Thursday, June 30, 2005

Well that didn't work, gov 

A few weeks ago I gave some advice to Governor Pawlenty's poor handling of the budget negotiations. In about half an hour the deadline for a budget will pass, and we got no deal. Not only did he not get a deal, he didn't even get the conditionality he said he had to have.
On Thursday, Sviggum said he and Pawlenty had backed away from a demand for government reform legislation as part of a budget deal. He and Pawlenty also dropped calls for a new casino at Canterbury Park, although they didn't declare it off the table for good.
Oh, it's dead, Tim. Bring it out to the cart.

But, hey, the parks will stay open!

Mr. Pawlenty, do you understand the meaning of the word 'leverage'? How exactly do you expect anyone to make a deal with you when you draw more lines in the sand than a French diplomat? When 2/3 of state employees are going to keep working, and you won't even inflict the pain of a lost weekend in a state park to make people pay attention to the insistence of the bureaucracy, all the way to the courts, that Leviathan is getting hungrier?

Think you're better off now without the pledge? Do you really believe the Cities newspapers and the gasbag on (we don't c)AIR (4) AMERICA will lighten up on you at all because you made conciliatory gestures to demonstrate leadership? Watch, my friend. The best thing happening this weekend is everyone's gone and so the STrib will have fewer readers (though sales will be up as they leave 10,000 copies in front of your mansion and call it circulation.) You're about to reap the shitstorm, all because you got off message trying to be nice with people who play with knives.

Here's the message, one more time: IT'S THE SPENDING, STUPID!

Question to those who thought Pawlenty would get the message from the battle over the state Republican chair -- think he got it?

UPDATE: At least someone is maintaining his sense of humor.

Online answer keys a no-no 

Some of my colleagues from UVa will not be pleased to find that their economics department has a cheating scandal.
Department officials said that some problem sets from textbooks used in introductory graduate economics courses have answer keys online. At least one student found answers for a course taken by all first-year students, and apparently shared the information with classmates. Though the solutions were apparently available, David Mills, chair of the economics department, said students should have �known it was off-limits,� but that they instead �used it without the professor being aware.�
Virginia has a farily strict honor code, so these students should normally be expelled. But this is highly unusual in the case of grad students, at least at UVa. One of the graduate students notes,
from an economist�s perspective, he considered it a bad tactical move to cheat. �It isn�t worth the risk,� he said. He had never heard of graduate students finding answer keys before, and said he would be shocked if someone cheated on a test, but that �as far as for homework, that doesn�t surprise me at all.� He added that the idea a cheater would share his or her apparent competitive advantage with classmates is also less than stunning. �There�s sort of a communal feel in that everybody�s trying to help each other out a lot.�
I agree that grad school is not nearly as cutthroat as one might think from hearing stories of law or medical schools. And it's also not surprising that the economics department is trying to find some way to deal with the dishonesty short of expulsion. Faculty probably should know if their textbooks have problems answered online, and it's easy to catch who didn't learn the material with an exam or the students' qualifying exams. I suspect one problem to arise will be that the students in this class of UVa economics PhDs will be scrutinized a little more carefully on the job market.

h/t: reader Roger Lewis

Target locked 

St. Cloud Mayor John Ellenbecker has decided to run for re-election here in St. Cloud. Most of the local pols of the liberal persuasion will clear out for him, but there's still talk state Senator Dave Kleis might run against him. Kleis is not saying anything about that until the Legislature finishes its work. Given Senator Kleis' preference for small government, the story today provides early ammunition should he choose to run:
If he's re-elected, Ellenbecker said he'll focus on the city's financial health and a capital improvement plan for big-ticket items such as new fire stations, a new public library and a campus-style government center.
That is, having already twisted arms to gain a half-cent sales tax to expand government, he now wants to increase spending on capital projects. Improving financial health probably does not involve reducing spending somewhere else.

The mayor, as I've mentioned before, likes to read the chat room at the St. Cloud Times, and is responding to posters commenting on this story (up over 185 today, which is the most I can remember.) If you want to talk with or debate Mr. Ellenbecker, there are opportunities available to you on that chat room. He responds frequently and hasn't been bashful about responding. Those posts are going to make some nice food for debates this fall.

One more point: Ellenbecker is frequently cited as a possible DFL candidate for US Congressional District 6, the seat Mark Kennedy is leaving to run for the Senate. (St. Cloud mayoral races, like many other municipal elections, are non-partisan.) There is nothing in this story to indicate he isn't still looking at the race, but it's quite obvious that a defeat in this election would probably preclude a run for the House. It will be interesting to see both what opposition is offered to take Ellenbecker down a peg and how much DFL sources are used to support his re-election.

Upping the ante on Africa 

Over at Apprehension, Douglas Bass offers another thought and an interesting graphic on the question of foreign aid and infant mortality rates (IMR).
The rows are nations/regions, the columns are years, and the cells are the IMR's for that nation/region and year. The cells are black if the Census Bureau doesn't have data for that nation/region and year, brown if the IMR is above 50, and green if the IMR is below 50. All of the countries that were green when measurement started have stayed green, and most of the countries that were brown, and have gone green, have stayed green.

Now what I plotted before, for Africa, was the level of IMR versus foreign aid. Douglas' post talks about the change in IMR. Given that he left on my comments page the data for his graph, I thought it rather simple to calculate the decline in IMR versus foreign aid. So, same graph except using the change in IMR over 1990-2000.

I've got a slight change in my data, as I added North Africa back into the dataset. I also have the problem that I only have aid data from my source for 1999-2003, and only the 2000 dataset looks complete. So I could be wrong in what I have here if the earlier aid pattern to Africa is different than it was in 2000. This is supposed to be a back-of-the-envelope exercise, not a detailed senior paper. (If any of my students are reading: You have a ready-made senior paper topic.) But here are two pictures, one for the level of IMR in 2000 (the previous graph had two fewer datapoints) and the second of the change in IMR over the 1990s versus foreign aid in 2000.

There doesn't appear to be much of a relationship. Depressingly, the data don't seem to show any change in IMR in the 1990s in Africa; you can count seven countries with noticeably hire IMR in 2000 than 1990.

This week's Economist has a review of the aid for Africa question as its headline piece, and it includes this intriguing reference to the Sharon Stone-mosquito bednet story.

Top of the list of quick wins are mosquito bednets, impregnated with insecticide. They cost less than $4 and cut the risk of infants dying by 14%, to 63%. The appeal is obvious and immediate. At the World Economic Forum in Davos this year, a speech on malaria by Benjamin Mkapa, Tanzania's president, prompted Sharon Stone, a Hollywood actress, to stand up, pledge $10,000 for bednets on the spot, and challenge her fellow audience members to do the same.

Sadly, this impulsive generosity will not be instantly gratified. Nets cost more to distribute than to make. Misguided policies can make matters worse. Nigeria, for
example, has on various occasions imposed tariffs of up to 40% on imported nets to protect its own netmakers. Demand for the insecticide, with which many Africans are unfamiliar, cannot be taken for granted (less than a fifth of nets are retreated regularly) nor can demand for the nets themselves. The Monitor, a Ugandan newspaper, reports that a government official last month warned villagers not to turn their nets into wedding gowns.

So where are Ms Stone's nets now? In fact, the Tanzanian government has a sensible policy of not giving bednets away. To do so might crowd out the commercial sellers of bednets, who distribute them more efficiently than the public sector�and can be relied on to keep selling them, provided they can make a profit, long after celebrity donors have lost interest. Instead, the government hands out vouchers to pregnant women at antenatal clinics, covering much of the cost of the nets in the market.

The dilemmas of distributing bednets illustrate some general problems of aid. Donors muster resources, but they fail to align the incentives of the people providing them or benefiting from them. The grand macro-solutions often neglect the nagging micro-foundations.

The Economist story goes on to tell of informal markets developing to distribute drugs; this may not be out and out corruption but simply the means by which clinics stay in business when they don't receive payments expected from the public sector. And getting incentives right is important for both the micro and macro levels, as this piece from the IMF's research chief Raghuram Rajan suggests. It's not just the amount that Africa gets but how it gets it that matters.

If the country�s government is thoroughly corrupt, then the status quo�no forgiveness and no additional aid�is best, for it gives the government no official resources to misuse and limits its ability to raise private sector funds. Aid in this case should be distributed directly to nongovernmental organizations. If the country has a reasonably committed government, look at the country�s primary need. When social sector projects top the list, then what matters is the extent of official sector net funding. Here, the first alternative�debt is not forgiven but official creditors lend more�is best. But if most projects are commercially viable, the second alternative�some relief but leaving enough outstanding official debt that foreign private investors lend responsibly�may be optimal. Finally, substantial debt forgiveness is prudent if the risk of financial distress really is a serious problem�an unlikely eventuality. But there must be an assurance that the country does not borrow up again from private creditors and game the system to get further debt relief.

The Africa question is daunting, as more and more advisors become frustrated and calloused with the lack of progress after pouring in so much and receiving so little. The story dates back as far as the end of WW2, when parts of Africa were seen as better prospects for economic growth than Japan. The Economist writers want us not to abandon all hope. We haven't, but we would like to be sure first that we do no harm.

I hope my students are reading this 

Phil Miller, on the math he needed to get into graduate school:
I am not a math jock. In fact, through my undergraduate years, I never took a math class beyond college algebra although I was exposed to some essentials of calculus in a mathematical econ course. I was also exposed to more calculus in the footnotes of the intermediate micro text that I used.

...During the winter of 1992-93 and the spring and summer of 1993, the time immediately prior to the beginning of my graduate studies, I spent my time reading a calculus book and a linear algebra book. My time at UNO told me that to be successful in a graduate program, I needed to know that stuff. I read and took notes from every section of the calc book that covered material typically covered in calc 1 and 2 and the material on partial differentiation. I read and took notes from nearly the entire linear algebra text. ... In short, I taught myself calc 1, 2, parts of 3, and linear algebra in the space of about 9 months. In my life, this was one of the best investments I made.

That's almost exactly the advice I give my students. There's no way around the calculus, even when the guy who taught me micro in graduate school, Dan Vandermeulen (the first economist at Claremont McKenna), did his entire set of course using linear programming and set theory. If you have linear algebra, linear programming isn't hard, and set theory struck me as akin to my formal logic course as an undergrad, a course that should be taught far more often than it is. But even that didn't help, because when it came time for qualifying exams that odd way of writing economic problems was all I knew. I had technique, but no insight. Insight actually didn't come for me until I taught principles myself, something which most students at Claremont didn't do because GAs were not used to teach there.

I see many of my students nowadays not only taking the calculus and linear algebra but thinking they need a minor in mathematics or a double major to get into graduate school. That might be true -- grad schools will look to see what math you've had and will use it as a screen. But as John Palmer points out, that's not what makes you an economist.

Wednesday, June 29, 2005

Float or bloat 

First Ringer's post of the suit filed against the StarTribune for inflated circulation figures interested me for a few reasons.
  1. I had no idea that there's a non-profit company keeping track of circulation figures, and that advertisers and papers were using that company's information to decide ad rates;
  2. Advertising is 84% of revenues for the paper.
  3. I had no idea the Fraters had such foresight as to have said on NARN last week many of the charges in the suit.
  4. Plaintiffs believe and allege that Defendants charged them higher advertising rates based upon manipulated, inflated circulation figures, which upon information and belief were derived from various programs designed to manipulate circulation figures, including (1) requiring independent contractor distributors to leave newspapers at residential addresses that do not subscribe to the Star Tribune; (2) requiring distributors to dump unsold newspapers; (3) refusing to credit retailers with unsold newspapers and instead reporting unsold papers as sales; (4) implementing programs designed to inflate circulation numbers at schools and hotels; (5) "buying down returns", whereby the Star Tribune gave agents incentives not to report returns accurately.
  5. The suit discusses "grace period" deliveries, so that when The Elder cancelled his subscription but continued to find the paper on his doorstep, the STrib "reports circulation revenue on its books from these unsold, freely delivered papers, but classifies them as ciruclation bad debts if subscriptions are not regained."
I'm not shocked to hear this has happened, and as the suit points out, inflated circulation figures are not a unique problem at the STrib. Newsday is going through its problems with circulation inflation right now. But it would be interesting to see what the actual, uninflated numbers were for the STrib, since it tends to boast its growth. Having driven a delivery truck for the Manchester Union Leader back in the 1970s as one of those independent contractors, I can say I saw none of these activities during my time.

Side note: My uncle used to complain about returns at the Dover (NH) News, a distributor where he was a manager. But the best thing about that business was that they also distributed comic books, and all they had to return for credit was the cover. The rest ended up often at his apartment, where I would read the innards. This was also true with magazines -- I'm willing to bet he had some uncovered Playboys, as it were.

How much language should a TA have? 

One of the really troubling things for me when judging a young scholar's ability to teach is when he or she is not a native English speaker and has a heavy accent. I travel overseas a good bit but normally conduct business in English -- my Russian, French and Armenian are good enough to order food and get through the customs line at the airport, not much more -- and so I am used to hearing many different accents and learn to work with them. I adjust fairly quickly to a new accent.

Students, particularly from smaller cities and towns, have no such experience. So it is rather common now for them to come to me, as an academic chair, to complain about accents for the non-native English faculty I have. (We don't use our graduate students in the classroom because our programs are applied programs for people going into business fields, not academia.) I was therefore fascinated by an article in the IHT on graduate assistants with limited command of English.

Valerie Serrin still remembers the feeling of helplessness. After getting a low grade on a lab report in an introductory chemistry course, she went to her teaching assistant to ask what she should have done for a better grade.

The teaching assistant, a graduate student from China, had a heavy accent and a limited grasp of spoken English, so he could not explain to Serrin, a freshman at the time, what her report had lacked, Serrin said. "He would just say, 'It's easy, it's easy,"' said Serrin, who recently completed her junior year at the University of California at Berkeley. "But it wasn't easy. He was brilliant, absolutely brilliant, but he couldn't communicate in English."

Some writers think this is just students being, well, students.

Some in the academic world believe that the complaints can be a reflection of insularity and laziness. "Is there some low-level carping? Absolutely," said Dudley Doane, director of the Center for American English Language and Culture at the University of Virginia. "Is it justified? At times it may be. However, we have some students who aren't used to stretching."

Some foreign teaching assistants said that, in addition to their own studies and the rigors of grading papers, overseeing labs and leading discussions, they must deal with what some might consider intolerant undergraduates.

"I had students come into my class mimicking the accent of a friend of mine, who is a teaching assistant in math," said Atreyee Phukan, a graduate student in comparative literature at Rutgers University, in New Jersey, who was born in India, raised in Bahrain and has a slight accent.

Students can be cruel, too, and some stretching is a good idea. The point here though is that, as someone who's evaluated potential professors for some time (and remember, most of these are foreign-born scholars who received English-language instruction and earned a Ph.D. with a thesis written in the language), there is a serious attempt to try to be sure the people we put in the classroom can speak the language too. However, too much of an attempt can sometimes run afoul of campus diversity crusaders who think your evaluation of an accent is a thinly-veiled attempt to keep, say, an African scholar off the faculty. Particularly at larger state institutions of second- or third-tier status, that pressure can be quite severe.

Another weird First Amendment case of student newspaper  

With all the Supreme Court rulings out there driving folks around the bend, one that's fallen through the cracks is the Seventh Court of Appeals' decision that even college newspapers can be censored. John Wilson of Inside Higher Ed is quite concerned. The court's majority opinion includes this whopper:
Let us not forget that academic freedom includes the authority of the university to manage an academic community and evaluate teaching and scholarship free from interference by other units of government, including the courts.
Sounds like quite a license to run amok in the hallowed halls. One wonders if the ruling has any bearing on the case of former dean Richard Lewis here at SCSU, who was denied the opportunity to sue the university for libelous claims in its student newspaper.

Tuesday, June 28, 2005

How dare you! 

Why, the cads!
The state Commerce Department is accusing Midwest Oil of Minnesota of more than 160 violations of a state law that requires stations to charge at least 8 cents more per gallon than they pay. Midwest Oil faces a potential fine of up to $1.6 million.

...A Minnesota law bars retailers from selling gasoline below cost. That amounts to at least 8 cents above the total of wholesale prices, plus taxes and fees. For instance, [MN Dept. of] Commerce said the minimum price on March 25 was $2.05 per gallon, but Commerce said it paid $1.96 at Midwest Oil's Anoka station. Two days later, with the minimum still at $2.05 a gallon, Commerce said it paid $1.98.

Commerce also alleged that Midwest Oil charged less at the pump than the prices posted on its signs and that the company offered illegal discounts if customers paid inside rather than at the pump.
The law, passed in 2001, has typically not been enforced and when it has the fines were much smaller than the one proposed. But Commerce is cracking down in an attempt to protect competitors, they admit.
"Any time prices increase there's more sensitivity to what people are charging at the pump. Competitors are also very sensitive because margins are very thin. Our complaints come from competitors, not consumers." -- spokesman Bruce Gordon (the old WJON Bruce Gordon?)
So even if some guys are taking advantage of futures markets to smooth price swings, they can't make use of the savings to pass on to customers. A similar law in Maryland is preventing Walter Williams from getting a cup of free coffee.

H/T: Policy Guy.

Better to keep quiet and have everyone think your stupid... 

It was bad enough for me to read Joanne Jacobs' report that in Virginia, prospective teachers will not have to take a test on math knowledge unless they are planning to teach math. What was unintentionally hysterical was a commenter who tried to show the test was flawed and instead showed why we probably need that test.

That reader, it turns out, would have probably been in the 3% that can't pass the test.

Berry bikes redux 

Remember when I blogged last fall about community yellow bicycles on campus? Fraters Libertas reports it's moving into cars now, though the market-clearing price might be lower than the organizers think.

A reminder to read the economics lesson that goes with this.

Deja unvu 

Caroline Baum, maybe the best economics reporter you haven't heard of:
If I could pick one graph in the entire field of economics to illustrate my columns, be they on the Federal Reserve, the yield curve or oil, it would be the supply and demand curves.

I would draw a vertical axis marked P (price) and a horizontal axis marked Q (quantity). Then I'd draw a downward- sloping demand curve and an upward-sloping supply curve. I'd mark the point where they intersect ``E,'' for equilibrium: Supply and demand are in balance.

