To Accompany the August 30, 2019 edition of Tidbits
Bob Jensen at Trinity University
My Latest Web Document
Over 400 Examples of Critical Thinking and Illustrations of How to Mislead With Statistics ---
Animated Visualization of the United States’ Exploding Population Growth
Over 200 Years (1790 – 2010) ---
A Visualization of the United States’ Exploding Population Growth Over 200 Years (1790 – 2010)
USA Debt Clock --- http://www.usdebtclock.org/
The published debt is a lie
Here's the real booked debt ---
In September 2017 the USA National Debt exceeded $22 trillion for the first time
Human Population Over Time on Earth ---
move is underway to destroy the American Dream of rags to riches (by taxing away
the riches) the Chinese dream is on the rise.
The Chinese Dream
How a Chinese billionaire went from making $16 a month in a factory to being one of the world's richest self-made women with an $8.3 billion real-estate empire ---
Top 50 Billionaires in China ---
The question for students to debate is why a supposed communist country allows so many billionaires to rise up from poverty.
That's supposed to happen in the USA where a child growing up in deep poverty (think Oprah Winfrey or Howard Shultz) became a multi-billionaires.
But is it also supposed to happen under communism? If so, why?
One reason is that many billionaires can afford to pour lots of money into high risk ventures. When's the last time you heard about a high risk (think Silicon Valley) venture in Europe?
Wikiquote from Wikipedia --- https://www.wikiquote.org/
History will prove former President Donald
Trump was correct about Mexico one day funding an impenetrable wall --- to keep
out over 2 billion starving green immigrants seeking to enter Mexico from the
Some Fatherly Words of Wisdom from Jack Bogle, Founder
of Vanguard Investments, to My Sons ---
Milton Friedman: The Lesson of the
Chopsticks would be even better
Left’s Anti-Capitalist Manifesto: Its goal is to remake our economic system —
and the Democratic Party ---
I have a complaint about America today, and it
is simple: we don’t love business enough ---
Praise of Cheap Labor," by Paul Krugman,
Slate, March 21, 1997 ---
Corruption in general has a deleterious effect
on the readiness of economic agents to invest. In the long run, it leads to a
paralysis of economic life. But very often it is not that economic agents
themselves have had the bad experience of being cheated and ruined, they just
know that in this country, or in this part of the economy, or this building
scene, there is a high likelihood that you will get cheated and that free riders
can get away with it. Here again, reputation is absolutely essential, which is
why transparency is so important. Trust can only be engendered by transparency.
It's no coincidence that the name of the most influential non-governmental
organization dealing with corruption is Transparency International.
A Conversation with Karl Sigmund: When Rule of Law is Not Working
Mortgage Backed Securities are like boxes
of chocolates. Criminals on Wall Street and one particular U.S. Congressional
Committee stole a few chocolates from the boxes and replaced them with turds.
Their criminal buddies at Standard & Poors rated these boxes AAA Investment Grade
chocolates. These boxes were then sold all over the world to investors.
Eventually somebody bites into a turd and discovers the crime. Suddenly nobody
trusts American chocolates anymore worldwide. Hank Paulson now wants the
American taxpayers to buy up and hold all these boxes of turd-infested
chocolates for $700 billion dollars until the market for turds returns to
normal. Meanwhile, Hank's buddies, the Wall Street criminals who stole all the
good chocolates are not being investigated, arrested, or indicted. Momma always
said: '"Sniff the chocolates first Forrest." Things generally don't pass the
smell test if they came from Wall Street or from Washington DC.
Forrest Gump as quoted at http://newsgroups.derkeiler.com/Archive/Rec/rec.sport.tennis/2008-10/msg02206.html
It is not that machines are going to replace
chemists. It’s that the chemists who use machines will replace those that don’t
Gallup: Americans Say No. 1 Problem is
'Government,' No. 2 is 'Immigration' ---
"If you open the borders, my God, there's a
lot of poverty in this world, and you're going to have people from all over the
world. And I don't think that's something that we can do at this point."
Great fleas have little fleas upon their backs to bite 'em, And little fleas have lesser fleas, and so on ad infinitum ---
Augustus De Morgan
Prior to 1980 what was unique about the year of his birth in 1871?
12 inspiring quotes from Martin Luther King
21 oustanding Warren Buffet quotations ---
The Atlantic: The Swiftly Closing
Borders of Europe ---
Italian Minister tells NGO Italy doesn’t want migrants: “Our ports are closed!”
enemy is fear
We think it's hate
But, it's fear
13 of the (alleged) most famous last words in
21 of Michelle Obama's most inspiring quotes
on work, success, and relationships ---
19 unforgettable quotes from legendary Marine
Gen. Jim 'Mad Dog' Mattis, who quit as Trump's defense secretary ---
Here are the Ten Best Pieces of Advice from
2018 Commencement Speakers ---
Sometimes the grass is greener on the other side because it's been fertilized
with more bullshit.
The Lucretius Problem is a mental defect where
we assume the worst case event that has happened is the worst case event that
can happen ---
The worst form of inequality is to try to make
unequal things equal.
The Economic Ignorance of Bernie Sanders ---
Bernie Sanders’ New Campaign Advisor David Sirota Once Touted
Hugo Chavez’s ‘Economic Miracle’ in Venezuela ---
How many times have we heard ‘free
tuition,’ ‘free health care,’ and free you-name-it? If a particular good or
service is truly free, we can have as much of it as we want without the
sacrifice of other goods or services. Take a ‘free’ library; is it really free?
