Tidbits Quotations
To Accompany December 30, 2014 edition of Tidbits
Bob Jensen at Trinity University


Paul Harvey's Tribute to the Policeman  ---

LeBron James "did the right thing" by wearing "I can’t breathe’ shirt."
Barack Obama. President of the United States
I wonder LeBron is still proudly wearing this shirt after the assignations of police in NYC and San Diego that he helped inspire with more assassinations on the way. Do we really want more "hate-the-police" inspiration of mentally ill assassins? LeBron? It's a bit unfair to blame most of the peaceful protesters for the assignations of cops, but we must attribute much of the blame to media heros like Al Sharpton, Jesse Jackson, LeBron James,  and some RAMS football players for inspiring mentally ill potential assassins to carry out the ambushes.

Nate Silver's Statistical Analysis Blog Finds NYC Bifurcated into Residents Who Love Their Cops and Residents Who Hate Their Cops
"New Yorkers Who Like Cops Don’t Like De Blasio," Nate Silver's 5:38 Blog, December 22, 2014 ---

We want dead cops
Chanters in NYC protests ---

The implications are chilling. As a rule, poor black people do not work their way out of the ghetto—and those who do often face the horror of watching their children and grandchildren tumble back. Even seeming evidence of progress withers under harsh light. In 2012, the Manhattan Institute cheerily noted that segregation had declined since the 1960s. And yet African Americans still remained—by far—the most segregated ethnic group in the country.
Ta-Nehisi Coates ---
Jensen Comment
Title 8 housing divided up many of the big central city ghettos and moved them into subsidized housing in the white suburban neighborhoods. This did bring more minorities, especially blacks, into suburban schools, but it also added higher crime rates in those neighborhoods. When scores of apartment houses became subsidized housing near our neighborhood in San Antonio crime went up significantly in the neighborhood, and police patrols increased about ten times.

I added burglar bars to my San Antonio home after nearby apartment complexes became Title 8 subsidized housing, but this was ashamedly overkill. Crime really did not increase greatly among in our relatively expensive white-Hispanic housing clusters (there are no white-only neighborhoods in San Antonio). When I say crime went up in the neighborhood, my policeman friend told me that most of the increases were black-on-black crimes in and around the subsidized housing itself, especially drug selling, prostitution, rape, and drunken domestic violence. Ta-Nehisi Coates is correct in the sense that black poor people do not work their way out of the ghettos --- even if you move those ghettos into the white suburbs with Title 8 housing.

The problem is that so many African Americans cannot seem to work their way out of even the small suburban neighborhood ghettos of Title 8 subsidized housing. Solutions are complicated, but I think it's still largely a cultural problem caused by our welfare system and the lost war on drug gangs that discourages two-parents living with their children and getting an education in the midst of the $2 trillion underground economy where drug dealers make so much more than school teachers. 

Do we need ask why both K-Mart and Big Lots stores are closing down in Ferguson?
Looting and burning hurts the entire community in the long run.

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

Happiness is like a butterfly: the more you chase it, the more it will elude you, but if you turn your attention to other things, it will come and sit softly on your shoulder.
Henry David Thoreau

For the first time ever, there are 100 women in Congress
Sarah Kliff --- http://www.vox.com/2014/11/5/7160477/women-in-congress-first-time-100-legislators-midterms

Mahatma Gandhi’s List of the 7 Social Sins; or Tips on How to Avoid Living the Bad Life ---

Dumb Rich Kids Get All The Breaks
Paul Krugman --- http://www.businessinsider.com/krugman-on-rich-poor-wealth-success-america-2014-11
Paul's Krugman managed to graduate from Yale and then got a PhD from MIT.  I don't was a rich kid kid but he got the breaks..
Barack Obama managed to graduate from Columbia University and then got a law degree from Harvard.  I don't think he was rich kid but he got the breaks..
Michelle Obama and Sonia Sotomayor graduated from Princeton University.  Neither them was rich kid but each one got the breaks..
There is such a thing as getting breaks under the American dream, and those breaks are commonly earned without being a rich kid.
Why is it that so many poor people who became rich and prominent in the USA despise the system that gave them such big breaks in life?
Would their chances have been as great outside the USA if they were smart and not rich?

Moocher Hall of Fame --- https://danieljmitchell.wordpress.com/the-moocher-hall-of-fame/


ISIS Reportedly Executed Nearly 2,000 People In 6 Months
Including 120 of its own fighters who tried to return home and 930 Sunnis ---

ISIS is one of the darkest forces that any country has ever had to deal with.
"Inside the War Against Islamic State A retired four-star Marine Corps general, now the U.S. ‘special envoy’ in the war against the terrorist army, on reasons for optimism even as a long fight looms," by Joseph Rago, The Wall Street Journal, December 26, 2014 ---

Jensen Comment
This is a tremendous summary about the rise of ISIS and why we should all worry greatly about the dark forces of ISIS. One of the huge problems is that this enemy is not the least bit ashamed of fighting behind the shields of innocent civilians. Suppressing this evil means taking out innocent civilians. The other choice is unconditional global surrender to one force and one religion. Victory is not sweet and surrender is not an option except to people who not understand what surrender will ultimately entail.

This is probably terror without end between global combatants on all sides who will never surrender. There's no limit to the ultimate willingness to sacrifice others.


Jensen Comment
From Hard Workers to Couch Potatoes: Television Advertising Fills the Days (not mine, although in retirement Erika and I do watch one Netflix movie most days. Lately its been a long and well-written and addictive TV series called Longmire. The nice thing about watching such a series on Netflix is that there are no commercial breaks.)

"Over The Past 150 Years, There Has Been A Profound Shift In What Humans Do With Their Time," by Henry Blodget, Business Insider, December 27, 2014 ---

. . .

150 years ago, we spent about 70 of those 112 waking hours working.

Thanks to the remarkable productivity enhancements we have made over the past 150 years, the average workweek in most countries has dropped by about 30 hours:

This remarkable drop in working hours has freed up a lot of extra time.

So what do we humans do with all the extra hours our miraculous progress and productivity enhancements have allowed us to create for ourselves?

We spend them watching television.

According to recent figures, the average human spends about 4 hours a day, or 28 hours a week, watching television.

Continued in article

Jensen Comment
How we spend our 21st Century leisure time varies somewhat in across different cultures and ages. For example, bike riding is increasingly popular in the USA but not to the extreme that we find in Denmark and Holland. In Latin American countries, where it is quite hot and humid, clusters of men stand around a lot outdoors seemingly doing nothing but conversing. In the USA that is also the case but most of them are ostensibly doing road repairs with two workers actually working while ten more are standing around conversing.

Aside from bike riding, men and women in the USA spend a lot more time walking and running indoors and outdoors. When I drive to town I always see a lot of cars parked at our most popular (Evergreen) physical fitness center. Golf and swimming seem to have increased in popularity while tennis and fishing declined.

Many men find more time for hobbies like antique car restoration. Women are increasingly into gardening, art, and crafts. Both men and women spend a lot more time on their computers and gadgets.

Teens spend an enormous amount of time in social networking, computer games, and video games. In middle age, studies show that middle-aged women are more prone than middle-aged men toward social networking and game addictions.

With fuel prices plunging, many more folks in the USA will be on the roadways with their motor homes. They will still be watching a lot of TV in the RV parks. I guess we could write poems about the TV-RV thing.

By the end of the day nearly all of us have spent more of our non-working days on television and movies than on hobbies and books.

"The Rise of Men Who Don’t Work (and What They Do Instead)," by Barry Ritholtz, December 16, 2014 ---

Jensen Comment
Many men and women who do not get W-2 forms for working hours are nevertheless still earning wages in the $2 trillion underground economy while working in construction, house cleaning, etc.

Many of them are on food stamps and other forms of welfare.
The welfare average will be  $1.4 trillion in the USA over the next decade not counting tens of millions of people receiving full disability payments fraudulently
"America in Urgent Need of Welfare Reform," by Vann Ellison, Townhall, December 16. 2014 ---

Case Studies in Gaming the Income Tax Laws ---

Kim Jong-un Meets the Streisand Effect (without singing a note)

"Why Electric Cars May Be Much Dirtier Than Gas-Powered Ones," The Economist, December 28, 2014 ---

Driving an electric car confers a badge of greenery, or so the marketing departments of their makers would have you believe.

Yet a report which analyses the life cycle of car emissions (ie, all the way from those created by the mining of materials for batteries, via the ones from the production of fuel and the generation of electricity, to the muck that actually comes out of the exhaust) presents a rather different picture.

A battery-powered car recharged with electricity generated by coal-fired power stations, it found, is likely to cause more than three times as many deaths from pollution as a conventional petrol-driven vehicle.

Even a battery car running on the average mix of electrical power generated in America is much more hazardous than the conventional alternative.

Christopher Tessum, Jason Hill and Julian Marshall of the University of Minnesota have just published this study in the Proceedings of the National Academy of Sciences. They estimate how levels of fine particulate matter and ground-level ozone--two important constituents of air pollution, which kills more than 100,000 people a year in America--would change if each of 11 ways of powering a car were to be responsible for 10% of the vehicle-miles expected to be driven in America in 2020.

It was no surprise that electric cars whose batteries were topped up from wind, solar or hydroelectric sources came out cleanest, causing 231 putative deaths over the course of a year, compared with 878 for petrol cars.

Electric cars recharged with power from natural-gas-fired stations were also a lot less lethal than petrol-driven ones, with 439 deaths. But if those same electric cars were recharged ultimately by coal, they would be responsible, according to the model, for just over 3,000 deaths.

Biofuels also caused more health problems than petrol. But diesel, which is generating concern about pollution in parts of Europe, where it is a more popular fuel than in America, was marginally cleaner than petrol. This is because the Minnesota model assumes for all cars that present and future emission-control technologies will be more widely used in 2020, especially particulate filters which have a marked effect on cleaning diesel exhausts. Diesel cars also have better fuel economy than petrol-driven ones.

Overall, the research shows that electric cars are cleaner than those that rely on internal-combustion engines only if the power used to charge them is also clean. That is hardly a surprise, but the magnitude of the difference is. How green electric cars really are, then, will depend mainly on where they are driven. In France, which obtains more than half its power from nuclear stations, they look like a good bet. In China--which is keen on electric cars, but produces some 80% of its electricity from coal--rather less so.

"Rev. Al Sharpton's Key Tax Tips...From Lois Lerner," Forbes, December 20, 2014 ---

In Tell it to the Reverend Al, the New York Post says Rev. Sharpton still owes New York State $916,000 from tax liens filed against him between 2008 and 2010. In all, Mr. Sharpton is said to have $4.5 million of tax liens. He claims he paid them, but state officials say otherwise. This isn’t the first time his records do not line up. Indeed, on two prior occasions he suffered inconvenient fires that destroyed records.

