Tidbits on July  11, 2013
 Bob Jensen at Trinity University

Featured this week are photographs of our Memorial Day destructive snow that could've been worse
http://www.trinity.edu/rjensen/tidbits/Snow/2013MemorialDay/2013ZMemorialDaySnow.htm  

The Sunset Hill House Hotel is just down the road from our cottage. I had to chuckle at the following line from their July 2013 Web promotional:
"Take advantage of our Summer Specials, like our Guaranteed Moose package.  Bottom line:  if you don't see a moose, you get a free night."

Gudvangen, Norway --- Click Here
http://www.google.ca/search?q="Gudvangen"&lr=&as_qdr=all&tbm=isch&tbo=u&source=univ&sa=X&ei=6izdUZndCZK54APA9IDoAw&ved=0CDwQsAQ&biw=1024&bih=497

Bob Jensen's First-Time Experience With Isobuster File Recovery ---
http://www.cs.trinity.edu/~rjensen/temp/PictureRecoveryWithIsobuster/IsobusterTrial01Experiences.htm

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

 

Tidbits on July 11, 2013
Bob Jensen

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

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


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

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

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

 

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

Helen Keller & Annie Sullivan Appear Together in Moving 1930 Newsreel ---
http://www.openculture.com/2013/06/helen_keller_annie_sullivan_appear_together_in_moving_1930_newsreel.html

How to Get to Mars --- http://www.youtube.com/embed/XRCIzZHpFtY?rel=0

Great Moments in Computer History: Douglas Engelbart Presents “The Mother of All Demos” (1968) ---
http://www.openculture.com/2013/07/douglas-engelbart-presents-the-mother-of-all-demos.html

In “The Dictionary of Obscure Sorrows,” Artist John Koenig Names Feelings that Leave Us Speechless --- Click Here
http://www.openculture.com/2013/06/in_the_dictionary_of_obscure_sorrows_artist_john_koenig_names_feelings_that_leave_us_speechless.html

86-year-old gymnast --- http://safeshare.tv/w/cdaBSBkGKr

NASA:  Three Years of Sun in Three Minutes ---
http://www.ritholtz.com/blog/2013/07/three-years-of-sun-in-three-minutes/

The Musical Mind of Albert Einstein: Great Physicist, Amateur Violinist and Devotee of Mozart ---
http://www.openculture.com/2013/06/the_musical_mind_of_albert_einstein.html

The World’s Best Commercials from 2012-2013 Named at Cannes ---
http://www.openculture.com/2013/06/the_worlds_best_commercials.html

A Short, Animated Look at What’s Inside Your Average Cup of Coffee ---
http://www.openculture.com/2013/06/whats_inside_your_average_cup_of_coffee.html

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

Watch a Surprisingly Moving Performance of John Cage’s 1948 “Suite for Toy Piano” --- Click Here
http://www.openculture.com/2013/06/watch_a_surprisingly_moving_performance_of_john_cages_1948_suite_for_toy_piano.html

The Earliest Footage of Elvis Presley, Buddy Holly and Johnny Cash (1955) --- Click Here
http://www.openculture.com/2013/07/the_earliest_footage_of_elvis_presley_buddy_holly_and_johnny_cash_1955.html

Theme Song for Seniors ---
http://www.youtube.com/embed/HzSaoN2LdfU?fs=1

Minnesota nurse-anesthetists (waking up is hard to do) --- http://nottotallyrad.blogspot.com/2009/11/waking-up-is-hard-to-do.html

Barbara Streisand singing in Hebrew and English ---
http://www.jewishhumorcentral.com/2013/06/barbra-streisand-performs-in-hebrew-and.html

Why Tchaikovsky's Bells And Cannons Sound Every July 4 ---
http://www.npr.org/blogs/deceptivecadence/2013/06/29/196682351/why-tchaikovskys-bells-and-cannons-sound-every-july-4

Revved-up Vivaldi, Persian Bamboo And Soaring Spirituals: New Classical Albums ---
http://www.npr.org/blogs/deceptivecadence/2013/06/30/195496249/MUSIC-CLASSICAL-REVIEW

The Musical Mind of Albert Einstein: Great Physicist, Amateur Violinist and Devotee of Mozart ---
http://www.openculture.com/2013/06/the_musical_mind_of_albert_einstein.html

Vi Hart Uses Her Video Magic to Demystify Stravinsky and Schoenberg’s 12-Tone Compositions --- Click Here
http://www.openculture.com/2013/07/vi-hart-uses-her-video-magic-to-demystify-stravinsky-and-schoenbergs-12-tone-compositions.html

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

Pandora (my favorite online music station) --- www.pandora.com
TheRadio (online music site) --- http://www.theradio.com/
Slacker (my second-favorite commercial-free online music site) --- http://www.slacker.com/
Gerald Trites likes this international radio site --- http://www.e-radio.gr/
Songza:  Search for a song or band and play the selection --- http://songza.com/
Also try Jango --- http://www.jango.com/?r=342376581
Sometimes this old guy prefers the jukebox era (just let it play through) --- http://www.tropicalglen.com/
And I listen quite often to Soldiers Radio Live --- http://www.army.mil/fieldband/pages/listening/bandstand.html
Also note U.S. Army Band recordings --- http://bands.army.mil/music/default.asp

Bob Jensen's threads on nearly all types of free music selections online ---
http://www.trinity.edu/rjensen/Music.htm

Photographs and Art

Take A Tour Of The Most Beautiful College Campus In New York City (historic Columbia University) ---
http://www.businessinsider.com/columbia-university-photo-tour-2013-6

Chrysler Museum of Art --- http://www.chrysler.org/

The University of Michigan Museum of Art --- http://www.umma.umich.edu/

Iceland's Blue Lagoon --- http://www.businessinsider.com/pictures-of-icelands-blue-lagoon-2013-6

25 Adorable Photos Of Troops Playing With Puppies In Iraq And Afghanistan ---
http://www.businessinsider.com/25-photos-of-troops-playing-with-puppies-2013-7

Free Interactive e-Books from NASA Reveal History, Discoveries of the Hubble & Webb Telescopes --- Click Here
http://www.openculture.com/2013/06/free_interactive_e-books_from_nasa_reveal_history_discoveries_of_the_hubble_telescope.html

Two Drawings by Jorge Luis Borges Illustrate the Author’s Obsessions ---
http://www.openculture.com/2013/06/two_drawings_by_jorge_luis_borges_illustrate_the_authors_obsessions.html

Puppy Adoption Photographs ---
http://www.businessinsider.com/bark-and-co-puppy-adoption-event-photos-2013-6

Breathtaking Photos Of Classic Rolls-Royces On A Road Trip Through The Alps ---
http://www.businessinsider.com/photos-from-the-rolls-royces-alpine-trial-2013-6

The Tradition of Anglo-American Mourning Jewelry --- http://www.masshist.org/features/mourning-jewelry

National Maritime Museum: Jewelry http://www.nmm.ac.uk/collections/explore/index.cfm/category/jewellery 

Jewelry at Historic New England --- http://www.historicnewengland.org/JewelryHistory/

Nine Beautiful Tree House Hotels That You Can Sleep In ---
http://www.businessinsider.com/tree-house-hotels-2013-6

31 Stunning Pictures Of American National Parks ---
http://www.businessinsider.com/americas-national-parks-2013-6

MoMA: Inside/Out (Metropolitan Museum of Art in NYC) --- http://www.moma.org/explore/inside_out

Northern New York Historical Newspapers --- http://news.nnyln.net/

New Orleans Public Library: WPA Photograph Collection --- http://nutrias.org/photos/wpa/wpaphotos.htm

WPA/TVA Archaeological Photographs --- http://diglib.lib.utk.edu/wpa/

WPA Art Inventory Project --- http://wpa.cslib.org/

National African American Photographic Archive
http://catalogquicksearch.memphis.edu/iii/cpro/CollectionViewPage.external?lang=eng&sp=1000011&suite=def

Victoria and Albert Museum Teachers' Resource: Architecture ---
http://www.vam.ac.uk/page/t/teachers-resource-architecture/

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

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

Gertrude Stein Gets a Snarky Rejection Letter from Publisher (1912) ---
http://www.openculture.com/2013/06/gertrude_stein_a_snarky_rejection_letter_from_publisher_1912.html

Watch Monty Python’s “Summarize Proust Competition” on the 100th Anniversary of Swann’s Way ---
http://www.openculture.com/2013/06/monty_pythons_summarize_proust_competition.html

In “The Dictionary of Obscure Sorrows,” Artist John Koenig Names Feelings that Leave Us Speechless --- Click Here
http://www.openculture.com/2013/06/in_the_dictionary_of_obscure_sorrows_artist_john_koenig_names_feelings_that_leave_us_speechless.html

Mark Twain Drafts the Ultimate Letter of Complaint (1905) ---
http://www.openculture.com/2013/07/mark-twain-drafts-the-ultimate-letter-of-complaint.html

Books Bought By Big Picture Readers (June 2013) ---
http://www.ritholtz.com/blog/2013/07/books-bought-by-big-picture-readers-june-2013/

Aeon Magazine (Essays, Social Science, Literature) --- http://www.aeonmagazine.com/

Listening to Proust’s Remembrance of Things Past, (Maybe) the Longest Audio Book Ever Made --- Click Here
http://www.openculture.com/2013/07/listening-to-prousts-remembrance-of-things-past-maybe-the-longest-audio-book-ever-made.html

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

Now in Another Tidbits Document
Political Quotations on July 11, 2013
http://www.trinity.edu/rjensen/tidbits/2013/TidbitsQuotations071113.htm      

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

Peter G. Peterson Website on Deficit/Debt Solutions ---
http://www.pgpf.org/

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

Jensen Comment
Before I retired I tended to accept almost all invitations to speak at other universities as long as they reimbursed my travel expenses. The size of the honorarium really didn't matter if I was invited to speak at a college campus ---
http://www.trinity.edu/rjensen/Resume.htm#Presentations

There may be some useful considerations in the article below, but I think the author stretches the point. When building and sustaining a reputation I would instead say accept invitations as long as they don't seriously interfere with your day job, e.g., your responsibilities to your own students.  I accepted mostly because I enjoyed these opportunities to learn and well as speak. Speakers learn a great deal from both their audiences and their hosts.

"Just Say No," by Brian Croxall, Chronicle of Higher Education, July 3, 2013 ---
http://chronicle.com/blogs/profhacker/open-thread-wednesday-just-say-no/50889?cid=wc&utm_source=wc&utm_medium=en

"Real Estate Apps From Android To Zillow:  If you're in the market for a new home, here are some great real estate apps to check out," by Brian S. Hall, ReadWriteWeb, July 2, 2013 ---
http://readwrite.com/2013/07/02/real-estate-apps-from-android-to-zillow#awesm=~oaVs11WySN9lsP

"Redesigned Window Stops Sound But Not Air, Say Materials Scientists," MIT's Technology Review, July 8, 2013 --- Click Here
http://www.technologyreview.com/view/516766/redesigned-window-stops-sound-but-not-air-say-materials-scientists/?utm_campaign=newsletters&utm_source=newsletter-daily-all&utm_medium=email&utm_content=20130709

Jensen Comment
I think this should be called a "window screen" that stops sound but not air. Up where I live there are many months of the year when we want our windows to stop freezing air but not the light. In the southern USA it's the opposite when trying to cool the hot summer air by closing off the outside air.

Sound is not a problem at our rural cottage, and on warmer days we want to hear our songbirds.

I think this window screen is more of a solution for city dwellers. When Erika had all her surgeries in Boston my hotel was near a fire station. I would've loved to have window screens that stopped the sound 24/7.

800 Numbers.net: Find 1-800 Numbers for (most) Any Company --- http://www.800-numbers.net/

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

"These Excel Text Tricks Will Save Your Life When Cleaning Up Disorganized Data," by Walter Hickey and Daniel Goodman, Business Insider, July 5, 2013 ---
http://www.businessinsider.com/excel-tricks-left-right-len-2013-7

"The True Science of Spinach: What the Popeye Mythology Teaches Us about How Error Spreads," by Maria Popova, Brain Pickings, July 2, 2013 ---
http://www.brainpickings.org/index.php/2013/07/02/spinach-popeye-error-half-life-of-facts/

Accounting for Business Firms Versus Accounting for Vegetables  ---
http://www.trinity.edu/rjensen/FraudConclusion.htm#BadNews

35 Science 'Facts' That Are Totally Wrong ---
http://www.businessinsider.com/science-misconceptions-and-myths-2013-7?op=1

Learn 46 Languages for Free Online: A Big Update to Our Master List ---
http://www.openculture.com/2013/07/learn_46_languages_for_free_online_a_big_update.html

Bob Jensen's First-Time Experience With Isobuster File Recovery ---
http://www.cs.trinity.edu/~rjensen/temp/PictureRecoveryWithIsobuster/IsobusterTrial01Experiences.htm

From CFO Journal's Morning Ledger on July 9, 2013

Accounting fraud cases are at a 10-year low, but that could be lulling CFOs into complacency, writes Emily Chasan in today’s Marketplace section. Accounting experts and regulatory officials see warning signs of a potential new round of fraud as the recovery continues.  “The next fraud’s going to happen, it’s just a matter of time,” said James Walker, CFO of publisher Walch Education and former chairman of the Institute of Management Accountants’ ethics committee. Companies are also filing fewer financial-statement revisions, but they’re making more small adjustments and revisions, Chasan notes.

The SEC, meanwhile, is making a big push to uncover fraud at the earliest possible stage. Last week it launched a Financial Reporting and Audit Task Force of about eight attorneys and accountants who will act as an “incubator” to build accounting-fraud cases and hand them over to bigger units for full investigations. They’ll focus on common problem areas: revenue recognition, valuation, capitalized versus noncapitalized expenses, reserves, acquisition accounting and other performance benchmarks that don’t follow standard accounting principles.

The task force is small, so it’s counting on some inside help from whistleblowers. “Frauds in the accounting area are often difficult to detect without somebody from the inside,” said David Woodcock, who will head the new task force. The SEC is investigating several accounting-fraud cases referred by whistleblowers that it wouldn’t have detected otherwise, he said.

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

"What Makes Rich and Powerful Executives Commit Fraud?" by Steve Tobak, Fox Business, July 5, 2013 ---
http://www.foxbusiness.com/business-leaders/2013/07/05/what-makes-rich-and-powerful-executives-commit-fraud/
Thank you Dennis Huber for the heads up.

Perhaps the title of the article should instead be:
"What Makes Rich and Powerful Executives (Continue to) Commit Fraud?"

Jensen Comment
Perhaps they became rich and famous because they committed fraud all along. The question is why they continue to commit fraud after they are multi-millionaires?  By all accounts most Ponzi scheme fraudsters eventually want to end their frauds but find that it's impossible to do so without getting caught.

Frauds like inside traders that often involve partners who feed in the inside information make it hard to shut down such frauds unless all the partners agree to end the schemes.

I don't think that behind the facade arrogance that most fraudsters do not daily live in tension and fear about getting caught. I think they continue to commit fraud either because they still need the money to feed their bad habits or that they cannot find an easy way out once they have their pot of gold.

Of course there are many successful fraudsters who get out before its too late and live well on their stolen pot of gold
We often hear about the scores of Enron executives went to prison. But there are also those who grabbed their pot of gold early on and were never punished. I hesitate to call Rich Kinder a fraudster since I think he perhaps got out early when he commenced to smell the rats at Enron. He earned his billions legitimately after he left Enron without a pot of fraudulent gold.

Some fraudsters get out due to blind luck. Read about Lou Pai's timely divorce below. Read about Rebecca Mack's timely firing that led to her very timely sale of her Enron stock.

More questionable executives in Enron who departed early with their pot of gold ahead of law enforcement include Rebecca Mack and Lou Pai.

Lou Pai
First there's the soap opera of Lou Pai, his strip tease dancers, his Colorado ranch bigger than Rhode Island, and the mountain he named after himself.

An obscure and incompetent trading executive named Lou Pai is the biggest Enron stock sale winner (over $270 million) but that was sheer luck because he was sued for divorce by his wife while Enron's share prices were still soaring.  Lou had an addiction for strippers to a point where he brought dancers back to Enron HQ to prove that he really was a wealthy executive.

He didn't particularly want to sell his Enron stock at that time, but when he got a strip tease dancer pregnant Lou's wife demanded a cash settlement in the divorce.  That turned out to be the luckiest timing in her or his life.  I don't know how much the dancer got in the end, but she did marry Lou immediately after his divorce.
 

Rebecca Mark's timely selling of her Enron shares yielded $82,536,737.  You can read 1997  good stuff about her in http://www.businessweek.com/1997/08/b351586.htm and bad stuff about her (with pictures) at http://www.apfn.org/enron/mark.htm 

Rebecca Mark-Jusbasche has held major leadership positions with one of the world's largest corporations.  She was chairman and CEO of Azurix from 1998 to 2000.  Prior to that time, she joined Enron Corp. in 1982, became executive vice president of Enron Power Corp. in 1986, chairman and CEO of Enron Development Corp. in 1991, chairman and CEO of Enron International in 1996 and vice chairman of Enron Corp. in 1998.  She was named to Fortune's "50 Most Powerful Women in American Business" in 1998 and 1999 and Independent Energy Executive of the Year in 1994.  She serves on a number of boards and is a member of the Young President's Organization.

She is a graduate of Baylor University and Harvard University.  She is married and has two children.
http://superwomancentral.com/panelists.htm

If Mark had taken a bitter pleasure in Skilling’s current woes—the congressional grilling, the mounting lawsuits, the inevitable criminal investigation—no one would have blamed her. And yet she was not altogether happy to be out of the game. Sure, she had sold her stock when it was still worth $56 million, and she still owns her ski house in Taos. Her battle with Skilling, however, had been a wild, exhilarating ride.
TIME TABLE AND THE REST OF THE STORY:
http://www.msnbc.com/news/718437.asp

Rebecca P. Mark-Jusbasche, now listed as a director, bagged nearly $80 million for her 1.4 million shares. Rebecca was just Rebecca P. Mark without the hyphenated flourish in 1995, though I shouldn't say "just" because she was also Enron's CEO at the time, busily trying to smooth huge wrinkles in the unraveling Dabhol power project outside Bombay. That deal, projected to run to $40 billion and said to be the biggest civilian deal ever written in India, hinged on a power purchase agreement between the Maharashtra State Electricity Board (MSEB) and Enron's Dabhol Power Corp. (a JV led with project manager Bechtel and generator supplier GE).

There had been a lot of foot-dragging on the Indian side and Becky was there to light a fire. A memorandum of understanding between Enron and the MSEB had been signed in June '92 – only two weeks, as it happened, before the World Bank said it couldn't back the project because it would make for hugely expensive electricity and didn't make sense.

According to the state chief minister's account given two years later, the phase-one $910 million 695 MW plant was to run on imported distillate oil till liquefied natural gas became available. By the time the phase-two $1.9 billion 1320 MW plant was to be commissioned, all electricity would be generated by burning LNG – a very sore point with World Bank and other critics, given the availability of much cheaper coal.

In the event, by December '93, the power purchase agreement was signed, but with an escape clause for MSEB to jump clear of the second, much bigger plant.

State and union governments in India came and went, and for every doubt that surfaced, two were assuaged long enough for Indian taxpayers to sink deeper into Enron's grip.

Soon they were bound up in agreements to go ahead with the second phase of the project -- which now promised electricity rates that would be twice those levied by Tata Power and other suppliers. Unusually for this kind of project, the state government, with Delhi acting as a back-up guarantor, backed not just project loans but actually guaranteed paying the monthly power bill forever -- all in U.S. dollars – in the event the electricity board, DPC's sole customer, defaulted.

"The deal with Enron involves payments guaranteed by MSEB, Govt. of Maharashtra and Govt. of India, which border on the ridiculous," noted altindia.net on its Enron Saga pages. "The Republic of India has staked all its assets (including those abroad, save diplomatic and military) as surety for the payments due to Enron."
http://www.asiawise.com/mainpage.asp?mainaction=50&articleid=2389 

Key Lay and Rebecca Mark attempted to strong arm President Bush and Vice President Cheney into holding back on U.S. Aid payments to India if India defaulted on payments to India for the almost-useless power plant built by Enron (because it was gas in coal-rich India).  However, about the same time, the Gulf War commenced.  The U.S. needed all the allies it could get, including India.  Hence, the best laid political strong arm intentions of Lay and Mark failed.

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

"A University's Offer of Credit for a MOOC Gets No Takers," by Steve Kolowich, Chronicle of Higher Education, July 8, 2013 ---
http://chronicle.com/article/A-Universitys-Offer-of-Credit/140131/?cid=wc&utm_source=wc&utm_medium=en

Jensen Comment
With nationwide median grades being around A- in live classrooms, it may well be that students just fear that the same loose grading standards will not be applied to competency-based grading in a MOOC ---
http://www.gradeinflation.com/

Students cannot brown nose a MOOC for a higher grade ---
http://www.trinity.edu/rjensen/Assess.htm#ConceptKnowledge

There may also be problems transferring these MOOC credits to other universities. There are many universities who do not allow transfer credit for distance education courses in general, although this is somewhat hard to enforce when major universities do not distinguish (on transcripts) what sections of courses were taken onsite versus online. In may instances students have a choice as to whether to take onsite sections or online sections of the same course. But when all sections are only available via distance education other universities may deny transfer credits. In accountancy, some state societies of CPAs, such as in Texas, limit the number of distance education courses allowed for permission to take the CPA examination.

Also it could be that this MOOC alternative just was not publicized enough to reach its potential market.

Bob Jensen's threads on Gaming for grades ---
http://www.trinity.edu/rjensen/HigherEdControversies.htm#GamingForGrades

Bob Jensen's threads on MOOCs ---
http://www.trinity.edu/rjensen/000aaa/updateee.htm#OKI

"High-Impact Tax Breaks," by Laura Saunders, The Wall Street Journal, July 5, 2013 ---
http://online.wsj.com/article/SB10001424127887324251504578581902057217408.html?mod=ITP_businessandfinance_5

The year is half over. So it's time to make sure you are making your best tax moves for 2013.

