Quite a Lay-gacy:

Thanks to Ken Lay and a few other bubble fraudsters, we now have Sarbanes-Oxley sucking at productivity in every publicly-held corporation in America.

I feel sympathy for his family, but none for Lay himself. He died rich and left behind many who watched their investments disappear into thin air, never to return.

It is no small accomplishment for one man to be at the root of an entire economy growing more slowly than it could have, but Ken Lay pulled it off.

Of course I pray for the repose of his soul and that he got himself right with God before he passed away.

From Columbus Business First:

State to accelerate income tax cuts
July 5, 2006 4:53 PM EDT

Rather than transferring money from an expected budget surplus to the state’s Rainy Day Fund, Ohio is returning money to residents by speeding up income tax cuts.

Beginning Oct. 1, the Ohio Department of Taxation will cut personal income tax rates by 8.4 percent, double the annual amount called for in the tax reform package instituted last July.

The cut would be in addition to a 4.2 percent cut in tax rates in January. Ohio’s tax reform package called for a 21 percent income tax cut phased in over five years.

According to a release from Ohio Gov. Bob Taft, the 8.4 percent cut would average about $390 per Ohioan.

Contrary to the impression created in the first sentence, I believe the law mandates the income tax reduction, and that putting the money in the Rainy Day Fund is not an option. Tell me if I’m wrong.

What the larger-than-expected income tax cut proves is that taxes should have been lower across-the-board during all of the past fiscal year. The improved economy in Ohio should also give new momentum to the idea of “killing the CAT” (the Commercial Activities Tax) before more opportunities like Honda’s new plant are lost.

Sunday evening I was privileged to appear on Pundit Review Radio out of WRKO-AM in Boston.

Kevin and Gregg of punditreview.com and I spoke about the Kelo v. New London Supreme Court ruling, how the situation in New London itself has ultimately worked out, and how economic good news in general is being downplayed or ignored by the press, particularly The Associated Press.

A replay audio file is here. A podcast is available through iTunes by subscribing to the Pundit Review podcast.

“I think embryonic stem cells are going to fade in the rearview mirror of adult stem cells.”

– Douglas Losordo, Tufts cardiologist
and stem cell researcher

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Dr. Losordo’s 2005 prediction about adult stem cells (ASCs) has come closer to reality (HT Life News), even if the WORMs (Worn-Out Reactionary Media, known to most as The Mainstream Media) remain fixated on embryonic stem cell (ESC) research and seemingly determined not to relay good news about ASCs:

Adult Cells Relive Their Youth
3 July 2006

TORONTO–One of the biggest questions in stem cell biology is how the cloning process manages to turn back the clock of mature cells, resetting them to their embryonic potential. Ideally, researchers would like to find a way to convert adult cells directly into to embryonic stem (ES) cells–without having to create an embryo at all. At a meeting of the International Society for Stem Cell Research here, Shinya Yamanaka of Kyoto University in Japan reported that boosting the activity of just four genes can apparently turn mouse skin cells into cells that closely resemble ES cells.

Yamanaka and his colleagues wondered whether the factors that give ES cells their unique properties might also be able to reprogram adult cells to behave like ES cells. They identified 24 genes that are specifically expressed in mouse ES cells and used viral vectors to introduce extra copies of the genes into skin cells taken from mouse tail tips. When they inserted extra copies of all 24 genes, they found that a small percentage of cells that took up the genes did indeed seem to take on characteristics of ES cells. But no single gene introduced alone was able to manage the transformation.

Through a process of elimination, the team whittled down the candidates to a suite of just four genes that, when introduced together into the tail-tip cells, could produce colonies of ES-like cells. As Yamanaka described, three of the four factors are old friends: Oct4, Sox2, and c-Myc are all key genes in both early embryos and ES cells. Yamanaka did not name the fourth gene, but he said it is a transcription factor that until now has not been recognized as playing a major role in ES cells.

