Saturday, July 30, 2016

Why This Republican is Voting for Hillary Clinton

I will vote for Hillary Clinton in November. I will do this knowing full well that Hillary Clinton has more baggage than United Airlines and that she would nominate Supreme Court justices that would do violence to the First, Second and Fifth Amendments to the United States Constitution. She flat out lied about her home brew server and was careless with the classified information on it; thereby imperiling national security.  I recognize that she is owned in fee-simple by one of the most reactionary groups in America, the public employee unions. Further I assume that the SVR, the foreign intelligence service of the Russian Federation, will cause to be released documents showing a very unsavory connection between Hillary Clinton’s actions as Secretary of State and the Clinton Foundation.

Had Trump not been nominated, I would have proudly voted for Marco Rubio, John Kasich or Jeb Bush and would have supported Scott Walker, Chris Christie and yes, Mike Pence. But compared to these candidates Donald Trump lives on another planet. Simply put he is not a Republican or a conservative as we have known those terms to be defined.

So you might rightly ask, why will I vote for her? The reason is simple. Hillary Clinton, as cynical as she sometimes can be, believes in America and its values. Trump does not by wanting to establish religious tests for immigration and ethnic tests for judges. She is open to the world; Trump is not. Donald Trump believes in only himself. As Khizr Kahn, the Muslim father of a slain U.S. Army captain noted at the Democratic Convention of Trump: “You have sacrificed nothing.”   And hopefully we will soon know the contents of Trump’s tax returns which will demonstrate that he is not as rich as he says he is, has given only pittance to charity and has played the tax code like an aria by paying a minimal amount of taxes. The media should think about not covering him until he releases his tax returns, like every modern candidate for the presidency. Why do they let him get away with it?

Trump represents a steak of authoritarianism that goes back to the proto-fascist America First movement of the early 1940s championed by Charles Lindbergh. He doesn’t have a clue about foreign policy and has no advisers of stature, military or diplomatic. This is evidenced by his “bromance” with Putin and his playing fast and loose with our commitments to NATO. In contrast Hillary Clinton is a tough minded foreign policy realist who understands the dangers we face with Putinism and ISIS.

As I wrote in two prior blog posts ( and )  we are in the process of reliving the 1930s where Russian expansionism in the Ukraine is analogous to Hitler’s moves in central Europe and the rise of antisemitism in Europe today has a parallel to that dark era. Similar to the 1930s, Trump wants to close America off from the rest of the world. He doesn’t realize that we benefit from trade and immigration. To be sure there are losers in the process and we as a society have to do much better for them going forward.

Further, if you think Hillary has a problem with the truth, she doesn’t hold a candle to The Donald’s prevarications. Simply put, as the old adage goes, “How can you tell when Trump is lying? Answer: When he is moving his lips.”  You really can’t tell from one day to the next what he will say and whether or not he will say the same thing again the following day. He is an unstable egomaniac who is unfit for public office, any office. That is why I will be voting for Hillary.

Now I will close with some internal Republican Party dynamics. We brought Trump on ourselves. The Congressional leadership, K-Street lobbyists and public policy intellectuals (save a few) only talked to themselves. They had no clue as to what was going on out in the country and became completely out of touch with the working class base of the Republican Party. Instead of the toney restaurants of D.C., I suggest they visit the fast food joints and bars of the Midwest and South. Simply put a whole lot of soul searching is ahead of us.

Tuesday, July 19, 2016

My Amazon Review of Baruch Lev and Feng Gu's "The End of Accounting and the Path Forward for Investors and Managers"

Tension is Mounting in Financial Accounting

Accounting Professors Baruch Lev and Feng Gu have written a very important book on the need to update century old accounting practices. They open their book by presenting the financial statements for U.S. Steel in 1902 and 2012. There point is that not much has changed from an accounting standpoint, but from an economic standpoint U.S. Steel’s profitability dramatically declined over the century.

Lev and Gu describe in great detail the accounting and finance literature demonstrating the 50 year decline in importance of traditional accounting data’s influence on stock prices. Although stock prices do move in the very short run in response to earnings announcements, over the intermediate term they respond far more to non-accounting data.

According to Lev and Gu the problem with current financial accounting is that it ignores intangible assets that are developed internally, for example research and development, trademarks and investments designed to improve organizational efficiency. All of those expenses are expensed. The authors would capitalize them, which is exactly what occurs when those assets are acquired in a merger or by individual purchase. Second accounting today is more about estimates rather than hard facts. These estimates would include the provision for bad debts, pension expense, stock option expense, and even revenue recognition. Finally accounting does not take into account such unrecorded events as the receipt of a patent, a new drug approval, the signing of an important contract, and the rise or fall in the number of subscribers. It is this last category that seems to matter the most to investors. For example yesterday Netflix reported better than expected earnings, but far fewer than expected new subscribers. The result the stock dropped 15% in a heartbeat.

To remedy the situation Lev and Gu would like to see corporations present a more fuller “Strategic Resources and Consequences Report.” This is really a very enhanced management discussion and analysis section that would take into account the issues raised above. The problem here is whether accountants are capable of producing such a report and whether or not management would be candid enough to put it in writing. One would hope so, because it goes to the heart of what serious analysts are interested in.

This is not an easy book for the lay reader, but for the professional investor and manager “The End of Accounting” is a most useful book.

The full Amazon URL is:

Thursday, July 14, 2016

Tuesday, July 5, 2016

Hillary Bumper Sticker - Not Indicted,Vote Hillary

F.B.I. Director  James Comey walked right up to the line of recommending a charge of criminal negligence against Hillary Clinton, but he did not cross it. Instead he declared that she was "extremely careless" with the handling of Top Secret  information. There goes all of her prior denials about sending and receiving classified information. He further noted that she "should have known that an unclassified system was no place for that conversation." Indeed Comey noted how lax Hillary's State Department was with the whole process of handling classified information. Hardly the hallmark of a good manager.

Although she was not charged criminally, if she were still Secretary of State it would be grounds for impeachment. Further, if any government employee with a Top Secret clearance were so cavalier in handling such information, at minimum that employee would have had their clearance suspended, more likely would be fired.

As a result, this issue ain't going away.