It’s a little like the crash of Lois Lerner’s hard drive. Those fires destroyed Mr. Sharpton’s financial records just as he was about to turn them over to officials. And records are key to tax disputes. As Mr. Sharpton works though his tax problems with or without records, he appears to have a suit made of Teflon, even when it comes to taxes.

In 1993, he pleaded guilty to a misdemeanor for failure to file a state tax return. His Raw Talent operation which he uses for speaking engagements has reportedly also had tax problems. But beyond these smidgens, Mr. Sharpton has never faced criminal tax-related charges. There is no question he has had trouble keeping his finances straight. He has been marvelously successful in explaining that he is simply in over his head.

Not every taxpayer is so lucky. In fact, he is so unusual in that respect that perhaps Mr. Sharpton should be dispensing tax advice. A New York Times report claims the Reverend and his for-profit businesses owe millions. Both he and his advocacy organization, the National Action Network may be strapped. But it is hard to reach that conclusion from the outside.

Some of his financial woes stem from poor divisions between business and personal, a common tax problem among entrepreneurs. Reports suggest that everything is paid for by the entities, not Mr. Sharpton. That may extend to clothes, his daughters’ private school tuition, etc. If so, Rev. Sharpton is blurring one of the most important lines in the tax law. Many tax disputes come down to the fundamental divide between business and personal.

Continued in article

"Questions About Sharpton’s Finances Accompany His Rise in Influence," by Russ Buettne, The New York Times, November 18, 2014 ---

. . .

Obscured in his ascent, however, has been his troubling financial past, which continues to shadow his present.

Mr. Sharpton has regularly sidestepped the sorts of obligations most people see as inevitable, like taxes, rent and other bills. Records reviewed by The New York Times show more than $4.5 million in current state and federal tax liens against him and his for-profit businesses. And though he said in recent interviews that he was paying both down, his balance with the state, at least, has actually grown in recent years. His National Action Network appears to have been sustained for years by not paying federal payroll taxes on its employees.

With the tax liability outstanding, Mr. Sharpton traveled first class and collected a sizable salary, the kind of practice by nonprofit groups that the United States Treasury’s inspector general for tax administration recently characterized as “abusive,” or “potentially criminal” if the failure to turn over or collect taxes is willful.

Mr. Sharpton and the National Action Network have repeatedly failed to pay travel agencies, hotels and landlords. He has leaned on the generosity of friends and sometimes even the organization, intermingling its finances with his own to cover his daughters’ private school tuition.

He has been in the news as much as ever this year, becoming a prominent advocate on behalf of the families of Eric Garner, a Staten Island man who died in police custody, and Michael Brown, the unarmed black teenager who was killed by a white police officer in Ferguson, Mo. He also has a daily platform through his show on MSNBC.

Behind the scenes, he has consulted with the mayor and the president on matters of race and civil rights and even the occasional high-level appointment. He was among a small group at the White House when Mr. Obama announced his nomination of Loretta E. Lynch, the United States attorney for the Eastern District of New York, to become the next attorney general.Mr. Sharpton’s newly found insider status represents a potential financial boon for him, furnishing him with new credibility and a surge in donations. His politician-heavy birthday party, at one of New York City’s most expensive restaurants, was billed as a fund-raiser to help his organization. Mr. Obama also spoke at the organization’s convention in April, its primary fund-raising event.

But the recent troubles of Rachel Noerdlinger, Mr. Sharpton’s closest aide for many years and more recently a top official in the de Blasio administration, served as a reminder of Mr. Sharpton’s fraught history and how easily it can spill over into the corridors of power in which he now travels.

Ms. Noerdlinger took a leave of absence from her post on Monday, after the arrest of her teenage son on trespassing charges. The decision capped weeks of scrutiny after news accounts revealed that she had failed to disclose a live-in boyfriend with an extensive criminal record on a background questionnaire when she became the top adviser to Mr. de Blasio’s wife, Chirlane McCray. The omission was unrelated to Mr. Sharpton, but it is the kind of paperwork oversight that has been a trademark of his nonprofit, where Ms. Noerdlinger built her career.

Mr. Sharpton acknowledged his financial troubles in recent telephone interviews. He said all of the debts were being paid, thanks to vastly increased revenues from donors. And he pointed out that he had lent the organization money himself, while at times not taking a salary.

“You can say I’m not a great administrator,” he said. “You can’t say that I’m not committed.”

Often Strident Language

Mr. Sharpton got his start preaching in Brooklyn churches at age 4. As a young man, he worked at the side of the soul singer James Brown, where he met a backup singer, Kathy, who would become his wife. By the 1980s, however, he was becoming increasingly involved in fiery activism on behalf of black people hurt by the police or members of other racial groups, sometimes making outlandish accusations. He accused an upstate New York prosecutor, Steven A. Pagones, of being part of a group of white men whom he said had abducted and raped the teenager Tawana Brawley, an allegation that a grand jury report showed had been fabricated.

He often used strident language that many saw as inflaming racial tensions. During rallies at the Slave Theater in Brooklyn, he characterized black people who disagreed with him as “yellow niggers" and called white people “crackers.” After a car in a prominent Hasidic rabbi’s motorcade jumped a curb in the Crown Heights section of Brooklyn and killed a 7-year-old black boy in 1991, Mr. Sharpton referred to the neighborhood’s Hasidic Jews as “diamond merchants.” In 1995, he referred to a Harlem businessman who wanted to expand his store into a space that had been occupied by black-owned business as a “white interloper.”

Problems keeping his personal and professional affairs in order have threatened Mr. Sharpton’s rise from the streets for decades.In 1990, he was acquitted of felony charges that he stole $250,000 from his youth group. Then in 1993 he pleaded guilty to a misdemeanor for failing to file a state income tax return. Later, the authorities discovered that one of Mr. Sharpton’s for-profit companies, Raw Talent, which he used as a repository for money from speaking engagements, was also not paying taxes, a failure that continued for years.

In 1998, Mr. Sharpton lost a defamation suit brought by Mr. Pagones and was ordered to pay a judgment of $65,000. He said he did not have enough money to pay all at once, and after years of a slow trickle of money from wage garnishments, Mr. Sharpton was forced to testify under oath about his finances.

He said he had no assets, save for a watch and a ring. Everything else, including some of his suits, was owned by a for-profit business, Revals Communications, he said. He testified that he put nearly all of his $73,000 in take-home pay from the National Action Network into Revals, which in turn paid many of his expenses, including his daughters’ private school tuition and some of the rent on his house. Even though state law prohibits nonprofits from making loans to officers, Mr. Sharpton said National Action Network had also once lent him money to cover his daughters’ tuition.

Continued in article

Jensen Comment
Electric car drivers must one day stop getting a free ride or nearly free ride in terms of road taxes. One answer is to tax cars on the basis of miles driven rather than gallons consumed. One obvious problem with that, however, is that some of those miles may be out of state. Who should get the money? Dividing up the tax for miles driven between states seems like an accounting nightmare.

A GPS electronic device might estimate the miles driven in one state. But it seems impractical to have 48 or 49 devices on every car. Alternately the same device might compute the mileage for every state, although such a tamper-proof device might be quite costly to buy, install, and monitor.

"Minnesota May Start Taxing Drivers," CBS Minnesota, December 25, 2014 ---

Gas prices are finally falling, but those savings might not last long.

At least 18 states, including Minnesota, are considering taxing drivers based on distance.

Gas prices aren’t the only reason for the idea, since newer cars get better gas mileage.

Oregon has a pilot project that will start next year to test the idea. They’re having 5,000 volunteers pay 1.5 cents per mile instead of the 30-cents-per-gallon tax.

An electronic device attached to their vehicle will report how far they drive in state.

Minnesota is one of four other states trying something similar. Hennepin and Ramsey counties both approved “wheelage taxes” last year.

Statewide, Gov. Mark Dayton has been considering a number of different ways to fix roads and bridges with less gas-tax revenue.

California readies for 900 new laws ---

SACRAMENTO — New Year’s Day will usher in hundreds of new laws in California, including a landmark law that allows undocumented individuals to receive a driver’s license.

In all, California will add 930 new laws, most of which will go into effect Thursday. Some of the most talked-about laws won’t take effect until July, such as a statewide ban on plastic bags, required sick leave for employees and a requirement that new smartphones come with antitheft technology.

Here’s a look at some of the new laws:

Driver’s licenses: More than a million driver’s license applications from people living in the U.S. without documentation are expected under a law that passed in 2013, but goes into effect Jan. 1.

The Department of Motor Vehicles opened four driver’s license processing centers, including one in San Jose, extended its hours and hired additional staff to brace for the onslaught of applications under AB60, which allows undocumented people to drive legally in California.

Officials anticipate processing approximately 1.4 million driver’s license applications under AB60 during the next three years. First-time applicants can make an appointment at www.dmv.ca.gov. The DMV is closed New Year’s Day, but will be open Friday.

“Selfie” protections: Revenge will come at a price for those who post private naked photos or videos of someone without his or her consent. The new law extends privacy protections to all individuals who take nude “selfies” intended to be private. A law passed last year to offer “revenge porn” protections did not include selfies. Anyone who violates the new law by disseminating a protected image could be charged with disorderly conduct, a misdemeanor.

In July, a second “revenge porn” law will allow a person whose naked image was shared online without his or her consent to file a civil suit for monetary damages against the perpetrator under a pseudonym in court.

Care homes: State-licensed assisted-living homes could be subjected to substantially increased fines for major violations under a new law that arose out of several instances of failures at care facilities in the state, including last year’s botched closure of Valley Springs Manor in Castro Valley, where residents were left behind when the state shut it down.

The previous maximum fine of $150 levied for serious incidents including death will be raised to a maximum of $10,000 in cases of physical abuse and $15,000 for violations that lead to a death. Facility operators can appeal the fines.

Another law would ban residential care facilities for the elderly from accepting new residents if they have not corrected serious health and safety violations or have failed to pay a state-issued fine.

Sexual assault: Colleges and universities in California will be required to adopt policies against sexual assault that radically rewrite what constitutes consent as a condition of receiving state financial aid.

Under the new law, the standard for consent to sexual activity in campus judicial hearings shifts from whether a person said “no” to whether both partners said “yes.” The law only applies to the burden of proof used during campus disciplinary hearings, not criminal proceedings.

Birth to death: Birth certificates will receive a makeover in California to accommodate same-sex couples. Instead of being able to select only mother or father when identifying a parent, birth certificates will include “parent” as an option.

