Tidbits Political Quotations
To Accompany the June 30, 2015 edition of Tidbits
Bob Jensen at Trinity University

Only those who will risk going too far can possibly find out how far one can go.
T.S. Eliot

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

We’re only interested in protecting some civil rights.

Pope’s key science advisor Hans Schellnhuber is an atheist who believes in ‘Gaia, but not in God’

The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds.
John Maynard Keynes

Just because you’re a star don’t think you’re bigger than the enterprise.
Bob Lefsetz --- http://www.ritholtz.com/blog/2015/05/recode-to-vox/
Put simply:  Vox is not The Wall Street Journal and Yahoo News is not the New York Times
Once high-flying startups like the Huffington Post are "in decline."

Is there some society you know that doesn’t run on greed?
Milton Friedman --- http://www.wsj.com/articles/notable-quotable-milton-friedman-1434318595?tesla=y 

It was very courageous and brave, if not crazy as well, to open fire on the police headquarters.
CNN's Fredricka Whitfield ---
She later apologized.

Who needs drones from Amazon when you have bike couriers making 75 cents per delivery?
Jensen Comment
This may work in India, but I would not pedal up our hill one time for $75 with a package on a bike or no package on a bike.

ABC Warmunists Claimed New York to be Underwater in 2015 [That was in 2008] ---
Mistakes like that make me want to write off media alarmists.

Boko Haram is winning. That's the assessment of both U.S. counterterrorism officials and many experts who cover West Africa ---

Woman Carrying Cocaine in Breast Implants Arrested at Colombia Airport
Mother's Milk for Millennials

An Australian doctor has warned against the dangers of so-called "skinny jeans," citing a patient who collapsed after a day of strenuous activity while wearing tight pants.
Kate Stanton
But tight jeans are recommended for middle school boys who increasingly find it difficult to sing soprano.

During Monday’s episode of the ABC daytime talk show “The View,” Whoopi Goldberg and the crew were fooled by a fake news website that claimed pastor John Hagee of San Antonio’s Cornerstone Church wanted women prosecuted if they said “God” during sex.
Watch the video ---
What happened to media verification of reported news?

To be clear, gunmakers don't benefit from tighter gun control. They benefit when there are talks of tighter gun control but those talks go nowhere ---  Sam Roe --- http://www.businessinsider.com/smith-and-wesson-obama-was-good-for-gun-sales-2015-6#ixzz3dVv0J1uZ
Jensen Comment
This type of thing happens with other products. Confederate flags are now selling like hotcakes. Every time the government talks about increasing gas mileage restrictions buyers rush out to buy big cars and trucks before it's too late. There is a psychology of wanting that which we're not allowed to have.

Neutral Sweden, arms peddler extraordinaire ---

The Death Penalty Is Cruel. But So Is Life Without Parole ---
Stephen Lurie --- http://www.newrepublic.com/article/121943/death-row-crueler-and-more-unusual-penalty-execution
Jensen Comment
I often think activists against both types of extreme punishment fail to recognize the main advantage of these punishments in the prosecutor's toolbox. The main advantage is that they become bargaining tools for obtaining confessions without having to go to the time, trouble, and cost of long trials. If a murderer can negotiate a 30-year sentence in exchange for a a confession it can be a win-win outcome. Prosecutors who lose the death penalty in their toolboxes lose a lot in prying open clogged court calendars I've been downstreaming the FBI Files on NetFlix. It's amazing how often accomplaces will confess details of crimes after bargaining not to get the death penalty. What would happen if the FBI lost this bargaining chip?.

The reason Bernie Sanders doesn't have a chance --- it's the Democratic Party stupid!

The Way Humans Get Electricity Is About to Change Forever ---
Tom Randall
Also see

In an essay published this month on a Washington Post education blog, the Luther Burbank High School teacher explained she does not want to teach Shakespeare’s works despite his esteemed place in American education because his perspective does not speak well to her ethnically diverse students.
Read that as meaning African Americans should remain ignorant about all things Shakespeare.

He graduated from law school, could not find a law job, and took a job at Wal-Mart
Disgruntled Charlotte Law School Grad Spreads Tale Of Debt Woes Via Hundreds Of Windshield Flyers ---

We'd rather be obese on benefits than thin and working.
Janice and Amber Manzur
John Hill, http://www.telegraph.co.uk/news/uknews/11347454/Mother-and-daughter-weigh-a-total-of-43-stone-and-get-34k-a-year-handouts-but-refuse-to-diet.html 

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


Hilarious: NY Times chronicles Hillary's problems hiding her wealth  ---

Oh! Oh!
20 Hillary Clinton Quotes ---


Completely Ignorant
Let me tell you that government creates jobs, not business
Hillary Clinton ---
Jensen Comment
I was listening to her on television when she first made this assertion. Let me tell you that it is the most ignorant assertion that I've heard in my entire life

Say What?
"No. We just can't trust the American people to make those types of choices ... Government has to make those choices for people."
Hillary Clinton --- http://townhall.com/columnists/johnhawkins/2015/06/16/draft-n2012995/page/2
Jensen Question
This sounds more like a Putin quotation.

We came out of the White House not only dead-broke, but in debt. We had no money when we got there and we struggled to piece together the resources for mortgages, for houses, for Chelsea's education. It was not easy.
Hillary Clinton --- http://townhall.com/columnists/johnhawkins/2015/06/16/draft-n2012995/page/2
Jensen Comment
Makes me Want to increase the annual pension of retired USA presidents from zero to nearly $500,000 per year?
 Oops that's already the case with many more perks.

