Tidbits Quotations
To Accompany August 12, 2014 edition of Tidbits
http://www.trinity.edu/rjensen/tidbits/2014/tidbits081214.htm  
Bob Jensen at Trinity University




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

Inspector General Report: Hundreds of Thousands of Machine Guns, Rifles Given to Afghani Security Forces Are Missing.
http://townhall.com/tipsheet/katiepavlich/2014/07/28/report-thousands-of-weapons-missing-in-afghanistan-n1870894?utm_source=thdaily&utm_medium=email&utm_campaign=nl
Why doesn't this surprise anybody?

Be brave enough to start a conversation that matters.
Margaret Wheatley,

We must be willing to get rid of the life we've planned, so as to have the life that is waiting for us.
Joseph Campbell

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

It's better to walk alone than in a crowd going in the wrong direction.
Diane Grant

Christians Are Dumber Than Atheists
Ohio State University’s Psychology 1100 course answer to an online homework set ---
http://christiannews.net/2014/07/28/ohio-state-psychology-course-teaches-christians-are-dumber-than-atheists/

California’s Exceptional Drought Just Keeps Getting Worse
Tom Randall , Bloomberg News, July 31, 2014
http://www.bloomberg.com/news/2014-07-31/california-s-exceptional-drought-spreads-north-as-water-supplies-drop.html

Israel Uses Rockets To Protect People, Hamas Uses People To Protect Their Rockets
Greg Hengler --- http://www.townhallmail.com/zbzjrctbjjwkrbjbkbrptkgllfkllbftddpcqrwdmwsspl_asdmtldhmpt.html

Jimmy Carter: The Only Way to Fix Gaza is by Giving Hamas Everything It Wants.
http://www.frontpagemag.com/2014/dgreenfield/jimmy-carter-the-only-way-to-fix-gaza-is-by-giving-hamas-everything-it-wants/
But he won't say where to export the 8+ million Jews living in Israel.
Maybe the deportations should evolve in stages. First send all Jewish children (unaccompanied) across the Rio Grande. When they are given refugee status they can then be joined by their parents.

We're old enough to remember when advocates for the Affordable Care Act promised that it would "bend the cost curve" and reduce expensive hospital visits, particularly at emergency rooms. So far, the opposite is occurring.
James Freeman, "There Goes Another ObamaCare Argument," WSJ, August 6, 2014 ---
http://online.wsj.com/articles/there-goes-another-obamacare-argument-1407242712?tesla=y&mod=djemMER_h&mg=reno64-wsj

Non-Refugee Migrant Kids Will Be Sent Back
Barach Obama
http://time.com/3037414/barack-obama-migrant-children-humanitarian-claims/?xid=newsletter-brief

But 99.99% of them will be declared refuges.

Ray Stevens at the Border --- https://www.youtube.com/embed/WgOHOHKBEqE?feature=player_detailpage

"When Did the U.S. Forfeit its Moral Leadership in the World?" by Steven Mintz, Ethics Sage, August 6, 2014 --- Click Here
http://www.ethicssage.com/2014/08/when-did-the-us-forfeit-its-moral-leadership-in-the-world-courage-and-leadership-is-lacking-in-dealing-with-foreign-crise.html

Democracy is Wrong for the World and Belgium is a Test Case ---
http://www.cbn.com/tv/embedplayer.aspx?bcid=1509282970001




And to Think That Before the Presidential Elections We Were Promised More Transparency in Government
Yahoo News:  US inspectors general report that the Obama administration is delaying or stalling delay or stall their investigations ---
http://news.yahoo.com/us-inspectors-general-govt-blocked-access-212333415--politics.html


How to Mislead With StatisticsThis time its the Bureau of Labor Statistics
"4 Million Fewer Jobs: How The BLS Massively Overestimated US Job Creation," by Tyler Durden, Zero Hedge, August 5, 2014 ---
http://www.zerohedge.com/news/2014-08-05/4-million-fewer-jobs-how-bls-massively-overestimated-us-job-creation


On the Outer Margins of Political Correctness
I never knew that horticulture was such an offensive field of study.  . . . Dr. Ben Pitcher, a lecturer in sociology at the University of Westminster, is claiming that a local British gardening show is
actually a dog whistle for genocidal nationalist racism. And, no, I’m not making this up. Our friendly British professor has officially helped the politically-correct crowd jump the multiculturalist shark. According to the Telegraph.co.uk:
Michael Schaus ---
http://finance.townhall.com/columnists/michaelschaus/2014/08/09/leftist-professor-labels-gardening-advice-as-racist-n1876789?utm_source=thdaily&utm_medium=email&utm_campaign=nl

Jensen Comment
Since I've been putting out Tidbits and pictures of my three flower gardens and my wildflower field for years perhaps I really am genocidal national racist. ---
http://www.trinity.edu/rjensen/Pictures.htm

Bob Jensen's threads on political correctness ---
http://www.trinity.edu/rjensen/HigherEdControversies2.htm#PoliticalCorrectness


How to Mislead With Governmental Accounting
"How Much Do We Really Owe?," by John Goodman, Forbes, August 7, 2014 ---
http://www.forbes.com/sites/johngoodman/2014/08/07/how-much-do-we-really-owe/

First the good news: the official federal deficit is only 3% of GDP – way below the 10% figure it reached only a few years ago. Now the bad news: The real deficit is more than ten times that amount.

The U.S. government’s deficit is expected to be $514 billion this year, according to the Congressional Budget Office (CBO). That’s the number you get when you look at cash flow. It means the government will spend $514 billion more than it takes in during the 2014 fiscal year.

But this kind of accounting ignores federal government liabilities that will become due in future years. For example, over the course of a year millions of people earn Social Security and Medicare benefits as well as other government entitlement benefits that will have to be paid in future years. When you total all that up (and subtract expected future revenues to pay those benefits), we added $5 trillion in debt last year according to Boston University economist Larry Kotlikoff.

Another way to look at the problem is to consider not just one year’s deficit, but the total amount of debt that government has accumulated. US debt held by the public is currently $12.6 trillion, or about 75% of the size of our economy the way the CBO measures things. But in arriving at that number, the CBO doesn’t recognize promises to pay Social Security checks and medical bills as real obligations.

Take a senior citizen who is expecting an interest payment on a government bond next month and who is also expecting a Social Security check. The way the CBO looks at the world, the interest payment on the bond is a real obligation of the government. But the Social Security check isn’t.

That’s a strange way of accounting and Kotlikoff and his colleagues reject it. Instead they project the value of all the promises we have made under Social Security and other entitlement programs – benefits that ordinary citizens believe they have earned – and subtract expected future revenues, given the current tax law. The difference is an unfunded liability that is every bit as real as promises to make future interest payments on bonds and Treasury bills.

Calculating obligations in this way, Kotlikoff estimates that the total unfunded liability of the federal government is $210 trillion, or about 12 times the size of our economy. Writing in The New York Times, Kotlikoff says:

“The fiscal gap — the difference between our government’s projected financial obligations and the present value of all projected future tax and other receipts — is, effectively, our nation’s credit card bill. Eliminating it, would require an immediate, permanent 59 percent increase in federal tax revenue. An immediate, permanent 38 percent cut in federal spending would also suffice. The longer we wait, the worse the pain. If, for example, we do nothing for 20 years, the requisite federal tax increase would be 70 percent, or the requisite spending cut, 43 percent.”

And the tax increase, by the way, doesn’t work unless the money is sequestered and invested. It can’t just be deposited in the Treasury’s bank account and spent on other things.

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

Bob Jensen's threads on the sad state of governmental accounting ---
http://www.trinity.edu/rjensen/Theory02.htm#GovernmentalAccounting


Former Secretary of Labor, Secretary of the Treasury, Secretary of State, and Economics Professorhttp://en.wikipedia.org/wiki/George_Shultz
George P. Shultz --- http://en.wikipedia.org/wiki/George_Shultz

"How to Get America Moving Again:  The world is in turmoil and needs a stronger U.S. It's time to wake the sleeping giant by taking these specific steps to rev up the economy,"  by George P. Shultz, The Wall Street Journal, August 8, 2014 ---
http://online.wsj.com/articles/george-p-shultz-how-to-get-america-moving-again-1407536979?tesla=y&mod=djemMER_h&mg=reno64-wsj

Adm. Isoroku Yamamoto, who led the Japanese fleet at Pearl Harbor, had spent some time before World War II in the United States. After the attack, he allegedly said, with a sense of foreboding, "I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve." Well, the giant is sleeping again. What does it take to wake us up? How many times can we be kicked in the belly before we take notice?

The world is awash in change that affects us and our allies. We must recognize this and strengthen our military capabilities, set effective strategies, and be prepared to support our principles and oppose those who seek to destroy them. To do so, we must get our economy really rolling again. How? Everyone knows how. We just need to take action:

(1) Cleanse the personal income tax system of deductions and lower the marginal rate on a revenue-neutral basis. The template is right there in the 1986 Tax Act, which passed the U.S. Senate 97-3.

(2) We all know that corporate taxation is an anachronism. Why do we want a system that encourages American companies to reincorporate abroad? Let the earnings they make in other countries be taxed there, and that's it. Why give incentives for companies to keep their cash offshore rather than invest it in the U.S.? And let's lower the corporate tax rate to be competitive with the rest of the world. How about 20%?

(3) We all know that the maze and uncertainty of the regulatory octopus is stifling the economy. Regulations are needed, but they can be made simpler and designed to work better. Overhaul the current complexity so that even small businesses can see how to comply without having to hire compliance advocates they can't afford.

(4) While we are reducing uncertainty, why not take the mystery out of the Federal Reserve? The Fed can establish a rules-based monetary policy with the ability to deviate from the rules as long as they publicly explain why, using cost benefit thinking in the explanation.

(5) Get control of spending. Otherwise the burden of servicing government debt when normal interest rates return—a burden that already amounts to hundreds of billions annually—will be unbearable.

The problem is entitlement spending. There are many well-known ways to put the Social Security system back on track so it will be there for young people in the future. One way is to change from wage-indexing to price-indexing as a method of calculating benefits, and apply the change only to people under the age of 55. That means younger people will receive benefits at least as large as those now being paid with protection against any future inflation.

Another change is to index the normal retirement age—when people can receive full benefits—to longevity. And when workers reach age 65, stop any payroll deductions and employer contributions to encourage them to stay in the labor force. Their pay will increase and they will be less costly employees. Incentives work.

(6) Health-care finance is more difficult, but here is a simple formula to use as a basis for further work. Right now, health-insurance companies are pass-through agents that receive money from the government, employers, and other sources that they spend on a wide variety of health services. But insurance is about risk. The main risks in the health-care area are catastrophic events that have high costs, so high-deductible catastrophic insurance is what is needed. Even young people will buy such coverage because the cost—particularly if insurance companies have to compete across state lines—will be low and the protection these policies give is important for everyone.

Let's encourage health-savings accounts. Singapore has required health savings accounts and price transparency since 1984, and even the poor who get government support are motivated to spend carefully. According to World Bankfigures, the total public and private spending on health care in Singapore is 4.7% of their GDP compared with 17.9% in the U.S. The outcomes and health-care facilities in Singapore are among the best in the world.

Most people who make a decent living can afford to put pretax income into health-savings accounts, which they can then use to pay for routine medical services. We also should tweak Medicare and Medicaid so that significant health-savings accounts can be created for their recipients—so most everyone can have access to the health care system. And consumers need more information about the prices of health-care services so they can make informed decisions.

Finally, we should encourage public and private neighborhood health clinics, which are spreading rapidly and can dispense health care inexpensively.With these changes, the economy will soar. It will be morning once again in America.

What about our defense and foreign policy? Let's put our military to work figuring out what we really need. We want no-nonsense people in charge. We want to do away with all nonsensical across-the-board sequester rules. But we must have a robust military capability. And then we need to conduct ourselves in a credible way.

