Tidbits Quotations
To Accompany the April 23, 2013 edition of Tidbits
http://www.trinity.edu/rjensen/tidbits/2013/tidbits042313.htm  
Bob Jensen at Trinity University

My Free Speech Political Quotations and Commentaries Directory and Log ---
http://www.cs.trinity.edu/~rjensen/temp/Political/PoliticalQuotationsCommentaries.htm

In Tribute To The Iron Lady: The 25 Greatest Quotes From Margaret Thatcher --- Click Here
http://townhall.com/columnists/johnhawkins/2013/04/09/in-tribute-to-the-iron-lady-the-25-greatest-quotes-from-margaret-thatcher-n1561588?utm_source=thdaily&utm_medium=email&utm_campaign=nl

The U.S. will "do what is necessary" to prevent the Tehran from acquiring nuclear weapons.
President Barack Obama, March 2013
http://www.nbcnews.com/id/51262069/ns/local_news-charleston_sc/t/obama-us-will-do-what-necessary-stop-iran/#.UU2uaUpuSkw
President Obama is apparently playing world war brinksmanship in the footsteps of President Kennedy. Except for the disastrous Bay of Pigs Invasion, the game of chicken worked well for JFK. I'm not optimistic it will work well with Iran. President Obama may end up with chicken egg on his face. But for the moment talking touch raises leadership approval ratings in the political arena where everything else in Washington DC is going badly.

The Economist: World in 2013 (Annual summary of world economics trends from The Economist magazine) ---
http://www.economist.com/theworldin/2013

Wealth and Inequality in America --- https://www.youtube.com/watch?feature=player_embedded&v=QPKKQnijnsM

"Business Ethics" (Judge) Richard Posner, Becker-Posner Blog, March 3, 2013 ---
http://www.becker-posner-blog.com/2013/03/business-ethicsposner.html

If I never meet another psychopath again, it'll be far too soon ---
Alan Smith who taught philosophy to prisoners for 14 years ---
http://www.guardian.co.uk/education/2013/apr/08/prison-philosophy-classes

Faked Moon Landing? Conspiracy Beliefs Fall Along Party Lines ---
http://news.yahoo.com/faked-moon-landing-conspiracy-beliefs-fall-along-party-155031640.html

Academic Versus Political Reporting of Research:  Percentage Columns Versus Per Capita Columns ---
http://www.cs.trinity.edu/~rjensen/temp/TaxAirlineSeatCase.htm
by Bob Jensen, April 3, 2013

Entitlements are two-thirds of the federal budget. Entitlement spending has grown 100-fold over the past 50 years. Half of all American households now rely on government handouts. When we hear statistics like that, most of us shake our heads and mutter some sort of expletive. That’s because nobody thinks they’re the problem. Nobody ever wants to think they’re the problem. But that’s not the truth. The truth is, as long as we continue to think of the rising entitlement culture in America as someone else’s problem, someone else’s fault, we’ll never truly understand it and we’ll have absolutely zero chance...
Steve Tobak ---
http://www.foxbusiness.com/business-leaders/2013/02/07/truth-behind-our-entitlement-culture/?intcmp=sem_outloud

"Immigration Bill Would Ease Path to Citizenship and to Jobs for Immigrant Students," by Kelly Field, Chronicle of Higher Education, April 17, 2013 ---
http://chronicle.com/article/Immigration-Bill-Would-Ease/138557/

A bipartisan group of eight U.S. senators unveiled the outlines of a comprehensive immigration-reform bill on Tuesday that would speed the path to citizenship for students who are in the United States illegally and would make it easier for some foreign graduates of American universities to remain in the country to work.

The "Gang of Eight" plan, which would tackle border security as well as legalization, would grant provisional legal status to such immigrants who paid a $500 fine and back taxes, allowing them to work in the United States and travel outside the country. After 10 years, the plan says, they could apply for a green card.

College students who were brought to the country illegally as children, a group known as "Dreamers," would not have to pay the fine and could apply for a green card after only five years. Once they received a green card, they would be immediately eligible for citizenship, along with federal student aid.

They would also be exempt from the bill's requirement that no immigrants be granted provisional status until four criteria for securing the U.S.-Mexico border were met. Dreamers who have been deported would be allowed to re-enter the country in provisional status.

Cesar Vargas, a spokesman for the Dream Act Coalition, welcomed the plan, but said his group would push lawmakers to eliminate the five-year waiting period for Dreamers.

Ending a 'Self-Defeating Policy'

The senators' plan would also drop limits on the number of employment-based green cards granted to individuals with doctoral degrees in science, technology, engineering, and mathematics fields, as well as "outstanding professors and researchers" and "aliens of extraordinary ability in the sciences, arts, professions, or business."

Continued in article

"Supreme Court (9-0) hands broad victory to business in human rights case," by Erik Wasson, TheHill, April 17, 2013 ---
http://thehill.com/blogs/on-the-money/1005-trade/294521-supreme-court-hands-victory-to-big-business-in-rights-case

The Supreme Court delivered a broad victory to multinational companies on Wednesday by shielding them from a type of human rights lawsuit.

The court affirmed a ruling from a lower court that the 200-year-old Alien Tort Statute (ATS) does not give U.S. courts jurisdiction to hear lawsuits about foreign acts involving international law.

Human rights activists have tried to use the loosely worded statute to go after multinational companies they say are complicit in abuses by dictatorial regimes.

In the case at hand, Kiobel v. Royal Dutch Petroleum, Nigerian activists sued the oil giant Shell in the United States for allegedly aiding the Nigerian government in the torture and execution of local activists.

Read more: http://thehill.com/blogs/on-the-money/1005-trade/294521-supreme-court-hands-victory-to-big-business-in-rights-case#ixzz2QueTwaej Follow us: @thehill on Twitter | TheHill on Facebook

The court threw out the suit in a 9-0 decision, with liberal justices arguing for a more narrow ruling than the one issued by the conservative majority.

“There is no indication that the ATS was passed to make the United States a uniquely hospitable forum for the enforcement of international norms,” the court said in the majority ruling from Chief Justice John Roberts.

"On these facts, all the relevant conduct took place outside the United States. And even where the claims touch and concern the territory of the United States, they must do so with sufficient force to displace the presumption against extraterritorial application. Corporations are often present in many countries, and it would reach too far to say that mere corporate presence suffices," Roberts wrote.

In the concurring opinion from liberals on the court, Justice Stephen Breyer said he would have used more narrow reasoning to make room for lawsuits in specific cases, such as when U.S. national interest is at stake.

Continued in article

Yeah Right!
All a baseball team needs to win the World Series is a new and luxurious stadium.
We're still waiting for their new luxurious stadium to win a Super Bowl for the Dallas Cowboys

While Chicago is buried in billions of debt and lousy schools, it really can't afford to subsidize mulii-millionaire owners of and players in professional sports teams
"Cubs Owner: Wrigley Plan 'Will Win the World Series'," by Joe Barrett, The Wall Street Journal, April 15, 2013 ---
http://online.wsj.com/article/SB10001424127887324485004578425101880334958.html?mod=djemCFO_t

The Chicago Cubs on Monday announced an agreement with the city for a $500 million privately financed renovation of historic Wrigley Field, but property owners who offer fans a view of the action from neighboring rooftops are threatening to throw a monkey wrench into the plans.

The team, purchased by the Ricketts family in 2009 for about $845 million, plans new locker rooms, food services and a nearby hotel and office building. Supporters promised new jobs for the city and a better experience for fans as they seek to secure final approval from the City Council and the landmarks commission.

Continued in article

The new 37,000-seat Major League Baseball facility includes a retractable roof to shield spectators from the sun and rain, inherently changing the perception of summertime baseball in South Florida for generations to come. It's time to experience baseball in Miami as it was meant to be experienced.
http://miami.marlins.mlb.com/mia/ballpark/new_ballpark.jsp

"Miami Marlins Have Become Baseball's Most Expensive Stadium Disaster," Forbes, January 27, 2013 ---
http://www.forbes.com/sites/mikeozanian/2013/01/27/miami-marlins-have-become-baseballs-most-expensive-stadium-disaster/

By the end of that championship season, the Marlins posted an operating loss of $43 million — due in part to attendance that was the third-worst in the Major Leagues.
"The financial mess at Marlins Park: inside the numbers," by Douglas Hanks and Barry Jackson, Miami Herald, March 31, 2013 ---
http://www.miamiherald.com/2013/03/31/3315626/the-financial-mess-at-marlins.html

A new baseball stadium was supposed to fix South Florida’s lukewarm embrace of professional baseball. But the Marlins’ first season in their new ballpark may have made things even worse for the team.

Splurging on payroll last year gave owner Jeffrey Loria a $100 million lineup that he couldn’t afford without a windfall from a winning season. The trades that followed last year’s 93-loss debacle sent payroll down 60 percent to the second-lowest in baseball, leaving fans more furious at the Marlins than at any time in the franchise’s 20 year-history.

And while cutting payroll used to produce profits, the added debt and operating costs of a new $634 million stadium have left team executives predicting another loss on top of last year’s team record $47 million operating loss.

“The attendance impacted everything,’’ said David Samson, the team’s president, in a recent interview. “We looked at our revenue numbers, and the team has to be able to sustain itself.”

As the new season opens Sunday, the team appears to be in the baseball equivalent of a foxhole, waiting to fight another day. With a payroll estimated at $45 million — only the Houston Astros pay out less, at $32 million — the odds of the Marlins winning the National League pennant are pegged at 150-to-1.

Samson says attendance needs to increase at least a third from last year for the Marlins to afford a mid-range payroll of $80 million in the coming seasons.

That’s highly unlikely. Would-be ticket buyers don’t seem eager to forgive Loria for cutting costs so quickly after occupying a stadium set to cost taxpayers $2 billion over the next 40 years. Season-ticket sales have fallen by 60 percent to around 5,000, and the Marlins recently became the only major league team using Groupon to sell seats for Opening Day, according to the online discounter.

“Fans really put their emotions into the 2012 season, and they really got hurt,’’ said Michael Jong, a 26-year-old writer for the independent Marlins blog Fish Stripes, and a fan of the team since he went to a 1997 baseball-themed birthday party at what was then called Pro Player Stadium. “They thought things were going to change.”

A review of 10 years worth of Marlins financial statements illustrates the predicament now facing the team. Since Loria bought the Marlins in 2002, boosting the payroll has failed to bring the spike in ticket revenue needed to turn a profit. Only when he slashed player costs did the team record a cash surplus, according to the records.

A source with access to the Marlins’ audited financial statements allowed a Miami Herald reporter to review them and a 10-year summary of the reports during one two-hour session. The reporter could take notes but not make copies of the documents, meaning a thorough examination of the accounting and fine-print was not possible.

The review did identify some key financial metrics the team has not revealed before, including yearly revenue from tickets, payroll costs and how the team borrowed and paid down debt.

Before 2012, the team’s worst year financially in the Loria era was also its best on the field: 2003, when the underdog Marlins managed to beat the New York Yankees in the World Series.