Economics textbooks are very good at explaining this stuff. Really. Economists are equally good at forgetting it.
Mahalanobis has an illustration. Baum is trying to figure out why people who thought $50 oil would take some of the growth out of the economy are now saying demand will be strong even at $60. RTWT.

I laugh at you and your silly censure 

Douglas Bass has been tireless in covering the case at Cumberland College, now University of the Cumberlands, and he now reports that the AAUP has censured the school. Not that they care.
The response of President James Taylor to the decision was consistent with his responses during the entire proceedings; a stiffarm to the AAUP, and relying on weasely legalese to justify his actions. Since Dr. Taylor referred to the censure as 'a badge of honor,' University of the Cumberlands may be on the AAUP's list of censured administrations for a long time.
If university administrators choose not to care about AAUP censure, there is little available as a remedy outside of the courts, alas. As the two faculty concerned have both left the school are are "moving on" in Douglas' words, there's no pressure to reform.

What does that aid not buy? 

MOBsters Douglas Bass and Heavy Handed are wondering about foreign aid too. And in Douglass' post Heavy wonders about the relationship between foreign aid and infant mortality. Knowing where they keep that data, I thought it worth drawing. Here's your answer for Africa, year 2000.

In words, if aid is reducing infant mortality, it isn't by much and it isn't significant.

Monday, June 27, 2005

What I do in real life: A blast from my past 

I haven't printed critiques of too many St. Cloud Times editorials lately, not for lack of targets of opportunity, but because they aren't nearly in the class of the turds the Minneapolis StarTribune drop with regularity. But I'll take this one, because I had a hand in part of this. It is on the critically important issue of ... pet licenses.

75 percent of about 20,000 dogs [in the area] are not licensed even though each city requires it. Considering the primary purposes of a license are to protect public health and keep track of the pet, it's astounding that 15,000 dogs remain unlicensed.

Why? This editorial board believes it's because, beyond doing the right thing, there is little motivation for pet owners to follow the law. After all, buying Buddy an ID tag and a rabies vaccination is probably good enough, especially if Buddy sticks to your property or stays on a leash.

Unlicensed pets may not be a pressing issue, but dealing with them and other pet-related issues does require public resources. St.Cloud spent $186,249 on animal control efforts for fiscal 2004. Yet pet licenses and fees brought in only $47,858, leaving city taxpayers to cover the $138,000 difference.

OK, first time out. Those latter two paragraphs don't connect. Either animal control efforts aren't an issue because Buddy sticks to his property or on a leash, or they are because he doesn't. Which is it? Also, the entire cost of animal control is supposed to be paid by pet owners? How much of animal control is for feral cats or dogs, or for the stray deer or wolf that wanders in? And again, context: The city's general government revenue is about $31 million.

Given those numbers and the area's rapid growth, cities should consider one of two options. Either find ways to compel people to buy pet licenses, or scrap the entire licensing system. As it stands now, clearly most pet owners don't abide by � or benefit from � it anyway.

One way to compel compliance would be to require a dog to have a license before it gets a rabies vaccine. Right now, it's the opposite in area cities; it takes a rabies tag to get a license.

The down side would mean area veterinarians, who are simply trying to run a business, would become the enforcers. This approach also might lead to people skipping vaccinations, which is the one outcome the area doesn't want.

It may indeed. And that gets us to the other part and my hand in the current regulation. But think about this first: What would be the cost of compelling licenses? It is substantial, because it would take time away from veterinarians doing other things they need to do. If you are interested in pet health, why would you do this? It raises the cost of their services, quite possibly by more than $138k, but of course taxpayers won't see this. And, note, here's a city that has always complained about "unfunded mandates" in essence conscripting vets to be tax collectors for them.
Another way might be to boost the fees and fines charged for licenses and citations. For example, St. Cloud charges a minimum of $7.50 to license a spayed or neutered dog. Late fees of $5 a month are applied after May 31. What if those fees doubled?
If you double those fees, like with the rabies shots, you get fewer animal spayed or neutered. St. Cloud, like several cities, has a two-tier price for licenses, charging $21 for "intact" dogs (their phrase, not mine. Talk about scare quotes!) The two-tier system came about through an effort of some people working in animal welfare groups, which included Mrs. Scholar and myself. It was my idea to put that two-tier price in there, because we want to encourage spaying and neutering. If you double the price, you would encourage people not to take their animals to be spayed and neutered, leading to more unwanted pets. For the very same reason we wouldn't want to make the rabies vaccine depend on a license -- we would rather have unlicensed, vaccinated pets than licensed, unvaccinated ones -- so to would we prefer neutered and spayed pets. We left pet owners with a choice.

If the $138,000 is due to abandoned dogs and cats from unwanted pregnancies, you might consider increasing the size of the step between spayed/neutered and intact pets. But that again may simply lead to intact animals being unlicensed. It's a question of the elasticity of demand for licenses.

Or what if fines for loose dogs were increased substantially? In Sauk Rapids, that can yield a $25 fine for first-time offenders. It doubles for every violation. If the animal is not licensed, it is impounded. To recover the animal, the owner must pay a $31 redemption fee, a $31 impounding fee and an $8.50 daily boarding fee, and buy a license, which can cost up to $20.

Other cities have similar fee structures. However, officials in each city said it's rare for someone to be cited more than once.

Yes, because if you've paid all that money to get your dog out of the pound, you probably reveal yourself as someone able to take care of your pet. What the article doesn't say is how many owners lose pets and choose to not recover them because of the cost. I'll let you figure out on your own what happens to those pets. Dogs typically adopt out well -- only seven were euthanized in St. Cloud last year; cats do much, much worse. It is rare that a cat is reclaimed by his or her original owner; the adoption rate is around 50%. Details. I can tell you those numbers were much higher in my family's days of working with local animal welfare groups. (Mrs. S continues to keep up on this.)

I wouldn't have really bothered to blog this editorial except for this weasel paragraph.
Overall, the intent of this editorial isn't to push for a police crackdown on unlicensed pets or shame people into getting Buddy licensed. Rather, it's simply to ask if these licensing systems are effectively achieving their intended purpose.

Given that you haven't come up with a reasonable alternative nor come up with a rationale for why the current system doesn't work, all you've managed to accomplish is to cast aspersions on a system that is actually working pretty well.

What I do in real life: The new QBR is up 

I've loaded a copy of the new Quarterly Business Report (published in ROI Central Minnesota and discussed in yesterday's St. Cloud Times) onto my university page. It should be up at the site of the St. Cloud Area Partnership, one of our gracious and generous sponsors, with the archive in a few days.

The Times ran a separate feature on our speculations about Electrolux. I agree with most of the commenters -- while they haven't said for sure what's happening and I don't know anything more than what I read in the company's financials, I'd be surprised to find Electrolux still in business here next summer. I just did a radio interview with WJON in the last two hours which covered the question.

How to think about a housing bubble 

Bryan Caplan is thinking about housing bubbles. The problem most economists have with bubbles is that in a market that functions well, arbitrage opportunities should cure bubbles. But, Caplan says,
What would I actually do if I knew for sure that my house was going to plummet in value one year from today? My ideal solution would be to sell my house to someone, rent it from them for a year, then buy it back. But that would be very hard to arrange. In practice, I'd have to sell, rent whatever's available for a year, then use my nest egg to buy a comparable (or better home), pocketing the difference.

There's a lot of transactions costs built in there. For starters, there's moving costs x2, plus all the pain and suffering of changing my address and phone number twice, plus the loss of sentimental value in my current house. And don't forget opportunity costs - I'd say that 100 hours each for me and my wife is a conservative estimate.

So how much money would I have to net to make me sell, rent, and buy again after the crash? Frankly, it would take $200,000 just to pique my interest. And that's with certainty. Maybe I'm unusually averse to moving, but I can easily see people with kids in school being even less mobile than I am.
And if the difference is really that large, that creates a big hole in "no $20 bills on the ground in the housing market" story.

Told'ja so, part 36* 

Willie Sutton could have learned from the rulers of Nigeria.

The scale of the task facing Tony Blair in his drive to help Africa was laid bare yesterday when it emerged that Nigeria's past rulers stole or misused �220 billion.

That is as much as all the western aid given to Africa in almost four decades. The looting of Africa's most populous country amounted to a sum equivalent to 300 years of British aid for the continent.

Not to pick too much at my NARN brother Captain Ed, but I believe I get a 'toldja' for this one. Instead, while admitting this is a problem, Ed still thinks the problem is ours.

The Nigerian scam shows the absolute necessity of on-the-ground verification of aid distribution and a requirement for the positive political reform that will make future aid unnecessary, not just for Nigeria but for all African aid. It also demonstrates that Africa's problems aren't due to Western neglect, although Western exploitation certainly didn't do anything to help. The reason why an entire continent can't feed, clothe, or shelter itself is because of the political corruption that Western aid ironically enabled. It doesn't absolve us of our need to get Africa on its feet now, but it does demonstrate that just throwing money at the poorest continent won't do anything but make the situation worse.

McQ links to an interview of Jeff Sachs, noted debt relief tout, and George Ayittey, a Ghanaian who thinks there's a real problem here that debt relief is not going to help. Ayittey says,

The big elephant in the room is African governments. Africa has been totally mismanaged and misruled in the past decade, but nobody wants to talk about that because of political correctness. Africa's begging bowl leaks horribly. As a matter of fact, the African Union itself estimated that every year corruption alone costs Africa $148 billion. If African leaders could cut that in half, they'll find more money than what Tony Blair is trying to raise for them.

But in the past we entrusted money to the government sector and the government sector simply did not spend the money wisely. And that is why we need reforms, but the government sector is not being reformed. So in the meantime, people are dying. We want to save the people especially those, the children who are dying of malaria. If there's a way by which we a matter of fact, if we can get to the people directly rather than passing through these corrupt governments, it would be better for the people.

And that is the problem -- how do you as a government bypass the governments of Africa to get aid to people? And more importantly, how do you fix corrupt governments like Nigeria's? What's to say they won't do it again?

In context: Corruption may have cost Nigeria $400 billion. Current external debt of Nigeria is about $34 billion. Nigerian proven crude oil reserves: 33 billion barrels. They are not bankrupt by any stretch, and they aren't poor. Most of the $400 billion stolen is siphoned oil money. Maybe rather than pay off the debt, we should just collect 2 billion barrels as collateral and call it even.

For further reading: New non-technical report from the IMF: Can Debt Relief Boost Growth in Poor Countries?

*...of a damn long list. I'm smarter than you think.

Retreat homes 

Senior administrators often have backup positions, something that doesn't happen usually in the private sector, as Owen notes. Stephen Karlson, however, puts the matter in some context.
Traditionally, deans, provosts, and chancellors (using the Wisconsin terminology) are senior members of the faculty given additional responsibilities that they might hold by virtue of their long experience and wisdom ... who might hold such positions for a few years before returning to faculty.

...mid-level university administrators (holding positions other than department chairman, dean, provost, chancellor) sometimes are failed scholars, frequently from disciplines with large reserve armies of the underemployed, and sometimes hired for purposes that may or may not be central to the university's mission. Whether those mid-levels ought to be accorded the same protections as accomplished faculty (who sometimes deserve it; there is a reason one traditionally greets the newly seated chairman or dean with condolences) is another matter.
When one is hiring someone who has tenure, it is customary to ascertain whether the person would warrant tenure at your institution -- and if not, why hire him or her? -- and then grant it on arrival or after a usually perfunctory review a year or two later. This frequently happens for faculty, and there's no reason why it wouldn't happen as you took a dean who was tenured in his or her university to be a dean in yours. Unfortunately, the state system in Minnesota does not permit us to tenure an outside dean. Thus the ones we get are either insiders -- who deserve either condolences or condemnation for masochism, or those who have decided that administration is more rewarding than teaching and research -- or outsiders who most likely were failures elsewhere (otherwise, why go from a job with tenure to one without?)

Another point, however: A dean or a chairman has additional power in the system by dint of having a retreat home. Senior administrators come and go, and tenured faculty who become deans and chairmen usually survive them. They have a greater stake in the institution, and also the ability to oppose itinerant careerists who want to impose, say, mandatory diversity training to feather their resumes for their next posting. Firing me as a chairman for being a royal pain in the tuckus isn't much help to the president. I go down the hall and open up a second blog like SCSUPRESIDENTMUSTGO.blogspot... or something.

It is with great hope that I note I have only two more years in my term as a department chairman.

Some people have a knack for getting smacked 

During his drive out to the upper Midwest, Jeff from Quid Nomen Illius stumbles into a life lesson.

Unshaven and surly, I fill up my car at the station next to the seedy Denny's where I ate dinner last night, a wondrous place where nearly all of the patrons are perfect spheres, and half a tank into my business I glance up from the gas-fumes to discover that the world, the whole world, has stopped. Police cruisers block the intersections, and only a group of Harleys and a long line of flag-bearing SUVs are allowed to use the one route back to the interstate and I think: Aw, hell. My friends say I have a knack for stumbling into things; leave it to me to drive right into a goddamn parade.

But then I shake off my remnant sleep and I realize: The crowds of people waving flags along the side of the road--they're not cheering. In fact, they're eerily silent.

And then I see: That's not a black station wagon passing in front of me. It's a hearse.

I'm mortified by how disrespectful I've been, and immediately I stand up straight next to my car and join the many Ohioans who have come out of KMart and other nearby stores to stand on the curb and pay their respects to a fallen Marine. It's hot, and everyone is in shorts, tank-tops, sandals, whatever they'd wear on a normal June morning. I shouldn't feel underdressed, but I do. The cars pass, and pass, and pass, and I'm no longer worried about rushing toward the interstate. I wish I had a hat to remove.

I'm reminded of the Zen saying that when you need a teacher, one will be presented to you. I have noticed that when I remove my hat, place it over my heart, and sing the national anthem at a ballgame, nervous glances often are replaced by others joining me. Sometimes you're the student, and sometimes you're the teacher.

Friday, June 24, 2005

One more parade 

I'll miss NARN tomorrow to be in the WWW.fest parade here in St. Cloud. (BTW, Spass Tag last week was fun -- even saw the Singing Saints in the parade, which includes Psycmeister.) We're fortunate to have Christina Hoff Sommers on the show this week to discuss her book with Sally Satel, One Nation Under Therapy:How the Helping Culture Is Eroding Self-Reliance. Tune in 12-3pm on AM1280 the Patriot (there's a radio stream there if you're out of range.)

Voting with the pings 

MOBster Matt Abe is wondering about news that liberal blogs are more popular because they're more like communities.
The "next big thing" in the political blogosphere is already underway in its liberal regions, but apparently not in conservative areas. Liberal bloggers (most notably Daily Kos and MyDD) are leading the way with a new kind of web site that combines group blogging and social networking. The most popular platform for this right now is called Scoop.
The thesis is that new liberal bloggers are found through more interactive platforms, while conservative bloggers find each other only via blogrolls, meaning the top-level blogs carry huge blogrolls and third- and fourth-level conservative blogs suffer from low traffic and have trouble being found. These newer platforms are supposed to be collaborative and reader-driven.

Like conservative blogs aren't?

The thesis fails, I think, on two levels. First, it is quite difficult to tell on community blogs who is good and who is bad if you are an outsider. I spend a good deal of time on bulletin boards and some posters will have credibility versus other posters. But that credibility is only for others who are members in the community of frequent posters (or lurkers, I suppose.) To outsiders there isn't much credibility. What makes a conservative blog fly is its credibility. You acquire it by building a brand. But once established, the brand can be marketed to other readers to expand readership. These are very different marketing tools. And a blogger with his or her own brand has a greater incentive to bring new information to the blogosphere because he or she can profit from it, either through ego from having many eyes reading or through Blogads. (It's noteworthy that most bloggers trying to make a living from their blogs are lefties, who therefore are more aggressively marketing their blogs to advertisers. It's my impression from talking to Captain Ed and Powerline that they do not actively seek blogads, for example; in the latter case it isn't necessary -- being in Time will draw advertisers to them.)

And it's worth noting that we discussed this before last fall during Rathergate. Joe Carter has noted that there is a hierarchy of news, and it may be that interactive aggregators would fit on Joe's third tier than at the level of Powerline or Kos. But the value of these things as I wrote at the time comes from their ability to gather specific knowledge for others to use for their own decisionmaking. Trackback, Technorati and other linking features act as votes that the information at such a place has value. (Even though my trackback is manual, I try to ping whenever I can.) The problem Scoop is that while it allows for voting, it doesn't indicate whose vote it is. Someone with a highly visible and reliable blog leaves a strong mark when he or she tracks back to a third- or fourth-level blog.

Choice of viewing 

I watched the dreadful NBA final Game 7 last night, and wish instead I had seen Declining by Degrees, a PBS documentary asking how good is higher education in America. Viewing the trailers we see it discusses the lack of preparedness of entering students, the size of classrooms, the lack of academic rigor, and the lack of rewards academia gives to good teachers. It has the kind of slant you might expect from PBS: It's about the money.
"Declining by Degrees" also highlights the impact of market forces in higher education today. The reality of the college experience today often depends on the bottom line: money. As one university president described it, "The state taxpayer support for public universities is eroding. That creates financial stress that we all understand and we just manage it. We just deal with it the best we can."

The two-hour documentary examines the public and government's decreasing financial commitment to higher education. Sixty years ago our country entered into what amounted to a social contract to ensure access to college for all despite family income. States supported public colleges and the federal government helped with money for the poor. Today, the funds and the support for the social contract are diminishing.

As Pat Callan, President of the National Center for Public Policy and Higher Education, explains, "The federal Pell Grant program is the nation's largest program that focuses on the lowest income students who actually get to go to college. In the early 80's, that program had about 3 or 4 billion dollars in it, and it covered over 95 percent of the average tuition at a 4-year public college or university." Today it's about 57%.
But the documentary is making some schools nervous. The University of Arizona is one school the documentary focuses on, and they're not happy.
While UA administrators agreed that a comprehensive look at higher education was overdue, they don't agree with the way the 37,000-student UA campus is portrayed.

