Tidbits on October 2016 --- Special Edition
Bob Jensen at Trinity University


For over a week in early October 2016 our AECM accounting educator listserv was shut down for reasons I won't go into here.

Rather than flood subscriber mailboxes with the backlog of my individual postings for my three blogs I will instead issue the following special edition of email messages that I sent to each subscriber after the AECM returned to normal.

These are the tidbits you've all been waiting for during the AECM blackout period.

How the owners of Fidelity get richer at everyday investors’ expense ---

Easy ways to clean stainless steel sinks and appliances ---

PwC Study Maligned by Liberals in 2009 is Vindicated by Events of 2016

From the Left-Leaning Website Called Vox
"Obamacare was built to fail," by Avik Roy, Vox, October 7, 2016---

. . .

In October 2009, analysts at PricewaterhouseCoopers published a report estimating that by 2016, the Senate Finance Committee bill would increase individual-market health insurance premiums by 47 percent. Today, we would describe that figure as a lowball estimate. In fact, cumulatively, median premiums for "silver plans" have nearly doubled in the ACA’s first four plan years (49 percent in 2014, 7 percent in 2015, 11 percent in 2016, and a projected 10 percent in 2017).

But in 2009, the ACA’s cheerleaders described it in much different terms.

"We couldn’t stop intellectual saboteurs from introducing new lies into the debate," wrote Cohn. "But I think we were able to expose those lies just a little more quickly." Cohn and others slammed the PwC report as the work of corrupt health insurance lobbyists seeking to sink reform — as an example of "the insurance industry declaring war." In the Washington Post, Ezra Klein, who went on to found Vox.com, compared the PwC report to lies promulgated by the tobacco and oil industries.

What was remarkable about all this controversy is that PricewaterhouseCoopers' findings were quite reasonable. The ACA’s insurance market regulations were going to drive up the underlying cost of individually purchased insurance.

For example, forcing insurers to charge their youngest customers no less than one-third of their oldest customers meant that premiums for young people would double, because on average, 19-year-olds consume one-sixth as much health care as 64-year-olds. Mandating that insurers cover a federally-prescribed suite of health care services, regardless of whether enrollees need coverage for those services, meant that premiums would go up. Requiring that insurers charge the same prices to the healthy and the sick meant that healthy people in particular would pay more.

By contrast, the law’s individual mandate, forcing consumers to buy that costlier insurance, was going to be phased in over time. As a result, premiums would spike and enrollment would suffer.

But Obamacare’s cheerleaders, fearing that this information might sink the bill’s fate in Congress, decided to shoot the messenger. They brought in Jonathan Gruber, the MIT economist, to assure everyone that "what we know for sure the bill will do is that it will lower the [underlying] cost of buying non-group health insurance" — that is, the cost before any subsidies.

As a political matter, the aggressive critiques of PwC worked. "Within hours of [the report’s] publication," Cohn recounted, "several blogs, including this one, had published critiques … [they] circulated in Washington and provoked a backlash against the insurers. Wavering Democrats said they were offended by the effort at political sabotage; the Finance Committee went on the pass the bill, as it had originally planned."

The exchanges punish middle-income Americans

But as a matter of policy, PwC was right and the cheerleaders and Democratic policymakers were wrong. The ACA’s exchanges were designed poorly, and premiums did become unaffordable for millions. It is true that many people with incomes near the poverty line, whose premiums were nearly fully subsidized by other taxpayers, gained coverage through the law, many through the deeply flawed Medicaid program, whose health outcomes are no better than those of people without health insurance.

But millions of uninsured, taxpaying Americans don’t qualify for Medicaid or the ACA’s exchange subsidies. Still others — typically those with incomes between 250 and 400 percent of the federal poverty level — qualify for partial subsidies that don’t make up for the fact that ACA exchange insurance costs so much more. As Bill Clinton put it, "You’ve got this crazy system where … people that are out there busting it —sometimes 60 hours a week — wind up with their premiums doubled and their coverage cut in half." That’s why ACA exchange enrollment has fallen 9 million short of initial estimates.