By the end of that championship season, the Marlins posted an operating loss of $43 million — due in part to attendance that was the third-worst in the Major Leagues. Ticket revenue rose the following year as the Marlins charged more and cut back on discounts, but attendance inched up just one notch to fourth-worst in baseball.

Read more here: http://www.miamiherald.com/2013/03/31/3315626/the-financial-mess-at-marlins.html#storylink=cpy

Jensen
Kickback Moneyball is by far the biggest sport in government. It's impossible to stop these frauds against taxpayers. Government frauds from villages to enormous cities to Washington DC are the biggest diseases of "Democracy."

Federal Spending for 2012

Build America Bonds (BABs Bonds) --- http://en.wikipedia.org/wiki/Build_America_Bonds

America Fast Forward Bonds (AFF Bonds)
http://www.ballardspahr.com/alertspublications/legalalerts/2013-04-12-proposed-2014-budget-encourages-private-investment-in-infrastructure.aspx

This week, the Obama administration released its proposed budget for the 2014 fiscal year. Notably, the budget encourages private investment in infrastructure projects through various liberalizations of the tax laws relating to tax-exempt bonds and tax-credit bonds. If enacted as proposed, the budget would create a new tax-credit bond program, ease certain private activity bond restrictions, and enact tax reforms designed to incentivize foreign investment.

The proposal calls for the creation of “America Fast Forward Bonds.” These bonds, modeled on the expired Build America Bonds, would provide state and local governmental issuers with an optional alternative to tax-exempt bonds. America Fast Forward Bonds would be taxable bonds for which issuers would receive a direct payment from the federal government in an amount equal to 28 percent of their interest costs. The proposal allows the bonds to be issued for any of the following purposes:

The proposal does not appear to restrict the qualified private activity bond categories that could be financed.

Although America Fast Forward Bonds generally would provide a 28 percent tax-credit subsidy rate, the budget provides a temporary increase to 50 percent for bonds issued for original financings for governmental capital projects involving public schools and state universities, as well as new money financings for section 501(c)(3) nonprofit educational entities. Such entities would include nonprofit schools and universities that could be financed with qualified 501(c)(3) bonds.

As presented, the proposal does not appear to limit the classes of potential 501(c)(3) borrowers for purposes of the temporary 50 percent interest cost subsidy. It would not apply, however, to current refundings of prior capital projects for public schools and state universities, or current refundings of prior financings for section 501(c)(3) nonprofit educational entities. The temporary 50 percent subsidy for school construction would expire on January 1, 2016.

In addition to creating the America Fast Forward Bond program, the President’s budget calls for the easing of certain private activity bond restrictions. Specific proposals include the following:

Other infrastructure-related proposals within the budget include an amendment to the Foreign Investment in Real Property Tax Act (FIRPTA) to exempt foreign pension funds’ gains from the disposition of U.S. real property interests (including infrastructure and real estate assets) from U.S. taxation.

Although crafted with the goal of promoting infrastructure investment, the budget also proposes to limit the value of certain tax expenditures to 28 percent for taxpayers in the top three individual income tax brackets (33 percent, 35 percent, and 39.6 percent). The limit would apply to:

The limit would be effective for taxable years beginning after December 31, 2013.

Conceptually, with the exception of the proposed cap on the value of tax-exempt interest, the fiscal 2014 budget is a positive step towards increased infrastructure funding through both governmental and private sources. It remains to be seen, however, whether the proposals will gain any traction in Congress. Ballard Spahr will continue to monitor these proposals as well as other ongoing developments in the areas of deficit reduction, sequestration, and tax reform.

 

"The Government's New 'Fast Forward' Bonds Are Going To Cost America A Bundle," by Bruce Krasting, Business Insider, April 13, 2013 ---
http://www.businessinsider.com/america-fast-forward-in-reverse-2013-4

. . .

The proposal is to allow Munis to issue taxable debt. The objective is increase the number of investors who would invest in Muni debt. Traditionally, Munis have financed themselves by issuing tax free bonds. As no tax is levied against this form of interest income, the cost of the debt has been lower than taxable debt. The problem is that in order to benefit from the tax free status, the holder of debt must be taxable in the US.

Assume that an individual is in the 28% federal tax bracket and is making a bond investment. They have two alternatives:

1) Invest in a AA corporate taxable bond that yields 5%.

2) Invest in a AA Tax Free Muni bond at 3.6%.

Assuming that the credits are equivalent risks, then the investor is indifferent as to which bond they chose. The after tax yield is identical (5% minus 28% tax = 3.6%). As a result, only US taxable investors can buy Munis. (That or they are stupid..)

The President’s proposal is to widen the audience of potential investors for Munis. If the AFF proposal were implemented, it would be extremely successful. The investment demand for taxable Munis is huge. This fact was proven with the BABs bonds. Everyone loved them – Wall Street sold the hell out of them, investors snatched them up. AFF bonds would be no different.

The problem with AFF bonds is what they will cost taxpayers. The lie from the White House is that AFFs will be revenue neutral. This is the same lie that was told about the BABs bonds. I’m amazed that the Administration is continuing with this charade. It must believe that Congress and the American people are stupid to have re-introduced this idea.

Buried deep in the hundreds of pages of budget information the White House lie is presented. On page 194 of the “Analytical Perspectives – Government Receipts” there is a discussion of the AFF bonds. This is the key language:

The Administration proposes to create a new permanent America Fast Forward Bond program, which would be an optional alternative to traditional tax exempt bonds. Like Build America Bonds, America Fast Forward Bonds would be conventional taxable bonds issued by State and local governments in which the Federal government makes direct payments to State and local governmental issuers . The subsidy rate would be 28 percent, which is approximately revenue neutral.

Here’s the White House math:

- Muni issues taxable bonds at 5%

- Treasury pays the Muni 28% of the interest expense. (1.4% federal rebate).

- Investors earn 5% and pay (on average) 28% in federal taxes, the government collects the full 1.4% it has paid to the States.

As a result, this is “revenue neutral” to the Federal Government.

The White House provided specifics of the net cost of issuing the new AFF bonds on page 211. As you can see, the claim is that AFFs won’t cost a dime:

As presented by the White House, this all makes sense. The Treasury will pay out $53B, but the IRS will collect taxes from bond holders at the 28% rate and receive the $53B back in income taxes. Therefore there is no net cost (slide #1), at least that is how the information is presented.

Who will buy the AFF bonds? All sorts of investors. Pension plans will love them. Folks with IRAs and 401Ks will lap them up, but by far, the biggest buyers will be foreigners.

When the Treasury Department first introduced the concept of AFF bonds it described the potential investors as:

AFF bonds would attract new sources of capital for infrastructure investment—including from public pension funds and foreign investors.

The problem is that none of these buyers are paying US taxes. So very little of the tax revenue the White House is including in its analysis is going to be realized. AFFs are going to cost the taxpayers a bundle.

I went through the same arguments about BAB bonds. The Treasury Department sold the BABS proposal back in 2009 as being tax neutral. It wasn’t true then for BABs, it is equally untrue for AFFs today. As part of my proof that that this was not budget neutral I provided an email response from the IRS I received on the tax collections related to BABs. That response (LINK):

In response to your request for the percentage of tax collections from bonds associated with Build America Bonds, we will not be able to answer your request. Unlike tax-exempt bonds build America bonds are taxable, but the IRS Tax-Exempt area collects no data on the tax obligations associated with them.

The IRS has no idea what the tax receipts were regarding BABS, yet the White House is making exact forecasts of what the revenues will be for AFF bonds. The Treasury department has flat out said the bonds are likely to go to tax exempt hands, the White House assumes that all the AFF bond holders will pay US tax at the 28% rate. The reality is that BABS were not revenue neutral, and the facts are that AFF bonds will not be revenue neutral either. But the President’s budget says they will be, and that is a flat out lie.

Republicans hated BABS, they will hate AFF bonds too, so this part of the President’s budget will never be enacted. But there is a lie in the White House proposal for AFF bonds. One can safely assume that there are many other lies in the President’s plan. What bothers me is that so called “Economists” like Alan Blinder of Princeton make OpEd statements in the Wall Street Journal supporting the White House budget. Blinder went out of his way to defend the “credible numbers”, I doubt Blinder even looked at the numbers, that or he’s just a shill for the Administration.

 

Jensen Question
What remains unclear to me is what the impact will be of possible tax reform that caps tax exemption of muni interest received, e.g., limits such interest to 20% of adjusted gross income. This could greatly increase the cost of capital to towns, counties, schools, and state governments. It could also affect demand for America Fast Forward Bonds.

Question
What tax breaks are the most valuable to USA corporations?

Answer
From the GAO as reported by TaxProf (Paul Caron) on April 16, 2013 ---
http://taxprof.typepad.com/

More on how to lie with statistics, tables, and graphs
"Did Reinhart-Rogoff Screw Up Their Debt Research?" by Barry Ritholtz, April 16th, 2013 ---
http://www.ritholtz.com/blog/2013/04/did-reinhart-rogoff-screw-up-their-debt-research/

"How much of Reinhart/Rogoff has survived?" by Gavyn Davies, Financial Times, April 19, 2013 ---
http://blogs.ft.com/gavyndavies/2013/04/19/how-much-of-reinhartrogoff-has-survived/?

. . .

However, if the economy is working well below capacity, a rise in the budget deficit may not raise interest rates, but may instead raise aggregate demand and thus boost GDP growth. Under some circumstances, this might even reduce the debt ratio for a while.

In summary, the most dramatic version of the RR stylised fact is no longer a stylised fact. RR were right to argue that, over most normal periods, higher public debt has been associated with lower real GDP growth rates, but a sudden discontinuity at 90 per cent is not proven. Furthermore, causation might work in both directions, depending on economic circumstances. The timing of these effects is not a definitive indicator of true causation, and the relationship may be very different in a time of full employment from a time of high unemployment.

The moral of this story is that it is an illusion to expect that the complicated relationship between public debt and GDP growth will always and everywhere be the same.

 

 

"The Secret To Sweden's Brilliant Economic Comeback," by Michael Moran, Business Insider, April 13, 2013 ---
http://www.cs.trinity.edu/~rjensen/temp/SunsetHillHouse/SunsetHillHouse.htm#NordicCapitalism

As recently as the early 1990s, the idea that Sweden could be a model of anything except socialism gone awry would have been laughable.

Sweden's debt-to-GDP was staggering when compared to other advanced industrial nations, topping 70 percent in 1992 and headed ever upward. Nearly 60 percent of all economic activity was generated by either government or government-owned enterprises. Meanwhile, the full employment mantra of its socialist model was coming apart at the seams as government simply could not borrow or print enough money to bridge the gap. The Swedish jobless rate shot from less than 2 percent in 1988 to more than 10 percent in 1993.

Even renowned global brands — Saab, Volvo and Electrolux — were failing. By 1993, Sweden’s banks were effectively bankrupt.

But Sweden today barely resembles its former self. As the Economist magazine wrote last year, “The streets of Stockholm are awash in the blood of sacred cows.”