"It plays on the stereotypes of huge universities," said UA spokesman Paul Allvin, who has seen the documentary's first hour. "There is more to the UA than what these people have chosen to highlight."

Cade Bernsen, UA's student body president, agreed.

"I've had great professors who enjoy the time they get to have one on one," said Bernsen, 25, a political science major whose professors have invited him and his peers for coffee to discuss assignments. "You can go to any campus and find people who are disgruntled or skating through the system."
John Merrow, the documentarian, also has an article from the New York Times (but use this link rather than the one on the PBS webpage -- thanks to William Polley), which plays up a quote from UA President Peter Likins that the school's environment is "Darwinian".

The show is replaying here in the local market on Channel 17 Sunday at noon. Readers outside the Twin Cities area should check their listings.

Thursday, June 23, 2005

Supply-side merit pay 

Teaching is hard, and teaching to the children of the urban poor is many times harder. So when you hear a story of great teachers turning around a district in New York City, you have to wonder how it is done. Nicole Gelinas explains that it's hard work:
It�s no mystery why scores are going up: a gifted, determined manager who motivated teachers to succeed. The district�s leader, Kathleen Cashin, established clear expectations for principals and teachers, and pushed the schools in the district to meet them. P.S./I.S. 41 principal Myron Rock enthuses that his teachers worked evenings, Saturdays, and vacations to push students.
But, Gelinas explains, the teachers had to do it only for pride because they could not get additional money for the extra hours and effort they put in. Gelinas draws on a paper from 2003 by Caroline Hoxby and Andrew Leigh that shows a relationship between the compression in wages for female teachers and teacher aptitude. The reason, they explain, is that in other occupations, the wage gap between men and women of higher aptitude declined (not so for those of lower aptitude).
When we began this study, our prior was that pay parity would play the major and pay compression the minor role. We had not recognized the implications of the fact that pay parity changed similarly for college women of all aptitudes, which makes its smaller role predictable. Put another way, outside of teaching, high aptitude college women did not gain dramatically relative to low aptitude
college women: they all gained over time. However, in teaching, high aptitude women experienced substantial relative losses.
As a result, the share of teachers in the lowest aptitude category rose from 16% to 36%, of which 2/3 of the increase was due to pay compression.

To induce better teachers -- those with higher aptitude -- that pay compression needs to be released. That's what merit pay does. Merit pay pulls in higher-aptitude teachers from alternative forms of employment.

SCSU does not have merit pay. What this means for the quality of the faculty is quite clear: It makes it quite difficult to retain top faculty. The issue is under debate in the current round of contract negotiations.

A fond memory of Kyiv 

Scott Clark is blogging in Ukraine with someone playing a Ukrainian accordion outside his flat. I love old Ukrainian folk music, and I'm pretty sure he's listening to a harmoshka. I recall it seeming more like a concertina than an accordion. There was an open-air restaurant in the park below Marinskyy palace in Kyiv where I ate once, and they had one of these. Gorgeous sound.

One of these days I picture Mitch Berg with a bandura. Maybe he can grow a handlebar mustache to complement. It has been my pleasure lately at church to sing with a band that recently added a wonderful mandolin and violin player, but a bandura? That would be to die for.

Throw it on the pile. 

Gary Miller got Cheri Yecke to play book tag with us. Her "last book I read" is a good addition to my own collection that I should make soon.
The Thernstroms were the pioneers in analyzing the achievement gap and bringing national attention to this issue � an issue that we cannot ignore and have a moral obligation to address.
UPDATE: Saint Paul checks in. I'll grant his using Shelby Foote's trilogy as three books. I knew he was an inveterate magazine reader, but 25 books? Does he stack magazines in the corners of his house?

Getting religion -- a victory for academic freedom 

My whole argument about the Academic Bill of Rights has been that it's never been about passing a law but about getting higher education institutions to value intellectual diversity. This is what happened in Colorado, and it's what you'd hope for everywhere else.

A first step seems to have been taken. The American Council on Education, the largest of the organizations representing higher education, along with 25 other such organizations, issued a supporting statement today. It asserts five principles, including this:
Colleges and universities should welcome intellectual pluralism and the free exchange of ideas. Such a commitment will inevitably encourage debate over complex and difficult issues about which individuals will disagree. Such discussions should be held in an environment characterized by openness, tolerance and civility.
The language is loose elsewhere, allowing for individual institutions to define academic freedom and intellectual diversity based on their own institutional missions. For private institutions this seems quite right. My one concern from the statement is that it does not make a stronger statement about intellectual diversity for public institutions, at which I believe the arguments for intellectual diversity are stronger than, say, a church-run college.

David Horowitz calls it "a major victory". Well, the devil is always in the details, but undoubtedly this is a large step forward.

Wednesday, June 22, 2005

Send your referee to Gitmo 

Tyler Cowen and Bryan Caplan are discussing career advice. I agree with Caplan that most of the time referees suffer from anal-cranial inversions. They take very little time to read and understand articles; those that do are quite young and haven't yet developed enough sense to just read the articles they really can help referee. Given they are unpaid, there are no incentives that help you get good reports. (Note to other academics: There is NO law that says you must referee every article an editor sends you. My life has improved dramatically since I've started saying no.)

On Cowen's point five, returns to quality are high, but tenure is often a function of quantity, as Caplan points out. Deans in fact do count -- oftentimes, so too do departmental tenure and promotion committees. Understand the counting rules, use them in your favor. Once you reach tenure, you can have the luxury of just aiming at top-40 journals.

However, never pass up an opportunity to get your writing out before other people, even if it's in a non-top-30 journal. Working papers are great. If your field has something like SSRN, use it. Store your paper online everywhere you can. Your readers use Google.

Last, economists tend to eschew writing books because they learn books don't count as much in promotion and tenure. That's true, so maybe don't write one before then. But my year writing my first book was one of the most professionally gratifying years I've ever had; you control the product much more than that paper you had to revise and resubmit, including comment three which blew out the point you really wanted to make. You don't have to compromise with a book.

Half a loaf 

You could dig through my archives and hear of how much I wanted the Bush Administration to stick to its guns and generate support for personal retirement accounts. While Bush holds fast on John Bolton, it appears he is surrendering his leverage for PRAs by allowing a fix-it Social Security bill to come from the Republicans. So now the House Republican leadership will be seen supporting bigger government. If Bush had paid any attention to Tim Pawlenty's current travails, you'd have to expect he'd think twice before doing this.

But at least it appears the estate tax repeal is heading towards a satisfactory ending, if not a complete victory. Senator Jon Kyl has issued a report and is planning a vote in the Senate to make the repeal of the tax permanent. People will tell you we can't afford it with the current deficit, but point out back to them that it's about 1% of the budget, and that meanwhile it's both distorting economic choices and voluntary for the rich to pay (but not, say, for a farmer with a large parcel of land.)

And given this quote, it has a decent chance at passage.
"You ought to be able to leave your land and the bulk of your fortunes to your children and not the government."

That's right, Hillary Clinton, during her election run in 2000.

Undertake action X and you fund undesirable group Y 

I suppose as the economist of the NARN that this duty falls to me. Captain Ed blogs about an investigation of ties between an Ecuadorean drug ring and Hezbollah. Ed admonishes:
People who use cocaine and other recreational drugs should see this as a wake-up call in more ways than one. That little vial or baggie you buy to feel hip and cool doesn't come out of nowhere. Even without the Middle Eastern connections, most "distribution channels" rely on extortion and murder for market control. Add in the Hezbollah funding, however, and you can draw a direct line between the party animals who do a little blow and the pro-democracy activists getting blown up.

I've heard this meme applied to oil: "If Big Oil wasn't supressing the secrets of engines that get 300 mpg, we'd not have to be in Iraq" or "Drive your SUV and you support the terrorists".

Making any good illegal to consume (or restricting its consumption) creates a black market and an opportunity for those willing to accept risk in return for high profits. This can be illegal drugs or even legal ones (I am waiting for the first black market in Sudafed); Prohibition funded the growth of La Cosa Nostra in the 1920s. The simplest way to stop Hezbollah from earning large profits from drug importation isn't to run more commercials with frying eggs and dumb analogies but to end the prohibition on cocaine use. If you want to keep prices high to discourage consumption, tax it legally at a rate sufficient to keep street prices where they are.* This will not do a thing to stop ancillary crimes committed by addicts seeking a fix, but it will stop funding narco-terrorists and their friends in the Middle East.

If it's good enough for Milton Friedman, it's good enough for me.

*--Maybe you can call it a health impact fee.

Ah good, she's back 

Liz, who reads and comments here regularly, has decided to return to blogging. It's not like she's ever stopped, it's just that I've been a beneficiary of my former student's good letters during A Blonde Moment's hiatus. Hope we'll continue to see her 'round, but in the meantime please enjoy her writing.

But it would still be in mine 

Looking for economics to blog I found Bob Subrick arguing on Spin's Top 100 albums of the last 20 years that Radiohead's OK Computer, which came in #1, won't top the list in five years. I'd have to disagree. Indeed, this reminds me that Quid Nomen Illius, which I tagged for books the other day not seeing he already had been tagged, also did music. Since I probably spend more time listening to new music than reading new books, this would be a good place for me to do so.

Total number of music files on your computer: At home I'm over 1400. At the office about half that. Mostly rock, pop, electronica/chillout/trip at home; more blues, jazz and classical at the office. My iRiver mp3 player has mostly the homebased stuff.

Last CD bought: Two new ones. Turin Brakes JackInABox, and New Order Waiting For the Sirens' Call. Both, by the way, are excellent, particularly the latter, which might be the best thing they've done Power, Corruption and Lies.

Song playing at the moment of writing: Here are the last five I played:
Goldfrapp, Utopia
New Order, Guilt is a Useless Emotion (Mac Quayle Vocal Mix -- from the new CD)
Blue Merle, Burning in the Sun
Delerium, Love
The The, Love is Stronger than Death
(if I had written this at the office it would be completely different)

CDs that absolutely must be with me on my desert island (invented my own category)
5. Talking Heads, Stop Making Sense
4. Bill Nelson's Red Noise, Furniture Music
3. Emerson, Lake and Palmer, Pictures at an Exhibition
2. George Thoroughgood, Live (have to take one blues CD, and it was this or SRV)
1. Radiohead, OK Computer

Reason #328 why my kid is in a private school 

This kind of story is just creepy.
"How often does your 6th-grade daughter have oral sex?"

If the question offends you, then talk to the school officials at Shrewsbury, Mass. But don't expect a sympathetic response.

When Mark Fisher protested quizzing his 12-year-old daughter about oral sex (among other topics), the school authorities asserted their right to gather such information without his consent.
The other questions on The Youth Risk Behavior Surveilance System concerned drug and alcohol use, and included questions that would self-incriminate respondents of criminal charges. Wendy McElroy continues:
That is what Fisher is demanding of the Massachusetts' Department of Education: active parental involvement. At this point, state law requires parents to explicitly exempt their children from programs involving sexuality. Fisher is fighting for a bill that requires parental permission before children are included.

Explicit permission is particularly important in situations where parents seem to be � in Fisher's words � "kept in the dark."

School committee President Deborah Peeples reportedly explained that parents are permitted to view the survey but they are not allowed to take a copy home. Why? "It might be misinterpreted or misunderstood or they could use it to direct their children's responses," Peeples said.

In short, parents might discuss the sexual (and other) topics with their children.
McElroy suggests gettng your kids out of public schools. Short of that, getting involved and being "a genuine pain in the tuckus" is a good idea.

(h/t: reader jw)

Tuesday, June 21, 2005

Well yeah, I knew that 

Your IQ Is 140

Your Logical Intelligence is Genius
Your Verbal Intelligence is Genius
Your Mathematical Intelligence is Genius
Your General Knowledge is Genius

A Quick and Dirty IQ Test

Sorry for my lightness today, but many cool things today including taking LS to golf and lunch, a consulting contract gained, and some inspired principal component analysis. (I know that last doesn't look like fun to most of you, but it is.) And now it's dinner time for this genius...

(h/t IQ Test: Sandy at MAWB Squad. Thankee!)

He's your graduation guy 

What with all the graduation speakers out there who sometimes say really stupid things, and seldom sensible, The Eclectic Econoclast is offering his services for free. Benefits include
  1. I have a cap and gown that have been described as cool or sexy (click here to see a photo).
  2. I look very professional and academic with my gray beard and glasses.
  3. I have considerable experience listening to bad commencement addresses, so I know what not to do or say.
  4. I am an award-winning professor, with considerable acting and speaking experience.
  5. I promise not to cuss.
  6. ...You have your choice of opening lines (and topics):
    • "Never apply latex paint over glossy alkyd enamel," or
    • "There are no refunds for losing lottery tickets."
Hella deal. I'd get into this myself, but I can't beat John on price.

Borders and the ACLU 

Loyal reader jw noticed an article in the Las Cruces Sun-News that someone who is head of the ACLU chapter in that town is also a leader in the Minuteman Project. The Las Cruces chapter was suspended by its state board.
�The suspension of the chapter was a technical move to make certain that the Minuteman claiming to be an ACLU chapter board member no longer had authority to act or speak on behalf of the ACLU,� said Gary Mitchell, president of the New Mexico ACLU board of directors. �We will not tolerate racism and vigilantism in the leadership structure of our organization. They (the Minuteman Project) are repugnant to the principles of civil liberties and the mission of the ACLU.�

Alford recently announced that he would lead a group termed the New Mexico Minutemen in patrolling the U.S.-Mexico border between Santa Teresa and Columbus. A second group, aligned with the Minuteman Project and led by a Farmington man, then said it also would begin patrols in New Mexico. The two leaders have since met and reportedly plan to work together.

Peter Simonson, executive director of the New Mexico ACLU, said the suspension was needed because of Alford�s affiliation with the Minuteman Project and the ACLU.

�We denounce both Minutemen efforts and we denounce Clifford Alford,� Simonson said. �The ACLU believes that both of the Minutemen projects are absolutely antithetical to the principles of civil liberties.�
ACLU is a private organization and entitled to act according to its preferences. There's nothing that says, or should say, that this suspension cannot be done. Nevertheless, the state chapter's actions assume that Mr. Alford is going to act beyond his legitimate position of expressing his Frist Amendment right to assemble a group that wishes to enforce immigration laws. Isn't Alford protected by the First Amendment too?

And more telling is that Alford is part of a split group of Minutemen who seem to have peaceful intentions.
Alford said Saturday he was scouting the border, trying to figure out where he would place his 40 New Mexico Minutemen volunteers. Their members will distinguish themselves by offering food, water and medical aid to illegal immigrants but at the same time report them to the U.S. Border Patrol, Alford said.

"If someone breaks down on the border, we can help them,'' he said. "We're not wearing uniforms, and we don't carry assault weapons.''

Alford, who lives in Organ, said he met Thursday with state police and Border Patrol officials to tell them that his group wants to help secure the border while showing compassion.
It seems the ACLU of New Mexico may be overreaching.

I really should pay better attention to these things 

Margaret from Our House blog tags me to review books.

Total number of books owned, ever: I cannot say well, because I tend to give books away almost as fast as I get them. I'm up to seven bookcases right now, mostly economics, politics and history. Fiction holdings are relatively few because I tend not to use them much. I read them and give them away.

Last book I bought: I tend to buy in bunches, and last time I bought three: Freakonomics, Black Rednecks and White Liberals, and The Tipping Point. I've already started the first and put it down, and am now getting to the second one.

Last book I read: The Wisdom of Crowds, in part because of David's interview with Surowiecki. As you'll see to the next question, one of the key questions I read about is how information and knowledge is processed in society, which for me started when I first read Hayek's Use of Knowledge in Society. Had I read that before I finished my PhD, I'm quite sure my life would have turned out differently; it completely messed with the type of economic models I was building at the time. But I couldn't tell you what I'd've done instead.

Anyway, Wisdom of Crowds is a great book because what he actually demonstrates isn't crowd behavior at all but market behavior. That is, when people have incentives to bring their own information to a decision and can communicate it to the group at relatively low cost and without interference, the resulting outcome tends to be better than using experts or some other decisionmaking mechanism. The brilliant part of Surowiecki's thesis is that the size of the profit that someone needs to make to offer his or her own little bit of information is quite small and often non-monetary. Sometimes it's just a desire to help or to look good to others. Somebody who's read Adam Smith's Theory of Moral Sentiments would understand that desire.

Five Books that mean a lot to me: That could be tough to limit to five, and I somewhat answered this question when Doug asked me to list the top five books. Now that's somewhat different, and I'll vary a few, but certainly Hayek's Road to Serfdom and the Bible have to remain, because they are the two books that mean the most to me. I said The Fountainhead in that interview, which certainly was a book of great meaning to me about for about ten years. But it has fallen aside -- I tried watching the movie again this spring and actually didn't finish it, for the first time ever. Likewise Zen and the Art of Motorcycle Maintenance. It was the book of my twenties, as The Fountainhead was the book of my thirties and early forties. But do they mean a lot to me now? I think not. I'm actually re-reading ZAMM right now for a book group my church has just formed. It will be interesting to re-experience Pirsig. Maybe at the end of the month I'll want to put the book back on the list!

So what would be three through five? Huckleberry Finn has to stay. I still believe it to be the greatest American novel ever written. I would prefer to believe that children still play this way. More importantly, I would like to think the world was as complex then as it is now; it certainly struck me as being complex as Huck experiences life on the Mississippi.

The next is simply a placemarker for a series of books where I tried to understand the evolution of data, something Margaret alludes to in her choice of Tufte's Visual Display of Quantitative Data. For me, though, it's summarized by James Gleick's Chaos. It drove home for me the importance of non-linearities in the world, that the world not only isn't linear but can't be described by a Taylor series either. In short, I had to start confronting the origins of the data I was taking off (back then) magnetic tapes and treating as gospel. This led to some other wonderful books like Nicholas Nassim Taleb's Fooled by Randomness, or evolutionary biology like Richard Dawkins or Robert Axelrod, thinking about brains with Steven Pinker and John Searle, all kinds of reading about financial crises, panics and crashes, and Thomas Sowell's underappreciated (in relation to his other work) Knowledge and Decisions. And in the middle of that comes Hayek.