"People need to be proactive," says Janet Hagy, a certified public accountant in Austin, Texas. "By December, it may be too late."

Income and estate taxes underwent seismic shifts in January, rearranging the landscape for many taxpayers. Wealthy Americans in particular are facing higher tax rates on ordinary and investment income.

That makes it all the more important to review Uncle Sam's highest-impact tax breaks, such as donations of appreciated assets, tax-free exchanges and capital-loss harvesting.

Unlike obvious moves, such as contributing to an individual retirement account or a 401(k) plan, these strategies require a higher degree of awareness and active planning. "It's easy to write a check to charity," says Jeffrey Porter, a CPA in Huntington, W.Va., "but often it's a better idea to give stock that has risen in value."

Some investors already have begun to take advantage of these moves. Scott Saunders, an investment real estate specialist at Asset Preservation in Palmer Lake, Colo., says he has seen a spike in tax-deferred "like-kind" exchanges of residential rental and commercial real estate in the past six months.

In one case, an investor with a $1 million property in Brooklyn, N.Y., exchanged it for two in upstate New York and a third in Queens, N.Y., instead of selling outright. The move deferred federal tax of about $225,000, plus state taxes, Mr. Saunders says.

"People are surprised at how much the new taxes will take, so they're looking for alternatives," he adds (see the Family Value column on page B8 for a tax strategy using trusts).

Not all high-impact breaks are for the wealthy. Any homeowner can benefit from a provision allowing taxpayers to pocket tax-free income from renting a residence for as long as two weeks, and low-bracket taxpayers can pay zero tax on long-term capital gains.

Other important moves can help minimize estate, gift and inheritance taxes. This might seem like a less-urgent task now, since Congress approved in January a generous gift-and-estate tax exemption of $5.25 million per individual that is indexed to inflation. But there already is a proposal to scale back the exemption to $3.5 million.

What's more, 20 states and the District of Columbia have their own estate or inheritance taxes, according to tax publisher CCH, a unit of Wolters Kluwer WTKWY +1.12% . Many of them have exemptions far below the federal level: $1 million in Minnesota, Massachusetts, Maryland and New York, for example, and $675,000 in New Jersey.

Here are some tax strategies that could deliver big benefits.

Capital-loss harvesting. This break—beloved by the superrich, including Mitt Romney and Michael Bloomberg—can be helpful for all investors with taxable accounts. Losses from one investment can be used to offset gains on another. A loss on the sale of stock can be applied against gains on the sale of real estate, for example. Up to $3,000 a year can also be deducted against ordinary income such as wages.

After a sale, capital losses "carry forward" until the investor has gains to offset. Smart taxpayers sold losing assets during the 2008 financial crisis and then bought them back, capturing the losses for use against future gains.

Be careful, though, to avoid a "wash sale," which occurs when you buy shares 30 days before or after selling losing shares of the same investment. It diminishes the strategy's benefits.

Capital-gains harvesting. Although the total tax rate on long-term investment gains rose sharply this year for top-bracket taxpayers—to nearly 25% from 15% in 2012—the rate on gains for low-bracket investors is still zero.

The rate is available to married couples with taxable income below $72,500 this year ($36,200 for singles), which doesn't include tax-free municipal-bond income. Taxpayers who qualify can sell appreciated assets (such as shares) to "scrub" gains and lower future tax bills.

For example, a couple with $50,000 of taxable income could take up to $22,500 of profits on stock tax-free and then buy back the shares immediately. (Sales at a gain aren't subject to wash-sale rules.)

The couple still owns the stock, but future gains will be measured from a higher starting point, or "cost basis," so future taxes will be lower.

Like-kind exchanges. In this strategy, investors trade one investment for another without owing federal tax. Instead, tax is deferred until the replacement asset is sold. If the taxpayer holds the asset until death, no tax might ever be due (see "Step-up at death" below).

The rules are more restrictive than those on capital losses, however, and getting expert help is a good idea.

According to Mr. Saunders, most types of investment real estate can be traded for other real estate (other than a residence), but they can't be traded for personal property—as in a building for art. Still, certain investment collectibles can be traded for one another, he says.

Two-week home rentals. The income from renting a residence for less than 15 days is tax-free, and it doesn't have to be reported on your tax return. This is a boon for people living near the site of the Super Bowl or another major sports event, and it also works for owners of second homes who want to rent short-term.

The tax-free perk is often called the "Masters' provision," because homeowners use it during the famed golf tournament in Augusta, Ga.

"Even people with modest homes get a boost," often earning between 15% and 25% of a year's mortgage payments, says Bill Woodward, a CPA at the Elliott Davis firm in Augusta. Many homeowners pocket from $6,000 to $30,000, he adds.

Home-sale benefit. As often as every two years, taxpayers can sell a principal residence (not a second home) and the profit will be tax-free—up to $500,000 for married couples or $250,000 for singles. A surviving spouse gets the full $500,000 break for up to two years after a spouse's death.

Because the profit doesn't include the purchase price or improvements, most home sales in most areas will be tax-free. For more information, see IRS Publication 523.

Charitable donations of appreciated assets. The tax code offers a great boon to philanthropic Americans. Within certain limits, taxpayers who donate appreciated assets to charities can deduct the fair-market value of the gift and skip paying capital-gains tax on the appreciation.

For example, say a taxpayer wants to give $1,000 to her college. If instead of cash she gives $1,000 of stock that she bought for $500, she won't owe tax on $500 of profit but can take a deduction for the full $1,000.

Charitable IRA rollover. Individual retirement account owners who are at least 70½ years old are allowed to donate as much as $100,000 of account assets directly to one or more qualified charities and count the gift as part of their required annual withdrawal.

While the taxpayer doesn't get a deduction for the gift, neither does it count as income. This popular move also can help reduce a taxpayer's adjusted gross income, which in turn can help minimize Medicare premiums or taxes on Social Security benefits.

Solo defined-benefit pension plan. With this strategy, taxpayers can deduct contributions of tens of thousands of dollars or more to a tax-sheltered retirement plan—as long as they are in the fortunate position of having their own consulting firms or other solo business, plus a steady stream of income they don't need to tap immediately.

The rules are especially generous to older workers, who often can set aside large sums to reach a goal quickly. But the plans, which must be custom-designed, aren't simple. Lisa Germano, president of Actuarial Benefits & Design in Midlothian, Va., estimates the setup cost of a solo plan at about $3,000.

529 plans. These popular college-savings accounts can help save on both income and estate taxes. There isn't a federal tax deduction for money going in, but asset growth and withdrawals are tax-free if used for qualified education costs.

Plans are sponsored by U.S. states, some of which give a state tax deduction for contributions. Some have lower fees and better investment options than others, so choose carefully.

Three features make 529 plans especially attractive. First, owners can change beneficiaries, so if one child doesn't need all the money, a relative can use it. In addition, owners can bunch up to five years' worth of $14,000 tax-free gifts to the plans. President Barack Obama and his wife Michelle used this break several years ago.

Finally, owners such as grandparents who don't want to owe estate taxes but also worry they might have unexpected costs, such as for health care, have a useful option. Although 529 contributions remove assets from an estate, the giver can take back account assets if the money is needed.

Annual gifts of $14,000. The law allows any taxpayer to give anyone else—a neighbor, friend or relative, say—up to $14,000 a year without owing federal gift tax. Above that, the gift is subtracted from an individual's lifetime gift-and-estate tax exemption, now $5.25 million.

The gifts remove assets from the giver's estate, and the total can add up over time. A husband and wife with three married children and six grandchildren, for example, could shift $336,000 a year to family members using this benefit.

This provision can be used to move assets other than cash, such as fractional shares of a business, but expert help is recommended in such cases.

Gifts of tuition or medical care. Taxpayers don't owe federal gift tax on amounts paid for tuition or medical care for another person. Given the growth in medical and education costs, such gifts can also remove large amounts from a taxable estate. Remember, however, that payment must be made directly to the provider.

"Step-up" at death. Under current law, taxpayers don't owe capital-gains tax on assets held at death. Instead, the assets are stepped up to their current value and become part of the taxpayer's estate, with no income tax due on the profits.

The upshot is that people planning estates should look carefully at their gains in various assets.

The taxable profit on a $100 share of stock that was bought for $10 will be $90 if it is sold shortly before death, but zero if it is held till death. There might be no estate tax either, given the current exemption of $5.25 million per individual.

As noted earlier, this benefit can be combined with techniques such as the like-kind exchange to eliminate tax altogether.

Estate-tax exemption portability. This provision, made permanent in January, allows a spouse's estate to transfer to the survivor the unused portion of the lifetime gift-and-estate tax exemption.

So if a wife dies leaving an estate of $500,000, her husband could receive her unused $4.75 million exemption and add it to his own $5.25 million one, for a total $10 million future exemption. But to take advantage of this provision, the executor must file an estate-tax return.

What if the survivor has assets far below the total exemption? File a return to preserve it anyway, says Mr. Porter, the West Virginia CPA. "Who knows?" he says. "You might win the lottery or receive an inheritance."

Continued in article

Bob Jensen's taxation helpers are at
http://www.trinity.edu/rjensen/Bookbob1.htm#010304Taxation

 

"Victorian Literature for Accounting Majors," by Joe Hoyle and Elizabeth Gruner, Chronicle of Higher Education, June 26, 2013 ---
http://chronicle.com/article/Victorian-Literature-for/139971/

Jensen Comment
I've been tracking Joe's blog for years. It's a very passionate blog long on personal experience and short on scholarly references. That can be both a strength and weakness. Sometimes it may be rewarding to re-invent wheels passionately. For one thing it frees up much more time for creativity ---
http://joehoyle-teaching.blogspot.com/

Charles Dickens Would Approve ---
http://joehoyle-teaching.blogspot.com/2013/06/charles-dickens-would-approve.html

Note that the Victorian Literature experiment of Joe and Professor Gruner differs from an AECC experiment at the University of North Texas. In that experiment accounting students were given choices between traditional sections of accounting courses (taught by accounting professors) and sections team taught by accounting and humanities professors. Too many students opted for the traditional accounting courses ---
http://aaahq.org/AECC/changegrant/chap11.htm
Read that as probably meaning that undergraduates were more concerned about passing the CPA examination than increasing the mix of liberal studies in accountancy studies.

"The Young and the Bookless:  Many of my college students hadn't read for fun since 'Harry Potter'," by Danny Heitman, The Wall Street Journal, June 26, 2013 ---
http://online.wsj.com/article/SB10001424127887323844804578526963222895632.html?mod=djemEditorialPage_h 

As I start another summer reading season, I'm worried that few of my recent students will be joining me in reading for fun.

This spring, in addition to my primary job as a journalist, I taught my first college writing course. It was a class of 16, most of them freshmen. They were sharp, engaging and curious students, but I quickly noticed that much of their writing didn't display the kind of familiarity with English that comes from reading a lot.

For my first quiz, I included a bonus question asking my students to name the last book they had read for fun. More than half of the students listed one of the Harry Potter books by J.K. Rowling, titles most popular with middle-school youngsters. The answers suggested that most of my students hadn't read a book for pleasure in nearly a decade.

I was saddened to learn this, although I shouldn't have been surprised. A landmark 2007 study by the National Endowment for the Arts noted a sharp decline in reading for pleasure among young people. The number of 17-year-olds who never read for pleasure increased to 19% in 2004 from 9% in 1984. According to the report, almost half of Americans between ages 18 and 24 never read books for fun.

When the NEA study appeared six years ago, I convinced myself that the young nonreaders identified in the report were probably mediocre students with little aptitude for language arts. But meeting my own students—smart young people who were trying to write English without reading much of it—made me realize that the grim numbers about America's reading habits have real faces among some of the best and brightest members of the next generation.

The implications of being a nonreading writer soon become obvious to anyone who's graded a sheaf of college compositions lately. One of my students struggled to correctly spell "excited"—a result, I suspect, of not routinely meeting her mother tongue in print. Author Stephen King recently recalled similar experiences he had while giving some high-school writing seminars in Canada last year. "These were bright kids. . . . They all have computers," Mr. King lamented of his students, "but they can't spell. Because spell-check won't [help] you if you don't know through from threw."

There are a hundred other reasons that reading matters, but most of them are eat-your-vegetables arguments that probably won't do much to persuade more young people to read for fun. That's the thing about fun: When you frame it as a civic duty, the pleasure quickly fades.

My initial temptation, as a college instructor, was to beef up my students' language skills by making them read more. But the importance of language in our national life requires that we engage it with commitment and passion—and passion is necessarily rooted in pleasure and personal choice. We'll always need assigned reading in the classroom, but we must also tempt more young people to read because they want to, not because they have to.

The first step is assuming that young people can enjoy reading. Jon Stewart, whose "The Daily Show" has such appeal to college kids, regularly features authors as guests, an abiding reminder that reading is a part of culture, not apart from it.

I'm also convinced that people of all ages can continue to enjoy reading in the way that we first enjoyed it as toddlers—by hearing words read aloud.

If poetry slams have helped renew the vitality of verse among the young, then maybe similar celebrations of recited work can help introduce teen and 20-something readers to longer-form works of fiction and nonfiction.

Continued in article

"Barnes & Noble, the Last Big Bookseller Standing: But for How Long," Knowledge@Wharton, January 16, 2013 ---
http://knowledge.wharton.upenn.edu/article.cfm?articleid=3167

How long can onsite bookstore owners hang on?
From the CFO Journal's Morning Ledger on June 24, 2013

We’ve got a few big name companies reporting earnings this week. Barnes & Noble is expected to post another quarterly loss on Tuesday amid declining revenue. Its Nook digital business led the company to post a small loss in the previous quarter and has lagged behind in the tablet wars, writes MoneyBeat’s Paul Vigna.

The Demise of Bookstores ---
http://www.jamiechavez.com/blog/2011/06/the-demise-of-bookstores/

Judge Posner Hails the Demise of Bookstores ---
http://blogs.wsj.com/ideas-market/2011/01/13/judge-posner-hails-the-demise-of-bookstores/

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

Bob Jensen's threads on free electronic literature ---
http://www.trinity.edu/rjensen/ElectronicLiterature.htm

"California Education Initiative Misguided:  Governor Brown’s New School Funding Mechanism Won't Save the State's Failing Education System," by Steven Mintz, Ethics Sage, July 3, 2013 --- Click Here
http://www.ethicssage.com/2013/07/california-education-initiative-misguided-will-governor-browns-new-school-funding-mechanism-save-our.html

Anywhere except California, Illinois, New York, and New Jersey? (Vermont does not have an NBA team)
 "Did Taxes Help Drive Dwight Howard to Sign With the Houston Rockets Rather Than the L.A. Lakers?" by Paul Caron, TaxProf, Blog, July 6, 2013 ---
http://taxprof.typepad.com/

Seven-time NBA all star Dwight Howard yesterday signed with the Houston Rockets for the maximum free agent contract permitted under the NBA's "Larry Bird Rule" -- $87.6 million over four years (4.5% annual increases over his existing contract).  He spurned a much higher offer from the L.A. Lakers -- $118.0 million over five years (7.5% annual increases).  Several tax folks have run the numbers and concluded that Howard will receive more after-tax income by signing with the Rockets rather than the Lakers, based on California's 13.3% top marginal income tax rate and the absence of a state income tax in Texas, after taking into account the application of various state and local "jock taxes." 

 

Douglas Englebart (inventor of the mouse) dies at 88 years of age ---
http://readwrite.com/2013/07/03/doug-engelbart-inventor-of-the-mouse-dies-at-88#awesm=~oaVqEESYI5ELKi
Great Moments in Computer History: Douglas Engelbart Presents “The Mother of All Demos” (1968) ---
http://www.openculture.com/2013/07/douglas-engelbart-presents-the-mother-of-all-demos.html
Wait a while for the audio

History of Computing
Internet Archive: Computers & Technology --- http://archive.org/details/computersandtechvideos

From the Scout Report on May 3, 2013

20 years ago, the World Wide Web opened for business
WWW opened to all 20 years ago today; world's first website restored
http://www.latimes.com/business/technology/la-fi-tn-web-20th-anniversary-20130430,0,2025840.story

Team rebuilding world's first website
http://www.cnn.com/2013/04/30/tech/web/first-website-cern/

Hands up if you prefer the world's first website to what's come since
http://www.independent.co.uk/voices/iv-drip/hands-up-if-you-prefer-the-worlds-first-website-to-whats-come-since-8597877.html

History of the Web: World Wide Web Foundation
http://www.webfoundation.org/vision/history-of-the-web/

Hypertext: Behind the Hype
http://www.ericdigests.org/pre-9212/hype.htm

Five Best Early Internet Ads
http://www.geek.com/news/youtube-five-best-early-internet-ads-1360967/

 

Discovery: Gear & Gadgets Videos --- http://dsc.discovery.com/video-topics/gear-gadgets

"Don’t Forget the Small Ideas That Make a Difference," by David A. Pogue, The New York Times, June 27, 2013 ---
http://pogue.blogs.nytimes.com/2013/06/27/dont-forget-the-small-ideas-that-make-a-difference/?_r=0

Bob Jensen's threads on gadgets are at
http://www.trinity.edu/rjensen/Bookbob4.htm#Technology

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

Cengage Learning offers textbooks, instructor supplements, digital content, online reference databases, distance learning courses,[ test preparation materials, corporate training courses, career assessment tools, materials for specific academic disciplines, and custom solutions.

History

Thomson Learning was created out of a restructuring of International Thomson Publishing.

Sale to private equity

It was announced on October 25, 2006 that Thomson Learning would be offered for sale by the Thomson Corporation, with an estimated value of up to US$5 billion. The company was bought by a private equity consortium consisting of Apax Partners and OMERS Capital Partners for US$7.75 billion and the name was changed to Cengage Learning on 24 July 2007.

Acquisitions

In addition to organic growth, Cengage Learning has expanded through acquisitions within the publishing industry. Notable acquisitions include:

Date of acquisition announced Asset acquired Industry
16 May 2008 PAL Publications[10] Professional reference series
2 June 2008 Houghton Mifflin College Division[11] Publishing for 2- and 4-year colleges
17 July 2008 Gatlin Education Services[12] Web-based training for education providers
16 December 2008 HighBeam Research[13] Paid search engine of newspapers and magazines

Brands/imprints

The company's product lines include: 4LTR Press, Aplia, Atomic Dog Publishing, Charles River Media, Chilton, Chilton DIY[14] CompuTaught, Education To Go, Milady, NetLearning, and Primary Source Media.

Cengage Learning's imprints are:

Rankings

Based on its 2009 revenues, Publishers Weekly ranked it at number eleven out of fifty publishers worldwide, with a revenue of 1.958 billion dollars for that year.[4]

 

"Cengage Files for Bankruptcy Protection," Inside Higher Ed, July 3, 2013 ---
http://www.insidehighered.com/quicktakes/2013/07/03/cengage-files-bankruptcy-protection

Cengage Learning, Inc., the second largest publisher of higher education course materials in America, filed for Chapter 11 bankruptcy protection Tuesday. The move had been expected by financial analysts.

The company hopes to eliminate about $4 billion of its $5.8 billion in debt, the company said in a statement. The company's chief financial officer, Dean Durbin, blamed the company's woes on the move away from traditional printed textbooks to digital offerings, cuts in government spending since the recession, and piracy of its materials.

In a court filing, he said the company is working on a new business plan and pointed in particular to MindTap, a new cloud-based platform the company has elsewhere described as "more than an e-book and different than a learning management system." The company expects to continue to make timely payments to its vendors and offer the same wages and benefits to its employees, it said in a press release.

Continued in article

"Publisher's Bankruptcy Filing Comes as Market for Print Textbooks Shrinks," by Jennifer Howard, Chronicle of Higher Education, July 3, 2013 ---
http://chronicle.com/article/Publishers-Bankruptcy-Filing/140103/?cid=wc&utm_source=wc&utm_medium=en

Jensen Comment
It's not at all clear as to why the "move away from traditional printed textbooks to digital offerings" could be a major cause of failure in the business model. An accounting investigator would look for such reasons as failed cost savings by moving away from printing presses, failed demand for digital offerings, competition if pricing of digital offerings, etc. Particular culprits might be the failure to save as much money as intended by not having inventory, shipping, and handling costs of printed copy. More likely, however, it may well be that students and faculty resisted the moves away from printed textbooks.

One factor to consider is the way textbooks are marketed by giving free examination copies of printed textbooks to instructors. For example, I know of one instructor in San Antonio's largest colleges who made over thousands of dollars each year selling his free examination copies. In exchange for giving a sales rep an adoption of a hard copy textbook for over a thousand students per semester he demanded 50 free "examination copies" that he, in turn, sold to slimy book buyers who stalk faculty office hallways with thick packets of cash. Ostensibly the extra copies were to be used by his teaching assistants. But he did not have 50 teaching assistants each semester. In reality this was just a cozy deal between an unethical professor and an unethical book sales rep. My guess is that the book rep. was buying up almost 50 examination copies from the slimy book buyers in Texas. The publishing company may not have been involved in the fraud.

I don't think he ever figured out how to make money on 50 electronic textbook passwords. So he encourage his students to buy newly printed textbooks with a warning that there may be some missing material in used copies and electronic copies.

Why Females Are Better at Remembering Faces
"Females Scan More Than Males A Potential Mechanism for Sex Differences in Recognition Memory," by Jennifer J. Heisz, Molly M. Pottruff and David I. Shore, Psychological Science, May 20, 2013 ---
http://pss.sagepub.com/content/early/2013/05/20/0956797612468281

Recognition-memory tests reveal individual differences in episodic memory; however, by themselves, these tests provide little information regarding the stage (or stages) in memory processing at which differences are manifested. We used eye-tracking technology, together with a recognition paradigm, to achieve a more detailed analysis of visual processing during encoding and retrieval. Although this approach may be useful for assessing differences in memory across many different populations, we focused on sex differences in face memory. Females outperformed males on recognition-memory tests, and this advantage was directly related to females’ scanning behavior at encoding. Moreover, additional exposures to the faces reduced sex differences in face recognition, which suggests that males may be able to improve their recognition memory by extracting more information at encoding through increased scanning. A strategy of increased scanning at encoding may prove to be a simple way to enhance memory performance in other populations with memory impairment.

