Professor Elam

The SEC and Protectionist Threats

First we'll kill all the lawyers
King Henry VI, Scene 2

Alan Murray speculates on the outcome of the Committee on Capital Markets Regulation on page A2 of the Wed 11/29 WSJ. The conclusion is -too many lawyers.  Too many complex regulations and too many mouthings of what is money. Incredibly the SEC is staffed with 1344 attorneys and 27 economists, what no CPAs, now wonder nothing gets done.

On page A11, Treasury Secy Paulson warns against protectionism-establishing tariffs to protect domestic workers in any country from a 'flood of under priced goods made by cheap labor.'  Paulson, fresh from his 71st trip to China, is worried that a slowdown in the Chinese economy would slow the world economy.  One reason the Depression lasted as long as it did was the passage in the early 1930s of the restrictive Smoot Hawley Tariffs . 

Now on the op ed page the WSJ editorializes that the US dollar has sunk to a 20 month low,  the Dems are talking protectionist legislation, Paulson is fearful of just that, and Bernake thinks inflation may still be a big worry.  They are all of course correct.

A currency sinks versus other currencies due to lack of faith in both an economy or the government that should help provide stable prices  supported by a stable currency.  Protectionist legislation chases investment in an economy away, that is why South America and India have wandered in the economic wilderness for decades; ditto for Western Europe today with 9% unemployment.  As the dollar falls, commodity prices rise to maintain a constant value.  And so oil has hit a low and is advancing as are gold and silver.  All the pieces fit together don't they.  If this continues Bernake will have no choice but to raise interest rates which he does not want to do.  This is a good example of how economics, finance, and accounting all fit together to help one understand the world economy.

DLE

Patton

Yesterday one of you indicated that you had not seen the movie Patton.   Wait no longer it is on AMC tonite Thursday  11/30 at 7 PM.  Make plenty of popcorn as it runs near three hours, 180 absorbing minutes.

You can read some reviews on the hyperlink. Some actors get the role of a lifetime and this was just that for George C. Scott.  The opening speech to Army he would command in the race to Berlin alone would have made the movie memorable, but it is much more than that.  I have been reading Omar Bradley' Soldier's Story, who was very well portrayed by Karl Malden in the film. Bradley  remarks, Patton was an excellent tank commander who never learned how to command himself. Bradley was the technical source for the movie and the first scene in Africa is drawn right from his book.  Francis Coppola co wrote the script.  Jerry Goldsmith's Patton March theme music quickly became a staple of football marching bands. A modern movie in every sense, great photography, great battle scenes using the Yugoslav Army, it's all here.  A true biographical study of someone who believed in reincarnation and destiny. Yet as a German lieutenant muses in the film, without a war to fight, Patton will be without a mission or purpose. 

Patton was unable to keep his mouth shut and managed to get fired two or hree times in the same war. He is a controversial figure to this day -  A must see.

DLE

More on SARBOX

No less than the CEO of the Institute of Management Accountants weighs in with this article on SARBOX.  He demands change now, noting that London has enacted controls with out the hue and cry over here which has doubled audit fees. Check it out.

DLE

Six Sigma At Motorola

Check out this article on Six Sigma at Motorla.  The authors explain how Six Sigma, a left brain analytical discipline with roots in Deming's TQM, mates with right brain innovation to come up with products like the RAZAR phone. This is another good example of my increasing interest in DESIGN and that a portion of our curriculum should address it.

Well I never heard much from anyone on their favorite things-Guadalupe liked her apple corer and I liked my digital cam but since thinking about it I would have to add my simple two blad Swiss Army Knife that fits on my keychain as one of the longest running items I still carry around.  With the temp due to drop to 28 this Thursday, I am reminded that natural fibers are best

DLE

Guest Speakers

Okay, you heard both guest speakers say some of the same things in two days, even though they have never met one another or discussed what we have been doing in class with me.  Each recommended reading Business Week and the WSJ.  In addition, they both recommended improving your public speaking. These are all things we have discussed. The point of the Blog is to highlight news events and how they relate to our class.  We will attempt more class presentations next semester. 

I hope you found time to contact them by e mail and thank  each for their time with us

Ariane E. Urschler

[email protected]

Ken Helfenbein

[email protected]

DLE

Recession Coming for Christmas?

Perhaps so, in the last month Gary Schilling in his Forbes column and Jim Rogers on Neal Cavuto's show have both predicted recessions beginning in December.  Now comes Hoisington Investment Management  based in Austin TX.  Their prediction is also based on the combination of a collapsing housing market and an inverted yield curve.  This firm was featured in Scott Burns column in this Sunday's DMN, they have quite an enviable track record.  Click and see what you think.