A century of pursuing political neutrality and aggressive egalitarian socialism has more recently been leavened by economic reforms and market liberalizations, lighting a fire under the economy. After a modest dip during 2008, the economy has outperformed the US and even Germany since.

Most importantly, the growth has not led to the kind of spike in income inequality that accompanied growth spurts in many other western countries since the 1980s. Sweden’s reforms caused inequality of income to grow over the past 20 years. As measured by the Gini coefficient, the world’s standard measure of household equality, Sweden went from a .21 to a .25 – still the best in the developed world. For the US, the numbers are staggering. From a Gini rating of .31 in 1975, the current ranking (adjusted for taxes and benefits) is .38.

How did Sweden do it? The answer is a mix of carefully introduced competitive pressures on services previously run by government, from schools to health to pensions, and an intelligent and forceful response to a banking crisis in the early 1990s that had a lot in common with the one that followed the collapse of Lehman Brothers.

There was no "radical shock" akin to the market reforms applied to the states of the former Warsaw Pact in Europe after 1989. Rather, Sweden embarked on a gradual recalibration of government spending, a lowering of top tax rates — to "only" 57 percent at the top — without a kind of offloading of social responsibility that characterized earlier market reform efforts in Thatcher's Britain or Reagan's America. The result is a country and a Nordic region, given that its neighbors have followed suit, that no longer resembles the socialist "Third Way" economy of the late 1970s.

Not just Sweden, but also Denmark, Finland and Norway are thriving, and it turns out its quirky mix of social democracy, communitarianism and advanced capitalism has produced the most socially mobile, consistently robust and fiscally sound nations in the world. While some of its old state champions have been sold — Saab to a Dutch firm, Volvo to China — new powerhouses like IKEA and H&M have mixed corporate responsibility with an intense focus on cost controls — and high profits.

Sweden’s banks, flat on their back in 1993, are now rated by the European Union’s chief banking regulator as the strongest on the continent.

While there are many lessons from Sweden’s experience applicable in the West, there also is an apples and oranges problem.

For one thing, Sweden is a relatively small economy at $500 billion in GDP, compared to the $15.7 trillion in US annual output. It’s also a much more homogeneous society. A recent spike in immigration from the Middle East and Eastern Europe notwithstanding, most Swedes are, well, Swedish.

The large influx of immigrants into the US that began in the late 1980s certainly did much to prevent fiscal problems; by raising the US birth rate, for instance, immigrants have prevented the current debate about Social Security from being a question of collapse and merely one of finding a way to make it more sustainable; and a few founded world-beating companies, like Russian immigrant Sergey Brin at Google or Taiwan-born Jerry Yang of Yahoo, adding billions to US GDP.

But immigration on such a scale attracts people at both the top and bottom of the skills pool, meaning that some will go on to found S&P 500 firms or win Nobel Prizes, while many other lag in educational achievement and earnings. Taken together, this phenomenon naturally pushes up inequality rankings.

Sweden also has handled the age of globalized finance very differently and indeed, it might be argued, a lot more intelligently.

Back in 1992, Sweden suffered its own real estate bubble-fueled banking crisis. Facing the same kind of domino-effect collapse on a smaller scale, Swedish regulators demanded banks write down losses, provide major relief to underwater homeowners and issue warrants — in effect, voting rights on their boards of directors — the government. Once the bad debts were sold back onto the market, Swedish taxpayers rather than bank shareholders were the primary beneficiaries, and taxpayers made more when the government exited from its stake in the banks later in the 1990s.

Reflecting on the Swedish crisis in 2008, as the US and UK were trying to structure their own bailouts, Urban Backstrom, a senior Swedish finance ministry official at the time, warned that a guiding principle was that the “public will not support a plan if you leave the former shareholders with anything.” By and large, the American version, TARP, left shareholders, including bank executives, completely intact — to this day a source of serious criticism of former US Treasury Secretary Tim Geithner and his team.

While the Swedish government insisted that banks pay a proper tab for their drinking binge, it simultaneously opened up other markets which had been over regulated, selling state shares in major enterprises, introducing school vouchers and private, rather than state-run pension programs. The country also broke the state’s hold on its central bank (with the US Federal Reserve as a model).

“These decisive economic liberalizations, and not socialism, are what laid the foundations for Sweden's success over the last 15 years,” says Jonny Munkhammar, a member of parliament for Sweden’s center-right Moderate Party who wrote a book about the Swedish reforms.

Could the United States emulate even some of this? The question is complex and shot through with the competing ideological dogmas that each party bring to the table. Indeed, it might be said that there is something from both sides to loathe in the modern Swedish model. For the American Left, the idea that market liberalization is a significant part of the Swedish story shatters a simplistic devotion to redistributive policy. For the American Right, Sweden’s heavy handed devotion to regulation and a top tax rate of 57 percent for multimillionaires would be a hard pill to swallow.

Then again, national insolvency and an ever rising gap between rich and poor in America are two nasty pills in their own right. The Swedish option is starting to look pretty good.

Continued in article

Jensen Comment
Sweden's tax rates cover expenditures for nationwide health care and education. If we added what Americans pay separately for health care and college education wouldn't our tax rate be higher than that of Sweden?

Comparing the U.S. and Sweden is complicated by differences in size, ethnicity, immigration (legal and illegal) and the massive drug underworld in the United States that is destroying the largest cities in the USA. Similarly Sweden did not choose to become the police force of the world.

Among the smart things Sweden did is resist becoming part of the disastrous Eurozone.

"KRUGMAN: Sweden Has The Answers To Our Taxation Problems," by Kamelia Angelova, Business Insider, February 12, 2013 ---
http://www.businessinsider.com/paul-krugman-on-taxes-2013-2 

The above link is a video of Paul Krugman being interviewed. He seems to be holding an earlier Sweden as having some type of taxation and welfare spending program that's an ideal without mentioning that the current Sweden and other Nordic nations are  trying to change all that by:

Either Professor Krugman is ignorant of the changes taking place in Sweden (which I doubt) or he's selectively trying to mislead his audience. He should be more careful in selectively choosing examples he promotes as ideals. This is not, in my viewpoint, the type of selectivity we want in our Academy.

 

Special Report in The Economist magazine that the liberal television stations and newspapers are keeping secret
"Northern lights:  The Nordic countries are reinventing their model of capitalism," by Adrian Wooldridge, The Economist, February 2, 2013, pp. 1-6 ---
http://www.economist.com/news/special-report/21570840-nordic-countries-are-reinventing-their-model-capitalism-says-adrian

THIRTY YEARS AGO Margaret Thatcher turned Britain into the world’s leading centre of “thinking the unthinkable”. Today that distinction has passed to Sweden. The streets of Stockholm are awash with the blood of sacred cows. The think-tanks are brimful of new ideas. The erstwhile champion of the “third way” is now pursuing a far more interesting brand of politics.

Sweden has reduced public spending as a proportion of GDP from 67% in 1993 to 49% today. It could soon have a smaller state than Britain. It has also cut the top marginal tax rate by 27 percentage points since 1983, to 57%, and scrapped a mare’s nest of taxes on property, gifts, wealth and inheritance. This year it is cutting the corporate-tax rate from 26.3% to 22%.

Sweden has also donned the golden straitjacket of fiscal orthodoxy with its pledge to produce a fiscal surplus over the economic cycle. Its public debt fell from 70% of GDP in 1993 to 37% in 2010, and its budget moved from an 11% deficit to a surplus of 0.3% over the same period. This allowed a country with a small, open economy to recover quickly from the financial storm of 2007-08. Sweden has also put its pension system on a sound foundation, replacing a defined-benefit system with a defined-contribution one and making automatic adjustments for longer life expectancy.

Most daringly, it has introduced a universal system of school vouchers and invited private schools to compete with public ones. Private companies also vie with each other to provide state-funded health services and care for the elderly. Anders Aslund, a Swedish economist who lives in America, hopes that Sweden is pioneering “a new conservative model”; Brian Palmer, an American anthropologist who lives in Sweden, worries that it is turning into “the United States of Swedeamerica”.

There can be no doubt that Sweden’s quiet revolution has brought about a dramatic change in its economic performance. The two decades from 1970 were a period of decline: the country was demoted from being the world’s fourth-richest in 1970 to 14th-richest in 1993, when the average Swede was poorer than the average Briton or Italian. The two decades from 1990 were a period of recovery: GDP growth between 1993 and 2010 averaged 2.7% a year and productivity 2.1% a year, compared with 1.9% and 1% respectively for the main 15 EU countries.

For most of the 20th century Sweden prided itself on offering what Marquis Childs called, in his 1936 book of that title, a “Middle Way” between capitalism and socialism. Global companies such as Volvo and Ericsson generated wealth while enlightened bureaucrats built the Folkhemmet or “People’s Home”. As the decades rolled by, the middle way veered left. The government kept growing: public spending as a share of GDP nearly doubled from 1960 to 1980 and peaked at 67% in 1993. Taxes kept rising. The Social Democrats (who ruled Sweden for 44 uninterrupted years from 1932 to 1976 and for 21 out of the 24 years from 1982 to 2006) kept squeezing business. “The era of neo-capitalism is drawing to an end,” said Olof Palme, the party’s leader, in 1974. “It is some kind of socialism that is the key to the future.”

The other Nordic countries have been moving in the same direction, if more slowly. Denmark has one of the most liberal labour markets in Europe. It also allows parents to send children to private schools at public expense and make up the difference in cost with their own money. Finland is harnessing the skills of venture capitalists and angel investors to promote innovation and entrepreneurship. Oil-rich Norway is a partial exception to this pattern, but even there the government is preparing for its post-oil future.

This is not to say that the Nordics are shredding their old model. They continue to pride themselves on the generosity of their welfare states. About 30% of their labour force works in the public sector, twice the average in the Organisation for Economic Development and Co-operation, a rich-country think-tank. They continue to believe in combining open economies with public investment in human capital. But the new Nordic model begins with the individual rather than the state. It begins with fiscal responsibility rather than pump-priming: all four Nordic countries have AAA ratings and debt loads significantly below the euro-zone average. It begins with choice and competition rather than paternalism and planning. The economic-freedom index of the Fraser Institute, a Canadian think-tank, shows Sweden and Finland catching up with the United States (see chart). The leftward lurch has been reversed: rather than extending the state into the market, the Nordics are extending the market into the state.

Why are the Nordic countries doing this? The obvious answer is that they have reached the limits of big government. “The welfare state we have is excellent in most ways,” says Gunnar Viby Mogensen, a Danish historian. “We only have this little problem. We can’t afford it.” The economic storms that shook all the Nordic countries in the early 1990s provided a foretaste of what would happen if they failed to get their affairs in order.

There are two less obvious reasons. The old Nordic model depended on the ability of a cadre of big companies to generate enough money to support the state, but these companies are being slimmed by global competition. The old model also depended on people’s willingness to accept direction from above, but Nordic populations are becoming more demanding.