Jensen Comment
This does not make them necessarily better than men at remembering names among recognized faces. There are memory tricks to remembering names that some people, especially executives, master as part of their job skills. Accounting males and females may be better than marketing employees at remembering shoe tops.

 

Controversy and Scandal Surrounding John Hancock and the Compounding of Interest
"Our signature 1776 revolutionary:  John Hancock's role as treasurer left an uneasy Harvard," Harvard Gazette, July 2, 2013 ---
http://news.harvard.edu/gazette/story/2013/06/our-signature-1776-revolutionary/

Jensen Comment
To this day, many people in the USA do not understand the difference between simple interest versus annual compounding versus continuous compounding ---
http://en.wikipedia.org/wiki/Compound_Interest
Except for very long holding periods, continuous compounding does not add all that much to annual compounding. But compounding adds a huge amount relative to simple interest.

For example, if the Lenape Indians in 1626 had invested the $24 they received for Manhattan at 6% compounded annually they could perhaps buy the island back in 2013 for the accumulated savings of  $149,135,522,178.18.  In my first course in economics this was a footnote in the famous textbook by Paul Samuelson (with slightly different numbers). If this was indexed over time for inflation and exempt from taxation the Lenapes could perhaps buy the entire State of New York in 2013.

It's no wonder that in 1793 Harvard University badly wanted $529 accumulated compound interest owed by the John Hancock estate.

Bob Jensen's personal finance helpers ---
http://www.trinity.edu/rjensen/Bookbob1.htm#InvestmentHelpers

From Paul Caron on July 2, 2013 --- http://taxprof.typepad.com/

Following 52% Tuition Cut, Seton Hall Reduces Faculty Pay by 10% and Informs Junior Faculty They May be Terminated

Following up on my previous post, Seton Hall Law School Offers 52% Tuition Discount to Fill Incoming 1L Class:  Seton Hall has announced that it has cut faculty salaries by 10% and informed all seven junior faculty that they may be terminated following the 2013-14 academic year:

Jensen Comment
It can be disastrous to cut the faculty and/or faculty compensation of cash cow programs, particularly those in professional areas like accounting, business, law,  and nursing.

"5 Ways Business School Can Ruin Your Life," by Exeter Jones, Business Insider, July 1, 2013 ---
http://www.businessinsider.com/5-ways-business-school-ruins-your-life-2013-7

Jensen Comment
I always remember one of Bob Anthony's Harvard Cases (in his famous managerial accounting textbook) where a newly-minted MBA proposes a naive application of CVP analysis to increase operating margins. He failed to comprehend the basic assumptions of the linear model that he superficially learned in an accounting course. His older and wiser boss clued him in on how so much of what in learned in college courses more often than not do not fit realities of the world of business.

Always challenge underlying assumptions.

"Suit Challenges Princeton's Tax-Exempt Status," Inside Higher Ed, July 1, 2013 ---
http://www.insidehighered.com/quicktakes/2013/07/01/suit-challenges-princetons-tax-exempt-status

From the TaxProf Blog on July 2, 2013 --- http://taxprof.typepad.com/

Lawsuit Challenges Princeton's Tax-Exempt Status Over Faculty Participation in Royalty Payments

NewJersey.com:  Lawsuit Challenging Princeton University's Tax-Exempt Status Won't be Dismissed:

A lawsuit that argues Princeton University violates the provisions of its tax-exempt status survived a university-led attempt to throw the case out Thursday.

Plaintiffs in the case argue that, because Princeton is earning hundreds of millions of dollars in patent royalty income and is distributing some of that money to faculty, the school is deeply involved in commercial enterprise and isn’t entitled to its tax exemptions. The suit also takes aim at campus buildings that host extensive commercial activity, such as the Frist Campus Center and McCarter Theatre, which sells tickets to the general public for many events and performances.

Public interest lawyer Bruce Afran, who represents a handful of Princeton residents in the case, said yesterday that tax court judge Vito Bianco said the case had merit, and the potential precedent it could set was so far-reaching that the case was too important to be dismissed. ...

The suit alleges the university has violated its exemption status since 2005, the year it started sharing patent royalties with faculty. It challenges the exempt status of 19 buildings on campus, saying that they have non-academic or commercial uses. Afran said yesterday that while changes in building exempt status could force the university to pay additional taxes to the town, the school’s policy of sharing patent royalties with faculty could deprive the university of its overall nonprofit status — costing the university an additional $20-30 million in taxes a year.

Since the university started sharing royalty profit with faculty in 2005, it has given out $118,493,000 in profit sharing to faculty members, Afran said. Between fiscal year 2010 and 2011, the university’s annual patent license income increased from $95,948,000 to $115,206,000, according to the university’s annual research report.

 

"The Immortal Life of the Enron E-mails: A decade after the Enron scandal, the company’s internal messages are still helping to advance data science and many other fields," by Jessica Leber, MIT's Technology Review, July 2, 2013 ---
http://www.technologyreview.com/news/515801/the-immortal-life-of-the-enron-e-mails/?utm_campaign=newsletters&utm_source=newsletter-daily-all&utm_medium=email&utm_content=20130702

Bob Jensen's threads on the Enron and Worldcom (and Andersen accounting firm) scandals ---
http://www.trinity.edu/rjensen/FraudEnron.htm

"Illiberal Education and the 'Heart of the Matter':  A new report on the humanities and social sciences misses a big reason they're in trouble," by Peter Berkowitz, The Wall Street Journal, July 1, 2013 ---
http://online.wsj.com/article/SB10001424127887324637504578566333483406550.html?mod=djemEditorialPage_h

'The Heart of the Matter," the just-released report by the American Academy of Arts and Sciences, deserves praise for affirming the importance of the humanities and social sciences to the prosperity and security of liberal democracy in America. Regrettably, however, the report's failure to address the true nature of the crisis facing liberal education may cause more harm than good.

In 2010, leading congressional Democrats and Republicans sent letters to the American Academy of Arts and Sciences asking that it identify actions that could be taken by "federal, state and local governments, universities, foundations, educators, individual benefactors and others" to "maintain national excellence in humanities and social scientific scholarship and education."

In response, the American Academy formed the Commission on the Humanities and Social Sciences, with Duke University President Richard Brodhead and retired Exelon CEO John Rowe as co-chairmen. Among the commission's 51 members are top-tier-university presidents, scholars, lawyers, judges, and business executives, as well as prominent figures from diplomacy, filmmaking, music and journalism.

The goals identified in the report are generally admirable. Because representative government presupposes an informed citizenry, the report supports full literacy; stresses the study of history and government, particularly American history and American government; and encourages the use of new digital technologies.

To encourage innovation and competition, the report calls for increased investment in research, the crafting of coherent curricula that improve students' ability to solve problems and communicate effectively in the 21st century, increased funding for teachers and the encouragement of scholars to bring their learning to bear on the great challenges of the day. The report also advocates greater study of foreign languages, international affairs and the expansion of study abroad programs.

One of the more novel ideas in the report is the creation of a "Culture Corps" in cities and town across America to "transmit humanistic and social scientific expertise from one generation to the next."

Unfortunately, despite 2½ years in the making, "The Heart of the Matter" never gets to the heart of the matter: the illiberal nature of liberal education at our leading colleges and universities.

The commission ignores that for several decades America's colleges and universities have produced graduates who don't know the content and character of liberal education and are thus deprived of its benefits. Sadly, the spirit of inquiry once at home on campus has been replaced by the use of the humanities and social sciences as vehicles for disseminating "progressive," or left-liberal propaganda.

We know from the extensive documentation that William F. Buckley Jr. provided in his stellar critique of American academia, "God and Man at Yale," first published in 1951, that this propagandizing extends back at least to the middle of the 20th century.

Today, professors routinely treat the progressive interpretation of history and progressive public policy as the proper subject of study while portraying conservative or classical liberal ideas—such as free markets, self-reliance and a distrust of central planning—as falling outside the boundaries of routine, and sometimes legitimate, intellectual investigation.

Meanwhile, courses proliferate on highly specialized topics—Muslims in movies, gay and lesbian gardeners, the mathematical formalization of political decision making, for example—that closely correspond to professors' niche research interests but contribute little to students' grasp of the broad sweep of Western civilization and its literary, philosophical and religious masterpieces.

Through speech codes, endless seminars and workshops designed to teach students how to avoid "offensive" speech—and by handling sexual harassment and sexual-assault allegations with procedures that undermine the presumption of innocence—universities teach students to discount free speech and due process.

The American Academy of Arts and Sciences displays great enthusiasm for liberal education. Yet its report may well set back reform by obscuring the depth and breadth of the challenge that Congress asked it to illuminate.

Continued in article

Humanities Versus Business Concentrations ---
http://www.trinity.edu/rjensen/HigherEdControversies.htm#HumanitiesVsBusiness

"The Value of a Humanities Degree: Six Students' Views," by Jackie Basu et al., Chronicle of Higher Education, June 5, 2011 ---
http://chronicle.com/article/The-Value-of-a-Humanities/127758/?sid=wb&utm_source=wb&utm_medium=en

"Toward a Plausible Rationale for the Humanities," by Frank Donoghue, Chronicle of Higher Education, June 3, 2011 ---
http://chronicle.com/blogs/innovations/towards-a-plausible-rationale-for-the-humanities/29565?sid=cr&utm_source=cr&utm_medium=en

Graduate Education in Humanities is in a Crisis
"The Humanities, Unraveled," by Michael Bérubé, The Chronicle of Higher Education's Chronicle Review, February 18, 2013 ---
http://chronicle.com/article/Humanities-Unraveled/137291/?cid=wb&utm_source=wb&utm_medium=en

Jensen Comment
I recall having a coffee break with a humanities professor who was active in designing SAT examination questions. She reported that one classic piece of literature was deemed unacceptable for the examination because it had a sentence that reads something like:  "The women brought food and water to the men in the fields."

I think that censorship of classic literature because in modern times it has sexism connotations is an abomination in liberal education. Times change but we need not censor the past in art and literature.

Banned Conversations
"Philosopher's Downfall, From Star to 'Ruin,' Divides a Discipline," by Seth Zweifler, Chronicle of Higher Education, July 1, 2013 ---
http://chronicle.com/article/A-Prominent-Philosophers/140071/?cid=wb

Colin McGinn is towering above Miami Beach.

The prominent British philosopher, who was considered a star hire by the University of Miami several years ago, is sitting on the deck of his penthouse condo as waves crash onto the shore 43 floors below.

To an outsider, it looks like paradise. Mr. McGinn's home is in one of the most sought-after high-rises on Miami Beach's "Millionaire's Row"; his cabana, where he stores paddleboards and surfing gear, is larger than some city apartments.

But on the inside, he says, he's living in a state of "total ruin."

It has been six months since Mr. McGinn informed the university that he would resign at the end of the calendar year. His decision followed allegations that he had engaged in an inappropriate relationship with a graduate student. The student told the university that she felt uncomfortable after receiving a number of sexually explicit e-mail and text messages from Mr. McGinn. He denies any wrongdoing.

The ignominious conclusion to Mr. McGinn's career at Miami has fueled a continuing conversation about sexual harassment in philosophy departments. Stories of harassment of women have long plagued the discipline, in which fewer than one in five full-time professors are female. That imbalance, many say, has created a sense of isolation for women who have struggled to combat the sometimes clubby culture they say they have encountered.

In the past year, groups like the American Philosophical Association have led a renewed effort to rid philosophy of sexual harassment, establishing in November an Ad Hoc Committee on Sexual Harassment.

It is almost unheard-of, however, to see one of these accounts end as it did at Miami: with the departure of a tenured professor.

For some philosophers, the fact that an accomplished scholar like Mr. McGinn, who is 63, may have been pressured to leave his job when concerns were raised about his conduct provides hope that the discipline may be changing. The development could be a sign of progress, these philosophers say, in rooting out sexual harassment and sexist behavior in their field.

For other professors, Mr. McGinn's case is little more than a high-profile example of sexual-harassment policing run amok. These scholars—among them the Harvard University psychologist Steven A. Pinker and the New York University philosopher Stephen Schiffer—see his falling out with Miami as a sign that the measures adopted by academe for dealing with allegations of impropriety are becoming increasingly draconian. That is particularly true in this case, they say, because both Mr. McGinn and the student's boyfriend say the relationship at Miami never became physical.

Mr. McGinn has been vigorous in his own defense, on his blog and elsewhere. Even he acknowledges, though, that this is a situation from which he will very likely never escape. "This is a cloud I'll be under forever," he says. "I don't think it's ever going to lift." An 'Intellectual Romance'

When Mr. McGinn, a leading philosopher of mind, arrived at the University of Miami in 2006, the institution touted the hire as a major catch that would raise the profile of its philosophy department. Mr. McGinn received the John Locke Prize at the University of Oxford in 1973—a prestigious recognition in philosophy—and previously taught at University College London, Oxford, and Rutgers University. A garrulous professor, known by some for his scathing reviews in The New York Review of Books, he has long been in demand as a commentator on contemporary philosophical issues.

In the fall of 2011, Mr. McGinn came to know the graduate student who would later raise concerns about him. The student took a seminar on human evolution in relation to the hand with him that semester. Early in 2012, she became Mr. McGinn's paid research assistant. From the beginning, the professor says, the two had a close intellectual rapport and developed what he calls an "intellectual romance."

"The relationship was difficult," he says, speaking in his living room. "It wasn't natural. It was constrained by the fact that I was a professor and she was a student. ... We couldn't just go in the way people normally would."

On several occasions, Mr. McGinn says, he invited the student to his condo. The two went paddleboarding, played tennis, and talked philosophy. "I suppose in a very broad sense it could be said that we were attracted to each other, in the sense that we liked being with each other a lot," he says. "Were we sexually attracted to each other? I don't think that was really very relevant to our thoughts about it. It was so off the table, it was so not what we were doing."

During one conversation with the student, Mr. McGinn says he told her of a tumor (which he later had successfully removed) that he had developed on his face. He had not told anybody outside his family about it. "That builds closeness between people," he says. "You go beyond a barrier into another level when that happens, and you can't change that."

Another time, the professor says, the student expressed reservations about her job prospects in philosophy. He devised a solution, an undertaking he called the "genius project." He describes it as an experimental learning endeavor in which he hoped to help the student improve her philosophical abilities by fostering creativity and encouraging taboo busting.

The two would often engage in sexual banter, he says, but it always stemmed from their collaboration on a book about the hand's role in human evolution. Mr. McGinn says they would make jokes about the hand in a sexual context. When he saw the student, they would perform a "ceremony," he says, during which they went through a series of "hand grips" simulating closeness and social interaction.

Mr. McGinn says he believes that the student later complained about him because she had failed to complete her work over the summer and was wary of receiving a negative report. He does not think that their sexual banter made her uncomfortable.

The student, however, maintains otherwise, according to some of her friends and professors. Before she went to administrators last September, "she was just extremely scared and anxious," says Benjamin M. Yelle, her boyfriend, who is a fifth-year graduate student in philosophy at Miami.

Although she declined to comment for this article, citing her desire to pursue a career in philosophy, Mr. Yelle consulted with her before speaking with The Chronicle. "Sexual harassment is a serious issue in philosophy, and it's not going to stop unless people are willing to stand up against famous philosophers like Colin," he says. It took months, Mr. Yelle adds, for the student to work up the courage to approach the university about Mr. McGinn's behavior.

Mr. McGinn once wrote to the student that they should "have sex three times in my office over the summer when no one else is around," Mr. Yelle says. He also says the professor once suggested that the student should wear shorts more often because he thought her legs were attractive.

Mr. McGinn says he never suggested to the student that they should have sex. He also says he merely told the student that her legs were "muscular." He is unwilling, however, to share the e-mails he sent to the student.

In one e-mail, described identically by several people familiar with the case, Mr. McGinn told the student that, earlier in the morning, he "had a hand job imagining you giving me a hand job."

Mr. McGinn defended that e-mail in a June 6 post on Philospot, a blog to which he frequently contributes. He put a linguistic spin on it: "What kind of hand job leaves you cleaner than before?" he wrote. "A manicure, of course." In a later interview, Mr. McGinn said that the student would have interpreted "hand job" to mean manicure because of the work on which they were collaborating.

"People did not have a sense of humor about things," Mr. McGinn says of the reaction to the hand-job e-mail. "When you're communicating with someone almost on a daily basis, like we were, the sense of humor is assumed. ... Almost everything I say to people is ironic. It's my style." 'Most Enlightened Person'

Mr. McGinn is angry. He's been playing tennis for an hour, and he's beginning to hit the ball a bit too hard, his shots sailing just beyond the baseline of the court.

"I've never felt this kind of anger in my life," he says, noting that tennis has been his go-to source for stress relief in recent months. "'Anger' is not a sufficient word for it; it's a sense of indignation, a sense of injustice."

In preparation for a daylong interview with The Chronicle, Mr. McGinn compiled a list of 11 "likely consequences" of his case. Among them, he wrote, his situation will fan anti-American sentiment (because people will view his case as a result of a culture obsessed with political correctness); will lead "delinquent students" to lodge more complaints against professors; and will impede free speech in the classroom. In person, he expanded liberally on that list, saying that his departure from Miami will result in the demise of the philosophy department there within three years.

Mr. McGinn, who calls himself both a "ladies' man" and "the most enlightened person in the world," is not one to hide his belief that modesty is a form of dishonesty. "People sometimes perceive superiority as arrogance," he says. "A superior person is not necessarily arrogant, but just superior."

While he resigned of his own accord, he says that he "couldn't win," because Donna E. Shalala, the university's president, was determined to drive him out. A Miami spokeswoman declined to comment on Ms. Shalala's behalf, citing the institution's policy of not commenting on personnel matters.

As Mr. McGinn has continued to defend himself vigorously on his blog, many philosophers have come to view him as egotistical, or simply as someone who just doesn't get it. One professor called him a "dinosaur"; another said his behavior is "something you'd find in a department in the 70s."

But a small circle of academics has come to his defense, arguing that the Miami administration overstepped its bounds when it pressured Mr. McGinn to resign. Some, like Mr. Schiffer, of NYU, have written letters to Miami, expressing concern over the "grave injustice" done to Mr. McGinn. "The punishment doesn't even begin to fit the crime," Mr. Schiffer said in an interview.

Mr. Pinker, of Harvard, does not think Mr. McGinn should have gone unpunished, but he is concerned that the punishment is so harsh that it could inhibit even scholarly relationships between graduate students and faculty members. "It's a matter of universities' not taking a Victorian stance that anything sexual between competent adults is so unthinkably outrageous," he says, "that it merits the worst possible punishment."

Some academics, too, have rejected the notion that sexual harassment is rampant in philosophy. "It is surely nonsense to suppose that sexual harassment has been greater in philosophy than in other subjects," Ted Honderich, a professor emeritus of philosophy at University College London, says via e-mail. "Sexual harassment has always been everywhere."

Continued in article

Jensen Question
Can two non-gay males or two non-lesbian females have intellectual conversations were other scholars dare not go?

"Creating and Sharing Videos That Are Not Too Long and Not Too Short: Two services let you gather photos and video clips, and upload them for automated video editing," by Walter S. Mossberg, The Wall Street Journal, July 2, 2013 ---
http://online.wsj.com/article/SB10001424127887323936404578581651707015148.html

. . .

This week, I tested two such services, Magisto and Animoto. Both work on iPhones and Android phones, but also via Web browsers on PCs and Macs. Both offer free versions, as well as paid versions with richer features.

I found both worked well, but Magisto was easier to use. It, however, offered fewer options and less control. It's focused on automated video editing based on algorithms it claims allow it to deduce the gist, or emotion, of the video, in accordance with the theme. Animoto offers more customization, with a greater variety of styles and more manual controls. It keys its production mainly from the music you choose.

Each has some drawbacks, but I generally preferred Magisto. It took less time and its free version offers longer videos. I'd use Animoto if I wanted greater control.

With each service, I was able to make short videos of family events like Thanksgiving dinner and a wedding, which took almost no effort and time. The videos looked professional and pleasing to people with whom I shared them.

Both services store your videos on their servers. Both allow you to share your videos by sending links to select groups of friends and family. They also allow you to share videos more widely on Facebook, Twitter and other social networks. But neither is a social network itself. Both offer either music they've licensed or allow you to upload your own.

Magisto, which launched in 2012, makes videos of up to one minute and 15 seconds long free of charge. A paid version costs $5 a month or $18 a year for videos of up to 2½ minutes.

Animoto, which has been around since 2007 (it started out as a way to make slide shows from photos), gives you just 30-second videos free and charges $5 a month, or $30 a year, for videos of up to 10 minutes long, though the company says average projects are two to three minutes. Animoto also has costlier plans with longer durations for professionals like wedding photographers.

I used short video clips of events and tried each service in a Web browser and via iPhone apps. I emailed links to friends and family and did test posts to Facebook.

Magisto has a beautiful, clean interface, with clearly labeled steps and buttons that say "Next," and, when you're done, "It's a Wrap!" and "You're Done." Like Animoto, the automated process takes a few minutes to produce the movie on its servers and notify you by email when your movie is ready.

My finished Magisto movies looked good and weren't cheesy. The service adds panning and zooming to photos, changes from color to monochrome, and creatively shows your video clips—for instance, quickly repeating key sections, or stopping the videos to make it look like a photo is being snapped, complete with a shutter sound. I especially liked one wedding project I did accompanied by the song "Chapel of Love."

But Magisto's main drawback is that it only offers 11 themes and I found these either too specific or general to match my projects. The company says it's adding more themes. Also, the iPhone version is marred by a giant pop-up ad for a sponsor running a contest.

Animoto took longer to use, partly because I found its interface harder to decode, and partly because it let me choose which parts of my video clips it would use. Animoto only uses 10 seconds of each of your clips in its finished movie, interspersing these segments with photos and text you create. By default, it takes the first 10 seconds you create.

But Animoto doesn't work in a clear step-by-step fashion. In particular, when you're done, instead of saying the movie is completed and being processed on the server, it merely has a button saying you can preview the video.