Finally, I need a book that describes how I became interested in finding my own Armenian roots, which again is something that begat other books. As before, I'm listing the first and not the best of the bunch, but it was William Saroyan's My Name is Aram. He and I both named our sons that. It's a book of short stories about living in an Armenian immigrant family in Fresno. My own experience was much different, largely because I didn't grow up around other Armenian families, like Saroyan's Aram or Peter Balakian in Black Dog of Fate. But I wanted that experience as a child myself, and Saroyan gave me a chance to imagine it.

I guess the tradition now is for me to tag some other bloggers. Here are my five:

John Palmer at The Eclectic Econoclast. I mean, with a blog name like that...
Bryan "Saint Paul" Ward of Fraters Libertas. My NARN choice because I know less of what he reads than the others.
Jeff at Quid Nomen Illius? I bet he reads weird stuff, and he'll tag interesting people.
Sean Hackbarth at The American Mind. (He better start reading his fantasy football guides!)
Duane at Radioblogger. I want to know what the brain behind Hewitt is reading!

Monday, June 20, 2005


Ethnomathematics. I never even heard of it until I read Diane Ravitch's piece in this morning's WSJ (subscriber link; excerpt at Free Republic), but I don't know why I'm surprised. They cite a work by Williamson Evers and Paul Clopton showing how curriculum has changed in between a 1973 algebra text and one in 1998 for "contemporary math".
In the 1973 book, for example, the index for the letter "F" included "factors, factoring, fallacies, finite decimal, finite set, formulas, fractions, and functions." In the 1998 book, the index listed "families (in poverty data), fast food nutrition data, fat in fast food, feasibility study, feeding tours, ferris wheel, fish, fishing, flags, flight, floor plan, flower beds, food, football, Ford Mustang, franchises, and fund-raising carnival."
But the first link shows you that, as Ravitch points out, things have gotten much worse from there. Algebra is a form of oppression.
Now in the twentieth century, this distinction is manifested in the contrast between the "academic" mathematics that is taught in schools, which allows an elite to assume management of a society's productive forces, and the "everyday" mathematics, which allows individuals to function effectively in the world.
This is not just twaddle, but dangerous twaddle, as Ravitch points out.
It seems terribly old-fashioned to point out that the countries that regularly beat our students in international tests of mathematics do not use the subject to steer students into political action. They teach them instead that mathematics is a universal language that is as relevant and meaningful in Tokyo as it is in Paris, Nairobi and Chicago. The students who learn this universal language well will be the builders and shapers of technology in the 21st century. The students in American classes who fall prey to the political designs of their teachers and professors will not.
Every fact to the cultural relativists is subject to spin; no fact is neutral to them. There is no desire to teach anything beyond what is "everyday math" because they do not believe it is necessary for students to understand the vertical connections between fields of math, which is why we taught algebra before geometry before trigonometry before calculus. I don't know that it's because educators are trying to create borgs for social justice or if they simply haven't been educated well enough themselves to understand the reason traditional or "academic" math has been taught as it is.

Stadium welfare 

If you've been reading here, you'll notice I've been a little miffed with our governor over taxes. This is not the only thing that has perturbed me; I've been surprised and disappointed with the Twins Stadium issue as well, for one. Eva Young summarizes some news coverage over the weekend which suggests that the Twins' argument that it makes economic sense has been dropped. Well, duh. My friends and sports economists Brad Humphreys and Dennis Coates have been saying this for years.

Our conclusion, and that of nearly all academic economists studying this issue, is that professional sports generally have little, if any, positive effect on a city�s economy. The net economic impact of professional sports in Washington, D.C., and the 36 other cities that hosted professional sports teams over nearly 30 years, was a reduction in real per capita income over the entire metropolitan area.

A baseball team in D.C. might produce intangible benefits. Rooting for the team might provide satisfaction to many local baseball fans. That is hardly a reason for the city government to subsidize the team. D.C. policymakers should not be mesmerized by faulty impact studies that claim that a baseball team and a new stadium can be an engine of economic growth.

MOBster Phil Miller of Market Power, writing at the most excellent Sports Economist blog (um, guys, you should see if Brad or Dennis will blog with you ... and I work for peanuts, just ask The Patriot), notes that the intangibles argument seems to have captured the Hennepin County commissioners, and Eva clips this from Twins President Jerry Bell.

"I don't think the economic argument turns it one way or another, so why go there?" said Bell, president of Twins Sports Inc. "If there are side benefits, great. If not, so what?

"You get into an economic argument, and the bottom line is, 'Do you want to build it or not?' " he said.

That is, do you want a team or not, because Phil also points out that the monopoly power that leagues have, by leaving out there a pool of other cities denied a major league team that act as leverage against the Twin Cities.
Las Vegas does not have a team in part because it provides leverage to the few teams left (namely Minnesota and Florida) who are still seeking public money for a new stadium in their existing regions. Proponents for public funding in places like Minneapolis and Miami can haul out Las Vegas as a viable threat point to opponents of public funding, just like Los Angeles is a viable threat point to proponents of public funding for NFL stadiums. Believe it or not, St. Petersburg, Fl, was once used in this manner to get public funding for stadiums such as US Cellular Field (Chicago White Sox). The basic threat is "if you don't give us what we want, we're going to take our ball to Las Vegas and play there."

How do you get out of this pickle? Well, one option is to simply call their bluff, as Minnesota has done with Pohlad in the past, a bet Minnesota won when Charlotte voters said no to expanded taxes. Teams can often have a larger "novelty effect" when they move to a new place, but Charlotte seems not to have an appetite, and the market lost its biggest lever when the owners of MLB collected their ransom to move the Expos to Washington DC. It's worth asking Bell and Pohlad, "If we say no, where you gonna go?"

Pawlenty, however, has had a longstanding interest in building stadia for the Twins and the Gophers. I'm not entirely sure why he has, as it doesn't appear to have been his position as a legislator. But nobody is making an economic case for this any more, not even the Twins.

UPDATE (6/22): Phil Miller adds more details.

What happens when your wife and your doctor don't agree 

I try not to do too many posts about me and my life, but this was the result of something I wrote and decided to address it here. I mentioned in my last post Friday that I'm exercising and working on diet to control cholesterol. A kind reader who is a doctor commented about using a statin drug to help. I appreciate the kindness; the issue is salient since my family history has heart disease in it from the paternal side, and I'm rapidly closing in on one of those round number birthdays where these thoughts become a daily event. My own doctor actually prescribed Lipitor, another statin, but Mrs. Scholar vehemently disagreed with the prescription. She is the one running my diet and exercise routine, for which I'm relatively grateful, though sometimes I think she enjoys herself too much feeding me stuff that makes my face screw up funny.

I forwarded the comment to Mrs. S, who immediately snapped off this webpage which questions using statins. She reads Dr. Mercola constantly, and she and my doctor are pretty stubborn in their disagreement. So, for all readers, and ignoring the risks to marital harmony (those are for me to evaluate), what do you do? Take the pill and ignore my wife's own research? Or do you decline your doctor's (and my commenter's) advice? Perhaps germane to the conversation: I have had this doctor longer than I've known my wife, so he's as knowledgeable about my medical history as she is.

UPDATE (12:20) -- Mrs. S has weighed in. We were writing at the same time, apparently.

One plagiarizer busted 

No, not Ward Churchill, at least not yet. But Dean Bryan LeBeau of the University of Missouri at Kansas City admits plagiarism of a Cornel West speech, and now has been put on administrative leave. His speech also opened with something "nearly identical" to the introduction of a speech by Russell Baker in 1995. At least he steals well.

Lay down Sallie 

Here's an interesting tidbit from this morning's financial news.
Nelnet Inc. (NNI: news, chart, profile) said it will schedule an audit of a portion of its student loan portfolio after being contacted by the Department of Education's Office of the Inspector General. The audit will focus on the portion of Nelnet's student loan portfolio that receives a 9.5% special allowance. It also said the Department of Education is conducting a review of lenders related to tax-exempt bonds that are eligible for the special allowance.
A fuller story in the Chronicle of Higher Education this AM (subscriber link) points out that this comes from a loophole that Congress thought it had closed 12 years ago, but apparently not yet.
The loophole at issue dates from 1993, when Congress rewrote student-loan laws to rescind a guarantee that assured a return of 9.5 percent on loans backed by tax-exempt bonds issued by nonprofit lenders. The 9.5-percent guarantee, established during a period of high interest rates, had previously been necessary to attract lenders into the loan program. Loan providers maintain that the department's regulations allowed them to continuing receiving the 9.5-percent return by merely refinancing bonds issued before the cutoff date. Some of those bonds are now held by large, for-profit companies like Nelnet that have purchased nonprofit agencies.

The loophole, which Congress voted in October to close for at least a year, is believed to have been worth billions of dollars to some lenders. Budget analysts estimated that closing the loophole for just one year would save the government $270-million. Students currently pay interest of about 3.4 percent on loans, leaving the government to make up the balance of the 9.5-percent guarantee.
So understand: The loan program is just to roll over debt on student loans made before 1993. It generates no new money. It is simply an incentive to keep those bonds rolling over, and to guarantee lenders a fat profit. Nelnet has been a huge player in this, having its portfolio of loans on which the 9.5% interest paid grow 818% between 1/03 and 6/04. That's what's triggered the audit.

Interested readers should visit Student Loan Watch fmi, including some possible conflicts of interest at Sallie Mae, the government backer of student loans. Given all the attention given to Fannie and Freddie, why Sallie gets ignored is a good question to ask.

Friday, June 17, 2005

I love walking with the LS 

The doctor has ordered me to get more exercise and get the cholesterol under control, so part of this has been walking. My companion these days is Littlest Scholar. People who meet LS think she's very quiet, but actually she's just very shy. Around people she knows, she's outspoken. An example came last night as we discussed whether she (a 'tween' in the modern parlance) could go see Batman Begins. I usually will ask Chumley from Plastic Hallway for recommendations, since he reviews movies and has a morality standard for kids about the same as mine. I had already, and here's where the conversation picks up.

LS: So did you ask that guy about Batman?
Dad: Yes I did. He said it has a gross scene with maggots.
LS: That's OK, though, isn't it?
Dad: Well, I'm not really sure.
LS: C'mon, Dad!
Dad: I'll think about it.
LS: This guy gets to see movies before everyone else?
Dad: Yes, he's a reviewer. He sees the movies and writes the reviews we read in the newspapers or online, or hear on TV and radio.
LS: There are jobs like this?
Dad: Yes
LS: For money?
Dad: Yes. You have to learn how to write and watch movies though. You go to college.
LS: You go to college to learn how to watch movies?
Dad: Maybe, or you go to learn how to write. English, or journalism.
LS: (pause) You're kidding, right?

Her current career goal is to be a police officer, or an FBI agent.

The other gentlemen at NARN will handle chores this weekend and the show will be good with state Rep. Phil Krinkie to talk about his run for the Sixth CD's Republican nomination, and Doctor Zin of Regime Change Iran to discuss the elections underway there. I'll be at the Spass Tag parade with my church's float. See you Monday.

When even your friends desert you 

Robert KC Johnson writes about the role of the AAUP in protecting academic freedom. The news isn't good.

Responding to real and imagined threats to academic freedom played a role in several contested races this past spring for the AAUP�s governing council. Defining the concept as chiefly a tool for protecting the professoriate�s dominant ideological faction, a successful slate of candidates headed by Yeshiva�s Ellen Schrecker ran on a platform of resisting outside scrutiny of the academy and limiting publicly available information about academic matters. Schrecker, whose scholarly works have focused on McCarthyism, is particularly quick to play the �McCarthyism� card when attacking critics of the academic majority; she has even written about Internet-related �virtual McCarthyism.� The Schrecker viewpoint accurately reflects the approach of Joan Wallach Scott the current head of the AAUP�s �Committee A� (which handles academic freedom and tenure issues). Indeed, it would be hard to imagine a figure more representative of the contemporary academic mainstream than Scott, a highly regarded specialist in women�s history and gender theory.

As yesterday�s Inside Higher Ed reports, Scott, Schrecker, and the AAUP are now targeting CUNY, expressing �grave concern� about the state of academic freedom in the City University system. CUNY�s offenses against academic freedom? The non-reappointment of two adjuncts (Susan Rosenberg and Mohamed Yousry) convicted of terrorist acts; and what Scott termed CUNY�s unwillingness to resist �outside pressures� in the recent withdrawal by Brooklyn professor Timothy Shortell of his bid to be Sociology chairman.

According to an AAUP press release on the issue, these three events suggest a �pattern of failure to safeguard the university from political interference in matters of academic appointments.� As I�ve noted previously, adjuncts have no right of reappointment under the current CUNY contract. (The AAUP has vehemently opposed such provisions, not just at CUNY but nationally.) Surely, however, the AAUP cannot seriously contend that being indicted for or accused of a criminal act�even if that act was associated with political causes that enjoy disproportionate support in the academy�should confer upon an adjunct an �academic freedom� right to reappointment that adjuncts with clean criminal records do not possess.

In a reply to a commenter later on, Johnson notes that the problem isn't fixed by having faculty take control of their local AAUP chapters.
It seems to me that the AAUP's Committee A is increasingly morphing into a body that views part of its mission as protecting the ideological status quo among the professoriate. Since it is dissenters whose academic freedom is most likely to be abridged, running for office within either the AAUP or PSC is not a terribly satisfactory solution--the reason dissenters are dissenters is that they represent the ideological minority.

It's a bloody shame what has happened to Committee A, which developed principles of academic freedom that most of us, of all political stripes, continue to believe in, has stopped thinking about what the professional standards of faculty should be.

Support for school choice 

There is a new poll coming out from the Partnership for Choice in Education that suggests school choice has parental support. Here is the result for Senate District 15, in which I live here in St. Cloud:

Question: Do you favor legislation that would promote school choice and give parents with modest incomes more control over where their children attend school?

532 likely voters surveyed
52% favor
12% do not favor
17% undecided
17% refused
48% overall responded favorably, with about 16% opposing, of 10,000 voters interviewed. Likely voters were screened to include those who "indicated an awareness that bills are being considered to give children of low-income families greater access to schools including private and parochial schools, and that Governor Pawlenty has said that �meaningful school choice legislation� is a prerequisite for his signature on a new state budget bill." That was 55% of those called. Those screens make this not necessarily representative of the entire district, just those informed on the issue. This argues that the battle for school choice must still focus on marketing the idea.

Unhappy anniversary 

Thomas Sowell commemorates the 75th anniversary of the Smoot-Hawley tariffs.

Many factors, of course, affected the Great Depression of the 1930s. But later economists have seen the Hawley-Smoot tariff as one factor needlessly prolonging the economic disaster.

How much wiser are we today? Not much, if at all.

Talk about import restrictions or complaints about "outsourcing" today proceed with the same mindless disregard of what other nations are doing and will do.

People who throw around statistics about how many American jobs have been outsourced don't even mention how many Americans have jobs that have been outsourced from other countries, much less how many Americans will lose those jobs if we start a new round of international trade restrictions.

Well, let us start mentioning. And mentioning. And mentioning.


Graduation time often brings out weird stories about high school valedictorians. Here are two.
  1. Erin O'Connor notes that Garfield High in Seattle is graduating 44 valedictorians (valedictorii?) this year. This is not that uncommon, I guess. At many schools there are multiple students with 4.0s (or higher, with weighting systems allowing someone to get "more than an 'A'"). But 44? That seems an awful lot.
  2. You might want to find a tiebreaker, I guess, to establish a single valedictorian, but then you get behavior like this. Students will game the system; if the rules are a priori fair, then I don't see a problem. If the student takes advantage of a loophole you didn't intend, close it. In this case, the school got rid of the valedictorian and simply puts an asterisk on the top 10% of the class, which in this large school means 300 asterisks.
There are winners and losers in life, and winners are often those who devote the most resources to winning. The first couple of years I played rotiserrie baseball I lost because I was buying players who I thought were good, not the ones who generated the best statistics for the game. Students who want a 4.0 for their transcript, and who devote resources to that, aren't necessarily the smartest or the most likely to succeed in the future. Just ask these guys.

Quarter haikus 

Their quarter ugly
Fishing always beats mountains
Vote Minnesota

No Colorado
Elway has a horselike face
Not on their quarter

Governor Owens
Could not even beat on his skis

(Damn Westover -- look what you've started!)

Thursday, June 16, 2005

Not bloody likely 

The Minnesota Senate Republicans wish to avoid choosing, so are asking the state's forecasters to redo their work hoping for a better number on the state budget.

Sen. David Gaither, R-Plymouth, asked the Department of Finance and state economist Tom Stinson to present "an updated budget forecast taking into account improving corporate profits and salary levels" as well as changes in federal taxation that benefit the state.

Senators also asked Pawlenty to accelerate the July statement of income tax receipts and refunds. "I believe the amount will be significantly higher than anticipated and could be useful information to have as we attempt to resolve the current budget impasse," Day said in a letter to the governor.

I'm somewhat familiar with the process by which they come up with the forecasts, and I can say with a pretty high degree of confidence that you can't just gin one up in a week. The next new forecast would not be due until November I believe. The last update had revenue collections running ahead of forecast by about $74 million, and it's highly unlikely a new forecast could close the remainder. It could close some of the gap, I guess, and they could take that and the $74 mil as part of the gap. But then, it might get used to fund additional spending.

Wolfowitz isn't a dumb guy 

The decision to make Paul Wolfowitz head of the World Bank is looking better for us free-market types, butthis won't go well with the EU.
On a tour of a cotton-processing factory in Burkina Faso, Wolfowtiz said the World Bank would have a "strong voice" at the Doha trade talks to make a case for wealthy nations to reduce agricultural subsidies worldwide.
Developing countries complain they are pushed out of the market by the subsidies rich nations pay their cotton farmers, and argue the huge subsidies to U.S. cotton producers -- which at $4 billion are larger than the whole Burkina Faso economy -- are the cause of a collapse in cotton prices.

"The key to tackling the problem of cotton subsidies, which obviously hurts farmers here in Burkina Faso and in other poor countries ... is to tackle agricultural subsidies across the board (in the Doha trade round)," Wolfowitz said.

