Professor Elam

Accounting & Investing Info for San Antonio A & M

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  • Professor Elam

    Visual Science Lab

    Friday Dec 3, 2010

     

    But none of that really bothers me.  I understand better than you might think that the nature of western man is constant innovation—for good or bad.  No, what bothers me is that we've used all these tools to turn our lives into something that's measured based on productivity.   Volume.  Throughput.

    I heard a great actor speak two days ago.  He defined art.  It's not about which lens renders hairs on the kitty photo the sharpest or who's got the best toys.  And it's certainly not measurable.  He defined art in this way:  Art teaches us what it  is to be human.

    But this is a problem because art is notorious for being unmeasurable.  And in a society that values ranking and measuring above all else it gives one the feeling that art, which teaches us what it is to be human, is being replaced more and more by craft just for the sake of craft.  And the craft is powered more and more by precision, performance and production and less and less by ideas and translations of human experience.

    It starts in school.  We, as a society, need to give as much weight to the study of art and art history, music and drama as we do the math and science courses.  We need to make sure our kids are as content literate as they are process literate.  I can assure you that, as technology becomes more and more pervasive the real value; the "gold",  will be content.

    Multitasking?  I've got a bridge in Brooklyn you might be interested in…..

    Kirk Tuck, Visual Science Lab

    I am adding a new link to the sidebar, Kirk Tuck's Visual Science Lab. Kirk is an Austin based photographer, part time UT instructor and author. I attended one of his portrait workshops and learned a good deal. I have advocated a course, indeed an entire graduate degree,  emphasizing Design . We have an active Art Community here in San Antonio but hardly any university takes advantage of it. 

    I have come to realize that Art History is in fact a record of a society's reflections on itself. its pictures, sculpture and now still photos and motion pictures are a reflection of its human experience. The Egyptians had a rigid hierarchy to their society. As a result all the sculptures and even the pyramids have a structured, rigid look. As society advanced, the looks became more real and then finally with the Impressionists, less real. 

    The trick is to harness all this technology for some good. I agree with Kirk, with all our computers decision making is no better than it has ever been. But the iPod and IPad are great inventions as is the digital camera. But what will we do with them?  I hope you enjoy exploring Kirk's blog, and are inspired to think more about design and creativity. 

  • Professor Elam

    Wall Street is Its Own Client

    Friday Dec 3 2010

    This article from the New Yorker shows that Las Vegas has come to Wall Street. Most of the 'banks' are now simply gambling houses. Only a minor amount of income results from raising capital, most comes from 'trading' but in a way that you or I will never be able to do. 

    I hope they are saving their gains, I doubt they will be rescued in the next meltdown.

  • Professor Elam

    The Most Ethical Congress in History

    The Most Ethical Congress in History

     

     Charles Rangel has his swagger back, but not his power.

    The 40-year congressional veteran on Thursday became the 23rd House member in the nation's history to be censured for misconduct. Beyond the stain on his career, the censure will have little, practical effect. Rangel's seat appears safe as long as he wants it.

    Washington DC December 2, 2010

     

    Rangel was censured on a  333-79 vote for failing to pay taxes, not reporting assets, and various other misdeeds. One wonder what the 79 would consider conduct not becoming. A Censure is just that. Charlie stood in front of Congress and Nancy Pelosi said, you are censured. The result however…He remains extremely popular with his House colleagues, greeting them by the dozens as he moves through the Capitol.

     

    There are four levels of disapproval for a Congressman’s actions. From bottom to top they are Fine, Reprimand, Censure, And Expulsion.  It occurred to me that the rest of us operate at Level One every April 15. We are annually fined for making money. Indeed the arrogance of the government is now expressed in terms like, if taxes are not raised the government will be shorted x billions.

     

    Well we can only hope. The ruse that Federal Employees will have their pay cut is just that, the only hold is on inflation adjusted increases, and of course there is no official inflation. The rich endow us with   museums, libraries, symphonies, and all manner of public conveniences. When the Federal Government builds something it is usually in Washington DC.  That is not particularly handy for a weekend stroll in Andrews, TX.