I always remember the day in Marine Corps boot camp when my drill sergeant handed me my rifle. He said, "This is your best friend. Take good care of it and remember: Never point this rifle at anybody unless you're willing to pull the trigger." The lesson—no empty threats—was one that I have never forgotten. But this boot-camp wisdom is too often ignored, undermining our credibility.

America needs to work closely with its friends and allies. There are many of them. They need leadership and example. The problems ahead are too numerous to enumerate, but the threats to us and our friends are real. So, wake up, sleeping giant! You have work to do.

Jensen Comment
The problem with tax reforms like those suggested by Professor Shultz is that stakeholders have become dependent upon the status quo. Universities, churches, and virtually all charities have grown dependent upon donors who give money and other assets primarily for the tax benefits. Towns, cities, counties, and school districts are dependent upon lower interest on their risky bonds that attract investors due to tax exempt interest. Alternative energy companies are dependent upon tax incentives. Ant the list of stakeholders in the current tax breaks goes on and on and on. Getting tax reform passed trhough their lobbying checkpoints is virtually impossible.

The corporate income tax can and should be replaced by a VAT tax but business firms used to beating the corporate tax code fight the VAT tax with all the weapons in their arsenal.

Even less likely is getting control of government spending. Here again there are too many stakeholders and too much fraud to make any headway on spending until entitlements force double digit annual inflation so that entitlement obligations and be paid off dollars that will eventually not be worth the cloth/paper they are printed on. Currently most people won't bother to bend down to pick up a penny. Eventually they won't bother to pick up a dropped dollar in the gutter.

As a result what Professor Shultz recommends is purely academic (read that as fantasy). Reality will one day be hyperinflation.


Chevy Volt --- http://en.wikipedia.org/wiki/Chevy_Volt

"Chevy Volt Resale Values Plunge as Lease Returns Hit Market," by Mark Modica, National Legal and Policy Center, August 8, 2014 ---
http://nlpc.org/stories/2014/08/07/chevy-volt-resale-values-plunge-lease-returns-hit-market

. . .

GM was able to use taxpayer money in the form of electric vehicle tax credits to help drive down costs to lessees. Taxpayers chipped in $7,500 for each Chevy Volt placed on the road for terms as low as two years. The taxpayer subsidies, along with inflated residual values and other GM incentives, provided for low monthly lease payments and led to a full two-thirds of all Volt "sales" being attributed to leases. That's about three times the lease rate for the overall industry.

So, what happens to resale values of vehicles with little mass appeal that are forced upon the public with subsidies and manipulated leases? The result was predictable; those leased vehicles are now being returned and resale values are plunging. Having won many awards in the past, the Chevy Volt is now the front-runner to be the recipient of the highest depreciating vehicle award.

A search on the Manheim auction site, a primary indicator of vehicle wholesale value, shows that 81 Chevy Volts, model year 2012, were sold at auction for the week ending August 2nd. The average price was $14,871 for vehicles that are only two or three years old, primarily coming off of the manipulated leases. That equates to an absurd loss of values for Chevy Volts of about 65% in only two or three years.

To quickly review how lease terms are calculated, lessors (in the case of GM vehicles that would have been crony, government-owned financial company Ally Financial) set the residual values for vehicles at the expected time of lease termination. The residual value is the amount of money the lessors expect to receive when they have to sell the leased vehicles after they are returned. The lessee pays the difference between the original price of the leased vehicle and the residual value, plus a small lease rate. The higher the residual value, the lower the monthly payment.

So, we now have Chevy Volt resale values suffering as a result of lack of demand and manipulated leases. Financial institutes that lease Chevy Volts to consumers will need to recalculate residual values lower to reflect market conditions. At least they would in a free market devoid of political intrusion. GM and/or Ally Financial will have to absorb losses for the Chevy Volt lease returns that sell for less than the original residual values. The already low sales numbers for the Volt will be hurt if leases stop being manipulated through the use of artificially high residual values and politically-driven incentives. The supply of low-priced, two year old Volts on lots will not help new sales either.

Continued in article

Jensen Comment
I don't think the Volt can be used as a gas-only vehicle with a totally dead power battery. You can read the following at
http://en.wikipedia.org/wiki/Chevy_Volt

The Volt's nominal usable battery capacity is 10.3 kW·h. The Volt's fuel tank capacity is 9.3 US gallons (35 L; 7.7 imp gal). Aside from charge sustaining modes of operation, the battery capacity is completely used first, and then the fuel is consumed. In the event that the car is operated until it runs out of gasoline, the gasoline-powered generator shuts down, and the Volt continues to operate, tapping into a reserve portion of the battery capacity which is below the regular minimum state-of-charge. The reserve battery capacity provides an extra 3 to 4 mi (4.8 to 6.4 km). If this reserve battery capacity is also exhausted, the Volt slows to a stop.

Thus the Volt appears to not be a viable used-car option to operate on a totally dead battery. To operate the vehicle a dead battery must be rechargeable or replaced. It would seem that as Volts age (e.g., to over 20 years) it could become nearly impossible to replace the batteries unless newer batteries are still being manufactured to power the very old Volts on the road. This is an added uncertainly about the future of used Chevy Volts relative to gasoline-only cars that are commonly driven when they are 20-? years of age.

The market for Chevy Volt replacement batteries seems to be disorganized with highly varying prices ---
http://green.autoblog.com/2014/01/10/chevy-volt-battery-replacement-cost-34000/

However, GM provides an eight-year warranty for battery replacement in new models. A fully-charged battery gives the Volt an electric only range of 25-50 miles depending upon such factors as temperature and terrain and traffic conditions (e.g., starting and stopping). The range with a full battery charge and full fuel tank averages about 375 miles subject once again to such factors as temperature and terrain and traffic conditions. Very cold weather is very troublesome in terms of the Volt's range.

Volts have only been sold since 2010 such that there is uncertainty about the mileage and range of Volt's that have batteries 6-? years of age. Will older batteries be less efficient and/or less effective? How durable are the electric engines and power trains over time? The current resale values in 2014 suggest that the public is not all that optimistic about buying used Chevy Volts. For that matter it has never been all that optimistic about new models that probably would have been complete busts without government pricing subsidies.


Shareholder Value --- http://en.wikipedia.org/wiki/Shareholder_value

From the CFO Journal's Morning Ledger on August 8, 2014

Boston Globe: Is Shareholder Value Bad For Business?
The decision this week by drugstore chain Walgreens to go against the will of shareholders and remain domiciled in the U.S. following its merger with a European outfit, is just one of many acts in the ongoing morality tale about what it means to run a corporation in latter-day America. Does one do ‘the right thing’ by opting for what’s best for ‘shareholder value’ or for wider ‘society’? That question is threatening to rip apart Massachusetts-based, family-owned grocery store chain Market Basket, whose unfolding story is being told in the
Boston Globe.  Operating across three New England states, Market Basket board members dismissed the popular company CEO Arthur T. Demoulas and two executives on June 23. Loyal staff and sympathetic customers didn’t like that: so now the staff are on strike and customers have boycotted the stores, threatening the business’ very existence. “This controversy is the tip of an iceberg,” said James Post, coauthor of the 2002 book “Redefining the Corporation” and a professor emeritus at Boston University School of Management. “And what’s below the iceberg is a much larger debate about the relationship between shareholders and all of the other parties that help account for the success of a company.”

"Is ‘shareholder value’ bad for business?" by Leon Neyfaldi, Boston Globe, August 3, 2014 ---
http://www.bostonglobe.com/ideas/2014/08/02/shareholder-value-bad-for-business/3O4MYxjWgmJ2DOPwkeYxyN/story.html

It sounds like great management philosophy—but critics say we need to get back to a broader vision of the purpose of corporations

The uprising against the owners of Market Basket that’s been unfolding over the past several weeks looks at first like a classic showdown between the powers that be and the little guys who would. In one corner stands a coalition of board members and major shareholders who think it should be returning higher profits; in the other, a crowd of employees fiercely devoted to the recently fired CEO, who won their loyalty by paying high wages, providing generous benefits, and handing out regular bonuses. Amazingly, even customers have joined the revolt, turning Market Basket stores into ghost towns and costing the company millions of dollars in losses.

There’s something heartwarming about workers risking their necks in the name of a beloved former boss. But to observers who know how modern corporations work, the protests can seem a little naive: After all, everybody knows that a corporation is an entity whose first job is to maximize profits and deliver the highest return possible to its owners. As some commentators have noted, Market Basket is a business, and demanding that its investors forgo profits in service of some greater good goes against everything we know about the natural laws of capitalism.

Unless, of course, it doesn’t. Related

Timeline of Market Basket events

Experts on the history of business say the Market Basket saga is a window onto something deeper than a power struggle among the Demoulas clan that owns it. They see it as emblematic of a war over the future of the American corporation—what its purpose is, how it should be run, and whom it should be engineered to benefit. They argue that maximizing profit and shareholder value—an approach to running companies that drives investment on Wall Street and serves as the closest thing to modern management gospel—is only one way of defining corporate success, and a fairly new one at that.

“This controversy is the tip of an iceberg,” said James Post, coauthor of the 2002 book “Redefining the Corporation” and a professor emeritus at Boston University School of Management. “And what’s below the iceberg is a much larger debate about the relationship between shareholders and all of the other parties that help account for the success of a company.”

A company like IBM or General Motors could be the heart of an entire ecosystem of suppliers, investors, and even civic institutions.

Quote Icon

Post and others argue that a well-run company can—and should—be managed in a way that benefits not just the investors who own its stock, but a wide range of constituents. As opposed to “shareholders,” they call these people “stakeholders”: a group that includes employees, customers, suppliers, and creditors, as well as the broader community in which the company operates, and even the country that it calls home. According to that view, Market Basket’s employees and customers are essential to the firm’s success and, thus, rightful beneficiaries of its prosperity.

Importantly, it’s not just antimarket leftists who are making this point: It’s pro-business thinkers who want to see a more competitive future for American corporations. Critics like Post argue that the singleminded emphasis on profits and shareholder value—which took hold in the corporate world during the 1980s—has actually hurt corporations in a number of ways, giving their leaders the wrong kinds of incentives, gutting their future in pursuit of short-term profits, and often draining them of their real value and putting them at odds with their communities.

To take seriously the idea of a “stakeholder”-oriented corporation is to realize that firms like Market Basket, which we rely on in our daily lives and which rely on us in return, don’t have a fixed role in a capitalist society, but rather exist as tools that can serve a variety of functions. While “shareholder value” is attractive in its simplicity, a look at its track record suggests it might be an idea that has reached its sell-by date.

***

Today, it’s widely taken for granted that the American corporation functions as a standalone, self-interested entity responsible exclusively to its investors. But it wasn’t always this way. “The early corporations were chartered by the state to meet a social purpose,” Post said. “Sometimes it was to build highways, sometimes it was to run banks, but there was always public purpose that went with the grant of a charter.” The message was straightforward: People who owned incorporated companies ran them at the pleasure of the state, and, in exchange for various legal protections, had a responsibility to do more than enrich themselves.

Though such demanding legislative charters had long fallen out of use by the mid-20th century, when American corporations entered what is widely considered their golden age, historians say that many executives nevertheless held onto the notion that they were overseeing entities with a role in society, and were responsible for creating more than the value that existed on paper. “They viewed their job as a sort of stewardship of an economic and social institution,” said Lynn Stout, a professor at Cornell University Law School and the author of “The Myth of Shareholder Value.”

During this era of so-called managerial capitalism, which began roughly in the 1920s, corporations were seen by both their managers and much of the American public as institutions that mattered in themselves: They produced useful products, gave workers and their families a stable and often long-term source of income, and played a role in the cities and towns where they did business. A company like IBM or General Motors could be the heart of an entire ecosystem of suppliers, investors, and even civic institutions.

But a change was coming to American capitalism. Facing unprecedented competition from Europe and Asia, these long-stable firms began to look like sleepy behemoths. And economists had begun to worry that top executives had become so powerful they were running companies with their own personal interests at heart, lining their pockets at the expense of the stockholders who, in theory, should have been benefiting in proportion to the company’s success.

