It's hard to beat a person who never gives up.

Babe Ruth, Historic Home Run Hitter
What's sad is to witness what Syria has become because nobody will give up.

Why, we grow rusty and you catch us at the very point of decadence --- by this time tomorrow we may have forgotten everything we ever knew. That's a thought isn't it? We'd be back to where we started --- improvising.
Tom Stoppard, Rosencrantz and Guildenstern are Dead (Act I)

I think this was a cartoon in The New Yorker.
The CEO stands in front of a chart showing a pending financial disaster.
The CEO says to his chief accountant:
"Digbee, the only thing that can save us is an accounting miracle!"

GAO Assails Department Of Education's Cost Estimates Of Income-Driven Student Loans, Projects 39% ($137 Billion) Of 1995-2017 Loans Will Not Be Repaid ---
http://taxprof.typepad.com/taxprof_blog/2016/12/gao-assails-department-of-educations-cost-estimates-of-income-driven-student-loans-projects-39-137-b.html

Jensen Comment

We have to think that maybe the Department of Education's accountants took lessons on how to cheat from the House Budget Committee estimating the future costs of Obamacare around the turn of the 21st Century. The errors are so enormous one has to think that these errors are intentional in both cases.

Even in states that have legalized marijuana, using it means sacrificing your right to armed self-defense ---
http://reason.com/archives/2016/11/30/the-cannabis-exception-to-the-second-ame

. . .

If you are one of the 68 million Americans who live in a state that has decided to allow recreational use of marijuana, or one of the 186 million who live in a state that recognizes marijuana as a medicine, you may have been under the impression that legalization makes cannabis consumption lawful. The ATF wants to disabuse you of that notion; hence the warning.

"We were concerned that some buyers who use marijuana may read the 2012 language asking if they were an 'unlawful user of, or addicted to, marijuana' and erroneously say no because in that particular state, marijuana has been legalized," an ATF spokeswoman told The Denver Post last week. "Most dealers recognize that marijuana use prohibits people from purchasing firearms under federal law, but many members of the general public may not be as familiar with the Gun Control Act."

Under that law, a cannabis consumer who possesses a gun (no matter where he got it) is guilty of a felony punishable by up to 10 years in prison. Likewise anyone who sells him a gun if has reason to know the buyer is a cannabis consumer. Falsely denying marijuana use on Form 4473 can get you up to five years.

Continued in article

Jensen Comment
If you have one or more guns for protecting yourself and your home, think again about ever buying or even going near marijuana. If you are thinking about taking marijuana for pain think trying other pain killers.

What is not clear is enforcement or lack thereof. For example, what about guns in your house that you already possess and will not be filing Form 4473 for those guns. If you buy marijuana legally will the AFF be raiding your home looking for guns? Perhaps not unless they have other reasons to find your guns. Legal marijuana purchase may become an excuse, however, to look for guns in your house or car.

What's probably unfair about the law is that alcohol abusers are likely to be far more impaired that marijuana abusers.

Big Brother knows when you purchase marijuana legally. Have three double martinis instead (but don't drive).

Countries With the Most Generous Welfare Programs Can't Afford Them ---
http://247wallst.com/special-report/2016/11/30/countries-with-the-most-generous-welfare-programs/?utm_source=247WallStDailyNewsletter&utm_medium=email&utm_content=NOV302016A&utm_campaign=DailyNewsletter

Jensen Comment
I question whether the top welfare spenders can really afford it these days because they also have high unemployment, including the generous welfare spenders of France, Finland, Belgium, and Italy at Ranks 1-4. Italy is probably least able to sustain such generous welfare. High welfare spenders like Italy and Greece are in need of more EU bailouts. Only a few high welfare spenders like Germany, Austria, and Norway have sound economies. Finland historically has a sound economy but is struggling with very high unemployment at the moment. Sweden is in the process of trying to offload too many refugees.

Can't stuff them back into the bottle
Austria is threatening to sue its neighbour if it doesn't take back migrants ---
http://www.businessinsider.com/austria-threatens-to-sue-hungary-over-migrants-2016-9

Sweden Seeks to Relocate Thousands of Migrants ---
http://www.wsj.com/articles/sweden-seeks-to-relocate-migrants-1446657536

Sweden Is Now Paying Migrants to Leave (after rejecting asylum requests)---
http://townhall.com/tipsheet/christinerousselle/2016/08/28/sweden-is-now-paying-migrants-to-leave-n2211156?utm_source=thdaily&utm_medium=email&utm_campaign=nl&newsletterad=
Norway started the trend followed by Germany and now Sweden. Finland exports them quickly to Sweden, and Denmark never let them in in any serious numbers. Paying undocumented immigrants to leave the USA does not work well because it is so easy for them to return in a matter of weeks.