The people who implemented the markets were ignorant and arrogant, too

And Obamacare didn’t suffer only from a flawed blueprint. It was also implemented by people with poor knowledge of how health insurance markets worked.

Continued in article

PwC Study Maligned by Liberals in 2009 is Vindicated in 2016

"Brouhaha erupts over PwC private health insurance report," AccountingWeb, October 21, 2009 ---

PricewaterhouseCoopers (PwC) has found itself at the center of a controversy over its estimates of cost increases in private health insurance premiums if certain provisions of the heath care reform bill passed by the Senate Finance Committee become law.  PwC was engaged to conduct the study, "Potential Impact of Health Reform on the Cost of Private Health Insurance Coverage," by the American Health Insurance Plans (AHIP).  Critics have questioned the methodology used by PwC, saying it does not take into consideration some of the cost containment measures in the bill and potential behavioral responses that could affect premium increases. 

AHIP president and CEO Karen Ignagni told ABC News, "One of the most important things that should be done is for PricewaterhouseCoopers, a world class firm, to speak for itself about methodology."

PwC defends its analysis and conclusions in a statement provided to AccountingWEB, citing the specific parameters of the study, saying that "America's Health Insurance Plans engaged PricewaterhouseCoopers to prepare a report that focused on four components of the Senate Finance Committee proposal:

* Insurance market reforms and consumer protections that would raise health insurance premiums for individuals and families if the reforms are not coupled with an effective coverage requirement.
* An excise tax on employer-sponsored high value health plans.
* Cuts in payment rates in public programs that could increase cost shifting to private sector businesses and consumers.
* New taxes on health sector entities.

The study concluded that collectively the four provisions would raise premiums for private health insurance coverage.  As the report itself acknowledges, other provisions that are part of health reform proposals were not included in the PwC analysis."

By 2019, the study says, after analysis of these four provisions, the cost of single coverage is expected to increase by $1,500 more than it would under the current system and the cost of family coverage is expected to increase by $4,000 more than it would under the current system.  This amounts to an additional 18 percent increase in premiums by 2019. The overall 18 percent increase is a composite of increases by market segment as follows:

* 49% increase for the non-group (individual) market;
* 28% increase for small employers (those firms with fewer than 50 employees);
* 11% increase for large employers with insured coverage; and,
* 9% increase for self-insured employers.

The highest increase would be for individuals covered by private insurance.

In its discussion of a "Strong Workable Coverage Requirement," the study acknowledges it methodology as it does elsewhere in the report.  "The reform packages under consideration have other provisions that we have not included in this analysis.  We have not estimated the impact of the new subsidies on the net insurance cost to households.  Also, if other provisions in health care reform are successful in lowering costs over the long term, those improvements would offset some of the impacts we have estimated."  The analysis of the coverage requirement shows the potential impact on premiums for individuals without a broad coverage requirement."

PwC says that impacts identified in the study assume payment of tax on high-value plans, cost-shifting of cuts to public programs, and full pass-through of industry taxes. 

The PwC study also states that it factored in the excise tax but not any anticipated behavioral changes:  "We have estimated the potential impact of the tax on premiums," the study says.  "Although we expect employers to respond to the tax by restructuring their benefits to avoid it, we demonstrate the impact assuming it is applied."

In an earlier study based on AHIP data, PwC estimated that structural reforms, such as improved wellness and prevention, disease management, value based payment reform, improvements in health information technology, comparative effectiveness, and malpractice reform, could mitigate growth in healthcare costs by between 0.5 and 1.0 percent per year after an initial investment period.  See PricewaterhouseCoopers "A Review of AHIP Savings Estimates" in Appendix to AHIP, "A Shared Responsibility," 2008.

Bob Jensen's threads on the health care mess are at

"Sen. Chuck Schumer: Obamacare Focused 'On The Wrong Problem,' Ignores The Middle Class" by  Avik Roy, Forbes, November 26, 2014 ---

Despite the enduring unpopularity of Obamacare, Congressional Democrats have up to now stood by their health care law, allowing that “it’s not perfect” but that they are proud of their votes to pass it. That all changed on Tuesday, when the Senate’s third-highest-ranking Democrat—New York’s Chuck Schumer—declared that “we took [the public’s] mandate and put all our focus on the wrong problem—health care reform…When Democrats focused on health care, the average middle-class person thought, ‘The Democrats aren’t paying enough attention to me.’”