The solution to all these problems, famously articulated by the University of Chicago free market economist Milton Friedman in a 1970 New York Times article, was an elegant one: By framing the corporation purely in terms of its monetary value to shareholders, and setting aside the notion that it might be a valuable entity in and of itself by virtue of what it did, corporate America suddenly had an easy way to measure performance. The scheme had a kind of moral clarity: The risk of operating a company is borne by stockholders, so they’re the ones who deserve to reap the rewards.

A well-managed company, then, would have a high stock price that reflected the best possible use of its assets. A poorly managed one was a target for a new class of investor—the corporate raider—who saw big companies as collections of assets that could be bought, broken up, and sold at a profit.

CEOs got the message: The point of running a company was to keep the share price high. And to keep their eyes on the target, boards started tying executive pay to the share price, by paying CEOs with stock options that were much more valuable than their paper salary. In the wake of the “shareholder value” revolution, everything except the value of a company’s stock—including its impact on the lives of its employees, its contracts with suppliers and retailers, whether it was liked or hated by its customers—came to be seen as almost irrelevant. Everything you needed to know about how a company was doing was believed to be reflected in its share price.

By the 1990s, the notion that a CEO had an obligation to maximize shareholder value had become an unquestioned mantra taught in business schools; ordinary people assumed it was simply the way of the world. “People think it was brought down from Mount Sinai by Moses, as the 11th Commandment,” said Richard Sylla, a professor who specializes in the history of financial institutions at NYU Stern School of Business, and the coauthor of a recent article in the journal Daedalus critiquing the notion of shareholder supremacy. “If you’re younger than 50 or 60, you’ve lived in a world where everyone taught you that this is what a corporation is supposed to do—maximize profit and shareholder value. But the world used to be different.”

The philosophy of shareholder supremacy, initially a reform to curb irresponsibility in managers, has ended up causing significant problems of its own, say Sylla and other critics. CEOs became obsessed with stock price at the expense of all other considerations. Some, like the executives at Enron, went so far as to defraud their own stockholders by engineering bogus profits. Countless others made short-sighted decisions intended to goose earnings, keep investors happy, and enrich themselves—all without regard for the long-term health of their companies.

The broader social effects of the shift toward shareholder value are clear, critics say, with wages stagnating and unemployment remaining stubbornly high even as the stock market has rebounded after the recession. Meanwhile, if the point was to benefit shareholders, it’s not clear that worked either. Roger Martin, the former dean of the Rotman School of Management at the University of Toronto, points out in his 2011 book, “Fixing the Game,” that from 1933 to 1976, returns on investment in the S&P 500—the decades immediately before the “shareholder value” took hold—were actually higher than they have been since. And Stout notes that in the 20 years after 1993, when a change to the tax code encouraged corporations to tie executive compensation to share price, investors in the S&P 500 saw returns that were slightly worse than what they were getting during the 40 years prior. The life expectancy of S&P 500 companies, meanwhile, has been cut dramatically—from around 70 years in the 1920s to 15 years today.

“We have been dosing our public corporations with the medicine of shareholder value thinking for at least two decades now,” Stout has written. “The patient seems, if anything, to be getting worse.”

As the effects of shareholder supremacy have begun to make themselves evident—Stout points to Sears and Motorola as examples of companies that have been hollowed out in the name of stoking share prices—an alternative approach to running a corporation, known as the stakeholder model, began gaining purchase among academics and business leaders. This model, as described by its proponents, recommends taking a less simplistic and short-term view of what makes a company successful, and calls for measuring its value not just in terms of profits and stock price, but the total impact it has on the lives of people who come into contact with it. There are clear reasons this might be better for employees, customers, and their communities. In the long run, say thinkers like Stout and Post, it is going to be better for the competitiveness of the American company. Pointing to firms like Market Basket, they argue that stakeholder-focused companies are ultimately more stable and financially healthy—a win, ultimately, for the very shareholders being forced to make room at the trough for other interested parties.

***

Though lots of prominent companies now take pains to cultivate reputations as conscientious corporate citizens, would-be reformers want something more. “All that stuff is just window dressing,” said Stout, referring to philanthropic programs financed by big corporations in the name of good PR. “Corporate social responsibility means running a business that contributes to public welfare—that’s the moral defense of capitalism. Business should be a force for good, not for the enrichment of a few small individuals.”

Continued in article

Unbelievable Photos Show Factory Farms Destroying The American Countryside ---
http://www.businessinsider.com/mishka-henners-photos-of-american-feedlots-2014-8

Jensen Comment
It would seem that anything that is bad for business adversely affects shareholder value. However, is the opposite the case. Is everything good for increasing shareholder value good for business. Most of the debate hinges on long-term versus short-term values.

Milton Friedman argued that the only responsibility of business should be making profits while abiding by all laws ---
http://www.bostonglobe.com/ideas/2014/08/02/shareholder-value-bad-for-business/3O4MYxjWgmJ2DOPwkeYxyN/story.html
This is of course difficult when laws are conflicting or unclear --- as is often the case. One example is affirmative action where the laws are sometimes vague or conflicting. Adverse publicity can sometimes cut on both sides of the sword.

A classic problem is when tax laws and regulations allow companies to avoid taxes in a way that hurts them with adverse publicity such as when Walgreens contemplated moving its headquarters across the Atlantic Ocean --- a decision that the company has since rescinded due to both bad publicity and governmental pressures. The company would have benefitted in the short run by this inversion, but it's not at all clear that the long-term benefits would have been positive.

It's clear that the private sector differs greatly from the public sector in terms of social responsibilities. For example, the government is ideally subjected to the democratic voting process with respect to controversial decisions such as banning genetic modification certain food products. A company deciding to modify or not modify its products via genetic modification is not directly subjected to the will of the people except via government intervention.

Highly controversial decisions that are on surface socially responsible have many possible favorable and adverse externalities. For example, if an enormous electric power company elects to substitute coal and nuclear power generation with solar, wind, and hydo power (as is the case with the power generating companies in Vermont) there are many possible externalities for which government would be accountable but not the power companies themselves. For example, enormous increases in the cost of power may cause a spike in unemployment and huge losses of tax revenues from businesses depending on cheap power. In fact power-intensive companies may move to another state where power is cheaper.

At the moment, there's huge political fight in New Hampshire over what is termed the northern pass ---
http://en.wikipedia.org/wiki/Northern_Pass_transmission_line
Power companies want to destroy a significant portion of our forests for enormous (80-foot) transmission towers to bring in hydro power from Quebec. What is profitable for the power companies has adverse externalities on life in the forests as well as life in Quebec if more and more land is flooded for newer and larger hydro dams. But those are Canadians who are hurt. Why should our USA companies care about Canadians if the Northern Pass transmission lines add shareholder value to USA power companies.?

 


The Worst States for Finding Full-Time Work --- Click Here
http://247wallst.com/special-report/2014/08/07/states-where-its-hardest-to-find-full-time-work/?utm_source=247WallStDailyNewsletter&utm_medium=email&utm_content=AUG072014A&utm_campaign=DailyNewsletter

  1. Nevada
  2. California
  3. Arizona
  4. Oregon
  5. Rhode Island
  6. Illinois
  7. Michigan
  8. Kentucky
  9. Florida
  10. New Jersey

    Jensen Comment
    The smoking gun in each state is not obvious. Some states are low in opportunities for skilled workers who typically have an easier time finding full-time work. Nevada. The sunshine states typically have more opportunities for restaurant and travel employment notorious for part-time work. California, Illinois, and Rhode Island have immense fiscal problems that spill over into high taxation that discourages business expansion. Obamacare especially  discourages full-time employment in small and medium-sized companies, but this is a problem in all 50 states.

    Mysteries remain. Why aren't Texas, Alabama, Vermont, and Mississippi in the list above? I don't know!

 

"The Full-Time Scandal of Part-Time America Fewer than half of U.S. adults are working full time. Why? Slow growth and the perverse incentives of ObamaCare," by Mortimer Zuckerman, The Wall Street Journal,  July 13, 2014 ---
http://online.wsj.com/articles/mortimer-zuckerman-the-full-time-scandal-of-part-time-america-1405291652?tesla=y&mod=djemMER_h&mg=reno64-wsj

There has been a distinctive odor of hype lately about the national jobs report for June. Most people will have the impression that the 288,000 jobs created last month were full-time. Not so.

The Obama administration and much of the media trumpeting the figure overlooked that the government numbers didn't distinguish between new part-time and full-time jobs. Full-time jobs last month plunged by 523,000, according to the Bureau of Labor Statistics. What has increased are part-time jobs. They soared by about 800,000 to more than 28 million. Just think of all those Americans working part time, no doubt glad to have the work but also contending with lower pay, diminished benefits and little job security.

On July 2 President Obama boasted that the jobs report "showed the sixth straight month of job growth" in the private economy. "Make no mistake," he said. "We are headed in the right direction." What he failed to mention is that only 47.7% of adults in the U.S. are working full time. Yes, the percentage of unemployed has fallen, but that's worth barely a Bronx cheer. It reflects the bleak fact that 2.4 million Americans have become discouraged and dropped out of the workforce. You might as well say that the unemployment rate would be zero if everyone quit looking for work.

Last month involuntary part-timers swelled to 7.5 million, compared with 4.4 million in 2007. Way too many adults now depend on the low-wage, part-time jobs that teenagers would normally fill. Federal Reserve Chair Janet Yellen had it right in March when she said: "The existence of such a large pool of partly unemployed workers is a sign that labor conditions are worse than indicated by the unemployment rate."

There are a number of reasons for our predicament, most importantly a historically low growth rate for an economic "recovery." Gross domestic product growth in 2013 was a feeble 1.9%, and it fell at a seasonally adjusted annual rate of 2.9% in the first quarter of 2014.

But there is one clear political contribution to the dismal jobs trend. Many employers cut workers' hours to avoid the Affordable Care Act's mandate to provide health insurance to anyone working 30 hours a week or more. The unintended consequence of President Obama's "signature legislation"? Fewer full-time workers. In many cases two people are working the same number of hours that one had previously worked.

Since mid-2007 the U.S. population has grown by 17.2 million, according to the Census Bureau, but we have 374,000 fewer jobs since a November 2007 peak and are 10 million jobs shy of where we should be. It is particularly upsetting that our current high unemployment is concentrated in the oldest and youngest workers. Older workers have been phased out as new technologies improve productivity, and young adults who lack skills are struggling to find entry-level jobs with advancement opportunities. In the process, they are losing critical time to develop workplace habits, contacts and new skills.

Most Americans wouldn't call this an economic recovery. Yes, we're not technically in a recession as the recovery began in mid-2009, but high-wage industries have lost a million positions since 2007. Low-paying jobs are gaining and now account for 44% of all employment growth since employment hit bottom in February 2010, with by far the most growth—3.8 million jobs—in low-wage industries. The number of long-term unemployed remains at historically high levels, standing at more than three million in June. The proportion of Americans in the labor force is at a 36-year low, 62.8%, down from 66% in 2008.

Part-time jobs are no longer the domain of the young. Many are taken by adults in their prime working years—25 to 54 years of age—and many are single men and women without high-school diplomas. Why is this happening? It can't all be attributed to the unforeseen consequences of the Affordable Care Act. The longer workers have been out of a job, the more likely they are to take a part-time job to make ends meet.

The result: Faith in the American dream is eroding fast. The feeling is that the rules aren't fair and the system has been rigged in favor of business and against the average person. The share of financial compensation and outputs going to labor has dropped to less than 60% today from about 65% before 1980.

Why haven't increases in labor productivity translated into higher household income in private employment? In part because of very low rates of capital spending on new plant and equipment over the past five years. In the 1960s, only one in 20 American men between the ages of 25 and 54 was not working. According to former Treasury Secretary Larry Summers, in 10 years that number will be one in seven.

The lack of breadwinners working full time is a burgeoning disaster. There are 48 million people in the U.S. in low-wage jobs. Those workers won't be able to spend what is necessary in an economy that is mostly based on consumer spending, and this will put further pressure on growth. What we have is a very high unemployment rate, a slow recovery and across-the-board wage stagnation (except for the top few percent). According to the Bureau of Labor Statistics, almost 91 million people over age 16 aren't working, a record high. When Barack Obama became president, that figure was nearly 10 million lower.