Small is powerful

The Nordic countries have a collective population of only 26m. Finland is the only one of them that is a member of both the European Union and the euro area. Sweden is in the EU but outside the euro and has a freely floating currency. Denmark, too, is in the EU and outside the euro area but pegs its currency to the euro. Norway has remained outside the EU.

But there are compelling reasons for paying attention to these small countries on the edge of Europe. The first is that they have reached the future first. They are grappling with problems that other countries too will have to deal with in due course, such as what to do when you reach the limits of big government and how to organise society when almost all women work. And the Nordics are coming up with highly innovative solutions that reject the tired orthodoxies of left and right.

The second reason to pay attention is that the new Nordic model is proving strikingly successful. The Nordics dominate indices of competitiveness as well as of well-being. Their high scores in both types of league table mark a big change since the 1980s when welfare took precedence over competitiveness.

The Nordics do particularly well in two areas where competitiveness and welfare can reinforce each other most powerfully: innovation and social inclusion. BCG, as the Boston Consulting Group calls itself, gives all of them high scores on its e-intensity index, which measures the internet’s impact on business and society. Booz & Company, another consultancy, points out that big companies often test-market new products on Nordic consumers because of their willingness to try new things. The Nordic countries led the world in introducing the mobile network in the 1980s and the GSM standard in the 1990s. Today they are ahead in the transition to both e-government and the cashless economy. Locals boast that they pay their taxes by SMS. This correspondent gave up changing sterling into local currencies because everything from taxi rides to cups of coffee can be paid for by card.

The Nordics also have a strong record of drawing on the talents of their entire populations, with the possible exception of their immigrants. They have the world’s highest rates of social mobility: in a comparison of social mobility in eight advanced countries by Jo Blanden, Paul Gregg and Stephen Machin, of the London School of Economics, they occupied the first four places. America and Britain came last. The Nordics also have exceptionally high rates of female labour-force participation: in Denmark not far off as many women go out to work (72%) as men (79%).

Flies in the ointment

This special report will examine the way the Nordic governments are updating their version of capitalism to deal with a more difficult world. It will note that in doing so they have unleashed a huge amount of creativity and become world leaders in reform. Nordic entrepreneurs are feeling their oats in a way not seen since the early 20th century. Nordic writers and artists—and indeed Nordic chefs and game designers—are enjoying a creative renaissance.

The report will also add caveats. The growing diversity of Nordic societies is generating social tensions, most horrifically in Norway, where Anders Breivik killed 77 people in a racially motivated attack in 2011, but also on a more mundane level every day. Sweden is finding it particularly hard to integrate its large population of refugees.

The Nordic model is still a work in progress. The three forces that have obliged the Nordic countries to revamp it—limited resources, rampant globalisation and growing diversity—are gathering momentum

Continued in article

Note that on Page 5 there's also a section entitled "More for Less" devoted to Welfare Capitalism.

Jensen Comment
It appears that among the Nordics only Norway will continue to afford socialism, but this is because oil-rich Norway is a leading OPEC nation less concerned with the need for private sector growth.

There are of course serious obstacles to applying the new Nordic capitalism to the USA. Firstly, the USA is not bound by the Arctic Ocean on the north and the North Sea on the south that greatly discourages illegal immigration and narcotics. Secondly, the Nordic countries have difficult languages that are not studied to a significant degree in other nations. For example, I'm told that if you weren't raised in Finland you can never understand the language. Thirdly, there's no existing infrastructure to absorb and aid illegal immigrants in Scandinavia. Scandinavians like my grandparents, Ole, Sven, and Lena emigrated from these hard and cold countries rather than immigrating to these lands.

Scandinavians have avoided the crippling costs of building up powerful military forces and have not tried to become the police force of the world.

Scandinavians also avoided the horrors in importing millions of slaves and the centuries of social costs and degradations that followed. Nor did they have to go to war, to a serious degree, with indigenous peoples to take over the land by trickery and force.

February 13, 2013 reply from David Johnstone

Dear Bob, even if tax rates in Sweden have come down, the top marginal rates are still very high in Sweden relative to where they are now in the US (and once were in the US) and surely that makes a very big difference to taxes collected, socially and in other ways. I just watched a program on TV here, showing how previously comfortably albeit not extremely well-off off families in the US were living in cars and barely feeding/clothing/warming themselves, and I must say that this, like the frequency of gun ownership, seems like another planet and species to life in Australia. I have not tried to think it through, or read all the arguments, but it seems to me that people who want to get rich and create businesses and wealth will still have that drive even if at the top end they pay higher tax rates (as they used to in the US). Once these rates are set much lower and spoilt people get used to them and “believe” they are “right”, then it is very hard behaviourally to go back. Similarly with letting people own guns galore.

February 14, 2013 reply from Bob Jensen

Hi David,

It was Krugman's comparisons of the U.S. and Swedish tax rates that started this thread.

In reality it is very hard to compare many macroeconomic measures between nations because they often are not very comparable. Sweden's marginal tax rates are still relatively high because they include paying for nationalized health care and education, including college education. If we had the cost of our health care and education added to the U.S. tax revenues we would be closer to comparability. But there are other enormous problems. In the U.S. we must also add in state taxation to the Federal tax rates to make them more comparable to Sweden. In California, for example, the marginal Federal and State rates before health care costs to 50%,

At the same time, the U.S. tax rates are not comparable with Sweden because of all the tax preferences we build into the system such as tax exemptions of municipal bond interest and deductions medical expenses in excess of 7.5% of AGI, state taxes. mortgage interest, casualty losses, etc. These days there are also enormous credits reducing payments such as the earned income credit, energy credits, etc.

But if economists like Krugman still want to make these international tax rate comparisons in public interviews, I think that it is also important to discuss trends in those tax rates. The tax rates in Nordic countries have been coming down rather dramatically over the decades, and it's important to point this fact out and to examine the reasons why Nordic countries are reducing the size of their governments in favor o building up their private sectors.

Of course there are many other international measures that are not comparable such as unemployment rates, poverty rates (e.g., Gini coefficients), infant mortality, etc.

Even within a nation, statistics are often not comparable over time. For example, inflation rates in the USA used to factor in price changes in food and fuel. Now to make inflation look less severe, the U.S. government no longer includes fuel and food price changes in inflation rates. Dah!

Respectfully,
Bob Jensen

"The Nordic model for unemployment insurance," Sober Look, January 11, 2013 ---
http://soberlook.com/2013/01/the-nordic-model-for-unemployment.html 

Bob Jensen's comparisons of the American versus Denmark dreams ---
http://www.cs.trinity.edu/~rjensen/temp/SunsetHillHouse/SunsetHillHouse.htm

Bob Jensen's threads on why Vermont is trying to increase its unemployment rate ---
http://www.cs.trinity.edu/~rjensen/temp/Political/PoliticalQuotationsCommentaries.htm#VermontWelfare

Bob Jensen's threads on The American Dream are at
http://www.cs.trinity.edu/~rjensen/temp/SunsetHillHouse/SunsetHillHouse.htm

"Scientists are struggling to explain a slowdown in climate change that has exposed gaps in their understanding and defies a rise in global greenhouse gas emissions," Reuters, April 16, 2013 ---
http://www.reuters.com/article/2013/04/16/us-climate-slowdown-idUSBRE93F0AJ20130416

"Last Year’s U.S. Drought Wasn’t Caused by Climate Change: Those advocating limits on greenhouse gases can’t count on the weather to make their argument," by Kevin Bullis, MIT's Technology Review, April 12, 2013 --- Click Here
http://www.technologyreview.com/view/513646/last-years-us-drought-wasnt-caused-by-climate-change/?utm_campaign=newsletters&utm_source=newsletter-daily-all&utm_medium=email&utm_content=20130415

University of Illinois
5th consecutive week total sea ice has been above the average extent since measured.
See Graph ---
http://www.cs.trinity.edu/~rjensen/temp/GlobalSeaIce.jpg

Consensus Forecasting --- http://en.wikipedia.org/wiki/Consensus_forecasts

Consensus Forecasts (e.g., global warming) and Conspiracy Beliefs That Fall Along Party Lines ---
http://news.yahoo.com/faked-moon-landing-conspiracy-beliefs-fall-along-party-155031640.html

Yet on the subject closest to his heart – the state that he clearly adores – Brown has a singular focus. California, he says, is “in some ways a dream … it’s a civilisation, a culture, an exceptional place. I’m intentionally bringing to the public the idea of what California is, its history, its people, its character and what it can be.” He says he will be around “for a while” but having returned as Golden State governor for a second act it is unclear what he intends to do for an encore. Brown, I sense, will write his own finale. “I have no intention of walking off the stage here, now that I’m on it.”
Matthew Garrahan speaking of California's Governor Jerry Brown, Financial Times, April 5, 2013 ---
http://www.ft.com/cms/s/2/331e85b0-9cb1-11e2-9a4b-00144feabdc0.html#axzz2PmvrTFKV?src=longreads
Note that Brown speaks of retiring people at age 50 "who will live to be 100"

Joe Biden's 5 Most Comical – And Cringe-Worthy — Comments On Guns ---
http://www.businessinsider.com/bidens-5-most-comical-comments-on-guns-2013-4

 

Man Gets 7 Years for Stealing Obama's Teleprompter ---
http://www.nbcchicago.com/blogs/ward-room/obama-teleprompter-theft-sentencing-202640431.html

Andy Fastow, who stole $60 million was released after five years and three months ---
http://en.wikipedia.org/wiki/Andy_Fastow#Sentencing_and_incarceration
Most of his colleagues at Enron who also stole millions served less than three years

Soldier handed three-year sentence for raping recruit --- http://www.businessinsider.com/bidens-5-most-comical-comments-on-guns-2013-4

Maloney was released from prison last year after serving a three year sentence for raping an elderly woman ---
http://www.caribbeantrakker.com/2011/09/man-accused-of-raping-80-year-old-woman/#.UWhH1Njm8Sk

A Newfoundland man was given a three-year sentence for raping and sexually assaulting his 11-year-old niece --- Click Here

Conclusion
Stealing the President's teleprompter is about as bad as it gets this side of murder.

Bob Jensen's threads on how white collar crime pays even if you know you're going to get caught ---
http://www.trinity.edu/rjensen/FraudConclusion.htm#CrimePays

"It’s Time to Focus Attention on the Disability Program," by Daniel J. Mitchell, Townhall, April 13, 2013 --- Click Here
http://finance.townhall.com/columnists/danieljmitchell/2013/04/13/its-time-to-focus-attention-on-the-disability-progam-n1566408?utm_source=thdaily&utm_medium=email&utm_campaign=nl

The Bad News is That You Never Have to Get Off This Lifetime Welfare When You're No Longer Technically Eligible
And throw in Medicare as a fringe benefit
"Has disability become a 'de facto welfare program'?" By Barbara Raab, Senior Producer, NBC News, NBC News, March 28, 2013 ---
http://inplainsight.nbcnews.com/_news/2013/03/28/17459470-has-disability-become-a-de-facto-welfare-program?lite

When President Clinton signed "welfare reform" into law in 1996, he promised to end welfare as we know it. Now, some new reporting suggests we've created a new kind of welfare -- only most Americans aren't aware of it. 