But Animoto has features Magisto lacks, like the ability to add text frames and 44 styles. These included many general ones, like "Air" and "Fire," that would work with more projects.

I found my Animoto movies were pleasant, but a bit more basic than the Magisto examples. The same wedding looked less interesting and more like a slide show with some effects in Animoto.

Your reactions may differ, however, and your material may lend itself better to one service than the other. Both work well and I urge you to try them if you want more than Vine or Instagram offer, with less work than a full video-editing app.

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

"How to Rescue Barnes & Noble? Here Are Ideas From Five Experts," by Jeffrey A. Trachtenberg, The Wall Street Journal, June 30, 2013 ---
http://online.wsj.com/article/SB10001424127887323689204578573891816525774.html?mod=djemCFO_h

To cope with the rise of e-books and Amazon.com Inc., AMZN +0.05% Barnes & Noble Inc. BKS +0.75% has started selling toys, games, stationery and all manner of other products. To some observers, books seem less important there.

That strategy has helped the retailer's bottom line but holds long-term risks, potentially driving customers to Amazon. So what is the alternative? Should Barnes & Noble double-down on books, a strategy that could be costly in the near term? As it is, the company signaled last week it expected a tough year in its consumer-stores business in the coming year.

The Wall Street Journal asked a group of leading writers, retailers, and agents on what they would do if they ran Barnes & Noble. Edited excerpts:

Peter Olson, co-chief executive of the Fullbridge Program and former CEO of Bertelsmann SE & Co. KGaA's Random House, the world's largest consumer book publisher.

Barnes & Noble is in real trouble but they have real, underleveraged strategic assets.

Let's start with people coming in to browse, which you can't do well online yet. They can take this loyal customer base that is willing to travel and leverage it by offering more than just the print books on the shelves. The customer base could be looking for a lot more in terms of rewards, such as a discount for volume shopping, bundling, and help in ordering alternative formats if a book isn't in the store.

Say you're looking for a history book but it's not in stock. You go to the counter and they say that if you buy the e-book now, we'll deliver the hardcover tomorrow, plus we'll offer you a discounted price for the two of them. Make it worth their while to come in. You have dedicated print readers walking into your stores. Don't let Amazon serve them.

Or say a customer is interested in a book by somebody who has written 20 novels. Why shouldn't you work out a really steep discount on future purchases by that loyal customer? Share the discount with the publisher, and say to the shopper, pay us $12.99 on the first title, but the next one will be $10.99. Or, if you want all 20 titles, here's a special price. Or here's a special price for all and we'll throw in the e-book versions, so you can have them while you travel and in your home.

That's how Barnes & Noble could use its one real advantage: the traffic of loyal book browsers. Give them more aggressive bundling and discounting, and get them coming back.

 

James Patterson, best-selling author and a former senior advertising executive at J. Walter Thompson:

They need to make the stores feel like much more exciting places to shop. Compelling, contemporary, clear signage would be helpful.

The way a lot of smaller bookstores survive is through continual events, some even every day. Barnes & Noble could do more of that. They are putting an incredible effort into e-books and e-book devices, but some of the other things aren't front and center. It seems to me that at one time they discounted more across the board, more hardcovers and paperbacks, and not just best sellers. And I think paperbacks should be featured more. A lot of people consider them within their budget. They are more likely to try authors with a paperback. It's harder to pay a hardcover price when you haven't heard of somebody. And it needs to be part of their windows.

For me, maybe less knickknacks. In the short run they sell. But what do they do for the store experience?

 

Gerald Storch, former chief executive of Toys R Us Inc. and vice chairman of Target Corp.:

Barnes & Noble has done a good job enabling its customers to interact with it however they choose. But they need to create a store environment that people who love the brand want to visit. That means more destination activities, such as book groups, author readings.

What doesn't work is trying to change your customer or trying to expand your product offering dramatically beyond the historical offering of the brand. There are very few examples of successfully changing your customer base.

 

Praveen Madan, president of Kepler's Books in Menlo Park, Calif.:

If I were in their shoes, I would deepen the commitment to a broader stock of books, to displaying and promoting books from small presses and university presses. They should also be more involved with local schools and libraries. They may have to run fewer, smaller stores, but that's how to do it. There is absolutely a place for them if they embrace the commitment to books and ideas. But if they are a profit first, general retailer, then I don't think there is a place for them.

 

Simon Lipskar, president of Writers House, a New York literary agency:

Continued in article

"Barnes & Noble, the Last Big Bookseller Standing: But for How Long," Knowledge@Wharton, January 16, 2013 ---
http://knowledge.wharton.upenn.edu/article.cfm?articleid=3167

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

"Lie Detection 101 for Financial Analysts: How to Spot Manipulators and Actors," by Jason Voss, CFA, Enterprise Investor, July 19, 2012 ---
http://blogs.cfainstitute.org/investor/2012/07/19/lie-detection-basics/

"How to spot a liar," by Leon Gettler, Sydney Morning Herald, July 10, 2010 ---
http://www.smh.com.au/executive-style/management/blogs/management-line/how-to-spot-a-liar-20100905-14vot.html

Watch the Video
"The Science of Reading Faces" by Paul Eckman
http://www.youtube.com/watch?v=IA8nYZg4VnI

Watch the Video
"10 Verbal and Non-Verbal Signs to Spot a Liar at Work," Stanford Graduate School of Business, June 2013 ---
http://stanfordbusiness.tumblr.com/post/54109702521/10-verbal-and-non-verbal-signs-to-spot-a-liar-at-work

VERBAL SIGNS:
1. Selective wording
Someone might be lying if he or she doesn’t actually answer your question. For example, you might ask an interviewee, “Did you leave your last workplace under good conditions?” If the person responds, “I left to pursue things that were more in line with my skills and talents,” you should take note that he or she skirted around your true question.

2. Quasi-denials
Listen for instances when people back out of statements before actually saying them, like “I could be wrong but…”.

3. Qualifiers
Another possible sign of deception could be using qualifying phrases like “To the best of my knowledge…”.

4. Softeners
When innocent people are questioned about a possible theft or crime, they tend to use “hard” words like “steal” or “forge.” But if they are guilty, people soften their diction using words like “borrow” or “mistake.”

5. Overly formal wording
Liars might use phrases that add distance, like formal titles Mr. or Mrs. You might also hear them speak in full phrases like “did not” versus informal contraction “didn’t.”  

NONVERBAL SIGNS:
1. Stress signals
When people lie, their heart rate goes up, blood pressure goes up and breathing gets shallow. Much of detecting lies is actually detecting stress. You won’t know if people are lying just by the fact that they are playing with their jewelry or bouncing their feet, but you’ll know that something is up.

2. Deviation from the “truth baseline”
Before an official job interview, you might invite candidates for coffee so you can observe their gestures and the pitch of their voices as they answer easy questions like, “How did you hear about this job?” Look for a baseline of truthful answer behaviors and then take note of any changes during further questioning. 

3. “Telltale Four”
Look for clusters of verbal and nonverbal signs. If you’re interviewing someone and notice stress signs, put an asterisk by that question and return to the subject later. If you get the stressed reactions a second time, the person may be holding something back. 

4. Eye signals
The biggest myth around deception is that liars don’t look you in the eye. Because liars have heard this, they may overcompensate and look at you too directly. There is, however, a correlation between lying and blink rate. As a lie is constructed and told, the liar’s blink rate goes down. After the lie is told, the blink rate will increase up to eight times. 

5. Emotional incongruence
Sometimes you just have a gut feeling that something is off, like catching someone with a phony smile. A liar can look incredibly fearful that he or she will be caught, but be careful because truthful people can also look fearful that you won’t believe them. 

Jensen Comment
I don't have much faith in these cues. All too often fraudsters like Bernie Madoff, Jeff Skilling, Andy Fastow, and Rita Grundwell lie with great skill even amidst their own families. Chances are they repeatedly got away with telling lies and cheating from early childhood.

"Some Juicy Audiobook Tidbits," by Joshua Kim, Inside Higher Ed, July 4, 2013 ---
http://www.insidehighered.com//blogs/technology-and-learning/some-juicy-audiobook-tidbits

Bob Jensen's threads on free audio books and poems ---
http://www.trinity.edu/rjensen/ElectronicLiterature.htm#Audio

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

What he does not confess is how, before the scandal broke, virtually all employees of Enron who knew him hated the "arrogant little bastard"
"The confessions of Andy Fastow," by Peter Elkind, Fortune, July 1, 2013 ---
http://features.blogs.fortune.cnn.com/2013/07/01/the-confessions-of-andy-fastow/

He was an improbable Las Vegas headliner, taking the stage before a packed convention hall of 2,500 fraud examiners.

For former Enron CFO Andy Fastow, who spent more than five years in federal prison for his crimes, last week's appearance before the Association of Certified Fraud Examiners was his most public step in an uphill redemptive journey -- to explain how he became a "fraudster;" to sound provocative warnings about today's corporate practices; and even to offer a bit of revisionism on the company's 2001 collapse.

Fastow launched his talk with a broad mea culpa, introduced with a grim joke. "Several of you have commented to me that your organization has grown dramatically over the past 10 years," he said. "And they thank me. They said no other individual has been more responsible for the growth of your industry than me. So: You're welcome."

The crowd roared.

"It's not something I'm proud of," he added soberly, after the laughter had died down.

Fastow was initially charged with 78 counts of fraud, mostly connected to his central role in a web of off-balance sheet entities that did business with Enron, disguised the company's financial condition, and made Fastow tens of millions. He ultimately pled guilty to two counts, forfeited $30 million, and agreed to testify against his former bosses as a government witness.

Since leaving prison in 2011 and resuming life with his wife Lea and two sons in Houston, where Enron was based, Fastow has kept a low profile. Now 51, he works 9-to-5 as a document-review clerk at the law firm that represented him in civil litigation.

Fastow has given 14 unpaid talks, mostly at universities, usually with no press allowed. The first came at the University of Colorado-Boulder. He volunteered to speak to students after reading a column on ethics by the dean of the business school. Fastow has also spoken at Tufts, Tulane, and Dartmouth and is scheduled to address a United Nations group in the fall.

In Las Vegas, dressed in a blazer and open shirt, Fastow stood at the podium a bit grim-faced, his speech sometimes halting. "I'm not used to giving talk to groups this big," he explained. "I apologize to you if I feel nervous -- if I appear nervous."

"Why am I here?" he asked. "First of all, let me say I'm here because I'm guilty ... I caused immeasurable damage ... I can never repair that. But I try, by doing these presentations, especially by meeting with students or directors, to help them understand why I did the things I did, how I went down that path, and how they might think about things so they also don't make the mistakes I made."

"The last reason I'm here," Fastow continued, "is because, in my opinion, the problem today is 10 times worse than when Enron had its implosion ... The things that Enron did, and that I did, are being done today, and in many cases they're being done in such a manner that makes me blush -- and I was the CFO of Enron." He cited the continuing widespread use of off-balance-sheet vehicles, as well as inflated financial assumptions embedded in corporate pension plans.

MORE: Big companies don't have to lose their souls

Fastow said he was prosecuted "for not technically complying with certain securities rules" -- but that wasn't "the important reason why I'm guilty." The "most egregious reason" for his culpability, he said, was that the transactions he spearheaded "intentionally created a false appearance of what Enron was -- it made Enron look healthy when it really wasn't."

"Accounting rules and regulations and securities laws and regulation are vague," Fastow explained. "They're complex ... What I did at Enron and what we tended to do as a company [was] to view that complexity, that vagueness ... not as a problem, but as an opportunity." The only question was "do the rules allow it -- or do the rules allow an interpretation that will allow it?"

Fastow insisted he got approval for every single deal -- from lawyers, accountants, management, and directors -- yet noted that Enron is still considered "the largest accounting fraud in history." He asked rhetorically, "How can it be that you get approvals ... and it's still fraud?"

Because it was misleading, Fastow said -- and he knew it. "I knew it was wrong," he told the crowd. "I knew that what I was doing was misleading. But I didn't think it was illegal. I thought: That's how the game is played. You have a complex set of rules, and the objective is to use the rules to your advantage. And that was the mistake I made."

After speaking for about 20 minutes, Fastow took questions. He insisted on this despite the trepidations of conference organizers. "A lot of people are still angry," explained James Ratley, a former Dallas police department fraud investigator and the Austin-based group's CEO. "I was cautious that someone would create a disturbance."

The fraud group invites a "criminal speaker" to address its convention every year. But Fastow's invitation drew unusually acidic comments on a LinkedIn message board. "A total slap in the face to all of the honest and respectable investigators that could be utilized as a presenter," one person fulminated. "Just scum," was another's summary. "To be blunt," a third person wrote, "I see him as a calculating low life, as bad as an armed robber who would shoot up a bank to get the people's money."

But Ratley dismissed the criticism. "If you're a fraud examiner and you don't want to deal with a fraud perpetrator, you ought to change professions." Ratley said he had met with Fastow to screen him "for any type of evasiveness. He has not dodged, ducked, or blinked since I started talking with him." ACFE made a point of noting prominently in promotional materials that Fastow was not paid to speak. (The group did cover his travel expenses).

Among his questions, Fastow was asked about former Enron CEO Jeff Skilling's sentence reduction last month -- from 24 to 14 years. Fastow offered considerable sympathy for his former boss, against whom he had testified at trial. "Going to prison is terrible," Fastow said. "You're never comfortable. All the talk about 'Club Fed' is garbage ... You're surrounded by very violent people, very unstable people. Prisons work hard to make you uncomfortable. But that's not what's bad about going to prison. What's bad about going to prison is that you're separated from your family." (Skilling's parents and youngest son all died while he was behind bars.) Fastow added that even Skilling's reduced term is still "a devastating sentence."

Fastow went on to insist that "Enron did not have to go bankrupt when it went bankrupt ... Enron should not have gone bankrupt. It could have survived. And it was decisions made in October 2001" -- after Skilling resigned as CEO -- "that caused it go into bankruptcy" early that December. That's a highly debatable point -- but Fastow did not elaborate.

And then, the final question: "This is on a lot of people's minds. Many people vilify you for what you did at Enron, and the resulting effect on other companies, pensions, market share, people's fortunes. How do you grapple with that? How do you react to that condemnation?"

"Um, well, first of all," said Fastow, looking down, "I deserve it. It's a very difficult thing to accept that about yourself. I didn't set out to commit a crime. I certainly didn't set out to hurt anyone. When I was working at Enron, you know, I was kind of a hero, because I helped the company make its numbers every quarter. And I thought I was doing a good thing. I thought I was smart. But I wasn't."

"I wake up every morning, and I take out my prison ID card, which I have with me here today. And it makes certain that I remember all the people. I remember that I harmed so many people in what I did. It encourages me to try to do the little things that I can to make amends for what I did."

"I can't repay everyone. I can't give them jobs. I can't fix it. But I just have to try bit by bit to do that. Being here is hopefully a little contribution to that."

Continued in article

MORE: The real story behind Jeff Skilling's big sentence reduction
(Jensen:  Actually it was far less reduction than Skilling had hoped for --- he will remain in prison until 2017 while the creep Fastow milks the public speaking circuit)

Rebecca Mark's Secret Recipes for Looting $100 million from corporations you manage ---
http://www.trinity.edu/rjensen/FraudEnron.htm#RebeccaMark

Bob Jensen's threads on the enormous Enron, Worldcom, and Andersen scandals ---
http://www.trinity.edu/rjensen/FraudEnron.htm

"Accountants do it with sharp pencils"
"The Surprising History of the Pencil," by Maria Popova, Brain Pickings, June 24, 2013 ---
http://www.brainpickings.org/index.php/2013/06/24/history-of-the-pencil/

Bob Jensen's threads on accounting history ---
http://www.trinity.edu/rjensen/Theory01.htm#AccountingHistory

July 1, 2013 reply from Jagdish Gangolly\

Bob,

For those of us who use mechanical pencils, the main problem is constant breaking of the lead. I got so fed up that I stopped using mechanical pencils. That is, until I recently discovered a Japanese pencil, Kuru Toga uni pencil, whose lead never breaks. It also has a special auto lead rotation mechanism which keeps the lead sharp as you write. Just unbelievable! And it is quite inexpensive (just $10-15).

Just thought you might like to know.

Regards,

Jagdish

Jagdish S. Gangolly
Department of Informatics College of Computing & Information
State University of New York at Albany
Harriman Campus, Building 7A, Suite 220
Albany, NY 12222 Phone: 518-956-8251, Fax: 518-956-8247

 

One Lie You Learned in School:  "Crime Doesn't Pay" (Yeah Right!)

"Ex-Olympus Chairman Gets Suspended Sentence for Fraud," by Kanoko Matsuyama & Takashi Amano, Bloomberg, June 3, 2013 ---
http://www.bloomberg.com/news/2013-07-03/ex-olympus-chairman-gets-suspended-sentence-for-accounting-fraud.html

Former Olympus Corp. (7733) Chairman Tsuyoshi Kikukawa received a suspended sentence for his role in a $1.7 billion accounting fraud that caused the Japanese camera maker’s market value to plunge 80 percent.

Olympus itself, also the world’s largest maker of endoscopes, was ordered to pay 700 million yen ($7 million) in fines by Tokyo District Judge Hiroaki Saito today. Former Olympus Executive Vice President Hisashi Mori and Hideo Yamada, a former auditing officer, also got suspended sentences.

Judge Saito’s decision comes almost two years after revelations that the company had falsified financial reports to conceal losses on investments. The sentences reflect the defendants’ claims that former Olympus presidents Masatoshi Kishimoto and Toshiro Shimoyama made the decision to hide losses, while he inherited the aftermath.

“Kikukawa and Yamada succeeded in a negative legacy and weren’t involved in the decision-making process to hide losses,” Saito said in court today. “They were distressed and didn’t benefit personally from hiding losses. Mori followed their orders.”

The camera maker still faces lawsuits by investors including State Street Bank and Trust & Co. and Government of Singapore Investment Corporation Pte Ltd. in a joint complaint seeking 19.1 billion yen in damages. Suspended Years

Kikukawa and Yamada were given three years of jail time suspended for five years, while Mori got two and a half years jail time suspended for four years. Kishimoto and Shimoyama haven’t been charged because the statute of limitations has expired, Kyodo News reported on April 23.

Prosecutors had asked for a five-year jail term for Kikukawa and a 1 billion yen fine for Tokyo-based Olympus, Kyodo News reported on March 26. Lawyers for the defendants said jailing them would be unfair because other executives involved weren’t charged, the news service reported.

The fraud, “destroyed the image of Japanese companies internationally,” Kikukawa told the court in September when pleading guilty along with the other executives.

Olympus fell 0.9 percent to 3,170 yen at the close in Tokyo trading. The shares have more than doubled in the past 12 months, compared with a 55 percent jump in the benchmark Nikkei 225 Stock Average. Whistleblower Woodford

Kikukawa resigned in October 2011, weeks after the board fired former President Michael Woodford, who uncovered the accounting discrepancies and went public with them after the Olympus board declined to take action. The company and three former executives eventually admitted using fraudulent takeover deals to hide losses for 13 years starting in the 1990s.

Olympus restated five years of earnings results to account for the bookkeeping fraud, wiping $1.3 billion off its balance sheet and prompting speculation the company would seek a capital infusion. Reports of the attempts to hide losses in mid-October 2011 triggered an 82 percent drop in the company’s shares between Oct. 13 and Nov. 11, 2011.

The company said in July last year it would pay 191.8 million yen in fines to Japan’s financial regulators, while the camera maker itself has sued 19 former executives for damages related to the cover up of losses.

Founded in 1919 as a microscope and thermometer maker, Olympus produced its first camera in 1936 and a predecessor to the modern-day endoscope in 1950, according to its website. The company controls 75 percent of the global market for endoscopes, instruments doctors use to peer inside the body to help diagnose disease.

Continued in article

Bob Jensen's thread on the Olympus accounting fraud ---
http://www.trinity.edu/rjensen/Fraud001.htm
Search on the word "Olympus"

Bob Jensen's threads on why white collar crime pays even if you know you will be caught ---
http://www.trinity.edu/rjensen/FraudConclusion.htm#CrimePays

They say that patriotism is the last refuge
To which a scoundrel clings.
Steal a little and they throw you in jail,
Steal a lot and they make you king.
There's only one step down from here, baby,
It's called the land of permanent bliss. 
What's a sweetheart like you doin' in a dump like this?
Lyrics of a Bob Dylan song forwarded by Amian Gadal [DGADAL@CI.SANTA-BARBARA.CA.US] 

KPMG signed off and then quit on the way out the dooo:  Did you ever wonder why?
Maybe they signed to save their fingers, toes, and knee caps!
"Questions Raised over Auditors’ Role in Olympus False Accounting Scandal," by Michael Foster, Big Four Blog, December 9, 2011 ---
http://www.big4.com/kpmg/questions-raised-over-auditors-role-in-olympus-false-accounting-scandal

Japan’s Financial Services Agency is to determine whether auditors deliberately falsified Olympus’s financial statements in a series of hearings. Both KPMG Azsa and Ernst & Young ShinNihon could be forced to cease their business operations. If either company’s activities are found to be negligent or fraudulent by the agency, they could also face private suits for damages.

Olympus has stated in a press conference that it is investigating the two Big4 firms’ involvement in the false accounting scandal, although Ernst & Young insists that an internal probe concluded that nothing was wrong with its audit. KPMG has said that it will cooperate with the investigations but insists that its auditing was in line with Japanese auditing standards.

Both companies are under increasing pressure as they are due to sign off on Olympus’s latest earnings results due next week, although neither company exposed the $1.5 billion in investment losses incurred throughout the thirteen-year long coverup.

Although auditors from both firms had given an unqualified opinion when producing their reports of Olympus’s accounts, KPMG had expressed concern over the four deals that are at the center of the scandal in 2008. The Big4 firm said that it thought Olympus had overpaid for Gyrus Group PLC, a British medical company, and three Japanese venture firms. In January 2009, KPMG conducted an on-site audit and warned Olympus that a shareholder lawsuit could result from the acquisitions. In April of that year, KPMG then threatened to notify authorities of the discrepancies.