The ES-like cells the group produced with the four introduced genes seemed to have almost all the key properties of ES cells derived from embryos. They formed several kinds of tissue in the culture dish and produced tumors called teratomas when they were injected under the skin of immune-compromised mice–both classic characteristics of ES cells.

If “converted” ASCs have the clear potential to do everything ESCs can, why engage in ESC research, which of necessity must kill embryos (i.e., tiny forms of human life) in the process? Unfortunately, thanks to ESC advocates putting one over on California voters and getting it past the state courts (note how the report manages to avoid using the word “embryonic”), the answer is money. Now there’s $3 billion to be spent on ESC research. One can only hope that those in charge of the money get a conscience and improved business acumen, and divert the money to places where the true potential lies.

And it’s here.

WELCOME to Dr. Sanity readers, and thanks to Ms. “Learned Economic Helplessness” for the link! For another example of the press downplaying good economic news, go here to see how the AP treated the announcement that the final 1st Quarter economic growth rate was 5.6%.
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Payroll-processing and employee-benefits giant ADP does its own monthly survey on employment levels, which it releases two days ahead of the official government report from the Bureau of Labor Statistics. I didn’t know that, but since their July report is only the third one they’ve issued, I don’t feel too bad. Now I know, and they’re blogrolled.

Their report is based on a survey of ADP clients, who happen to employ one of every six people in the USA. Read ADP’s “why it’s needed” FAQ, and I believe you’ll agree that it looks like a potentially promising addition to the data bank.

If the survey proves to be reliable, it will be a great attention-getting business move by ADP. In fact, the report’s July 5 release for the month of June is making major waves:

US private sector adds 368,000 jobs in June - survey

U.S. private sector employers created an estimated 368,000 jobs in June, compared with 122,000 jobs in the previous month, a report by a private employment service said on Wednesday.

The monthly ADP National Employment Report is based on payroll data and measures the change in in total nonfarm employment each month.

The report is released each month, two days before the government’s own job survey of a net gain in nonfarm jobs in the U.S. private and public sectors.

“These findings indicate a strong acceleration of employment in June,” said Joel Prakken, chairman of Macroeconomic Advisers, LLC, said in a statement. Macroeconomic Advisers developed the ADP report together with ADP Employer Services.

He separately told Reuters that private sector jobs growth in June was “broad-based”, averaging around 218,000 over the last six months. “I’m pretty confident that jobs growth on Friday would be healthy and I wouldn’t be surprised if it shows an acceleration.”

The interesting comparison will of course be to the BLS report when it’s released at 8:30 Friday morning.

There is one downside if ADP’s report proves to be consistently reliable — It will give the economic naysayers at The Associated Press and others in the business press more time to either work up their “yeah, but” verbiage designed to downplay good news, or to badmouth “the Bush economy” if the news isn’t good, in advance of the official numbers from the BLS. If ADP’s June employment growth figure is accurate, the business press’s “yeah, but” creativity will be sorely tested Friday morning.
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UPDATE: Now here’s something that’s really interesting:

As you’ll see if you go to the link, ADP has apparently been tracking the data internally for years without releasing it.

As to the table above — After being at the same place as BLS at the end of January, ADP’s reported employment levels were greater than BLS’s by 273,000 by the end of May. If (very big if) ADP’s methodology picks up employment-level changes more quickly and accurately than the BLS does, Friday’s BLS report, which will also revise its April and May numbers, could be a real eye-popper.

UPDATE 2: MarketWatch reports that “Before the ADP data was released, economists expected a gain of about 160,000 jobs.”

UPDATE 3: Larry Kudlow weighs in — “….. the demand-siders continue their doom and gloom. They’ve predicted four or five growth pauses in the last three years, as the economy shrugged off their pessimism and roared ahead. They have been wrong over and over again. And all signs suggest they will continue to be wrong.”