     

    Corporations in the United States now pay the highest corporate taxes in the world. It is no wonder they are exporting jobs overseas. And questions about the new health care liability have other potential hires on hold. The big question should not be whether the Bush tax cuts (read the Obama tax increases) should be extended but how the entire tax structure should be overhauled. East European nations that have cut taxes have seen business move to their country. Georgia, the country not the state, is advertising that fact as I write. My ideal would be a Federal Government so unobtrusive it could get by on excise taxes, which it did until 1913. But realistically, how about these ideas for a start?

     

    The amount Congress can spend is limited to say 10% of the Gross Domestic Product, period. They would be capped just like states and cities.

     

    We would all pay a flat tax on ordinary income of ten percent. No deductions for kids, if you want more of them, you can pay for them.  Please note this is the program suggested in the Bible thousands of years ago, if it works for the Baptists it ought to work for the Feds.

     

    Everyone pays, and in that way we all stay interested in how our money is spent.

     

    It would be too much to hope for eliminating withholding, as that would collapse the entire Federal Government the first time all had to write a check for this nonsense.

     

    Corporations would pay no tax as that is just passed on to consumers.

     

    There would be no estate or alternative minimum tax or capital gains tax.

     

    Best of all this would prevent Congress from dolling out fax favors which bloat the tax code with unreadable prose. The tens of thousands of hours spent by you and I and accountants all wasting time preparing tax returns would be eliminated. CPAs could help clients improves their business, make more money, and, pay more taxes on the improved income, what a concept.

    If one party wanted to stand out, it would introduce a proposal like this a force a vote, and then run on the result. That is probably wishful thinking, after all authors of the tax code are still extremely popular with their colleagues.

     

     

     

     

     

     

  • Professor Elam

    Tom Sowell on Taxes

    Thursday Dec 2 2010

    The liberals in congress want to raise taxes on high earners. Yet IRS records clearly show this does not increase tax revenues. When Congress has raised tax rates, the number of high earners mysteriously disappear. President Obama has had this pointed out to him yet he rails on about fairness. Nothing is fair about tax policy unless all pay the same rates, period. 

    Check out the record for yourself in this Tom Sowell column linked above. If you were making a milion in ordinary income and congress asked for more, what would you do?  Most change their business arrangements and report less income.

  • Professor Elam

    Michigan Budget Woes

    Thursday Dec 2 2010

    Wayne County Michigan has cut unionized worker pay by either 10 or 20%. Expect to see more, much more, of this as cities and local governments grapple with their promises that cannot be kept. 

    We are studying budgeting in cost accounting, municipal governments are doing the same thing. 

  • Professor Elam

    Marriott CEO notes US is not Travel Friendly

    The CEO of Marriott notes the US is unresponsive to his industry. He noted that more Chinese visited Paris than the US last year. Yikes, Paris is one of the most expensive cities in the world. He also noted there is no one in this administration with any business experience. He suggested the best way to improve exports would be to make it easier to travel to the US. 

    Hmm wasn't this the President that came out against Hawaii and Las Vegas as destinations?  That results in numerous cancelled conventions. 

  • Professor Elam

    World Bear Markets Get Underway

    Tuesday Nov 30 2010

    The scenario playing out in Europe will likely be in the US next year. Here we will substitute states for European nations. Here the analogy to Ireland and Portugal are cities like Chicago and Miami. The states of CA and IL are analogous to Spain and Italy. Without their own currencies the countries cannot devalue and so they wait for Germany to decide to 'lend' more Euros. I doubt the citizens will want to pay off debt to rescue bond holders that bet on overheated economies. 

    Then add the overbuilding in China as well as other emerging economies around the world. It all adds up to another financial meltdown coming our way in 2011. This will definitely impact job prospects for graduates, prepare now!

    From Mish Shedlock this morning

    Risks to the Downside

    • China is overheating.
    • India is overheating.
    • Philippines, Thailand and Singapore are all in contraction.
    • Growth in South Korea, Taiwan and Indonesia has slowed markedly.
    • Contagion threatens Spain.
    • The property bubble in Australia is busting.
    • Ireland cannot possibly pay back its debts.
    • Greece needs an extension.
    • US corporate bond sales have collapsed.
    • There are significant tax cut and unemployment insurance issues in the US.