The number of people who depend on checks from Social Security's disability programs has soared in recent years, according to NPR's series "Unfit for Work: the Startling Rise of Disability in America." The reports, which began over the weekend and continue this week, raise the question: How disabled are the recipients, really? As you might imagine, they have touched a nerve.

 

A quick primer: the Supplemental Security Income (SSI) program provides monthly cash assistance to people who are poor and disabled, including families with disabled children. The basic monthly SSI cash benefit is a set amount -- currently $710 for an individual and $1,066 for a couple. The Social Security Disability Insurance (SSDI) program also provides monthly cash assistance, to disabled people who have worked in jobs covered by Social Security.  People who leave the workforce and go on disability also qualify for Medicare. 

After six months of investigation, NPR reporter Chana Joffee-Walt concluded that Social Security's disability programs have become "a de facto welfare program for people without a lot of education or job skills." In the past three decades, she reports, the number of Americans who are on disability has skyrocketed:

Every month, 14 million people now get a disability check from the government.

The federal government spends more money each year on cash payments for disabled former workers than it spends on food stamps and welfare combined. [...]

[And] story of these programs -- who goes on them, and why, and what happens after that -- is, to a large extent, the story of the U.S. economy. It's the story not only of an aging workforce, but also of a hidden, increasingly expensive safety net.

Joffee-Walt's report takes listeners to Hale County, Ala., where one in four working-age adults is on disability, a local doctor is the go-to-guy for people in pain, and on "the day government checks come in every month, banks stay open late, Main Street fills up with cars, and anybody looking to unload an old TV or armchair has a yard sale" because people are relatively flush with cash.

She takes us inside "the disability industrial complex," including one of the private call centers that states pay to scrutinize their welfare rolls, contact as many people as possible who might qualify for federal disability payments, and move them off the state's rolls and into the federal disability system. 

The PCG [Public Consulting Group] agents help the potentially disabled fill out the Social Security disability application over the phone. And by help, I mean the agents actually do the filling out. When the potentially disabled don't have the right medical documentation to prove a disability, the agents at PCG help them get it. They call doctors' offices; they get records faxed. If the right medical records do not exist, PCG sets up doctors' appointments and calls applicants the day before to remind them of those appointments.

Joffee-Walt also reports on the 1.3 million kids on SSI, and says that some parents in Hale County told her they want kids who can "pull a check" so the family gets extra income. She suggests that some families who are surviving on that check may be holding their kids back from overcoming disabilities because they don't want to lose the money. 

Critics call the report riddled with factual errors, devoid of context and "ill-informed". NPR's This American Life says it stands by its story.

The essence of the backlash is this: While critics admit the NPR report raises worthwhile questions, they say it does so in a sensational manner, traffics in inaccuracies and myths about Social Security's disability programs, and fails to tell the story about the millions of people these disability programs help. Here's how one critical analysis puts it:

The piece ignored that the recent rise in disability benefits is tied to the recession and higher rates of poverty, that qualifying for benefits is difficult, that SSI encourages employment, and that the current program has significantly reduced poverty among children with disabilities.

Listen to the report, read the criticisms, tell us your thoughts and personal experiences with the Social Security disability programs.

Bob Jensen's threads on the rankings of the top states where welfare draws in more residents that workers are at
http://www.cs.trinity.edu/~rjensen/temp/Political/PoliticalQuotationsCommentaries.htm#Vermont

 

Hi again Scott,

This is off topic for the AECM, but I wonder if this is already being studied?

It might be interesting after 2016 to compare the drastically different leadership styles of liberal President Johnson versus liberal President Obama.

Johnson was, in my viewpoint, a lousy public speaker. However, when pushing his "Great Society" agenda he got down and dirty with virtually every senator and representative. If Congressman X from Iowa wanted something for his/her constituency Johnson traded votes. He spent hours in private conversations one-on-one with legislators. Purportedly, he was sometimes on the toilet with the door open while having some conversations. Many people, especially academics, despise this type of back room deal making. But it got the job done, and we've got the Civil Rights Act, the Voting Rights Act, and other social and education programs in place because of the way President Johnson made back room deals. Johnson did not get all of what he wanted but he got a lot of what he wanted.

After the Great Society legislation, for the first time a person who was not elderly or disabled could receive need-based aid from the U.S. government

President Obama is a great public speaker who prefers to bring megaphone pressures to bear on legislators by speaking to their constituencies, on their own turfs, that elected these legislators to Congress. Many people, especially academics, prefer this open air form of politics. But it has it's drawbacks since many proud legislators don't like this end run type of pressure where they are sometimes forced to give in while getting nothing in return.

For example, in spite of all the speeches and grandstanding by our President who wants assault rifle ban legislation he will probably have limited or no success. President Johnson probably would only have made a few speeches about this legislation, but he would invite the Midwest senators and representatives into a back room where he would say:

"If you want to increase the corn ethanol content of every gallon of gasoline to go from 10% to 15%, then give me what I want on banning assault rifles, immigration reform, and a $22 minimum wage."

When the Great Scorer comes to write against their names, the score probably will be less for Obama than Johnson because, in the political arena, President Johnson played down and dirty and perhaps got more things done except when it came to winning the war in Viet Nam (his curse).

I'm not saying that playing down and dirty is the best way or the most ethical way to get things done in Washington DC, but it probably is the only way to get something done when our legislators are totally gridlocked.

I don't think the megaphone works very well with gridlock even if the megaphone has a teleprompter.

Like it or not, just to get what he wanted President Johnson probably would not give a damn about his approval ratings or what was being preached on Fox News and MSNBC. He'd be spending less time on Air Force One and more time bargaining one-on-one while on the can in Washington DC or on his ranch in Texas where he arm twisted strategic guests.

Respectfully,
Bob Jensen

Scott also wrote:

A site that analyzes government information - some free subscriptions, also paid subscriptions for detailed analysis.

http://trac.syr.edu/

"Japan's Stimulus Generates Ripples," by Ira Josefbashvill, Jessica Mead, and Neelabh Chaturvedi, The Wall Street Journal, April 8, 2013 ---
http://online.wsj.com/article/SB10001424127887324050304578410722869665256.html

The Japanese yen slid to its lowest level since April 2009, reeling from the stimulus measures unleashed by the country's central bank.

Global investors have been storming out of the yen for months in anticipation of last week's move by the Bank of Japan, 8301.JA -5.21% bringing the currency's decline to 29% against the dollar since late September.

Now, another pressure point for the yen is emerging: Some Japanese investors are retreating from the yen-denominated domestic government-bond market, the main target of the Bank of Japan's expanded asset-purchase program, to snatch up higher yields elsewhere. Many investors and analysts expect that selling to contribute to a further weakening of the yen. Investors often equate monetary easing with a weaker currency, in part because lower rates make a currency less attractive to hold.

Late Monday in New York, one dollar bought ¥99.37, compared with ¥97.55 late Friday.

Japanese investors are pouring money into the market for European sovereign debt, these investors and analysts said, sending yields on some countries' bonds to record lows. Despite the recent turmoil in European bonds, Japan's investors are attracted to the market's large size and the relatively stability of the euro.

"It's evident that Japanese flow into foreign fixed income has picked up" since the Bank of Japan's decision on Thursday, said Jens Nordvig, head of major-currency strategy in New York for Nomura Securities. Mr. Nordvig said recent transactions made by Nomura's big Japanese clients show an increase.

"This is a historical shift that investors are trying to position themselves for," Mr. Nordvig said.

Financial markets around the world have begun to experience the ripple effects from the Bank of Japan's stimulus.

Some analysts and traders said the Bank of Japan's actions could cause a recalibration of markets world-wide. Large outflows from Japan into other markets could boost prices of some assets, lowering yields. Other investors, then, could be forced to look further afield for outsize returns.

Market watchers are comparing the phenomenon with the "wall of money" the Federal Reserve put up in 2008 when it launched its own stimulus program. Like the Fed, the Bank of Japan is aiming to lower long-term interest rates to encourage investment and consumption. But the Bank of Japan's main goal is to combat deflation, which has had Japan's economy in a chokehold for 15 years.

To be sure, some investors are skeptical the Bank of Japan is solely responsible for the recent moves in currency and bond markets. The disappointing U.S. jobs data offered reassurance that the Federal Reserve wasn't likely to dial back its own stimulus measures soon, giving investors confidence to dive into riskier assets.

Gavin Redknap, an emerging-markets currency strategist at Nikko Asset Management in London, thinks the impact of the Bank of Japan has been marginal. "It's too early to say that Japanese flows would shift these currencies. These things should be measured in terms of years, not weeks," he said.

Still, Europe's sovereign-debt markets have been one of the most prominent beneficiaries of investors' search for relatively high-yielding assets in a more stable currency than the yen.

Over the past two trading days, France, the Netherlands, Austria and Belgium saw their borrowing costs, as indicated by 10-year bond yields, fall to record lows.

Continued in article

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

I wonder if this financial fraud will ever be reported in our liberal media?  I doubt it.
"A Socialist Lawmaker's Fiscal Double Life," by Rachel Marsden, Townhall, April 9, 2013 ---
http://townhall.com/columnists/rachelmarsden/2013/04/09/a-socialist-lawmakers-fiscal-double-life-n1562588?utm_source=thdaily&utm_medium=email&utm_campaign=nl

PARIS -- The left revels in sex scandals involving preachy conservative moralists, but when members of the left get caught up in seedy financial scandals, so perverted and twisted is their relationship with money that the effect can be equally jaw-dropping and salacious.

Former French Budget Minister Jerome Cahuzac, who left his Socialist government post earlier this year amid allegations of a secret Swiss bank account, now faces a formal investigation for allegedly laundering the proceeds of tax evasion.

This would be less of a big deal if Cahuzac himself hadn't been one of the loudest supporters of French President Francois Hollande's plan to tax income above 1 million euros at a 75 percent rate. After the French Constitutional Council rejected the proposed measure in December as being unconstitutional, Cahuzac proclaimed to the media that it would be reworked and back on the table by fall. "That measure had the objective of encouraging a bit of prudence and decency in a certain, very rare, number of leaders," Cahuzac said.

Speaking of fall, could there have been a better setup for one? Cahuzac's biggest problem is that he tried to shoehorn himself into a socialist ideology with which his own life path was destined to come into conflict. His talents -- he was previously a cardiologist, then a plastic surgeon and hair-transplant specialist -- made him well-off. Why shouldn't he have been entitled to keep his earnings? Instead, Cahuzac decided to adopt the Socialist label that inherently stands for the notion that your own talent-driven wealth isn't yours to keep, but rather everyone else's to share regardless of merit. At some point, Cahuzac must have felt that he was getting a raw deal.