Germany:  Seeking to Repatriate (read that deport) 100,000 migrants ---
http://townhall.com/tipsheet/mattvespa/2016/11/28/germany-okay100000-of-you-migrants-have-gotta-go-n2251519?utm_source=thdailypm&utm_medium=email&utm_campaign=nl_pm&newsletterad=
Jensen Comment
Things are somewhat different now that Merkel is facing in a re-election campaign. Generously opened its borders to thousands of refugees and is not overwhelmed.

Boeing's Illegal Tax Incentive from the State of Washington

From the CFO Journal's Morning Ledger on November 28, 2016

Boeing faces WTO sanctions. The World Trade Organization as early as Monday is expected to rule that Boeing Co. has been granted illegal state subsidies, according to people familiar with the finding. The judgment involves tax incentives Boeing will receive from Washington state to build its new 777X widebody plane, the latest round in a long-running dispute between the U.S. and the European Union over support for Boeing and Airbus Group SE. Boeing said the value of the 777X tax incentive is $50 million a year.

The CEO of Ford just perfectly summarized the biggest problem for electric cars ---
http://www.businessinsider.com/ford-ceo-biggest-problem-for-electric-cars-2016-12

Jensen Comment
CEO Mark Fields contends the sales demand just isn't there.

Sure there are rich people in warm climates providing a niche market for Tesla electric cars as long as taxpayers are stupid enough to continue paying the 1% huge subsidies for purchase prices and provide free roads and bridges for electric cars. But those rich folks have gasoline cars for longer trips beyond the limited ranges of electric cars.

Sure there are rich people not worried about what Trump's angry China might do to the price of lithium. Rich folks have other cars.

I suspect there will be an increased market for hybrids since they have longer ranges. Those cars make sense.

All eyes on on the forthcoming Chevy Bolt since the Bolt is cheaper than the Tesla and has a worldwide network of dealers.

Ford's CEO Mark Fields does not seem to be losing sleep over competition from Tesla or Bolt.

The serious long-term vehicle of the future might be hydrogen powered. We're not dependent upon China for hydrogen. There's a new startup company that's actually making 18-wheel hydrogen trucks.

It's the Worst for Wurst (and imported cars and other goods from around the world)

From the CFO Journal's Morning Ledger on November 28, 2016

For years, Germans have worn their title with pride. From 2003 to 2008, the world’s fourth-largest economy was dubbed “Exportweltmeister,” German for world export champion, a description of the country’s massive current-account surplus. For 2016, Germany is forecast to regain the title from China, to which it lost it in 2015.

The outlook, however, is less promising, Natascha Divac and Sarah Sloat report. Donald Trump’s victory in the U.S. presidential election, after a campaign attacking free trade, has German companies scrambling to tally the impact. Germany shipped $125 billion in goods to the U.S. last year, 2.5 times what it imported from the U.S. The U.S. is Germany’s largest trading partner, accounting for almost 10% of all German exports. “If Trump can enact the trade limits he has announced, the damage would be substantial,” said Clemens Fuest, president of Germany’s Ifo Institute for Economic Research. He estimates 1.5 million German jobs depend on exports to the U.S.

Jensen Comment

We expect prices will be higher for some German food items we buy through Amazon. But it's not clear how much our next Subaru will increase in price since it's assembled in Indiana. Many of the components, however, come from Japan.

I expect those Midwestern farmers who voted for Trump will become unhappy over the decline in farm exports, especially those Asian exports.

I'm vote no on protectionism and tariffs.

Although the number of Thanksgiving online shoppers increased by 10 million over last year, customer spending in total this year was down nearly 3.5% ---
http://time.com/4583028/thanksgiving-shopping-discounts-spending-black-friday/?xid=newsletter-brief

Jensen Comment
Some travelers are saving up for those cheap winter vacations in Cuba.

25 of Prospering Versus Dying Industries in the USA ---
http://247wallst.com/special-report/2016/12/09/americas-25-thriving-industries/6/

Among the most prosperous industries eldercare slightly edged out goat farming, oil pipeline construction, and technical services like accounting and consulting ---
http://247wallst.com/special-report/2016/12/09/americas-25-thriving-industries/6/ 
Note that a prospering industry need not mean growing employment in that industry if robotics are taking over.
And a prospering industry need not have highly paid employees.