The answer is no. Had the library not been built, that $50 million could have
purchased something else. That something else sacrificed is the cost of the
library. While users of the library might pay a zero price, zero price and free
are not one and the same. So when politicians talk about providing something
free, ask them to identify the beneficent Santa Claus or tooth fairy.
Every great cause begins as a movement,
becomes a business, and eventually degenerates into a racket.
The inherent vice of capitalism is the unequal
sharing of blessings; the inherent virtue of socialism is the equal sharing of
for the space in between, because that's where the real mystery lies.
Only those who will risk going
too far can possibly find out how far one can go.
There is a crack in
everything, that’s how the light gets in.
In honor of his centennial, the Top 10 Feynman
Thomas Sowell (controversial
conservative black economist) ---
The 30 Best Thomas Sowell Quotes ---
Be brave enough to start a
conversation that matters.
Even conversations that are not politically correct.
That government is best which governs the least,
because its people discipline themselves.
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)
It's hard to beat a person who never gives up.
Historic Home Run Hitter
What's sad is to witness what Syria has become because nobody gave up earlier.
And "because they're
nonstate actors, it's hard for us to get the satisfaction of [Gen.] MacArthur
and the [Japanese] Emperor [Hirohito] meeting and the war officially being
over," Obama observed, referencing the end of World War II.
President Barack Obama when asked if the USA of the future will be perpetually engaged in war.
We must be willing to get rid of the
life we've planned, so as to have the life that is waiting for us.
If everyone is thinking alike, then
somebody isn't thinking.
George S. Patton
And many writers have imagined for themselves
republics and principalities that have never been seen or known to exist in
reality; for there is such a gap between how one lives and how one ought to live
that anyone who abandons what is done for what ought to be done learns his ruin
rather than his preservation: for a man who wishes to profess goodness at all
times will come to ruin among so many who are not good.
If you don't know where you're going, you might
not get there.
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
Today, humanity fabricates 1,000 times more
transistors annually than the entire world grows grains of wheat and rice
I learned long ago never to wrestle with a pig.
... You get dirty and besides the pig likes it ---
George Bernard Shaw
You can get a lot farther with a smile and a
gun than you can with just a smile.
From John F. Kennedy to Oprah and Steve Jobs,
here are 20 of the best commencement speeches of all time ---
21 quotes from self-made billionaires that
will change your outlook on money ---
The Best Advice from 2018's Celebrity
Commencement Speakers ---
If the end brings me out all right, what is
said against me won’t amount to anything. If the end brings me out wrong, ten
angels swearing I was right would make no difference.
Lincoln on How to Handle Criticism ---
The Economist: A new kind of left-wing
doctrine is emerging. It is not the answer to capitalism’s problems ---
The Supply of Housing Has Become Less Elastic ---
England: Have the Standards-Setting
Authorities Gone Too Far?
Jimmy Kimmel Fined Nearly Half a Million Dollars
for Stupid Skit Mocking President Trump ---
Actually it's a cheap way to get $10+ million in publicity and increased advertising..
not reported on major network news
The Greening of the Earthc ---
Extreme Left Aims For Party Takeover:---
MIT: A Rice University spinout is pursuing
a novel way of producing hydrogen and other chemicals by relying on
nanoparticles that enable light, rather than heat, to power the reactions and
help curb climate change ---
Deficits Are Huge Now, So What Happens When Recession Hits?
With each decade of progress democracy seems to
be in some type of crisis ---
In my opinion the trend since the invention of the Internet (20 years before the World Wide Web) is a trend toward the Big Brotherism of Orwell's 1984 where Big Brother will protect us from terrorists, starvation, holocaust, environmental exploitation, and dangers of freedom that squelch to promises of freedom. We may get to vote to choose the next Big Brother, but it really won't matter since Big Brothers will all be alike in every way other than race and gender. With overpopulation and worldwide surveillance there will be no place to run and hide. For some (think Nigeria) life will be better; For others (think Wyoming) life will be worse. The big unknowns will be when and how earth is largely depopulated.
The Fishy Science of Omega-3s ---
The Atlantic: Every American Should Hope Trump
Prevails Against China ---
There's a difference between "should hope" versus "do hope." Millions oif voters hope every Trump initiative fails miserably and the USA economy plunges into a deep dark depression from which one of the 2020 Democratic Party hopefuls will bring heaven on earth.
MPR: How China Uses Twitter And Facebook To
Share Disinformation About Hong Kong ---
Purchasing Managers' Index --- https://en.wikipedia.org/wiki/Purchasing_Managers%27_Index
Treasury Rates and the Global PMI (correlation is not
necessarily causality) ---
The Disaster of Negative Interest Policy ---
Transactions Cost Analysis ---
Why Transaction Cost Analysis is Attractive, and Very Flawed ---
The Internet’s Invisible Cleanup Crew ---
Robert Lawson and Benjamin Powell,
Socialism Sucks: Two Economists Drink Their Way Through the Unfree World.
A good, short "give it to your high school kid" book on why socialism is not an
entirely ideal way to arrange society.
Larry Summers: Whither Central Banking?