Free Links:

• The City of Baltimore assesses a $3.50 tax on each telephone line a person has, landline or wireless. Montgomery County in Maryland charges $2.00 for each wireless line. Maryland’s state tax court said Monday that these taxes are legal. Look for more of these nuisance taxes to pop up elsewhere.
• Apple Rids Product Line of CRT Monitors — Overburdened desks around the world are rejoicing. I say good riddance.
• The really bizarre thing about New Jersey’s state government shutdown is that one party can’t blame the other — A Dem governor is fighting with the Dem legislature, with the only questions being how much taxes are going to be increased, and which ones. Meanwhile, for every day the shutdown continues casino operators in Atlantic City lose millions of dollars and the state loses over $1 million in payroll taxes alone.
• Continuing its best-since-the-80s performance, the ISM manufacturing index was in expansion mode for the 37th consecutive month. It wasn’t as strong as the previous month or as “expected,” but an expansion is an expansion. Factory orders also expanded 0.7%, beating the “expected” result of 0.1%.
• After this, who can credibly pretend that the BBC isn’t horribly biased against the US and President Bush? More on this can be seen at Biased BBC and Slugger O’Toole via Instapundit.
• There are secrets, and then there are secrets. The people trying to give away these secrets are in a heap of trouble:
  

  Three people have been arrested and charged with stealing confidential information about drink recipes from The Coca-Cola Co. (KO) and trying to sell it to rival PepsiCo Inc. (PEP) federal prosecutors said Wednesday.

  The suspects include an executive administrative assistant at Atlanta-based Coke, Joya Williams, who is accused of rifling through corporate files and stuffing documents and a new Coca-Cola product into a personal bag.

  Williams, 41, of Norcross, Ga., and 30-year-old Ibrahim Dimson of New York and 43-year-old Edmund Duhaney of Decatur, Ga., are charged with wire fraud and unlawfully stealing and selling Coke trade secrets, federal prosecutors said.

  They are expected to appear before a federal magistrate judge on Thursday in Atlanta.

  Pepsi spokesman Dave DeCecco said his company did what any responsible company would do in cooperating with Coke and the investigation.

  I’d say the suspects’ biggest mistake was not going to The New York Times immediately.

After a harrowing experience, Thomas Whitman is safe:

Nictaux teens rescued from mudhole
July 4, 2006

NICTAUX, NOVA SCOTIA — “I was hoping I wouldn’t go under. I honestly thought I was going to die there,” 14-year-old Thomas Whitman said earnestly Monday.

The Nictaux boy was describing what went through his mind Sunday night after he became trapped in a mudhole at a gravel pit about two kilometres from home.

Thomas and his brothers, Leroy, 12, and Robbie, 15, had been riding their bikes in the pit when they discovered the hole between two large banks.

“It looked like mud to play in,” Thomas said in an interview.

But the boys soon learned they weren’t playing in ordinary mud. When Robbie’s bike got stuck, Thomas stepped into the mud to try to free it. He sank to his ankles and discovered he couldn’t free his feet. He tried to get back on his own bike but it leaned and began to sink.

“The more I moved, the more I sank.”

At one point, all three boys were stuck in what they described as quicksand.

After several minutes, Robbie freed himself and his bike, riding about two kilometres to a convenience store where he called 911 just after 9 o’clock.

Within an hour, Thomas had sunk from his ankles to his waist. Leroy managed to free himself, but Thomas worried he would get trapped again so he told him to stay out of danger.

“It was scary,” Leroy said. “We didn’t know how deep it was and it’s pretty hard to move in that stuff.”

Two rescue vehicles were finally dispatched from the Nictaux firehall.

“I heard the sirens,” Thomas said, “and was relieved to know help was coming.”

Deputy Fire Chief Eddy Porter was among the first to arrive.

“He was stuck in the mud up to his waist and couldn’t move. It was wet crusher dust and it is like quicksand.”

The deputy chief said a firefighter slid down the side of one of the banks near the boy and soon two ropes were placed around his waist. He was pulled out within a few minutes.

The boys’ mother, Nancy Whitman, is very appreciative of the eight firefighters who may have saved her son’s life.

“They couldn’t have done any better,” she said Monday. “It was definitely a 911 situation. Those boys would have never gotten out of there.”