How death certificates are filled out for transgender people also will be updated. Under a new law, coroners will be required to list the gender consistent with how the person lived, instead of solely relying on the person’s anatomy.

The bill was inspired by Christopher Lee, co-founder of the San Francisco Transgender Film Festival, who committed suicide in 2012. Lee’s friends were dismayed to learn his death certificate listed him by his anatomical gender, female.

Education: All public high schools will be required to submit grade point averages electronically for each graduating senior to the California Student Aid Commission to increase the number of students who receive Cal Grant award offers for higher education. Students or schools failing to send GPA information is among the more common reasons students don’t receive Cal Grants.

Groundwater: California will begin the long process of regulating groundwater for the first time in the state’s history under three new laws that require local agencies to create sustainable groundwater management plans to ensure priority basins are sustainable by 2040.

Mug shots: It will be illegal in California for websites to profit from posting arrest mug shots by charging embarrassed people to have them removed. Under the new law, commercial websites could face a $1,000 civil penalty for each violation in what lawmakers called a “mug shot racket.”

Many of the people whose mug shots have been posted by websites were never convicted of a crime.

School pesticides: Parents will have the right to know what pesticides are used at K-12 schools and many licensed child care centers. Pesticides can be used on school campuses to get rid of cockroaches, vermin and weeds, but the new law will make chemical pesticides a last resort and increase disclosures of what is used.

Sex abuse: Childhood sex abuse victims will have more time to press charges against their abusers under a law that goes into effect Jan. 1. Victims of childhood sexual abuse previously had until they turned 28 years of age to press charges, but the new law extends the age limit to 40.

'Audrie’s Law’: Teens will face increased penalties and receive fewer privacy protections if convicted of sex acts on someone who is passed out from drugs or alcohol or incapable of giving consent due to a disability. Known as “Audrie’s Law,” the tougher penalties were sought after a Saratoga teen named Audrie Pott committed suicide days after she was sexually assaulted while unconscious. The teens convicted in the attack were given light sentences between 30 days and 45 days in juvenile detention.

Prison transition: State prison inmates will be given current California Identification cards upon release in hopes of helping them apply for jobs and housing or access health care and social services.

Plastic bags: Later this year, California will begin phasing out single-use plastic bags. The statewide ban goes into effect July 1 in grocery stores and pharmacies and a year later in convenience stores and liquor stores. The state became the first in the nation to ban single-use plastic bags, although many cities and counties in California already have bans in place.

Paid sick leave: Millions of Californians will begin earning paid sick leave under a law that takes effect in July. Largely affecting retail, fast food and other service-industry jobs that don’t offer sick leave benefits to full-time or part-time employees, the law will allow workers to earn one hour of paid sick leave for every 30 hours worked.

California became the second in the nation to require the benefit, after Connecticut.

Kill switches: Smartphones manufactured after July 1 and sold in California must come pre-equipped with antitheft technology that allows the owner to temporarily or permanently render the phone inoperable if stolen or lost. Consumers would be prompted to enable the kill switch as the default setting during the initial setup of a new smartphone. Consumers can opt out if they choose.

Jensen Comment
Most towns in California (e.g., Stockton) are really strapped by shortages of law enforcement officers. At the same time, California is emptying its prisons of non-violet offenders. This release will undoubtedly increase non-violent crimes in California. My point is that it's one thing to have 900 new laws on the books to accompany tens of thousand of released convicts. It's quite another to enforce those laws.

Senator Bernie Sanders who describes himself as an socialist has a great wish list for the USA. He left out one thing --- how to pay for all of this!

As Vermont's senator, here are 12 initiatives that I will be fighting for which can restore America's middle class.

1. We need a major investment to rebuild our crumbling infrastructure: roads, bridges, water systems, waste water plants, airports, railroads and schools..... A $1 trillion investment in infrastructure could create 13 million decent paying jobs and make this country more efficient and productive

Why does this sound so familiar?  Because it is!  Remember the Obama stimulus plan?  That too was a trillion-dollar investment in our "crumbling infrastructure" (the favorite amorphous buzzword for government spending).  How many millions of permanent jobs were created from that?  I think the exact number was... zero.

2. The United States must lead the world in reversing climate change and make certain that this planet is habitable for our children and grandchildren. We must transform our energy system away from fossil fuels and into energy efficiency and sustainable energies.... and we need to greatly accelerate the progress we are already seeing in wind, solar, geothermal, biomass and other forms of sustainable energy.

Good news!  Our planet is currently habitable for our children and grandchildren.  Nothing further needs be done!  However, if we move away from fossil fuels to cutting-edge Don Quixote technologies from the 1900s, like windmills, our children and grandchildren will be paying enormous costs for energy and will have no energy at all when the wind isn't blowing (for windmills) and when the sun isn't shining (for solar).

3. We need to develop new economic models to increase job creation and productivity. Instead of giving huge tax breaks to corporations which ship our jobs to China and other low-wage countries, we need to provide assistance to workers who want to purchase their own businesses by establishing worker-owned cooperatives.

This has been tried in many countries.  Israel used to have cooperatives called "Kibbutzes."  I say "used to" because most of them went bankrupt.  When people were not rewarded more for working harder, and people were rewarded for not working at all, the system went broke.

4. Union workers who are able to collectively bargain for higher wages and benefits earn substantially more than non-union workers. Today, corporate opposition to union organizing makes it extremely difficult for workers to join a union. We need legislation which makes it clear that when a majority of workers sign cards in support of a union, they can form a union.

Union workers in places like Detroit have good jobs at good wages with good benefits...the ones who still have jobs, that is.  Many lost their jobs because the wages unions demanded for unskilled labor caused the auto companies to collapse – not once, but several times.

5. The current federal minimum wage of $7.25 an hour is a starvation wage. We need to raise the minimum wage to a living wage.

Every time you raise the minimum wage, the poor suffer, because more jobs disappear, and the products produced by minimum-wage labor become more expensive.  The minimum wage is supposed to be a training wage, where people go to get their first step on the ladder leading upward.  Those who learn are promoted and get higher wages.  Those who don't...well...

6. Women [sic] workers today earn 78 percent of what their male counterparts make. We need pay equity in our country -- equal pay for equal work.

Will we start this policy in the White House?  In the offices of Democratic Senate and House staffers?  Will we hire committees of thousands of bureaucrats to go into every company and judge the work of every employee to decide what is "equal work"?  Because that is the only way such a policy could be put into effect.

7. Since 2001 we have lost more than 60,000 factories in this country, and more than 4.9 million decent-paying manufacturing jobs. We must end our disastrous trade policies (NAFTA, CAFTA, PNTR with China, etc.)

I think what Senator Sanders is saying here is that he supports tariffs.  It's funny, though, that he doesn't say tariffs.  Tariffs acquired a bad reputation after they helped lead to the Great Depression.

8. In today's highly competitive global economy, millions of Americans are unable to afford the higher education they need in order to get good-paying jobs. Quality education in America, from child care to higher education, must be affordable for all.

Is Senator Sanders going to require colleges and universities to make sure that all their professors are working 40-hour work weeks in the classroom?  Is he going to audit the costs of universities, find out how much the teaching component costs, and then require universities to lower tuition accordingly?  If so, I congratulate Senator Sanders for taking on the liberal college money-making establishment!

9. The function of banking is to facilitate the flow of capital into productive and job-creating activities. Financial institutions cannot be an island unto themselves, standing as huge profit centers outside of the real economy. Today, six huge Wall Street financial institutions have assets equivalent to 61 percent of our gross domestic product - over $9.8 trillion.... They are too powerful to be reformed. They must be broken up.

If banks are profit centers, how do they make profits?  The only way I can think of is by investing in the economy, real estate, industries, and businesses.  These activities create jobs.

10. The United States must join the rest of the industrialized world and recognize that health care is a right of all, and not a privilege. Despite the fact that more than 40 million Americans have no health insurance, we spend almost twice as much per capita on health care as any other nation. We need to establish a Medicare-for-all, single-payer system.

Health care is a right in many countries, such as Cuba and North Korea.  However, having a right to health care is not the same as receiving health care.  In a single-payer system, the incentive to innovate and create medicines is lost, and the demand for medical care will far outstrip supply.

11. Millions of seniors live in poverty and we have the highest rate of childhood poverty of any major country. We must strengthen the social safety net, not weaken it. Instead of cutting Social Security, Medicare, Medicaid and nutrition programs, we should be expanding these programs.

The more we spend, the better off these people will be – so he says.  But where will this money come from?  We currently have over 18 trillion dollars in debt, and that doesn't even count unfunded obligations to Social Security and other programs.  If we incur more debt, and our economy collapses, as is happening in countries like Greece and Portugal, the poor will suffer even more.  The best anti-poverty program is a free-market economy, which creates jobs.  A job is the best "safety net."

12. At a time of massive wealth and income inequality, we need a progressive tax system in this country which is based on ability to pay.

Now Senator Sanders is quoting Karl Marx!  "From each according to his ability, to each according to his need."  But we already have a progressive tax system in America.  If you combine federal and state taxes, in some states, like California and New York, "the rich" pay over 50% in taxes.  Does Senator Sanders think an even higher rate will inspire job-creators to work even harder?

Senator Sanders will be 75 years old in 2016.  His campaign ideas are only slightly older.



"What New Left History Gave Us The New Left historians’ withering critiques of liberalism have proven enormously influential:  But do they hold up in our more conservative age?" by Rich Yeselson, Democracy --- A Journal of Ideas, Winter 2015 ---

In this age of partisan and ideological polarization, something unusual happened in May: A writer from the right delivered an encomium to a writer from the left. The Washington Examiner’s Timothy Carney—a relentless libertarian who has never seen a government program he did not view as a squalid arrangement between statist liberals and corporate welfare seekers—paid tribute to Gabriel Kolko, a historian identified with the New Left of the 1960s who had passed away earlier that month.

Carney wrote that Americans typically believe a classic “fable” that courageous “trust busters” like Teddy Roosevelt used “the big stick of federal power to battle the greedy corporations.” Kolko’s work, especially his most significant book, The Triumph of Conservatism (1963), though little known today to anybody but specialists in early twentieth-century history, “dismantled this myth.” Carney quoted Kolko’s core argument: “The dominant fact of American political life” in the Progressive Era “was that big business led the struggle for the federal regulation of the economy.” And to both Carney and Kolko, this is pretty much everything you need to know.

Continued in a very long article that's difficult to summarize except to say that the New Left's intellectual heroes have changed the paradigm from a study of the history of power to a study of the history of society.


