Tidbits Quotations
To Accompany the August 19, 2013 edition of Tidbits
Bob Jensen at Trinity University

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

If everyone is thinking alike, then somebody isn't thinking.
George S. Patton

Barack Obama beat Mitt Romney in the 2012 elections 65,909,451 Obama to 60,932,176 Romney votes.
Among the 48 million people of food stamps, how many voted for Mitt Romney?
The GOP will never win without gaining half the food stamp votes.

Reagan Humor --- http://www.youtube.com/watch_popup?v=wrRTau5jusU

U.S. National Debt Clock --- http://www.usdebtclock.org/
Also see http://www.brillig.com/debt_clock/

Nightwitches --- http://en.wikipedia.org/wiki/Night_witches  -
Female Russian bombers who bombed Germany during WW2. They had old, noisy planes & the engines used to conk out halfway through their missions, so they had to climb out on the wings mid-flight to restart the props. To stop Germans from hearing them & starting up the anti aircraft guns, they’d climb to a certain height, coast down to German positions, drop their bombs, restart their engines in midair & get the hell out of dodge. Their leader flew 200+ missions & was never captured.

AICPA Honors San Diego State University Student with Medal of Inspiration Award --- Click Here

The LSAT Is Not the Problem and Affirmative Action Is Not the Answer ---

Passage of the Bar exam is a problem for minorities ---
California Law School Sues State Bar, Claims First Amendment Right to Hide Bar Passage Stats ---

America’s Great Shrinking Companies --- Click Here

Glasner makes a good case that Friedman was indeed more or less a Keynesian, or maybe Hicksian — certainly that was the message everyone took from his Monetary Framework, which was disappointingly conventional. And Friedman’s attempts to claim that Keynes added little that wasn’t already in a Chicago oral tradition don’t hold up well either.
Paul Krugman, "Milton Friedman, Unperson," The New York Times, August 8, 2013 ---

. . .

Think of it this way: Friedman was an avid free-market advocate, who insisted that the market, left to itself, could solve almost any problem. Yet he was also a macroeconomic realist, who recognized that the market definitely did not solve the problem of recessions and depressions. So he tried to wall off macroeconomics from everything else, and make it as inoffensive to laissez-faire sensibilities as possible. Yes, he in effect admitted, we do need stabilization policy — but we can minimize the government’s role by relying only on monetary policy, none of that nasty fiscal stuff, and then not even allowing the monetary authority any discretion.

At a fundamental level, however, this was an inconsistent position: if markets can go so wrong that they cause Great Depressions, how can you be a free-market true believer on everything except macro? And as American conservatism moved ever further right, it had no room for any kind of interventionism, not even the sterilized, clean-room interventionism of Friedman’s monetarism.

So Friedman has vanished from the policy scene — so much so that I suspect that a few decades from now, historians of economic thought will regard him as little more than an extended footnote.


States Where It Is Hardest To Find Full-Time Work
--- Click Here

Mortgage Fraud Task Force Stats: Did You See This? WOW  ---

Nine Cities Running Out of Water --- Click Here

How to mislead with statistics

"The Half Full Economy," by Peter Schiff, Townhall, August 11, 2013 --- Clck Here

The marginal economic strength that was described in the most recent GDP release from Washington has caused many to double down on their belief that the Federal Reserve will begin tapering Quantitative Easing sometime later this year. While I believe that is a fantasy given our economy's extreme dependence on QE, market observers should have learned long ago that the Bureau of Economic Analysis (BEA) initial GDP estimates can't be trusted. A perusal of their subsequent GDP revisions in the last five years reveals a clear trend: They are almost twice as likely to revise initial estimates down rather than up, and the downward adjustments have been much larger on average.

As a result of this phenomenon, an overall optimism has pervaded the economic discussion that has consistently been unfulfilled by actual performance. The government is continuously over promising and under delivering. Unfortunately, no one seems to care.