It's not a good time to be into fabrics, newspapers, and land developing.

What Does Betsy DeVos Have in Mind for Higher Ed? ---
http://www.chronicle.com/article/What-Does-Betsy-DeVos-Have-in/238514?cid=db&elqTrackId=bde920cdf67644d7be3b66d813adb214&elq=18095b2a2cb544aaa2ffbe395ea52f87&elqaid=11608&elqat=1&elqCampaignId=4586

. . .

But it’s hard to find evidence of Ms. DeVos having taken any positions on higher-ed policy. Neal McCluskey, director of the libertarian-leaning Cato Institute’s Center for Educational Freedom, put it bluntly in an analysis of her nomination: "I have no idea where DeVos stands on early-childhood or higher-education issues, and the latter, especially, is gigantic."

"DeVos will essentially be taking over a hugely bureaucratic lending company — with lots of regulatory power — that on a day-to-day basis could prove to be a far greater burden than she expected," Mr. McCluskey wrote.

Continued in article

Jensen Comment
One of the problem with higher education for-profits is that they've become almost entirely dependent upon government to pay the tuition of their students. Another problem is that their admission and academic standards are suspected of being lower than those of their competitors in the public sector of higher education. If Ms Devos promotes academic standards and more competitiveness among the for-profits for students then she might be a breath of fresh air in the Department of Education. However, it's not clear that the for-profits can really compete with the public sector where online education is soaring with more reputable universities and professors.

For-profits might become more competitive if accrediting agencies like the AACSB are forced to open the door a crack for-profits with deep funding with such new names as Google University, GE Technical Institute, Budweiser University, etc.

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

Bob Jensen's threads on distance education alternatives --- http://www.trinity.edu/rjensen/Crossborder.htm

The Great Eucalyptus Debate:  Science Can't Tell Us What to Do
When environmentalists clash among themselves it's not a "clear cut" war between bad guys versus good guys
When the research of prestigious universities (think Stanford and UC Berkeley)  is not trusted by residents on and near those campuses

Jensen Commen6t
When I lived on the Stanford University campus (six years as a graduate student plus two later years in a think tank) I loved to walk among the towering Eucalyptus trees and breathe their wonderful aroma. Even when healthy these towering giants usually look like they're dying among lots of falling branches and bark,

Eucalyptus trees are slow (think centuries) growing and very hard and heavy --- https://en.wikipedia.org/wiki/Eucalyptus

California. In the 1850s
Eucalyptus trees were introduced to California by Australians during the California Gold Rush. Much of California has a similar climate to parts of Australia. By the early 1900s, thousands of acres of eucalypts were planted with the encouragement of the state government. It was hoped that they would provide a renewable source of timber for construction, furniture making and railroad ties. It was soon found that for the latter purpose eucalyptus was particularly unsuitable, as the ties made from eucalyptus had a tendency to twist while drying, and the dried ties were so tough that it was nearly impossible to hammer rail spikes into them. They went on to note that the promise of eucalyptus in California was based on the old virgin forests of Australia. This was a mistake as the young trees being harvested in California could not compare in quality to the centuries-old eucalyptus timber of Australia. It reacted differently to harvest. The older trees didn't split or warp as the infant California crop did. There was a vast difference between the two, and this would doom the California eucalyptus industry. One way in which the eucalyptus, mainly the blue gum E. globulus, proved valuable in California was in providing windbreaks for highways, orange groves, and other farms in the mostly treeless central part of the state. They are also admired as shade and ornamental trees in many cities and gardens. Eucalyptus plantations in California have been criticised because they compete with native plants and do not support native animals. Fire is also a problem. The 1991 Oakland Hills firestorm which destroyed almost 3,000 homes and killed 25 people was partly fuelled by large numbers of eucalypts close to the houses.[41] In some parts of California, eucalypt plantations are being removed and native trees and plants restored. Individuals have also illegally destroyed some trees and are suspected of introducing insect pests from Australia which attack the trees.[42] Eucalyptus trees also grow in parts of the Pacific Northwest: Washington, Oregon and parts of British Columbia.

Eucalyptus tree fire hazard --- https://en.wikipedia.org/wiki/Eucalyptus#Fire_hazard
What makes them doubly dangerous are the many arsonists ready, willing, and able to start fires in troubled California

The Great Eucalyptus Debate
The Bay Area is deadlocked in a battle over whether its non-native blue gum trees should be felled or protected ---
https://www.theatlantic.com/science/archive/2016/11/the-great-eucalyptus-debate/509069/

. . .