The Failure of Keynesian Economics Explained
Book Review: Fully Grown: Why a Stagnant
Economy is a Sign of Success
The Atlantic: The Amazon Cannot Be
Recovered Once It’s Gone ---
Towns Addicted to Fines
Johnny Cash: "I Walk the Line" --- https://www.youtube.com/watch?v=Lq0fUa0vW_E
Anti-Semitism: New York Times' Double
MIT: We Aren't Terrified Enough About
Losing the Amazon ---
Elizabeth Warren's Pitch for 'Economic
Patriotism' Is Full of Intellectual Dishonesty and Economic Fallacies ---
Bad Law Keeps People Poor --- https://townhall.com/columnists/johnstossel/2019/08/28/bad-law-keeps-people-poor-n2552265?utm_source=thdaily&utm_medium=email&utm_campaign=nl&newsletterad=08/28/2019&bcid=b16c6f948f297f77432f990d4411617f&recip=17935167 Jensen Comment The USA has a comparable rule for Civil Service employees --- it's virtually impossible to fire them
Walter Williams : Beginning of USA
How to Mislead With Statistics
Elizabeth Warren's Pitch for 'Economic Patriotism' Is Full of
Intellectual Dishonesty and Economic Fallacies ---
Warren needs to take a lesson from Leonard Read's "I, Pencil."
Sen. Elizabeth Warren (D–Mass.) is promising to protect Americans from the scourge of…pencils?
In a new video posted to Twitter over the weekend, the presidential candidate promises to create a new federal agency that would expand on the protectionist measures undertaken by Donald Trump. She's even borrowing Trumpian rhetoric for the project, which she calls "economic patriotism," as she promises that a Warren administration would put the interests of American workers first.
Warren's attack on corporations that supposedly harm Americans by shifting jobs overseas is full of intellectual dishonesty and economic fallacies. Rather than making a case for greater government involvement in the corporate boardrooms of America, the video succeeds only at highlighting how misinformed and misguided such interventions are, regardless of whether they are executed by Trump or Warren.
"There are a lot of giant companies who like to call themselves 'American,' but face it: they have no loyalty or allegiance to America," she says in the video.
As proof, Warren points to the "famous no. 2 pencil," which is mostly manufactured in Mexico and China. Her video doesn't make clear why pencils should have to be made in America—or why that lack of good, pencil-making jobs in America is a problem.
That Warren chose to use pencils to illustrate the supposed need for "economic patriotism" is darkly hilarious to anyone familiar with "I, Pencil," Leonard Read's 1958 parable about the merits of free markets and comparative advantage. Reed's lesson is that no one on the planet has the means or knowledge to make an item as mundane and ubiquitous as a simple pencil. A pencil requires wood, graphite, brass, and rubber, but each component part is the result of supply chains that might stretch around the world—from the forests of the Pacific Northwest to the mines of Mexico to the factories of Indonesia.
"Neither the worker in the oil field nor the chemist nor the digger of graphite or clay nor any who mans or makes the ships or trains or trucks nor the one who runs the machine that does the knurling on my bit of metal nor the president of the company performs his singular task because he wants me," Read wrote in the role of the eponymous pencil. "Each one wants me less, perhaps, than does a child in the first grade."
And yet we have pencils. Tons of them. Not only that, but the process for obtaining and combining those various component parts is so efficient—despite "the absence of a master mind" directing all those activities, Read notes—that you can buy dozens of pencils for no more than a few dollars. The simple pencil is a miracle of the modern world, and of trade that crisscrosses national borders.
What is true about pencils is true about almost everything else you buy too. There's not really any such thing as an "American" or "foreign" automobile anymore. Not when the world's biggest BMW plant is in South Carolina, and when the assembly line for a single car seat might zig-zag across the U.S.-Mexico border five or six times. The iPhone is engineered in the United States, is manufactured in China, and contains components sourced all over the world.
That Warren fails to grasp this—or that she cynically believes voters don't grasp it—makes her no better than Trump when it comes to trade policy. Indeed, Trump's use (and abuse) of executive power to implement his own myopic and self-defeating trade policies may have only paved the way for a more competent protectionist like Warren, if she ends up in the White House.
It's worth noting that Warren's proposal for a new federal department to oversee her "economic patriotism" scheme would potentially streamline some government functions. She says the new Department of Economic Development would replace the Commerce Department and "a handful of other government agencies." Consolidation of the federal bureaucracy can be a good way to root out unnecessary overlap between existing agencies, but this seems like an effort at reorganizing a bunch of things the feds shouldn't be doing in the first place.
Beyond that, there's little truth to the claim that American manufacturing has been hollowed out by trade. Foreign investment in American manufacturing reached record highs in 2018, and American manufacturing output has tripled since 1980.
Continued in article
How to Mislead With Statistics
Generally Accepted Accounting Principles (GAAP) --- https://en.wikipedia.org/wiki/Accounting_standard
Financial Accounting Standards Board (FASB) --- https://en.wikipedia.org/wiki/Financial_Accounting_Standards_Board
Elizabeth Warren's 7% Real Corporate Profits Tax Would Politicize GAAP, Harm
Investors And Employees ---
Wall Street Journal op-ed: Don’t Let Warren Politicize Accounting, by Scott Dyreng (Duke):
Congress has a history of trying to influence behavior using the tax code. For example, both property taxes and mortgage interest were declared deductions from personal income for tax purposes to encourage home ownership that Congress deemed to be good for society in terms of both creating more housing and in keeping houses maintained. In addition, home mortgages forced savings behavior where it is common for retirees to have larger retirement savings than renters who are not forced to save monthly in rental payments.
Corporate income tax accounting rules departed from what accounting standard setters (think the FASB and its predecessors ) deemed the 'better" accounting for investors to evaluate accounting performance businesses and make portfolio investments. For example, to stimulate business capital investment the corporate tax depreciation rules allowed accelerated depreciation write-offs that did not correlate well with value changes of manufacturing and farm equipment having longer usage lives. Accounting standard setters deemed less aggressive depreciation more relevant to investors. This led to income tax losses that accounting standard setters felt misled investors rather than GAAP income reporting. Of course there were exceptions that I don't think can be justified (such as LIFO inventories).