I remember landing under sniper fire. There was supposed to be some kind of a greeting ceremony at the airport, but instead we just ran with our heads down to get into the vehicles to get to our base.
 Hillary Clinton --- http://townhall.com/columnists/johnhawkins/2015/06/16/draft-n2012995/page/2
Jensen Comment
She later apologized for making this story up --- one of her Brian Williams' moments.

I have to admit that a good deal of what my husband and I have learned (about Islam) has come from my daughter. (As) some of you who are our friends know, she took a course last year in Islamic history.
 Hillary Clinton --- http://townhall.com/columnists/johnhawkins/2015/06/16/draft-n2012995/page/2
Jensen Comment
She apparently didn't learn nearly as much about Islam in her years as Secretary of State.

My husband may have his faults, but he has never lied to me.
 Hillary Clinton --- http://townhall.com/columnists/johnhawkins/2015/06/16/draft-n2012995/page/2
Jensen Comment
She did not need to ask about his many extramarital affairs as Governor and President. Most of the details were reported  in the media.

Jeb Bush made promises about the economy that nobody could keep ---

The History of Economics & Economic Theory Explained with Comics, Starting with Adam Smith ---
This is not a free download ---

. . .

The book covers two (plus) centuries of economic history. It starts with the Physiocrats, Adam Smith and theoretical development of capitalism, and then steams ahead into the 19th century, covering the Industrial Revolution, the rise of big business and big finance. Next comes the action packed 20th century: the Great Depression, the New Deal, the threat from Communism during the Cold War, the tax reforms of the Reagan era, and eventually the crash of 2008 and Occupy Wall Street. Along the way, Goodwin and the illustrator Dan E. Burr demystify the economic theories of figures like Ricardo, Marx, Malthus, Keynes, Friedman and Hayek — all in a substantive but approachable way.

As with most treatments of modern economics, the book starts with Adam Smith. To get a feel for Goodwin’s approach, you can dive into the first chapter of Economix, which grapples with Smith’s theories about the free market, division of labor and the Invisible Hand. Economix can be purchased online here.

Related Content:

An Introduction to Great Economists — Adam Smith, the Physiocrats & More — Presented in a Free Online Course

60-Second Adventures in Economics: An Animated Intro to The Invisible Hand and Other Economic Ideas

Reading Marx’s Capital with David Harvey (Free Course)

"The IRS Scandal, Day 777, by Paul Caron, TaxProf Blog, June 25, 2015 ---

Minneapolis Star-Tribune, Investigator: IRS Erased Computer Backups After Officials Realized Tea Party Emails Were Lost:

IRS employees erased computer backup tapes a month after officials discovered that thousands of emails related to the tax agency's tea party scandal had been lost, according to government investigators.

The investigators, however, concluded that employees erased the tapes by mistake, not as part of an attempt to destroy evidence.

As many as 24,000 emails were lost because 422 backup tapes were erased, according to J. Russell George, the Treasury inspector general for tax administration. George says those tapes "most likely" contained emails to and from former IRS official Lois Lerner, who has emerged as a central figure in congressional investigations.

The revelation is likely to fuel conspiracy theories among conservatives who say the IRS has obstructed investigations into the scandal.

George is scheduled to testify before the House Oversight Committee Thursday morning about his investigation into the emails. The Associated Press obtained a copy of his prepared testimony.

Continued in article

"Debt-Free and (Mostly) Detail-Free," by Michael Stratford, Inside Higher Ed, June 19, 2015 ---

Jensen Comment
Bernie Sanders thinks his "Robin Hood Plan" of taxing USA financial transactions can pay for college education of every student in the USA. A trillion here and a trillion there in taxation and pretty soon we're talking real money (remember Senator Dirksen?). These trillions in taxation might be feasible if all global financial transactions took place in the USA.

In reality, Sander's plan would simply ship most of the global financial transacting off shore to where there are already enormous trading markets such as in Hong Kong, Singapore, London, Switzerland, Paris, etc. The rest of the world will salivate over such a USA Robin Hood Plan if it has half a chance.

We can argue about the extent of our current unfunded entitlements, especially for Medicare and expanded Medicaid, but estimates range from $60-$150 trillion in unbooked obligations that cannot be paid for with hyperinflation. What funding of free college education for all USA citizens who want a college diploma would really do is add to the destruction of the USA economy with more  unfunded entitlements that cannot possibly be paid by future generations of taxpayers ---

People point to nations like Germany that provide free tuition for higher education. But these nations wisely restrict who is allowed to go to college. Over 70% of young Germans and an even larger percentage of older Germans are not allowed to go to college. Instead those who are denied university admission must opt for training in the skilled trades where much of the financing comes from on-the-job apprenticeships.

No nation to date  is so economically ignorant as to to offer free college education to everybody. And if we do so, most of our graduates will have diplomas from the University of Lake Wobegon ---
Graduates with prestigious diplomas in other parts of the world treat a college diploma as something special in society --- not an entitlement.

The Robin Hood Plan might be financially feasible if we instead restrict college education in the USA to only 28% of the high school graduates who apply to get into college --- like the Germans.

How hungry are the inner city school children?

Even though lunches are “free,” they are so unappetizing thanks to new nutrition standards that much food is thrown away. “It is horrible,” one inner-city principal, responsible for 1,200 students and 10,000 meals a week, told us. “It is just heartbreaking how much food is thrown away.”
"The School Lunch Program With an Unappetizing Report Card," by Julie Kelly and Jeff Stier, The Wall Street Journal, June 17, 2015 ---

. . .