Sen. Schumer made his remarks at the National Press Club in Washington. “Democrats blew the opportunity the American people gave them…Now, the plight of uninsured Americans and the hardships caused by unfair insurance company practices certainly needed to be addressed,” Schumer maintained. “But it wasn’t the change we were hired to make. Americans were crying out for the end to the recession, for better wages and more jobs—not changes in health care.”

“This makes sense,” Schumer continued, “considering 85 percent of all Americans got their health care from either the government, Medicare, Medicaid, or their employer. And if health care costs were going up, it really did not affect them. The Affordable Care Act was aimed at the 36 million Americans who were not covered. It has been reported that only a third of the uninsured are even registered to vote…it made no political sense.”

The response from Obama Democrats was swift. Many, like Obama speechwriters Jon Lovett and Jon Favreau and NSC spokesman Tommy Vietor, took to Twitter. “Shorter Chuck Schumer,” said Vietor, “I wish Obama cared more about helping Democrats than

Nationalized healthcare is not all it's cracked up to be ---

. . .

Back home, though, Canadians seem far more critical of the system. If you follow the internal Canadian debate, you’ll hear the word “crisis.” In fact, many Canadian healthcare economists warn that their system is headed for a major collapse. The aging population has continued to stress an already fragile system. This is the same system that many proponents of the Affordable Care Act, or Obamacare, pointed to as a model.

Another model of national health care cited by fans of the ACA is the UK’s National Health Service (NHS). Like the Canadian system, there seems to be one attitude for export and another for domestic consumption. You may recall the odd tribute to the UK’s National Health Service (NHS) in the opening ceremony of the 2012 Olympics. The NHS was portrayed as a sea of Mary Poppins bliss. At home, though, Brits had reason to complain. The UK was rated as having the worst patient care and lowest cancer survival rates in the Western World.

The NHS is in even worse shape now, and complaints are growing louder. According to the committee that represents UK hospitals, the NHS is on the verge of collapse. The former health minister Paul Burstow warned of this outcome two years ago. At the time, increases in the NIH budget were limited to the rate of inflation. But that did not allow for the increased cost of a growing elderly population. The NIH effort to find £30 billion in “efficiency savings” was already putting enormous strains on the system.

When a healthcare system is overloaded, it’s not just the aged who suffer. A Lancashire man operated on himself when he was put on a long waitlist for a surgery that he badly needed. With waitlists growing, the Royal College of Surgeons reports that financially challenged clinical groups are denying services to patients who are obese or smoke. Often, delayed treatment will increase medical costs in the long run.  

So it shouldn’t be surprising that the Affordable Care Act, which was inspired by the Canadian and British systems, is in deep trouble. Though I predicted it, it is worrisome when the act’s biggest supporters, including The New York Times, admit the program’s flaws.

The growing aged population is a huge financial burden

Obamacare doesn’t deal with the real source of rising healthcare costs: the increase in age-related diseases due to a growing elderly population. It is mathematically impossible to cut societal medical costs while at the same time providing adequate healthcare to a growing and increasingly expensive older population.

This is not just a problem with health care. Social Security and pension funds are running deficits, which will also worsen. Alan Greenspan, former chairman of the Federal Reserve, recently said that he has lost the optimism that he has long been known for. The reason is that “we have a 9 percent annual rate of increase in entitlements, which is mandated by law.  It has got nothing to do with the economy. It has got to do with age and health and the like.”

Greenspan points out that politicians refuse to deal with the “third rail” of entitlements. I agree, but I think there’s a solution. Politicians claim that voters won’t accept delayed retirement. But the evidence shows that most people would like to work longer and save more to pay their own way. Zoya Financial reports that almost two thirds of Americans have to retire earlier than planned, largely due to problems with their own health or a spouse’s.

