverage Provisions on Tax Revenues” and $6.0 billion within CBO’s “Other Revenue Provisions” category that is not otherwise accounted for in the CBO or JCT estimates.

Source: Joint Committee on Taxation Estimates, prepared by Ways and Means Committee Staff

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

Bob Jensen's Tidbits Archives ---

Bob Jensen's Pictures and Stories

Summary of Major Accounting Scandals --- http://en.wikipedia.org/wiki/Accounting_scandals

Bob Jensen's threads on such scandals:

Bob Jensen's threads on audit firm litigation and negligence ---

Current and past editions of my newsletter called Fraud Updates ---

Enron --- http://www.trinity.edu/rjensen/FraudEnron.htm

Rotten to the Core --- http://www.trinity.edu/rjensen/FraudRotten.htm

American History of Fraud --- http://www.trinity.edu/rjensen/FraudAmericanHistory.htm

Bob Jensen's fraud conclusions ---

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

Bob Jensen's threads on corporate governance are at


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

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

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

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

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

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

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

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


Bob Jensen's threads on accounting theory ---

Tom Lehrer on Mathematical Models and Statistics ---

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

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

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

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