The great American job machine is spluttering. We are going through the weakest post-recession recovery the U.S. has ever experienced, with growth half of what it was after four previous recessions. And that's despite the most expansive monetary policy in history and the largest fiscal stimulus since World War II.

Continued in article


The Mystery is Why Bank of America Does not Appeal It's New $17 Billion Fine All the Way to the Supreme Court
Why isn't former Treasury Secretary Hank Paulson being punished?
These Countrywide Financial mortgage lending crimes were committed before Paulson foreced BofA to buy out Countrywide Financial.

After the subprime collapse then BofA CEO, Ken Lewis, most certainly did not want to use BofA money to stop the free fall of Merrill Lynch and Countrywide Financial. However, U.S. Treasury Secretary Hank Paulson resorted to personal blackmail according to Ken Lewis.
"Bank Chief Tells of U.S. Pressure to Buy Merrill Lynch," by Louise Story and Jo Becker, The New York Times, June 11. 2009 ---
http://www.nytimes.com/2009/06/12/business/12bank.html

"No Good Rescue Goes Unpunished:  Bank of America keeps paying for doing the feds two bailout favors," The Wall Street Journal, August 1, 2014 ---
http://online.wsj.com/articles/no-good-rescue-goes-unpunished-1407454672?tesla=y&mod=djemMER_h&mg=reno64-wsj

If you thought the last financial crisis was expensive, wait until taxpayers see how much it costs to rescue banks when they have to do it all on their own. The U.S. Department of Justice aims to extract as much as $17 billion from Bank of America BAC +0.26% for the crime of taking problems off Washington's hands in 2008.

Regulators were high-fiving when the bank bought Countrywide Financial and then Merrill Lynch during the crisis. But now Washington seems intent on making bank shareholders pay again for the problems that caused these firms to need a rescue in the first place. Come the next crisis, CEOs will know to run in the other direction when the government offers a deal on a failing firm. And when private capital flees, guess whose money will be used to prop up the banking system.

In some earlier post-crisis settlements, the feds at least pretended that the cases were about making mortgage investors or borrowers whole. But the pending Bank of America settlement appears to consist largely of a penalty for alleged mortgage sins committed by the two failing companies the feds wanted the bank to buy, and in one case pressured it to buy.

The new game at Justice seems to be to come up with a big dollar figure to be paid by bank shareholders—big enough to persuade progressives that the department is being tough on Wall Street—and then fill in the blanks on the alleged legal violations. So we can't say for sure what the final deal will claim the bank did. But BofA must be taking the fall for Countrywide and Merrill Lynch because the bank itself originated only 4% of the bad mortgage paper for which it is now responsible.

The bank has already shovelled out roughly $60 billion in mortgage settlements to various public and private parties, far more than any other bank. Now the feds are coming back to further punish Bank of America for its foolish acquisitions. But at the time the bank made these deals, the regulators were celebrating.

In 2008 Federal Reserve officials were concerned about their exposure to Countrywide. As BofA prepared for an early July closing on its purchase of Countrywide, New York Fed banking supervisor Arthur Angulo told the Federal Open Market Committee that Countrywide's use of one Fed lending facility "should come to a close next week, knock on wood."

In his recent memoir, former New York Fed President and Treasury Secretary Timothy Geithner, who thought Countrywide was a systemic threat, wrote that Bank of America's investment "eased fears of a collapse."

When the bank agreed to buy Merrill a few months later, regulators were once again gratified. St. Louis Fed President James Bullard said at a September 16 meeting of the Federal Open Market Committee that the Merrill deal had removed one of the "large uncertainties looming over the economy." Regulators were so pleased that when BofA CEO Ken Lewis later expressed a desire to back out of the deal, then-Treasury Secretary Hank Paulson threatened to fire him and gave the bank another $20 billion in TARP rescue money to absorb Merrill.

Bank of America finished repaying its $45 billion in TARP loans in 2009. But we wonder if its shareholders will ever stop paying Washington for the deals Washington wanted—and even demanded—during the crisis.

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

 


Go Figure!
German Interest Rates Go Negative --- http://www.businessinsider.com/german-negative-yield-2014-8
Imagine if your retirement depended upon interest income on your investments.


Ten Cities Running Out of Water --- Click Here
http://247wallst.com/special-report/2014/07/30/10-cities-running-out-of-water/?utm_source=247WallStDailyNewsletter&utm_medium=email&utm_content=JULY302014A&utm_campaign=DailyNewsletter
It's no surprise that all ten are in California.

Did this researcher overlook San Paulo in Brazil? ---
http://www.businessinsider.com/so-paulo-running-out-of-water-2014-7

"Tapped Out?" by Kate Galbraith, Stanford Magazine, July-August, 2014 ---
http://alumni.stanford.edu/get/page/magazine/article/?article_id=71847

In recent years, drought has spread across California like a lengthening shadow, sapping farms and fish, fueling wildfires and forcing towns to scramble for extra water supplies lest taps run dry. It's not the first time, nor will it be the last.

In the coming decades, the situation may become even grimmer. If current models of climate change are borne out, the spring snowpack in the Sierra, a water source for tens of millions of Californians, likely will have dwindled to a shimmering semblance of its former self. Some of the massive aquifers that underlie the bountiful Central Valley croplands may falter from continued overuse. At the same time, California's population, now 38 million, is projected to swell to 46 million by 2035 and then to more than 50 million by 2050.

The Golden State, like much of the parched yet booming West, has reached a crossroads.

"In the past, we have developed a water system that does a great job of meeting our needs—the needs of growing cities, the needs of growing agricultural areas," says Barton "Buzz" Thompson, a Stanford law professor who has become one of the West's foremost authorities on water issues. "But the approaches that we used were not sustainable, and they are at risk of much more extreme drought conditions than we have today."

California has myriad natural advantages, and a few unnatural ones, when it comes to water. The long, high Sierra range serves as a vast reservoir for snow, and beneath much of the state lie rich repositories of groundwater—"drought insurance," as Thompson puts it. And due to sharp historical negotiating, California has first dibs on some of the water from the Colorado River, one of the West's greatest (and most contested) resources.

The state also enjoys the ability to move water around via a comprehensive network of rivers and reservoirs. "The plumbing system of California is incredible," says Terry Anderson, a Hoover Institution senior fellow focused on applying market concepts to environmental issues. "You can almost sit in an office and look at a board with lights flashing or a computer screen and, say, click that valve down three units and that one up three, and move water from Shasta to L.A."

Still, the problems of California and the West have become too pressing to brush aside. Last year was the driest since at least the Gold Rush era, when record keeping began. Even though desperately needed spring rains arrived, they could not make up the deficit. The Sierra snowpack, which comprises a third of the state's water supply, ended the season at just 18 percent of its average level.

More than a dozen small, mostly rural communities nearly ran out of drinking water. In some cases state and local governments had to intervene to help dig new wells or lengthen pipelines. Elsewhere, rivers used by migrating salmon shrank and scientists used boats to ferry struggling young fish to the ocean.

Farmers, who account for about 80 percent of the state's water usage, felt the drought just as acutely. Barred by the state and federal governments from drawing as large a portion of their customary allotment of surface water, many scrambled to salvage long-term investments in valuable crops like almonds and pistachios by pumping water from aquifers. Even so, California's Central Valley, the nation's most prolific producer of fruits, vegetables and nuts, was projected to lose about 6 percent of its irrigated cropland; the financial toll could exceed $1 billion.

Dramatic as this drought has been, with angry Central Valley billboards accusing Congress of creating a new Dust Bowl by favoring endangered species' water needs over farmers', it may merely be a prelude of battles in a future with more people and less water to go around. Across California and the West, "we have very high confidence that continued global warming will increase the likelihood of severely low snow years," says Noah Diffenbaugh, an associate professor in earth sciences and at the Woods Institute for the Environment. That is true, he says, even if the world's warming is held to 1 additional degree Celsius, the target agreed to by the United Nations.

Essentially, although precipitation is variable across the Western United States and has actually increased in recent decades in the Southern Sierra, in the coming decades the higher average temperatures predicted by even conservative climate models are likely to turn a larger portion of that snow into rain, as well as hastening melting and evaporation. A smaller snowpack means less of that water will make it into reservoirs and, ultimately, to taps.

The supply situation is worse when aquifers are taken into account. Most years, groundwater accounts for 40 percent of the state's water usage, much of that for agriculture, but in a drought the figure often rises to 60 percent. "We talk about bank accounts for a rainy day; groundwater is our bank account for a dry day," Thompson says. "And we're using up that bank account."

In contrast to most other Western states, groundwater use in California is essentially unregulated at the state level, and local restrictions are a patchwork. Landowners are entitled to draw water that flows beneath their property, but the collective drain can have far-reaching consequences. Overpumping depletes stores faster than they can recharge and can cause the ground to sink. If current practices continue, some experts have warned that California could run out of groundwater in just a few decades. What's more, as the aquifers are depleted, water quality could suffer due to saltwater intrusion.

This is a dreary prognosis, but such outcomes are not inevitable. Thompson, Anderson and other Stanford scholars across a range of disciplines have outlined a series of measures that California can take now to ensure that the water needs of cities, farms and wildlife are met.

The first step toward forestalling future droughts is to gather as much information as possible about water. This may sound obvious, but our knowledge of this invaluable resource has some significant gaps.

Cities are among the fastest-growing users of water, yet some can't accurately measure usage by individual customers. Statewide, some 255,000 homes and businesses in 42 communities lack water meters, according to an investigation of Department of Water Resources records by the San Jose Mercury News. (The newspaper also found that those areas use significantly more water per person than the state average.) In Sacramento, for example, where state lawmakers fret perpetually about water, only about half the homes and businesses have meters. In January, when local officials asked everyone to reduce their water usage by 20 percent, the city couldn't actually tell whether some residents were complying.

Back in 2004, then-Gov. Arnold Schwarzenegger signed a law mandating that all California cities must have meters fully installed by 2025. The intensifying drought has increased the sense of urgency, and some experts have called for accelerating the deadline.

Most farmers in California do not have meters on their groundwater wells, either—a situation mirrored in other large agricultural states like Texas, where meters are seen as not only expensive (costing a few thousand dollars each) but also a slippery slope to regulation. Apart from pumping costs, groundwater is generally free to farms, and lack of data on its use is a serious concern, says Leon Szeptycki, an attorney specializing in water use and management, and executive director of Stanford's Water in the West program.

Meters could help remedy that. Among other things, they would help with dispute resolution. "If everybody had a meter on their well, and you knew how much everybody was using, and you knew what the aquifer levels are, you could sort of calculate everybody's contribution to aquifer depletion," Szeptycki says. "But if you don't know any of those things, those just become things to fight about."

Farmers counter that they use other means, such as the amount of energy used for pumping, to estimate water use. "Contrary to popular belief, most farms do have some sort of measurement on the water supply," says Mike Wade, executive director of the California Farm Water Coalition. California farms also have been "very proactive in adopting high-efficiency irrigation systems over the last few decades," he adds.

Currently, the state delegates management of groundwater to local authorities, and few of the local bodies have taken aggressive measures to counter aquifers' decline. So despite its reputation as a regulatory minefield, California actually lags behind the rest of the West when it comes to groundwater management. "Most states have taken some action to deal with their most extreme groundwater overdraft," Thompson says. "California is probably the worst. We've probably done the least so far."

That could change, however, as legislation is gathering momentum in Sacramento to increase state oversight of aquifers—a notion that is gaining support even from farmers during this worryingly dry year. Tighter regulations could edge out marginal croplands, Thompson says, but he does not believe it will kill California's farming industry.

Even more basically, California and other states have only limited knowledge about the aquifers themselves. Whereas water in rivers and reservoirs can be measured with reasonable accuracy, we have only a vague idea of how much water lies beneath the Earth's surface, and where it is clean and where it is salty. If this information existed, California could construct a comprehensive map of groundwater resources just as it maps river systems and mountain snowpacks.