Bob Jensen's threads on history tutorials are at http://www.trinity.edu/rjensen/bookbob2.htm
Also see http://www.trinity.edu/rjensen/ElectronicLiterature.htm  

These GIFs Show How Much American Politics Has Changed Since The 1900s ---

"Rouhani's Façade Is Crumbling," by Pamela Engel and Michael B Kelley, Business Insider, December 24, 2014 ---

"EPA Just Saved Utilities a Lot of Money With Weak Coal Ash Regulation," by Rebecca Leber, New Republic, December 2014 ---

When power plants burn coal, they’re left with a coal ash residue containing arsenic, mercury, lead, and selenium. Until Friday, there were no federal standards for utilities to dispose of it. Utilities produce more than 100 million tons of the stuff annually, and what’s not recycled into concrete is spread across the country in 1,400 dry and wet ponds. The problem, environmentalists say, is that the coal ash is sometimes dumped into unlined and open-air pits and seeps into the ground, gets picked up by the wind, and occasionally spills into rivers and streams. 

For the first time, the Environmental Protection Agency has set a minimum baseline for coal-ash disposal that leaves enforcement to states. Ponds will now have to be inspected regularly and monitored for groundwater contamination; those that are leaky will be shut down. New ponds will now have to be lined and located away from sensitive areas like earthquake zones and wetlands. Otherwise, the EPA doesn't address what to do with inactive ponds. Vox's Brad Plumer points out that the EPA's regulations would not have applied to Duke Energy's Dan River site, where a closed-down pond leaked 39,000 tons of coal ash into the river in February.

“While EPA’s coal ash rule takes some long overdue steps to establish minimum national groundwater monitoring and cleanup standards, it relies too heavily on the industry to police itself," said Eric Schaeffer, executive director of the Environmental Integrity Project and former EPA director of civil enforcement.

Environmentalists hoped the EPA would label coal ash as a hazardous waste, requiring utilities to dispose of it in facilities that are lined and sealed and far away from bodies of water. They've been asking the EPA to set stricter requirements for yearsever since the coal ash spill in Kingston, Tennessee in 2008The EPA labeled it as a solid waste instead, meaning coal ash ponds are subject to requirements similar to those controlling household waste.

“It’s stunning that 21st century America would store millions of tons of industrial waste in such a primitive and outmoded way,” Senior Attorney Frank Holleman of the Southern Environmental Law Center said. “This was a lost opportunity on the part of the EPA and national government to protect rivers and lakes.” 

“While EPA’s coal ash rule takes some long overdue steps to establish minimum national groundwater monitoring and cleanup standards, it relies too heavily on the industry to police itself," said Eric Schaeffer, executive director of the Environmental Integrity Project and former EPA director of civil enforcement.

Any stricter regulations will be left to state legislaturesand environmental activists. But utilities also maintain close ties with state lawmakers, making this unlikely. Prior to Duke Energy's coal ash spill earlier this year, North Carolina Governor Pat McCrory held stock in the company, didn’t disclose this, and later sold it. Then North Carolina passed what was called the most "sweeping" coal ash legislation in the country that still left a few glaring loopholes for Duke Energy. North Carolina should have been a reminder of why a strong federal standard is so important.

Continued in article

"Into the great wide open Scientific studies of techniques for deliberately modifying the climate are getting ready to move out of the laboratory," The Economist, December 13, 2014 ---

IN 1990 John Latham, a cloud physicist, published a short article in Nature under the headline “Control of Global Warming?” It argued that if low-lying maritime clouds were made a bit brighter, the Earth could be cooled enough to make up for the increased warming caused by emissions of greenhouse gases. The brightening was to be achieved by wafting tiny sea-salt particles up into the clouds from below; by acting as “cloud condensation nuclei” (CCN) they would increase the number of water droplets in the clouds, and thus the amount of sunlight they reflect out into space. Latham calculated that a square kilometre of cloud might be kept bright with just 400 grams of spray an hour. And finding out if it was really that easy might be straightforwardly tested. “It seems feasible”, Dr Latham wrote, “to conduct an experiment in which CCN are introduced in a controlled manner into marine stratus.”

A quarter of a century on, such a test may soon be on the cards. For more than ten years Dr Latham’s idea was almost entirely ignored. Then it caught the attention of an enterprising engineer, Stephen Salter of the University of Edinburgh, who looked at ways it might be made practicable, and a small number of researchers started to pay attention. But the question of whether anyone could actually produce ship-borne sprayers that would reliably churn out particles a ten-thousandth of a millimetre in diameter at a rate of 1,000 trillion a second remained open.

Continued in article

"The Double-Dipping Legal Scam Bogus asbestos claims break into the open in federal court," The Wall Street Journal, December 25, 2014 ---

House Speaker John Boehner says asbestos legal reform is a priority in the New Year, and it can’t come soon enough. Based on the details emerging from federal bankruptcy court, asbestos litigation fraud has reached new heights.

Garlock Sealing Technologies is a maker of gaskets that since its bankruptcy in 2010 has become a symbol of the corrupt practices of the plaintiffs bar. Lawyers demanded $1.3 billion in payouts from Garlock for mesothelioma patients until federal Judge George Hodges reviewed evidence showing that many of the claims were a sham. The judge in January slashed the company’s liability to $125 million and slammed the trial bar for “misrepresenting” the facts.

Then in October he moved to unseal that evidence, and now we’re getting a glimpse of what has become a widespread tort-bar con. Court documents show the ugly specifics of “double-dipping”—in which lawyers sue a company and claim its products caused their clients’ disease, even as they file claims with asbestos trusts blaming other products for the harm. This lets them get double or multiple payouts for a single illness, with a huge cut for the lawyers each time.

Garlock unveiled how this worked in at least 15 different cases that it had previously settled or lost after Judge Hodges allowed for belated discovery. In a case called Torres, the plaintiff claimed the only asbestos he handled was in Garlock gaskets, even as he told multiple trusts that he regularly handled raw asbestos.

In a case called White, the plaintiff told Garlock he’d never worked at the Norfolk naval shipyard, that he never went aboard naval ships, and that he’d never had exposure to insulation in the Coast Guard. The plaintiff meanwhile told various asbestos trusts that he had worked at the Norfolk shipyard, that he’d been exposed to asbestos aboard naval ships, and that he’d been exposed to insulation while in the Coast Guard. Each of the 15 cases shows similar contradictions.

The extent of the deception won’t surprise anyone who’s done business with plaintiffs firms. In the White case, the plaintiff told Garlock that he’d been exposed to only two asbestos products. He told others (including trusts or courts) he’d been exposed to 22 additional products.

Of the 15 cases in question, the plaintiffs disclosed to Garlock a cumulative total of 32 asbestos products to which they’d had exposure. In other forums, those same 15 plaintiffs claimed to have been exposed to 284 different products—many containing the most dangerous forms of asbestos.

Often these trust claims were filed with sworn statements in which plaintiffs attested to having “breathed” specific products—though they hid this from Garlock. The company paid nearly $18 million to these 15 plaintiffs based on the misrepresentations.

Garlock noted in court that these 15 cases were handled by the same five national firms: Shein Law Center; Waters, Kraus & Paul; Belluck & Fox; Williams Kherkher; and Simon Greenstone Panatier Bartlett. The gasket maker also pointed out that four of the firms (all but Shein Law Center) employ lawyers who’d once worked for Baron & Budd, a firm famous for a 1997 memo that instructed clients in the art of withholding pertinent information from defense attorneys and courts.

The law firms have been able to get away with this because they’ve pressured dozens of outside asbestos trusts not to share claims data with each other or with courts. Most judges deny requests for discovery, and Garlock was able to uncover the double-dipping because Judge Hodges was a rare exception. No doubt more extensive discovery would turn up more double-dipping, and Garlock has filed federal racketeering suits against four of the firms toward that end.

Another response is moving through Congress: The Furthering Asbestos Claim Transparency Act would require asbestos trusts to disclose basic details about the claims they receive. This would allow companies and the courts to produce more honest assessments of asbestos liabilities. It would also allow the trusts to exercise some due diligence, preserving more assets to compensate asbestos victims who have legitimate claims.

The FACT Act had no chance in Harry Reid s Senate, but a Republican Congress might be different. Asbestos fraud is a blight on the courts and basic legal fairness, and Congress ought to put a bill to stop it on President Obama ’s desk.


Bob Jensen's Fraud Updates ---

"Harvesting Crop Insurance Profits A simple fix could save taxpayers $40 billion without damaging the U.S. food supply," by Bruce Babcock And Vincent H. Smith, The Wall Street Journal, December 23, 2014 ---

Over the past three years, proposals from the Obama administration and the House Budget Committee to reform the $80 billion-a-year federal crop-insurance program have been defeated by opposition centered in the House and Senate agricultural committees. With the new Congress, Republicans and Democrats who stand for fiscal responsibility have an opportunity to finally implement reforms.

Farmers have a sweet deal with crop insurance: Taxpayers currently cover all the administrative costs associated with marketing and managing the program and fund more than 60% of the premiums to cover anticipated crop-insurance payouts, according to annual data from the Agriculture Department’s Risk Management Agency. Farmers pay only about one-third of the real costs of their crop-insurance coverage. From 2003 to 2012, crop-insurance subsidies cost U.S. taxpayers $55.4 billion—66% of the cost of the program.

Proponents of federal crop insurance argue that roughly $6 billion a year in subsidized premiums is a small price to pay to guarantee the financial stability of the nation’s food supply. That argument is specious, not least because 85%-90% of all crop-insurance subsidies are channeled to the largest 10%-15% of farm operations, few of which would face any risk of going out of business because of short-term fluctuations in their revenues.

What most Americans don’t know is that a large portion of the program’s cost is caused by the “harvest price option.” By paying a higher premium—again, largely subsidized by taxpayers—farmers can indemnify their lost crop production at the higher of the market price just before planting or at the time of harvest. Almost all farmers choose the harvest price option because taxpayers pay such a large portion of the extra premium and it creates an opportunity for windfall profits.

The severe drought of 2012, for instance, caused average U.S. corn yields to drop by 20%. Market prices responded with an increase of 40% resulting, on average, in farmers receiving a 20% increase in revenues from corn sales. Under a standard subsidized-revenue insurance contract, those farmers would have been paid about $5 billion to cover the effects of the 2012 drought. But because nearly all corn farmers used the harvest price option to insure their crops, they received almost $12 billion in insurance indemnities—even though most had already benefitted from corn prices that were much higher than expected.

The harvest-price option resulted in the insured production losses being valued at the “drought-affected” higher prices, instead of the prices listed in the original insurance contract. Thus farmers enjoyed the benefits of higher prices on both what they harvested and on the production lost to drought. For most Corn Belt farmers the benefit of inflated insurance indemnities and high market prices made for a merry, and profitable, 2012 Christmas.

