There was a call from a distinguished accountant this morning for “accurate” accounting but how can it ever be accurate. Depreciation is nothing more than an arbitrary allocation. Bad debt expense is nothing more than a judgment. The cost of physical assets is nothing more than a historical artifice. There is nothing “accurate” about any of this. The term does not appear in official rules and should be abandoned.
Thomas Friedman (NY Times 10/4/08) “Swedish Spoken Here” notes that Americans now owe the Chinese over one trillion dollars not to mention what we owe to other nations. He quote Professor Jeffrey Garten of Yale that “being a debtor nation means losing even more of our sovereignty.” We talk big about being free but our profligate ways are leaving us in chains to the advice, criticism, and constraints of other nations.
Thomas Friedman (NY Times 10/21/09) “The New Untouchables” makes the unassailable point that “we need to understand that it is not only our financial system that needs a reboot and an upgrade, but also our public school system. Otherwise, the jobless recovery won’t be just a passing phase, but our future.” As someone who has watched the steady decline in education at the college level in the US, one can only say Amen.
High time that the SEC brought some sense to the application of FAS 157, which called for the use of market prices in orderly markets. Financial markets are at present anything but orderly and the use of market pricing bordered on absurd. The standard is an excellent one; its application has been plain silly.
Fascinating — and scary — article by Joe Nocera on how we are continuing to pay for a drug Avastin that studies show does not work. As he rightly asks, how will we get healthcare costs under control if we are unwilling to stop paying for useless drugs.
Stop press . . .economists are still predicting a relatively mild recession. (NY Times 10/4/08). When will we ever learn that the predictions of economists are almost worse than useless? Did any of them seriously predict the mess within which we find ourselves? Statistically, a few had to get it right – and those few were right. Most had it dead wrong. Someone once said that prediction is hard, especially when it is about the future. Wise words!
There was a wonderful diagram in the New York Times (October 4, 2008) with a diagram showing the mess of regulations that we currently have in this country. See http://www.nytimes.com/2008/10/05/business/05metrics.html.