"We will have a strong voice in favor of reducing subsidies worldwide," he said.
His words come as Oxfam chides the US and EU for subsidizing overproduction of agricultural goods.
Rich countries are dodging the commitments they�ve made to reduce subsidies that hurt poor farmers overseas. At the same time, they�re forcing poor countries to open their markets to unfairly subsidised produce. This duplicity threatens to turn the whole round of �development� talks into a farce.
The data on this is mixed, though. Countries that open up to trade seem to grow faster on their own, even if the other side does not reciprocate. But there is less good evidence on whether or not labor policies improve and that income inequality is reduced. I still argue that a rising tide that in fact lifts all boats is a good in and of itself, regardless of what it does to a Gini coefficient.

Still, the thought that Oxfam and Wolfowitz would side together on this would certainly not have been the vision Wolfie's detractors had last spring when he was tapped for the post.

Reference librarians editorialize 

While looking for something this morning I looked at .my library's page for data. At the very end is an entry for the national debt clock. The descriptor reads:
Current estimate of the U.S. national debt. Not for the squeamish.
In relation to what, exactly?

iTuned out that lecture, dude 

Maybe I'm older and more crusty than I used to be. As much as I love new technology, the thought that Duke would hand out iPods to its 1650 freshman last year looked mostly like a marketing gimmick. In a new report, the school says that about 1200 students used their iPods for something academic. The list included delivery of course content -- lectures, songs, speeches and foreign language content -- recording classroom lectures and field experiences, playback of orignal content and data storage. The project cost $500,000.

In a report in The Chronicle of Higher Education (subscriber link), a student is quoted saying that the technology is used to substitute for actually paying attention in class. Of course it is. I certainly took advantage of using a tape recorder for classes I could not attend, sometimes as a substitute so that I could work on another class. (And once or twice to go see afternoon baseball.) Substituting capital for labor is no big surprise here.

Wednesday, June 15, 2005

The cost of incompetent faculty 

Adjusting tuition through grants and scholarships is a form of price discrimination, one long researched in economics, and practiced for finding students of merit. Grant McCracken observes a note on the practice in yesterday's WSJ and writes:
So why are they discounting the price of the �product.� It can�t be to drum up more business. They�re oversubscribed as it is. I think it�s to create more generous alums. Down the road, better students should enjoy more accomplished careers, earn bigger incomes, and give bigger gifts to alum mater. It�s a long term bet, but universities are well positioned for long term bets.

That certainly would be a hypothesis based on rational self-interest. It could also be that schools want high application rates so that they can be more selective (and look better in rankings by US News and the like), and handing out a few more merit scholarships early on leads to more applications down the road. But McCracken continues,

Would this be the time to think about quality control? There is no point bringing better students to campus, if we are going to inflict a substandard education on them. They will graduate unhappy. Or they will just leave and end up giving their alum dollars someplace else.

So it�s time to do something about those academic dead beats. You know the ones I mean. (If you don�t have them as colleagues, you had them as teachers.) Almost every department in almost every university has academics who just gave up years ago. Usually, they don�t teach very well. Usually, they hardly think at all. Now in mid-career, they appear to struggling to qualify as late entrants in that rather large club identified by George Bernard Shaw. �Most people would rather die than think. Most do.�

The answer to this is that it may be cheaper to keep handing out merit scholarships than to clean up the academic deadbeats. The problem is large. And if there are enough good faculty around, the deadbeats are circumvented. The good faculty attract good students. I'm amazed how many of the students I have in economics have had the same faculty in other departments, the ones I think are good teachers and researchers. But it makes sense: Universities have sorting processes that shunts poorer students towards poorer faculty.

McCracken tries to assign a cost to incompetent faculty and there's no doubt they cost, but unless you account for students' strategic behavior in sorting towards good faculty when the students are also good, you've overstated the problem. Still, I think McCracken has a useful exercise here, for the reason he concludes:
If we can get this number right, we can calculate not only the costs inflicted on alumni support created by Dr. Lunatic, but the amount that must be laid at the door of university administrators who refuse to move against him. Now we have a metric that can be used to assess performance in the high offices of the university. Dr. Lunatic has no shame. If he had, he would have restored himself to usefulness years ago. But Dean Robertson? Actually, she has pretty active sense of pride. If we say she is costing us hundreds of thousands of alumni dollars by suffering Dr. Lunatic, there�s a pretty good chance she will do something about it.

This can apply by extension to showing the numbers to the boards of trustees of campuses with university administrators who will not act against their incompetent faculty. And it should.

It all depends on the meaning of the word "magnanimous" 

I almost love Craig Westover's column today on Pawlenty. (I would not have objected in the slightest to the headline.) My qualifier 'almost' comes from one word in one sentence, to wit:
The governor made the magnanimous gesture. He put his political future on the line for the good of Minnesota by backing off his no new taxes pledge to balance the budget and fund education. The DFL rejected his offer with the indefensible ploy of playing education off against increased taxes.

It is not magnanimous to take poll readings and decide to expand government. It is not magnanimous to give other people's money to the education borg, or to corn growers, or to a baseball team. It is not magnanimous to promise to one group to help you get elected, and then break that promise when doing so promotes your own venal interests.

Either smaller government is "for the good of Minnesota" or it is not. Either no new taxes is "for the good for Minnesota" or it is not. There are no needs now for Minnesota that require extra confiscation that did not exist in 2002. Nothing changed except Pawlenty's resolve and his own political calculus.

UPDATE (6/16): David Strom, last night.

The Governor needs to remember the formula for his success: when his interests are aligned with the Republican Party and the Conservative movement, he won. He has now chosen to diverge from both of his allies, asking them to follow him down a path they cannot possible go down (higher taxes, Northstar, Stadium, minimum wage, no sudafed in the stores, ethanol, etc.). He needs to tack right, take the argument out of the Capitol to the people, and beat the Democrats in the field of public opinion.

As long as he tries to negotiate by giving the Democrats more of what they want, they will continue to demand ever higher prices for a settlement. You have to impose high costs for failing to deal with you, not offer more and more concessions in hope of a good faith settlement. This is like the Oslo Accords, where only one side seemed to get anything, with the other always giving in hope of buying peace.

David also quotes Machiavelli. Pawlenty is no Machiavelli.

Dragged-out case settled 

I have had more than a passing interest in the case of Andrei Shleifer and the Harvard Institute for International Development, the latter of which folded after a scandal in Russia. In 1997, Shleifer and an associate Jonathan Hay, who worked for HIID on a U.S. government contract for Russian privatization, were accused of insider dealing themselves and with their wives, both of whom worked in the investment field. The government has pursued a civil case against them, and both the defendants and the university were found liable last July.

Today's Harvard Crimson announces that a settlement at last has been reached in the case. Shleifer and Harvard President Larry Summers are good friends; they worked with Jeffrey Sachs, who at the time of the scandal was the director of HIID. Sachs and Hay are no longer at Harvard; so far, Shleifer remains in the faculty.

The problem created is more than the greed of two people. It is that the validity of voucher privatization (something Shleifer explored academically) for distributing state assets was undermined by their actions. Their usefulness is still in doubt theoretically, but the discussion has been curtailed by the scandal. That's too bad, because some places it seems to have worked.

Tuesday, June 14, 2005

Coming out party 

Captain Ed has decided to try his hand at public speaking, and will be appearing at a CFACT talk at 7 pm at Coffmann Union at the University of Minnesota tomorrow night. His talk is on blogging and new media -- what else? -- and he's already had a success: CFACT has started blogging.
Captain Ed will be discussing the role of blogs in reshaping the media, and since he will be speaking to a smattering of UMN bloggers, the topic of establishing an organized campus media blog to compete with the incompetent Minnesota Daily is likely to be discussed.

Come hear Captain Ed and then join us afterwards at the Big 10 for a more intimate discussion. Live blogging allowed and encouraged.

Math and science education -- a wine that doesn't age 

Craig Depken draws another graph, gets a fascinating result. This time it's math and science scores for the U.S. compared to the rest of the world.

In the fourth grade U.S. students are in the 90th percentile and 55th percentile worldwide in science and math worldwide. This indicates to me that our elementary education is pretty strong - a,b,c and 1,2,3 are mastered early.

By the twelfth grade we rank less than the 30th and around 10th percentile worldwide in science and math worldwide. Clearly we fall off dramatically. But what is the reason? Is it a supply side issue - are our highschool educators compared to, say, Germany's, not as strong as the same comparison at the elementary level? Is it a demand side issue - American students don't give a rip about science and math by the tenth, eleventh, and twelfth grades because they are busy playing Halo, text messaging their buddies, and otherwise goofing off?

I know some high school math teachers who have undergraduate and masters degrees IN MATH. I also know other high school math teachers who have never taken a college math course. Ceteris paribus, my money is on the one with the math education. Yet, if the latter outnumber the former then regardless of a kid's desire to learn math and science their teachers are uninspiring or lack the knowledge needed to convey the topics appropriately.

His graph is drawn from the new Annual Report of the Dallas Federal Reserve. RTWT.

Cash offends no one 

According to the Christian Science Monitor, merit pay for teachers is taking hold in many places.

Since 1993, the fast-growing Douglas County School District has given bonuses based on a variety of factors, from an entire school's academic performance to an individual teacher's willingness to take on extra duties and train colleagues. A group of art teachers, for instance, can get together, create goals for themselves, and make more money in the process. "Outstanding Teachers" ... can get bonuses by creating portfolios that demonstrate their performance and their students' growth.

Thanks to the bonuses, district teachers - who make an average salary of $48,000 - can boost their paychecks by several thousand dollars a year. "This is encouraging people to go over the top, above and beyond," says Pat McGraw, a physics teacher and president of the local teachers' union.

The key to creating a popular program, says Denver teachers' union president Becky Wissink, is inviting educators into the process. The proposed system wasn't "imposed," she says, and that made all the difference.

The issue of merit-based pay for teachers in Minnesota is tied to Governor Pawlenty's cigarette tax, as it is a condition for the money to be diverted from smokers to schools. The model programs are identical to the one in Douglas County. Where it has been implemented, teachers seem to like it, which just means that it's implemented where teachers like it. Will the state teachers' unions support this remains to be seen.

Down on the farm 

One of the great perks of my job comes when I teach research seminars. Students need topics but sometimes don't know what to write about; I can steer them towards topics I am interested in but haven't yet been able to research myself. I consider it a fair trade, because they get a great deal of help in learning how to write research, and I get someone to help me find out if a topic is fruitful for me to research or a dry hole.

That turns out to be the benefit found in summer intern programs in DC. Conservative shops like Heritage have been very good at using these students to help with the research of their fellows. Add in networking and seminars on Hayek and Friedman, and conservative students flock to these places. Leftist research institutes are trying to catch up.

Besides Heritage, there are good ones at The Institute for Humane Studies and the Cato Institute. I've had students work with those places, as well as DC Internships which isn't necessarily conservative, but was a good experience for those students who went. The experience is a vital part of a student's education and opens doors for future employment. Who knows, you could be the next Rich Lowry.

Rentseeking in everything 

The Night Writer has tales from Vegas packed in his bags as he wings homeward, including this doozie.
You don't have to scratch the glittery surface much to see the underlying machinery. While I was there the local taxi drivers were forming their cabs into slow-moving, light-flashing, horn-honking parades up and down Las Vegas Boulevard to protest proposed legislation that would prevent strip clubs from kicking back to the drivers the cover charges of people the taxis delivered to the clubs' doors. According to my cabbie, the proposed law is being pushed by the hotel and casino lobby (which is prohibited by law from having its own strip clubs) which would rather have visitors throwing money at its slot machines than at strippers' g-strings.

A local TV station covered the slowdown, and lo and behold, the cabdrivers have defeated the hotel and casino lobby.

Hope the Night Writer got home safe and sound, because his daughters need him.

That sucks 

The blogosphere is a little poorer today: Killer Grease Mungowitz has closed shop.

Confusing announcements 

Our campus has an email announcement list for use of faculty and staff to "serve as a resource for SCSU faculty, staff and administrators to communicate announcements that reflect the professional nature of their work environments." One is not allowed by state law to post things that are "for the purpose of personal profitability". (Here's the state statute and its coverage under the state employee handbook.)

These rules are routinely circumvented. For example, I can't post that my car is for sale, but I can ask a colleague to post it. For another, we had the woman posting poetry, which requires a rather elastic definition of "reflecting the professional nature of their work environment" to meet the criteria for use of the announce list.

A week or so ago a military recruiter on our campus sent on the list announcements of two events that were to support Operation Interdependence, one of many means people have used to send supplies and reminders of home to U.S. troops stationed abroad. Does this reflect our professional nature? It strikes me as borderline, but given the laxity with which the announce list policy is enforced -- it is unmoderated and self-policing -- it certainly didn't strike me as far out of bounds. Nevertheless, and as you'd expect around here, discussion breaks out over whether this was an acceptable post.

This morning another staff member gets it in her head to "announce" the Downing Street Memo. Her call includes this statement:

Downing Street also has a link for people to sign the letter John Conyers and 89 members of Congress have addressed to George Bush. Conyers will present the letter when there are 500,000 signatures and they're close to having that number.

Please go to the above site and start contacting the media they list and sign the petition and if you are so inclined send a request out to your like minded friends.

And I'm sure she sent this because on this campus, all she thinks there are, are "like-minded friends." Amazingly, there has been silence over this, except for one brave professor:
To me, announcing the availability of the web sites alone is dubious. That is, what is the connection between the Downing Street Memo's content and our campus activities? However, to include instructions, "...sign the petition," is way beyond an "announcement." Once more, we see proof that our "rules" are bent to accommodate the leftist agenda espoused by many on this campus.

I expect the administration will soon send around once again the "rules" of the announce list, which will be ignored for the 49th time.

Monday, June 13, 2005

Get the quarterback 

My brother and I have little in common for football -- he, like Ed, is a Steelers fan -- but one thing we agree on is our hatred of John Elway, known around the family table simply as "horseface". (Indeed, I believe he was the model for the horsehead logo on the Bronco team helmet.) But even he looks better than that Colorado state quarter. Get to Radioblogger and vote Minnesota. Lakes, loons, and fishing -- and no "The Drive" bull.

"We're from the party, sir, and we're here to help you" 

We learned during the NARN broadcast that the Minnesota GOP had replaced Ron Eibensteiner with Ron Carey as its chair. According to descriptions from First Ringer, Residual Forces, and Kennedy vs. The Machine, it was either a mutiny or a bloodletting. They are also almost uniformly upset that this strengthens the hands of the Democrats.

They're worried about the wrong thing. The DFL's hand has been strengthened by things that occurred before Saturday. These are now sunk costs (or more precisely, sunk decisions). Sunk costs are irrelevant to decisionmaking, though they are part of the profit-and-loss calculation. We will have bigger government now regardless of what happens. What we need to focus on is what happens next, particularly in the governor's mansion.

The focus on Pawlenty is correct, but I don't thing words like bloodletting or mutiny are correct. The correct word is that the party performed an "intervention" on TPaw, meant in the same way you do with a friend who has developed an unhealthy addiction, or who is marrying the wrong person, or buying a sports car in the middle of a midlife crisis, &c. After drawing a bright line for three years that there would be no new taxes, Pawlenty threw this away for ... well, we don't know yet, but he's promised he's going to get something, soon. That's not the talk of a leader; that's not the talk of someone with principles and conviction. It's not the talk of Candidate Pawlenty, who was the candidate folks like Margaret got behind.

Interventions are messy. The person who's lost his way doesn't realize it, and is often in denial. There's plenty of evidence that Pawlenty is still in denial that there's a real problem here, including his reported "storming out" of the central committee meeting between ballots -- if true, because I've asked others attending who said he left before the first ballot. This isn't exactly like the four stages of grieving, but there are similarities. And denying there's a problem is certainly Stage One.

Thus Eibensteiner had to go, to confront the denial. And to show that the fist had some velvet, it made sense to leave Eric Hoplin in place. You don't want the intervention to leave the sense that you don't care about them any more. The party isn't ready to throw Pawlenty over the side of the boat -- he's still their best candidate -- and discouraging him isn't going to help. But he needed to be shown that the worker bees of the party mean business about holding to the pledge not to raise taxes.

Part of this comes, I think, from the national asperations that TPaw seems to hold. He cannot run for national office with a government shutdown this year that can be pinned on him. He will be pilloried in the press, his negatives driven up and a campaign issue to be used against him. He's less a firebrand than someone who wants to be seen a competent and well-liked leader, and so he reads the papers and the polls more than, say, a Schwarzenegger. And he has an unhealthy addiction to papers and polls. So he agrees to a bonding bill early -- David is exactly correct that this removed an important lever for the session -- and ends up blinking before the Democrats, who had no compelling reason to want a deal once larger spending bills in many areas had already been passed and their friends in the construction business got their borrowed money.

And he may feel that he can take advantage of the party faithful by figuring there will be no opposition to his re-election campaign here in MN for 2006. What has to happen to get his attention is that the party point out to him that there are alternatives they might prefer if he continues down a path that leads to expanding government.

If my analysis is correct, there will be some days while Pawlenty absorbs the message. We must then wait to see if he decides to go forward with his plans or if he changes and admits mistakes. Both of these are painful, which is one reason for the anguished righty-blogs over the weekend. But it is necessary. Sacking Eibensteiner will not kill GOP chances in 2006 outright, but it's now up to Pawlenty for it to make the GOP stronger. What we should worry about, rather than strengthening the DFL's hand, is the choice Pawlenty makes next.

I give more to my neighbors 

Craig Depken draws some simple graphs to show spending per student is higher when local school districts are the ones doing the spending.
It seems that federal spending is less of a problem where spending per-pupil is relatively high already. The graph above likely puts the causation in the wrong direction: states with low local/state spending per-pupil rely moreso on government money, to include lunch programs, etc. Perhaps the federal government should stay out of the primary/secondary education business, I definitely have some sympathy for that view, but let's not argue about the money - let's argue about the strings.

An old scholar has a new blog 

I was surprised and pleased to get a note from Kevin McGrew, formerly of the Applied Psychology Department and the creator of the Shadow University on the Mississippi website that was part of the ancestry of SCSU Scholars. Kevin has a new blog, "Intelligent" Insights on Intelligence Theories & Tests (aka IQ's Corner). Kevin is now in the private sector and happy to be away from the campus wars.