The lack of information about the water stored in the state's aquifer system is a problem that Rosemary Knight, PhD '85, a professor of geophysics, has been working on for almost 30 years. Extending Thompson's bank metaphor, she says that our current pump-friendly system "would be like me saying, 'OK, I'm going to retire next week and live off my savings account.' And to see if that's viable, I go to the bank five days in a row and pull out $100—no problem. So I say, 'I'm going to retire and pull out $100 once a week for the rest of my life,' without any knowledge of where the bottom of my savings account is."

Continued in article


How to Mislead With Statistics
"How the Government Exaggerates the Cost of College," by David Lennhardt, The New York Times, July 29, 2014 ---
http://www.nytimes.com/2014/07/29/upshot/how-the-government-exaggerates-the-cost-of-college.html?rref=upshot&_r=2

The government’s official statistic for college-tuition inflation has become somewhat infamous. It appears frequently in the news media, and policy makers lament what it shows.

No wonder: College tuition and fees have risen an astounding 107 percent since 1992, even after adjusting for economywide inflation, according to the measure. No other major household budget item has increased in price nearly as much.

But it turns out the government’s measure is deeply misleading.

For years, that measure was based on the list prices that colleges published in their brochures, rather than the actual amount students and their families paid. The government ignored financial-aid grants. Effectively, the measure tracked the price of college for rich families, many of whom were not eligible for scholarships, but exaggerated the price – and price increases – for everyone from the upper middle class to the poor.

Here’s an animation that explains the difference succintly. It shows the government’s estimate of how college costs have changed since 1992 — and, for comparison, toggles between the changes in the colleges' published prices and actual prices, according to the College Board, the group that conducts the SAT.

Continued in article

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


"Paul Ryan's latest plan Second verse, different from the first," The Economist, July 29, 2014 ---
http://www.economist.com/blogs/democracyinamerica/2014/07/paul-ryans-latest-plan

ASK liberals how to reduce poverty and they usually have a handful of policies ready to go, complete with spreadsheets suggesting their likely impact and a real-life example from a hitherto obscure province of Sweden. Compared with this, conservative proposals on tackling poverty can look thin. This is not necessarily because conservatives are a uniquely heartless bunch, but rather because what they propose is not an answer to the question but a process by which an answer might be reached. Paul Ryan’s recent thoughts on federal anti-poverty programmes, delivered in a report from the House budget committee and remarks to the American Enterprise Institute, fall into this category. Basically, the Republican congressman from Wisconsin wants to disrupt welfare.

If this sounds like a mash-up of Silicon Valley and Detroit, that is no coincidence. Policy wonks are always glancing enviously at the private sector (all those ready metrics for success). And while Mr Ryan ranks among those who believe the government has a role in reducing poverty, he shares his party’s disdain for government bureaucracy and top-down solutions, which often fail to understand the needs at the bottom. The answer? Let the people who actually work with poor Americans create the programmes, and the government can fund the experiments. Some things will work, some things won’t. But this iterative process will discover improvements that a centralised system cannot.

Mr Ryan proposes something he calls an Opportunity Grant, which would bundle together a clutch of overlapping federal programmes and hand over the money to interested states. In return, states would try out new things, evaluate their efforts and share the results. Ultimately instead of a one-size-fits-all approach, programmes would be tailored to the needs of individuals. Poor people would each be paired with a caseworker tasked with crafting a plan to help them escape from poverty. These plans will be funded by the federal government, which means they will function as contracts between the individual and the state. If participants come up short, there will be consequences. Solid research suggests that this contractual approach to fighting poverty can work. Perhaps more importantly, this is a good way to sell anti-poverty measures to people who believe that government programmes always erode personal responsibility. Mr Ryan also wants to inject some healthy competition into the mix. “The state welfare agency,” Mr Ryan told the AEI, “can’t be the only game in town.”

This grand plan does not cut existing funding for the poor, but rather shifts it around a bit. Critics say this handily contradicts with Mr Ryan’s last grand plan, his proposed budget, which promised serious cuts in funding for federal poverty programmes. Some suggest this is evidence that these plans are not about creating workable policies but about burnishing the congressman’s resume before a possible presidential bid. (As Bloomberg’s Noah Smith observes, Mr Ryan “has made a name for himself as an idea man, but this usually entails releasing plans that look bold but won’t work.”) It will be interesting to see how the next House budget handles Mr Ryan’s sudden generosity towards the poor.

Just over two years ago, Mr Ryan warned about the dangers of turning the safety net into “a hammock, which lulls able-bodied people into lives of complacency and dependency.” That hammock came to stand for the view that the Republicans had become the party of rich people—an idea that Mitt Romney’s campaign did little to dispel. Yet Mr Ryan now appears to be steering a new course for Republicans. (In this he is aided by Marco Rubio, a Florida senator, who praises safety nets for the way they enable necessary risk-taking.) It is unclear how much of this is rhetoric and how much might translate into policy. But at a time when so little appears to be getting accomplished anyway, it is refreshing—even encouraging—when at least the messages make some sense.

 

 


Question
What is the difference between education and indoctrination? 

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

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

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

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

"Social-Psychology Researchers Are Very Liberal. Is That a Problem?" by Tom Bartlett, Chronicle of Higher Education, July 29, 2014 ---
http://chronicle.com/article/Social-Psychology-Researchers/147957/?cid=at&utm_source=at&utm_medium=en  
Especially note the comments.

Jensen Comment
This could be a problem well beyond social psychology since the liberal bias of higher education in general is well known ---
http://www.trinity.edu/rjensen/HigherEdControversies.htm#LiberalBias
I even think it is wrong to assume business school faculty and other researchers are more conservative than the general population in academe. It is always surprising to me how few conservatives I encounter among business school faculty.

However, liberal bias does not necessarily mean that ipso facto this bias is a "problem." It can be a problem and often is an indoctrination problem in the classroom, but conservatives probably exaggerate the problem. Sure there is plenty of anecdotal evidence of classroom indoctrination rather than education, but most of my informal studies of "liberal" faculty suggest that efforts are made to restrain indoctrination. Much of my informal study comes from review of tens of thousands of student comments on RateMyProfessor ---
http://www.ratemyprofessors.com/
The most prominent exception is that feminists frequently have a hard time restraining indoctrinating students about gender bias.

There are "scandals" about racial bias in grading, but reasons for this so-called bias may be more complicated such as the reasons behind the recent grading scandals in the African American Studies Program at the University of North Carolina. Much more likely is that the widespread scandal of grade inflation in higher education is caused much more by instructor fear of bad teaching evaluations than racial bias ---
http://www.trinity.edu/rjensen/HigherEdControversies.htm#GradeInflation

"The Academic Mob Rules Instead of encouraging wide discussion, the Chronicle of Higher Education fires a blogger," by Naomi Schaefer Riley, The Wall Street Journal, May 8, 2012 ---
http://online.wsj.com/article/SB10001424052702304363104577391842133259230.html?mod=djemEditorialPage_t

Recently, the Chronicle of Higher Education published a cover story called "Black Studies: 'Swaggering Into the Future,'" in which the reporter described how "young black-studies scholars . . . are less consumed than their predecessors with the need to validate the field or explain why they are pursuing doctorates in their discipline." The "5 Up-and-Coming Ph.D. Candidates" described in the piece's sidebar "are rewriting the history of race." While the article suggested some are skeptical of black studies as a discipline, the reporter neglected to quote anyone who is.

Like me. So last week, on the Chronicle's "Brainstorm" blog (where I was paid to be a regular contributor), I suggested that the dissertation topics of the graduate students mentioned were obscure at best and "a collection of left-wing victimization claptrap," at worst.

For instance, the author of a dissertation on the history of black midwifery began her research, she told the Chronicle, because she "noticed that nonwhite women's experiences were largely absent from natural-birth literature." Another graduate student blamed the housing crisis in America on institutional racism. And a third argued that conservatives like Thomas Sowell, Clarence Thomas and John McWhorter have "played one of the most-significant roles in the assault on the civil-rights legacy that benefited them."

The reaction to my blog post ranged from puerile to vitriolic. The graduate students I mentioned and the senior faculty who advise them at Northwestern University accused me (in guest blogs posted by the Chronicle editors) of bigotry and cowardice. The former wrote that "in a bid to not be 'out-niggered' [their word] by her right-wing cohort, Riley found some black women graduate students to beat up on." (I confess I don't actually know what that means.) One fellow blogger (and hundreds of commenters) called my post "racist."

Gina Barreca, a teacher of English and feminist theory at the University of Connecticut, composed a poem mocking me. (It begins "A certain white chick—Schaefer Riley/ decided to do something wily.") MSNBC host Melissa Harris-Perry spewed a four-minute rant about my post, invoking the memory of Trayvon Martin and accusing me of "small-mindedness."

Scores of critics on the site complained that I had not read the dissertations in full before daring to write about them—an absurd standard for a 500-word blog post. A number of the dissertations aren't even available. Which didn't seem to stop the Chronicle reporter, though. And 6,500 academics signed a petition online demanding that I be fired.

At first, the Chronicle stood its ground, suggesting that my post was an "invitation to debate." But that stance lasted for little more than a weekend. In a note that reads like a confession at a re-education camp, the Chronicle's editor, Liz McMillen announced her decision on Monday to fire me: "We've heard you," she tells my critics. "And we have taken to heart what you said. We now agree that Ms. Riley's blog posting did not meet The Chronicle's basic editorial standards for reporting and fairness in opinion articles."

When I asked Ms. McMillen whether the poem by fellow blogger Ms. Barreca, for instance, lived up to such standards, she said they were "reviewing" the other content on the site. So far, however, that blogger has not been fired. Other ad hominem attacks against me seem to have passed editorial muster as well.

In her Monday mea culpa, Ms. McMillen wrote that her previous "editor's note last week inviting [readers] to debate the posting also seemed to elevate it to the level of informed opinion, which it was not." I have been a journalist writing about higher education for close to 15 years now, having visited dozens of colleges and universities and interviewed hundreds of faculty, students and administrators. My work has been published in every major newspaper in the country, most often this one, and I have written two widely reviewed books on higher education as well.

As I wrote in the book I published shortly before the Chronicle hired me, "It is not merely that [many] departments approach African-American studies from a particular perspective—an Africa-centered one in which blacks residing in America today are still deeply hobbled by the legacy of slavery. It's that course and department descriptions often appear to be a series of axes that faculty members would like to grind."

But why take my word for it? Scholars more learned than I have been saying the same thing for decades. In 1974, Thomas Sowell wrote that from the beginnings of the discipline, "the demands for black studies differed from demands for other forms of new academic studies in that they . . . restricted the philosophical and political positions acceptable, even from black scholars in such programs."

Thirty-five years later in a piece for the Minding the Campus website, former Berkeley Prof. John McWhorter noted that little had changed: "Too often the curriculum of African-American Studies departments gives the impression that racism and disadvantage are the most important things to note and study about being black."

My critics have suggested that I do not believe the black experience in America is worthy of study. That is not true. It's just that the best of this work rarely comes out of black studies departments. Scholars like Roland Fryer in Harvard's economics department have done pathbreaking research on the causes of economic disparities between blacks and whites. And Eugene Genovese's work on slavery and the role of religion in black American history retains its seminal role in the field decades after its publication.

But a substantive critique about the content of academic disciplines is simply impossible in the closed bubble of higher education. If you want to know why almost all of the responses to my original post consist of personal attacks on me, along with irrelevant mentions of Fox News, The Wall Street Journal, Newt Gingrich, Rick Santorum and George Zimmerman, it is because black studies is a cause, not a course of study. By doubting the academic worthiness of black studies, my critics conclude, I am opposed to racial justice—and therefore a racist.

 

As Ellen Schrecker, a Yeshiva University historian, writes in her book "The Lost Soul of Higher Education," political ends were the goals of the founders of black studies. Ms. Schrecker—who is, by the way, sympathetic to these political goals—explains that the discipline's proponents "viewed these programs as contributions to the continuing struggle for racial justice, not as conventional academic courses of study."