Even though lunches are “free,” they are so unappetizing thanks to new nutrition standards that much food is thrown away. “It is horrible,” one inner-city principal, responsible for 1,200 students and 10,000 meals a week, told us. “It is just heartbreaking how much food is thrown away.”

So the students go hungry most of the day, until after school when enterprising vendors sell items like pork rinds, hot chips, or fresh corn mixed with cheese and mayonnaise from food carts outside of the school. Students don’t eat the free, healthy meals at school, remain hungry during the day, then flock to purchase the unhealthy foods the school lunches aim to replace.

The program also wastes money. One largely unknown provision allows entire school districts, rather than individual families, to apply for free meals. For instance, all of Chicago’s 400,000 public-school students receive free breakfast, lunch and a snack regardless of financial need.

Continued in article

Jensen Comment
So often good intentions in government spending turn into garbage and other kinds of wasted money. Such programs should look to the Pentagon where money is never wasted. One of our sons (who worked for a military contractor) on the the largest U.S. military base in Iraq said that the choices included porterhouse steaks, prime rib, and three lobster dinner choices among many other mouth-watering choices every night of the week. Iraqi workers in the mess halls "hauled" home sumptuous uneaten food every night. So in this case, the leftover food was not wasted.

One of my colleagues, former MIS professor Keith Lindsey, at Trinity University said that hardly a day went by when he did not miss the chow on a nuclear submarine.

In London’s Guardian on Jan. 6, Columbia University professor Jeffrey Sachs lambastes Krugman: “Not one of his New York Times commentaries in the first half of 2013, when ‘austerian’ deficit cutting was taking effect, forecast a major reduction in unemployment or that economic growth would recover to brisk rates. ... Yet he now says that everything has turned out just as he predicted.” Krugman retorts: “I’ve just been applying straightforward textbook macro. ... If you think I’ve been slippery or dishonest, you’re almost certainly suffering from a failure of reading comprehension.”
"Krugman Battles the Austrians," by Jeremy Kahn, Bloomberg, June 2015 ---

Since the financial crisis, Nobel Prize–winning economist and New York Times columnist Paul Krugman has devoted no fewer than 74 columns and blog posts to what he calls “austerians”– supporters of government budget cuts in response to recession. Any fiscal adjustments most developed economies need are long-term, whereas austerity is short-term, he says. Krugman has also gone after central bankers who were too slow in lowering rates in response to the crisis and then too quick to raise them during the recovery, calling them “sadomonetarists” who enjoy inflicting economic suffering. Krugman has acquired powerful critics on the left and right who accuse him of everything from intellectual dishonesty to political naiveté.

Krugman accuses Sweden’s Riksbank of “sadomonetarism”–raising rates in 2010 and 2011 at a time when, though the economy was growing, unemployment remained high and inflation low. Doing so, he said, risked turning Sweden–“the rock star of the recovery”–into another Japan, beset by stagnation and deflation. Riksbank Deputy Governor Per Jansson asks, “Has he ever had a look at the data?” The central bank, he says, acted in the face of rapidly rising gross domestic product. In the end, the bank was forced into full retreat, slashing rates below zero and buying government bonds to bring down long-term rates and revive inflation.

. . .

Benn Steil, an economist at the Council on Foreign Relations in New York, accuses Krugman of using misleading data. Examining data Krugman used to show that Iceland, which has an independent monetary policy, outperformed Baltic economies that, as euro-zone members, don’t, Steil says Krugman’s argument disintegrates if the starting date is moved just three months forward or backward. “He has been very deliberate in his cherry-picking of the data,” Steil says. Krugman, who says he selected the fourth quarter of 2007 as a baseline because that’s when the U.S. recession started, retorts: “I do two or three blog posts each day. I don’t have time to pick cherries!” He alters his approach when he realizes it is “problematic.”

Continued in article

This story appears in the July/August special Rivalry Issue of Bloomberg Markets magazine.


Paul Krugman Rants About the Evils of Austerity
Why is Finland resorting to austerity?

"Finland is in a 'grave' situation." by Szu Ping Chan, The Telegraph via Business Insider, June 13, 2015 ---

. . .

Faced with a bloated state, below-par growth, and prices and costs that have risen at a much faster pace than the rest of the eurozone, the medicine is a familiar one.

"The key to resolving the serious problems in the economy lies in structural reforms, fiscal consolidation and improved cost competitiveness," the Bank of Finland's latest health check of the economy said last week.

The phrase could have been taken from Greece's own long austerity prescription, but with an ageing population, state spending approaching 60pc of gross domestic product (GDP) and tax revenues far short of this, something has to change, and quickly.

Perhaps Liikanen's passion for marathon running will be a help because, like so many others in Finland, he knows he is in it for the long haul. "I ran 4 hours 35 minutes in December," he states, an impressive time, particularly for a sexagenarian.

Finland, which has become known as one of the eurozone's lead preachers of fiscal prudence, will embark on a €10bn (£7.2bn) round of belt tightening over five years .

Read more: http://www.businessinsider.com/finland-is-in-a-grave-situation-2015-6#ixzz3cyPK3rAl

Jensen Comment
All of Scandinavia is having economic troubles (with the highest prices in the world) and entering some types of austerity. Could it be that welfare states have been overspending on (gasp) welfare?