By the middle of May, KPMG demanded the resignation of then Olympus president Tsuyoshi Kikukawa and two executives and threatened to resign as auditor. On May 7, 2009, KPMG said that it would “be difficult to continue as your auditor” if Olympus continued to insist that the deals were appropriate, according to the firm’s report. Olympus then agreed to write down a large portion of the value of the purchases and convened an external panel, who concluded that Olympus’s executives had done nothing wrong. Satisfied, KPMG Azsa signed off. Shortly thereafter, Kikukawa and Olympus executive Hideo Yamada cancelled their contract with KPMG.

"KPMG Scrutinized Over Handling of Olympus Accounting Fraud Scandal," by Kalen Smith, Big Four Blog, December 15, 2011 ---
http://www.big4.com/kpmg/kpmg-scrutinized-over-handling-of-olympus-accounting-fraud-scandal

KPMG’s auditors in Tokyo are under scrutiny after signing off on reports issued by Olympus Corp. Auditors found several accounting irregularities when they reviewed financial statements provided by Olympus executives. The auditors were particularly concerned over $600 million worth of takeover advisory fees and payments on acquisitions. Despite their concerns, auditors chose to sign off on the reports after an outside consultant approved of the findings.

Although the consultant said the takeover costs were justified, they were also hired from Olympus Corp. This has raised some red flags over a possible conflict of interest in the matter.

Olympus has now been revealed to have engaged in financial fraud for more than two decades. Following the revelation of the accounting scandal at Olympus, regulators are looking closely at KPMG and Ernst & Young. Regulators feel the auditors should have seen signs of the fraud and taking measures to stop them.

According to allegations, KPMG was Olympus’s auditor for years. They failed to catch the discrepancies and Ernst & Young was called in as well.

According to Yuuki Sakurai of Fukoku Capital Management, auditors work for the companies that pay them. Auditors are going to have a hard time staying in business if they get a reputation for being the kind of company that goes to the regulators without solid evidence of malfeasance.

Although the manner in which KPMG handled the Olympus case created some concern for regulators, it may signify greater concern over the corporate culture that has created a serious conflict of interest between auditors’ responsibilities for their clients and need to uphold the law.

Bob Jensen's threads on KPMG ---
http://www.trinity.edu/rjensen/Fraud001.htm

Bob Jensen's threads on the the decline of professionalism and independence in auditing ---
http://www.trinity.edu/rjensen/Fraud001c.htm

 

 

Teaching Cases on Olympus and SPV Frauds

From The Wall Street Journal Accounting Weekly Review on December 2, 2011

Olympus Heat Rises
by: Juro Osawa and Phred Dvorak
Nov 25, 2011
Click here to view the full article on WSJ.com
Click here to view the video on WSJ.com WSJ Video
 

TOPICS: Audit Quality, Audit Report, Auditing, Auditor Changes, Auditor/Client Disagreements, business combinations, Business Ethics, Fraudulent Financial Reporting

SUMMARY: The series of events leading to questions about auditing practices at Olympus that failed to uncover a decades-long coverup of investment losses is highlighted in this review. The company must submit its next financial statement filing to the Tokyo Stock Exchange by December 14, 2011 for the period ended September 30, 2011 or face delisting.

CLASSROOM APPLICATION: The review focuses on auditing questions about sufficient competent evidence, change of auditors, and ability to provide an audit report given knowledge of the length of time this coverup has been ongoing.

QUESTIONS: 
1. (Introductory) What fraudulent accounting and reporting practices has Olympus, the Japanese optical equipment maker, admitted to committing?

2. (Advanced) What services is Mr. Woodford calling for to investigate the inappropriate payments and accounting practices by Olympus? Specifically name the type of engagement for which Mr. Woodford thinks that Olympus should contract with outside accountants.

3. (Introductory) Refer to the related articles. What questions have been raised about outside accountants' examinations of Olympus's financial statements for many years?

4. (Advanced) Based only on the discussion in the article, what evidence did Olympus's auditors rely on to resolve their questions about the propriety of accounting for mergers and acquisitions? Again, based only on the WSJ articles, how reliable was that audit evidence?

5. (Advanced) What happened with Olympus's engagement of KPMG AZSA LLC as its outside auditor? What steps must be taken under U.S. requirements when a change of auditors occurs?

6. (Introductory) What challenges will Olympus face in meeting the deadline of December 14 to file its latest financial statements? What will happen to the company if it cannot do so?
 

Reviewed By: Judy Beckman, University of Rhode Island

From The Wall Street Journal Weekly Accounting Review on December 9, 2011

Panel Calls Olympus "Rotten" at Core
 by: Daisuke Wakabayashi and Phred Dvorak
Dec 07, 2011
Click here to view the full article on WSJ.com
 

TOPICS: Auditing, Auditor/Client Disagreements, Fair Value Accounting, Historical Cost Accounting, Investments

SUMMARY: This review continues coverage from last week of the accounting scandal at Olympus Corp. The Investigation Report into Olympus Corporation and its management, written by the "Third Party Committee" hired by the Board of Directors on October 14, 2011, is available directly online at http://online.wsj.com/public/resources/documents/third_party_olympus_report_english_summary.pdf The report provides the clearest description yet of the investment loss and accounting scandal that has brought the Japanese imaging equipment maker to the brink of delisting from the Tokyo Stock Exchange. As described in the opening page of the document, the Olympus Corporation Board of Directors called for a third party review because "the shareholders and others doubted that" payments by Olympus to a financial advisor and acquisitions by Olympus, along with subsequent recognition of impairment losses on those investments, were appropriate. The findings in the report essentially state that Olympus began incurring financial losses on speculative investments that were originally hoped to bolster corporate earnings when operating earnings declined due to a strengthening yen in the late 1980s. "However, in 1990 the bubble economy burst and the loss incurred on Olympus by the financial assets management increased" (p. 6). Then, in 1997 to 1998, "when the unrealized loss was ballooning," Japanese accounting standards were changed to require fair value reporting of financial assets, as did those in the U.S. "In that environment, Olympus led by Yamada and Mori started seeking a measure to avoid the situation where the substantial amount of unrealized loss would come up to the surface..." because of this change in accounting standards. The technique was so common in Japan that it was given a name, "tobashi." As noted in the WSJ article, the Olympus auditors at the time, KPMG AZSA LLC "...came across information that indicated the company was engaged in tabshi, which recently had become illegal in Japan....[T]he auditor pushed them...to admit to the presence of one [tobashi scheme] and unwind it, booking a loss of 16.8 billion yen."

CLASSROOM APPLICATION: Questions relate to the accounting environment under historical cost accounting that allows avoiding recognition of unrealized losses and to the potential for audit issues when management is found to have engaged in one unethical or illegal act.

QUESTIONS: 
1. (Introductory) For how long were investment losses hidden by accounting practices at Olympus Corp?

2. (Advanced) What is the difference between realized and unrealized investment losses? How are these two types of losses shown in financial statements under historical cost accounting and under fair value accounting methods for investments?

3. (Introductory) What accounting change in the late 1990s led Olympus Corp. management to search for further ways to hide their investment losses? In your answer, comment on the meaning of the Japanese term "tobashi."

4. (Introductory) What happened in 1999 when KPMG AZSA "came across information that indicated the company was engaged in tobashi, which recently had become illegal in Japan"?

5. (Advanced) Given the result of the KPMG AZSA finding in 1999, what concerns should that raise for any auditor about overall ability to conduct an audit engagement?
 

Reviewed By: Judy Beckman, University of Rhode Island

What's Right and What's Wrong With (SPEs), SPVs, and VIEs --- 
http://www.trinity.edu/rjensen//theory/00overview/speOverview.htm

"Olympus Probe Finds 5 Auditors Responsible," SmartPros, January 17, 2012 ---
http://accounting.smartpros.com/x73270.xml

 

How can such a panel have this much legal power?
"Ernst & Young, KPMG Cleared of Wrongdoing in Olympus Scandal," by Michael Foster, Big4.com, January 17, 2012 ---
http://www.big4.com/kpmg/breaking-ernst-young-kpmg-cleared-of-wrongdoing-in-olympus-scandal

An independent panel has determined that KPMG Azsa LLC and Ernst & Young ShinNihon LLC did not break the law and did not violate any legal obligations when auditing Olympus. The panel determined that both Big4 firms were not responsible for the accounting fraud scandal in which Olympus hid $1.7 billion in assets over a 13-year long period.

The panel’s decision clears KPMG and Ernst & Young from culpability, meaning that no party has grounds to file a suit against either accounting firm.

The panel also determined that five internal auditors, some of which are still with Olympus, were responsible for hiding the assets. The panel concluded that those auditors were responsible for 8.4 billion yen ($109 million) in damages.

Continued in article

Jensen Comment
I have no idea why this "panel" has the power "that no party has grounds to file a suit against either accounting firm."

If this were a lower court decision, there are generally routes of appeal in higher courts.

How does an appointed panel decide that shareholders and creditors have no right to sue in lower or higher courts?

Of course in the case of Olympus the guilty executives were purportedly tied to organized crime. Well now I'm beginning to understand. Organized crime members have their own ways of determining that no lawsuits will ever be filed.

"How Do You Hide A Multibillion Dollar Loss? Accounting For The Olympus Fraud," by Francine McKenna, re:TheAuditors, January 5, 2012 ---
http://retheauditors.com/2012/01/02/how-do-you-hide-a-multibillion-dollar-loss-accounting-for-the-olympus-fraud/

Bob Jensen's threads on the Olympus scandal are at
http://www.trinity.edu/rjensen/Fraud001.htm

 

"Three Lies You Learned in School," Everyday Einstein, June 27, 2013 ---
http://everydayeinstein.quickanddirtytips.com/three-lies-you-learned-in-school.aspx

Quantitative Easing (QE) --- http://en.wikipedia.org/wiki/Quantitative_Easing

Quantitative easing (QE) is an unconventional monetary policy used by central banks to stimulate the national economy when standard monetary policy has become ineffective. A central bank implements quantitative easing by buying financial assets from commercial banks and other private institutions, thus increasing the monetary base.[3] This is distinguished from the more usual policy of buying or selling government bonds in order to keep market interest rates at a specified target value.[4][5][6][7]

Expansionary monetary policy typically involves the central bank buying short-term government bonds in order to lower short-term market interest rates. However, when short-term interest rates are either at, or close to, zero, normal monetary policy can no longer lower interest rates. Quantitative easing may then be used by the monetary authorities to further stimulate the economy by purchasing assets of longer maturity than only short-term government bonds, and thereby lowering longer-term interest rates further out on the yield curve. Quantitative easing raises the prices of the financial assets bought, which lowers their yield.[

Quantitative easing can be used to help ensure that inflation does not fall below target.Risks include the policy being more effective than intended in acting against deflation – leading to higher inflation, or of not being effective enough if banks do not lend out the additional reserves. According to the IMF and various other economists, quantitative easing undertaken since the global financial crisis has mitigated some of the adverse effects of the crisis.

 

Another Lie College Students May Now Be Learning in School
"Quantitative Easing Is Not 'Printing Money'," by Martin Feldstein, Business Insider, June 27, 2013 ---
http://www.businessinsider.com/feldstein-why-inflation-is-low-2013-6 

Jensen Comment
There's a bit of slight of hand in the above article. There's a difference when the U.S. sells a treasury bond to China relative to selling a treasury bond to itself (errrr read that the Fed). The main difference is that the USA has to pay off the debt to China when it comes due. If QE comes to an end Uncle Sam has to either raise the payoff from taxpayers or borrow from somewhere (e.g., Saudi Arabia) to pay off what it owes to China. 

Uncle Sam does not have to borrow from Saudi Arabia (at possibly higher treasury rates) or raise taxes to pay off the bonds that it sold to itself. Instead this debt is paid off with inflation which is (gasp) tantamount to printing green backs. The QE works as long as circumstances are holding down inflation, especially circumstances where the other national economies on earth are in such worse shape.

If QE was the answer to deficit spending economies like Switzerland and Sweden would see the light and use QE to fund massive deficits like the USA funds massive deficits. But they know better!

Thus Feldstein's article is a smoke and mirrors piece that is technically correct but couched in wording that disguises the fact that QE is really a form of printing money.

The biggest drawback of QE in the USA political attitude that deficits don't matter as long as you're borrowing from yourself. Economists are not so easily misled, but the big spenders in Washington who want more of both guns and butter will keep borrowing from themselves if for no other reason than to keep getting re-elected year after year after year ad infinitum until they're finally pushing up daisies.

Someday the USA will pay the piper who is not invited to make music in Switzerland and Sweden. Quantitative Easing is not free money when you tear down the smoke and mirrors justification. Shame on you Martin Feldstein!

The Economist Dean of the Columbia University Business School  is Not a Fan of Ben Bernanke or Paul Krugman

"Glenn Hubbard Explains The Doomsday Scenario That America Will See In 20 Years If There's No Change In Spending," by Joe Weisenthal, Business Insider, June 24, 2013 ---
http://www.businessinsider.com/glenn-hubbards-doomsday-scenario-2013-6

We recently had Glenn Hubbard, dean of the Columbia Graduate School of Business, into discuss his book Balance: The Economics of Great Powers from Ancient Rome to Modern America.

Hubbard's main argument is that the US must reduce its long-term deficit, and that if it's not addressed, then within 20 years the US will see a "doomsday scenario" of virtually no social spending and monstrous taxes.

Watch the video

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

Noam Chomsky Slams Žižek and Lacan: Empty ‘Posturing’ ---
http://www.openculture.com/2013/06/noam_chomsky_slams_zizek_and_lacan_empty_posturing.html

"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

The Patriots Are Letting Fans Trade In Their Aaron Hernandez Jerseys ---
http://www.businessinsider.com/the-patriots-trade-in-hernandez-jerseys-2013-6

Jensen Comment
Not so fast! These are probably collectors items. Think of three fans walking side by side down the street wearing Hernandez Jerseys. One fan is wearing the University of Florida version. Another is wearing the NFL Patriots version. The third fan is wearing the striped prison version.

The Right Time To Buy A New Car Is Never ---
http://www.businessinsider.com/right-time-to-buy-a-new-car-is-never-2013-6

Jensen Comment
That has always been my strategy except the one and only time I bought a new car in the "Cash for Clunker" boondoggle of the Federal government's Bailout Program.

Throw Mamma from the train
"Mich. man recognizes mom as bank robbery suspect," Yahoo News, June 26, 2013 --- Click Here

Nate Silver --- http://en.wikipedia.org/wiki/Nate_Silver

Perhaps we should at once encourage or require college students to take coursework in English – and tell them to be wary about majoring in it.
Nate Silver --- Click Here
http://fivethirtyeight.blogs.nytimes.com/2013/06/25/as-more-attend-college-majors-become-more-career-focused/?utm_source=twitter&utm_medium=social&utm_content=584740&_r=1

"Nate Silver on College Majors," Inside Higher Ed, June 26, 2013 ---
http://www.insidehighered.com/quicktakes/2013/06/26/nate-silver-college-majors

Have enrollments in traditional liberal arts fields dropped? Debates over the issue turn up everywhere, and Nate Silver -- the popular New York Times analyst of polling and statistics -- has taken up the issue. He argues that it all depends how you frame the question. If you ask whether certain majors are less popular, you may find that they are relative to other majors. But part of that is because the college population has expanded over time, with many of those going to college -- who might not have in earlier generations -- picking practical majors. But if you look at the percentage of all college students majoring in a given field, you may get a different figure. So, for example, English majors as a share of all majors have fallen in recent years, but English majors as a percentage of all college students have been relatively constant.

Jensen Comment
Students sometimes major in a career field for the wrong reasons. For example, the among the most underemployed graduates in college are undergraduate business majors (as opposed to accounting majors where opportunities are higher than ever). The data, however, are somewhat misleading. For example, business majors are very popular in most for-profit universities like the enormous University of Phoenix. However, all majors from for-profit universities are somewhat at a disadvantage when competing with well-known traditional universities in the job market. Hence, an English major at the University of Texas may not really have more job choices that a UT business major. Also much depends upon grades, concentrations in business studies (e.g. accounting and finance), and other factors such as experience and skills.

See the salary report at
http://click.mail.payscale.com/?qs=58720d56470d3f6925a7bc89938cd47cfd48ab78f341adc327a16baf4154d07bbb33af0977074c7f
As usual I warn that starting salaries are misleading. Go for the best starting jobs in terms of training, experience, and job advancement potential. Also consider living costs. A living wage in Des Moines is a poverty-level wage in most USA and other world cities.

Also Nate's data are somewhat biased in that most of the Ivy League schools and many, many small liberal arts colleges have few career majoring alternatives, especially avoiding business degrees that might suck up the student choices for majors like a giant vacuum cleaner. I often wonder if this is one of the reasons Harvard, Princeton, Brown, Stanford, Swarthmore, etc. will not offer business degrees at the undergraduate level.

Another thing that Nate appears to overlook is how popular it is to double major in a professional major and something else. Also it's common to have a major plus a minor. For example, in Trinity University it was very popular to major in business or accounting with a second major in modern languages. The reason is that in accountancy, knowing a foreign language often accelerates career opportunities, especially a second major in Spanish or Chinese. a few decades back second majors in Japanese, German, and Russian were also popular, but these have fallen somewhat in popularity relative to Chinese and Spanish. French of course is still the language of love but not so much the language of business.

Double majoring in business and economics is also very popular, especially for students having finance concentrations in business. There are other popular double majors such as computer science and mathematics for students having strong quantitative aptitudes.

Double majoring in education and some humanities concentrations is also popular such as majoring in both education and English.

I think students choose double majors when the second major might directly benefit the first major. When the benefits become more obscure such as majoring in classical studies and accounting, the incentives are less obvious.

 

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

Question
When we took econometrics we learned that predictor variable independence was good and interdependence was bad, especially higher ordered complicated interdependencies?

"Can You Actually TEST for Multicollinearity?" --- Click Here
http://davegiles.blogspot.com/2013/06/can-you-actually-test-for.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+blogspot%2FjjOHE+%28Econometrics+Beat%3A+Dave+Giles%27+Blog%29

. . .

Now, let's return to the "problem" of multicollinearity.

 
What do we mean by this term, anyway? This turns out to be the key question!

 
Multicollinearity is a phenomenon associated with our particular sample of data when we're trying to estimate a regression model. Essentially, it's a situation where there is insufficient information in the sample of data to enable us to enable us to draw "reliable" inferences about the individual parameters of the underlying (population) model.


I'll be elaborating more on the "informational content" aspect of this phenomenon in a follow-up post. Yes, there are various sample measures that we can compute and report, to help us gauge how severe this data "problem" may be. But they're not statistical tests, in any sense of the word

 

Because multicollinearity is a characteristic of the sample, and not a characteristic of the population, you should immediately be suspicious when someone starts talking about "testing for multicollinearity". Right?


Apparently not everyone gets it!


There's an old paper by Farrar and Glauber (1967) which, on the face of it might seem to take a different stance. In fact, if you were around when this paper was published (or if you've bothered to actually read it carefully), you'll know that this paper makes two contributions. First, it provides a very sensible discussion of what multicollinearity is all about. Second, the authors take some well known results from the statistics literature (notably, by Wishart, 1928; Wilks, 1932; and Bartlett, 1950) and use them to give "tests" of the hypothesis that the regressor matrix, X, is orthogonal.


How can this be? Well, there's a simple explanation if you read the Farrar and Glauber paper carefully, and note what assumptions are made when they "borrow" the old statistics results. Specifically, there's an explicit (and necessary) assumption that in the population the X matrix is random, and that it follows a multivariate normal distribution.


This assumption is, of course totally at odds with what is usually assumed in the linear regression model! The "tests" that Farrar and Glauber gave us aren't really tests of multicollinearity in the sample. Unfortunately, this point wasn't fully appreciated by everyone.


There are some sound suggestions in this paper, including looking at the sample multiple correlations between each regressor, and all of the other regressors. These, and other sample measures such as variance inflation factors, are useful from a diagnostic viewpoint, but they don't constitute tests of "zero multicollinearity".


So, why am I even mentioning the Farrar and Glauber paper now?


Well, I was intrigued to come across some STATA code (Shehata, 2012) that allows one to implement the Farrar and Glauber "tests". I'm not sure that this is really very helpful. Indeed, this seems to me to be a great example of applying someone's results without understanding (bothering to read?) the assumptions on which they're based!


Be careful out there - and be highly suspicious of strangers bearing gifts!


 
References

 
Bartlett, M. S., 1950. Tests of significance in factor analysis. British Journal of Psychology, Statistical Section, 3, 77-85.

 
Farrar, D. E. and R. R. Glauber, 1967. Multicollinearity in regression analysis: The problem revisited.  Review of Economics and Statistics, 49, 92-107.

 
Shehata, E. A. E., 2012. FGTEST: Stata module to compute Farrar-Glauber Multicollinearity Chi2, F, t tests.

Wilks, S. S., 1932. Certain generalizations in the analysis of variance. Biometrika, 24, 477-494.

Wishart, J., 1928. The generalized product moment distribution in samples from a multivariate normal population. Biometrika, 20A, 32-52.

 

Jensen Comment on Robustness

Back in the 1970s, on leave of absence for two years from the University of Maine, I spent much of my first year in a think tank trying to "invent" adaptive linear regression models that were robust when predictor variables were interactive. This was in the days before personal computers and networked computers. The think tank was, and still is, just outside the main Stanford University campus on a cow-pasture hill overlooking Lake Laganita. The think tank provided me with a courier service that would take my IBM punch card decks (that i punched out) down to Stanford's main frame computer for agonizingly slow batch processing. After months of trial and error my "inventions" were failures largely because they were just not robust in the sense that the importance of predictor variables varied with such things as the order in which they were fed adaptively into my multivariate predictor models. I other words Models A and B might end up with the same predictive powers and the same predictor variables that were fed in adaptively. But the relative importance of the predictor variables often varied with the order in which they were fed into the model. My "inventions" were just not robust enough to excite any statistician or economist.

This was nearly twenty years before Jerome Friedman in 1991introduced a non-parametric multivariate regression splines ---
http://en.wikipedia.org/wiki/Multivariate_adaptive_regression_splines
These MARS models are designed to handle data with interactive predictor variables.