It's not difficult to understand the appeal of sending your hard-earned cash on a vacation to a place where it won't be put upon by oppressive taxation -- particularly when you're in France. You just have to look around to see all the ways in which the state can fritter away your earnings -- from propping up a bloated government bureaucracy and political class to paying universal health care for far too many chain smokers and unproductive beneficiaries of state generosity.

But rather than announce that he'd had an epiphany and had decided to leave the Socialist Party for the more free-market-friendly alternative, Cahuzac apparently decided to lead a fiscal double life. Worse, as budget minister, he spoke out in favor of increased wealth confiscation of productive citizens like himself.

Continued in article

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

Even China, with its seemingly endless government budgets is still implementing fossil fuels because it’s cheap and high-performing.
"Renewables Can’t Keep Up with the Growth in Coal Use Worldwide:  An International Energy Agency report calls for more research, carbon price, to help renewables compete," by Kevin Bullis, MIT's Technology Review, April 17, 2013 --- Click Here
http://www.technologyreview.com/news/513821/renewables-cant-keep-up-with-the-growth-in-coal-use-worldwide/?utm_campaign=newsletters&utm_source=newsletter-daily-all&utm_medium=email&utm_content=20130418

. . .

Renewable energy can’t keep up with coal, let alone decrease its use. From 2001 to 2010, the amount of electricity generated with coal increased by 2,700 terawatt hours. Over the same period, electricity from non-fossil sources—including wind, solar, biomass, hydropower, and nuclear—increased by less than half that amount: or 1,300 terawatt hours.

Worldwide, more coal power is being installed because it’s inexpensive, reliable, and easy to incorporate into the grid. Before countries decide to stop building new coal plants, wind and solar and other low-carbon alternatives need to get cheaper, says Matthew Stepp, a senior analyst at the Information Technology and Innovation Foundation.

Continued in article

Jensen Comment
In the U.S., as opposed to the world in general, natural gas is displacing coal plants. However, the positive impact on greenhouse gasses is dwarfed by greenhouse gases spewing forth in other parts of the world.

Walter E. Williams --- http://en.wikipedia.org/wiki/Walter_E._Williams

"Black Unemployment," by Walter E. Williams, Townhall, April 10, 2013 ---
http://townhall.com/columnists/walterewilliams/2013/04/10/black-unemployment-n1561096?utm_source=thdaily&utm_medium=email&utm_campaign=nl

A couple of weeks ago, Black Entertainment Television founder Bob Johnson, speaking at The National Press Club, said the nation "would never tolerate white unemployment at 14 and 15 percent." Black unemployment has been double that of white Americans for more than 50 years. The black youth unemployment rate is more than 40 percent nationally. In some cities, unemployment for black working-age males is more than 50 percent. Let's look at this, but first let's look at some history.

From 1900 to 1954, blacks were more active than whites in the labor market. Until about 1960, black male labor force participation in every age group was equal to or greater than that of whites. During that period, black teen unemployment was roughly equal to or less than white teen unemployment. As early as 1900, the duration of black unemployment was 15 percent shorter than that of whites; today it's about 30 percent longer. To do something about today's employment picture requires abandonment of sacred cows and honesty.

The typical answer given for many black problems is racial discrimination. No one argues that every vestige of racial discrimination has been eliminated. But the relevant question is: How much of what we see can be explained by discrimination? I doubt whether anyone would argue that the reason for lower unemployment, higher labor force participation and shorter duration of unemployment among blacks in the first half of the 20th century was that there was less racial discrimination. I also doubt whether anyone would argue that during earlier periods, blacks had higher education and greater skills attainment than whites. Answers must be sought elsewhere.

I was a teenager during the late 1940s, living in North Philadelphia's Richard Allen housing project. Youngsters in my neighborhood who sought after-school, weekend or summer jobs found them. I picked blueberries in New Jersey, caddied at Cobbs Creek Golf Club, shoveled snow for the Philadelphia Transportation Co., delivered packages for a milliner, performed janitorial work at Horn & Hardart restaurant, and huckstered fruits and vegetables. As a high-school student, Christmas employment for me included after-school and weekend work at Sears, Roebuck and Co.'s mail-order house, and one year, I delivered mail for the U.S. Post Office.

Such opportunities for early work experiences are all but gone for today's teens living in Richard Allen homes. A major reason is the minimum wage law, which makes hiring low-skilled workers a losing economic proposition. In 1950, only 50 percent of jobs were covered by the minimum wage law. That meant the minimum wage didn't have today's unemployment effect. Today nearly 100 percent are covered. Today's child labor laws prevent youngsters from working in perfectly safe environments. The minimum wage has destroyed many jobs. That's why, for example, in contrast with the past, today's gasoline stations are self-service and theater ushers are nonexistent.

Then there are super-minimum wage laws, such as the Davis-Bacon Act, which were written for the express purposes of excluding blacks from government-financed or -assisted construction projects. Labor unions have a long history of discrimination against blacks. Frederick Douglass wrote about this in "The Tyranny, Folly, and Wickedness of Labor Unions," and Booker T. Washington did so in "The Negro and the Labor Unions." To the detriment of their constituents, black politicians give support to labor laws pushed by unions and white liberal organizations.

Continued in article

The 40th President of the United States (Richard Prior) --- http://www.youtube.com/watch_popup?v=-_cdbByTeNE

Made in the USA:  Renaissance in US Manufacturing (But Not Jobs So Much)
From the Barry Ritholtz Blog on April 12, 2013
http://www.ritholtz.com/blog/2013/04/manufacturing-returns-to-usa/

Fascinating cover story in Time magazine about the renaissance in US Manufacturing.

What is so interesting about this is while new businesses are being created, the amount and kinds of jobs that go with this are very different than what the manufacturing sector produced in the past.

Some takeaways from the article:

• Post-recession, U.S. manufacturing growth is outpacing other advanced nations;

• 500,000 manufacturing jobs created in the USA over the past three years;

• U.S. factories access to cheap energy, (oil and gas from the shale boom) means cheaper costs versus expensive overseas Oil and costly shipping prices.

• Energy- and resource-intensive industries (chemicals, wood products, heavy machinery and appliances) do better, powered by that cheaper homegrown energy.

• New made-in-America economics is centered largely on cutting-edge technologies (3D printing, specialized metals, robotics and bioengineering);

• New US factories are “superautomated” and heavily roboticized;

• Employees typically are required to have computer skills and specialized training; Minimum of two-year tech degree, which is likely to rise to four-year degree (eventually);

More machines and fewer workers is the future of manufacturing in the USA. But looking only at factories misses some of the new jobs that are related to these industries. Many of the jobs created are outside the factory floors — R&D, support services, software engineers, data scientists, user-experience designers, transportation & shipping, etc.

Perhaps this helps to explain why every $1 of manufacturing activity returns $1.48 to the economy.

Here is an excerpt:

“Today’s U.S. factories aren’t the noisy places where your grandfather knocked in four bolts a minute for eight hours a day. Dungarees and lunch pails are out; computer skills and specialized training are in, since the new made-in-America economics is centered largely on cutting-edge technologies. The trick for U.S. companies is to develop new manufacturing techniques ahead of global competitors and then use them to produce goods more efficiently on superautomated factory floors. These factories of the future have more machines and fewer workers—and those workers must be able to master the machines. Many new manufacturing jobs require at least a two-year tech degree to complement artisan skills such as welding and milling. The bar will only get higher. Some experts believe it won’t be too long before employers expect a four-year degree—a job qualification that will eventually be required in many other places around the world too.

Understanding this new look is critical if the U.S. wants to nurture manufacturing and grow jobs. There are implications for educators (who must ensure that future workers have the right skills) as well as policy­makers (who may have to set new educational standards). “Manufacturing is coming back, but it’s evolving into a very different type of animal than the one most people recognize today,” says James Manyika, a director at McKinsey Global Institute who specializes in global high tech. “We’re going to see new jobs, but nowhere near the number some people expect, especially in the short term.”

If the U.S. can get this right, though, the payoff will be tremendous. Labor statistics actually shortchange the importance of manufacturing because they mainly count jobs inside factories, and related positions in, say, Ford’s marketing department or at small businesses doing industrial design or creating software for big exporters don’t get tallied. Yet those jobs wouldn’t exist but for the big factories. The official figure for U.S. manufacturing employment, 9%, belies the importance of the sector for the overall economy. Manufacturing represents a whopping 67% of private-sector R&D spending as well as 30% of the country’s productivity growth. Every $1 of manufacturing activity returns $1.48 to the economy. “The ability to make things is fundamental to the ability to innovate things over the long term,” says Willy Shih, a Harvard Business School professor and co-author of Producing Prosperity: Why America Needs a Manufacturing Renaissance. “When you give up making products, you lose a lot of the added value.” In other words, what you make makes you.”

The full article is well worth your time to read . . . ---
Source:
Made in the USA --- http://www.time.com/time/magazine/article/0,9171,2140793,00.html
Rana Foroohar and Bill Saporito
Time, April 2013   
http://business.time.com/2013/04/11/how-made-in-the-usa-is-making-a-comeback/

Robotics Displacing Labor Even in Higher Education
"The New Industrial Revolution," by Jeffrey R. Young, Chronicle of Higher Education's Chronicle Review, March  25, 2013 ---
http://chronicle.com/article/The-New-Industrial-Revolution/138015/?cid=cr&utm_source=cr&utm_medium=en

"Rethink Robotics invented a $22,000 humanoid (i.e. trainable) robot that competes with low-wage workers," by Antonio Regalado, MIT's Technology Review, January 16, 2013 --- Click Here
http://www.technologyreview.com/news/509296/small-factories-give-baxter-the-robot-a-cautious-once-over/?utm_campaign=newsletters&utm_source=newsletter-daily-all&utm_medium=email&utm_content=20130116

"Rise of the Robots," by Paul Krugman, The New York Times, December 8, 2012 ---
http://krugman.blogs.nytimes.com/2012/12/08/rise-of-the-robots/

Catherine Rampell and Nick Wingfield write about the growing evidence for “reshoring” of manufacturing to the United States. They cite several reasons: rising wages in Asia; lower energy costs here; higher transportation costs. In a followup piece, however, Rampell cites another factor: robots.

The most valuable part of each computer, a motherboard loaded with microprocessors and memory, is already largely made with robots, according to my colleague Quentin Hardy. People do things like fitting in batteries and snapping on screens.

As more robots are built, largely by other robots, “assembly can be done here as well as anywhere else,” said Rob Enderle, an analyst based in San Jose, Calif., who has been following the computer electronics industry for a quarter-century. “That will replace most of the workers, though you will need a few people to manage the robots.”

Robots mean that labor costs don’t matter much, so you might as well locate in advanced countries with large markets and good infrastructure (which may soon not include us, but that’s another issue). On the other hand, it’s not good news for workers!

This is an old concern in economics; it’s “capital-biased technological change”, which tends to shift the distribution of income away from workers to the owners of capital.

Twenty years ago, when I was writing about globalization and inequality, capital bias didn’t look like a big issue; the major changes in income distribution had been among workers (when you include hedge fund managers and CEOs among the workers), rather than between labor and capital. So the academic literature focused almost exclusively on “skill bias”, supposedly explaining the rising college premium.