Kevin sends word that issues of race, genetics and intelligence are being covered in a new issue of Psychology, Public Policy and Law, which he highly recommends. Given that the area is highly controversial, I'm sure this is going to generate a good deal of discussion over the coming months.

Saturday, June 11, 2005

And maybe we'll even talk euros again! 

The NARN will be at White Bear Lake Superstore today, 12-3pm for a live broadcast. Just before going to bed last night I checked the other NARN blogs (don't you love that little aggregator in the NARN flash site?) and found Captain Ed had announced the news of a new deal to relieve the debt of the poorest countries, mostly in Africa. This came after an agreement between the Blair government and the Bush administration earlier in the day. Ed thinks this is a good idea -- I wrote to say I did not and that we should debate this point. Here's why:

Bob Subrick at Stationary Bandit
cuts to the heart of the matter with a single question:
How does this change the incentives of public officials that led to the debt in the first place?
The answer of course is that it doesn't. This aid is akin to sending my kid to college with a credit card, having him max it out on pot and beer, and then paying it all off and telling him to use the card more wisely next time. If you do this, you usually find the card re-mexxed a few months later. But even that metaphor fails: It's more like giving your kid the money to pay the bill, only to find he's wasted that on the finer aspects of college dorm life. Former World Bank chief economist William Easterly explains:

The mythology of African debt is that huge amounts of money are being sucked out of the continent to go to international creditors. The truth is that much of Africa's debt has been fictional for a long time. When the debtors had difficulty coming up with the repayments, creditors gave new loans, postponed the repayment of old loans, or forgave the old loans altogether. The G7 has already spent 20 years giving ever more debt relief to Africa at each successive summit. Maybe the best argument for dropping the debt is just to end this charade, freeing up the time of people such as Geldof, G7 politicians and African leaders to concentrate on the real problems of African aid.

Debt relief itself shows that insufficient aid was not the problem in Africa. African governments could not repay zero-interest World Bank loans that required no repayment until 10 years after the loan was made and then had a 40-year repayment period. What does that say about the pay -off to the money lent in the first place? The International Monetary Fund and World Bank gave debt relief even to such long-standing "success stories" as Uganda. If a businessman could not generate enough profit to repay a loan with a 10-year grace period and 40-year maturity at zero interest, you wouldn't call that a successful business.

We know that aid is ineffective from the record of the $568bn (�313bn) already given in aid to sub-Saharan Africa. This aid was not successful in preventing decades of stagnation. Yet campaigners and politicians are jostling in the public square to call for ever more aid to Africa, from Geldof to Jeffrey Sachs to Tony Blair and Gordon Brown.
And now they seem to have persuaded George Bush to go along with this, which is silly because George Bush already has the right plan, in the form of Millennium Challenge Grants. To use another private market analogy, Millennium Challenge Grants require the U.S. do to more due diligence of the countries to whom they lend, and insists on accountability. Towards that end, the U.S. has a set of criteria in three main areas: good governance; investment in people; and economic freedom. To get the grants, which are as generous as those Easterly describes, you must fulfill a majority of the criteria in each of the six areas. (I've been working on a few papers to discuss these criteria, but I'll save those thoughts for later this month when the first one rolls towards completion.) Bush is still pushing those today, but so far only one country has qualified: Madagascar.

Why, you should ask? Because up to now countries in Africa have not created the institutions needed to provide good governance and economic freedom, and have not invested in public health or education. And the aid given to them has not worked. In short, Millennium Challenge Grants create an incentive for the poor countries of Africa to put good policies in place by making them a precondition for aid rather than something to be done after the aid arrives. Unfortunately from my view, Geldof and the other rocking wheezers have given the kleptocrats in Africa their junkie fix and delayed reform and the Bush Administration, for agreeing to this, needs to be held accountable, as Easterly concludes.
you could hold aid agencies accountable for results if the aid agenda was less utopian, just concentrating on specific tangible steps to help poor people. Researchers have found many programmes that reach the poor: subsidies to parents to keep children in school, free textbooks for school children, de-worming medicines, nutritional supplements, education on condoms and treatment for other sexually transmitted diseases to prevent Aids, indoor spraying to control malaria, fertiliser subsidies, vaccination, and water provision.

Aid agencies need independent evaluation of the effects on the poor of their programmes. What aid agencies do today is mostly self-evaluation. Aid agencies are only accountable if independent evaluators judge them. In short, three steps - individual responsibility of aid agencies, a less utopian agenda for aid and debt relief, and independent evaluation - are more likely to help the poor than even more utopian campaigning for more aid and debt relief.

To all of you who will be listening to Madonna and Coldplay at Live8, you deserve congratulations for your compassion for Africa's desperate poor. Direct your energies at the outrage of aid and debt relief dollars not reaching those same poor. Ask the aid agencies why those 12-cent medicines have still not reached children dying of malaria. Don't let aid agencies shun individual accountability and hide behind utopian agendas and self-evaluation. Once that outrage is fixed, let's go ahead and increase foreign aid.

But the money is spent now, without regard for these conditions.

Friday, June 10, 2005

The high cost of sleeping with students 

Reader jw also sends this charming story of a Chinese professor who gave away "state secrets" for sex. The state secret is the graduate school's entrance exam. The maximum sentence is death.

The CIA says they're on top of this one.

You're kidding, right? 

Philadelphia's public school system has decided to make a year of black studies a required course in its high schools.
Leaders of the school district, where two-thirds of students are black, hope the course will not only keep those students interested in their academic work but also give others a more accurate view of history.

�We have the opportunity ... to do something under our watch that is really going to do right by our students, to say, �We�ve come from some pretty great places,�� said assistant superintendent Cecilia Cannon.

The course, already offered as an elective at 11 of the city�s 54 high schools, covers topics including classical African civilizations, civil rights and black nationalism, and teachers say it has captivated students.
Well, now they're captured rather than captivated.

At some point you have to ask, what coursework is being crowded out of high schoolers' education in return for these requirements. There's no doubt tracing a student's bloodline through genetic testing has value, but at $360 a pop, what is being sacrificed to give that student that experience? And how exactly do other students -- black or not -- gain from it?

(h/t: reader jw)

Return on investment in public universities 

While the governor and the state legislature are fighting their battle over the budget, one area that is done is higher education. After reading Richard Vedder in Forbes today, they might want to reconsider.

When university presidents plead for government money, they often make an argument for social investment. Pump funds into higher education and the economy will grow, they claim. After all, this is an information- and skill-based age in which college graduates are far more productive than their less-educated peers.

True. But the evidence suggests that increased public funding for universities doesn't lead to greater prosperity-and may even reduce the chances of it. Compare the growth in real per capita income in states that spend a lot on higher education with that of states that spend less and a few surprises show up. Over the past 50 years low-support New Hampshire outdistanced neighboring Vermont on nearly any economic measure, though Vermont spent more than twice as much of its population's personal income on higher education (2.37% versus 1.15% in New Hampshire). Missouri, with modest state university appropriations (1.32% of personal income), grew faster than its neighbor to the north, Iowa (at 2.41%).

Similar examples abound. Using data for all 50 states from 1977 and 2002, I compared the 10 states with the highest state funding for universities against the 10 states with the lowest. The result: The low-spending states had far better growth in real income per capita, a median growth of 46% compared with 32% for the states with the highest university spending. In 2000 the median per capita income level for the low-spending states was $32,777, 27% higher than the median for the 10 states where higher education got the most state money.

How could this be? Certainly money is invested in human capital which should return to the state in additional economic growth right?
Colleges have devoted relatively little new funding over the past generation to the core mission of instruction (spending only 21 cents of each new inflation-adjusted dollar per student on it), preferring instead to assist research, hire more nonacademic staff, give generous pay increases, support athletics and build luxurious facilities. And while in the private sector companies have learned to get more work out of fewer employees, the opposite appears to have happened in higher education. In 1976 American education employed three nonfaculty professional workers (administrators, counselors, librarians, computer experts) for every 100 students; by 2001 that number had doubled.

If someone wants to flip through our university's budget to get that number, be my guest. Here's some data, though, that's a little older but indicates that the ratio of students to staff has fallen by a third while the number of full-time students has held about constant. That is, we've increased non-faculty staff here by about 50% since 1994. I don't beleive that number has decreased since 2000, but I'd need to get better data than we can grab from the public website.

Meanwhile, here in St. Cloud my colleague Rich MacDonald has announced some results of a study of the university's impact on the local economy: We're 3% of St. Cloud's $10 billion economy. Of the $315 million in impact he's estimated thus far -- they are doing a study of alumni spending in St. Cloud, such as returning for hockey and Homecoming -- $50 million is from state dollars. $55 million is tuition dollars; more millions are spent from allowances and summer work savings students bring to campus, and then circulate around SCSU. The full results of the study are due in the fall.

(H/T for Vedder article: Jeff at Mises Blog.)

Frittering away early childhood ed 

The new issue of The American Experiment Quarterly is out, and I'm pleased that they've taken space to explore further the research that Art Rolnick and Rob Grunewald from the Minneapolis Federal Reserve have done on the benefits and costs of early childhood education. I had the pleasure of visiting with Art and Rob during the 2004 Winter Institute here at SCSU, where they presented their research. I consider it impressive. The AEQ editors put their research with a paper done by the Goldwater Institute's Darcy Olsen, who thinks early childhood ed research has opened the door to an unnecessary intrusion of the state into parents' homes. In a discussion they have later also in that issue, Art agrees with that. They also agree that something goes wrong when they get to K-12, that was the most fascinating part of the research.
Olsen:if the gains of these programs are realizable, if there
really is potential for these preschool combination parenting and mentoring programs to have a lasting impact on children, it is absolutely imperative that the schools they enter can sustain and build on those gains. Right now, we have a system where that is not happening. We have too many schools that are inadequate and I think that explains quite a bit of the "fade out" phenomenon. The problem may not be that the preschool programs are not good, but rather that the schools that children enter are not able to sustain those gains.
Rolnick: The research is clear: if you do a great job at getting at-risk kids ready for kindergarten and they go to dysfunctional schools, you lose all these benefits. You need some leverage in making these K-12 schools, especially in the inner city, responsive and accountable, and you�ve got to get the results.
Getting that message across to K-12 educators is vital, but given the continued push for universal, cookie-cutter E-12 programs, there's no sign that the message is being received.

UPDATE: Minnesota Education Reform News has some additional thoughts, and finds Olsen to have the more persuasive arguments.

A matter of pride 

I'm not a native Minnesotan. Growing up in New Hampshire meant being around mountains and lakes, though we never got credit for this from the arrogant people in the Rockies. And they're at it again. Last night, as recorded by Radioblogger, Governors Tim Pawlenty and Bill Owens exchanged barbs over the design of our respective state quarters. Owens started it.

Owens started the two-bit battle when he was asked at the unveiling of Colorado's design if there were any states' quarters which he did not like. He did not hesitate for long.

"I think Minnesota left something to be desired," he told a number of reporters at the State Capitol. "It has lakes and canoes and big mosquitoes on it."

In reality, the Minnesota quarter has a lake, the blue sky, a boat with fishermen, the outline of the state, the state bird (a loon) and the slogan "Land of 10,000 Lakes."

Later, in a separate interview, Owens went further calling the mosquito the "Minnesota state bird" ...

"Minnesota state bird," Governor? That's a new one. I never have heard that before. Sort of like calling Ward Churchill "Colorado state non-Indian", eh?

Duane at Radioblogger is running a poll to determine who has the better-looking coin. Now let me ask you: if you have to insert the words "Colorful Colorado" on your quarter, chances are you have an inferiority complex. Their coin says "Hey, we've got mountains and trees!" Minnesota's coin says "we're a place you can fish with friends in a boat on a lake with loons." There are no signs of people on the CO coin. The Minnesota coin has the shape of the state, which is unusual. Colorado is a rectangle. And everyone knows you can't fit a rectangular state in a round coin, right?

Hie thee to the poll, and vote as often as possible.

Thursday, June 09, 2005

Governor, you asked for this 

The Senate DFL's offer on Thursday would accept 55 cents of Gov. Tim Pawlenty's 75-cent proposed per-pack cigarette charge, but did not drop its own proposal for higher taxes on Minnesotans making more than $250,000.

"The governor has no high ground on taxes," said House Minority Leader Matt Entenza, DFL-St. Paul, just before entering talks with Pawlenty and GOP leaders. "Virtually every Minnesotan would be touched by the governor's tax increases," he said.

"Do you actually believe, for a moment, the governor has kept his pledge?" said Senate Majority Leader Dean Johnson, DFL-Willmar, referring to Pawlenty's promise not to raise taxes during his term.
Of course not, except that you didn't deliver a tax bill yourself, Deano. Source. See more, including an intrafamilial debate, on Our House blog. (Scroll down for full effect.)

An old Russian proverb goes that the hammer that breaks the glass also forges the steel. Governor, sometimes glass needs to be broken. The stalemate will be long; your weakness last month has made it longer by strengthening the resolve of your opponents. Johnson is trying to prevent you from picking up the hammer once again. Answer yourself why, then grab it.

May I live as long, and be proven just as right 

The amazing thing about Milton Friedman is that he's still writing, granting interviews and still has the same charm he had before. Observe this recent interview.
San Francisco seems an unlikely home for the man who in 1962 first proposed the privatization of Social Security.

Asked why he dwells in liberalism's den, Milton Friedman, 92, the Nobel laureate economist and father of modern conservatism, didn't skip a beat.

"Not much competition here," he quipped.
In today's WSJ, Friedman finds himself as right as can be about education, reviewing progress after a national report on education in 1983 called "A Nation at Risk":
'A Nation at Risk' stimulated much soul-searching and a whole series of major attempts to reform the government educational system. These reforms, however extensive or bold, have, it is widely agreed, had negligible effect on the quality of the public school system. Though spending per pupil has more than doubled since 1970 after allowing for inflation, students continue to rank low in international comparisons; dropout rates are high; scores on SATs and the like have fallen and remain flat. Simple literacy, let alone functional literacy, in the United States is almost surely lower at the beginning of the 21st century than it was a century earlier. And all this is despite a major increase in real spending per student since 'A Nation at Risk' was published.
The emphasis is mine -- you'd think we had kids in schools without books if you read the local newspapers. Yet rather than deal with this issue with a modest proposal, such as sending a 1,500 children from lower-income families in the Cities to private schools, the Education Minne$ota continues to block any effort to harness the power of markets to solve these tough cases.

If Minnesota really wants to be a leader in education, it can follow up its success with open enrollment by embracing Friedman's vision.

Do department chairs have academic freedom? 

There's a question to be asked, after Professor Timothy Shortell's forced resignation of his chair at CUNY. CUNY is unionized, and tenured faculty elect a chair, who is then appointed by the administration. But according to this memo from a previous go-round on evaluation of department chairs between the union and administration, the school's by-laws
provides that the president may remove a chairperson �as the interests of the college may require� and that in the event of a removal, and after conferring with the department, the president shall recommend to the board the designation of a new chairperson.
Is it in the interest of that college to have a department chair say that
On a personal level, religiosity is merely annoying�like bad taste. This immaturity represents a significant social problem, however, because religious adherents fail to recognize their limitations. So, in the name of their faith, these moral retards are running around pointing fingers and doing real harm to others. One only has to read the newspaper to see the results of their handiwork. They discriminate, exclude and belittle. They make a virtue of closed-mindedness and virulent ignorance. They are an ugly, violent lot.
In the NY Sun article, even the AAUP representative consulted by the reporter (good job there!) has his doubts.
A senior program officer at the AAUP, Robert Kreiser, questioned the extent to which a department chairman - who holds an essentially administrative post - is covered by the protections of academic freedom. He said a college administration may not want to have as chairman someone whose views "are outside the mainstream" of the department or the college.
Shortell's own writings indicate he is unrepentant, assuming that everyone will understand when he "changes roles" between author, professor and, I suppose, department chair. But Shortell wants us to believe that he could set aside his views to evaluate tenure for a Sociology professor who was, say, an evangelical Christian. It seems well within the rights of the university to think itself better served with someone else making the evaluation. This is a function both of the vehemence of his condemnation of religious people and that evaluation of social scientists is far less objective -- we would not have nearly the problem with Shortell were he a professor of chemistry, for example.

A competent working group, saying nothing 

University Diaries discusses the cultural competency debate at the University of Oregon.

[University President Dave] Frohnmayer �is in the process of appointing an executive working group of eight to ten people to conduct [a] review this summer.� �... The working group will review the draft�the draft which was, dammit, just a draft, as Frohnmayer keeps saying in the article: �What is it you [critics of the plan] don't understand about the word 'draft?��

Nothing! I understand the word �draft.� But if your institution has produced a draft document that in its extremism has become a national scandal, maybe instead of appointing a committee to review the draft, which will merely delay diversity efforts (�Appointing the executive working group to review the plan and recommend changes will slow the process, Frohnmayer said, but given the response to the original draft he said it's clear that more time is needed.�) you could do what people often do with bad drafts. You could throw it away.

But you seldom see universities do this. Bad ideas are simply left around because too many people have a stake in getting it passed. Anytime resistance to these things is given, the reaction is to deflect, to refer to a committee ... but never to walk away and say it was a bad draft or a bad idea. Egos won't allow this. And you can see this in how Frohnmayer continues to beat the dead horse.
Frohnmayer likes the language of the draft, however, especially the phrase that got everybody so angry, �cultural competency�:

Cultural competency, Frohnmayer said, is a straightforward concept. "To me it means that we are able to effectively reach all of the students who have demonstrated their competence to be in the university but for whom, because of cultural background, traditional techniques of teaching may not be as effective as others," he said. "A good teacher is always open, I hope, to ways to increase teaching effectiveness."

Does this seem weird to you? If it�s a straightforward concept, why does Frohnmayer talk about it in a circuitous way? For instance, I thought �cultural competence� referred to professors, who would, under this plan, be tested on their cultural competence before being promoted. Yet as Frohnmayer now defines it, cultural competency seems to refer to the difficulty some students may have being competent in the traditional classroom.
Increasing teaching effectiveness is not a free good. It faces competing claims -- it has an opportunity cost. Increasing performance in two students at the expense of retarding the learning of twenty others, or by decreasing the amount of knowledge creation a faculty member might do, implies a value statement that favors one group's learning over another's. That may be what is desired by educators such as Frohnmayer, but at a public institution you would never say such a thing openly.