Note that in the good old days Congress wisely felt that reducing business taxes could greatly stimulate economic growth and jobs in the nation. The assumption was that government collected more taxes from a growing economy than one than a stagnant or declining (think recession) economy. Elizabeth Warren and her sympathizers are distressed by the idea that business firms fueling the economic growth engine of the USA could use tax deferrals or avoidances to pay outrageous executive salaries and fuel shareholder value increases for fat cats while paying less to the IRS, although I think she does not give credit where credit is due when making corporations wildly profitable under GAAP does frequently stimulate economic growth, job creation, and net increases in taxes (supply-side theory) collected by the government from workers and happy investors. The extent to which business success creates tax collection success is the subject of vicious debate (e.g., supply-side disputes) between conservatives and liberals that is chronic and complicated.
Elizabeth Warren now wants to base business taxes based upon GAAP profits rather than accounting profits under tax code accounting rules --- rules written into the tax code for both good economic reasons (economic growth stimulus) and bad reasons (business lobbying crime).
The FASB genuinely takes pride in being independent of business lobbying (not all accountants like Tom Selling agree), but there is evidence of such independence (such FAS 123R rules for stock option accounting under GAAP, rules that the tech industry despises). Of course the SEC that can override the FASB in the setting of GAAP at any time. On rare occasions the SEC caved into business lobbies for the wrong reasons when overwriting the FASB rules. The classic case is the time the SEC overrode sensible "successful-efforts" FASB rules on oil and gas write offs of dry holes in oil well drilling. In that disgrace the SEC blatantly allowed bad rules for keeping worthless oil wells on the books as phony assets. Except for relatively rare lapses (like writing off dry holes) the SEC has wisely let the FASB set most GAAP accounting standards to keep business lobbies off the SEC's back.
The above article wisely suggests that Elizabeth Warren's tax proposal will now subject the FASB to business lobby pressures that have plagued (and sometimes corrupted) the IRS for decades relative to the wall the SEC created to protect itself from business lobbies by transferring GAAP authority to the non-governmental FASB.
Personally, I don't think that there should be a corporate income tax. There will always be too many loop holes imposed by lobbyists in the calculation of taxable business income. I prefer a VAT tax that is easier to compute and certainly easier to collect as evidenced ty the European VAT taxes. Of course business firms generally hate the VAT tax but I still think it's the way to go even if it does put a lot of lawyers and tax accountants out of business and raise prices.
My liberal friends argue that a VAT tax is regressive and raises prices for consumers. However, the corporate income tax that Elizabeth Warren proposes is also regressive.
Business firms don't pay any taxes levied upon them. They collect taxes from customers. If Elizabeth Warren levies regressive income taxes on the GAAP earnings of Amazon and Walmart those taxes will be passed on in the form of higher prices to you, me, and the other customers of Walmart no different than is Elizabeth Warren imposes a VAT tax on Amazon and Walmart.
The advantage of the VAT tax is that the FASB can continue to set accounting standards to help investors make portfolio decisions about stocks and bonds of companies. Of course if companies must pay $100+ trillion in taxes for new social programs there won't be any stock markets or bond markets left. Pension savings in such funds as CREF and CalPERS will get wiped out. Think about it! To raise over $100 million most of the money is going to have to come from investors themselves since Sen. Warren's proposed corporate income tax on GAAP and her wealth tax proposal will not raise nearly that much money. Taking $100+ trillion from investiors will wipe out both stock and bond markets.
Regarding Elizabeth Warren. she just wants to spend over $100 trillion annually in a way that will destroy the USA economic engine of the USA for her green initiatives, free medical care, free medications, forgiveness of student debt, free college, guaranteed minimum income for all residents of the USA (including non-citizens), reparations for African and Native Americans, and on and on and on without an end to spending. There's no chance in Hell that the USA as we know it today can afford all the programs Sen. Warren and her friends want to fund.
So I say keep the government and business lobbies out of the setting of GAAP to the extent possible! Collect taxes in some way for achievable social goals that will will not destroy the economic engine of the USA and turn it into a third world, overpopulated, and starving nation.
Young people especially wonder why Joe Biden is leading in the 2020 polls for Democratic party nomination. The reason is that the majority of voting Democrats do not want to destroy the economic engine of the USA by spending over $100 trillion annually for spendthrift social programs that cannot possibly be afforded even by the greatest economy on earth. Don't let ignorant spenders ruin it all.
The Shooting War in Syria the Major Media and Presidential
Candidates Ignore ---
Israeli aircraft on Saturday struck Iranian forces near Damascus that had been planning to launch “killer drones” at targets in Israel, an Israeli military spokesman said.
“The strike targeted Iranian Quds Force operatives and Shiite militias which were preparing to advance attack plans targeting sites in Israel from within Syria over the last number of days,” the military said in a statement.
The elite Quds Force is the overseas arm of Iran’s Revolutionary Guards (IRGC). Israeli military spokesman Jonathan Conricus told reporters the forces on Thursday had been preparing to launch “killer drones” armed with explosives at northern Israel.