But the college premium hasn’t risen for a while. What has happened, on the other hand, is a notable shift in income away from labor:.

"Harley Goes Lean to Build Hogs," by James R. Hagerty, The Wall Street Journal, September 22, 2012 ---
http://professional.wsj.com/article/SB10000872396390443720204578004164199848452.html?mod=djem_jiewr_AC_domainid&mg=reno64-wsj

If the global economy slips into a deep slump, American manufacturers including motorcycle maker Harley-Davidson Inc. that have embraced flexible production face less risk of veering into a ditch.

Until recently, the company's sprawling factory here had a lack of automation that made it an industrial museum. Now, production that once was scattered among 41 buildings is consolidated into one brightly lighted facility where robots do more heavy lifting. The number of hourly workers, about 1,000, is half the level of three years ago and more than 100 of those workers are "casual" employees who come and go as needed.

All the jobs are not going to Asia, They're going to Hal --- http://en.wikipedia.org/wiki/2001_Space_Oddessey
"When Machines Do Your Job: Researcher Andrew McAfee says advances in computing and artificial intelligence could create a more unequal society," by Antonio Regalado, MIT's Technology Review, July 11, 2012 ---
http://www.technologyreview.com/news/428429/when-machines-do-your-job/

"Raytheon's Missiles Are Now Made by Robots," by Ashlee Vance, Bloomberg Business Week, December 11, 2012 ---
http://www.businessweek.com/articles/2012-12-11/raytheons-missiles-now-made-by-robots

A World Without Work," by Dana Rousmaniere, Harvard Business Review Blog, January 27, 2013 --- Click Here
http://blogs.hbr.org/morning-advantage/2013/01/morning-advantage-a-world-with.html?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date

Walter E. Williams --- http://en.wikipedia.org/wiki/Walter_E._Williams
"Black Unemployment," by Walter E. Williams, Townhall, April 10, 2013 ---
http://townhall.com/columnists/walterewilliams/2013/04/10/black-unemployment-n1561096?utm_source=thdaily&utm_medium=email&utm_campaign=nl

From CFO.com Morning Ledger on April 11, 2013

President Obama is pushing to revamp the tax code as part of the budget proposal he rolled out yesterday. The overall plan aims to curb the growth of Social Security and Medicare and calls for about $1 trillion in tax increases over 10 years, along with higher spending on programs like education and transportation, the WSJ notes. But it also takes aim at the corporate tax burden. For the first time, the president proposes segregating a set of revenue-raising provisions that could be used to lower the corporate tax rate, writes the Journal’s John D. McKinnon. The provisions, which Bloomberg says would be funded largely with tax increases on U.S. companies' foreign earnings, would generate about $100 billion over 10 years, enough to lower the corporate rate by about one percentage point — not the seven points sought by Obama or the 10 favored by House Republicans.

“This is a significant movement in the way they’re framing it,” said Drew Lyon, an economist in the tax-policy group at PricewaterhouseCoopers. “It really allows a discussion on corporate reform to move forward.” Still, Republican leaders and business groups like the U.S. Chamber of Commerce and the Business Roundtable panned the plan, especially the proposed tax hikes.

Getting any of this through Congress will be an uphill battle. A senior administration official told McKinnon that an overhaul of the corporate tax code is hard to do without considering the individual income tax code, and an overhaul of the individual tax code is tough to contemplate except as part of a broader deficit deal. But the president dug in his heels on further compromise on his part, warning that the budget represents his bottom-line offer. Any deal, he said, must not only replace the sequester cuts, but also raise revenue from “the wealthiest individuals and biggest corporations,” the Washington Post notes.

The Treasury Department released the 256-page Green Book ---
http://www.treasury.gov/resource-center/tax-policy/Documents/General-Explanations-FY2014.pdf
Thank you Paul Caron for the summary

President's 2013 Proposed Budget:

 

Jensen Comment
Instead of going down and dirty back room dealings with Congress, President Obama tends fly back and forth across the nation with his teleprompter. This might work for some gun control legislation that voters understand. It won't work for tax reforms that are too complicated to explain to most voters. Remember that among the 62 million voters who voted President Obama back into office in 2012 ware 48 million food stamp recipients who probably do not have a clue about corporate taxation.

Question
Do accounting professors know more about inflation index calculations than the voting public?

First note that in order to be deceptive the government took food and fuel out of the inflation index so that price changes for retired people that buy food and fuel are deceived by why their so-called Social Security adjustments are much less than if food and fuel price changes were factored into their inflation adjustments.

Here we go again with another round of deception.

 "The Obama Price Index ," The Wall Street Journal, April 10, 2013 ---
http://online.wsj.com/article/SB10001424127887324695104578414891693238684.html?mod=djemEditorialPage_h 

President Obama is said to be trying to lure Republicans into another grand bargain by including a proposal in his 2014 budget that would slightly slow the growth of Social Security and other federal benefits. But he's also telling the Democrats going bonkers about slashing Social Security not to worry, the cuts aren't drastic and barely noticeable.

It's the Schrödinger's cat of entitlement reform. Both his political postures can't be true at once, and no points awarded for guessing what the details reveal.

Mr. Obama is proposing that Congress replace the conventional consumer price index with a more accurate measure of inflation known as "chain-weighted CPI," or chain CPI. This alternative measure of purchasing power takes into account how consumers change their buying habits over time as prices change. When oranges cost more, for example, people buy fewer oranges and eat more apples instead.

If such "substitution effects" don't sound like much of a concession to Republicans or much for Democrats to get mad about, well, chain CPI is one of those Beltway specials—a proposal everyone can support because it gouges both sides.

Over the last decade or so, chain CPI has grown about a quarter of a percentage point slower than the normal index. Plugging the new measure into the Social Security formula means that the program's cost of living adjustments wouldn't increase as fast. The same applies to other federal assistance programs like food stamps, federal pensions and refundable tax credits. In total, chain CPI would reduce federal spending by $216 billion over 10 years, according to the Congressional Budget Office. Chain CPI would also raise $123 billion in new revenue, because the annual income amounts for the tax brackets would rise more slowly as well.

Chain CPI is a useful technocratic correction. The Social Security formula wasn't written with a finger of light on stone tablets, and in any case who's in favor of inaccurately measuring inflation?

Well, it seems Mr. Obama is. It turns out that his budget doesn't accept chain CPI for everyone. Instead it modifies the modification of inflation with (still undefined) "protections for the very elderly and others who rely on Social Security for long periods of time, and only applies the change to non-means-tested benefit programs." His version reduces the deficit $230 billion—$100 billion of it tax increases—not CBO's $339 billion.

So Mr. Obama's olive branch would accurately measure inflation for some people, but then continue to inaccurately measure inflation for the people he thinks are more deserving of larger government transfers. These exceptions are meant to placate the liberals who want to expand Social Security, but means-testing chain CPI defeats the alleged purpose of the change. Why not just go all the way and invent a new measure called Obama CPI?

Governmental accounting in general is all done with smoke and mirrors ---
http://www.trinity.edu/rjensen/Theory02.htm#GovernmentalAccounting

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

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

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

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

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

"A Different Ann Coulter Debate," by Scott Jaschik, Inside Higher Ed, November 12, 2012 ---
http://www.insidehighered.com/news/2012/11/12/fordham-declines-ban-ann-coulter-her-invitation-rescinded

96% of the faculty and staff at Ivy League colleges that contributed to the 2012 presidential race donated to President Obama's campaign, reveals a Campus Reform investigation compiled using numbers released by the Federal Election Commission (FEC). From the eight elite schools, $1,211,267 was contributed to the Obama campaign, compared to the $114,166 given to Romney. The highest percentage of Obama donors came from Brown University and Princeton, with 99 percent of donations from faculty and staff going towards his campaign.
Oliver Darcey, November 24, 2012 --- http://www.campusreform.org/blog/?ID=4511

"Moving Further to the Left," by Scott Jaschik, Inside Higher Ed, October 24, 2012 ---
http://www.insidehighered.com/news/2012/10/24/survey-finds-professors-already-liberal-have-moved-further-left

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


 

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


 

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

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


 

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


 

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


 

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


 

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


 

Professors' Political Identification, 2010-11, by Sector

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


 

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


 

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


 

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

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


 

So what do these data mean?


 

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

Continued in article

"Noam Chomsky Spells Out the Purpose of Education," by Josh Jones, Open Culture, November 2012 ---
http://www.openculture.com/2012/11/noam_chomsky_spells_out_the_purpose_of_education.html

Review of the Book:  Are Professors Liberal and Why Do Conservatives Care?
"Self-Fulfilling Professorial Politics," by Scott Jaschik, Inside Higher Education, April 9, 2013 ---
http://www.insidehighered.com/news/2013/04/09/new-book-explores-professors-politics-and-debates-about-those-politics

Conspiracy theories abound when it comes to professors and politics. To hear some conservatives tell it, a liberal-dominated professoriate attempts to brainwash students and to keep out of the faculty club any who challenge leftist orthodoxy. Ph.D. programs in the humanities teach some sort of secret handshake that lets those with politically correct views land the best jobs. To hear some liberals talk about it, there is no such thing as a liberal professoriate. Rather, a well-financed group of conservatives and their foundations use the politics issue to trash higher education. If there aren't more conservative professors around, it's because those on the right prefer the world of money to the world of ideas, and flock to Wall Street.

Neil Gross will disappoint most of the conspiracy theorists with his new book, Why Are Professors Liberal and Why Do Conservatives Care?, which is being released today by Harvard University Press.

Gross has spent years conducting research -- large-scale national surveys and smaller experiments and focus groups -- on professorial politics. And the book combines many of his studies, interviews with players in the debate, and a mix of history and sociology.

From the part of the book title that asks "why are professors liberal," it's clear that Gross has no problem saying that faculty members are in fact, on average, to the left of most other Americans. The degree to which this is true may differ by institution and discipline, and there are of course plenty of exceptions. But Gross cites his own past research to show that professors do indeed lean to the left. But that same research shows that most faculty members are not as radical as many believe and that there is a large center-left following in the academy.

Gross himself fits into that group. A professor of sociology at the University of British Columbia, he notes that he is an American expat and a Democrat. He writes that he has "very liberal social attitudes and more center-left views when it comes to issues like government regulation of the market and criminal justice policy." He writes that he tried not to let his politics influence his research or the writing here -- and the tone of the book, even when criticizing various ideas, is not dogmatic or partisan. (In a sign that he succeeded, The Weekly Standard published a generally positive review of the book by Mark Bauerlein, an Emory University professor who has written critically about ideological trends in academe.)

But while Gross doesn't view it as a particularly difficult question to determine whether professors are disproportionately liberal, he acknowledges the difficulty of explaining why, and he reviews various approaches to answering the question. He cites a series of studies he has done that suggest a self-selection at play in explaining why liberals are more likely than conservatives to gravitate toward Ph.D. programs that will lead to the professoriate. (Some of his past work that relates to this theme may be found here and here.)