 

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

Detection of multicollinearity

Indicators that multicollinearity may be present in a model:

  1. Large changes in the estimated regression coefficients when a predictor variable is added or deleted
  2. Insignificant regression coefficients for the affected variables in the multiple regression, but a rejection of the joint hypothesis that those coefficients are all zero (using an F-test)
  3. If a multivariate regression finds an insignificant coefficient of a particular explanator, yet a simple linear regression of the explained variable on this explanatory variable shows its coefficient to be significantly different from zero, this situation indicates multicollinearity in the multivariate regression.
  4. Some authors have suggested a formal detection-tolerance or the variance inflation factor (VIF) for multicollinearity:
    \mathrm{tolerance} = 1-R_{j}^2,\quad \mathrm{VIF} = \frac{1}{\mathrm{tolerance}},
    where R_{j}^2 is the coefficient of determination of a regression of explanator j on all the other explanators. A tolerance of less than 0.20 or 0.10 and/or a VIF of 5 or 10 and above indicates a multicollinearity problem (but see O'Brien 2007).[1]
  5. Condition Number Test: The standard measure of ill-conditioning in a matrix is the condition index. It will indicate that the inversion of the matrix is numerically unstable with finite-precision numbers ( standard computer floats and doubles ). This indicates the potential sensitivity of the computed inverse to small changes in the original matrix. The Condition Number is computed by finding the square root of (the maximum eigenvalue divided by the minimum eigenvalue). If the Condition Number is above 30, the regression is said to have significant multicollinearity.
  6. Farrar-Glauber Test:[2] If the variables are found to be orthogonal, there is no multicollinearity; if the variables are not orthogonal, then multicollinearity is present.
  7. Construction of a correlation matrix among the explanatory variables will yield indications as to the likelihood that any given couplet of right-hand-side variables are creating multicollinearity problems. Correlation values (off-diagonal elements) of at least .4 are sometimes interpreted as indicating a multicollinearity problem.

Consequences of multicollinearity

As mentioned above, one consequence of a high degree of multicollinearity is that, even if the matrix XTX is invertible, a computer algorithm may be unsuccessful in obtaining an approximate inverse, and if it does obtain one it may be numerically inaccurate. But even in the presence of an accurate XTX matrix, the following consequences arise:


 

In the presence of multicollinearity, the estimate of one variable's impact on the dependent variable Y while controlling for the others tends to be less precise than if predictors were uncorrelated with one another. The usual interpretation of a regression coefficient is that it provides an estimate of the effect of a one unit change in an independent variable, X_{1}, holding the other variables constant. If X_{1} is highly correlated with another independent variable, X_{2}, in the given data set, then we have a set of observations for which X_{1} and X_{2} have a particular linear stochastic relationship. We don't have a set of observations for which all changes in X_{1} are independent of changes in X_{2}, so we have an imprecise estimate of the effect of independent changes in X_{1}.


 

In some sense, the collinear variables contain the same information about the dependent variable. If nominally "different" measures actually quantify the same phenomenon then they are redundant. Alternatively, if the variables are accorded different names and perhaps employ different numeric measurement scales but are highly correlated with each other, then they suffer from redundancy.


 

One of the features of multicollinearity is that the standard errors of the affected coefficients tend to be large. In that case, the test of the hypothesis that the coefficient is equal to zero may lead to a failure to reject a false null hypothesis of no effect of the explanator.


 

A principal danger of such data redundancy is that of overfitting in regression analysis models. The best regression models are those in which the predictor variables each correlate highly with the dependent (outcome) variable but correlate at most only minimally with each other. Such a model is often called "low noise" and will be statistically robust (that is, it will predict reliably across numerous samples of variable sets drawn from the same statistical population).


 

So long as the underlying specification is correct, multicollinearity does not actually bias results; it just produces large standard errors in the related independent variables. If, however, there are other problems (such as omitted variables) which introduce bias, multicollinearity can multiply (by orders of magnitude) the effects of that bias.[citation needed] More importantly, the usual use of regression is to take coefficients from the model and then apply them to other data. If the pattern of multicollinearity in the new data differs from that in the data that was fitted, such extrapolation may introduce large errors in the predictions.[3]


 

Remedies for multicollinearity

  1. Make sure you have not fallen into the dummy variable trap; including a dummy variable for every category (e.g., summer, autumn, winter, and spring) and including a constant term in the regression together guarantee perfect multicollinearity.
  2. Try seeing what happens if you use independent subsets of your data for estimation and apply those estimates to the whole data set. Theoretically you should obtain somewhat higher variance from the smaller datasets used for estimation, but the expectation of the coefficient values should be the same. Naturally, the observed coefficient values will vary, but look at how much they vary.
  3. Leave the model as is, despite multicollinearity. The presence of multicollinearity doesn't affect the efficacy of extrapolating the fitted model to new data provided that the predictor variables follow the same pattern of multicollinearity in the new data as in the data on which the regression model is based.[4]
  4. Drop one of the variables. An explanatory variable may be dropped to produce a model with significant coefficients. However, you lose information (because you've dropped a variable). Omission of a relevant variable results in biased coefficient estimates for the remaining explanatory variables.
  5. Obtain more data, if possible. This is the preferred solution. More data can produce more precise parameter estimates (with lower standard errors), as seen from the formula in variance inflation factor for the variance of the estimate of a regression coefficient in terms of the sample size and the degree of multicollinearity.
  6. Mean-center the predictor variables. Generating polynomial terms (i.e., for x_1, x_1^2, x_1^3, etc.) can cause some multicolinearity if the variable in question has a limited range (e.g., [2,4]). Mean-centering will eliminate this special kind of multicollinearity. However, in general, this has no effect. It can be useful in overcoming problems arising from rounding and other computational steps if a carefully designed computer program is not used.
  7. Standardize your independent variables. This may help reduce a false flagging of a condition index above 30.
  8. It has also been suggested that using the Shapley value, a game theory tool, the model could account for the effects of multicollinearity. The Shapley value assigns a value for each predictor and assesses all possible combinations of importance.[5]
  9. Ridge regression or principal component regression can be used.
  10. If the correlated explanators are different lagged values of the same underlying explanator, then a distributed lag technique can be used, imposing a general structure on the relative values of the coefficients to be estimated.

Note that one technique that does not work in offsetting the effects of multicollinearity is orthogonalizing the explanatory variables (linearly transforming them so that the transformed variables are uncorrelated with each other): By the Frisch–Waugh–Lovell theorem, using projection matrices to make the explanatory variables orthogonal to each other will lead to the same results as running the regression with all non-orthogonal explanators included.

Examples of contexts in which multicollinearity arises

Survival analysis

Multicollinearity may represent a serious issue in survival analysis. The problem is that time-varying covariates may change their value over the time line of the study. A special procedure is recommended to assess the impact of multicollinearity on the results. See Van den Poel & Larivière (2004)[6] for a detailed discussion.

Interest rates for different terms to maturity

In various situations it might be hypothesized that multiple interest rates of various terms to maturity all influence some economic decision, such as the amount of money or some other financial asset to hold, or the amount of fixed investment spending to engage in. In this case, including these various interest rates will in general create a substantial multicollinearity problem because interest rates tend to move together. If in fact each of the interest rates has its own separate effect on the dependent variable, it can be extremely difficult to separate out their effects.

Bob Jensen's threads on the differences between the science and pseudo science ---
http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm#Pseudo-Science

 

 

June 25, 2013 reply from Zane Swanson

Bob,

I will throw out the idea that the nature of statistics depends upon the user:

1.Interdependence is bad when the value of regression coefficients are supposed to have economic meaning for hypothesis testing as you note below.

2.Interdependence among independent variables doesn't matter when the regression model is just being used only for the purpose of predicting the dependent variable.  In the place where I previously lived, the county tax assessor had a regression model that predicted the tax assessment value of a house as the dependent variable.  The tax assessor threw in everything but the kitchen sink (maybe that was in there too).  I checked the independent variables for multicollinearity and it was very high.  When I brought the multicollinearity to the attention of the assessor, the response was that it did not matter because the assessor was only interested in the predicted dependent variable of the house tax assessment for the tax bills of everyone in the county.   As a side note, I did get them to lower my real estate taxes because the data for one of the independent variables (the fireplace chimney material [brick or plaster]) was misclassified for my house.

Zane

June 25, 2013 reply from Bob Jensen

Hi Zane,

Models that throw every available variable into the predictor variable pot may be predictive of a dependent variable that is within the learning data set range (interpolation) . But with multicollinearity the model is limited in its ability to predict outside the learning set range. For example, you might be able to predict quite well for a house in the city blocks where the sales transactions were observed. But when it comes to predicting the value of that mansion or shack outside of town the extrapolations are subject to higher error in the presence of multicollinearity.

Definitions --- http://answers.yahoo.com/question/index?qid=20070620182332AAsAEtP

Interpolation is filling in data points between the data that you already have. for example - drawing a line (fitting a curve) from the first data point you have to the last allows you to estimate data points between those two extremes (or between any data points that you have). ie. 'filling in between'

Extrapolation is filling in data points beyond the data that you have (extending the data). for example fitting a curve to the data that you have using an equation, then extending that line beyond the first and last points enables you to estimate values (or extrapolate them) beyond the measured data.

"Comments on Mallows' C, Statistics And Multicollinearity Effects On Predictions," by Rahim Moineddin, University of Toronto, January 2001 ---  https://tspace.library.utoronto.ca/bitstream/1807/15249/1/MQ58663.pdf

Selecting a subset of predictors by considering al1 possible combinations of variables with corresponding values of Mallows' Cp , AIC and BIC is discussed. It is shown that when a model with the smallest C, is selected 16% of non-related predictors had the chance of being entered in the model. The effect of multicollinearity on the prediction errors is studied. When multicollinearity is not severe the fitted model can be used for prediction. When severe multicollinearity exists it is still safe to interpolate but not to extrapolate.

There is also the issue of robustness in prediction itself
Adding more and more variables into the predictor variable pot increases degrees of freedom. Too many degrees of freedom can make the model outcomes unstable, especially if some predictor variables are added to the model that have complicated and/or temporal impacts on the dependent variable. For example, having burglar bars on a house may greatly add to value in house until the first time in the town when five young children burn to death because they could not escape from inside the burglar bars (that may have had escape locks that were just too complicated for young children and their baby sitter).

A regression model that never added burglar bars into the predictor pot would not have been destroyed (lost predictive value)  by that disastrous house fire in the town.

Before those children burned up, adding burglar bars to the the predictor variable pot might add to the predictive power of the regression model. The first sale in town after the children died may find that the old regression model is now a lousy value predictor for houses with burglar bars. The prediction model has to be entirely retrained over time for sales after the children were burned alive.

The more variables you throw into the predictor pot (thereby adding degrees of freedom) increases the risk of more complicated unstable predictor models, especially for more and more variables having unstable predictive power over time.

This is one of the reason econometrics scholars often try to be parsimonious about what they throw into the stew pot.

Yawn! Meta Analysis of MBA Program Rankings
"A Psychometric Assessment of the Businessweek, U.S. News & World Report , and Financial Times Rankings of Business Schools’ MBA Programs," by Vanderbilt;s Dawn Iacobucci,  Journal of Marketing Education, 2013 ---
http://www.owen.vanderbilt.edu/vanderbilt/data/research/2355full.pdf

Abstract
This research investigates the reliability and validity of three major publications’ rankings of MBA programs. Each set of rankings showed reasonable consistency over time, both at the level of the overall rankings and for most of the facets from which the rankings are derived. Each set of rankings also showed some levels of convergent and discriminant validity, but each has room for improvement, particularly Businessweek , which relies heavily on subjective surveys of students and recruiters, and Financial Times , whose methodology may be simplified and streamlined, ceasing to measure facets that are empirically superfluous. Together the three publications blanket the student process— U.S. News & World Report captures incoming student quality clearly with GMAT scores, Businessweek captures whether the students are happy while at their respective business schools, and U.S. News captures salaries and Financial Times captures return on investment, as short-term and longer term indicators of graduates’ early career successes.

Bob Jensen's threads on the rankings controversies ---
http://www.trinity.edu/rjensen/HigherEdControversies.htm#BusinessSchoolRankings

Jensen Comment
The reliance on GMAT scores in the rankings of some media sources must complicate things for top schools like Wake Forest that have made the GMAT optional or eliminated it entirely. How do you factor in enormous chunks of missing data?

"Men are disappearing from the workforce," by Tami Luhby, CNN Money, June 19, 2013 ---
http://money.cnn.com/2013/06/19/news/economy/men-workforce/index.html 

Disability is contributing to a steady decline in the number of men in the American workforce: In 2012, 3.1% of working-age males were receiving federal disability benefits, up from 1.9% in 1982, according to National Academy of Social Insurance data cited by CNN. Other factors in the decline, aside from recession and downsizing, include increasing rates of incarceration. Just 88% of men ages 25 to 54 are participating in the workforce today, down from 97% in 1956.

Lt. Col. Gade is an assistant professor at the U.S. Military Academy. In 2005, he lost his right leg in combat in Iraq. His views do not reflect those of the Defense Department, Army or the U.S. Military Academy. This essay is adapted from an article in the upcoming Summer 2013 issue of National Affairs.

"Why the (Veterans Administration) VA Is Buried in Disability Claims The biggest factor by far is how Veterans Affairs defines 'disability.' by Daniel Gade, The Wall Street Journal, June 23, 2013 ---
http://online.wsj.com/article/SB10001424127887324688404578541540407691684.html?mod=djemEditorialPage_h

For a sense of how the U.S. Department of Veterans Affairs is coping with an unprecedented number of disability claims, consider that nationwide nearly 900,000 disability claims are backlogged or sitting in the processing queue. Veterans wait, on average, 273 days for their claims to be processed. For new claimants from the wars in Iraq and Afghanistan, the wait is 327 days. In some claims centers, the average wait approaches two years.

Budget cuts are not to blame. The VA's 2013 budget is $140.3 billion—more than double the 2001 level, adjusting for inflation. And it's not that the VA hasn't made enormous efforts to address the problem: For each of the past three years, VA claims-processors have managed to handle more than one million claims.

The VA has identified a number of factors driving the claims increase, including higher demand driven by a weak economy, an aging generation of Vietnam veterans and hundreds of thousands of post-9/11 veterans leaving the service. Making matters worse, the move to digital from paper claims is just getting started and the VA and the Defense Department continue to struggle in implementing compatible medical-records systems.

But the biggest issue by far is how the current system defines "disability." The average American may picture a disabled veteran as a wartime amputee, burn patient or wheelchair user. Fortunately, this isn't the case. The number of major amputations from Iraq and Afghanistan combined is less than 2,000, and the number of serious burns is around 2,500.

The reality is that the majority of veterans' disability claims are for post-traumatic stress disorder, depression or minor physical conditions, including common age-related ailments such as hearing loss, lower-back pain and arthritis. Furthermore, 62% of the claims in the backlog of unprocessed claims are not first-time claimants, but are from veterans reapplying for increased benefits.

The financial structure of the claims process gives veterans further incentive to make claims. By getting a disability adjusted upward to 90% from 70%, a veteran will gain an additional $500 per month. It should come as no surprise, then, that many veterans will appeal or refile their claims in hopes of getting a higher disability rating. There are so many conditions that the VA dubs disabilities that the average veteran in the system now claims more than eight conditions as "disabling." The average during the post-World War II era was one or two.

By categorizing minor conditions as disabilities, the process threatens to become a kind of stealthy welfare system, where those with minor conditions might feather their nests at the expense of both taxpayers and truly disabled veterans trapped behind them in a line that stretches over the horizon. This also harms the veterans who are being told the lie that they are "disabled" and being paid to believe it. Sadly, this process can decrease veterans' work incentives and dull their ability to contribute to society after military service.

The good news is that a small number of simple steps would result in a more just, streamlined and efficient claims system. First, the VA's authorizing legislation should be updated so that only true disabilities are compensated. There is no moral or financial reason why minor or age-related conditions should be labeled as disabilities or compensated as such. Of course, the VA should continue to treat veterans for their service-connected conditions of whatever severity, but the era of labeling a veteran "disabled" for age-related degeneration should end.

Second, the claims currently in the queue should be prioritized. First-time claims should move to the front of the line so that seriously injured veterans can get necessary assistance.

Third, the focus of the entire system should shift to retraining, rehabilitating and reintegrating veterans into the workforce. Those with serious disabilities should be compensated for their pain and reduced quality of life, but they should also be encouraged to work. Paying veterans to stop working is the wrong course for veterans and for broader American society.

The real crisis is not a backlog of claims; it's that the current system is focusing on the wrong goals. Instead of working to push the maximum number of claims through the system, the VA should take a step back and ask what we really owe our veterans.

Social Security Disability Insurance --- http://en.wikipedia.org/wiki/Social_Security_Disability_Insurance

Social Security Disability Insurance (SSD or SSDI) is a payroll tax-funded, federal insurance program of the United States government. It is managed by the Social Security Administration and is designed to provide income supplements to people who are physically restricted in their ability to be employed because of a notable disability, usually a physical disability. SSD can be supplied on either a temporary or permanent basis, usually directly correlated to whether the person's disability is temporary or permanent.

Unlike Supplemental Security Income (SSI), SSD does not depend on the income of the disabled individual receiving it. A "legitimately" (i.e. according to the Americans with Disabilities Act, and via other similar legal and medical backing) disabled person of any income level can theoretically receive SSD. Most SSI recipients are below an administratively-mandated income threshold, and indeed these individuals must in fact stay below that threshold to continue receiving SSI; but this is not the case with SSD.

. . .

This is a pretty good blog for those seeking disability benefits, especially SSI benefits ---
http://disabilityblogger.blogspot.com/2010/10/applications-for-social-security.html

One problem, in my opinion, of the SSD program is that family income and wealth are not taken into consideration. The 20-yer old wife or husband of a spouse making $10 million a year is eligible for SSD (and Medicare) lifetime benefits if she or he becomes mentally or physically disabled and unable to continue working. Joint ownership of $100 million in investments will not prelude receiving lifetime SSD and Medicare benefits even when entitled to half of those investments in the case of divorce.

I have a physician friend back in Iowa who has a very high income annually to a point where he and his working wife could well have afforded the best of care for their disabled child in a care home. Nevertheless the child received the maximum SSD benefits and Medicare that now continue into adult life.

In May 2013 there were over 14 million persons under age 65 receiving non-VA Social Security Disability benefits ---
http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/
The trend since 1970 is shown at
http://www.ssa.gov/oact/STATS/OASDIbenies.html
The number of recipients has doubled since 2002. There are many causes for this doubling, including the rise in unemployment (faked claims are especially high among workers who lose their jobs) coupled with the expansion of the definition of "disability" to cover depression and other forms of mood swing mental illness that were less commonly qualified for disability benefits in the 20th Century. This is in most cases fair and equitable if mental illness impairs job performance. Both soft tissue (e.g., spinal column) and some mental illnesses present rule enforcement problems because, with the help of questionable physicians and shyster lawyers, these impairments become more easily faked than, say, amputations and disabling cancer. To my knowledge, SSD recipients who are granted permanent lifetime disability are not required ever again to prove continued legibility. The millionaire SSD guy on the golf course daily may really have had a back injury 27 years ago.

At age 65 most SSD and SSI recipients are shifted into the Social Security retirement system even if they paid very little into the system, such as those that never were able to work since early childhood and paid nothing into the system.

Video:  Fraud in Disability Claims ---
https://www.youtube.com/watch?feature=player_embedded&v=Jr1kwC0je1Y

Another Example of White Collar Crime Leniency
If she stole $100 from a convenience store she probably would be in jail

"Sioux City accountant gets probation," Souix City Journal, July 1, 2013 --- Click Here
http://siouxcityjournal.com/news/local/crime-and-courts/sioux-city-accountant-gets-probation-for-taking-from-client-accounts/article_80e537d0-6b51-5d26-9991-726372155091.html

SIOUX CITY
The owner of a Sioux City accounting firm was placed on probation Monday for taking more than $150,000 from a client who had dementia.

Terry Lockie, 65, pleaded guilty in Woodbury County District Court to one count of dependent adult abuse. According to the terms of her plea agreement, a five-year prison sentence was suspended, and she was placed on probation for two years. A charge of first-degree theft was dismissed.

Lockie, who lives in Homer, Neb., owns Terry Lockie & Associates, 704 Jackson St. She likely faces the loss of her certified public accountant license, her attorney, Keith Rigg, said during court proceedings.

Continued in article

Bob Jensen's threads on why white collar crime pays ---
http://www.trinity.edu/rjensen/FraudConclusion.htm#CrimePays

"Teacher Prep Review Finds Most Teacher Education Dismal," by Dian Schaffhauser, T.H.E. Journal, June 19, 2013 ---
http://thejournal.com/articles/2013/06/19/teacher-prep-review-finds-most-teacher-education-dismal.aspx?=THENU

Quantitative Easing (QE) --- http://en.wikipedia.org/wiki/Quantitative_Easing

Quantitative easing (QE) is an unconventional monetary policy used by central banks to stimulate the national economy when standard monetary policy has become ineffective. A central bank implements quantitative easing by buying financial assets from commercial banks and other private institutions, thus increasing the monetary base.[3] This is distinguished from the more usual policy of buying or selling government bonds in order to keep market interest rates at a specified target value.[4][5][6][7]

Expansionary monetary policy typically involves the central bank buying short-term government bonds in order to lower short-term market interest rates. However, when short-term interest rates are either at, or close to, zero, normal monetary policy can no longer lower interest rates. Quantitative easing may then be used by the monetary authorities to further stimulate the economy by purchasing assets of longer maturity than only short-term government bonds, and thereby lowering longer-term interest rates further out on the yield curve. Quantitative easing raises the prices of the financial assets bought, which lowers their yield.[

Quantitative easing can be used to help ensure that inflation does not fall below target.Risks include the policy being more effective than intended in acting against deflation – leading to higher inflation, or of not being effective enough if banks do not lend out the additional reserves. According to the IMF and various other economists, quantitative easing undertaken since the global financial crisis has mitigated some of the adverse effects of the crisis.