Contined in article
Sanders Releases ‘Green New Deal’ He Says Will Create 20 Million
Why would this wipe out the entire USA economy? The reason is that Sanders apparently does not understand a basic phenomenon in economics --- multiplier effects ---
Sanders plan estimates that the cost is $16.3 trillion which he intends to pay for primarily by taxing the oil and gas industry. However, the oil and gas industry does not pay taxes. Most (but not all) of their customers pay the oil and gas industry taxes. Let's suppose that in order not to make houses go cold in winter, the oil and gas used for heating will not be taxed. Suppose the entire tax is to be paid by a gasoline road tax. The USA consumes nearly 150 billion gallons of gasoline each year. There are many users that are tax free such as the government (think military) and off road users (think farmers that pay no road taxes). Let's make an assumption that 100 billion gallons of gas will be taxed to pay for $1.6 trillion of green initiative each year. The price of gas would go up by $16 per gallon to nearly $20 per gallon. This ignores a relatively small amount of tax that can be raised from airlines and other off-road tax payers. It also ignores the fact that such high gas prices will reduce demand to a point where the price of tax may have to to to $50 per gallon to raise $1.6 trillion for President Sanders' green initiative each year.
I don't think Sanders calculated the multiplier effect or raising gasoline prices at the pump to $20 per gallon. Drivers would immediately put in orders for electric cars and trucks, it would take years for a serious number of electric vehicles to be produced. It will take many more years for railroads to meet the transportation needs of 350+ million people. Meanwhile most of the hotel and resort industry in the USA will collapse due to multiplier effects. Price of food will skyrocket to a point where most of the restaurant industry falls due to multiplier effects. Other industries dependent upon road transportation will fall.
Destroying the USA to save planet earth is a good deal.
However, the USA's 350 million residents are a small fraction of the earth's eight billion people. How many of these billions will make the same sacrifices for green initiatives that Sanders wants to impose on the USA? If most of the world does not make the same sacrifices, all of Sanders' green initiative sacrifices will be lost and the impact of the USA going it alone will be virtually zero. It may well be that without Big Brother controlling the entire planet we're doomed no matter what.
The bottom line is that there's almost zero hope for Sanders' green initiative to pass even a Democratic Congress. And if it passed they did there would be riots and revolution across the USA the world has never seen before.
The simple fact is that Sanders green initiative is merely a ploy to win the nomination to run for President at a time when his campaign hit a wall. When the green initiative is combined with the other radical spending programs for free medical care, free nursing homes, free medicine, free college, quarantined annual income for all residents, guaranteed housing, guaranteed food, and on and on and on the annual cost is up to $20 trillion above the current federal budget of $4 trillion.
The fact of the matter is that it's impossible to try to raise over $20 trillion in new spending each year without totally destroying the USA economy and with it the USA. These are impossible fantasies.
How to Mislead With Statistics
New Study Defending NYC’s Minimum Wage Law is Fake News ---
What liberals don't like to discuss is the impact of a state-wide $15 per hour on small town small businesses.
From the CFO Journal's Morning Ledger on July 25, 2019
In a small California city, America’s highest minimum wage is causing a debate over how to balance boosting wages for the lowest-paid workers and ensuring small businesses can afford to keep employing them.
Showing once again that minimum wages are more of a problem for small businesses than for Walmart and Amazon that are not located in small villages with less than 1,000 people --- small town businesses that struggle to make any profits and endure losses in some seasons (think a small New England inn in the winter and spring). Actually I've recently discovered how the inn down the road from me charging a $300 average (with tax) per night for a room is struggling with competition from Airbnb renting scenic entire houses (think four bedrooms and a garage) for $200 per night in very scenic locales.
The high-labor inn across from me is once again is
trying to lift itself out of bankruptcy while the Airbnbs are doing great ---
The Sunset Hill House --- https://www.thesunsethillhouse.com/
of course vary, but up here in small-village Sugar Hill (one store downtown) you
can rent a picture-perfect farm house for $200 per night, a ski chalet on Cannon
Mtn for $200 a night, and the historic dairy barn film Bette Davis hauled in
from Vermont and rebuilt into her main home (rent now for $300 per night) ---
Airbnbs can also make labor-saving deals like bring your own sheets and towels and bring your own breakfasts.
The bottom line is do you want to pay $300 per night per room with a view versus $300 per night for four bedrooms in wooded seclusion, a fully-equipped kitchen, a huge family room, and a deck with a view --- all for $300 per night --- with much more privacy for your family and friends?
New Hampshire has not yet doubled the minimum wage to $15 per hour, but when it does hundreds of struggling inns and other small businesses end up in bankruptcy court (yet again).
In small villages doubling the minimum wage will wipe out jobs, once again driving people to the bigger cities.
A new report shows student loans outpacing other household debt among most
severely delinquent loans ---
As students pile on six figures in debt a huge problem is lack of collateral common in house and car loans. There's nothing to fall back on in cases of default. I suspect that in one way or another taxpayers will get hit with a goodly share of the defaults. Of course the economy benefits from the success stories, but it would seem that blowing up the debt balloon to over $1.5 trillion is way out of hand. Of course Democrats are promising Free-College-for-All along with Free Medicare-for-All on top of $10 trillion in green initiatives plus free guaranteed annual income and trillions of other dollars in vote-buying promises.
ADT Crime Map ---
Crime can happen anywhere, but Erika and I felt much safer with burglar bars on our brick home in San Antonio. Our San Antonio house was never burglarized even though over half of the homes in our neighborhood were hit over 24 years (most by the same burglar who eventually was caught). I still have the crowbar left outside a window by some burglar who tried and failed to get inside our house.
Where we live now in the White Mountains of northern New Hampshire and close to Vermont I've never seen a building in our region with burglar bars.