     

  • Professor Elam

    Black Swans

    Sunday Nov 28 2010

    Picture 21 Nassim Taleb has an update on his best seller The Black Swan. I mentioned this book, over 2 million sold, to blank stares in class the other day. Here is a good review by

    Chris Anderson of Wired Magazine

    Important events are unexpected. Barack edges out Hillary, McCain comes back from nowhere, how did those things happen?  Taleb examines such occurrences and makes the unexpected relevant. 

  • Professor Elam

    Emerson on Gifts

    'Black Friday' Shopping Day Nov 26 2010

    I have posted some or part of Ralph Waldo Emerson's famous essay on gifts the last several Christmas seasons. He wrote these essays from 18330-32. Note the relevance of the first two sentences. Gee nothing has changed.

     

    "Gifts"
    By Ralph Waldo Emerson.

    IT is said that the world is in a state of bankruptcy, that the world owes the world more than the world can pay, and ought to go into chancery, and be sold. I do not think this general insolvency, which involves in some sort all the population, to be the reason of the difficulty experienced at Christmas and New Year, and other times, in bestowing gifts; since it is always so pleasant to be generous, though very vexatious to pay debts. But the impediment lies in the choosing. If, at any time, it comes into my head that a present is due from me to somebody, I am puzzled what to give, until the opportunity is gone. Flowers and fruits are always fit presents; flowers, because they are a proud assertion that a ray of beauty outvalues all the utilities of the world. These gay natures contrast with the somewhat stern countenance of ordinary nature: they are like music heard out of a workhouse. Nature does not cocker us: we are children, not pets: she is not fond: everything is dealt to us without fear or favour, after severe universal laws. Yet these delicate flowers look like the frolic and interference of love and beauty. Men use to tell us that we love flattery, even though we are not deceived by it, because it shows that we are of importance enough to be courted. Something like that pleasure the flowers give us: what ant I to whom these sweet hints are addressed? Fruits are acceptable gifts because they are the flower of commodities, and admit of fantastic values being attached to them. If a man should send to me to come a hundred miles to visit him, and should set before me a basket of fine summer fruit, I should think there was some proportion between the labour and the reward.

    For common gifts, necessity makes pertinences and beauty every day, and one is glad when an imperative leaves him no option, since if the man at the door have no shoes, you have not to consider whether you could procure him a paint-box. And as it is always pleasing to see a man eat bread, or drink water, in the house or out of doors, so it is always a great satisfaction to supply these first wants. Necessity does everything well. In our condition of universal dependence, it seems heroic to let the petitioner be the judge of his necessity, and to give all that is asked, though at great inconvenience. If it be a fantastic desire, it is better to leave to others the office of punishing him. I can think of many parts I should prefer playing to that of the Furies. Next to things of necessity, the rule for a gift which one of my friends prescribed is, that we might convey to some person that which properly, belonged to his character, and was easily associated with him in thought. But our tokens of compliment and love are for the most part barbarous. Rings and other jewels are not gifts, but apologies for gifts. The only gift is a portion of thyself. Thou must bleed for me. Therefore the poet brings his poem; the shepherd, his lamb; the farmer, corn; the miner, a gem; the sailor, coral and shells; the painter, his picture; the girl, a handkerchief of her own sewing. This is right and pleasing, for it restores society in so far to the primary basis, when a man's biography is conveyed in his gift, and every man's wealth is an index of his merit. But it is a cold, lifeless business when you go to the shops to buy me something, which does not represent your life and talent, but a goldsmith's. This is fib for kings, and rich men who represent kings, and a false state of property, to make presents of gold and silver stuffs, as a kind of symbolical sin-offering, or payment of black mail.

     

  • Professor Elam

    Wesley Snipes Appeals for Bail

    Wednesday Nov 24 2010

     

    Wesley Snipes is asking the court for bail while his case is on appeal. A Judge revoked the bail and put him in jail when the Court of Appeals agreed with a lower court, off to jail Wes. The Supreme Court typically does no hear tax cases and certainly not cases of rich movie stars that capriciously decide to fail to file tax returns. 

    Hmm, perhaps he can do a remake of Escape from Alcatraz….

    There is always someone with some whacky idea that they do not have to file income tax returns, most of those cases end like this….