 

"Quantitative Easing Is Not 'Printing Money'," by Martin Feldstein, Business Insider, June 27, 2013 ---
http://www.businessinsider.com/feldstein-why-inflation-is-low-2013-6 

Jensen Comment
There's a bit of slight of hand in the above article. There's a difference when the U.S. sells a treasury bond to China relative to selling a treasury bond to itself (errrr read that the Fed). The main difference is that the USA has to pay off the debt to China when it comes due. If QE comes to an end Uncle Sam has to either raise the payoff from taxpayers or borrow from somewhere (e.g., Saudi Arabia) to pay off what it owes to China. 

Uncle Sam does not have to borrow from Saudi Arabia (at possibly higher treasury rates) or raise taxes to pay off the bonds that it sold to itself. Instead this debt is paid off with inflation which is (gasp) tantamount to printing green backs. The QE works as long as circumstances are holding down inflation, especially circumstances where the other national economies on earth are in such worse shape.

If QE was the answer to deficit spending economies like Switzerland and Sweden would see the light and use QE to fund massive deficits like the USA funds massive deficits. But they know better!

Thus Feldstein's article is a smoke and mirrors piece that is technically correct but couched in wording that disguises the fact that QE is really a form of printing money.

The biggest drawback of QE in the USA political attitude that deficits don't matter as long as you're borrowing from yourself. Economists are not so easily misled, but the big spenders in Washington who want more of both guns and butter will keep borrowing from themselves if for no other reason than to keep getting re-elected year after year after year ad infinitum until they're finally pushing up daisies.

Someday the USA will pay the piper who is not invited to make music in Switzerland and Sweden. Quantitative Easing is not free money when you tear down the smoke and mirrors justification. Shame on you Martin Feldstein!

The Economist Dean of the Columbia University Business School  is Not a Fan of Ben Bernanke or Paul Krugman

"Glenn Hubbard Explains The Doomsday Scenario That America Will See In 20 Years If There's No Change In Spending," by Joe Weisenthal, Business Insider, June 24, 2013 ---
http://www.businessinsider.com/glenn-hubbards-doomsday-scenario-2013-6

We recently had Glenn Hubbard, dean of the Columbia Graduate School of Business, into discuss his book Balance: The Economics of Great Powers from Ancient Rome to Modern America.

Hubbard's main argument is that the US must reduce its long-term deficit, and that if it's not addressed, then within 20 years the US will see a "doomsday scenario" of virtually no social spending and monstrous taxes.

Watch the video

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

"'New York Times' Likely to Sell 'Boston Globe' for 1/10th Purchase Price," Breitbart, June 27, 2013 ---
http://www.breitbart.com/Big-Journalism/2013/06/27/NYT-To-Sell-Boston-Globe-For-One-Tenth-Purchase-Price

How to Migrate Your RSS Feeds from Google Reader ---
http://techtalker.quickanddirtytips.com/how-to-migrate-rss-feeds-fromgoogle-reader.aspx

"10 Things You Need To Know This Morning," by Jeff Yarrow, Business Insider, June 27, 2013 ---
http://www.businessinsider.com/10-things-you-need-to-know-this-morning-june-27-2013-6 

"A German B-School Goes Kaput and the Finger-Pointing Begins (toward Purdue)," by Louis Lavelle, BloombergBusinessweek, June 19, 2013 ---
http://www.businessweek.com/articles/2013-06-19/a-german-b-school-goes-kaput-and-the-finger-pointing-begins

Meanwhile the Auburn business school gets a $40 million gift (and beneficiaries do not even have to play football).

"Flexible Glass Could Make Tablets Lighter and Solar Power Cheaper:  NREL shows that Corning’s Willow glass can be used to make flexible solar cells that could be installed in place of roofing shingles," by Kevin Bullis, MIT's Technology Review, July 3, 2013 --- Click Here
http://www.technologyreview.com/news/516471/flexible-glass-could-make-tablets-lighter-and-solar-power-cheaper/?utm_campaign=newsletters&utm_source=newsletter-daily-all&utm_medium=email&utm_content=20130703

From the Scout Report on June 28, 2013

Critic Markup --- http://criticmarkup.com/ 

Everyone's a critic, but some of those critics use Markdown, Sublime Text, or other text editors instead of word. The CriticMarkup tool allows authors and editors to track changes to documents in plain text, which is most useful. Visitors can use the program to highlight insertions, deletions, substitutions, and comments. To see a full list of tools that Critic Markup is integrated with, visit the website.

PhotoBlab ---  http://www.photoblab.com/ 

Have you ever wanted to add audio to your photos? This is now very possible via the magic of PhotoBlab. This application allows users to add, edit, and share audio and photos with their followers via Twitter and other social media outlets. This version is compatible with devices running iOS 3.2 and newer.

In Brazil, citizens fear that rapid development for future
international events will gentrify larger cities
In Brazil, Politics, Protests, and Uncertain Urban Features
http://www.architizer.com/en_us/blog/dyn/90767/in-brazil-politics-protests-and-uncertain-urban-futures/#.UcxqWpW_PCc

Middle class Brazil family explains why joined mass anti-government
protests
http://www.cbsnews.com/8301-202_162-57591266/middle-class-brazil-family-explains-why-they-joined-mass-anti-government-protests/

Brazil’s President Dilma Rousseff promises major reforms
http://www.bbc.co.uk/news/world-latin-america-23041235

FIFA says no alternative to World Cup in Brazil as protests continue
http://www.abc.net.au/news/2013-06-25/fifa-says-no-alternative-to-brazil-world-cup/4777546

Political economy and the Olympic Games
http://www.humankinetics.com/excerpts/excerpts/political-economy-and-the-olympic-games

Cleaning up Brazil’s most dangerous favelas
http://www.dailymail.co.uk/news/article-2342458/Cleaning-Brazils-dangerous-favelas-How-armed-police-waging-war-vicious-drug-cartels-rule-slums-Rio-fight-make-city-safe-eyes-world-turn-2016-Olympic-Games.html

From the Scout Report on July 5, 2013

Notable --- https://play.google.com/store/apps/details?id=com.icechen1.notable 
(A virtual string around your finger to remind you)

What was that thing you were supposed to do? This might happen more than occasionally, so why not check out the Notable application? Visitors can use Notable to create notification reminders on the go and it's quite easy to use. The site for the application includes screenshots, a FAQ area, and an easy shortcut. This version is compatible with devices running Android 2.1 and newer. 

MailFred --- http://mailfred.de/ 

The MailFred application lets users temporarily archive and set reminders for Gmail, which can be quite handy. Visitors can use the program to get trip information reminders, notes on project management, and follow-up reminders for emails from clients or leads. This version is compatible with all computers utilizing Google Chrome

Has a truly disruptive technology come to American education?
Catching On at Last
http://www.economist.com/news/briefing/21580136-new-technology-poised-disrupt-americas-schools-and-then-worlds-catching-last

It's Time For Technology to Disrupt Education
http://www.forbes.com/sites/larrymagid/2012/05/08/its-time-for-technology-to-disrupt-education/

Why American Education Fails And How Lessons From Abroad Could Improve it
http://www.cfr.org/education/why-american-education-fails/p30529

Read 180: What Works
http://ies.ed.gov/ncee/wwc/interventionreport.aspx?sid=571

Khan Academy
http://www.khanacademy.org/

Share My Lesson
http://www.sharemylesson.com/

Bob Jensen's threads on Open Sharing in Education ---
http://www.trinity.edu/rjensen/000aaa/updateee.htm#OKI

 

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

Education Tutorials

Who said:
If he had only learnt a little less, how infinitely better he might have taught much more!
"Charles Dickens Would Approve," by Joe Hoyle, Teaching Blog, June 27, 2013 ---
http://joehoyle-teaching.blogspot.com/2013/06/charles-dickens-would-approve.html

Keyboard College (American Radio Works on Education Technology) --- 
http://americanradioworks.publicradio.org/features/tomorrows-college/keyboard-college/

Northwestern University Library: Data & Methods Bank (Library Science) ---  http://libguides.northwestern.edu/Assessment

Ibiblio (library science tutorials and resources) ---  http://www.ibiblio.org/

State of America's Libraries 2013 --- http://viewer.zmags.com/publication/33759128#/33759128/1

Szathmary Culinary Manuscripts --- http://digital.lib.uiowa.edu/cookbooks/

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

Discovery: Gear & Gadgets Videos --- http://dsc.discovery.com/video-topics/gear-gadgets

From the Scout Report on July 5, 2013

Has a truly disruptive technology come to American education?
Catching On at Last
http://www.economist.com/news/briefing/21580136-new-technology-poised-disrupt-americas-schools-and-then-worlds-catching-last

It's Time For Technology to Disrupt Education
http://www.forbes.com/sites/larrymagid/2012/05/08/its-time-for-technology-to-disrupt-education/

Why American Education Fails And How Lessons From Abroad Could Improve it
http://www.cfr.org/education/why-american-education-fails/p30529

Read 180: What Works
http://ies.ed.gov/ncee/wwc/interventionreport.aspx?sid=571

Khan Academy
http://www.khanacademy.org/

Share My Lesson
http://www.sharemylesson.com/

Bob Jensen's bookmarks for multiple disciplines ---
http://www.trinity.edu/rjensen/Bookbob2.htm

Engineering, Science, and Medicine Tutorials

Douglas Englebart (inventor of the mouse) dies at 88 years of age ---
http://readwrite.com/2013/07/03/doug-engelbart-inventor-of-the-mouse-dies-at-88#awesm=~oaVqEESYI5ELKi
Great Moments in Computer History: Douglas Engelbart Presents “The Mother of All Demos” (1968) ---
http://www.openculture.com/2013/07/douglas-engelbart-presents-the-mother-of-all-demos.html
Wait a while for the audio

Free Interactive e-Books from NASA Reveal History, Discoveries of the Hubble & Webb Telescopes --- Click Here
http://www.openculture.com/2013/06/free_interactive_e-books_from_nasa_reveal_history_discoveries_of_the_hubble_telescope.html

Practical Chemistry: Nuffield Foundation --- http://www.nuffieldfoundation.org/practical-chemistry

Learn Chemistry: Chemistry Resources for Teachers ---
http://www.rsc.org/learn-chemistry/resource/listing?searchtext=&fcategory=all&filter=all&Audience=AUD00000001&displayname=teachers

Creative Chemistry --- http://www.creative-chemistry.org.uk/

Distillations Podcast (chemistry) --- http://www.chemheritage.org/discover/media/distillations/index.aspx

Macs in Chemistry --- http://www.macinchem.org/

Northwestern University Library: Data & Methods Bank (Library Science) ---  http://libguides.northwestern.edu/Assessment

Ibiblio (library science tutorials and resources) ---  http://www.ibiblio.org/

Anatomy Arcade --- http://www.anatomyarcade.com/

Get Body Smart  --- http://www.getbodysmart.com/

University of Wisconsin-Madison: School of Pharmacy: Resources for Teaching ---
http://www.pharmacy.wisc.edu/american-institute-history-pharmacy/resources-teaching

Ohio State University College of Pharmacy Teaching Resources
http://www.pharmacy.ohio-state.edu/academics/teaching_resources/index.cfm

New York State Dental Association: Classroom/Teaching Resources ---
http://www.nysdental.org/for_the_public/subpage.cfm?ID=59&subID=64

American Society of Civil Engineers: Teaching Resources --- http://www.asceville.org/resources.html

American Association of Engineering Societies --- http://www.aaes.org/

The Engineering Exchange --- http://www.engineeringexchange.com/

Szathmary Culinary Manuscripts --- http://digital.lib.uiowa.edu/cookbooks/

Discovery: Gear & Gadgets Videos --- http://dsc.discovery.com/video-topics/gear-gadgets

Bob Jensen's threads on free online science, engineering, and medicine tutorials are at --- http://www.trinity.edu/rjensen/Bookbob2.htm#Science

Social Science and Economics Tutorials

Resources for Teaching Social Psychology --- http://jfmueller.faculty.noctrl.edu/crow/

POV: Special Flight (PBS Documentary on Undocumented Immigrants ---  http://video.pbs.org/video/2365030597

Migration Information Source (immigration) --- http://www.migrationinformation.org/?mpi

Foreign Affairs: Video --- http://www.foreignaffairs.com/video

Chicago Metropolitan Agency for Planning --- http://www.cmap.illinois.gov/

Downtown Toledo Associates Records, 1955-1978 --- http://drc.library.utoledo.edu/handle/2374.UTOL/285

In “The Dictionary of Obscure Sorrows,” Artist John Koenig Names Feelings that Leave Us Speechless --- Click Here
http://www.openculture.com/2013/06/in_the_dictionary_of_obscure_sorrows_artist_john_koenig_names_feelings_that_leave_us_speechless.html

New Orleans Public Library: WPA Photograph Collection --- http://nutrias.org/photos/wpa/wpaphotos.htm

WPA/TVA Archaeological Photographs --- http://diglib.lib.utk.edu/wpa/

WPA Art Inventory Project --- http://wpa.cslib.org/

Aeon Magazine (Essays, Social Science, Literature) --- http://www.aeonmagazine.com/

National African American Photographic Archive
http://catalogquicksearch.memphis.edu/iii/cpro/CollectionViewPage.external?lang=eng&sp=1000011&suite=def

History & Culture of Brazil --- http://library.osu.edu/sites/latinamerica/indxclas_0_tblcontnts.htm

From the Scout Report on June 28, 2013

In Brazil, citizens fear that rapid development for future
international events will gentrify larger cities
In Brazil, Politics, Protests, and Uncertain Urban Features
http://www.architizer.com/en_us/blog/dyn/90767/in-brazil-politics-protests-and-uncertain-urban-futures/#.UcxqWpW_PCc

Middle class Brazil family explains why joined mass anti-government
protests
http://www.cbsnews.com/8301-202_162-57591266/middle-class-brazil-family-explains-why-they-joined-mass-anti-government-protests/

Brazil’s President Dilma Rousseff promises major reforms
http://www.bbc.co.uk/news/world-latin-america-23041235

FIFA says no alternative to World Cup in Brazil as protests continue
http://www.abc.net.au/news/2013-06-25/fifa-says-no-alternative-to-brazil-world-cup/4777546

Political economy and the Olympic Games
http://www.humankinetics.com/excerpts/excerpts/political-economy-and-the-olympic-games

Cleaning up Brazil’s most dangerous favelas
http://www.dailymail.co.uk/news/article-2342458/Cleaning-Brazils-dangerous-favelas-How-armed-police-waging-war-vicious-drug-cartels-rule-slums-Rio-fight-make-city-safe-eyes-world-turn-2016-Olympic-Games.html

Bob Jensen's threads on Economics, Anthropology, Social Sciences, and Philosophy tutorials are at http://www.trinity.edu/rjensen/Bookbob2.htm#Social

Law and Legal Studies

Bob Jensen's threads on law and legal studies are at http://www.trinity.edu/rjensen/Bookbob2.htm#Law

Math Tutorials

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

History Tutorials

Douglas Englebart (inventor of the mouse) dies at 88 years of age ---
http://readwrite.com/2013/07/03/doug-engelbart-inventor-of-the-mouse-dies-at-88#awesm=~oaVqEESYI5ELKi
Great Moments in Computer History: Douglas Engelbart Presents “The Mother of All Demos” (1968) ---
http://www.openculture.com/2013/07/douglas-engelbart-presents-the-mother-of-all-demos.html
Wait a while for the audio

"New Light on 'Uncle Sam'," by Ben Zimmer, Visual Thesaurus, July 4, 2013 ---
http://www.visualthesaurus.com/cm/wordroutes/new-light-on-uncle-sam/

Listening to Proust’s Remembrance of Things Past, (Maybe) the Longest Audio Book Ever Made --- Click Here
http://www.openculture.com/2013/07/listening-to-prousts-remembrance-of-things-past-maybe-the-longest-audio-book-ever-made.html

MoMA: Inside/Out (Metropolitan Museum of Art in NYC) --- http://www.moma.org/explore/inside_out

Helen Keller & Annie Sullivan Appear Together in Moving 1930 Newsreel ---
http://www.openculture.com/2013/06/helen_keller_annie_sullivan_appear_together_in_moving_1930_newsreel.html

Artemas Ward House and Its Collections (Colonial Times, Revolutionary War) --- 
http://hcl.harvard.edu/collections/digital_collections/artemas_ward.cfm

American Passages: A Literary Survey (American History, Native American) --- 
http://www.learner.org/resources/series164.html

Victoria and Albert Museum Teachers' Resource: Architecture ---
http://www.vam.ac.uk/page/t/teachers-resource-architecture/

The Musical Mind of Albert Einstein: Great Physicist, Amateur Violinist and Devotee of Mozart ---
http://www.openculture.com/2013/06/the_musical_mind_of_albert_einstein.html

Free Interactive e-Books from NASA Reveal History, Discoveries of the Hubble & Webb Telescopes --- Click Here
http://www.openculture.com/2013/06/free_interactive_e-books_from_nasa_reveal_history_discoveries_of_the_hubble_telescope.html

Amazing Aerial Photographs of Great American Cities Circa 1906 --- Click Here 
http://www.openculture.com/2013/06/amazing_aerial_photographs_of_great_american_cities_circa_1906.html

Two Drawings by Jorge Luis Borges Illustrate the Author’s Obsessions ---
http://www.openculture.com/2013/06/two_drawings_by_jorge_luis_borges_illustrate_the_authors_obsessions.html

Gertrude Stein Gets a Snarky Rejection Letter from Publisher (1912) ---
http://www.openculture.com/2013/06/gertrude_stein_a_snarky_rejection_letter_from_publisher_1912.html

Bob Jensen's threads on history tutorials are at http://www.trinity.edu/rjensen/Bookbob2.htm#History
Also see http://www.trinity.edu/rjensen/ElectronicLiterature.htm  

Aeon Magazine (Essays, Social Science, Literature) --- http://www.aeonmagazine.com/

In “The Dictionary of Obscure Sorrows,” Artist John Koenig Names Feelings that Leave Us Speechless --- Click Here
http://www.openculture.com/2013/06/in_the_dictionary_of_obscure_sorrows_artist_john_koenig_names_feelings_that_leave_us_speechless.html

Szathmary Culinary Manuscripts --- http://digital.lib.uiowa.edu/cookbooks/

The Tradition of Anglo-American Mourning Jewelry --- http://www.masshist.org/features/mourning-jewelry

National Maritime Museum: Jewelry http://www.nmm.ac.uk/collections/explore/index.cfm/category/jewellery 

Jewelry at Historic New England --- http://www.historicnewengland.org/JewelryHistory/

Chrysler Museum of Art --- http://www.chrysler.org/

The University of Michigan Museum of Art --- http://www.umma.umich.edu/

History of Multiple Topics From War to Cooking
Virginia Tech: Special Collections' Digitized Manuscripts --- http://spec.lib.vt.edu/mss/pdf/index.html 

Take A Tour Of The Most Beautiful College Campus In New York City (historic Columbia University) ---
http://www.businessinsider.com/columbia-university-photo-tour-2013-6

Northern New York Historical Newspapers --- http://news.nnyln.net/

Arkansas Digital State Publications Collection  ---
http://cdm16039.contentdm.oclc.org/cdm/landingpage/collection/p266101coll7

Northampton State Hospital Annual Reports, 1856-1939 --- http://www.library.umass.edu/spcoll/umarmot/?p=563

Michigan County Histories and Atlases
http://quod.lib.umich.edu/m/micounty/

Mark Twain Drafts the Ultimate Letter of Complaint (1905) ---
http://www.openculture.com/2013/07/mark-twain-drafts-the-ultimate-letter-of-complaint.html

New Orleans Public Library: WPA Photograph Collection --- http://nutrias.org/photos/wpa/wpaphotos.htm

WPA/TVA Archaeological Photographs --- http://diglib.lib.utk.edu/wpa/

WPA Art Inventory Project --- http://wpa.cslib.org/

Florida Memory: WPA Church Records --- http://floridamemory.com/collections/churchrecords/

National African American Photographic Archive
http://catalogquicksearch.memphis.edu/iii/cpro/CollectionViewPage.external?lang=eng&sp=1000011&suite=def

Language Tutorials

Learn 46 Languages for Free Online: A Big Update to Our Master List ---
http://www.openculture.com/2013/07/learn_46_languages_for_free_online_a_big_update.html

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

Music Tutorials

The Musical Mind of Albert Einstein: Great Physicist, Amateur Violinist and Devotee of Mozart ---
http://www.openculture.com/2013/06/the_musical_mind_of_albert_einstein.html

Vi Hart Uses Her Video Magic to Demystify Stravinsky and Schoenberg’s 12-Tone Compositions --- Click Here
http://www.openculture.com/2013/07/vi-hart-uses-her-video-magic-to-demystify-stravinsky-and-schoenbergs-12-tone-compositions.html

Watch a Surprisingly Moving Performance of John Cage’s 1948 “Suite for Toy Piano” --- Click Here
http://www.openculture.com/2013/06/watch_a_surprisingly_moving_performance_of_john_cages_1948_suite_for_toy_piano.html

The Earliest Footage of Elvis Presley, Buddy Holly and Johnny Cash (1955) --- Click Here
http://www.openculture.com/2013/07/the_earliest_footage_of_elvis_presley_buddy_holly_and_johnny_cash_1955.html

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

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

Writing Tutorials

Mark Twain Drafts the Ultimate Letter of Complaint (1905) ---
http://www.openculture.com/2013/07/mark-twain-drafts-the-ultimate-letter-of-complaint.html

From the Scout Report on June 28, 2013

Critic Markup --- http://criticmarkup.com/ 

Everyone's a critic, but some of those critics use Markdown, Sublime Text, or other text editors instead of word. The CriticMarkup tool allows authors and editors to track changes to documents in plain text, which is most useful. Visitors can use the program to highlight insertions, deletions, substitutions, and comments. To see a full list of tools that Critic Markup is integrated with, visit the website.

In “The Dictionary of Obscure Sorrows,” Artist John Koenig Names Feelings that Leave Us Speechless --- Click Here
http://www.openculture.com/2013/06/in_the_dictionary_of_obscure_sorrows_artist_john_koenig_names_feelings_that_leave_us_speechless.html

June 25, 2013 message from Bryan A. Garner and LawProse <lawprose@bridgemailsystem.com> 

Forego vs. forgo

Confusing these terms is a persistent error in legal and other writing.