Federal crop insurance has provided yield coverage since 1980, but it wasn’t until premium subsidies were dramatically increased in 2000 and extended to revenue insurance that costs began to escalate. According to the Congressional Budget Office, the estimated cost to taxpayers of the harvest price option subsidy is $4 billion a year, or about 45% of the total cost of the crop-insurance program over the next 10 years.

Elimination of harvest-price-option subsidies would not require drastic changes. Farmers wishing to pay the full cost for the harvest-price option would still be able to do so, but most farmers would not sign up because of the expense. Revenue declines caused by unexpected drops in prices and yields would be compensated, but farmers would not receive subsidized windfall gains when crop-market prices unexpectedly increase, as they now do under the harvest price option.

Bipartisan congressional support should go to programs that spend federal dollars to serve the public’s interest and cannot be provided by the private sector. Subsidies that induce farmers to buy gold-plated harvest-price-option crop insurance fail on both counts. Eliminating these costly subsidies would save taxpayers $40 billion over 10 years while posing no threat to the nation’s food supply. Come January, the new Congress should do just that.

Mr. Babcock is an economics professor at Iowa State University, where he directs the Biobased Industry Center. Mr. Smith, an American Enterprise Institute visiting scholar, is an economics professor at Montana State University.


Fewer Americans Working Today Than Before The Recession Began ---

"An Autopsy for the Keynesians," by John H. Cochrane (University of Chicago), The Wall Street Journal, December 21, 2014 ---

This year the tide changed in the economy. Growth seems finally to be returning. The tide also changed in economic ideas. The brief resurgence of traditional Keynesian ideas is washing away from the world of economic policy.

No government is remotely likely to spend trillions of dollars or euros in the name of “stimulus,” financed by blowout borrowing. The euro is intact: Even the Greeks and Italians, after six years of advice that their problems can be solved with one more devaluation and inflation, are sticking with the euro and addressing—however slowly—structural “supply” problems instead.

U.K. Chancellor of the Exchequer George Osborne wrote in these pages Dec. 14 that Keynesians wanting more spending and more borrowing “were wrong in the recovery, and they are wrong now.” The land of John Maynard Keynes and Adam Smith is going with Smith.

Why? In part, because even in economics, you can’t be wrong too many times in a row.

Keynesians told us that once interest rates got stuck at or near zero, economies would fall into a deflationary spiral. Deflation would lower demand, causing more deflation, and so on.

It never happened. Zero interest rates and low inflation turn out to be quite a stable state, even in Japan. Yes, Japan is growing more slowly than one might wish, but with 3.5% unemployment and no deflationary spiral, it’s hard to blame slow growth on lack of “demand.”

Our first big stimulus fell flat, leaving Keynesians to argue that the recession would have been worse otherwise. George Washington’s doctors probably argued that if they hadn’t bled him, he would have died faster.

With the 2013 sequester, Keynesians warned that reduced spending and the end of 99-week unemployment benefits would drive the economy back to recession. Instead, unemployment came down faster than expected, and growth returned, albeit modestly. The story is similar in the U.K.

These are only the latest failures. Keynesians forecast depression with the end of World War II spending. The U.S. got a boom. The Phillips curve failed to understand inflation in the 1970s and its quick end in the 1980s, and disappeared in our recession as unemployment soared with steady inflation.

Still, facts and experience are seldom decisive in economics. Maybe Washington’s doctors are right. There are always confounding influences. Logic matters too. And illogic hurts. Keynesian ideas are also ebbing from policy as sensible people understand how much topsy-turvy magical thinking they require.

Hurricanes are good, rising oil prices are good, and ATMs are bad, we were advised: Destroying capital, lower productivity and costly oil will raise inflation and occasion government spending, which will stimulate output. Though Japan’s tsunami and oil shock gave it neither inflation nor stimulus, worriers are warning that the current oil price decline, a boon in the past, will kick off the dreaded deflationary spiral this time.

I suspect policy makers heard this, and said to themselves “That’s how you think the world works? Really?” And stopped listening to such policy advice.

Keynesians tell us not to worry about huge debts, or to default or inflate them away (but please, call it “restructuring” or “repairing balance sheets”). Even the Obama administration has ignored that advice, promising long-run solutions to the debt problem from day one. Europeans have centuries of memories of what happens to governments that don’t pay debts, or who need to borrow for a new emergency but have stiffed their creditors once too often. More debt? Nein danke!

In Keynesian models, government spending stimulates even if totally wasted. Pay people to dig ditches and fill them up again. By Keynesian logic, fraud is good; thieves have notoriously high marginal propensities to consume. That’s a hard sell, so stimulus is routinely dressed in “infrastructure” clothes. Clever. How can anyone who hit a pothole complain about infrastructure spending?

But people feel they’ve been had when they discover that the economics is about wasted spending, and infrastructure was a veneer to get the bill passed. And they smell a rat when they hear economic arguments shaded for partisan politics.

Stimulus advocates: Can you bring yourselves to say that the Keystone XL pipeline, LNG export terminals, nuclear power plants and dams are infrastructure? Can you bring yourselves to mention that the Environmental Protection Agency makes it nearly impossible to build anything in the U.S.? How can you assure us that infrastructure does not mean “crony boondoggle,” or high-speed trains to nowhere?

Now you like roads and bridges. Where were you during decades of opposition to every new road on grounds that they only encouraged suburban “sprawl”? If you repeat in your textbooks how defense spending saved the economy in World War II, why do you support defense cutbacks today? Why is “infrastructure” spending abstract or anecdotal, not a plan for actual, valuable, concrete projects that someone might object to?

Keynesians tell us that “sticky wages” are the big underlying economic problem. But why do they just repeat this story to justify inflation and stimulus? Why do they not advocate policies to undo minimum wages, labor laws, occupational licenses and other regulations that make wages stickier?

Inequality was fashionable this year. But no government in the foreseeable future is going to enact punitive wealth taxes. Europe’s first stab at “austerity” tried big taxes on the wealthy, meaning on those likely to invest, start businesses or hire people. Burned once, Europe is moving in the opposite direction. Magical thinking—that, contrary to centuries of experience, massive taxation and government control of incomes will lead to growth, prosperity and social peace—is moving back to the salons.

Yes, there is plenty wrong and plenty to worry about. Growth is too slow, and not enough people are working. Even supporters acknowledge that Dodd-Frank and ObamaCare are a mess. Too many people on the bottom are stuck in terrible education, jobless poverty, and a dysfunctional criminal justice system. But the policy world has abandoned the notion that we can solve our problems with blowout borrowing, wasted spending, inflation, default and high taxes. The policy world is facing the tough tradeoffs that centuries of experience have taught us, not wishing them away.

Mr. Cochrane is a professor of finance at the University of Chicago Booth School of Business, a senior fellow at Stanford University’s Hoover Institution and an adjunct scholar at the Cato Institute.



By adding an average of 803 new residents each day between July 1, 2013 and July 1, 2014, Florida passed New York to become the nation’s third most populous state . . . Six states lost population between July 1, 2013, and July 1, 2014: Illinois (9,972 or -0.08 percent), West Virginia (3,269 or -0.18 percent), Connecticut (2,664 or -0.07 percent), New Mexico (1,323 or -0.06 percent, Alaska (527 or -0.07 percent) and Vermont (293 or -0.05 percent).
Jensen Comment
What adds pain to msery is the loss of some professionals a state really, really wants to keep. Exhibit A is Vermont. Vermont's population loss is not enormous in terms of numbers, but the losses of high income professionals, especially physicians, hurts more than the total loss numbers reflect. I suspect this is also happening in the other high tax states like Illinois and Connecticut. California is a high-tax enigma. Hollywood hangs on to its professionals due to the enormous tax relief Governor Brown has given to the movie industry and wealthy taxpayers who donated heavily to his campaigns. Proposition 13 that prevents property tax increases to long-time home owners in California also encourages retirees to not move out of state after retirement ---
The Florida Express train would be derailed if more northern states like New York, New Jersey, Massachusetts, and Connecticut adopted Proposition 13.


Rev. Robert Malthus and the Malthusian Coming Global Over Population Catastrophe. ---

Global Distribution of Population --- http://en.wikipedia.org/wiki/Population

"Fixing the Crowded Earth," by Zoë Schlanger and Elijah Wolfson, Newsweek, December 18, 2014 ---

. . .

Most of the population growth is occurring in African nations. The continent hosts 15 percent of the world’s people; by 2050, the U.N. projects, that number will be closer to 25 percent. This is particularly problematic, because much of the continent is also where people are less able to adapt to the effects of overpopulation, says John Wilmoth, director of the U.N. Population Division. If the world can’t meet Africa’s need for family planning, the result will be more and more poor, and poorly educated, people, he says. Kenya, Ethiopia and Malawi, for example, are three nations where large numbers of women can’t get the contraception they need and are at high risk for climate change effects like flooding and drought.

As climate change turns more coasts into flood zones and more farmland to desert, the damage will be inextricably linked to population growth—the more of us there are, the more water, food and energy we’ll need to survive. In the past three years, Australia, Canada, China, Russia and the U.S. have all suffered devastating floods and droughts that severely impaired food harvests. Earlier this year, the Food and Agriculture Organization said that to feed a population of 9 billion in 2050, the world must increase its food production by an average of 60 percent or else risk serious food shortages that could bring social unrest and civil wars. By comparison, wheat and rice production have grown at a rate of less than 1 percent for the past 20 years.

Mark Montgomery, a scholar at the Population Council, studies how the urban population boom will cause dramatic freshwater shortages. By 2050, the U.N. projects that 70 percent of the world’s population will live in cities. Already, 150 million people in cities around the world suffer from freshwater shortages. In a recent paper, Montgomery and his colleagues found the number of urbanites with inadequate water will rise by more than 1 billion by 2050, and cities in certain regions “will struggle to find enough water for the needs of their residents.”

Continued in article

A Lot Like Big Cities in the USA
"In Haiti, Government Is Where You Go to Get Rich:  The political class fights over who next will loot the economy. Growth is an afterthought," by Mary Anastasia O’Grady, The Wall Street Journal, December 14, 2014 ---

Early on a Sunday morning, women carrying bundles, baskets and buckets on their heads plod up the steep, winding roads of Pétionville, the most desirable suburb of this capital city. It’s a grueling start to the Lord’s Day, but those living or working in this neighborhood are among the lucky ones. They have escaped the dire poverty that defines life in most of the rest of the country.

