South Korea’s fate

The victory for democracy in South Korea, with the impeachment of President Park Geun-hye, might herald it’s next disaster.

There will be three crucial elections in 2017.

In France, the election of Marine Le Pen could see the country leaving the European Union, signaling the beginning of the end of the European Union.

In Germany, Angela Merkel could be ousted, and liberal democracy would lose its last hope.

In South Korea, the impeachment of President Park Geun-hye will precipitate an election. Ban Ki-moon, the outgoing Secretary-General of the United Nations has ambitions to replace her.

Ban Ki-moon’s legacy at the United Nations provides evidence that his election as South Korea’s president would be a disaster.

The end of Kofi Annan’s tenure as Secretary-General was tainted by the oil for food scandal in Iraq. Annan instigated an investigation which culminated in the Volcker report making recommendations to ensure that the identified corruption at the United Nations could not happen again.

Part of this was the establishment of the Office of Internal Oversight Services (OIOS) that reported directly to the Secretary-General. Ban tried to shut it down, and severely hampered the operation.

In 2010, the head of OIOS wrote a scathing 50 page memorandum to Ban, in which she accused him of undermining the office. In it she makes clear that he was also working against the specific direction of the USG through his efforts. There is a covering memorandum sets out her complaints.

The OIOS is the internal office that is quoted as being so ineffective in investigating the incidents that happened in Kosovo and Bosnia. The memorandum explains why that was the case, and that Ban is directly implicated.

More at:
Broken System: The Failure to Punish High Level Corruption at the UN
Corruption Rears its Head Again at the United Nations
End of Assignment Report Inga-Britt Ahlenius
Inga-Britt Ahlenius Confidential Memo Portrays UN Chief As Secrecy Obsessed, Against Accountability
Note to the Secretary General
South Korea’s parliament votes to impeach President Park Geun-hye
UNacceptable

In war, truth is the first casualty

We live in a world where the courage of conviction has gone missing in action. Today misinformed public opinion holds more sway than professional advice.

To make things worse, western bureaucrats have adopted the soviet belief that knowledge is power. The Snowden leaks exposed that “top secret” classification sometimes has more to do with an author’s sense of self-importance than the responsibility to permit voters to make informed decisions.

The government agencies fail to inform the American public.

To make it worse, America has been at war with itself for the last 170 years. It’s a big surprise to any new visitor to the country. The visceral hatred between the former slave states and those that prevailed in the civil war appears undiminished.

A group of enterprising Macedonian teenagers created a series of money making fake news, and the polarized public lapped it up.1)fake news

The incredible intellect and integrity of America’s founding fathers is what made America great. Washington, Franklin, Madison, Jefferson and Hamilton created the foundation. Lincoln and Theodore Roosevelt continued that tradition of leadership with integrity. With the exception of Barack Obama, today’s American leaders disgrace that legacy.

The brilliance of the founding fathers was born in a time when having an opinion was the result of deep thought, and caring. Opinionation is an expectation of democracy. Debating politics (or religion) is not the start of a conflict – it is the openness to exchange views, and to understand thinking that differs from our own. The founding fathers did not always agree. Often they argued vehemently, but usually to the point of agreement, with imaginative solutions, rather than compromise.

An open mind is not an empty mind.

Democracy places a huge intellectual responsibility on ordinary people. A thoughtless member of a democracy is a delinquent member of a democracy.

Anti-intellectualism has been one of the regular features of populism, but in this respect populism is an offense against the people….Anti-intellectualism is always pseudo-democratic. In enshrining prejudices and dogmas, it robs the citizen of his exacting and proper role.

Democracy’s strength is the will of the people – when they are talking to each other.

More at:
The biggest fake news stories of 2016
The city getting rich from fake news
Obama is worried about fake news on social media – and we should be too
Reason and the Republic of Opinion
A reflection on Barack Obama’s presidency
The rise and rise of fake news
The scourge of the U.S. election: Fake news, exploding on social media, is seeping into the mainstream
This is a real news story about fake news stories
This Photo Of A Trump Billboard In Mumbai Is Real, And So Is The Dark Irony

Footnotes

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1. fake news

The Electoral College is a good idea

The are many people who question the need for the Electoral College. After all, the popular vote lost.

Hamilton originally proposed the idea in 1788. He offered it as a safeguard against the election of populists and demagogues, who having hoodwinked the voters, might prove unsuitable to be President of the United States of America.