My longtime familiarity with the absurdities of higher education did not, I confess, prepare me for this most absurd of results. The content of my post, after all, is hardly shocking; the same thing could have been written 30 years ago. And perhaps that's the most depressing part of all this. Despite the real social and economic advancement that has been made by blacks in this country, the American faculty is still stuck in the 1960s.

Ms. Riley, a former Journal editor, is author of "The Faculty Lounges: And Other Reasons Why You Won't Get the College Education You Pay For" (Ivan, R. Dee, 2011) and "God on the Quad: How Religious Colleges and the Missionary Generation Are Changing America" (St. Martin's, 2005).

 

Jensen Comment
Note that both Judge Posner and Justin Fox cited below have been featured Plenary Session speakers at recent AAA annual meetings.

"The Liberal Skew in Higher Education," by Richard Posner, The Becker-Posner Blog, December 30, 2007 --- http://www.becker-posner-blog.com/

"The Difference Between Political Journalists and B-School Profs," by Justin Fox, Harvard Business Review Blog, March 9, 2010 ---
http://blogs.hbr.org/fox/2010/03/the-difference-between-politic.html?cm_mmc=npv-_-DAILY_ALERT-_-AWEBER-_-DATE

"New View of Faculty Liberalism:  Why are professors liberal?" by Scott Jaschik, Inside Higher Ed, January 18, 2010 ---
http://www.insidehighered.com/news/2010/01/18/liberal 

Bob Jensen's threads about the liberal bias of the media and the Academy are at ---
http://www.trinity.edu/rjensen/HigherEdControversies.htm#LiberalBias

Jensen Conclusion
"Social-Psychology Researchers Are Very Liberal. Is That a Problem?" by Tom Bartlett, Chronicle of Higher Education, July 29, 2014 ---
http://chronicle.com/article/Social-Psychology-Researchers/147957/?cid=at&utm_source=at&utm_medium=en  
Especially note the comments.

Yes I think it is a problem, but it is a problem that academe will probably refuse to investigate with research.

 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Continued in article

"The Failure of Crits and Leftist Law Professors to Defend Progressive Causes," by Brian Z. Tamanaha, SSRN, April 25, 2013 ---
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2256725

Abstract:
Future generations will look back at the first decade of the twenty-first century as a pivotal time when a huge economic barrier was erected to encumber the path to a legal career. The symbolic announcement of this barrier rang out when annual tuition crossed the $50,000 threshold, now exceeded at a dozen or so law schools. Including fees and living expenses, it costs well in excess of $200,000 to obtain a law degree at most of the nation’s highly regarded law schools and at a number of non-elite ones as well. Law schools thus impose a formidable entry fee on anyone who wishes to follow what, until recently, has long served as a means of upward mobility and access to power in American society.

The pricing structure of legal education has profound class implications. High tuition will inhibit people from middle-class and poor families more than it will deter the offspring of the rich with ample resources. Law school scholarship policies, for reasons I will explain, in effect channel students with financial means to higher ranked law schools, reaping better opportunities, while sending students without money to lower law schools. A growing proportion of elite legal positions will be held by people from wealthy backgrounds as a result. For students who rely on borrowing to finance their legal education, the heavy debt they carry will dictate the types of jobs they seek and constrain the career they go on to have.

Liberal law professors often express concerns about class in American society — championing access to the legal profession and the provision of legal services for underserved communities. Yet as law school tuition rose to its current extraordinary heights, progressive law professors did nothing to resist it. This Article explores what happened and why.

This is offered in the spirit of critical legal studies — as a critical self-examination of the failure of leftist law professors. The Crits were highly critical of complacent liberal academics of their day, arguing that they had a hand in perpetuating an unjust legal system; here I charge liberal legal academia — including the Crits — with perpetuating the profoundly warped and harmful economics of legal education. What follows will offend many of my fellow liberals. It may even lose me some friends. Liberal law professors must see past their anger to reflect on whether there is a core truth to my arguments, to take personal responsibility for what has happened, and to engage in collective action to do something to alter the economics of our operation. If not, the current economic barrier to a legal career may become permanent.

"Dishonest Educators," by Walter E. Williams, Townhall, January 9, 2013 --- Click Here
http://townhall.com/columnists/walterewilliams/2013/01/09/dishonest-educators-n1482294?utm_source=thdaily&utm_medium=email&utm_campaign=nl

Nearly two years ago, U.S. News & World Report came out with a story titled "Educators Implicated in Atlanta Cheating Scandal." It reported that "for 10 years, hundreds of Atlanta public school teachers and principals changed answers on state tests in one of the largest cheating scandals in U.S. history." More than three-quarters of the 56 Atlanta schools investigated had cheated on the National Assessment of Educational Progress test, sometimes called the national report card. Cheating orders came from school administrators and included brazen acts such as teachers reading answers aloud during the test and erasing incorrect answers. One teacher told a colleague, "I had to give your kids, or your students, the answers because they're dumb as hell." Atlanta's not alone. There have been investigations, reports and charges of teacher-assisted cheating in other cities, such as Philadelphia, Houston, New York, Detroit, Baltimore, Los Angeles and Washington.

Recently, The Atlanta Journal-Constitution's blog carried a story titled "A new cheating scandal: Aspiring teachers hiring ringers." According to the story, for at least 15 years, teachers in Arkansas, Mississippi and Tennessee paid Clarence Mumford, who's now under indictment, between $1,500 and $3,000 to send someone else to take their Praxis exam, which is used for K-12 teacher certification in 40 states. Sandra Stotsky, an education professor at the University of Arkansas, said, "(Praxis I) is an easy test for anyone who has completed high school but has nothing to do with college-level ability or scores." She added, "The test is far too undemanding for a prospective teacher. ... The fact that these people hired somebody to take an easy test of their skills suggests that these prospective teachers were probably so academically weak it is questionable whether they would have been suitable teachers."

Here's a practice Praxis I math question: Which of the following is equal to a quarter-million -- 40,000, 250,000, 2,500,000, 1/4,000,000 or 4/1,000,000? The test taker is asked to click on the correct answer. A practice writing skills question is to identify the error in the following sentence: "The club members agreed that each would contribute ten days of voluntary work annually each year at the local hospital." The test taker is supposed to point out that "annually each year" is redundant.

CNN broke this cheating story last July, but the story hasn't gotten much national press since then. In an article for NewsBusters, titled "Months-Old, Three-State Teacher Certification Test Cheating Scandal Gets Major AP Story -- on a Slow News Weekend" (11/25/12), Tom Blumer quotes speculation by the blog "educationrealist": "I will be extremely surprised if it does not turn out that most if not all of the teachers who bought themselves a test grade are black. (I am also betting that the actual testers are white, but am not as certain. It just seems that if black people were taking the test and guaranteeing passage, the fees would be higher.)"

There's some basis in fact for the speculation that it's mostly black teachers buying grades, and that includes former Steelers wide receiver Cedrick Wilson, who's been indicted for fraud. According to a study titled "Differences in Passing Rates on Praxis I Tests by Race/Ethnicity Group" (March 2011), the percentages of blacks who passed the Praxis I reading, writing and mathematics tests on their first try were 41, 44 and 37, respectively. For white test takers, the respective percentages were 82, 80 and 78.

Continued in article

Jensen Commentary
It should be noted that the author of this article is an African American economics professor at George Mason University.. He's also conservative. This makes him an endangered species in academe.

"Why Students Gripe About Grades," by Cathy Davidson, Inside Higher Ed, January 7, 2013 --- 
http://www.insidehighered.com/views/2013/01/07/essay-how-end-student-complaints-grades

The biggest scandal in education is nearly universal grade inflation ---
http://www.trinity.edu/rjensen/Assess.htm#RateMyProfessor

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

"The Academic Mob Rules Instead of encouraging wide discussion, the Chronicle of Higher Education fires a blogger," by Naomi Schaefer Riley, The Wall Street Journal, May 8, 2012 ---
http://online.wsj.com/article/SB10001424052702304363104577391842133259230.html?mod=djemEditorialPage_t

Recently, the Chronicle of Higher Education published a cover story called "Black Studies: 'Swaggering Into the Future,'" in which the reporter described how "young black-studies scholars . . . are less consumed than their predecessors with the need to validate the field or explain why they are pursuing doctorates in their discipline." The "5 Up-and-Coming Ph.D. Candidates" described in the piece's sidebar "are rewriting the history of race." While the article suggested some are skeptical of black studies as a discipline, the reporter neglected to quote anyone who is.

Like me. So last week, on the Chronicle's "Brainstorm" blog (where I was paid to be a regular contributor), I suggested that the dissertation topics of the graduate students mentioned were obscure at best and "a collection of left-wing victimization claptrap," at worst.

For instance, the author of a dissertation on the history of black midwifery began her research, she told the Chronicle, because she "noticed that nonwhite women's experiences were largely absent from natural-birth literature." Another graduate student blamed the housing crisis in America on institutional racism. And a third argued that conservatives like Thomas Sowell, Clarence Thomas and John McWhorter have "played one of the most-significant roles in the assault on the civil-rights legacy that benefited them."

The reaction to my blog post ranged from puerile to vitriolic. The graduate students I mentioned and the senior faculty who advise them at Northwestern University accused me (in guest blogs posted by the Chronicle editors) of bigotry and cowardice. The former wrote that "in a bid to not be 'out-niggered' [their word] by her right-wing cohort, Riley found some black women graduate students to beat up on." (I confess I don't actually know what that means.) One fellow blogger (and hundreds of commenters) called my post "racist."

Gina Barreca, a teacher of English and feminist theory at the University of Connecticut, composed a poem mocking me. (It begins "A certain white chick—Schaefer Riley/ decided to do something wily.") MSNBC host Melissa Harris-Perry spewed a four-minute rant about my post, invoking the memory of Trayvon Martin and accusing me of "small-mindedness."

Scores of critics on the site complained that I had not read the dissertations in full before daring to write about them—an absurd standard for a 500-word blog post. A number of the dissertations aren't even available. Which didn't seem to stop the Chronicle reporter, though. And 6,500 academics signed a petition online demanding that I be fired.

At first, the Chronicle stood its ground, suggesting that my post was an "invitation to debate." But that stance lasted for little more than a weekend. In a note that reads like a confession at a re-education camp, the Chronicle's editor, Liz McMillen announced her decision on Monday to fire me: "We've heard you," she tells my critics. "And we have taken to heart what you said. We now agree that Ms. Riley's blog posting did not meet The Chronicle's basic editorial standards for reporting and fairness in opinion articles."

When I asked Ms. McMillen whether the poem by fellow blogger Ms. Barreca, for instance, lived up to such standards, she said they were "reviewing" the other content on the site. So far, however, that blogger has not been fired. Other ad hominem attacks against me seem to have passed editorial muster as well.

In her Monday mea culpa, Ms. McMillen wrote that her previous "editor's note last week inviting [readers] to debate the posting also seemed to elevate it to the level of informed opinion, which it was not." I have been a journalist writing about higher education for close to 15 years now, having visited dozens of colleges and universities and interviewed hundreds of faculty, students and administrators. My work has been published in every major newspaper in the country, most often this one, and I have written two widely reviewed books on higher education as well.

As I wrote in the book I published shortly before the Chronicle hired me, "It is not merely that [many] departments approach African-American studies from a particular perspective—an Africa-centered one in which blacks residing in America today are still deeply hobbled by the legacy of slavery. It's that course and department descriptions often appear to be a series of axes that faculty members would like to grind."

But why take my word for it? Scholars more learned than I have been saying the same thing for decades. In 1974, Thomas Sowell wrote that from the beginnings of the discipline, "the demands for black studies differed from demands for other forms of new academic studies in that they . . . restricted the philosophical and political positions acceptable, even from black scholars in such programs."

Thirty-five years later in a piece for the Minding the Campus website, former Berkeley Prof. John McWhorter noted that little had changed: "Too often the curriculum of African-American Studies departments gives the impression that racism and disadvantage are the most important things to note and study about being black."