June 13, 2015 reply from Tom Selling

Here is Krugman’s version of the causes Finland’s woes:
June 14, 2015 reply from Bob Jensen

Hi Tom,

I thought Keynesian economics was Krugman's answer to everything.
You may be correct in hindsight about the Eurozone. Early on, however, the Eurozone was an attempt to create a United States of Europe with free flow of commerce, labor, and one currency much like what happens among the 50 states if the USA.
But it's been a tough road on the other side of the pond. The biggest obstacles  are differences in corruption, public employment, and debt among member states. Northern nations ended up having to carry southern nations like Greece, Portugal, Spain, and Italy.
The Eurozone prevents member states from individually reneging on debt by devaluing the currency. Before the Eurozone was invented Italy was Exhibit A and became a source of economic inspiration for Zimbabwe.
The whole key to everything with or without the Eurozone is for a nation to "live within its means."

Here's how Krugman puts it at

So, about those Greek failings: Greece does indeed have a lot of corruption and a lot of tax evasion, and the Greek government has had a habit of living beyond its means. Beyond that, Greek labor productivity is low by European standards — about 25 percent below the European Union average. It’s worth noting, however, that labor productivity in, say, Mississippi is similarly low by American standards — and by about the same margin.


The most important admission is the phrase "living beyond its means." This is precisely the danger we are living in at the moment in the USA where naive politicians are now working toward free medical insurance and medications (with greatly expanded Medicaid and ACA subsidies), free college for everybody, and an income tax structure where half the taxpayers pay zero or negative income taxes and 20% of the taxpayers pay 80% of the income taxes collected.

Some deem this as "fair" in terms of egalitarianism.  I call it living beyond your means.

The Greeks viewed their welfare system (it was called "working" for the government in Greece) as "fair" until it exploded in their faces.

The worry in Greece is that if the Greeks withdraw from the Eurozone and renege on their debts they will become another Zimbabwe.

As currency dies, Zimbabweans will get $5 for every 175 quadrillion local dollars ---


June 14. 2015 reply from Apostolos Ballas (in Greece)


You are badly misrepresenting the situation, probably because you don’t understand the context. It is problematic that you don’t read the numbers. Finland is considering a 10bn adjustment over the next 5 years. Greece had a 30bn adjustment over the past 5 years (notice that there is a huge difference between someone planning to do something and doing it) and will have a further 5bn adjustment over the next 2 years. The policy issue thus is when does it all end.

Nevertheless, the problem that no one ever considered was that history /memories never die (does Georgia still use a Confederation flag?). Greece suffered a brutal occupation from Germany and many people still alive do remember the events. The problem was buried using German money but when the music (cash) stopped, enmities resurfaced. The problem thus is not so much about the numbers but rather about perceptions. Greeks feel slighted by the comments on the German media; even conservative newspapers remind their readers that Germany did not pay reparations and defaulted on a loan from Greece. The argument is stupid given that German officials have made extraordinary efforts to defuse the situation. However, the “popular” media in both countries focus on cultural stereotypes and the situation cannot be rationally resolved especially since sooner or later the creditors will (need to) take a hit.

Last, but certainly not least, is your question regarding why Greece and / or Finland do not leave the euro zone. Simply, because it is like Hotel California: “you can check out anytime you like, but you can never leave”.  The costs of leaving are unknowable but most certainly huge, the costs and benefits of staying predictable.

Best regards,


PS In the current situation, I think Greece’s problem is mainly what Bismarck said “three professors and the fatherland is lost”.

June 14, 2015 reply from Tom Selling

Hi, Apostolos:
Thanks for providing important context and perspective.  
I didn’t understand what you meant by the quote you attributed Bismarck, so I spent 5 minutes on a google search.  Permit me a technical addendum from this Wikipedia article about the composition of the German parliament in the 19th century:
The Frankfurt Assembly (German: Frankfurter Nationalversammlung, literally Frankfurt National Assembly) was the first freely elected parliament for all of Germany,[1] elected on 1 May 1848 
Because of this composition [underrepresentation of the entrepreneurial class]  the National Assembly was later often dismissively dubbed the Professorenparlament ("Professors' parliament") and ridiculed with verses such as „Dreimal 100 Advokaten – Vaterland, du bist verraten; dreimal 100 Professoren – Vaterland, du bist verloren!“[5] ("Three times 100 lawyers – Fatherland, you are betrayed; three times 100 professors – Fatherland, you are doomed”.)
I think that you are saying that the Germans are adopting a posture that, in their eyes, may be theoretically sound, but will nonetheless fail.  Am I correct?  


Jensen Comment

Hi, Apostolos,

You're correct in that I'm relying my readings of experts like Paul Krugman closer to problems in the Eurozone.

I do realize that Greece has had a vicious austerity program for the last five years that has added enormously to unemployment.

I think the issue now focuses on EU creditors throwing more billions into Greece without having an acceptable economic recovery plan that will not just waste those dollars on old corruption (we have a somewhat similar problem in Chicago and Detroit). Perhaps the recovery should be more "in kind" like building automobile assembly plants in Greece and labor relocation subsidies to go to other parts of Europe.

When North Dakota boomed unemployed welders and other workers  from all over the USA bought heavy parkas and moved to a god forsaken place to live. Millions of Turks relocated and are still relocating in Germany under dire economic opportunities in their homeland. Boatloads of desperate people are now arriving into Europe from Africa. My son Marshall has worked for years in a Maine town that is nearly overrun with thousands of Somali immigrants seeking opportunity not available in their homeland ---

If WW II reparations enter into the picture, there were other people that suffered a lot more recovering from German destruction --- the Blitzkrieg of England. the Battle of Stalingrad,  and the Holocaust come to mind. There's no amount of reparation that Germany could pay for their destructions of WW II.

Thanks for giving us a first-hand account,

June 21, 2015 reply form Apostolos,

Thank you all for your kind words.