Anti-aging biotechnologies are in labs right now that could lengthen health spans and working careers. This would allow us to save our entitlement systems. But economists and politicians still have no clue about the biotechnological progress that has marked the start of the 21st century. This will change because it must… but I hope it happens soon

Continued in article

Learn to Code with Harvard’s Popular Intro to Computer Science Course: The 2016 Edition  ---

The Math Dude --- http://www.quickanddirtytips.com/math-dude

Political Correctness Still Dominates University Filters for Speakers
University of New Haven Disinvites Sheriff David Clarke From Speaking ---
It's just not politically correct to let a police chief speak on a college campus in the USA even if he is African American

Political Correctness on Campuses
Harvard is just one of the prestigious institutions where such things have happened -- and where preemptive surrender to mob rule has been justified by a dean saying that it was too costly to provide security for many outside speakers who would set off campus turmoil.

Community Outraged as Walmart Refuses to Make 'Blue Lives Matter' Cake for Retiring Cop ---

I an not a Marxist.
Karl Marx
Maybe this is why only 11 people showed up for his funeral.

Quiz:  How Well Do You Know Microsoft PowerPoint?
Click on "Submit" for more questions

New Handbook  for Educators Explains How to Produce & Distribute Free Video for the World ---

Bob Jensen's threads on Tools and Tricks of the Trade ---

More than 94M Americans (over the age of 15) out of workforce Statistics show that 94 million people in the US older than 15 don't have a job and aren't seeking one. The Labor Department projects that by 2020, the number will top 101 million.)
The 2016 labor force in the USA is 160 million ---

One of the richest men in the world, a Mexican billionaire, is seeking financial control of The New York Times.
As reported by the NYT in 2015 (note the stock buyback program of the NYT that aids in the process)

Toyota Unveils Robot Baby to Tug at Maternal Instinct in Aging Japan ---

Excel: Keyboarding for speed ---

A Much Scarier Version of the Grandparent Scam:  "We have your child"

Previously I reported that wegot hit as grandparents by a phony call from a supposed grandchild allegedly arrested outside the USA. As luck would have it we did not fall for it, although this is a very convincing scam for grandparents who do not talk with a grandchild frequently on the telephone and are not quite fine tuned in to voice recognition like we are with our children ---
"Grandparent scam" explained: What you need to know ---
These days it's often more common for grandparents and some of their grandchildren to communicate via email rather than telephone. If you get an emergency request from a grandchild don't fall for it immediately unless you are 100% certain that the call is genuine. You can ask a grandchild a question that a scammer cannot answer such as what did we do together during our most recent visit. If you send money send it via something like a postal money order or certified check rather than give out a credit card number or checking account number.

This is a less common scarier version where fake kidnappers report that they have your child ---
This scam will probably get the FBI's attention.

Professors should make students aware of both of these types of scams. Students, in turn, should warn their parents and grandparents.

Indian police seek kingpins in tax scam aimed at Americans ---

Jensen Comment
Based upon voice accents, I suspect those computer repair scams also come out of India.

Larry Summers: Four things the Fed should do now to help the economy ---

Harvard's Oliver Hart and MIT's Bengt Holmström just won the 2016 Nobel Prize in economics ---

Still, there’s little to celebrate from Bankrate’s survey of banks. To make sure you’re not hit with egregious ATM fees, here are three simple ways to avoid them

Bob Jensen's personal finance helpers ---

Orange Juice is the Biggest Con of Your Life ---

From the Scout Report on October 7, 2016

XMind --- http://www.xmind.net 

Visual learners looking for a free study or note taking tool may want to check out XMind. This "mind-mapping" program, designed for Mac or Windows computers, allows users to create and save a variety of organizational maps, diagrams, charts, and spreadsheets. Users can create their own maps or select from a variety of templates, including timelines, fishbone charts, and flowcharts. Users can then save their maps to other note-taking tools like Evernote, or share them on social media via Facebook, Twitter, or LinkedIn. (Users may also purchase a version of XMind that allows them to export mindmaps to a variety of formats, including PDF or Microsoft Office). As of now, XMind is available only on computers; a mobile version is in the works.