I’m in Haiti to catch up on events. On Monday, in the downtown part of the city, I’m besieged by beggars on my way to the Dec. 8 feast-day Mass at the Immaculate Conception church inside the gates of the General Hospital. They’re mostly mothers, shepherding half-naked children and holding infants.

I am almost through the crowd when I feel a small hand tugging on my dress. A curly-haired boy no more than 4 years old, wearing a tattered polo shirt but no pants, peers up at me holding out an open palm.

Almost 25 years after the celebrated launch of a new “democracy,” following the fall of dictator “Baby Doc” Duvalier, Haitian per capita gross domestic product is just over $800 a year. The magnitude 7.0 earthquake in 2010 destroyed much of this city. Very little has been rebuilt. The sprawling slums, many of which long predate the quake, look more like garbage dumps than residential zones. Even for those who avoid the sheer desperation of the little boy I met, everyday life here is, in the words of Thomas Hobbes, mostly “nasty, brutish and short.” For this we can thank the politicians.

Opposition parties and their constituents have been marching in the streets here in recent weeks, demanding that President Michel Martelly resign. They accuse him of violating the constitution in a power grab and packing the electoral council. Not all are devoted to peaceful change. Some have been burning tires and trying to incite violence. Earlier this month opponents of the president carried placards bearing the face of Russia’s Vladimir Putin .

On Saturday night, Prime Minister (and presidential ally) Laurent Lamothe finally stepped down, paving the way for a new government and to organize legislative and local elections, the first since 2011. According to the president, Mr. Lamothe’s resignation is “a sacrifice” toward that end. Yet more compromise is needed to choose a new prime minister, and it is not clear whether either side, and particularly the extreme left-wing populists of former president Jean Bertrand Aristide’s Lavalas Party, is in the mood. Haitian politics is winner-take-all.

Haitians understand that government is where you go to get rich. Messrs. Martelly and Lamothe may have used their offices to favor friends and themselves, as many Haitians believe. But at a meeting at the Parliament with opposition senators, the loudest objection I heard was not that Mr. Martelly’s policies have failed to generate sufficient growth, but that he does not share government resources with rival constituencies.

Haitian poverty cannot be fixed with charity. It needs private-sector growth, which means it needs economic freedom and legal certainty. But Haiti is a failed state, devoid of institutions, transparency and the rule of law. Legal businesses face insurmountable odds, unless one has friends in high places. Haiti’s political class either hasn’t figured this out or doesn’t care.

Things weren’t always so grim, as a visit to the northern coastal city of Cap Haitien, far from the earthquake, suggests.

On the car ride from the airport, a bridge crosses a dirty, littered river. A resident now in his early 60s tells me that it was clean when he was a child. In town, old French-colonial-style houses with second-story balconies and railings line the narrow streets. Locals say that many of the owners of these architectural gems fled the country during the François Duvalier dictatorship and never returned. The buildings are in disrepair as are the streets and sidewalks, but the ghosts of their grandeur and charm remain. There can be little doubt that the brain-drain, which continues today, is an even greater tragedy.

“Water is precious,” the sign in my hotel bathroom said, imploring bathers to limit use. There was no shower head, only a curved metal spout sticking out of the wall. The difference between the hot and the cold was that the cold was freezing whereas the hot was just cold. The inn keeper scrambled about, trying to please guests. In my head I tallied up the challenges facing entrepreneurs in a country with almost no public services and a government hostile to profits. It’s a marvel that hotels even exist.

Bring up politics with Haitians and most will say “a pox on all their houses.” Only those who get by on the state payroll—or who have a chance to, should someone new come to power—believe that elections matter. For everyone else, government is an unavoidable nuisance at best and more often a predator.

Bob Jensen's Fraud Updates ---

Desalinization --- http://en.wikipedia.org/wiki/Desalination

California's Carlsbad Plant Turns to the Pacific Ocean for 54 million gallons of desalinized water
"Desalination out of Desperation," by David Talbot, MIT's Technology Review, December 16, 2014 ---


. . .

The process is called reverse osmosis (RO), and it’s the mainstay of large-scale desalination facilities around the world. As water is forced through the membrane, the polymer allows the water molecules to pass while blocking the salts and other inorganic impurities. Global desalination output has tripled since 2000: 16,000 plants are up and running around the world, and the pace of construction is expected to increase while the technology continues to improve. Carlsbad, for example, has been outfitted with state-of-the art commercial membranes and advanced pressure-recovery systems. But the plants remain costly to build and operate.

Seawater desalination, in fact, is one of the most expensive sources of fresh water. The water sells—depending on site conditions—for between $1,000 and $2,500 per acre-foot (the amount used by two five-person U.S. households per year). Carlsbad’s product will sell for around $2,000, which is 80 percent more than the county pays for treated water from outside the area. One reason is the huge amount of energy required to push water through the membranes. And Carlsbad, like most desalination plants, is being built with extra pumps, treatment capacity, and membrane tubes, the better to guarantee uptime. “Because it is a critical asset for the region, there is a tremendous amount of redundancy to give high reliability,” says Jonathan Loveland, vice president at Poseidon Water, the owner of the plant. “If any piece fails, something else will pick up the slack.”

Already, some 700 million people worldwide suffer from water scarcity, but that number is expected to swell to 1.8 billion in just 10 years. Some countries, like Israel, already rely heavily on desalination; more will follow suit. In many places, “we are already at the limit of renewable water resources, and yet we continue to grow,” says John Lienhard, a mechanical engineer and director of the Center for Clean Water and Clean Energy at MIT. “On top of that we have global warming, with hotter and drier conditions in many areas, which will potentially further reduce the amount of renewable water available.” While conservation and recycling will help, you can’t recycle what you don’t have. “As coastal cities grow,” he says, “the value of seawater desalination is going to increase rapidly, and it’s likely we will see widespread adoption.”

Against this grim backdrop, there is some good news. In short, desalination is ripe for technological improvement. A combination of sensor-driven optimization and automation, plus new types of membranes, could eventually allow for desalination plants that are half the size and use commensurately less energy. Among other benefits, small, mobile desalination units could be used in agricultural regions hundreds of miles away from the ocean, where demand for water is great and growing.

Jensen Comment
I read that a each pound of guacamole made from pulverized avocados takes 74 gallons of fresh water to grow not far from the Carlsbad plant in Southern California. Ironically salt is taken out of the sea water to grow the avocados and then put back into the guacamole for flavoring.

"U Michigan Is A Bastion Of Free Speech, But Only For Liberals," by Steve Berman, December 18, 2014 ---

The University of Michigan is a bastion of free speech, according to its own public affairs department.

But only if you’re a liberal.  One professor is allowed to publish a hate piece about Republicans, but a conservative student is fired for his own article.

UMich professor Susan Douglas, chair-liberal of the communications departmentwrote a hit piece entitled “It’s okay to hate Republicans”.

“I hate Republicans,” she wrote to begin her column. “I can’t stand the thought of having to spend the next two years watching Mitch McConnell, John Boehner, Ted Cruz, Darrell Issa or any of the legions of other blowhards denying climate change, thwarting immigration reform or championing fetal ‘personhood.'”

. . .

I suppose the opening sentence of her piece isn’t representative of anything, because Ms. Douglas is a communications professor who has no idea of what her point is.  It doesn’t even bother me that she hates Republicans, although it bothers some Republicans, including Bobby Schostak, chairman of the Michigan Republican Party.

Bobby Schostak, the chairman of the Michigan Republican Party, called the piece “ugly and full of hatred” and called for her resignation.

I’m still waiting for her resignation, or for the university to fire her.  I won’t hold my breath.  But they were pretty quick to fire another free speech writer.

I wrote about Omar Mahmoud a few days ago.  Omar worked for The Michigan Daily, until he published a hilarious article titled Do The Left Thingon a conservative website called Michigan Review, in which he skewers the “TRIGGER WARNING” liberal student culture at UMich.  For this, Omar wasn’t defended by the public affairs department.  He was fired from the student paper.

Not only was he fired, but he has also suffered personal attacks.

On Friday night, according to Mahmood, people attacked his dorm room door, egging it and leaving copies of his satirical article with notes on the backs including “Shut the f— up!” and “You scum embarrass us” and “DO YOU EVEN GO HERE?! LEAVE!!” along with various others, including an image of a creature with horns and another one of him with his eyes crossed out.

Apparently, at the University of Michigan, free speech is only a “core value” if you are are somewhere left of the Weather Underground in your political views.

U-M releases statement after professor pens 'I hate Republicans' article ---

The IRS Scandal, Day 594 --- http://taxprof.typepad.com/taxprof_blog/2014/12/the-irs-10.html

U.S. House of Representatives Committee on Oversight and Government Reform, The Internal Revenue Service’s Targeting of Conservative Tax- Exempt Applicants: Report of Findings for the 113th Congress (Dec. 23, 2014) (226 Page Merry Christmas):

The Committee’s investigation has resulted in the following findings to date about the Internal Revenue Service’s inappropriate treatment of tax-exempt applicants:

Findings continued in article

Innovations in the War on Tax Evasion
by Tracey A. Kay
2014 BYU L. Rev. 363:

Offshore tax evasion is a global problem that requires a global solution. Nevertheless, the United States unilaterally responded to the offshore tax evasion problem by enacting the Foreign Account Tax Compliance Act. FATCA requires foreign banks to report information about financial accounts held by U.S. taxpayers directly to the Internal Revenue Service and imposes a thirty percent withholding tax on certain U.S. payments to any bank that will not cooperate. Yet, U.S. banks were not required to report any information on nonresident account holders (except for Canadians) to anyone. FATCA garnered worldwide attention. The European Union expressed its concerns to the U.S. Treasury about the compliance burden on the financial industry and the conflict with EU Member States’ laws on privacy and data protection. Treasury is resolving these issues by negotiating bilateral agreements known as Intergovernmental Agreements (IGAs) that will require reciprocity on the part of the United States in the exchange of information. These IGAs are furthering the movement toward global transparency as most FATCA partner jurisdictions intend to require reporting on all nonresident accounts rather than just U.S. accounts. This could lead to the development of a multilateral platform for the exchange of information that is critical to combating offshore tax evasion. This Article urges the United States to adopt the regulations and legislation that are necessary before the United States can provide its FATCA partners with the same information that they have been asked to give the U.S. government. The United States should play a leadership role in furthering global transparency and take the steps required to no longer function as a tax haven for tax evaders from other countries. The IGA with Mexico that entered into force on January 1, 2013, is an appropriate vehicle for the United States to demonstrate this renewed commitment to the exchange of information.

Continued in article


The Most Corrupt and the least Corrupt Nations of the World ---

What is probably the main reason the USA is not among the Top 35 nations in terms of low corruption?