Actually, one of the issues that this group of economists had with others like me is of potential interest to AECM:

It concerns the question of responsibility of university faculty to students. The disagreement is about telling and showing students right / wrong as perceived by the instructor. One side believes that students are adults and we should listen to them and be friends we them. The other side argues that we should obviously listen but we must be friendly to students but never friends. Indeed, we diminish our role if we do not explain the difference between right and wrong in matters of fact (eg, IAS18) but also in matters of behavior and thinking (eg, urban myths aired in class must be shot down).

How do you react?


Jensen Comment
Greece's current Minister of Finance, Yanis Varoufakis, is an expert on game theory and wrote a popular book on the subject ---
https://en.wikipedia.org/wiki/Yanis_Varoufakis ---
Perhaps he should've focused more on the Lose-Lose solutions ---
Greece and its creditors are dangerously close to getting what neither side wants ---

The Game of Chicken --- https://en.wikipedia.org/wiki/Chicken_%28game%29

"My big fat Greek divorce:   Greece and the euro zone are stuck in an abusive relationship," The Economist, June 20, 2015 ---
The title of this article of course is a play on the popular movie title My big fat Greek Wedding ---

Greece’s Ruling Party Goes to War With Its Own Central Bank ---

Greece's Finance Minister Yanis Varoufakis is a " self-described 'libertarian Marxist.' ---

Greece's Prime Minister Alexis Tsipras has a long history with the Greek Communist party and assuredly the most left-leaning of all European heads of state.

Aside from the transitional pain and suffering of the Greek people, it would be interesting to see what would happen if Greece defaulted on all of its outside debts and made a tremendous effort to become the first truly communist state in the world. That of course would be even more difficult today in the global world than it might have been while Karl Marx was still alive. It would be most difficult to be a non-market economy in a world of market economies.

How productive would Greek workers become in an egalitarian economy? We will probably never know since the Greek people themselves will prevent this from happening over thelong-term  wishes of Tsipras and Varoufakis.

June 20, 2015 reply from Apostolos,

Hi Bob,

This is Athens calling.

Let’s start from the second article – it  is more fun.

Academic politics are always fascinating. Traditionally, irrespective of ideological leaning, Greek finance ministers were usually professors at either the Athens University of Economics and Business (where I work, mainly a business school with ties  to the financial sector in the broad sense) or the University of Piraeus (again mainly a business school with ties to the maritime industry). In the current government, most professors come from the University of Athens. Interestingly enough, it used to be the most conservative (or, bigoted) institution in Greek academe.

In the fight of the Party vs the Central Bank (Bloomberg story), I should point out that the Central Bank governor (Stournaras) was Chair of the appointments committee when the current Minister of Finance (Varoufakis) was elected professor. Both are UK educated. Stournaras is best known for taking solitary long-distance swims while Varoufakis is best known for his social life. Do you care to guess whom I think will leave first?

The Deputy Minister, E Tsakalotos, found himself in the unenviable position of quarrelling with most of his colleagues at AUEB and leaving for the UoA. Tsakalotos’ uncle was leader of the National Army during the Greek Civil war and very close to the US General J. Van Fleet and the application of the Truman Doctrine. Thus, Minister Tsakalotos has issues to settle.

The former department chairwoman (PhD, Princeton U) and current President of the biggest commercial bank is married to the former Minister of Finance G. Arsenis. Arsenis (PhD, MIT) was asked to resign by Andreas Papandreou (a Berkley economist) back in the 1980s from his twin job as Minister of the National Economy and Governor of the Bank of Greece because he lost control of inflation and government expenditure.

Enough gossip.

The first article is far more interesting.

Somewhere in the middle it points out that: “So long as the monetary union is forged between sovereign states the principles of irrevocability and enforceability are contradictory.” It was supposed that sooner rather than latter, states would no longer be 100% sovereign and thus irrevocability would become the guiding principle. The markets clearly believed that. Indeed, no matter which way you put it, they still do. The fundamentals in many Eurozone members are bad and yet most enjoy exceptionally low interest rates. Thus, question number one is who should pay for such folly? Creditors or the European taxpayer? Am I mean / unreasonable in believing that creditor beware? If that principle was accepted, Greece’s (and Cyprus’) problems would have been far more tractable.

And then comes the contradiction: “Both sides have bungled the Greek crisis. Especially at the outset, the creditors put too much weight on rapid fiscal adjustment, in a doomed attempt to limit the size of Greek debt. As well as needlessly impoverishing Greece (GDP has shrunk 21% since 2010), this was a distraction from the real task, which is to sort out the structural impediments to growth” and a few lines further down: “But Mr Tsipras has made a bad situation worse. In 2014 the Greek economy grew. Now it is shrinking again, partly because Syriza has proved incompetent and even more clientelist than its predecessors.”  However, to whom does the writer believe that an electorate turns to when it feels impoverished? Usually, the most populist party. Hopefully, we have been spared that – the Greek electorate turned to the 2nd or 3rd worst alternative. As a fan of history (indeed, some of my publications are in accounting history) I find it wonderfully ironic that Germany and Greece which currently appear to be at opposing ends, both are societies that committed suicide by elections in the past eighty years. I only hope that it doesn’t go that far in the case of Greece.

Best regards,


13 mind-blowing facts about Greece's economy ---

We've all been Keynesians for the last 7 years ---

GM to Build Medium Trucks in Japan --- Not Greece, Finland, Chicago, or Detroit

From the CFO Journal's Morning Ledger on June 15, 2015

GM to return to U.S. medium-truck market
General Motors Co
. is about to re-enter the U.S. market for medium-duty work trucks, a sector it withdrew from during restructuring over the last decade. The No. 1 U.S. auto maker in sales terms will team up with Japan’s Isuzu Motors Ltd. to build trucks to be sold in the U.S. under the Chevrolet brand. Using its dealer network, GM hopes to eventually dominate a medium-duty market that grew 3.5% this year.