Measuring the size of the economy accurately in anything close to real time is difficult, inexact, and messy. That is why the BEA has long pursued a policy of initial quarterly estimates (known as the "advanced estimate"), followed by two or three subsequent revisions as more thorough analysis comes to bear. The first estimates come out about a month after the conclusion of a particular quarter. The second and third revisions then come in monthly intervals thereafter. But in the minds of the media, the public and the politicians, the initial report carries much more weight than the revisions. It is the initial report that attracts the screaming headlines and sets the tone. The revisions are typically buried and ignored. This creates an unfortunate situation where the initial estimates are both the most important and the least reliable.

Continued in article

How to lie with statistics

"Poverty and Near-Poverty in the United States," by Judge Richard Posner, The Becker-Posner Blog, August 11, 2013 ---

"Education and the Growth of Poverty in United States," Nobel Laureate Gary Becker, The Becker-Posner Blog, August 11, 2013 ---

"Federal Job Training Programs and Crony Capitalism," byTad DeHaven, Townhall, August 11, 2013 ---

Warning:  I did not make the link live because the Newser link for me set off all sorts of pop up windows.

If McDonald's Doubled Wages, Big Macs Rise ... 68 Cents, July 30, 2013
Newser ^ | 07/30/2013 |
By John Johnson

Fast-food workers want to make a "living wage" of $15 an hour. Chains say they'd have to jack up prices if that ever happened. But just how high? Turns out, not as high as you might think, at least according to a University of Kansas researcher. He found that if McDonald's immediately doubled the wages of all its workers (including the $9 million CEO), it would have to raise the price of a Big Mac 68 cents, from $3.99 to $4.67, reports the Huffington Post. Items on the Dollar Menu technically wouldn't qualify anymore, but that hike...

Jensen Comment
Most accountants know better than to make these naive conclusions and overly simplified implications in this article. To do a proper analysis an analyst has to do what is called a full CPV analysis and product mix analysis that may also entail doing a complex simulation in which many factors interact such as product demand as a function of alternative prices for other food items on the menu and nonlinear relationships between product mix/sales and customer demand elasticity.

Yes McDonalds might make the same profit before and after raising prices on all its menu choices to double wages, but it is not likely without knowing just how elastic customer demand is with pricing and sales mix. It may well be that prices would have to triple in order to make the same profit on greatly reduced customer demand. Perhaps prices could be decreased when wages are increased if robots take over the cooking and packaging. In cost accounting this is called changing the "operating leverage." Much depends on demand elasticity and changes in operating leverage.

At a minimum, McDonalds should test market a sampling of stores by changing prices and sales mixes. This is difficult, however, since McDonalds would not be alone in raising prices if the legal minimum wage was doubled. In that case all the other restaurants from fast food to five-star restaurants would have to raise prices. And grocery stores would have to raise prices and make cooking at home much more expensive.

Nobody really knows what the direct and higher order societal effects are from raising prices. For example, how many full-time and part-time jobs would be lost? At some point in the cost function, it does become more profitable to add more operating leverage with robots. Just ask the automobile manufacturing companies that have adopted robots big time. We don't usually think of Hal as cooking our Big Macs, but Hal can probably cook Big Macs better than most of the cooks in the McDonalds chain.

I should add that my message has zero to do with whether doubling the minimum wage is a fair and equitable thing to do at this point in time.

But the case should not be made on top of naive (phony) analyses that mislead the public. Deceptive studies weaken rather than strengthen the case for doubling the minimum wage.

Physicists stole all the easy problems. They usually do not have to predict human interactive behavior.

"The Cellulosic Ethanol Industry Faces Big Challenges:  The advanced-biofuels industry is in danger of withering away," by Kevin Bullis, MIT's Technology Review, August 12, 2013 --- Click Here

Taco Bell Is The Worst-Paying Fast Food Company, In-N-Out Burger Is The Best  ---

Those of you who fly might note Big Mac prices at airports and compare them with Big Mac prices near where you live.

Fake Cops” Robbing Citizens At Gunpoint Turn Out To Be Real Cops Robbing Citizens ---

"Conflicts of Interest Raise Questions about Governor Kasich’s JobsOhio Program," by Steven Mintz, Ethics Sage, August 15, 2013 ---

The JobsOhio program is under investigation once again. I have previously blogged about independence questions raised with respect to the audit of the program by KPMG.