      Forego traditionally means "to go before; to precede in time or place." But it's most common in the participial forms foregone and, less often, foregoing.

       Ex.:  The outcome was a foregone conclusion.
       Ex.:   In an effective brief, the discussion flows
                from the foregoing statement of facts.
       Ex.:   The agenda states that the secretary's
                 report will forego the board's vote. (Rare.)

      Forgo means "to do without; to pass up voluntarily; waive; renounce."

       Ex.:  He will forgo the claim to the property
                if Smith settles before the trial starts.
       Ex.:  Don't forgo the opportunity to persuade
                the judge on the first page of your brief.

      Here's a good way to remember the distinction: think of fore as in before (things in sequence), and think of forgo's resemblance to forget (a common reason that things are not done). One of the most common errors in legal and other writing is the use of forego where forgo is meant. For example:
        How common is the misuse? It's so common that modern dictionaries list forego as a variant of forgo. In 1983, the President's Commission for the Study of Ethical Problems in Medicine used it in the title and throughout its report "Deciding to Forego Life-Sustaining Treatment." It wasn't changed when the report was updated in 2006.

      The opposite mistake -- misusing forgo for forego -- is less common:
        Forewent and forwent are the past-tense forms, foregone and forgone the past-participles. A foregone conclusion is a predictable result (the conclusion "went before" the question because everyone knew the answer before the question was posed). But be careful not to use foregone when forgone is intended {the lawyer explained that her client had foregone [read forgone] settlement of the claim by refusing to respond to the creditor's calls and e-mails}.

      We hope that the foregoing discussion will help you forgo any confusion.

Sources:
Garner's Dictionary of Legal Usage 371-72
  (3d ed. 2011).
Eric Partridge, Usage and Abusage 122 (1982).
R.W. Burchfield, The New Fowler's Modern English
  Usage 306 (3d ed. 1996).
Merriam-Webster's Collegiate Dictionary
  490-91 (11th ed. 2011).

Thanks to Jeffrey R. Babbin for suggesting this topic.

Correction to LawProse Lesson #122 (it's vs. its): The quotation from United States v. Boardwalk Motor Sports, Ltd. should have been attributed to the dissent. Our apologies to Judge Jerry E. Smith, the author of the majority opinion, for this error.

Writing for Web Crawlers
From a Grammar Girl newsletter on March 19, 2013

Although both "pled" and "pleaded" are in common use, language sticklers prefer "pleaded," and professional writers seem to have received the message: a Google News search returns about twenty times as many hits for "pleaded guilty" than for "pled guilty." To be safe, you should say, "They pleaded guilty."

Continued in article

Jensen Comment
This is something I'd not given thought to previously. If you want your documents to be found by users of Web search engines, it may well make a difference how you write your modules and/or whether you add parenthetical inserts to quotations.

For example, if you paste a quote that uses the phrase "pled earnestly" you may want change the quotation into  "pled (pleaded) earnestly" or  "pled earnestly (pleaded earnestly)" just for the Web crawlers.

Bob Jensen's helpers for writers are at http://www.trinity.edu/rjensen/Bookbob3.htm#Dictionaries

Updates from WebMD --- http://www.webmd.com/

June 26, 2013

June 27, 2013

June 28, 2013

June 29, 2013

July 1, 2013

  • Can Hi-Tech Avatars Promote Real-Life Weight Loss?
  • Collapsible Laundry Hampers May Pose Risk to Kids
  • Melanoma May Return Years Later in Some
  • U.S. Women Delay Motherhood, Teen Births Historically Low: CDC
  • Night Owls May Pack on More Pounds
  • Migraine Doctors in Short Supply Across U.S.
  • Acute Migraines More Apt to Turn Chronic With Poor Treatment
  • Baby Aspirin Recalled After Acetaminophen Discovery
  • PTSD May Raise Heart Risks for Vietnam Vets

    • July 2, 2013

    July 3, 2013

    July 5, 2013

    July 6, 2013

    July 9, 2013

     

    Depression --- http://en.wikipedia.org/wiki/Depression_%28mood%29

    "Innovative Therapy for Teen Depression," Stanford Graduate School of Business, June 12, 2013 ---
    http://csi.gsb.stanford.edu/innovative-therapy-teen-depression

    "Counterfeit Food More Widespread Than Suspected," by Stephen Castle and Doreen Carvajal, The New Your Times, June 26, 2013 ---
    http://www.nytimes.com/2013/06/27/business/food-fraud-more-widespread-than-suspected.html?_r=0

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

    University of Wisconsin-Madison: School of Pharmacy: Resources for Teaching ---
    http://www.pharmacy.wisc.edu/american-institute-history-pharmacy/resources-teaching

    Ohio State University College of Pharmacy Teaching Resources ---
    http://www.pharmacy.ohio-state.edu/academics/teaching_resources/index.cfm

    "Here's What Happens If You Don't Sign Up For Obamacare," by Mandi Woodruff, Business Insider, July  1, 2013 ---
    http://www.businessinsider.com/heres-what-happens-if-you-dont-sign-up-for-obamacare-2013-7

    The $2.7 Trillion Medical Bill Colonoscopies Explain Why U.S. Leads the World in Health Expenditures (NYT) ---
    http://www.nytimes.com/2013/06/02/health/colonoscopies-explain-why-us-leads-the-world-in-health-expenditures.html?pagewanted=all&_r=1&

    MERRICK, N.Y. — Deirdre Yapalater’s recent colonoscopy at a surgical center near her home here on Long Island went smoothly: she was whisked from pre-op to an operating room where a gastroenterologist, assisted by an anesthesiologist and a nurse, performed the routine cancer screening procedure in less than an hour. The test, which found nothing worrisome, racked up what is likely her most expensive medical bill of the year: $6,385.

    That is fairly typical: in Keene, N.H., Matt Meyer’s colonoscopy was billed at $7,563.56. Maggie Christ of Chappaqua, N.Y., received $9,142.84 in bills for the procedure. In Durham, N.C., the charges for Curtiss Devereux came to $19,438, which included a polyp removal. While their insurers negotiated down the price, the final tab for each test was more than $3,500.

    “Could that be right?” said Ms. Yapalater, stunned by charges on the statement on her dining room table. Although her insurer covered the procedure and she paid nothing, her health care costs still bite: Her premium payments jumped 10 percent last year, and rising co-payments and deductibles are straining the finances of her middle-class family, with its mission-style house in the suburbs and two S.U.V.’s parked outside. “You keep thinking it’s free,” she said. “We call it free, but of course it’s not.”

    In many other developed countries, a basic colonoscopy costs just a few hundred dollars and certainly well under $1,000. That chasm in price helps explain why the United States is far and away the world leader in medical spending, even though numerous studies have concluded that Americans do not get better care.

    Whether directly from their wallets or through insurance policies, Americans pay more for almost every interaction with the medical system. They are typically prescribed more expensive procedures and tests than people in other countries, no matter if those nations operate a private or national health system. A list of drug, scan and procedure prices compiled by the International Federation of Health Plans, a global network of health insurers, found that the United States came out the most costly in all 21 categories — and often by a huge margin.

    Americans pay, on average, about four times as much for a hip replacement as patients in Switzerland or France and more than three times as much for a Caesarean section as those in New Zealand or Britain. The average price for Nasonex, a common nasal spray for allergies, is $108 in the United States compared with $21 in Spain. The costs of hospital stays here are about triple those in other developed countries, even though they last no longer, according to a recent report by the Commonwealth Fund, a foundation that studies health policy.

    While the United States medical system is famous for drugs costing hundreds of thousands of dollars and heroic care at the end of life, it turns out that a more significant factor in the nation’s $2.7 trillion annual health care bill may not be the use of extraordinary services, but the high price tag of ordinary ones. “The U.S. just pays providers of health care much more for everything,” said Tom Sackville, chief executive of the health plans federation and a former British health minister.

    Colonoscopies offer a compelling case study. They are the most expensive screening test that healthy Americans routinely undergo — and often cost more than childbirth or an appendectomy in most other developed countries. Their numbers have increased manyfold over the last 15 years, with data from the Centers for Disease Control and Prevention suggesting that more than 10 million people get them each year, adding up to more than $10 billion in annual costs.

    Largely an office procedure when widespread screening was first recommended, colonoscopies have moved into surgery centers — which were created as a step down from costly hospital care but are now often a lucrative step up from doctors’ examining rooms — where they are billed like a quasi operation. They are often prescribed and performed more frequently than medical guidelines recommend.

    The high price paid for colonoscopies mostly results not from top-notch patient care, according to interviews with health care experts and economists, but from business plans seeking to maximize revenue; haggling between hospitals and insurers that have no relation to the actual costs of performing the procedure; and lobbying, marketing and turf battles among specialists that increase patient fees.

    While several cheaper and less invasive tests to screen for colon cancer are recommended as equally effective by the federal government’s expert panel on preventive care — and are commonly used in other countries — colonoscopy has become the go-to procedure in the United States. “We’ve defaulted to by far the most expensive option, without much if any data to support it,” said Dr. H. Gilbert Welch, a professor of medicine at the Dartmouth Institute for Health Policy and Clinical Practice.

    In coming months, The New York Times will look at common procedures, drugs and medical encounters to examine how the economic incentives underlying the fragmented health care market in the United States have driven up costs, putting deep economic strains on consumers and the country.

    Hospitals, drug companies, device makers, physicians and other providers can benefit by charging inflated prices, favoring the most costly treatment options and curbing competition that could give patients more, and cheaper, choices. And almost every interaction can be an opportunity to send multiple, often opaque bills with long lists of charges: $100 for the ice pack applied for 10 minutes after a physical therapy session, or $30,000 for the artificial joint implanted in surgery.

    The United States spends about 18 percent of its gross domestic product on health care, nearly twice as much as most other developed countries. The Congressional Budget Office has said that if medical costs continue to grow unabated, “total spending on health care would eventually account for all of the country’s economic output.” And it identified federal spending on government health programs as a primary cause of long-term budget deficits.

    ¶¶ While the rise in health care spending in the United States has slowed in the past four years — to about 4 percent annually from about 8 percent — it is still expected to rise faster than the gross domestic product. Aging baby boomers and tens of millions of patients newly insured under the Affordable Care Act are likely to add to the burden.

    With health insurance premiums eating up ever more of her flat paycheck, Ms. Yapalater, a customer relations specialist for a small Long Island company, recently decided to forgo physical therapy for an injury sustained during Hurricane Sandy because of high out-of-pocket expenses. She refused a dermatology medication prescribed for her daughter when the pharmacist said the co-payment was $130. “I said, ‘That’s impossible, I have insurance,’ ” Ms. Yapalater recalled. “I called the dermatologist and asked for something cheaper, even if it’s not as good.”

    The more than $35,000 annually that Ms. Yapalater and her employer collectively pay in premiums — her share is $15,000 — for her family’s Oxford Freedom Plan would be more than sufficient to cover their medical needs in most other countries. She and her husband, Jeff, 63, a sales and marketing consultant, have three children in their 20s with good jobs. Everyone in the family exercises, and none has had a serious illness.

    Like the Yapalaters, many other Americans have habits or traits that arguably could put the nation at the low end of the medical cost spectrum. Patients in the United States make fewer doctors’ visits and have fewer hospital stays than citizens of many other developed countries, according to the Commonwealth Fund report. People in Japan get more CT scans. People in Germany, Switzerland and Britain have more frequent hip replacements. The American population is younger and has fewer smokers than those in most other developed countries. Pushing costs in the other direction, though, is that the United States has relatively high rates of obesity and limited access to routine care for the poor.

    A major factor behind the high costs is that the United States, unique among industrialized nations, does not generally regulate or intervene in medical pricing, aside from setting payment rates for Medicare and Medicaid, the government programs for older people and the poor. Many other countries deliver health care on a private fee-for-service basis, as does much of the American health care system, but they set rates as if health care were a public utility or negotiate fees with providers and insurers nationwide, for example.

    “In the U.S., we like to consider health care a free market,” said Dr. David Blumenthal, president of the Commonwealth Fund and a former adviser to President Obama. ”But it is a very weird market, riddled with market failures.”

    Consider this:

    Consumers, the patients, do not see prices until after a service is provided, if they see them at all. And there is little quality data on hospitals and doctors to help determine good value, aside from surveys conducted by popular Web sites and magazines. Patients with insurance pay a tiny fraction of the bill, providing scant disincentive for spending.

    Continued in article

    Does Medical Care Cost Too Much in the United States? Posner ---
    http://www.becker-posner-blog.com/2013/06/does-medical-care-cost-too-much-in-the-united-states-posner.html

    Does Medical Care Cost Too Much in the United States? Becker ---
    http://www.becker-posner-blog.com/2013/06/medical-competition-and-the-cost-of-medical-care-becker.html

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

     

    10 Sun Safety Tips For Families  ---
    http://mightymommy.quickanddirtytips.com/10-sun-safety-tips-for-families.aspx

    Should We Only Eat Organic Strawberries? ---
    http://nutritiondiva.quickanddirtytips.com/non-organic-strawberries-nutrients-vs-pesticides.aspx

    A Short, Animated Look at What’s Inside Your Average Cup of Coffee ---
    http://www.openculture.com/2013/06/whats_inside_your_average_cup_of_coffee.html

    How to Mislead With Statistics
    "Myths About Wheatgrass," by Monica Reinagel, Nutrition Deva, June 26, 2013 ---
    http://nutritiondiva.quickanddirtytips.com/wheat-grass-myths.aspx 

    "World Drug Report Reveals The Staggering Extent Of North America's Meth Problem," by Michael Kelly, Business Insider, June 26, 2013 ---
    http://www.businessinsider.com/north-america-has-a-massive-meth-problem-2013-6 

    "'Digital Dementia':  Left Brain – Right Brain – and the Effects of Excessive Use of Smartphones," by Steven Mintz, Ethics Sage, June 28, 2013 ---
    http://www.ethicssage.com/2013/06/digital-dementia.html

     

    A Bit of Humor

    What’s the Most Intellectual Joke You Know?: The Best from Reddit (and You?) ---
    http://www.openculture.com/2013/07/whats-the-most-intellectual-joke-you-know.html

    The Most Intellectual Jokes Submitted by Readers of Open Culture ---
    http://www.openculture.com/2013/07/the-most-intellectual-jokes-our-favorite-open-culture-reader-submissions.html

    Explanations To 15 Jokes Only Smart People Can Understand ---
    http://www.businessinsider.com/smart-joke-explanations-2013-6

    Theme Song for Seniors ---
    http://www.youtube.com/embed/HzSaoN2LdfU?fs=1

    25 Adorable Photos Of Troops Playing With Puppies In Iraq And Afghanistan ---
    http://www.businessinsider.com/25-photos-of-troops-playing-with-puppies-2013-7

    Forwarded by Sid and Eileen

    NO NURSING HOME FOR US!!!

    No nursing home for us. We'll be checking into a Holiday Inn! With the average cost for a nursing home care costing $188.00 per day, there is a better way when we get old and too feeble. I've already checked on reservations at the Holiday Inn. For a combined long term stay discount and senior discount, it's $59.23 per night. Breakfast is included, and some have happy hours in the afternoon. That leaves $128.77 a day for lunch and dinner in any restaurant we want, or room service, laundry, gratuities and special TV movies. Plus, they provide a spa, swimming pool, a workout room, a lounge and washer-dryer, etc. Most have free toothpaste and razors, and all have free shampoo and soap. $5-worth of tips a day and you'll have the entire staff scrambling to help you. They treat you like a customer, not a patient. There's a city bus stop out front, and seniors ride free. The handicap bus will also pick you up (if you fake a decent limp). To meet other nice people, call a church bus on Sundays. For a change of scenery, take the airport shuttle bus and eat at one of the nice restaurants there. While you're at the airport, fly somewhere. Otherwise, the cash keeps building up.

    It takes months to get into decent nursing homes. Holiday Inn will take your reservation today. And you're not stuck in one place forever -- you can move from Inn to Inn, or even from city to city. Want to see Hawaii ? They have Holiday Inn there too. TV broken? Light bulbs need changing? Need a mattress replaced? No problem.. They fix everything, and apologize for the inconvenience.

    The Inn has a night security person and daily room service. The maid checks to see if you are ok. If not, they'll call an ambulance . .. . or the undertaker.

    If you fall and break a hip, Medicare will pay for the hip, and Holiday Inn will upgrade you to a suite for the rest of your life.

    And no worries about visits from family. They will always be glad to find you, and probably check in for a few days mini-vacation.

    The grand-kids can use the pool.

    What more could I ask for?

    So, when I reach that golden age, I'll face it with a grin.

    AIDS WARNING!

    To all of you approaching 50 or have REACHED 50 and past, this email is especially for you......

    SENIOR CITIZENS ARE THE NATION'S LEADING CARRIERS OF AIDS!

    HEARING AIDS

    BAND AIDS

    ROLL AIDS

    WALKING AIDS

    MEDICAL AIDS

    GOVERNMENT AIDS

    MOST OF ALL,

    MONETARY AID TO THEIR KIDS!

    Not forgetting HIV (Hair is Vanishing)

    I'm only sending this to my mature friends.

    I love to see you smile.

     

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

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

    Online Distance Education Training and Education --- http://www.trinity.edu/rjensen/Crossborder.htm
    For-Profit Universities Operating in the Gray Zone of Fraud  (College, Inc.) --- http://www.trinity.edu/rjensen/HigherEdControversies.htm#ForProfitFraud

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

    The Cult of Statistical Significance: How Standard Error Costs Us Jobs, Justice, and Lives ---
    http://www.cs.trinity.edu/~rjensen/temp/DeirdreMcCloskey/StatisticalSignificance01.htm

    How Accountics Scientists Should Change: 
    "Frankly, Scarlett, after I get a hit for my resume in The Accounting Review I just don't give a damn"
    http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm
    One more mission in what's left of my life will be to try to change this
    http://www.cs.trinity.edu/~rjensen/temp/AccounticsDamn.htm 

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

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

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

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

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

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

     

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

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

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

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

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

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

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

    Some of Bob Jensen's Tutorials

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

    Accounting  and Taxation News Sites ---
    http://www.trinity.edu/rjensen/AccountingNews.htm

     

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

    Over the years the AECM has become the worldwide forum for accounting educators on all issues of accountancy and accounting education, including debates on accounting standards, managerial accounting, careers, fraud, forensic accounting, auditing, doctoral programs, and critical debates on academic (accountics) research, publication, replication, and validity testing.

     
    CPAS-L (Practitioners) http://pacioli.loyola.edu/cpas-l/  (Closed Down)
    CPAS-L provides a forum for discussions of all aspects of the practice of accounting. It provides an unmoderated environment where issues, questions, comments, ideas, etc. related to accounting can be freely discussed. Members are welcome to take an active role by posting to CPAS-L or an inactive role by just monitoring the list. You qualify for a free subscription if you are either a CPA or a professional accountant in public accounting, private industry, government or education. Others will be denied access.
    Yahoo (Practitioners)  http://groups.yahoo.com/group/xyztalk
     This forum is for CPAs to discuss the activities of the AICPA. This can be anything  from the CPA2BIZ portal to the XYZ initiative or anything else that relates to the AICPA.
    AccountantsWorld  http://accountantsworld.com/forums/default.asp?scope=1 
    This site hosts various discussion groups on such topics as accounting software, consulting, financial planning, fixed assets, payroll, human resources, profit on the Internet, and taxation.
    Business Valuation Group BusValGroup-subscribe@topica.com 
    This discussion group is headed by Randy Schostag [RSchostag@BUSVALGROUP.COM] 
    FEI's Financial Reporting Blog
    Smart Stops on the Web, Journal of Accountancy, March 2008 --- http://www.aicpa.org/pubs/jofa/mar2008/smart_stops.htm
    FINANCIAL REPORTING PORTAL
    www.financialexecutives.org/blog
    Find news highlights from the SEC, FASB and the International Accounting Standards Board on this financial reporting blog from Financial Executives International. The site, updated daily, compiles regulatory news, rulings and statements, comment letters on standards, and hot topics from the Web’s largest business and accounting publications and organizations. Look for continuing coverage of SOX requirements, fair value reporting and the Alternative Minimum Tax, plus emerging issues such as the subprime mortgage crisis, international convergence, and rules for tax return preparers.
    The CAlCPA Tax Listserv

    September 4, 2008 message from Scott Bonacker [lister@bonackers.com]
    Scott has been a long-time contributor to the AECM listserv (he's a techie as well as a practicing CPA)

    I found another listserve that is exceptional -

    CalCPA maintains http://groups.yahoo.com/taxtalk/  and they let almost anyone join it.
    Jim Counts, CPA is moderator.

    There are several highly capable people that make frequent answers to tax questions posted there, and the answers are often in depth.

    Scott

    Scott forwarded the following message from Jim Counts

    Yes you may mention info on your listserve about TaxTalk. As part of what you say please say [... any CPA or attorney or a member of the Calif Society of CPAs may join. It is possible to join without having a free Yahoo account but then they will not have access to the files and other items posted.

    Once signed in on their Yahoo account go to http://finance.groups.yahoo.com/group/TaxTalk/ and I believe in top right corner is Join Group. Click on it and answer the few questions and in the comment box say you are a CPA or attorney, whichever you are and I will get the request to join.

    Be aware that we run on the average 30 or move emails per day. I encourage people to set up a folder for just the emails from this listserve and then via a rule or filter send them to that folder instead of having them be in your inbox. Thus you can read them when you want and it will not fill up the inbox when you are looking for client emails etc.

    We currently have about 830 CPAs and attorneys nationwide but mainly in California.... ]

    Please encourage your members to join our listserve.

    If any questions let me know.

    Jim Counts CPA.CITP CTFA
    Hemet, CA
    Moderator TaxTalk
     

     

     

     

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

     

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

    Some Accounting History Sites

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

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

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

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

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

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

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

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

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

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

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

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

    All my online pictures --- http://www.cs.trinity.edu/~rjensen/PictureHistory/

     

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