Independent Contractor --- https://en.wikipedia.org/wiki/Independent_contractor

"Massachusetts says Taxi Drivers are Independent Contractors (April 27, 2015)---

In a recent decision, the Massachusetts Supreme Judicial Court (SJC) said that taxi drivers were independent contractors and were not employees, Sebago, et al. v. Boston Cab Dispatch, Inc., et al (2015 WL 1780909, SJC-11757, April 21, 2015).  Boston taxi drivers alleged that they were employees and entitled to minimum wage, overtime and other protections offered to employees but the court said they were properly classified as independent contractors.

The court reviewed the allegations in light of statute that allowed the police commissioner in Boston to regulate the taxicab industry and the independent contractor statute.  The court said that both the regulation of taxicab industry and the independent contractor statute could co-exist and that the regulation of the taxicab industry “neither precludes taxicab owners from entering into employer-employee relationships with drivers nor recasts drivers as independent contractors where they would otherwise be considered employees.”

The court then turned to the question of whether the drivers were employees or independent contractors.  Many states have adopted the ABC test to determine if a worker is an employee or independent contractor, but Massachusetts modified the ABC test and the change makes it harder to qualify as an independent contractor.  Massachusetts General Laws chapter 149, section 148B provides:

an individual performing any service, except as authorized under this chapter, shall be considered to be an employee under those chapters unless:—

(1) the individual is free from control and direction in connection with the performance of the service, both under his contract for the performance of service and in fact; and

(2) the service is performed outside the usual course of the business of the employer; and,

(3) the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.

The second prong, “the service is performed outside the usual course of business of the employer”, is often considered the most difficult standard to meet.  Most other statutes provide that “performs work outside the usual course of the company’s business or outside the company’s place of business” (italics added) which allows workers who otherwise meet the first and third prong to qualify if they are not performing the services on the company’s premises.  In Massachusetts, to qualify as an independent contractor, the services must be performed outside the usual course of business of the employer.  The court in Sebago offers more guidance on what is “outside the usual course of business.”

In Sebago, there were three main parties whose “usual course of business” was separate but related.

Continued in article

Jensen Comment
It would seem that the latest decision in California that Uber drivers are not independent contractors will force more clarification across all 50 states. The clarification will probably come in federal rather than state courts --- Click Here

Making taxi drivers all employees has tremendous implications for costs and benefits. For example, taxi drivers as employees become eligible for workers compensation and are subject to city, state, federal, and union regulations  for employees.

Of course there's a huge difference in taxi services. My favorite taxi driver in San Antonio owned his own cab and license. He paid Yellow Cab for dispatching services. Other cab drivers rented their taxis from Yellow Cab but set their own hours and other work rules such as where to work in the city. Rates for all cabs were regulated by the city. However, drivers were free to negotiate long-distance, out-of-town fees unless they were paid by by hour as employees of Yellow Cab. It was not common for them to be paid by the hour.

My main point is that the courts will have a huge problem further clarifying who is and who is not an independent contractor taxi or limo driver. In most towns it is now quite complicated regarding how to define a taxi or limo driver. It's probably going to get more complicated after today's Uber decision in California.

Of course there are further complications when other types of services are concerned. For example, one question I never got resolved is the responsibility for hiring undocumented workers. If a University ABC  hires Cleaning Service Company XYZ to clean campus buildings how responsible is University ABC for liability regarding pay scales of XYZ, worker legality at XYZ, and compensation legality at XYZ?  It always seemed to me that cleaning employees of the XYZ that contracted to clean buildings at the university where I worked never could speak more than ten words of English.

Why do gun manufacturers secretly applaud political activism on gun control?

To be clear, gunmakers don't benefit from tighter gun control. They benefit when there are talks of tighter gun control but those talks go nowhere ---  Sam Roe --- http://www.businessinsider.com/smith-and-wesson-obama-was-good-for-gun-sales-2015-6#ixzz3dVv0J1uZ
Jensen Comment
The real irony is that activism on reducing gun production and sales leads to more production and sales. Activism on fuel efficiency leads to urgent demand for products with low fuel efficiency.  And so the world turns.

This type of thing happens with other products.
Every time the government talks about increasing gas mileage restrictions buyers rush out to buy big cars and trucks before it's too late. Up in these mountains a lot of home owners like me bury huge propane tanks and maintain huge inventories of propane to level out propane costs over pricing cycles. Media warnings of natural gas shortages (as in cold weather) or price hikes are applauded by tank sellers.

Louisiana State University at Baton Rouge has embarked on an $85 million upgrade to its student gym and recreational facilities, including a lazy river in the shape of the university’s initials, a climbing wall, a rope course and a 40,000-square-foot weight and cardio facility. The student government in 2011 voted to fund the project by quadrupling student fees. Students now pay $200 a semester in a recreational fee, or $1,080 more over four years than they would have paid under the old fee structure. The fee increase was approved by an 84 percent vote.
"Lazy Rivers and Student Debt," by Kellie Woodhouse, Inside Higher Ed, June 15, 2015 ---

Jensen Comment
I do think that competitions for more luxurious living on private college campuses (residence and dinning halls) have contributed greatly to the cost of room and board at private colleges. But I don't think "lazy rivers" on campuses of non-profit universities contribute greatly to the costs of attending those universities (as is noted in the article). Firstly, the lazy rivers are often funded from private donations and do not greatly increase  tuition or even room and board charges. To the extent that those lazy river donations do not distract from giving to other programs there's probably not a huge impact on what it costs students to attend those universities. There are certainly some possible impacts such as the cost of air conditioning and staffing of enormous gymnasiums that add to increases in student recreation fees.