As the state’s lead economic-development agency, Jobs-Ohio is charged with recommending financial incentives for companies seeking to locate in the state.

Last fall, charges were leveled at KPMG for its lack of independence in the JobsOhio audit. As KPMG was auditing JobsOhio’s books last fall, the global auditing and consulting firm also was seeking $1 million in taxpayer money from JobsOhio for an unnamed client.

JobsOhio, the state’s privatized development agency, says that the grant request was handled separately from and without the knowledge of the firm’s auditing division. But the timing raises ethical questions.

The situation also exposes weaknesses in the laws creating Governor John Kasich’s JobsOhio, because recipients of state aid are kept secret until the project is approved.

Laura Jones, a spokeswoman for JobsOhio, said KPMG LLP’s Columbus office conducted the audit, but the grant was sought by an out-of-state office.

“The fact that KPMG serves JobsOhio and countless other businesses ... from the same office here in Columbus is not a conflict in our minds,” she said, adding that the state also monitors and ultimately approves taxpayer-funded incentives to companies.

KPMG was chosen by JobsOhio to conduct an audit required by law. On November 5, 2012, about the time the audit was being conducted, KPMG also was listed on a sheet of eight pending grant commitments from the state for fiscal year 2013, according to a document obtained by the Columbus Dispatch through a public-records request.

JobsOhio officials said the record is confidential and the state released it by mistake.

Officials from the Kasich administration, JobsOhio, and KPMG indicated that the grant was not for KPMG itself, but for an anonymous KPMG business client. A KPMG spokesman said only that “we’re confident we acted properly at all times. It would be inappropriate for us to comment further due to client confidentiality.”

All the excuses and explanations do not mask the fact that KPMG lacked independence in appearance if not in fact raising ethical questions about the JobsOhio program. KPMG’s behavior in this matter fails to meet the independence and objectivity ‘smell test.’

Now, another matter has arisen bringing into question whether the JobsOhio program should be shut down. On August 5th of this year, two Cincinnati lawmakers called for an ethics investigation into possible conflicts of interest among board members of JobsOhio.

The lawmakers said Governor Kasich’s job-creation organization may be cutting secret deals that benefit big business and donors who support him and other Republicans.

Their complaints are based on a Dayton Daily News report last month that found six of nine members of the JobsOhio board of directors have financial ties to companies that got tax credits through the agency and the state.

“This looks terrible,” said state Representative Connie Pillich, D-Montgomery, who joined state Representative. Denise Driehaus, D-Clifton Heights, in calling for an investigation into JobsOhio by the state ethics commission.

“It’s a symptom of a larger problem,” Pillich said. “It reeks of secrecy, self-dealing and everything bad government can be.”

Kasich said Thursday the call for an ethics investigation is “a bunch of political carping.” JobsOhio doesn’t need to be more open about its work, the governor said. “There’s tremendous transparency,” Kasich said. “This is all politics.”

A spokeswoman for Kasich, Connie Wehrkamp, said board members do not have conflicts of interest and that most of the deals cited by Democrats were in place before JobsOhio began work. She also said board members do not vote on or personally approve tax breaks to companies.


The IRS Scandal, Day 100 --- http://taxprof.typepad.com/taxprof_blog/2013/08/the-irs-scandal-8.html#more

By Paul Caron

IRS Logo 2

Prior TaxProf Blog coverage:


August 14, 2013 message from Scott Bokacker regarding the Affordable Care Act implementation

This looks like a pretty good collection -


There is one item that is not listed on that page -


That one will be relevant if you are an employer required to give notice to employees.

Repeal Obamacare? Too late.

Scott Bonacker CPA – McCullough and Associates LLC – Springfield, MO


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 ---

Bob Jensen's Pictures and Stories

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

Bob Jensen's threads on such scandals:

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

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

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

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

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

Bob Jensen's fraud conclusions ---

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

Bob Jensen's threads on corporate governance are at


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

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

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

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

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

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

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

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


Bob Jensen's threads on accounting theory ---

Tom Lehrer on Mathematical Models and Statistics ---

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

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

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

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