 

Macalister isn’t 100 percent sure she could trust a NAS report, but she likes the idea better than charging a local university with studying these issues. “I would say it is a roll of the dice, but if you must put the dice in particular hands, the Academy is certainly better than local options,” she says.

 

Science can’t tell us what to do, whether to hone the axe and ready the glyphosphate or simply spread a picnic blanket under the canopy and relax. But in an ideal world, there would be an agreed-upon set of facts. From there, the differences of opinions would flow from different values, and there’s always hope that opposing values can expand and melt into each other—that compromise and compassion can be achieved. Until then, the magnificent Tasmanian blue gum is, in some sense, a prisoner of dueling realities.

Jensen Comment
I side with Mary Macalister in her quest to save the trees. But then I don't own nearby real estate (wish I did).

6 million Americans have stopped paying their car loans, and it's becoming a 'significant concern' ---
http://www.businessinsider.com/auto-loan-delinquency-numbers-from-ny-fed-2016-11

California: Where the Air is Pure and the Streets are Putrid

It's now legal to urinate and defecate on the streets of San Francisco even though it's not a good thing for tourism or health (don't walk barefoot on hotel room carpets)---
http://hotair.com/archives/2016/12/01/great-news-you-can-now-pee-on-the-sidewalks-in-san-francisco/

The Cow Fart Police in California:  California To Start Regulating Cow Farts ---
http://resistancefeed.com/2016/11/29/california-start-regulating-cow-farts/
Jensen Comment
Don't tell Jerry Brown, but as milk and dairy prices skyrocket in California it's possible to get fresh milk and many dairy products from Amazon. At what point will California's dairy farmers start selling their land for more ticky-tack housing? The lowest Amazon price I found today was $.59 per ounce which leaves a lot of cushion for California fresh milk price rises. However, customers may buy cheaper milk substitutes and powdered milk on Amazon as well.
It won't be long before California's fart police are sent to nursing homes and homes for wayward boys.
Our two sons in Yuba City, California have warned me that in the future I may need a special permit to visit them.

Examples of Junk Science: A Pseudoscience Whistleblower Story ---
http://politicalcalculations.blogspot.com/2016/12/examples-of-junk-science-pseudoscience.html#.WEHTUoWcGcw

The 400 Individual Income Tax Returns Reporting the Largest Adjusted Gross Incomes Each Year, 1992–2014 ---
https://www.irs.gov/pub/irs-soi/14intop400.pdf

The fastest way to destroy the United Nations would be to five every adult on earth one vote for UN representatives
Bob Jensen

"The Slippery Statistics Of the Popular Vote,"  by Walter A. McDougall, The New York Times, November 16, 2000 ---
http://www.nytimes.com/2000/11/16/opinion/the-slippery-statistics-of-the-popular-vote.html 

. . .

What is the significance of such historical revisionism for our conundrum today? First, it stands as a warning against those who would tinker with the Constitution because they don't like one possible outcome, or because they try to change the rules after the game is over. The national popular vote can be as indecipherable, not to mention inaccurate or dishonest, as the Electoral College result, and to abolish the Electoral College in favor of a national referendum would make every vote cast or disqualified everywhere as potentially decisive as those in Palm Beach County, Fla., are this week.

Second, 1960 and 2000 alike demonstrate that the popular vote means nothing because the candidates understood from the start that they were competing for states and they both campaigned on that basis. If the rules going into this election had stipulated that the popular vote alone would determine the victor, then Mr. Bush would have camped out in California, upstate New York and Illinois, and might well have swamped Mr. Gore in the national vote. But instead, judging that he would not carry those populous states, Bush focused elsewhere in a campaign to win a majority of electoral votes.

Third, and perhaps most important, 1960 teaches us that a candidate can win by a very slim margin (indeed, even lose the popular vote), and still govern effectively. President Kennedy sought to unite, not divide. He promoted bipartisanship on issues as volatile as civil rights, tax cuts and the cold war, and he preserved his nation's respect and affection for the office of the presidency.

 

Economist Magazine:  India's Road to Robin Hood Monitory Hell is Paved With Good Intentions

Jensen Comment
In the USA a huge underground (cash-only) economy allows criminals to launder money, rich folks to avoid income taxes, and laborers to avoid payroll taxes.