Block & Flow --- http://www.blockandflowapp.com 

Block & Flow is a free productivity iOS application and Google Chrome extension that uses the pomodoro technique (short work intervals followed by brief, regular breaks) and provides users with self-generated data about how they spend their time. Users create a number of categories to describe work activities (e.g. writing, email, studying, etc), then assign each of these tasks a color. Next, users select from their self-designed categories as they start to work. A timer, in the shape of block, appears on the screen for 25 minutes. Once this time is over, users are prompted to take a 5 minute break. Block and Flow is unique from other pomodoro devices in that users can then view the amount of time - or total blocks - they spend each week on each of their self-created categories. This allows users to regularly assess and adjust their work habits and productivity.

October is for Book Lovers: National Book Foundation Announces Book
Award Finalists; Nobel Prize for Literature and Man Booker Prize to be
Announced in Coming Weeks
These are the 2016 National Book Awards Finalists

The 2016 National Book Awards Finalists

Readers' Guide to This Fall's Big Book Awards

Meet the National Book Foundation's 5 Under 35

Robert Caro, The Art of Biography No. 5

National Book Foundation
http://www.nationalbook.or g

Data Analytics and Big Data: Opportunity or Threat for the Accounting Profession?
SSRN. September 10, 2016


Greg Richins University of Waterloo - School of Accounting and Finance

Andrea Stapleton University of Waterloo - School of Accounting and Finance

Theophanis C. Stratopoulos University of Waterloo - School of Accounting and Finance

Christopher Wong University of Waterloo - School of Accounting and Finance


Contrary to Frey and Osborne (2013) prediction that the accounting profession faces extinction, we argue that accountants can still create value in a world of big data. To advance our argument, we provide a conceptual framework based on structured/unstructured data and problem driven/exploratory analysis. We argue that accountants already excel at problem driven analysis of structured data, are well positioned to play a leading role in the problem driven analysis of unstructured data, and can support data scientists performing exploratory analysis on big data. Our argument rests on two pillars: accountants are familiar with structured data sets, easing the transition to working with unstructured data, and possess knowledge of business fundamentals. Thus, rather than replacing accountants, we argue that big data complements accountants’ skills and knowledge. However, educators, standard setters, and professional bodies must adjust their curricula, standards, and frameworks to accommodate the challenges of big data.

CNBC:  50-state public pension unfunded liabilities to hit $1.75 trillion: Moody's ---

IMF Seriously Worried About Pension Fund Failures
IMF urges regulators to strengthen pension funds amid weak growth, low interest rates ---

Sears Selling Craftsman for $2 Billion Likely Won't Keep Sears Afloat ---

Who is the 2016 Taxgate Deep Throat?

William Shakespeare reads my three blogs and occasionally sends me messages. For example, on February 12 he complained that his skull was stolen. I didn't pay much attention, because he blamed Tony Blair. In the U.K. Tony Blair gets blamed for everything from crop circles to world wars to grave robbing ---

On October 5, 2016 Shakespeare sent me the following message. I might add that only my Grandma Jensen and William Shakespeare call be Bobby.
The message reads as follows:


October 5, 2016
Dear Bobby,

'Tis true my Bobby that there's a Taxgate Deep Throat, but you've naively assumed that Deep Throat's a turncoat whistleblower. Truth is that The Donald grows weary of the many slings and arrows aimed at him because of his failure to disclose his tax returns. Upon receiving that plain brown envelope the foolish New York Times mistakenly assumed it had a 2016 Taxgate Deep Throat to rival the WaPo's 1972 Watergate Deep Throat. In truth The Donald himself fooled the Fool to divert the blame from himself to the evil IRS that lets millions of other wealthy naives to not pay a farthing in tax on hundreds of millions of dollars if revenue. Now the feverish media concedes that The Donald was cleverly taking advantage of injustices allowed by a dastardly IRS. Truth is that the Taxgate Deep Throat is none other than The Donald himself --- he fooled a Fool.

It's highly unlikely that Donald Trump's accountant named Jack Mitnick, CPA (and attorney)  would so willingly verify the that the disclosed partial tax returns were legitimate without his former employer's willingness to do so. To do so without permission is an ethics violation in the CPA profession. Of course it could be possible that Mitnick, now retired and quite elderly, no longer cares about the ethics of his profession.