We're just jealous 

I don't particularly care what John Kerry got for grades in school, but the Cranky Professor explains why so many others do.
Now as a college professor who just attended a college reunion weekend I can tell you that grades are not a particularly useful predictor of life performance -- something that irritates academics to NO end. That's part of why lots of academics were eager to believe that John Kerry had higher grades and a higher I.Q., because we not particularly secretly resent our C students who do well. Colleagues and other professors regularly allege that poor student who do well must have used family connections, family money, or well-planned marriages for advancement.

Grades tell us about hard work perhaps or good study habits, but those don't always correlate to success because, related to what I said last night, those are simply inputs, not outputs. Many are the athletes with great raw talent who never turn it into performance on the field. The 'C' student who actually stays to get the degree has shown persistence and the ability to meet a goal, without many academic accolades. That counts for something.

An absolute joy of blogging 

What you hope when you post a set of notes to a class and a blog is that they prove useful to others. I hope the notes have been a help to others, and I'm pleased to find that the Lahore School of Economics has linked to them. Thanks goes to Douglass Bass for putting the Lahore School of Economics (the LSE of Pakistan?) in touch with the notes.

Wednesday, June 08, 2005

Could ABoR expand to high schools? 

As I've noted in the past, the Academic Bill of Rights proposed in Minnesota and elsewhere have focused on colleges, not high schools. But the Christian Science Monitor reports that David Horowitz and others have decided to expand their field of operations.

"The last six months [have] been kind of a watershed for the academic-freedom movement," says Bradley Shipp, national field director for Students for Academic Freedom, a group founded by conservative activist David Horowitz in 2003. "It is going to filter itself down to the K-12 level."

It's an important battle front, proponents say, because younger students are more impressionable. They are concerned about multicultural lesson plans that go into detail about the Muslim faith, and cite incidents such as a young child being reprimanded by a teacher for writing about wanting to become a soldier.

The usual handwringing over silencing teachers ensues. One should ask, however, why academic freedom is granted to teachers? They are not to engage in cutting-edge research and create knowledge; they are working with minors who are more susceptible to misrepresentation of opinion as fact. If a teacher doesn't have academic freedom to teach intelligent design creationism, she probably also doesn't have it to teach that "it's all about oooooooooil."

Interested readers should take a look at the bill of rights for high school students in this group's pamphlet.

We grade output, not input 

David Beito, noting a WaPo article on how students are whining more about grades these days. Citing faculty who complain about students who want an 'A' based on how much they worked rather than the grade on their exams, David writes:
I share Shepard's anger about the popular "labor theory of value" used to justify higher grades. Let's always remember, however, that the root of the problem lies elsewhere. The administrators have repeatedly proven to the main force behind grade inflation on campus. Their motivations are far more insidious than those of the students. The students just want good grades but the administrators want to dumb down standards as a means to increase their power and budgets, via a higher student body count.

The worst offenders are faculty members who, instead of fighting the good fight to uphold standards, shrug their shoulders and let the administrators get away with it.

The title of this post is what I tell students on day one, and further inform them that those who tell me they should get a better grade because they worked so hard would be escorted from my office.

I'm reminded of a Stiglerism: A student comes to Professor Stigler to complain about receiving an 'F' in the class, that he didn't deserve it. Stigler replies that he agrees the student didn't deserve an 'F' ... but that is the lowest grade allowed under university policy.

My grade sheets are now all computerized with web access, alas..

Introductory econ lecture #10 

Final lecture. All these are now online in one spot on my classroom site.

I wanted to talk a little about trade, and that the balance of payments is always in balance. (A shorter explanation here.) As the text makes clear, theoretically any debit entry is offset with a credit entry, so that the balance of payments is always in balance. If we have a deficit in the balance of trade for merchandise and services, it must either be made up by unilateral transfers -- one-way transactions that act like a gift or a form of aid -- or by issuing an IOU (stocks, bonds, certificates of deposit, or even paper currency, which is an IOU of a country's central bank). If I'm not exchanging goods for goods, I must either pay with gift money or an IOU.

One student asked whether we always wanted the balance on trade or the balance on current account (the balance on trade for merchandise and services plus the balance of unilateral transfers) to equal zero. The answer to this is no -- there can be an equlibrium balance on trade that is different than zero. Perhaps we wish to issue IOUs to foreigners in order to finance investment. And perhaps these are in demand because the economy looks strong, is a technological leader, or seems a safe haven for investment (such as during the East Asian crisis in the late 1990s.) If others want to buy our bonds and stocks, they need to give us something back. It could be their own currency, if we want to hold it, but it's more likely we will take current goods and services in return for our IOUs. The press always seem to portray this in the other way -- that our profligacy in wanting to consume more than we produce causes us to owe the world a lot of money. That's possible, but isn't necessarily the case. It all depends on what you do with the resources acquired by the IOU.

We didn't have time this term to cover exchange rates. Had I another day, that and banking would have come up next.

I did take some time at the end of the lectures to return to a theme I had started at first -- what do we mean by asking for policies that "help economies grow"? I mentioned the One Campaign, which is another of those programs that says if the U.S. will just share a little more of its wealth with the poor countries in the developing world all will be well again. But it seldom seems to help. Bob Subrick and William Easterly each explain. From the latter:

Gordon Brown said in a speech in January that more aid could get 12-cent medicines to children to prevent half of all malaria deaths. Jeffrey Sachs says in his new book The End of Poverty that "ending the poverty trap will be much easier than it appears". At the World Economic Forum in Davos in January, these two got the actress haron Stone so excited about easy solutions that she jumped up and raised $1m (from an audience made up mostly of middle-aged males) for bed
nets to protect against malarial mosquitoes in Africa. Isn't Mr Brown a little curious as to why hundreds of billions of aid have not already delivered 12-cent medicines to dying children? Isn't Professor Sachs a little worried that four decades of aid efforts have not already ended the easy poverty trap? Isn't Miss Stone a little troubled that hundreds of billions in aid have not already got $4 bed nets to potential malaria victims?
Easterly's book, The Elusive Quest for Growth, is highly critical of the World Bank for whom he used to work, and he's gotten a little too acerbic with some of his criticism, but the points here remain: before we dedicate to sending another $110 billion/year into aid for developing countries, shouldn't we first figure out why the money already sent, in the trillions, seems to have done so little? (Students, after the course is over, you are recommended to Easterly's book and the Meltzer Report.)

What economic development is, after all, is not more money given to poor country's leaders, not even the best of them. It's expanding the circle of trading: increasing division of labor according to comparative advantage and the encouragement of exchange with a wider and wider group of traders. Just yesterday on Fraters Libertas, Chad has been sharing letters from a State Department employee named Peter with an apparent expertise in agriculture. He writes:
Successful farming requires the following:
  1. Secure legal ownership of the land by the farmer.
  2. Tax policies that permit the owner to make a profit from farming.
  3. Cultural values that encourage (vs. discouraging) educated people to farm.
  4. Support for high tech agriculture, both in development AND in use (this is a big problem in much of the Third World that largely refuses to use new technologies).
  5. Low or no trade barriers on agricultural products so that they may be exported.
  6. Specialization in agricultural products that are best produced in specific countries, such as cocoa in Ghana.
With few exceptions, none of this exists in the Third World.
I don't quite agree with #3 -- educated people typically don't have a comparative advantage in farming -- but the remainder are all things focused on helping with the division of labor. The textbook in chapter 20 writes as well.
The economic freedom that allows people to cooperate with one another through the voluntary exchange of private property rights -- to buy, sell, and trade as each best sees fit under the rule of law -- contributes to the development of personal and national wealth. It unleashes a process that allows people to seek their comparative advantage, to find ways to produce and deliver scarce goods and services at lower cost, and to tap the entrepreneurial motive that drives the market process.
In the margin it reads "The Wealth of Nations in one paragraph." Indeed. We know other stuff matters, like geography and climate, like culture and history: and as I concluded in class today there isn't a magic formula by which we can even create economic freedom. We can observe correlations, and we can theorize about the connections between freedom and growth. But all we are doing is creating conditions under which economic growth can occur, because growth is the result of individual decisions to specialize and trade.

Scary if true 

Soctt Clark saw this story.
U.S. billionaire George Soros said Friday that former Ukrainian President Leonid Kuchma was advised by President Vladimir Putin to order troops to fire on opposition protesters during last year's pro-democracy Orange Revolution.

He also claimed that Putin advised Uzbek President Islam Karimov to order troops to fire at protesters in Andijan, where hundreds died in what authorities described as clashes with Islamic militants.

The comments by the philanthropist who has funded myriad democracy projects in the former Soviet Union drew sharp response from the Kremlin, which called the allegations "the fruit of his imagination."

It could be, as Soros is prone to exaggerate. The reporter, Aleksandar Vasovic, is a "military expert" for the radio station B92 in Belgrade. He also had this story on the foiling of an attempt to sell dirty bombs. Still, what is scariest is that we can find the Putin story believable.

And connecting Karimov to Putin isn't exactly news.

Tuesday, June 07, 2005

Churchill charges pile up 

The Rocky Mountain News continues to pile up the record and research the charges against Ward Churchill. Its editor, John Temple, and Churchill have been having a row over the charges. If the NY Times ever wants to replace Dan Okrent, they should look at Mr. Temple.

Meanwhile, Jim Paine is in possession of a letter and documents from Churchill's wife, and is developing the story further.

Not even the U.S. is an optimal currency area 

Picking up on thoughts about currency areas, there's a great piece in The Economist from yesterday.
There are ways to mitigate imbalances within big currency areas. Even America is not an optimal currency zone; its regions sometimes boom or shrink out of sync with the rest of the economy. But America has important features that temper the problems of unified monetary policy. Federal programmes act as automatic fiscal stabilisers, siphoning off tax revenues from booming areas and transferring them to ailing regions as unemployment insurance or health benefits for the poor. America's labour market is also highly flexible. This allows wages and prices to adjust downward, giving depressed regions a competitive advantage that can attract new companies and thus smooth out regional disparities. And workers in declining industrial towns frequently pack up and move across the country to find work; capital flows freely as well. Without these mitigating factors, people in depressed areas could easily be trapped in a cycle of stagnation.

In Europe, by contrast, few mechanisms exist to bring the euro area's widely divergent business cycles into sync. The ECB has been trying to chart a middle course between slow- and fast-growing countries while establishing its credibility as an inflation-fighter. The result has been a monetary policy that is too "hot" for some, too "cold" for others, and "just right" for almost no one.

The lack of adjustment mechanisms means that "ever closer union" is not just a glowing ideal; it is a matter of survival. Language and cultural barriers--not to mention wide differences in social insurance and retirement programmes--encourage workers to stay in their own country, no matter how bad the economy, closing off one of the easiest avenues of convergence. If Europe's economies do not drive forward towards a single market, with labour markets that are more flexible (and international), there is a growing risk that some of its members will eventually find the gulf between their economies and their monetary policies too wide to endure.

(h/t: Mahalanobis.)

Introductory econ lecture #9 

I have been developing the information here into a webpage for my students which will sit on my academic site. I'll put the last lecture there tomorrow, and then we'll have a complete set. The first nine are up here.

Here's the basic definition of GDP: Gross Domestic Product (GDP) is the total market value of all the goods and services produced within the borders of a nation for final use during a specified period. Let's unpack it:

We looked at the circular flow. (Or use this one.) We came to a fundamental identity in GDP accounting:

Total output = Total income = Total expenditures = Total value
added at all stages of production

We then turned to employment and unemployment. I used a simpler chart like that below (source), but readers might wish to view this information from the Bureau of Labor Statistics on how the civilian population is divided into the labor force and not the labor force, and how the
former is divided into employed and unemployed workers.

The unemployment rate is defined as U/(U + E) = U/LF, where LF is the size of the labor force. There is a flow each month between all three boxes, and these combine to create an unemployment rate that will be above zero even when workers are satisfied with their present conditions. Workers will be laid off expectedly; others will be engaged in job search to find positions that fit them better. This is often known as voluntary unemployment.

What we need to understand is why we get involuntary unemployment, so that those who would like jobs at current wages are unable to get them. This may be because wages don't adjust to clear the labor market, or workers simply mistake a decline in the value of money for higher real wages. Seen in this light, it becomes more difficult to imagine what government can do to
prevent this.

Shortages in everything -- affordable housing edition 

A few years ago I wrote an article based on the experience St. Cloud was having with a local group pushing an affordable housing ordinance. The ordinance itself died, but the group still claims victory for a joint powers agreement that ties the five municipalities in the St. Cloud area to a plan to offer 15% of new construction as affordable, a goal they have trouble meeting.

Some money to help build homes has been found, but part of the program was to make available "gap loans" to help families get into first houses. But, we learn today, the affordable housing proponents in St. Cloud can't seem to find the bucks.
A housing program that makes new homes more affordable wants more participation, and it's asking area city councils to raise the income level needed to qualify.

St. Cloud City Council members voted 9-0 Monday to approve the changes. All five cities � St. Cloud, Sauk Rapids, Sartell, Waite Park and St. Joseph � must approve the changes.

Raising the qualifying income would allow people who do not need mortgage assistance to participate. It also may help an ongoing issue: More homes are designated than funds available for gap loans.

The Life Cycle Housing program has run out of funding for gap loans in the past and is quickly going through money granted in April, which will help about 13 people. There are more than 400 yet-to-be built homes designated.

"What we don't have enough of is the gap loans that would help moderate families," said Dan Finn, who sits on the housing board. "As a result, we won't be able to help families with as low of incomes. We can help families with slightly higher incomes."
Finn has a degree in economics, so let's help him out with the analysis here. Dan, it's called a shortage. All your proposal does is remove some of the excess demand. Does it add more houses? No. It chooses to kick some people out of the queued excess demand on the basis of income.

Producers create goods with the expectation of profit. Affordable houses are not built because the loan money isn't there. Meanwhile, house prices continue to skyrocket because land that could be used in production of housing people both want and can pay for is set aside in the increasingly vain hope that it can be used to create affordable housing. This set-aside is actually helping to keep property values high here, which of course means property becomes less affordable, etc.

One detail is more interesting yet.
Other proposed changes [include] allow[ing] gap loans to be repaid without interest after selling and charge a $1,000 fee to cover administrative costs.

Secondary mortgage markets have rules against charging interest for such loans, which officials originally wanted so participants did not have upfront costs, Finn said.
Did nobody think of this before?

Monday, June 06, 2005

Nobody knows what goes on behind closed doors 

Unsurprisingly, none of the public meetings here in Minnesota over the budget deadlock accomplished anything, so now Governor Pawlenty and leaders of the two houses of the legislature are going behind closed doors. Tomorrow could be interesting, as the cigarette health impact whatchamacallit comes up before the House Taxes committee. Tax committees were cancelled for today, so perhaps something is getting done. Alas, it looks like that cigarette tax is still part of the discussion.

Bills to provide for access grants and expansion of the tuition tax credit appear to be making progress in the Legislature as well.

Introductory econ lecture #8 

Test day, so the lecture was short. And sorry to be late today but family business intervened.

One of the basic lessons we've learned is that markets require an agreement on the rules of the game. Markets dislike uncertainty over the terms by which exchange happens. The coercive power of the state is used to reduce these uncertainties. In a set of notes from Heyne I read three presuppositions for the lecture, and I intertwined them with some of the work of Mancur Olson:
  1. "Government is not something exogenous to society. It is finally, like any other social institution, people interacting." This calls up the image of a social contract, but it's worth noting that the institutions usually do not come out of any constitutional convention at the outset. Olson's concept of roving bandits strikes me as right for the initial state, pretty close to Hobbes. (Regrettably, Olson never finished this research to show us how you get to democracy.)
  2. "The unique characteristic of government is the authority to coerce. This power enables government to deal effectively with certain free-rider problem created by positive externalities that could only be internalized through voluntary exchange at prohibitively high transaction costs." So Heyne offers an addition to Olson in this way: The move from roving bandits to stationary ones is because it's profitable to do so. Further improvements in the organization of government result from attempts to reduce transactions costs. Those interested in this should read this paper on Sweden by Olson and those referenced in footnote 4 therein.
  3. "Because government is not somehow 'above the fray,' all-knowing and supremely benevolent, the actions of government will depend as in the private sector, upon the information available to and the incentives confronting relevant individuals. As a result, the institution of government is not itself exempt from the problems created by free riders." We spent time talking about rent-seeking, and the logic of collective action (the title of Olson's first great book.) Discussion of government failure ensued.
One thing we didn't spend as much time discussing yet is prisoner's dilemma and other parts of game theory. I wish we had more time, but I need two full lectures on macroeconomics, and those begin tomorrow.

Sunday, June 05, 2005

Music that brings back memories 

Via Mitch, who was infected by Sheila. I assume this means music I am slightly embarrassed to admit I liked then. There's a lot of those types now and I intend to keep those secret. I so agree with Mitch about Nights in White Satin by the Moody Blues.

Elton John -- My first album was "Honky Chateau", second was "Madman". The Elton John who sang Rocket Man and Levon was the first introduction to much of the music I ended up liking, but finding who he became has made me less willing to talk about him. My kid brother and I played only these two albums for a year until I got

Chicago -- a move I regret terribly, because Dean hated it, but Ray across the street was sure we could make out with the girls up the street with it, and

Grand Funk Railroad -- a bittersweet memory, because my first friend to commit suicide and I had just learned to play "I'm Your Captain" before he took his life. GFR and J. Geils and Deep Purple were the prime parts of my 8-track tape collection, along with Black Sabbath. My other good friend Eric was the one to carry around John Denver, Starland Vocal Band and such. Better music (Crim, Yes, Floyd, ELP, and other bits of prog rock) was required to be on vinyl, as the turntable and receiver were where I had spent my money on sound.