"Modi's Bungle:  Narendra Modi needs to take measures to mitigate the damage his rupee reform has done," Economist Magazine, December 3, 2016 ---
http://www.economist.com/news/leaders/21711040-narendra-modi-needs-take-measures-mitigate-damage-his-rupee-reform-has-done-indias

. . .

Not the way to do it

The plan has laudable aims. Its initial popularity was based on the idea that the greedy rich, with their ill-gotten “black money” stored in stacks of banknotes, will get their comeuppance. Those who cannot justify the sources of their wealth will face punitive taxes. It also accords with Mr Modi’s manifesto pledge to normalise India’s black economy, estimated by the World Bank in 2010 to be worth about one-fifth of official GDP. The idea is that India will become more efficient, as more people and more money enter the banking system; counterfeit currency will become worthless; India’s woefully low tax base will expand; and government coffers will enjoy a windfall of cash expropriated from the corrupt.

It is a pity, then, that Mr Modi’s scheme to achieve these aims is so flawed. Banknotes are not just a way for the rich to store their wealth; they are also how the unbanked survive. As so often, the burden of this reform has fallen most heavily on the poor (see article). Over four-fifths of India’s workers are in the “informal” sector, paid in cash. Untold numbers have been laid off because their employers cannot pay them. Tens of millions have queued for hours at cash machines and bank branches, to get rid of the useless notes and get hold of some spending money. A new business has sprung up in laundering cash for a fee for those without the time or inclination to queue, or with more notes than they can account for.

Cash is used for 98% by volume of all consumer transactions in India. With factories idle, small shops struggling and a shortage of cash to pay farmers for their produce, the economy is stuttering. There are reports that sales of farm staples have fallen by half and those of consumer durables by 70%. Guesses at the effect on national output vary wildly, but the rupee withdrawal could shave two percentage points off annual GDP growth (running at 7.1% in the three months to September).

With a bit of forethought, much of the mayhem could have been avoided. It turns out that the new notes are smaller and require all the country’s ATMs to be reconfigured, which takes 45 days. Some 22bn notes are affected, but printing capacity is said by the previous finance minister to amount to only 3bn a month. So even if fewer notes are needed, because more money will be in banks, printing them will take some time. The banks were ill-prepared to handle about 8.5trn rupees in new deposits in the three weeks after demonetisation. After they used the deposits to buy bonds, lowering interest rates, the central bank had to order them to park the new money with it, in zero-interest accounts.

If Mr Modi’s plea for patience for a 50-day period until the end of the year looks optimistic, so does the promise of “the India of your dreams”, purged of the corrupt and their loot. In India’s black economy of undeclared, untaxed income, all sorts of transactions, from medical bills to house purchases, are sometimes settled with suitcase-loads of banknotes. Yet even if the hoarders will be wary of another confiscation in the future, they will be tempted to make use of the new 2,000-rupee note just as they used the old 1,000-rupee one.

Moreover, Mr Modi was wrong when he said that the rich now need sleeping pills, while the poor sleep peacefully. In past seizures of illegal wealth, only between 3.75% and 7.3% was found to be kept in cash. The sleepless are those who need cash to get by; the truly rich are laughing all the way to their flats in London. The punitive taxes levied on black money that is deposited will feel like flea-bites. As for the counterfeiters, most estimates of the value of fake rupees are in the tens of millions of dollars, out of $250bn in circulation.

Both for the sake of Indians and for his premiership, Mr Modi needs to mitigate some of the harm he has caused. He should find ways of printing the new money more quickly. More important, he should also lengthen the period over which notes may be exchanged or deposited and allow the old notes to remain valid as payments for a range of goods and services (tax payments, say, would seem logical).

Somewhat too sensational

Much in India needs reform—abolishing restrictive labour rules, for example. In the past such reform has often been stymied by a system that favours government by committee. Mr Modi has lurched to the other extreme. The perceived need for secrecy (to take cash-hoarders by surprise) fed into the innate sense he has of his own infallibility and his misplaced faith in his technocratic skills. By designing a scheme that was needlessly callous and which is becoming increasingly unpopular, he has squandered political capital. In future he needs to consult more widely, centralise less decision-making in his own hands and acknowledge that not all criticism is partisan or special pleading from the corrupt rich. India, fortunately, is not North Korea, and is aware that leaders are fallible. Its federal, democratic system will give voters plenty of chances to let it be known how badly Mr Modi has messed up his rupee rescue.