DLE

Behind the Scenes at Treasury

Don't let the Washington circus fool you, there are always figures that move behind the scenes between adn among various administrations.  This story about  Hank Paulson  reveals a great deal about how things really work at the White House and in shaping foreign policy.  I have mentioned before that no matter what party occupies the White House, someone from Goldman Sachs is usually on the scene. To wit, Robert Rubin, John Bolten, and now Hank Paulson Sec Treasury all worked at Goldman.  Rubin now works with banking giant Citicorp and did sit on the Ford Motor Board, he resigned so Citicorp could help finance selling off various Ford Assets-gee amazing how influence gets peddled isn't it? 

The article details how weak Bush's first two Sec Treasury were, I never understood either pick, neither man had any experience on Wall Street.  Paulson just finished his 71 st trip to China, imagine.  now there is experience and policy in the making.  This article is an important read in putting it all together on how things get done!  People who get things done are well connected, well traveled, and usually quite rich as a result. 

Crooks in Cyberspace

Forensic heads up, don't miss the article on the front page of the tuesday Nov 21 WSJ,
it describes how the FBI is working to catch crooks in cyberspcace particularly working in other countries.  Note, applicants need math, computer, and accounting skills!

Narrowing the Divide

Well the debate continues about whether there is a growing divide between the haves and have nots in the USA.  There are numerous op ed pieces and articles in the news about Dem versus Republican ideas on how to do this.  What do you think?  Now understand I am not trying nor do I desire to start a Rep vs Dem debate here. But you have now been exposed to enough economics and accounting to make some fo these desicions for yourself.  So what say you?

Is there an unfair divide economically in the US?
Are there ways to over come this divide, you know like education, new job skills? Welfare certainly didn't work.
What role should govt play in all this?
Does raising the minimum wage narrow the divide or decrease job opportunities, think about this the next time you pump your own gas or order a pizza....
What about ideas like differing income tax rates or the negative income tax, the earned income credit?
Do such schemes create unintended consequences of social behavior? ie, if you tell someone they will get a check if they do not make over say $24K, what will it then take for them to go ahead and start making over $24K and reject the check?  Or will they report $24K and 'go underground' and play the cash only economy to avod reporting wages which will keep them from getting their negative income tax bonus? And it works both ways.... In fact the whole stock option scandal got really going when congress denied companies the ability to expense a salary above $1M.  So execs signed up for stock options which were not expensed and resulted in capital not ordinary income-see what I mean, more unintended consequences.
Okay what about requiring some accomplishment or at least attempting to nurture that accomplishment in trying to improve one's skills?  For example, if one cannot keyboard, one is being sadly left behind in the information economy.  Yet, and please start noticing this, every day I see folks taking way more time to do simple tasks because they cannot keyboard or touch type.  Just yesterday I saw it in a convenience store or a cleaners or a pawn shop.  Why don't we offer some sort of reward for people who take  a keyboard class and they can show a proficiency, you know, teach some one to fish rather than give them a fish?

Your thoughts?

DLE

Blackboard Jungle 2006

Freedom Writers  is the latest in a long line of significant stories about struggle in the classroom.  This one stars Hillary Swank  whom I have admired from The Next karate Kid to Insomnia to Million Dollar Baby.  You can see the trailer by clicking on the link.  This genre got started with Glenn Ford in Black Board Jungle, then Rebel Without a Cause with James Dean, To Sir With Love with Sidney Poitier, sorta kinda Mr. Holland's Opus except here Mr. Holland is losing his job, Dangerous Minds with Michelle Pfeiffer, anyway

In this one Hillary is the new teacher in the San Diego Barrio. She urges her students to write down their frustrations in journals rather than engage in the existing violence that is destroying their civilization, or as I like to say, Write that Down!

Now, here's the interesting part, instead of just promoting the movie with banner ads, website, etc. Paramount is using widgets as outline in a story  on page B 4 of the Thursday  Nov 21 WSJ.  Click on
Freewebs  to learn more about  widgets.  See that calendar on my left hand bar on this blog, that's a widget, it highlights days I have made a post and takes you to them.  Widgets are now morphing into photos, surveys and other cool stuff. 

Which reminds me I am looking for a few volunteers. I would like to do some one minute digital videos of what you think about UNT Dallas as a student.  Raul Hinojosa is planning a You Tube site for UNT Dallas and I think it would be fun to include some of these, or on the blog.  Any takers?

DLE