The interaction of the public and private sectors in fraudulent procurements of goods and services and financing. For example, there are billions of examples of kickbacks and bribery from the upper reaches of the Pentagon procurement down procurements in small counties and towns and school districts throughout the USA where hundreds and hundreds of millions of dollars change hands under the table. Among the classic piñatas for municipality frauds are bond sales.

Exhibit A
"SEC Tightens Policing of Municipal Debt Market: Agency Seeks to Ban Some Local Officials for Their Involvement in Alleged Fraud," by Andrew Ackerman, The Wall Street Journal, December 19, 2014 ---

WASHINGTON—U.S. securities regulators, ratcheting up their policing of the $3.7 trillion market for state and local debt, are seeking to ban local officials from the market for their involvement in alleged fraud.

The Securities and Exchange Commission this year has sought to bar three officials in suburban Chicago and Detroit from future municipal-bond transactions, citing their roles in misleading investors in prior bond sales. A federal judge has issued a preliminary agreement to one of the requests.

Attempts to bar individual municipal officials are the latest sign of the SEC’s efforts to crack down on what it views as stale or misleading investor disclosures for municipal-bond investors. The move is significant, securities attorneys said, in part because the SEC hasn’t previously sought such prohibitions.

Unlike brokers and advisers whom regulators routinely bar from their respective industries for wrongdoing, the agency doesn’t have authority to directly regulate municipal officials and instead polices much of the market using broad antifraud authority.

“It’s an indication of how zealous they are in their enforcement actions in the state and local government market,” said Paul Maco, a partner at Bracewell & Giuliani LLP, who previously served as the SEC’s municipal-bond chief.

In seeking to bar individual municipal officials, the SEC has relied on a catchall provision of the securities laws that allows them to seek “any equitable relief that may be appropriate or necessary for the benefit of investors.” SEC officials say censuring individual municipal officials is a better alternative than imposing fines on local governments, because any fines would be borne broadly by taxpayers.

“In the municipal securities area, where the SEC has very limited enforcement authority, it is critically important to pursue cases that will deter future violations without harming innocent taxpayers,” said Daniel Gallagher, a Republican SEC commissioner. “In this context, actions against culpable individuals provide maximum deterrence.”

Last month, the SEC sought to bar the former mayor and former city administrator of Allen Park, Mich., as part of a suit against the city, for failing to inform investors of the city’s deteriorating financial condition. The city had sold $31 million of bonds to finance a now-failed movie studio.

Gary Burtka, the former mayor, and Eric Waidelich, the former city administrator, agreed to settle the SEC charges and consented to being barred from future municipal-bond transactions. A federal judge has yet to sign off on the settlements. Attorneys for Mr. Burtka didn’t respond to requests for comment. An attorney for Mr. Waidelich declined to comment.

Separately, the SEC earlier this year sued Harvey, Ill., and its former comptroller, Joseph Letke, having found the city diverted about $1.7 million of bond proceeds originally to be used for the construction of a Holiday Inn hotel—for “improper, undisclosed uses.” The city agreed to settle the charges but Mr. Letke, whom the SEC alleged received about $269,000 in undisclosed payments from the bond proceeds, has refused to settle.

Continued in article

Exhibit B
"Jury Convicts Former Detroit City Treasurer, Pension Officials of Conspiring to Defraud Pensioners Through Bribery"
U.S. Attorney's Office
December 8, 2014

Bob Jensen's Fraud Updates ---

Cold War Paranoia
Ayn Rand Helped the FBI Identify It’s A Wonderful Life as Communist Propaganda


"Vermont bails on single-payer health care," by Sarah Wheaton, Politico, December 17, 2014 ---

. . .

Gov. Shumlin had missed two earlier financing deadlines but finally released his proposal. But he immediately cast it as “detrimental to Vermonters.” The model called for businesses to take on a double-digit payroll tax, while individuals would face up to a 9.5 percent premium assessment. Big businesses, in particular, didn’t want to pay for Shumlin’s plan while maintaining their own employee health plans.

“These are simply not tax rates that I can responsibly support or urge the Legislature to pass,” the governor said. “In my judgment, the potential economic disruption and risks would be too great to small businesses, working families and the state’s economy.”

And that was for a plan that would not be truly single payer. Large companies with self-insured plans regulated by ERISA would have been exempt. And Medicare also would have operated separately, unless the state got a waiver, which was a long shot.

Shumlin added that federal funds available for the transition were $150 million less than expected.

He also has a lot less political capital than before November. Shumlin, chairman of the Democratic Governors Association, still hasn’t even officially won his own reelection bid: The Legislature will settle the outcome of the November race in January because Shumlin failed to win more than 50 percent of the vote. He’s leading his Republican challenger by just a few thousand ballots.

And the substance of the plan isn’t its only politically problematic aspect. Gruber, now infamous for his blunt assessments of the Affordable Care Act and his remarks about “stupid” voters, was until recently a state consultant. Days after the election, video emerged of him dismissing criticism of Vermont’s plan in 2011 by asking, “Was this written by my adolescent children, by any chance?” State officials said they would cut off his contract.

Advocates of a single-payer plan said Shumlin should not be able to cast aside Act 48, the 2011 law that called for the creation of Green Mountain Care, without repealing it. A group planned to hold a rally in front of the statehouse on Thursday to protest his decision.

“The governor’s misguided decision was a completely unnecessary result of a failed policy calculation that he pursued without Democratic input,” the group Healthcare Is a Human Right Campaign said in a statement.

Jensen Comment
This is sad, because I was hoping that Vermont would lead the way for the other 49 states to adopt single-payer plans ---

One of Vermont's many problems with health care is that physicians are leaving the state due, in large measure, to Vermont's huge taxation of higher income professionals. This has already forced Vermont to use the medical doctors, clinics, and hospitals in bordering New Hampshire where there are no taxes on earned incomes and sales.

Vermont is also having a problem with loss of students in schools. Thus far efforts to close nearly-empty schools have failed. Purportedly there are some Vermont school districts that have more members on the school boards than children in the schools.

"Ecuador Family Wins Favors After Donations to Democrats," by Francis Roblesdec, The New York Times, December 16, 2014 ---

The Obama administration overturned a ban preventing a wealthy, politically connected Ecuadorean woman from entering the United States after her family gave tens of thousands of dollars to Democratic campaigns, according to finance records and government officials.

The woman, Estefanía Isaías, had been barred from coming to the United States after being caught fraudulently obtaining visas for her maids. But the ban was lifted at the request of the State Department under former Secretary of State Hillary Rodham Clinton so that Ms. Isaías could work for an Obama fund-raiser with close ties to the administration.

It was one of several favorable decisions the Obama administration made in recent years involving the Isaías family, which the government of Ecuador accuses of buying protection from Washington and living comfortably in Miami off the profits of a looted bank in Ecuador.

The family, which has been investigated by federal law enforcement agencies on suspicion of money laundering and immigration fraud, has made hundreds of thousands of dollars in contributions to American political campaigns in recent years. During that time, it has repeatedly received favorable treatment from the highest levels of the American government, including from New Jersey’s senior senator and the State Department.

The Obama administration has allowed the family’s patriarchs, Roberto and William Isaías, to remain in the United States, refusing to extradite them to Ecuador. The two brothers were sentenced in absentia in 2012 to eight years in prison, accused of running their bank into the ground and then presenting false balance sheets to profit from bailout funds. In a highly politicized case, Ecuador says the fraud cost the country $400 million.

The family’s affairs have rankled Ecuador and strained relations with the United States at a time when the two nations are also at odds over another international fugitive: Julian Assange, the WikiLeaks founder, who has taken refuge in the Ecuadorean Embassy in London.

But while scrutiny has typically focused on whether the family’s generous campaign donations have helped its patriarchs avoid extradition, the unorthodox help given to Ms. Isaías, the daughter of Roberto, has received little attention.

In the spring of 2011, Ms. Isaías, a television executive, was in a difficult situation.

Her father and uncle were Ecuadorean fugitives living in Miami, but she was barred from entering the United States after she brought maids into the country under false visa pretenses and left them at her parents’ Miami home while she traveled.

“Alien smuggling” is what American consular officials in Ecuador called it.

American diplomats began enforcing the ban against Ms. Isaías, blocking her from coming to Miami for a job with a communications strategist who had raised up to $500,000 for President Obama.

What happened next illustrates the kind of access and influence available to people with vast amounts of money.For more than a year, Senator Robert Menendez, Democrat of New Jersey, and his staff engaged in a relentless effort to help Ms. Isaías, urging senior government officials, including Mrs. Clinton’s chief of staff, Cheryl Mills, to waive the ban. The senator’s assistance came even though Ms. Isaías’s family, a major donor to him and other American politicians, does not live in his state.

The Obama administration then reversed its decision and gave Ms. Isaías the waiver she needed to come to the United States — just as tens of thousands of dollars in donations from the family poured into Mr. Obama’s campaign coffers.

Continued in article


"The Man Who Busted Gruber Speaks Out, Reveals $250 Billion Obamacare Tax,"  Grab Katie Pavlich, Townhall, December 16, 2014 ---

The man who dug up the now infamous videos of MIT professor and Obamacare architect Jonathan Gruber talking about a lack of transparency and "stupid Americans" is speaking out about a hidden agenda in the legislation that hasn't been fully exposed yet.

During an interview with Project Veritas' James O'Keefe, little known Philadelphia financial advisor Rich Weinstein makes three main points: 

-Obamacare is a $250 billion hidden tax grab per year on individual Americans and their families

-Obamacare advocates make it seem like costs are shifted onto insurance companies, when really they're shifted onto healthcare consumers. Further, Weinstein points out that so-called "cadillac tax" isn't reserved for expensive plans, but instead eventually hits all plans. The "cadillac tax" in Obamacare is not applied directly to the consumer but indirectly through the insurance companies. This way, the consumer blames insurance companies for increased costs instead of the government for a massive tax grab hidden in Obamacare. 

-Obamacare isn't a "mess" or a "disaster" of a bill, but rather a brilliant, well structured piece of legislation with very deliberate language and components.

Be sure to watch the whole thing, it's well worth your time.

"I just wanted the American people to know what's going on," Weinsten said. 

Continued in article

Jensen Comment
Some journalists like John Cassady for The New Yorker forewarned all of this before the ACA was even passed. Nobody listened then.

"ObamaCare by the Numbers: Part 2," by John Cassidy, The New Yorker, March 2010 ---

. . .