My critics have suggested that I do not believe the black experience in America is worthy of study. That is not true. It's just that the best of this work rarely comes out of black studies departments. Scholars like Roland Fryer in Harvard's economics department have done pathbreaking research on the causes of economic disparities between blacks and whites. And Eugene Genovese's work on slavery and the role of religion in black American history retains its seminal role in the field decades after its publication.

But a substantive critique about the content of academic disciplines is simply impossible in the closed bubble of higher education. If you want to know why almost all of the responses to my original post consist of personal attacks on me, along with irrelevant mentions of Fox News, The Wall Street Journal, Newt Gingrich, Rick Santorum and George Zimmerman, it is because black studies is a cause, not a course of study. By doubting the academic worthiness of black studies, my critics conclude, I am opposed to racial justice—and therefore a racist.

 

As Ellen Schrecker, a Yeshiva University historian, writes in her book "The Lost Soul of Higher Education," political ends were the goals of the founders of black studies. Ms. Schrecker—who is, by the way, sympathetic to these political goals—explains that the discipline's proponents "viewed these programs as contributions to the continuing struggle for racial justice, not as conventional academic courses of study."

My longtime familiarity with the absurdities of higher education did not, I confess, prepare me for this most absurd of results. The content of my post, after all, is hardly shocking; the same thing could have been written 30 years ago. And perhaps that's the most depressing part of all this. Despite the real social and economic advancement that has been made by blacks in this country, the American faculty is still stuck in the 1960s.

Ms. Riley, a former Journal editor, is author of "The Faculty Lounges: And Other Reasons Why You Won't Get the College Education You Pay For" (Ivan, R. Dee, 2011) and "God on the Quad: How Religious Colleges and the Missionary Generation Are Changing America" (St. Martin's, 2005).

 

Jensen Comment
Note that both Judge Posner and Justin Fox cited below have been featured Plenary Session speakers at recent AAA annual meetings.

"The Liberal Skew in Higher Education," by Richard Posner, The Becker-Posner Blog, December 30, 2007 --- http://www.becker-posner-blog.com/

"The Difference Between Political Journalists and B-School Profs," by Justin Fox, Harvard Business Review Blog, March 9, 2010 ---
http://blogs.hbr.org/fox/2010/03/the-difference-between-politic.html?cm_mmc=npv-_-DAILY_ALERT-_-AWEBER-_-DATE

"New View of Faculty Liberalism:  Why are professors liberal?" by Scott Jaschik, Inside Higher Ed, January 18, 2010 ---
http://www.insidehighered.com/news/2010/01/18/liberal 

Bob Jensen's threads about the liberal bias of the media and the Academy are at ---
http://www.trinity.edu/rjensen/HigherEdControversies.htm#LiberalBias

Jensen Conclusion
"Social-Psychology Researchers Are Very Liberal. Is That a Problem?" by Tom Bartlett, Chronicle of Higher Education, July 29, 2014 ---
http://chronicle.com/article/Social-Psychology-Researchers/147957/?cid=at&utm_source=at&utm_medium=en  
Especially note the comments.

Yes I think it is a problem, but it is a problem that academe will probably refuse to investigate with research.


Admission of Corruption and Bias:  The EPA Follows the IRS in Admission of Illegally Playing Politics and Not Really Caring

"The Environmental Corruption Agency," by Michelle Malkin, Townhall, Aug 01, 2014 ---
http://townhall.com/columnists/michellemalkin/2014/08/01/the-environmental-corruption-agency-n1873237?utm_source=thdaily&utm_medium=email&utm_campaign=nl

The lofty motto of the Environmental Protection Agency is "protecting people and the environment." In practice, however, EPA bureaucrats faithfully protect their own people and preserve the government's cesspool of manipulation, cover-ups and cronyism.

Just last week, Mark Levin and his vigilant Landmark Legal Foundation went to court to ask federal district judge Royce Lamberth to sanction the EPA "for destroying or failing to preserve emails and text messages that may have helped document suspected agency efforts to influence the 2012 presidential election." The motion is part of a larger Freedom of Information Act (FOIA) lawsuit to force EPA to release emails and related records from former EPA Administrator Lisa Jackson and others "who may have delayed the release dates for hot-button environmental regulations until after the Nov. 6, 2012, presidential election."

Thanks to Levin and Landmark, Jackson and other EPA officials admitted in depositions that they used personal, nongovernmental email accounts to hide communications about official EPA business sent and received on their government-issued BlackBerries and smart phones. The agency has continued to drag its feet for two years in response to Landmark's FOIA requests.

Levin minced no words: "The EPA is a toxic waste dump for lawlessness and disdain for the Constitution." Not to mention disdain for the public's right to know. As Levin added: "When any federal agency receives a FOIA request, the statute says it must preserve every significant repository of records, both paper and electronic, that may contain materials that could be responsive to that request."

The agency is legally obliged to notify all involved in the suit to preserve everything in their possession that could be discoverable in the litigation. But the feds have bent over backward to delay and deny. "(T)he people at the EPA, from the administrator on down, think they're above the law, that no one has the right to question what or how they do their jobs," Levin blasted. "Well, they're wrong. The laws apply to everyone, even federal bureaucrats."

That's a bedrock principle the EPA has defied over and over again. As I first reported 13 corruption-stained years ago in 2001, former EPA head Carol Browner oversaw the destruction of her computer files on her last day in office under the Clinton administration -- in clear violation of a judge's order requiring the agency to preserve its records. Browner ordered a computer technician: "I would like my files deleted. I want you to delete my files." In 2003, the agency was held in contempt and fined more than $300,000 in connection with another email destruction incident under Browner's watch.

Continued in articls

May 10, 2013: Sen. Levin announces that the Permanent Subcommittee on Investigations will hold hearings on "the IRS's failure to enforce the law requiring that tax-exempt 501(c)(4)s be engaged exclusively in social welfare activities, not partisan politics." Three days later he postpones the hearings when Lois Lerner (then-director of the IRS Exempt Organizations Division) reveals that the IRS had been targeting and delaying the applications of conservative groups applying for tax-exempt status.
http://online.wsj.com/news/articles/SB10001424052702303426304579401513939340666?mod=djemMER_h&mg=reno64-wsj


"The GOP's Border Spectacle:  The party melts down one more time over immigration," The Wall Street Journal, August 1, 2014 ---
https://mail.google.com/mail/u/1/?pli=1#inbox/147967c81636cda2  

Republicans should be heading toward a November election victory, perhaps even a big one, adding to their House majority and maybe picking up the six or more seats necessary to control the Senate. Yet never underestimate their ability to save the day for Democrats, not least by showcasing the GOP's immigration neuralgia.

The House GOP looked ready Friday to pass a bill to address the influx of children over the Southwest border, though not before providing another spectacle of internal disarray. The bill should have been a moment to redirect attention to President Obama's cynical handling of the border problem and to the Democratic Party's immigration divisions. Instead the GOP again gave the country the impression that its highest policy priority is to deport as many children as rapidly as possible back from wherever they came.

Earlier this week Speaker John Boehner had his caucus lined up to pass a modest bill that would have provided the Obama Administration with $659 million to deal with the border influx, while tweaking a provision in a 2008 law that even President Obama has said has encouraged the flood of unaccompanied minors to the U.S. This would have allowed Republicans to return home for the August recess saying they had voted to address the border problem and put pressure on the White House and Senate Democrats to act.

Instead, the GOP's Deportation Caucus—led by Alabama Senator Jeff Sessions and Ted Cruz of Texas—lobbied House conservatives to resist any immigration compromise and pick a fight with Mr. Boehner. The dissenters demanded an array of policy changes, most notably new restrictions on the President's executive order allowing some undocumented immigrants who were brought here as children to remain in the country.

Readers may recall that the last Republican in an election year to support deporting immigrant children brought here through no fault of their own was Mitt Romney. A splendid voter attraction that was. "The only way to stop the border crisis is to stop Obama's amnesty," declared Mr. Cruz, as he rallied House GOP members to vote against the bill.

Iowa's Steve King and Minnesota's Michele Bachmann were only too happy to follow the Senators into this cul de sac. And by Thursday evening the Republican caucus disintegrated into a screaming match on the floor in full view of the national media. Our sources say that nearly the entire Alabama delegation defected (thanks to Mr. Sessions) as did numerous participants at a Wednesday huddle held in Mr. Cruz's office. House leaders had little choice but to pull the bill.

The result was to kill a solution to the border issue that Republicans have been declaring is a "crisis" that demands action. It also distracted attention from the Senate, where Majority Leader Harry Reid couldn't deliver on the President's border request.

Mr. Reid knows that Senate Democrats are also split on immigration—between liberals who want to use the border bill to loosen immigration restrictions and Senators running for re-election who want to vote with the GOP. The latter include Louisiana's Mary Landrieu and North Carolina's Kay Hagan. As usual, Mr. Reid refused to allow any amendments on his $2.7 billion border bill, dooming it so he could blame Republicans for the failure.

This Democratic use of border children as midterm-election pawns should be the story, but instead the Deportation Republicans played into Mr. Obama's hands. Right on cue, the President held a press event on Friday at the White House that tatooed the GOP for refusing to solve the problem they claim is a crisis. The truth is that Mr. Obama doesn't even care if the border bill passes. What he really wants is the immigration issue to bash Republicans and drive Hispanic and other minority turnout in states like Colorado that could determine Senate control.

House Republicans may have scrambled enough on Friday to save themselves from a total meltdown. But this latest immigration debacle won't help the party's image, which is still recovering from the government shutdown debacle of 2011. A party whose preoccupation is deporting children is going to alienate many conservatives, never mind minority voters.

The episode is also sure to raise doubts among swing voters about whether Republicans would be prepared to govern if they do win control of the entire Congress. Let's hope they spend August planning how to return in the fall like a party that looks ready to do something other than fight with each other.

 


"Why Liberals Hate Kansas:  Sam Brownback's tax cuts must be discredited before they succeed," The Wall Street Journal, July 29, 2014 ---
http://online.wsj.com/articles/why-liberals-hate-kansas-1406675335?tesla=y&mod=djemMER_h&mg=reno64-wsj

Liberals accuse Republicans of exaggerating the damage of raising taxes. So it's amusing to hear the apocalyptic claims about Kansas Governor Sam Brownback's income-tax cuts. Their goal is to defeat Mr. Brownback for re-election but in particular discredit tax reform in the states.

By liberal accounts Kansas is experiencing a major fiscal and economic meltdown like well, you know, Illinois. The truth is that it's too soon to draw grand conclusions about the tax cuts, which have been in effect for all of 19 months. But some early economic indicators suggest they may be producing modest positive effects. The danger is that a coalition of Democrats and big-spending Republicans will pull out the rug before the benefits fully materialize. ***

Kansas has long trailed its neighbors in private job and economic growth. The last decade's energy and farm booms in Oklahoma, Colorado, Iowa and Nebraska have increased the disparity. Though Kansas is part of the farm belt, agriculture makes up a mere 5.6% of its economy, about half as much as in Iowa. Meantime, manufacturing—a major contributor to state GDP—has been losing ground to other states.

In January 2012 Mr. Brownback proposed a revenue-neutral tax reform aimed at making the state more competitive. All of Kansas's surrounding states save Nebraska had lower top tax rates, and most also had lower unemployment. His plan slashed rates across the board, eliminated itemized deductions in toto and exempted small business income.

However, moderate Republicans—the main opposition party in Kansas—balked at clearing out the code's cobwebs. So the legislature passed the Governor's rate cuts with the expensive carve-outs for things like mortgage interest intact. Mr. Brownback signed the bill anyway hoping that lower revenues would induce spending restraint.

The top 6.45% bracket for income over $30,000 has disappeared while rates on individuals earning more than $15,000 have fallen to 4.8% from 6.25% and to 2.7% from 3.5% for those making less. These rates will slide to 3.9% and 2.3% by 2018. After tea-party groups toppled several Republican state senators who had opposed the Governor's original plan in 2012, a more conservative legislature revisited tax reform. As a result all itemized deductions save for charitable contributions will be reduced by half over the next five years.