And one way Gross backs up his theory of self-selection is by analyzing the potential for discrimination in graduate programs. With colleagues, he conducted an "audit" of graduate programs, sending off e-mails to graduate directors of programs in a variety of disciplines, posing as undergraduates looking for the right place to apply. The messages were similar in describing academic backgrounds, but some mentioned nothing about politics, while others briefly mentioned past experience working for either the Obama or McCain campaigns. (This project was done following the 2008 presidential election.) The idea was to test whether students might receive more or less encouragement based on their politics -- and no bias was found.

While some of the book explains and analyzes these findings, Gross also considers why the idea of a liberal professoriate is so powerful with some conservatives. He includes history of the William F. Buckley critique of professors as liberal and anti-religion, and notes that much of the frustration has come from people who care about ideas and who (in the case of Buckley and some of the National Review crowd) can hardly have been called populists.

But he also notes the strong resonance for many in the general public with the idea of professors as elite, liberal and disconnected. While he reviews the extent to which conservative foundations have funded organizations that have made a big deal out of professorial politics, he suggests that the views of many people about academics operate independently of anything David Horowitz said or did.

In an interview, Gross discussed why he sees it as crucial for academe to have a better handle on issues of faculty politics -- and it's not because it answers critics who say that academe imposes an ideological litmus test on professors. Rather, he thinks the findings pose challenges for those across the ideological spectrum.

For those who are conservative, and profess to care about a partisan imbalance in academe, Gross said, there is the question of whether their own statements are discouraging young conservatives from going to graduate school to prepare to become professors. The conservative undergraduate who reads about alleged liberal academic outrages all the time may simply come to view academe as a less-than-hospitable employer -- even if that's not necessarily the case.

But cutting back on the rhetoric may be easier said than done. "Among some conservatives, opposition to the liberal professoriate has become part of the identity, part of what it means to be a conservative," he said.

Perhaps, he said, now could be a time for such a re-evaluation. After all, some Republican leaders are arguing in the wake of President Obama's re-election that the party has been hurt by its image of being intolerant of immigrants and various other groups. "Higher ed is no less of a high-profile issue than immigration," Gross noted, and many Republicans have expressed concerns about voting trends (away from the party) by young voters. If conservatives were to tone down rhetoric about higher education, he said, they might see more people they agree with try to become professors.

Gross acknowledged seeing no signs to date that the conservatives are moving in this direction.

Continued in article

 

"Professor Calls Republicans Stupid & Racist," by Ted Starnes, Townhall, April 11, 2013 ---
http://townhall.com/columnists/toddstarnes/2013/04/11/professor-calls-republicans-stupid--racist-n1564681

For two years the University of Southern California student had listened to the classroom ranting of liberal professors. So it wasn’t much of a surprise when Darry Sragow, his political science professor, launched into an anti-Republican tirade on the first day of class.

“I knew that this was going to be a professor that was very left-wing, very biased,” Talgo told Fox News. “I knew this would be one of those classes where the professor would be biased all the time.”

So Talgo decided to fight back.

“As soon as I got back to my dorm, I decided to video his lectures,” he said. “I got inspired.”

The 20-year-old political science major bought a hidden camera disguised as a shirt button. And that’s how he was able to secretly videotape every single lecture delivered by Professor Sragow.

“It’s one thing to say this happened,” Talgo said. “It’s another thing to show that it happened.”

Talgo culled 15-minutes worth of Republican, Tea Party and conservative ranting from Sragow’s lectures and shared them with Campus Reform reporters Oliver Darcy and Josiah Ryan.

“On the first day of class he talked about how Republicans prevent blacks from voting,” Talgo said. “He also said that he used to work for Democratic candidates and it was his job to kill Republicans.”

The video shows Sragow peppering his lectures with curse words and ridicule for Republicans – with his teaching assistant joining in on the attacks.

“They’re really stupid and racist,” Sragow said at one point. “The Republican party is increasingly the last refuge of old, angry white people who don’t like what’s going on in this country.”

“Old white guys are stubborn sons of b*tches,” he noted.

Professor Sragow told Fox News that he has absolutely no regrets over any of his classroom lectures.

“I have said them many times to many audiences, and if the student had told me he was taping my comments I still would have said them,” he told Fox News. “I had had this exact conversation with many of my Republican colleagues and friends.”

Sragow said it is possible Talgo may have violated the student code of conduct by secretly taping his classes.

Continued in article

On Rate-My-Professor a student write the following:

He is only interested in liberal indoctrination, not teaching. He needs to go!

 

I probably study Rate-My-Professor.com comments (there are millions of them) about their teachers. It is much more common for students to complain about their teachers preaching from the left than from the right, but this is possibly because there are so few from the right that are and they're afraid to mention leanings to the right.


 
Here's some typical student comments about Robert Jensen (no relation to me) who teaches Journalism at the University of Texas:

 

Student Comments about a Shrill Leftist

Student 1
He made his entire class work on organizing a demonstration against the school, which I thought was way out of line. On top of that, it turned out that the reason behind all of this was so he could get media coverage at the demonstration, which made him look good since it seemed like he had a lot of supporters. So exploitative and opportunistic!!


 

Student 2
I expected to learn about journalism, not to be indoctrinated in left-wing ideologies. A waste of my time. It's alright to disagree with the war in Iraq but to openly state that you want the insurgents to win in Iraq is traitorious. Look elsewhere for a journalism class.


 

Student 3
Nice enough guy, but so liberal he's practically a socialist. He likes to preach (a.k.a. give people something to think about). I fell asleep in the class almost every day, but it was interesting. I just sleep in auditorium classes. His tests are easy if you do the reading and study at all.


 

Student 4
This was "intensive writing and editing," but it was neither intensive, nor was it "writing and editing." We did jack. Same in 349T. Jensen's schtick--hyping left politics--is fine for expanding undergrad minds. It was a waste of time and money in grad school, where I came to learn a craft. Politically, I mostly agree, but he's stuck in the '70.


 

Stident 5
Easiest class on the planet. Literally. Just Read the books and infer answers to test questions based on his socialist tendencies.


 

There are of course students on the left who enjoyed the courses, but in most instances what they really liked is how easy it was to get an A.


 
Added Jensen Comment
Harvey Mansfield once warned a non-tenured Harvard professor who whispered to Harvey that he too was conservative. Harvey advised that non-tenured professor against "raising the jolly Roger" until after attaining tenure. Harvey was serious in this instance.

How Could Our Academy Let Such a Horrible Thing Happen?
It's bad enough that the University of Colorado hired a non-tenured conservative, but now this.


"Florida Gulf Coast Has An Unapologetically Pro-Capitalist Economics Department, And Every Student Gets A Copy of Ayn Rand," by Tony Manfield, Business Insider, March 25, 2013 ---
http://www.businessinsider.com/florida-gulf-coast-economics-department-capitalist-2013-3

There Goes the Neighborhood
"U. of Colorado Is in Search of a Scholar of Conservative Thought U. of Colorado Is in Search of a Scholar of Conservative Thought," by Sydni Dunn, Chronicle of Higher Education., February 26, 2013 ---
http://chronicle.com/article/U-of-Colorado-Is-in-Search-of/137567/?cid=at&utm_source=at&utm_medium=en

Bob Jensen's threads on liberal bias in the media and higher education ---
http://www.trinity.edu/rjensen/HigherEdControversies.htm#LiberalBias

There Goes the Neighborhood
"U. of Colorado Is in Search of a Scholar of Conservative Thought U. of Colorado Is in Search of a Scholar of Conservative Thought," by Sydni Dunn, Chronicle of Higher Education., February 26, 2013 ---
http://chronicle.com/article/U-of-Colorado-Is-in-Search-of/137567/?cid=at&utm_source=at&utm_medium=en

 

Question
What is the difference between education and indoctrination? 

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

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

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

"Noam Chomsky Spells Out the Purpose of Education," by Josh Jones, Open Culture, November 2012 ---
http://www.openculture.com/2012/11/noam_chomsky_spells_out_the_purpose_of_education.html

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

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

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

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

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

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

Bob Jensen's threads on the liberal bias of the major media and higher education ---
http://www.trinity.edu/rjensen/HigherEdControversies.htm#LiberalBias

Remember those tiresome and frequent adds on television from "The Scooter Store"

"Scooter Store Files For Bankruptcy After Overbilling Medicare At Least $47 Million," by Laura Northrup, Consumerist, April 15, 2013 ---
http://consumerist.com/2013/04/15/scooter-store-files-for-bankruptcy-after-fbi-raid-and-medicare-fraud-allegations/

If you watch daytime TV or have been stuck watching daytime TV while visiting your parents, surely you’re familiar with The Scooter Store. The power wheelchair vendor has had some trouble lately, including accusations of Medicare and Medicaid fraud, a raid by the FBI, and even a lawsuit from the company’s hometown, of New Braunfels, Texas. The company laid off most of its employees, and plans to deal directly with health care providers, rather than blanketing the airwaves and selling directly to consumers.

Those investigations came after a a scathing investigative piece by CBS News about the company.  (Warning: the video at that link plays automatically.) Former salesmen and doctors who prescribed chairs in the past explained the company’s tactics: contact doctors’ offices incessantly to wear them down and convince them to prescribe scooters and power chairs whether the patient really needed one or not, and to depend on bureaucratic incompetence and error to get them approved by Medicare and Medicaid.

That got the attention of the federal government, and led to a raid by the Federal Bureau of Investigation. The company’s CEO insists that The Scooter Store itself wasn’t accused of fraud. Just a few weeks later, the company furloughed all employees, then permanently laid off about 1,000.

An independent audit found that the company had overbilled Medicare and Medicaid somewhere between $46.8 million and $87.7 million. The company had agreed to pay back $19.5 million. The Centers for Medicare and Medicaid Services is one of the largest creditors listed in the company’s bankruptcy petition, which details about $50 million in debt.

Just a few short years ago, in 2009, the city of New Braunfels gave the Scooter Store economic development money to convert a former Kroger store into their sparkling new headquarters. On Friday, the city filed a lawsuit to to get $2.6 million of that money back.

Continued in article

Jensen Comment
Milking Medicare and Medicaid seems to be the rule rather than the exception.

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

 

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

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

Bob Jensen's Tidbits Archives ---
http://www.trinity.edu/rjensen/tidbitsdirectory.htm 

Bob Jensen's Pictures and Stories
http://www.trinity.edu/rjensen/Pictures.htm

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 ---
http://www.trinity.edu/rjensen/Fraud001.htm

Current and past editions of my newsletter called Fraud Updates ---
http://www.trinity.edu/rjensen/FraudUpdates.htm

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 ---
http://www.trinity.edu/rjensen/FraudConclusion.htm

Bob Jensen's threads on auditor professionalism and independence are at
http://www.trinity.edu/rjensen/Fraud001c.htm

Bob Jensen's threads on corporate governance are at
http://www.trinity.edu/rjensen/Fraud001.htm#Governance 

 

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

·     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?  ---
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

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/