Trump's Accountant/Lawyer Committed 'Grievous Violation Of Legal And Professional Ethics In Discussing His Tax Returns With Media ---
But he's forgiven in the eyes of the world since the client was Donald Trump

Jack Mitnick says Trump's not tax genius ---

After the Sexit scandal all of this probably does not matter much ---
As Glen Beck said, Donald Trump is now the Anthony Weiner of the Republican Party. Bill Clinton's sex scandal fines and settlements of $1 million are long forgotten along with the adulteries of the three Kennedy brothers. Chappaquiddick is a distant memory.
If Trump no longer has a chance of becoming President of the USA it's a good thing. Let's restore the honor of women by voting for Hillary.

NY Times:  When It Comes To Tax Avoidance, Donald Trump’s Just A Small Fry ---

US homeowners get a huge tax break almost nobody knows about, and it's even part of GDP ---

Jensen Comment
I'm not so sure I agree with taxing imputed rents just like I'm not in favor of eliminating the mortgage interest tax break in the USA (that's not used by all taxpayers, especially retired owners, if they don't have enough other deductions to make it worthwhile to itemize deductions on their tax returns).

The reason is that there's already a housing shortage in many parts of the USA. Discouraging home ownership relative to renting simply exacerbates the housing shortage problem. In my opinion we should do more to encourage home ownership instead of further discouraging the building and owning of homes.

Another drawback of renting versus owning is that home owners are more apt to put in more time and money maintaining their homes. Renters usually don't care to put time and money into home maintenance. Government housing is a perfect example of renters not caring. After 20 or so years, government housing often has to be demolished because of the way renters destroyed the housing.

Renting often leads to vertical housing with ever higher and higher buildings and heavy concentrations of people. Such population concentrations often breed crime that led to an exodus of urban dwellers into sprawling suburbs. Sprawling suburbs have their own problems, but for many suburban living beats living in bee hive concentrations.

Accounting History Corner
University of Mississippi Accounting Digital Collection ---

The Digital Accounting Collection is composed of several discrete collections. The “Accounting Pamphlets Collection– Bibliographic Citations Only” containing over 33,000 references, indexes the pamphlets, brochures and newsletters that the American Institute of Certified Public Accountants’ library collected from 1918 to 2000. The other collections are full text searchable. The “Accounting Pamphlets Collection - Full Text ” is a small, but growing, collection of full text materials culled from the “Bibliographic Citations Only Collection.” Currently, the "Accounting Pamphlets Collection - Full Text” features pamphlets from the early twentieth century which were published as practical guides to bookkeepers in various industries and organizations. The Academy of Accounting Historians has kindly given permission to publish the Accounting Historians Journal and the Accounting Historians Notebook. Complete runs of both periodicals, save the last (embargoed) year, are now available. The American Institute of Certified Public Accountants has given permission to post the full text of all their noncurrent exposure drafts. Finally, a small collection of accounting art provides an entertaining glimpse into accounting through the ages. We wish to especially thank the American Institute of Certified Public Accountants and the Academy of Accounting Historians for providing materials and permissions for the creation of these collections.

Accounting History Corner
Voices of Experience Series: An Academy Interview with Richard Vangermeersch,
The Accounting Historians Notebook, April 2012 ---

Jensen Comment
Years ago Dick was my friend and colleague while we were both on the faculty at the University of Maine. I suspect most everybody remembers Dick as an unforgettable character --- independent, emotional, excitable, and very outspoken. He was also a dedicated scholar of accounting history and very active in the Academy of Accounting Historians. I'm proud to remember him as a true friend, albeit not somebody you want to sit beside at a sporting event such as a basketball game. More than once Dick yanked the phone cord out of the wall in his faculty office. He was uncompromising in most everything in life, including historical scholarship. He made his mark in our Academy.

Accounting History Corner
Accounting History Photographs --- http://www.olemiss.edu/depts/general_library/dac/files/photos.html

Accounting History Corner
Report on the 13th World Congress of Accounting Historians Newcastle upon Tyne • 17-19 July 2012 ---