As much as faculty like to deny it, residential learning is labor intensive and largely driven by increases payrolls, although many faculty have not seen much in the way of raises themselves in recent years. Faculty costs are also increased by labor costs of research and support of doctoral programs where faculty costs are higher for only a few students. I'm not arguing that this is a bad thing. How can we deny the need for new knowledge? I'm simply stating that faculty in universities are paid for much more than just teaching most of the students of the universities.

Distance education may or may not increase the cost of student learning. When done right with relatively small classes (say 25 students) and high instructor-student online communications (e.g., Instant Messaging) distance education marginal costs may be higher than onsite costs, especially for onsite courses using classrooms at night and week ends that would otherwise be empty. Some universities like the University of Wisconsin are now charging more for online courses --- treating them like cash cows.

The real issue is political --- how public higher education competes with other expenditures of federal and state tax dollars. Politicians on the campaign trail promise more tax money for higher education, but then again they promise more tax money for every other voter-sensitive program including more health care subsidies, medicine subsidies, job training, business subsidies, improvements to roads and bridges, better K-12 schools, more farm subsidies, higher minimum wages, high-tech weapons, and every other cause that wins votes including lower taxes.

The USA is already burdened with $100+ trillion in unfunded entitlements like Medicare and Medicaid and free K-12 education. I'm actually glad that I'm probably too old to see the eventual destruction that will come for overspending on entitlements like free K-16 education, greatly expanded Medicaid,  and fewer taxpayers actually paying income taxes while reaping the entitlements. Americans actually think Greece is not Exhibit A for us. How ignorant can we get? In the meantime please keep on generously paying my Medicare medical and medicine costs.

Overcrowded Prison in El Salvador ---

Jensen Question
Is holding up two fingers a universal signal for having to do a Number Two?







PwC:  Medical Cost Trend: Behind the Numbers 2016 ---

"The Supreme Court’s Obamacare Decision Is Already Worth $3 Billion For Insurers," by Leah Libresco, Nate Silver's 5:38 Blog, June 25, 2015 ---

Efforts tto Overturn Obamacare are Stupid and a Waste of Time, Money, and Energy
Beyond the Hype and Politics:  What Parts of the ACA Law and Related Problems Are In Need of Change?
"Bosses to Micro Target Health-Care Law," by Rachel Feintzeig And Emily Chasan, The Wall Street Journal, June 25, 2015 ---

Thursday’s Supreme Court ruling makes clear that the Affordable Care Act will be a permanent feature of the U.S. business landscape. Now, employers—even those that don’t support the health-care law—will turn their attention to changing some of the elements they don’t like.

. . .

The big question is “how do we move forward to make this law better,” said Ryan Thorn, a health-insurance agent in Salt Lake City, Utah, and the president of the National Association of Health Underwriters, a trade group. “There are parts of the law that are really needing some work.”

“The real win out of this decision is that now we can really move forward and focus on what needs to be fixed with the rest of the law,” said Emily Bremer, who is an insurance broker in St. Louis. For employers, there has been ”a shadow of uncertainty on everything—everything has been on hold,“ she said. “Now that it is done, we can get back to business and focus on what can be done" to plan for other potentially costly aspects of the health law, she added.

Many employers said Thursday that at a minimum, the ruling provides a dose of certainty. “As a company, we have pretty much accepted the fact that Obamacare is here to stay,” said Ken Harris, the CEO of Swanson Health Products, an online seller of vitamins and supplements based in Fargo, N.D. He said he has been running the numbers, looking at potentially raising deductibles or co-pays as a way to curb costs. “We’re fighting huge increases in our health-care expenses,” he said. “I’ve been looking at every way to cut into it.”

Ultimately, though, he said he doesn’t want to cut back too much or push his 650 employees to the federal exchanges for fear of losing out on top talent.

“Now the future is clear,” said John Hewitt, the CEO of Liberty Tax Service. “It was murky before.” He’s planning to discuss next steps with his human-resources director and will review multiple scenarios, he said. He’s also thinking about how to guide franchisees. The company, based in Virginia Beach, Va., has about 4,300 locations in the U.S., and the bulk of its work force, which swells to more than 62,000 employees during tax season, works for franchisees.

Continued in article

Background on Ruling

Jensen Comment
What the above article misses are more important things that need changing. For example, in states where the ACA expanded Medicaid coverage there is much more fraud in terms of granting Medicaid to people who are not eligible for Medicaid and the expanded losses to hospitals since Medicaid only pays about half of the hospital costs of treating Medicaid patients.  This in turn greatly increased the number of hospitals and physicians who will not accept Medicaid patients or ACA patients in general.

Taxpayer Costs Will Soon Go Out of Control
"How Obama’s $3 Trillion Health-Care Overhaul Would Work," by John Tozzi, Bloomberg Businessweek, January 26, 2015 ---

"Harvard Ideas on Health Care Hit Home, Hard," by Robert Pearjan, The New York Times, January 5, 2015 ---

People that were hardest hit by increases (to fund the subsidies) in insurance premiums are dropping health insurance
"One-Third Drop Obamacare in California," by Michael Reagan, Newsmax, April 26, 2015 ---

. . .

The truth is (there’s that word again), over one–third of Covered California policyholders dropped their insurance altogether.

