Episode #127 - Free-rider Friday - January 2017

Ed’s Topics

Calexit - A group started collecting signatures to hold a referendum on California's seceding from the United States. Ed's take is if Hillary Clinton had won, we would be talking Texit instead. 

Self-Deception - Ed recently attended a leadership workshop on self-deception held by John Engels of Leadership Coaching Inc. A primary source of self-deception is when we equate what is "true for me" with "the truth."  

Hitendra Patil article on AccountingWeb, Why Anxiety Around Automation is Absurd caught Ed's attention. It is an excellent piece but is missing the impact of the billable hour model on stalling the needed changes in the industry. 

Ed thinks his iPhone and Facebook were listening to a conversation we was having resulting in a ad for Five Guys Burgers showing up in his stream. He did some digging and found an article: which addresses this "phenomenon." - If you’re not paranoid, you’re crazy. 

According to a recent paper by Srikant Devaraj and Erik Nessen, "for $0.10 increase in real minimum wage, total hygiene violation score increases between 3.35 and 8.99 percent.” Is the minimum wage actually sickening?

In what is both an amazing scientific achievement and a source of ethical consideration, scientists announced that they can create human-pig embryos

Ron’s Topics

Hamilton—raise your price!

Battling bots,” The Economist, January 7, 2017

“When I was 25, having studied economics for 6 years, I grasped suddenly that prices are for allocation, not fairness. When I was 28, an assistant professor with Steve Cheung as an office mate, I grasped that prices are only one possible system of allocation (violence and queuing are others) but socially the cheapest." -Deirdre N. McCloskey, How to Be Human *Though an Economist

Deloitte Invests in Blockchain

Accounting Today, January 14, 2017, “Deloitte opens blockchain lab in New York

Google’s Business Model Threatened?

Still searching,” The Economist, December 17, 2016

Border Adjustability Tax

Trump wants to reduce the corporate tax rate from 35% to 15%; Paul Ryan wants 20%. Both want full expensing, and a  territorial system, where companies are taxed where they make the product, not on world-wide income as we do now.

But Republicans have proposed a border adjusted tax, whereby you are taxed at the consumption point, not the production point.

It’s very similar to a Value Added Tax, a sort of border-adjusted sales tax, or a cash flow consumption tax.

Corporations could not deduct the cost of imported goods, or interest expense.

Say Rolls-Royce exports a jet engine made in Britain to France: It pays a French VAT on the sale, and British tax on profit.

America currently imposes no VAT on imported goods.

So the border adjusted tax penalizes imports while subsidizing exports.

Boeing and GE love it! Wal-Mart and Target hate it! (the tax could exceed their profits, the cost being passed on to consumers).

Economists say, in theory, this wouldn’t affect trade since it would push up the dollar’s value. To offset a 20% border-adjusted tax, the dollar would need to rise by 25%.

This tax may violate WTO rules.

Steve Forbes writes it could cost consumers $1.2 trillion over 10 years, or more (since future Congresses could raise the rate easily).

Gain and pain,” The Economist, December 17, 2016

Steve Forbes, “OMG! House Republicans Are Preparing To Hit Consumers With A Horrible New Tax That Will Harm Trump And Hurt The Economy,” January 11, 2017.

Border Adjustability Is Already Fueling Tax Reform Controversy,” Forbes, December 8, 2016

Driverless Cars and Lidar

Eyes on the road,” The Economist, December 24, 2016

Trump’s Inauguration Speech

George Will wrote it was the worst inaugural speech in history.

It was short: 1433 words.

Fundamentally optimistic: “We must think big, and dream even bigger.”

He slammed the political class.

Jean-Claude Juncker, primer minister of Luxembourg: “We all know what to do; we just don’t know how to get re-elected after we’ve done it.”

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Ed Kless

Ed Kless joined Sage in July of 2003 and is currently the senior director of partner development and strategy. He develops and delivers curriculum for Sage business partners on the art and practice of small business consulting. Courses include: Sage Consulting Academy, Business Strategy and Customer Experience Workshops. Ed is the author of The Soul of Enterprise: Dialogues on Business in the Knowledge Economy, a compendium of a few of the episodes of his VoiceAmerica talk-show The Soul of Enterprise: Business in the Knowledge Economy with Ron Baker, founder of the VeraSage Institute where Ed is also a senior fellow.