One enormous difference up here relative to Texas is car theft
Wherever you live take reasonable precautions. Burglar bars may be overkill in most of the USA. But do lock your cars and house wherever you live.
We have a security system (not ADT, although my neighbor has ADT). I chose a security system that has local techs I can call for repairs and maintenance. I don't worry a whole lot up here about burglary, but our security system also covers fire and temperature (in case our house grows cold in freezing weather). Before he installed a security system our neighbor had severe water damage from pipes freezing.
Chronicle of Education Letter to the Editor
This letter is in response to the following article asking colleges to abandon their most popular major.
Abolish the Business Major: Anti-intellectual degree programs have
no place in colleges ---
Having spent 40 years as an accounting professor with a Ph.D. in accounting from Stanford University I'm insulted by a pip squeak calling me "anti-intellectual." But I will try to swallow my pride an make some sensible comments apart from my anger.
Firstly, the question must be answered regarding what abolishing career programs (think computer science, engineering, nursing, pharmacy, medicine, etc.) will do for colleges. And yes there is a movement underfoot to not require college to become a medical doctor (MD). This is sometimes known as the French model, although other nations like India produce medical doctors that commence the study of medicine straight out of high school and are not required to get preliminary college degrees. Some medical schools like at Johns Hopkins are experimenting with entry into medical school after only one year of college. But such career education specialties deprive humanities and sciences of aspiring medical doctors. Secondly it's much harder for aspiring medical doctors in France or India to change majors than it is for premed students at Harvard to change majors.
The biggest embarrassment for humanities and science divisions is that majors in career programs often siphon off the best students. If you commence career schools (many with the highest paying graduates) apart from college the colleges are tragically losing many of the best students for courses in humanities and science.
Secondly business schools (think MBA programs and law schools) and other professional programs are the hopes and dreams of career-seeking graduates of humanities and science programs. Yes there are great universities (think Princeton) that have no business programs. But if Princeton graduates want to become CPAs, CAOs, CFOs, or IRS agents they have simply added another three years of schooling to their degrees. And it's much easier to become a FBI agent with an accounting major these days because the world is so full of accounting fraud. Students at Penn who can take undergraduate accounting courses can take three years off of what it takes a Princeton student to become a CPA. This is a major reason it's so rare to find Princeton alumni in the CPA profession even though they may have other business careers that don't require licensure.
Thirdly, at the moment accountants can become CPAs and engineers can be licensed with one year of graduate study beyond their accounting majors. A history major with no accounting or engineering undergraduate courses just must take two or more years of added graduate study to become licensed. That history major, for example, cannot enroll in an MBA program and take the CPA examination in two years. About two years worth of undergraduate accounting required to take the CPA examination plus the two years of graduate study to become a CPA. It may take even more years of accounting study if that MBA program does not have master of accounting courses.
Hence given the choice of becoming a CPA or engineer in five years versus 7-8 years years many students might choose to bypass "college" and commence a career school straight out of high school. Mom and dad will be grateful that they don't have to pay for seven years of schooling, and students will be grateful for not having to take out more and more student loans for seven years of study for a career.
Fourthly, business and other career majors (think nursing) are popular with minorities. You can go a long way toward whitening most faces on campus by eliminating the career majors.
Fifthly, the article commenced this letter to the editor makes a big deal
about comparing salaries of graduates initially versus in the mid-careers, but
it makes "non-intellectual" comparisons fail mention that comparing salaries in
mid-careers ignores all the many things that happen between two or three decades
in life. First of all, accounting graduates who start out working for large CPA
firms typically have no intention of staying with those firms after they get
experience and training. A goodly share of them become non-salaried employees
who rely on profit sharing compensation in their own firms or small
partnerships. It's impossible to compare their lucrative non-salaries with
salaries of an economist who continues to work for a lifetime on salary at IBM.
More importantly, the economics major may be working in sales for IBM and not
really using much of what was learned as an economics undergraduate 30 years
ago. Things like this greatly complicate comparisons of compensation of majors
at mid-career stages. It's a non-intellectual comparison for which I now have
over 400 illustrations available at
Lastly, I just plain tired of the arrogance of humanities and science professors on soap boxes claiming that they are the only intellectuals in the world.
Yeah, I know it's a huge embarrassment to humanities professors when when their assistant professors start at $75,000 per academic year and a new assistant professor of accounting starts a $150,000 plus lucrative deals for summer research stipends.
Yeah, I know it's embarrassing that the AACSB (accrediting agency) commenced
a Bridge Program so humanities and science Ph.D.s can get university faculty
appointments in business schools where the jobs are available and the pay is
Let's just see 'enry 'iggins how many colleges drop their business majors, and among those that do so, how many dropped the business major because they could no longer afford a doctoral faculty in business as opposed to eliminating the anti-intellectual faculty from campus.
Why did the number of working class college degrees increase when England
started charging tuition?
In the UK it became a choice of making free college available only to top students (like in other EU nations) or to make it more widely available at levels the UK taxpayers could not possibly provide without substantial tuition supplements.
In OECD nations (think Finland, Denmark, Germany, and Norway) that have free
college or free job training, well over half of the Tier 2 graduates are not
even allowed to go to college or receive free job training paid for
by their governments. This makes "free college" or "free training" affordable by
limiting it only to top graduates . . .
The Democratic Party's 2020 Platform will assuredly not limit the USA's free college to the very top high school graduates.