Tax-reform critics complain that revenues (as expected) declined this year and that receipts were $235 million—or about 4%—below the state's estimate last year. However, predicting revenues was particularly challenging this year because federal tax changes encouraged investors to shift income to 2012 from 2013. Revenues missed the mark in numerous states including Iowa ($185 million; 3%), Missouri ($308 million; 4%) and Oklahoma ($283 million; 5%).

Thanks to a flush rainy day fund, Kansas finished the year $434 million in the black. The Kansas Legislative Research Department forecasts $112 million in reserves at the end of next year. But come 2016 lawmakers will have to limit spending, which has increased by nearly 20% since fiscal 2010. In May Moody's MCO -0.60% downgraded the state's credit rating, citing lower projected revenues and the state's $16.7 billion unfunded pension liability and school funding growth. But the rating is still four notches higher than Illinois's.

Contrary to liberal folklore, Mr. Brownback hasn't taken a meat-cleaver to schools. Total per-pupil spending has increased to $12,885 from $12,283 over four years. State education spending has risen by about 2% annually since 2010 and is set to jump 4% this year—which doesn't include a 10% bump for teacher pensions.

It's also untrue that tax cuts have hurt the poor. The tax rate on individuals earning less than $15,000 has fallen by nearly a quarter while the standard deduction has increased to $5,500 from $4,500. Although Republicans extended a temporary sales tax hike that Democratic Governor Mark Parkinson signed in 2010, they also reinstated a food sales tax rebate that will offset most of the cost for the poor. Kansans earning the minimum wage will net about $100 under the tax reforms.

Low-income workers may also benefit from small business growth in industries like construction, hospitality and food service. Since the tax cuts took effect, the gap in job creation between Kansas and neighboring states has shrunk.

Kansas's rate of private job growth between January 2013 and June 2014 averaged 167% of that in Nebraska, 105% of Iowa and 61% in Oklahoma. That compares to 61%, 85% and 42%, respectively, between 2004 and 2012. While Kansas added jobs at a slower pace than Missouri this year, its private economy grew more than twice as fast as its eastern neighbor last year. According to the Associated General Contractors of America, Kansas recorded the fourth highest growth in construction nationwide between March 2013 and 2014.

Kansas's private economy last year also grew faster than the nation as a whole and on par with California, which offers a counterpoint to the liberal assault on the Brownback tax cuts. California's growth slowed in 2013 following a huge tax increase on the wealthy. Could the tax hikes be to blame?

Mr. Brownback has led the movement for tax reform, which has been taken up by Republicans in Oklahoma, Missouri, Ohio, North Carolina and Wisconsin. Liberals are trying to stop the trend from spreading by predicting catastrophe. They're afraid people may soon be asking what's right with Kansas.

Jensen Comment
On the other side of the coin conservatives hate California. In spite of all the dire warnings about increases in state taxes and cities that either are or are on the verge of bankruptcy with miserable credit ratings, Governor Brown's tax increases have balanced the budget more or less in free spending California. This shows how all 50 states differ in terms of economic circumstances, and neither California nor Kansas are on the list of the 10 most troubled states in the USA where Rhode Island and Illinois are in the spotlight largely because of unfunded pensions of public employees and badly managed spending deficits.

One problem with tax cuts is that there is a significant lag between the time of the cuts and the payback. The infamous tax cuts of President Reagan did not do much to balance the budget of President Reagan, but his successor President Clinton balanced the budget largely because of those earlier tax cuts. We might say President Clinton Laffered all the way to balanced budgets ---
http://en.wikipedia.org/wiki/Laffer_curve


Former President of Yale University
What Happened to Academic Freedom:  City University of New York Chairman Benno Schmidt about the evolution of academic freedom on college campuses ---
Click Here
http://live.wsj.com/video/opinion-what-happened-to-academic-freedom/96EAC42D-21AD-4C97-BC69-8E0D5247FEB9.html?mod=djemEditorialPage_h#!96EAC42D-21AD-4C97-BC69-8E0D5247FEB9


Map Showing the Wealthiest Person in Each USA State (quite a few are women) ---
http://www.businessinsider.com/this-map-shows-the-wealthiest-person-in-every-state-2014-8

Jensen Comment
At some level of wealth a person seemingly locates a primary home irrespective of high taxes. It's interesting, however, to note which USA states have not one billionaire. One is the relatively high taxation state of Maine. The other is the relatively low taxation state of Delaware that nevertheless does have an income tax. In terms of affluence Delaware ranks 9/50. Maine ranks 34/50.

Most of the very wealthy folks on this map have one or more secondary houses, condos, and apartments around the world.  Some also have yachts.


 

 

 

 




We're old enough to remember when advocates for the Affordable Care Act promised that it would "bend the cost curve" and reduce expensive hospital visits, particularly at emergency rooms. So far, the opposite is occurring.
James Freeman, "There Goes Another ObamaCare Argument," WSJ, August 6, 2014 ---
http://online.wsj.com/articles/there-goes-another-obamacare-argument-1407242712?tesla=y&mod=djemMER_h&mg=reno64-wsj

"A Simple Theory for Why School and Health Costs Are So Much Higher in the U.S.," by Andrew O’Connell, Harvard Business Review Blog, April 7, 2014 ---
http://blogs.hbr.org/2014/04/a-simple-theory-for-why-school-and-health-costs-are-so-much-higher-in-the-u-s/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+harvardbusiness+%28HBR.org%29&cm_ite=DailyAlert-040814+%281%29&cm_lm=sp%3Arjensen%40trinity.edu&cm_ven=Spop-Email 

Jensen Comment
One reason higher education costs more in the USA is that more attempts are made to bring college education to everybody with nearby physical campuses such as community colleges and online degree programs from major universities. In Europe and most other parts of the world higher education is available only to a much smaller portion of the population. In Germany, for example, less than 25% of young graduates are admitted to college and opportunities for adult college education are much more limited than in the USA. Those other nations, however, often offer greater opportunities for learning a trade that does not require a college education.

There are many reasons health care costs more in the USA. One reason is that the USA is the world leader in medical and medication research. Another reason is that the USA imposes a costly private sector insurance intermediary where other nations offer insurance from a more efficient public sector.

Still another reason is that malpractice lawsuits are a legal punitive damages lottery in most parts of the USA such that hospitals and physicians must pay ten or more times as much for malpractice insurance relative to nations like Canada that restrict malpractice to actual damages only, leaving out the lottery for lawyers.

Still another reason is that the USA keeps extremely premature babies alive that other nations throw away. Even more expense if what Medicare spends on keeping people hopelessly and artificially alive, dying people that other nations let slip away without all the very costly artificial life extensions.

On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
"The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/

National Bureau of Economic Research: Bulletin on Aging and Health --- http://www.nber.org/aginghealth/

Leading ACA Act Blogs ---
http://www.zanebenefits.com/blog/15-best-health-reform-blogs

"The Full-Time Scandal of Part-Time America Fewer than half of U.S. adults are working full time. Why? Slow growth and the perverse incentives of ObamaCare," by Mortimer Zuckerman, The Wall Street Journal,  July 13, 2014 ---
http://online.wsj.com/articles/mortimer-zuckerman-the-full-time-scandal-of-part-time-america-1405291652?tesla=y&mod=djemMER_h&mg=reno64-wsj

There has been a distinctive odor of hype lately about the national jobs report for June. Most people will have the impression that the 288,000 jobs created last month were full-time. Not so.

The Obama administration and much of the media trumpeting the figure overlooked that the government numbers didn't distinguish between new part-time and full-time jobs. Full-time jobs last month plunged by 523,000, according to the Bureau of Labor Statistics. What has increased are part-time jobs. They soared by about 800,000 to more than 28 million. Just think of all those Americans working part time, no doubt glad to have the work but also contending with lower pay, diminished benefits and little job security.

On July 2 President Obama boasted that the jobs report "showed the sixth straight month of job growth" in the private economy. "Make no mistake," he said. "We are headed in the right direction." What he failed to mention is that only 47.7% of adults in the U.S. are working full time. Yes, the percentage of unemployed has fallen, but that's worth barely a Bronx cheer. It reflects the bleak fact that 2.4 million Americans have become discouraged and dropped out of the workforce. You might as well say that the unemployment rate would be zero if everyone quit looking for work.

Last month involuntary part-timers swelled to 7.5 million, compared with 4.4 million in 2007. Way too many adults now depend on the low-wage, part-time jobs that teenagers would normally fill. Federal Reserve Chair Janet Yellen had it right in March when she said: "The existence of such a large pool of partly unemployed workers is a sign that labor conditions are worse than indicated by the unemployment rate."

There are a number of reasons for our predicament, most importantly a historically low growth rate for an economic "recovery." Gross domestic product growth in 2013 was a feeble 1.9%, and it fell at a seasonally adjusted annual rate of 2.9% in the first quarter of 2014.

But there is one clear political contribution to the dismal jobs trend. Many employers cut workers' hours to avoid the Affordable Care Act's mandate to provide health insurance to anyone working 30 hours a week or more. The unintended consequence of President Obama's "signature legislation"? Fewer full-time workers. In many cases two people are working the same number of hours that one had previously worked.

Since mid-2007 the U.S. population has grown by 17.2 million, according to the Census Bureau, but we have 374,000 fewer jobs since a November 2007 peak and are 10 million jobs shy of where we should be. It is particularly upsetting that our current high unemployment is concentrated in the oldest and youngest workers. Older workers have been phased out as new technologies improve productivity, and young adults who lack skills are struggling to find entry-level jobs with advancement opportunities. In the process, they are losing critical time to develop workplace habits, contacts and new skills.

Most Americans wouldn't call this an economic recovery. Yes, we're not technically in a recession as the recovery began in mid-2009, but high-wage industries have lost a million positions since 2007. Low-paying jobs are gaining and now account for 44% of all employment growth since employment hit bottom in February 2010, with by far the most growth—3.8 million jobs—in low-wage industries. The number of long-term unemployed remains at historically high levels, standing at more than three million in June. The proportion of Americans in the labor force is at a 36-year low, 62.8%, down from 66% in 2008.

Part-time jobs are no longer the domain of the young. Many are taken by adults in their prime working years—25 to 54 years of age—and many are single men and women without high-school diplomas. Why is this happening? It can't all be attributed to the unforeseen consequences of the Affordable Care Act. The longer workers have been out of a job, the more likely they are to take a part-time job to make ends meet.

The result: Faith in the American dream is eroding fast. The feeling is that the rules aren't fair and the system has been rigged in favor of business and against the average person. The share of financial compensation and outputs going to labor has dropped to less than 60% today from about 65% before 1980.

Why haven't increases in labor productivity translated into higher household income in private employment? In part because of very low rates of capital spending on new plant and equipment over the past five years. In the 1960s, only one in 20 American men between the ages of 25 and 54 was not working. According to former Treasury Secretary Larry Summers, in 10 years that number will be one in seven.

The lack of breadwinners working full time is a burgeoning disaster. There are 48 million people in the U.S. in low-wage jobs. Those workers won't be able to spend what is necessary in an economy that is mostly based on consumer spending, and this will put further pressure on growth. What we have is a very high unemployment rate, a slow recovery and across-the-board wage stagnation (except for the top few percent). According to the Bureau of Labor Statistics, almost 91 million people over age 16 aren't working, a record high. When Barack Obama became president, that figure was nearly 10 million lower.

The great American job machine is spluttering. We are going through the weakest post-recession recovery the U.S. has ever experienced, with growth half of what it was after four previous recessions. And that's despite the most expansive monetary policy in history and the largest fiscal stimulus since World War II.

Continued in article

 




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

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

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

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

Bob Jensen's threads on such scandals:

Bob Jensen's threads on audit firm litigation and negligence ---
http://www.trinity.edu/rjensen/Fraud001.htm

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

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

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

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

Bob Jensen's fraud conclusions ---
http://www.trinity.edu/rjensen/FraudConclusion.htm

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

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

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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