ACCOUNTING 101

Writing-off” is one of those expressions that accountants use. However, it seems that Arthur Andersen’s Enron auditors didn’t do a lot of ‘writing-off’. They did the opposite. They ‘wrote-up’.

            For an accountant, ‘writing- off’ means that the objects or accounts are declared to have no value. If the account or item in question had been shown as having a value of $1,000,000; an accounting write-off would mean that the account would now have a new value – Zero! That $1,000,000 account would have disappeared. Pouf!

            Of course, if Arthur’s boys had been at it, that $1,000,000 account would have been ‘written-up’ and might have become $2,000,000 – or more. Like pulling a rabbit out of a hat. Presto!

            It’s the fun of accounting, this turning solid of numbers into ethereal concepts like profits and assets. It’s magic worked on paper.

            This writing-off process involves processes and machinery.  But it always involves an arcane term – depreciation. And just what does depreciation mean?

            Well, generally, it means that as time passes, the value of something – a building, say – reduces. Thus a building, built at a cost of $250 a square foot, and then depreciated over fifty years, will, after fifty years, be worth $0 a square foot and will thus have no value whatsoever. Which, translated, means that the office building next to you is losing its value every year and in time will be worth nothing.

            Ergo, to get rich all you have to do is find a fully depreciated building, buy it for $1 – which is greater than its fully depreciated value – and sell it at whatever price somebody else is willing to pay you – and then you can retire for life…

            Of course, you know that’s not the way it really works. You know that it’s all in the magic of accounting.

            Accountants certainly do write-off buildings and machines. But accountants don’t write-off people. Government’s, communities, and societies do write-off people.

            But where accountants do their write-offs publicly and openly in the thousands of pages of their publicly published Annual Reports; governments, communities, and societies tend to do their people write-offs less publicly. More insidiously. Often very well-hidden.

            So how does a community write-off people – either its own or others?  How?

            The most common write-off method is to marginalize. This means to treat some people as if they have very little value. Little value as workers – pay them chicken feed wages. Little value as people – give them poor or inadequate education and social and health care. Little value as human beings – give them no housing or very poor housing and don’t allow them any political power.

            Most importantly though, set up policing agencies [physical control], prison agencies [warehouse and storage], and law systems [rules for containment] so that the lives and actions of these people of little value don’t impinge on the lives of the people of higher value.

            One way or another, all societies write people off. Most will write-off people who are different from the majority of the dominant society. But sometimes a minority community writes-off a majority community.

            But whichever way it goes, this writing-off of a fellow human being is wrong. It’s as wrong as Arthur Andersen’s writing-up of Enron’s assets.

            Here in our tiny Bermuda, we Bermudians have been writing-off people for quite some time. We’ve been writing-off all those young men and women who come out of Bermuda’s under-performing public education. People who’ve been coming out for the past twenty years with insufficient academic grounding to be able to find some regular niche somewhere in our small but demanding Bermuda service market.

            Each year – at least according to this and past Censuses – about 400 male Bermudians are born…which means that seventeen years later, about 400 male Bermudians are supposed to be graduating from Bermuda’s school system…which means that 400 male Bermudians are either going straight into the job market or are going on to tertiary education causing a delayed entry into the job market.

            If, as it turns out, we’re putting only 55% of this 400 – that’ll be 220 males – through the final stages of the public education system; and if we’re under-educating this 220, it means that we’re close to writing-off 220 males a year – every year.

            Of course, some of these under-educated males will succeed despite the odds. But some won’t. And it’s this last group, the under-educated non-succeeders, who become the write-off kids.

            Perhaps only 30% of the 220 seventeen year-old boys who – every year – come out of the public education system are write-off kids. But that’s still 66 living breathing human beings who then enter our Bermuda society and who enter that market very badly equipped for survival in our unique service market.   

            Over ten years that’s 660 young men, and over twenty years it’s 1,320. These men range in age from young men of 17 [who left the system in 2002] to old men of 37 [who left the system in 1982].

            With jails that have been full to overfull for the past twenty years [and remember that Westgate Correctional Facility was an expansion]; with the appearance of an underclass of Bermudians [first specifically identified ten years ago in 1992]; with an acknowledged increase in levels of violence [fighting and killing as spectator sports]; and with the clear decline in educational standards [look at the ten, fifteen, twenty, twenty-five, year history of scholarship awards]; it’s clear that this community – this whole Bermuda community – has been writing-off its own Bermudian men [ and some women, too] for a lo-o-o-ng time.

            But, unlike Arthur Andersen’s boys who at least published their black magic accounting, us Bermudians have been doing our writing-off in deepest secrecy.

            What we Bermudians need to do is to re-value – or write-up as accountants would say it – our own Bermudian people and place the same value – no differences whatsoever – on each of our 46,000 Bermudian people. We need to make available the same high quality of education – and therefore life opportunity – to all Bermudians.

            Specifically? The public education system which spends at least as much as, and maybe even more per pupil than does the private system, must return at least the same value for dollar that the private educating system does today, and has done consistently over the past twenty years. That’s the going forward solution.

            But our Bermuda community still has an accounting decision to make. Our community still has to decide what it will do with the more than 1,000 men – and some women, too – that it has actually been writing-off all these years. Our community has to deal with this past – a past that is impacting heavily on our present.

            Maybe we could start by simply acknowledging that we have actually written-off some of our own Bermudian people.  After that we can change some of the values in our public education system.

            How many times have you heard that cliché: “It takes a village to raise a child.”? Well, we need to move on from that.  Our Bermuda “village” needs to raise the value that it places on its own children.

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