Does Santa Claus live after all? According to the C.B.O., between now and 2019 the net cost of insuring new enrollees in Medicaid and private insurance plans will be $788 billion, but other provisions in the legislation will generate revenues and cost savings of $933 billion. Subtract the first figure from the second and—voila!—you get $143 billion in deficit reduction.

The first objection to these figures is that the great bulk of the cost savings—more than $450 billion—comes from cuts in Medicare payments to doctors and other health-care providers. If you are vaguely familiar with Washington politics and the letters A.A.R.P. you might suspect that at least some of these cuts will fail to materialize. Unlike some hardened skeptics, I don’t think none of them will happen. One part of the reform involves reducing excessive payments that the Bush Administration agreed to when it set up the Medicare Advantage program in 2003. If Congress remains under Democratic control—a big if, admittedly—it will probably enact these changes. But that still leaves another $300 billion of Medicare savings to be found.

The second problem is accounting gimmickry. Acting in accordance with standard Washington practices, the C.B.O. counts as revenues more than $50 million in Social Security taxes and $70 billion in payments towards a new home-care program, which will eventually prove very costly, and it doesn’t count some $50 billion in discretionary spending. After excluding these pieces of trickery and the questionable Medicare cuts, Douglas Holtz-Eakin, a former head of the C.B.O., has calculated that the reform will actually raise the deficit by $562 billion in the first ten years. “The budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed,” he wrote in the Times. “So fantasy in, fantasy out.”

Holtz-Eakin advised John McCain in 2008, and he has a reputation as a straight shooter. I think the problems with the C.B.O.’s projections go even further than he suggests. If Holtz-Eakin’s figures turned out to be spot on, and over the next ten years health-care reform reduced the number of uninsured by thirty million at an annual cost of $56 billion, I would still regard it as a great success. In a $15 trillion economy—and, barring another recession, the U.S. economy should be that large in 2014—fifty or sixty billion dollars is a relatively small sum—about four tenths of one per cent of G.D.P., or about eight per cent of the 2011 Pentagon budget.

My two big worries about the reform are that it won’t capture nearly as many uninsured people as the official projections suggest, and that many businesses, once they realize the size of the handouts being offered for individual coverage, will wind down their group plans, shifting workers (and costs) onto the new government-subsidized plans. The legislation includes features designed to prevent both these things from happening, but I don’t think they will be effective.

Consider the so-called “individual mandate.” As a strict matter of law, all non-elderly Americans who earn more than the poverty line will be obliged to obtain some form of health coverage. If they don’t, in 2016 and beyond, they could face a fine of about $700 or 2.5 per cent of their income—whichever is the most. Two issues immediately arise.

Even if the fines are vigorously enforced, many people may choose to pay them and stay uninsured. Consider a healthy single man of thirty-five who earns $35,000 a year. Under the new system, he would have a choice of enrolling in a subsidized plan at an annual cost of $2,700 or paying a fine of $875. It may well make sense for him to pay the fine, take his chances, and report to the local emergency room if he gets really sick. (E.R.s will still be legally obliged to treat all comers.) If this sort of thing happens often, as well it could, the new insurance exchanges will be deprived of exactly the sort of healthy young people they need in order to bring down prices. (Healthy people improve the risk pool.)

If the rules aren’t properly enforced, the problem will be even worse. And that is precisely what is likely to happen. The I.R.S. will have the administrative responsibility of imposing penalties on people who can’t demonstrate that they have coverage, but it won’t have the legal authority to force people to pay the fines. “What happens if you don’t buy insurance and you don’t pay the penalty?” Ezra Klein, the Washington Post’s industrious and well-informed blogger, asks. “Well, not much. The law specifically says that no criminal action or liens can be imposed on people who don’t pay the fine.”

So, the individual mandate is a bit of a sham. Generous subsidies will be available for sick people and families with children who really need medical care to buy individual coverage, but healthy single people between the ages of twenty-six and forty, say, will still have a financial incentive to remain outside the system until they get ill, at which point they can sign up for coverage. Consequently, the number of uninsured won’t fall as much as expected, and neither will prices. Without a proper individual mandate, the idea of universality goes out the window, and so does much of the economic reasoning behind the bill.

The question of what impact the reforms will have on existing insurance plans has received even less analysis. According to President Obama, if you have coverage you like you can keep it, and that’s that. For the majority of workers, this will undoubtedly be true, at least in the short term, but in some parts of the economy, particularly industries that pay low and moderate wages, the presence of such generous subsidies for individual coverage is bound to affect behavior eventually. To suggest this won’t happen is to say economic incentives don’t matter.

Take a medium-sized firm that employs a hundred people earning $40,000 each—a private security firm based in Atlanta, say—and currently offers them health-care insurance worth $10,000 a year, of which the employees pay $2,500. This employer’s annual health-care costs are $750,000 (a hundred times $7,500). In the reformed system, the firm’s workers, if they didn’t have insurance, would be eligible for generous subsidies to buy private insurance. For example, a married forty-year-old security guard whose wife stayed home to raise two kids could enroll in a non-group plan for less than $1,400 a year, according to the Kaiser Health Reform Subsidy Calculator. (The subsidy from the government would be $8,058.)

In a situation like this, the firm has a strong financial incentive to junk its group coverage and dump its workers onto the taxpayer-subsidized plan. Under the new law, firms with more than fifty workers that don’t offer coverage would have to pay an annual fine of $2,000 for every worker they employ, excepting the first thirty. In this case, the security firm would incur a fine of $140,000 (seventy times two), but it would save $610,000 a year on health-care costs. If you owned this firm, what would you do? Unless you are unusually public spirited, you would take advantage of the free money that the government is giving out. Since your employees would see their own health-care contributions fall by more than $1,100 a year, or almost half, they would be unlikely to complain. And even if they did, you would be saving so much money you afford to buy their agreement with a pay raise of, say, $2,000 a year, and still come out well ahead.

Even if the government tried to impose additional sanctions on such firms, I doubt it would work. The dollar sums involved are so large that firms would try to game the system, by, for example, shutting down, reincorporating under a different name, and hiring back their employees without coverage. They might not even need to go to such lengths. Firms that pay modest wages have high rates of turnover. By simply refusing to offer coverage to new employees, they could pretty quickly convert most of their employees into non-covered workers.

The designers of health-care reform and the C.B.O. are aware of this problem, but, in my view, they have greatly underestimated it. According to the C.B.O., somewhere between eight and nine million workers will lose their group coverage as a result of their employers refusing to offer it. That isn’t a trifling number. But the C.B.O. says it will be largely offset by an opposite effect in which employers that don’t currently provide health insurance begin to offer it in response to higher demand from their workers as a result of the individual mandate. In this way, some six to seven million people will obtain new group coverage, the C.B.O. says, so the overall impact of the changes will be minor.

Continued in article

Does anybody find it shocking that hospitals and other medical service providers overbill the third party insurance fraud pinata?

What is sad is when powerful politicians stand in the way of legal investigations for their big-donor friends.

"Probes Of Overbilling Run Into Political Pressure," by Christopher S. Stewart, The Wall Street Journal, December 12, 2014 ---

When investigators suspected that Houston’s Riverside General Hospital had filed Medicare claims for patients who weren’t treated, they moved to block all payments to the facility. Then politics intervened.

Rep. Sheila Jackson Lee, a Texas Democrat, contacted the federal official who oversees Medicare, Marilyn Tavenner, asking her to back down, according to documents reviewed by The Wall Street Journal. In a June 2012 letter to Ms. Tavenner, Rep. Jackson Lee said blocking payments had put the hospital at financial risk and “jeopardized” patients needing Medicare.

Weeks later, Ms. Tavenner, administrator of the Centers for Medicare and Medicaid Services, instructed deputies to restore most payments to the hospital even as the agency was cooperating in a criminal investigation of the facility, according to former investigators and documents. “These changes are at the direction of the Administrator and have the highest priority,” a Medicare official wrote to investigators.

About two months after that order, Riverside’s top executive was indicted in a $158 million fraud scheme. The hospital was barred from Medicare this May, and the CEO was convicted in October.

What happened at Riverside General Hospital shows how political pressure from medical providers and elected officials can collide with efforts to rein in waste and abuse in the nearly $600 billion, taxpayer-funded Medicare system. More than a dozen former investigators and CMS officials said in interviews that they faced questions from members of Congress about policy changes or punitive action affecting providers or individual doctors.

Ricky Sluder, a former senior investigator for a Medicare contractor who oversaw part of the Riverside investigation, said “it was extremely frustrating to stall an investigation to give some explanation to a lawmaker. It’s providers’ way of using political power.”

In an emailed statement, Medicare administrator Ms. Tavenner said the Riverside episode “reflected the tension between fraud prevention and access to care.” She said she wasn’t aware of the pending indictments and that her job required her to “balance two important policy goals” — saving taxpayer money and protecting Medicare’s beneficiaries.

A spokesman for Rep. Jackson Lee declined to comment.

Medicare has reported that during the 2013 fiscal year, waste, fraud and abuse accounted for an estimated $34.6 billion in improper payments to medical providers. CMS says it clawed back about $9 billion that year through audits and investigations.

Medicare hires contractors to enforce antifraud rules and fight improper billing. The contractors can suspend payments to doctors and hospitals and revoke billing privileges. They also can block some payments to review claims — called “prepayment review.”

Such actions can squeeze medical providers and even threaten to put them out of business. Medical providers sometimes seek help from elected officials. Politicians have a stake in such disputes: Health providers often provide jobs and valued services in their districts, and can be campaign contributors.

Continued in article

What is the main difference between errors in hospital bills (in over 90% of the billings) and retail store scanned billings (in over 4% of the billings)?

Errors in hospital bills almost always favor the hospitals.
Retail store billing errors only favor the stores about half the time.


"The Accuracy of Scanned Prices, David Hardesty, Journal of Retailing, 2014 ---

4.08% of the prices picked up by retail-store scanners are wrong, about twice the error rate considered acceptable by the U.S. Federal Trade Commission, says a team led by David M. Hardesty of the University of Kentucky that studied more than 231,000 products scanned over 15 years in the state of Washington. Slightly less than half the errors were overcharges. An intriguing finding: Error rates are higher in affluent neighborhoods, suggesting that stores may be more careful about mistakes in areas where shoppers are more price-conscious, the researchers say.

Continued in article

The Health Care Market is Not a Market

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

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

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

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

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

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

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

Brill concludes:

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Continued in article

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

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

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

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

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

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

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

Who is telling a lie?

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

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

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

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

Jensen Comment
There are four possibilities behind this dispute:

  1. Brian Grissler could be lying through his teeth.

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

  3. Steven Brill could be lying through his teeth.

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

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


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

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

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

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

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

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

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

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


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