Attkisson contends this is one of the worst retention rates in the nation. And for those poor souls who are still at the mercy of Covered California, the situation doesn’t get any better, 84 percent of the policyholders will be paying increased premiums in 2015.

Continued in article

"How Obamacare Is Ruining Health Insurance," by John C. Goodman, Forbes, February 11, 2015 ---

"Hospitals Expected More of a Boost From Health Law Expansion of Medicaid hasn’t had the financial impact that was anticipated," by Christian Weaver, The Wall Street Journal, June 3, 2015 ---

The law needs better accounting
The Government Not Exactly Sure Where $3 Billion in Obamacare Subsidies Went
--- Click Here

. . Three billion dollars of hard earned tax money you've been sending to subsidize other people's healthcare plans
1) went to the wrong people
2) was paid out in the wrong amounts.

An Inspector General audit of the Department of Health and Human Services revealed today that Obamacare subsidies handled by the agency have been completely unorganized, disfunctional and misplaced. Why? Because HHS never implemented a system to ensure the subsides would be secure, distributed in the right amounts and sent to those who are eligible to receive them. More from the Washington Free Beacon

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

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

"Overhead costs exploding under ObamaCare, study finds," by Sarah Ferris, The Hill, May 27, 2015 ---

"Overkill An avalanche of unnecessary medical care is harming patients physically and financially. What can we do about it?" by Atul Gawande, The New Yorker, May 11, 2015 ---

PwC:  Medical Cost Trend: Behind the Numbers 2016 ---

Continued at  --- http://www.trinity.edu/rjensen/Health.htm

The Government Not Exactly Sure Where $3 Billion in Obamacare Subsidies Went --- Click Here

. . . Three billion dollars of hard earned tax money you've been sending to subsidize other people's healthcare plans
1) went to the wrong people
2) was paid out in the wrong amounts.

An Inspector General audit of the Department of Health and Human Services revealed today that Obamacare subsidies handled by the agency have been completely unorganized, disfunctional and misplaced. Why? Because HHS never implemented a system to ensure the subsides would be secure, distributed in the right amounts and sent to those who are eligible to receive them. More from the Washington Free Beacon

"[The Centers for Medicare and Medicaid Services] CMS's internal controls did not effectively ensure the accuracy of nearly $2.8 billion in aggregate financial assistance payments made to insurance companies under the Affordable Care Act during the first four months that these payments were made," the OIG said.

"CMS's system of internal controls could not ensure that CMS made correct financial assistance payments," they said.

The OIG reviewed subsidies paid to insurance companies between January and April 2014. The audit found that CMS did not have a process to "prevent or detect any possible substantial errors" in subsidy payments.

The OIG said the agency did not have a system to "ensure that financial assistance payments were made on behalf of confirmed enrollees and in the correct amounts."

In response to the audit, CMS said they issued a regulation to
change their accounting methods.“CMS takes the stewardship of tax dollars seriously and implemented a series of payment and process controls to assist in making manual financial assistance payments accurately to issuers,” they said.

More directly from the report about what was found: 

We determined that CMS’s internal controls (i.e., processes put in place to prevent or detect any possible substantial errors) for calculating and authorizing financial assistance payments were not effective. Specifically, we found that CMS:

-relied on issuer attestations that
-did not ensure that advance CSR payment rates identified as outliers were appropriate,
-did not have systems in place to ensure that financial assistance payments were made on
behalf of confirmed enrollees and in the correct amounts,
-did not have systems in place for State marketplaces to submit enrollee eligibility data for
ncial assistance payments, and
-did not always follow its guidance for calculating advance CSR payments and does not plan to perform a timely reconciliation of these payments.

The internal control deficiencies that we identified limited CMS’s ability to make accurate payments to QHP issuers. On the basis of our sample results, we concluded that CMS’s system of internal controls could not ensure that CMS made correct financial assistance payments during the period January through April 2014.


According to the Inspector General, the audit was conducted "to determine whether CMS’s internal controls were effective to ensure the accuracy of financial assistance payments to QHP issuers made during the first 4 months that these payments were made." 

Continued in article

Obamacare Cadillac Tax --- https://en.wikipedia.org/wiki/Cadillac_insurance_plan

Companies are cautious about raising the quality of their employee health insurance plans because of the Cadillac Tax
From the CFO Journal's Morning Ledger on June 18, 2015

CFOs mindful of “Cadillac Tax” in upcoming union talks
Finance executives of companies with unionized workers are bracing for the impact that excise tax on high-cost healthcare benefits will have on their businesses in three years, write CFO Journal’s Kimberly S. Johnson and Vipal Monga. Verizon Communications Inc. CFO Fran Shammo,  said the issue of health plans will be the subject of “very difficult negotiations.” The company covered almost 700,000 people last year at a cost of roughly $3.2 billion, and begins negotiations for a new contract with its unions next week. CSX Corp. has already begun scaling back costs, said finance chief Fredrik Eliasson. About 85% of the company’s workforce is unionized and talks with the United Transportation Union begin this year.




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

Bob Jensen's threads on medicine ---

The Atlantic: Health: Family --- http://www.theatlantic.com/health/category/family/

Bob Jensen's Tidbits Archives ---

Bob Jensen's Pictures and Stories

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

Bob Jensen's threads on such scandals:

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

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

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

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

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

Bob Jensen's fraud conclusions ---

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

Bob Jensen's threads on corporate governance are at


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

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

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

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

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

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

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

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


Bob Jensen's threads on accounting theory ---

Tom Lehrer on Mathematical Models and Statistics ---

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

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

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

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