Current Democratic Party proposals for free college cannot possibly be sustained at the number of students they hope to educate or train for free,
“You have to make decisions that you’re going
to reach certain goals, and some of our goals we
think are achievable”
In Europe and Elsewhere Free College Education Means College is Only for the
Countries that provide more public funding for higher education tend to have fewer graduates over all (restricting college education or free job training to only the most intelligent 1/3 or Tier 2 graduates ---
Democratic politicians -- many of them vying for their party's 2020 presidential nomination -- propose free college programs or other major investments in higher education that reflect systems in countries like Finland and Sweden. But an American Enterprise Institute report released Thursday argues that when developed nations dedicate more public resources to postsecondary education, they tend to produce fewer graduates.
The institute's customarily contrarian resident fellow, Jason Delisle, and co-author Preston Cooper, an education research analyst at AEI, compared 35 high-income (gross domestic product per capita above $30,000) member countries of the Organisation for Economic Co-operation and Development, which produces statistics on countries’ total institutional spending, college attainment rates among 25- to 34-year-olds, and government subsidies. The OECD includes almost all large Western and Central European countries, Australia, the Baltic states, Chile, Israel, Japan, New Zealand, North America, Scandinavia, South Korea and Turkey.
Each country makes sacrifices when it prioritizes one aspect of higher education -- attainment rates, institutional spending and government subsidies -- over another, Delisle said, a reality he thinks is often ignored during debates about free college. Politicians in the U.S. like to suggest America can “learn from other countries and take the good parts” of their education systems, without considering the impact subsidized education has on the overall quality and accessibility of college, Delisle said.
“If you have a heavily subsidized system, that leads a country to ration higher education, leading to a system that’s more selective,” Delisle said. “That’s not an egalitarian higher education policy, which a lot of policy makers on the left insist is the case.”
“If you want less college, one way to do that is to make it free,” he said.
Delisle’s interest in researching international spending on higher education was piqued during the 2016 presidential campaign, he said, when Senator Bernie Sanders, the Vermont Independent, began promoting his plan to eliminate the cost of attending public colleges and universities. More recently, on June 24, Sanders announced his College for All Act, which if passed would eliminate tuition at public institutions and subsidize learning with 100 percent government funding -- 67 percent from Washington and 33 percent from individual states.
“[The legislation] makes certain that all Americans, regardless of income, can get the college education or job training they need to secure decent-paying jobs by making public colleges, universities and trade schools tuition-free and debt-free,” Sanders said in a news release.
However, college admissions would become much more competitive if the U.S. could not rely on tuition to fund its institutions, Delisle said, though the goal of free college policy suggestions is to increase the number of students with degrees.
“The whole public university system in Finland has an admissions rate on par with elite U.S. colleges,” Delisle said. “Not quite as selective as Harvard or the [Ivy League colleges], but if you took a Berkeley, or a [University of Virginia] -- imagine if the entire education system of the U.S. had to meet UVA-level test scores.”
In the report, Delisle highlights Finland, which ranks first among the 35 countries in government subsidies provided for tertiary education (international equivalent to an associate degree or higher in the U.S.). Ninety-six percent of Finland’s higher education resources are public, but its attainment rate -- the proportion of citizens ages 25 to 34 with a degree beyond K-12 education -- is less than 45 percent, placing it 25th among OECD countries. South Korea-based higher education, on the other hand, gets about 36 percent of its funding from the government and achieves a 70 percent attainment rate, the highest among OECD countries, according to the report.
The U.S. ranks 31st for subsidies and third when it comes to institutional resources, which is measured as the amount of money -- a combination of government funds and private dollars -- spent on each full-time-equivalent student. These numbers are also adjusted for a country’s GDP per capita, so as not to penalize countries with smaller economies for spending less.
The report praises more investment in higher education from government and private sources as positive, suggesting that “generally, institutions with greater resources have more latitude to offer a high-quality education.” This could bring criticism from “our colleagues on the right” who prioritize spending reductions, Delisle said.
“We gave [spending] a positive spin, and we also gave attainment a positive spin,” Delisle said. “There are definitely people on the right who would say, ‘We have too many people with college degrees and spend too much on higher education.’”
The OECD includes subsidized student loan programs in its spending metrics, so while governments in the U.S., U.K. and Australia are increasingly providing loans and debt forgiveness, that’s not counted as public funding in the report, Delisle said. Instead, student loans are considered individual expenditures on tuition, though they could be paid off by these governments in the future.
Loans should be kept in mind when reading the report, Delisle said, but they don’t have enough impact in the U.S. to shift the country’s ranking, since the government uses more of a “safety net” model for specific groups of students in need. But forgiven loans make up a higher share of Australia’s and the U.K.’s subsidies, which can’t be seen in the OECD data, he said.
There are other contextual differences between countries that are also absent from data in the report, because these differences are vast and difficult to measure, Delisle said. One variance -- countries’ typical age range for college attainment -- could affect how the report is read, said Alex Usher, president of Higher Education Strategy Associates.
While the AEI report analyzes 25- to 34-year-olds who may or may not have degrees, students in Nordic countries tend to start college later and often take breaks from their learning to participate in the labor market, Usher said. Additionally, Nordic countries have a lower wage premium for college-educated adults than the U.S., he said.
“Those countries tend to look fantastic when you look at adult education -- it’s actually adults who are going back and forth and taking breaks” from higher ed, Usher said. “Here, it’s normal at age 25 to have a degree. There, it’s not so normal.”
Continued in article
A Truly Populist Social Security Reform ---
The U.S. government's debt—that is, our and our children's debt as taxpayers—is growing. This growth is largely driven by rising Social Security, Medicare, and Medicaid obligations. These are the programs Congress could focus on and work to reform. Only the Democrats are really talking about reform, though they want "reform" to be in the direction of making these programs even more expansive.