His idea was that electors be citizens

“most capable of analyzing the qualities adapted to the station, and acting under circumstances favorable to deliberation, and to a judicious combination of all the reasons and inducements which were proper to govern their choice. A small number of persons, selected by their fellow-citizens from the general mass, will be most likely to possess the information and discernment requisite to such complicated investigations.”

Hamilton argued that the

“electrical college affords a moral certainty, that the office of President will never fall to the lot of any man who is not in an eminent degree endowed with the requisite qualifications. Talents for low intrigue, and the little arts of popularity, may alone suffice to elevate a man to the first honors in a single State; but it will require other talents, and a different kind of merit, to establish him in the esteem and confidence of the whole Union, or of so considerable a portion of it as would be necessary to make him a successful candidate for the distinguished office of President of the United States.”

It was a time when civil intellectual debate about politics was common, and opposite views were encouraged, so that differing opinions could be fully understood. That time is gone. The debate is no longer intellectual nor civil.

Worse, many states legally bind the electors to the voters’, and the choice of electors is constrained more by who they should not be, rather than their eligibility to make an informed decision about the suitability of the voters’ choice for President of the United States of America.

The idea is a good one. It is sabotaged by the people implementing it who didn’t see how important it might be.

Trump is about to conduct the lesson.

More at:
About the Electors
The Mode of Electing the President
State Laws Regarding Presidential Electors

Trump Towers, a few years ago

“Kids we need to need to plan.”

“What’s up?”

“It’s about depreciation.”

You love depreciation!

“I do, but at some point it’s going to catch up with us.”

“What do you mean?”

“Well you know how the tax code allows us to keep two separate sets of books, one for the banks and another for the IRS?”

“You’ve said that before, but I’ve never really understood how it works.”

“Well the banks value our properties at their current worth, and the IRS looks at the value of the properties at cost minus depreciation. That difference means that we can borrow against the full value of the properties, and write-off the interest and the depreciation against income for tax purposes. If we keep buying properties and writing off the depreciation plus the interest, we don’t pay tax on the difference in the values, until we sell them.”

“Well that’s simple then. Don’t sell them!”

“It also happens when I die!”

“What happens then?”

“The IRS takes all the depreciation written off over the years as income.”

“How much does it come to?”

“A lot!”

“So we’ll just sell a few of the properties to pay the taxes.”

“After you pay off the mortgages, there still won’t be enough cash.”

“So what do we do?”

“We need to change the tax code, especially the part that covers estate duty.”

“The politicians will never agree to that! Not even the Republicans.”

“There are a number of politicians who are very concerned about the complexity of the tax code. The person at the head of that queue is Paul Ryan. Even The Economist says that the tax code needs reform. We just need to make sure that the estate duty is done away with, or at least significantly reduced.”

“And how are you going to convince them to do that?”

“I’m going to become the next President!”

More at:
26 U.S. Code § 6103 – Confidentiality and disclosure of returns and return information
Donald Trump’s Deep Love Of Tax Depreciation – An Affair To Remember
Donald Trump’s Possible $0 Tax Bill – That’s Why People Do Commercial Real Estate Development
Fixing the Broken Tax Code
Fixing the tax sieve
How Donald Trump Uses the Tax Code in Ways You Can’t
Ok, so where are the tax returns
Simpler, fairer, possible
Trump owes us his tax returns now more than ever
What is Depreciation, and Why Was it Mentioned in Sunday Night’s Debate?

Canada’s book cooks

In a recent article, The Economist reported that the Canadian budget uses the accrual basis of accounting for its revenues, and the cash basis for reporting its more detailed spending.

Accounting like that provides a government with the opportunity to cook the books, Enron style. The Public Sector Accounting and Auditing Board (PSAAB) of the Canadian Institute of Chartered Accountants provides recommendations for how Canadian governments should account, but has no authority to enforce their recommendations.

In a speech given in 1982 by PSAAB’s first Chairman, N.G. Ross, he posed the following question to a group of legislators – why might governments “cook the books”? The answer – because governments, like any organization, do not like to report bad news. Bad financial news can constrain policy and spending initiatives that a government wants to introduce.

In 2003 a Liberal finance minister changed the budget to full accrual accounting. But the more detailed spending estimates were still accounted for on a cash basis. So, Canada’s anticipated expeditures do not follow the matching concept, one of four founding principles of accounting.

And the government no longer reconciles the figures, the most basic accounting control mechanism.

To forensic accountants these are signs that things are amiss.

And it suggests that one of the world’s leading democracies isn’t.

More at:
Something doesn’t add up
Perspectives on Accrual Accounting