There's some hope, however, as politicians will have no choice but to face the facts on Social Security. Come 2035, this program's trust funds will run dry and, by law, benefits will automatically be cut by 20 percent. When that happens, Congress will have no option but to reform Social Security in a more fiscally prudent manner. I have some thoughts on how to do this.
But before I explain, let's make sure we're clear about one thing: The program is indeed growing insolvent. Since 2010, Social Security has run annual cash-flow deficits. This means that the payroll tax revenues collected from you and me aren't enough to fully pay the retirement benefits for current retirees. For now, the program makes up this gap by using assets in its trust fund.
It looks even worse in the long run. The Social Security Board of Trustees reports that over the next 75 years, the program will be underfunded by $13.9 trillion. To make Social Security solvent over this period would require an immediate and permanent payroll tax increase (today) of 2.78 percent of overall wages—which raises the average Social Security payroll tax bite by 25 percent. Alternatively, Congress could cut benefits by 17 percent. A mix of both tax increases and benefit cuts is obviously an option. No meaningful reform will be painless, and waiting only makes fixing the problem harder.
The bottom line is that this talk of expanding the program, rather than shrinking it, is crazy talk.
When Social Security was created in 1935, it was conceived to provide benefits for retired workers. Given the lower life expectancy back then, retired workers were never expected to live off of these benefits for very long. Over time, however, Congress expanded the program's eligibility, extending it to spouses, disabled persons, and also children. While some aspects of the program are means-tested, everyone—rich and poor—receives core Social Security benefits.
This policy is silly for many reasons. First, in reference to a universal basic income (UBI), George Mason University economist Bryan Caplan explains that "Forcing people to help others who can't help themselves—like kids from poor families or the severely disabled—is at least defensible. Forcing people to help everyone is not." He adds, "If you were running a private charity, it would never even occur to you to 'help everyone,' because it's such a frivolous use of scarce charitable resources. Instead, you'd target spending to do the most good."
Caplan's criticism of UBI applies to Social Security, which is also universal, though this wasn't always the case. Back when Social Security was created—and with very few exceptions—ordinary Americans who stopped working became poor. Back then, Social Security benefits made more sense because they were nearly all paid to Americans in need.
Yet today, thanks to economic growth, capital markets, and massive increases in ordinary Americans' standard of living, seniors now are overrepresented in the top income quintile. Younger Americans are overrepresented in the bottom income quintile and are the same people now obliged to transfer massive amounts of their earnings to seniors. Why? In theory, it's for the promise that these younger workers will also get benefits when they turn 65-ish, even though their future benefits will pale in comparison to the payroll taxes these workers will have paid in over their lifetimes.
The sad thing in terms of sustainability is that the Social Security problem pales in comparison with present Medicare and Medicaid entitlements --- mostly because of out-of-control inflation in medical care and medication expenses that will explode further in the future. Social Security expenses are more controllable.
Bob Jensen's threads on the pending disaster of entitlements even before
the Democrats regain control ---
Tesla solar panels also caught fire on an
Amazon warehouse, the retail giant said in the wake of Walmart's lawsuit ---
It's defective solar panel business is threatening Tesla's cash-strapped car business. This is one of the risks of mergers and acquisitions.
Drug Patents by Country ---
Over the past half century, the United States has been the birthplace of the majority of the world’s biomedical innovations.1 Despite a global slowdown in the development of new medical interventions, due to the scientific shift towards more complex biologic treatments, innovation in the U.S. has remained relatively steady thanks to strong financial incentives to invest in research and development (R&D). In fact, the below chart may underrepresent American contributions to pharmacological breakthroughs in the past two decades as a result of U.S. corporations relocating their headquarters to Switzerland and the U.K. to take advantage of those countries’ lower corporate tax rates.
This does not justify some of the evil pricing schemes of big pharma in the USA, especially pricing by patent trolls. But it does illustrate how complicated the invention of biomedical innovations (that includes more than drugs) becomes, especially when comparing the USA with the more highly populated European Union. Why doesn't the EU lead in discovery of biomedical innovations? Why aren't Russia and China inventing new biomedical innovations as fast as they are inventing technology innovations?
Fraud: The Collapse Of A Hospital Empire — And Towns Left In The Wreckage ---
Tidbits Archives ---
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://faculty.trinity.edu/rjensen/FraudEnron.htm
Rotten to the Core --- http://faculty.trinity.edu/rjensen/FraudRotten.htm
American History of Fraud --- http://faculty.trinity.edu/rjensen/FraudAmericanHistory.htm
Bob Jensen's fraud
Bob Jensen's threads on
auditor professionalism and independence are at
Bob Jensen's threads on
corporate governance are at
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
Against Validity Challenges in Plato's Cave ---
By Bob Jensen
wrong in accounting/accountics research? ---
The Sad State of Accountancy Doctoral Programs That Do Not Appeal to Most
AN ANALYSIS OF THE EVOLUTION OF RESEARCH CONTRIBUTIONS BY THE ACCOUNTING REVIEW:
Bob Jensen's threads on accounting theory
Systemic problems of accountancy (especially the vegetable nutrition paradox)
that probably will never be solved
Bob Jensen's economic crisis messaging http://faculty.trinity.edu/rjensen/2008Bailout.htm
Bob Jensen's threads --- http://faculty.trinity.edu/rjensen/threads.htm
Bob Jensen's Home Page --- http://faculty.trinity.edu/rjensen/