Dan Fogelberg -- Twin Sons of Different Mothers with Tim Weisberg was about at the height of my guitar playing, and I was convinced both that this was the music I was meant to play -- a tragedy, since I liked prog so much more, but because I couldn't be Howe or Lake I wouldn't try -- and because this was the music that made my dreamboat who turned out to be a footnote swoon. (Latter is a line from an Elvis Costello song.) So, the Power of Gold, with the John Denver guy, the dreamboat and one other, at his stable showing me his first horse.

I have never been a big Fleetwood Mac fan, but anytime I hear Stevie Nicks I think 4th of July, 1977, at Schaeffer Stadium in Foxboro, FM/Eagles twin bill with a very pretty girl whose name I no longer remember. Ever been on your way to a concert with a first date and know before you got there that there will be no second? She was proof of Beckhap's Law. Yes, but it didn't matter once it turned out special mystery guest was Boz Scaggs.

First and last songs I played with bands for money
-- first was "Just What I Needed" by the Cars, and last was "Johnny B. Goode". The band had already found another bassist, so I walked the stage and played every instrument and sang it, concluding with setting the bass on fire a la Hendrix. (It was a very junky bass -- I had already sold the rest of the instruments to finance grad school.) That last was on a deck overlooking a lake for a house party with about eight boats moored off the dock with people partying.

Question to the others: Where were you when you first heard "Year of the Cat"?

(Sidenote: speaking of nostalgia, Larry King is replaying his 1992 interview with Richard Nixon.)

In the jukebox: Joy Division; on deck: Sugar Cubes. It's been a long strange trip.

I'd like to persuade you, but I'll settle for sneering 

My friend and occasional reader Dr. Burt Dubow sent me a copy of Matt Miller's column in Saturday's NYT. I appreciated that Miller was persuaded to the case for war in Iraq by Ken Pollack's book, only to find later on that the book's premise -- that Iraq had W.M.D.s -- has since been falsified. So persuasion wasn't dead for him then. But that doesn't mean it isn't worth the trouble to try to persuade.

There are two sets of issues here. One, there's the possibility that to win elections, it is easier to mobilize your own base and "drive up the negatives" of the opponent. Persuasion in the since Miller uses -- trying to reach people who traditionally haven't supported you -- is costly. This is the problem I run into with with the church of which I am a leader: We don't seek to peel off Lutherans from other congregations but try to reach those who have never heard the Word or have turned their backs on it. Seeking new members, "expanding the Kingdom", is very difficult stuff. It's noteworthy that Howard Dean currently is spending a lot of effort speaking to his own base, trying to solicit donations, while Ken Mehlman, his Republican counterpart, is showing up at a lot of Latino and African-American groups.

Second, I would agree with Miller if what he meant by the article is that the art of persuasion is dead. Reason is passe; critical thinking is confused with being critical of power or the establishment. Guys like Bill Maher (liberal) or Penn Gillette (libertarian) are considered real thinkers, when they're just guys satirizing the establishment, and frankly neither are quite clever. What is dying is both the art of the persuasive essay and the ability of our public to understand them. Both are signs of decay of higher education, a decay I feel increasingly powerless to stop. And they're harming the good things someone like a Matt Miller or a Michael Kinsley, or a William Buckley or a Victor Davis Hanson, can do to create a public dialogue on serious issues.

And yes, I suppose you could argue -- anticipating where you might go here -- that the first set of issues are causing some of that decay. Maybe, but I think something more fundamental than that is going on. If I knew what it was, I might write a book, but who'd read it?

Euros in many flavos 

Captain Ed is posting on the euro, in part because of a discussion we had on NARN yesterday.
In our discussions of the EU crisis today on our radio show, SCSU Scholars' King Banaian made the point that without a viable EU, the euro has become superfluous.
I don't think I went so far as to say superfluous, but it removes what I think is the primary mover in the push for the euro. Roger Cohen noted yesterday that much of what has moved the European project forward has been a stubborn momentum, a sort of inevitability that this was going to happen. That has been the primary mover, and it appears to have run out of steam. For example, Matthew Lynn of Bloomberg notes,
[T]he economics of integration that have dominated Europe for the last 30 years have come to an end. Forget convergence. The big trend in the next few years will be Europe's economies going their own way, not with each other. In time, even the euro's survival might be called into question.


Since the constitution has been so decisively rejected by the voters, it puts a stop to any plans for further integration. Electorates won't tolerate it.

An elected EU president? Forget it.

A harmonized tax system? Don't make us laugh.

A single European army? Only in the dreams of a few ``eurocrats'' in Brussels.

The path that the large European countries followed toward a single government now seems to have reached a dead-end.

That has three main consequences for Europe's economies.

First, the euro club may well now be closed and the three EU countries that opted to remain out -- Britain, Sweden and Denmark -- aren't likely to change their minds. Questions will be asked among the accession countries whether they should live up to their treaty obligations to join the euro. In the Czech Republic, that debate has already started. Governments will find it tough to sell the single currency to skeptical electorates.

Next, political leaders who have been triumphant in anti-constitution campaigns will be emboldened to take the next step. If you can defeat the constitution, you could pull out of the euro, as well. In politics, once a bandwagon gets rolling, people want to jump on board. Anyone investing in euro-area assets will have to ask themselves: ``Am I happy to be holding this asset if, at some point, it reverts to an old national currency?'' Many investors will answer ``no'' to that question.

Third, the creation of a single European economy is now unrealistic. Trade barriers have been broken down, and capital markets have been freed up, boosting all economies involved. Indeed, the gains from integration may well have allowed countries to ignore the declining competitiveness that results from unreformed labor markets and overgenerous welfare systems. Yet if no further steps toward integration are taken, those gains will be lost. Countries will have to reshape their own national economies if they are to grow again.

H/T: Edward Hugh who also notes that any disappearance of the euro would take a good deal of time. I agree with that, but any further opening of a spread in interest rates between Eurozone countries undercuts one of the three main benefits of the common currency (the others being lower inflation and a lack of costs involved in trading in multiple currencies.) Captain Ed also notes an article in Stern that suggests the currencies will be separated as they are. I doubt that, as it creates confusion and because it's unlikely they have the proportions of the various flavors of Euro notes in proportion to the size of the economies.

The importance of that loss of momentum should be emphasized because the economic argument isn't as strong as it might need to be to persuade Europeans of the euro's viability, particularly in light of weakening support for the EU constitution. I recommend my mentor Tom Willett's paper from last year in which he explored the viability of Britain joining the EU or Canada joining a monetary union with the U.S. Tom has been a long-time skeptic and critic of people overselling monetary unions, and much of the former paper is vindicated by the events over the last week.

Someone asked me today why we didn't emphasize more what was the impact of the EU failure is for the US. I see three. First, without an EU constitution each of the countries that support the GWOT will be freer to continue to do so. There is unlikely to be any more lecturing from Chirac to Poland. Second, the instability of relations between Eurozone countries may help induce more trade with the U.S. and close some of the trade deficit. But the euro will fall versus the dollar, which eventually increases imports from Europe; as well, higher interest rates there will induce capital to stay in Europe and probably push up U.S. interest rates. Last, the discussion of what China will do with all its dollar reserves takes a new turn when there's not an alternative currency available. Perhaps the fraction of their reserve accumulation that goes to dollars stays high, and that could counteract the rise in interest rates that a mention in point two. I won't guess which effect is larger.

Friday, June 03, 2005

What to do with the kids? 

What did you do during the summer when you were a kid? Apparently these types of questions are now subjects of studies, complete with proposals for coordinated state responses. Both my parents worked, and I was always put out to others during the summer. My own list as a child included
I'm sure I've forgotten a few, but these were great times. There were also the camps you went to for a week -- church and Boy Scouts, for two -- but these were the special ones you did for a week or two while Mom and Dad did ... well, I now understand.

How is it that we've ended up with so few options for the kids in summer, that we have to have universities study a social problem of idle children?

Loose lips, sinking bonds, and storms gather? 

There's some troubling activity occuring in financial markets right now. It's troubling for me, because I wrote a report last week that included a forecast on the Fed funds rate that the Federal Reserve targets. (And, unluckily, it won't be published until July. This is the bane of a forecaster's life.) Today's activity, coming after the job report, has Tim Duy wondering if the Fed has actually decided to stop raising interest rates. Duy writes like a Fedwatcher, so I'll simply paraphrase him: The markets and Federal Reserve officials seem to be talking differently right now. If he's right, this is very bad news.

The whole strategy of the Fed recently has centered on guiding expectations. The Fed has made its statements after FOMC meetings a critical passing of information from policymakers to the market. As Duy notes, new Dallas Federal Reserve president Richard Fisher made statements on Wednesday that suggested a much different statement than the last statement of FOMC. Here's what the Fed said:
The Committee perceives that, with appropriate monetary policy action, the upside and downside risks to the attainment of both sustainable growth and price stability should be kept roughly equal. With underlying inflation expected to be contained, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability.
Less than a month later, Fisher.

"I think we've room to tighten a little bit further," Fisher said, but, using a baseball analogy, added that the U.S. central bank is in the eighth inning of its tightening cycle and entering the ninth, and usually final, inning this month.

Fisher noted that the Fed had a double mission - to keep inflation at bay and to maintain economic growth. He said interest rates had to get to the point where "we are neither stimulating inflation or discouraging growth."

"We are not quite there yet. We are getting closer, and as to when we get there, stay tuned," he said.

Duy and others think Fisher is out of step, but the noise is nevertheless roiling markets.

In the past week, bond yields plunged when a rookie president of a Fed bank hinted that the tightening cycle might be in the "eighth inning," then soared when an old clubhouse veteran who's halfway out the door refused to comment on the remark.

It's gotten to the point where a few offhand comments by a couple of Fed backbenchers can have as much impact on real interest rates as an actual rate hike.

Greenspan is scheduled to speak twice next week, including testimony to Congress on Thursday, and the market will be very sensitive to what he says next. The upshot has been that the market is no longer favoring that the Fed will increase interest rates a second time this summer (everyone expects a quarter-point rise at the meeting June 29-30.) This could mean that the expectation is that growth in the second half of the year won't be that strong. I can't release all of what I've written, but this local event at Electrolux has gotten my attention, and the events on the market the last few days makes me wonder if the Fed sees it too.

Dumb stuff economists think about 

Looking in our office supply closet I find a cheap stick pen with a chain attached to it. It is a counter pen, like this one for $6. It has "AgiON Technology Built In" to make it antimicrobial. Which means, I guess, they smeared some stuff on there to prevent germs from spreading. Or at least, so they say.

I am trying to figure out the set of relative prices that makes these pens an efficient purchase. Is it that pens get taken? I don't know -- if I'm a bank or a store or something like this, wouldn't it be better to simply plaster my logo on the pen and convert it to advertising? The pen can't be more than twenty cents -- not that bad an advertising purchase. Is it the cost of reloading the cup with the pens in it as they get taken? If it's a counter with a server or cashier behind it, certainly the opportunity cost of that person's time is pretty low. Probably not a good deal. How many pens are pinched at the bank, at the grocery store or gas station?

Meanwhile it's very annoying to sign a check or credit card voucher with a pen with a chain on it. Or pulling up the pen from the bowels of Hell where it has swung since the last person used it.

Do you check to see if the pen is antimicrobial? I doubt it. Maybe Lileks. Or Monk.

It gets deeper and deeper 

Referring to the mound of dung Ward Churchill keeps stepping in. The Rocky Mountain News, which has been the best source for all things Churchill, reports that our little Eichmann has been printing other people's work without their permission.
On a rainy Saturday in October 1988, Robert T. Coulter, a soft-spoken lawyer and member of the Potawatomi Nation, gave a talk at a conference hosted by Evergreen State College on the banks of Puget Sound in Washington state.

After his speech on the status of American Indian nations, he handed out copies of what he had presented.

One of the people attending the conference, Coulter recalled, was Ward Churchill.

Three years later, Churchill included Coulter's presentation in a book of essays he was editing. But Coulter said Churchill never asked for his approval.

In fact, Coulter said he wasn't even aware that Churchill had published his work until a reporter called to ask him about it recently.

At least three times, Ward Churchill has taken other people's work and published it without their permission, the Rocky Mountain News has found. In doing so, he has sometimes changed their words and, in one case, even added erroneous information.
I have had articles reprinted, and in each case I am asked to sign a release -- I'd like to say I got a check too, but that's happened only once in twenty years.

It's nice to have your work reprinted generally, so I understand one of the other authors whose work Churchill allegedly lifted saying it was OK with her. If they didn't change a word, I might send a letter pointing out they should have asked permission first but I probably wouldn't do anything more. But altering my words is pretty bad, and inserting information -- even if it is correct -- would be a serious violation.

Even worse, the RMN also reports that Churchill is taking some work and putting his own name on it. In the early 1970s there was a conspiracy theory that the U.S. Corps of Engineers was going to flood northern Canada. A group called Dam the Dams promulgated the story.
Dam the Dams published The Water Plot in 1972. In 1989, Churchill published a version of The Water Plot with the same structure, language and information found in the original. He credited that piece to Dam the Dams and his own research organization, Institute for Natural Progress.

In 1991, Churchill took sole credit for another version of The Water Plot that was largely identical to the 1989 version. In 2002, he published a third version of the essay under his own name.

Churchill declined to comment on why he took credit for work done by members of Dam the Dams.

The discovery of the striking similarity between Churchill's essays and the Dam the Dams pamphlet comes as the University of Colorado's standing committee on research misconduct investigates a plagiarism charge against the tenured ethnic studies professor, as well as other allegations of research misconduct.
And best of all, Dam the Dams had repudiated its own work long before Churchill started republishing it. Prof. Churchill still argues that it could happen. There are elements of sloppy editing (such as not changing time frames between publication in 1972, 1989 and 1992. As noted in the article -- which deserves a full reading -- while each item on its own might seem insufficient to warrant firing Churchill, it is the accummulation of repeated instances that leads to the conclusion that Churchill is perpetrating systematic academic fraud.

The University of Colorado committee investigating the charges is receiving all of this evidence. I can't find a reference right now, but my memory is that they should report 90 days from their formation, which would be later this month.

UPDATE: Reader Doug Sundseth notes that according to this article, the first report is due, but that a final determination on Churchill will take much longer.

UPDATE 2: I receive word there is a whole blog devoted to covering Churchill. Lo and behold, the Scholars saw it, and it was good.

Thursday, June 02, 2005

Introductory econ lecture #6-7 

(I was going to put #6 up last night but I was proofreading a report until 10:45 and then graded homework; I was ready to surrender to Morpheus at 12:45 only to find Littlest in my place in bed after consuming too much of a ghost story. So I started this and then fell asleep. It looked a lot worse when I opened it up this afternoon.)

We got off on many tangents today, as students seemed interested in playing with the new toys of supply and demand, and understanding how incentives motivate behavior and from whence incentives come. Some of the lessons I've done on this blog in the past, like the minimum wage or higher education, came into play. But much time was devoted to this question from the textbook:

Federal law currently prohibits the sale of human organs for transplant purposes. At the present time, people are dying while waiting for suitable organs to become available. It seems almost certain that more organs would become available if financial incentives were offered to prospective donors. Would you be in favor of allowing this? What consequences would you predict?
I had no idea things would careen so far out of control. Students somewhat reasonably expected I favored selling organ transplants. I think a majority of economists do not, though Alex Tabarrok argues in favor of providing financial incentives. (See also this post.) That's not to say the current system is perfect. William Anderson and Andy Barnett argue that while you can hold the price of the organ itself to zero, you can't hold the cost of the transplant there: Hospitals and organ provider organizations can simply raise their prices to capture the value added of the donated organs. A shortage of organs also limits the number of hospitals providing transplant services, they say, though the limiting factor there might be the AMA. Students worried that it provided an incentive for organ theft. That's a fine argument, I countered, but then you'd have to be consistent and say making heroin and cocaine illegal also encourages theft.

The point of the story, however, is that exchange is supposed to be a cooperative activity. You favor markets because they allow those with the best information about the value of the particular trade to these particular particiapnts to agree to terms of trade. In class I referred to this as part of the question of "informed consent". If a seven-year-old catches Manny Ramirez' 74th homerun in October (a guy can dream, can't he?) and someone offer the seven-year-old candy for every day for the next two years in return for the ball, would you honor the trade if the kid agrees? I doubt it; the kid doesn't know what the value is and doesn't have the capacity to provide informed consent. It is likewise difficult to imagine that two families, one with a member in need of a transplant and the other grieving the loss of one of its members, can provide consent. Informed consent of course has legal meaning in contracts; I'm not talking about that. What I am asking is whether those people in that situation can engage in rational economic calculations? It's a hard question, made no easier by the fact that because we are not encouraging more use of cadaveric organs we are putting live donors at risk for kidneys and parts of livers. (There isn't much question that paying for organs would increase their supply. People respond to incentives.) In the end I find myself saying 'no' still.

I spent the latter part of class talking about economic versus accounting costs. Two simple rules apply:
  1. The only costs that are relevant for economic decisionmaking are future costs.
  2. Future costs include the value of the next-best opportunity foregone in taking the action.
Accountants will count up revenue and explicit costs and ignore implicit costs. That's not wrong, but there are many times where a business owner does something with his or her property that is decided by something more than what the accountant presents as profit or loss. The text and I agree that the function of profits is to induce people to work under conditions of uncertainty. Profits that are a sure thing dissappear when others learn about them. (You don't have to be French to understand that about entrepreneurs.)

Entrepreneurs are residual claimants: The private enterprise system allows the owners of the other factors of production -- land, labor and capital -- to transfer risk of production to someone willing to accept it in return for the claim on anything earned by the enterprise after rent, wages and interest are paid. This has the wonderful benefit that entrepreneurs who use resources well are encouraged to expand, but those that do not are punished with losses. One lesson my students learn: Whenever you hear someone with antipathy to markets call it "the profit system," say in return "I don't support the profit system; I support the profit and loss system." Efficienct resource allocation requires both. This is probably the key reason you hear economists who are supposed to be "right wing wingnuts" vehemently oppose corporate welfare. It often comes as a shock to liberal non-economists.

What does market power mean? For one thing, a cool blog. But importantly, it's a matter of degree and not quality. We all have some amount of it, some of us much more than others. We get market power by persuading others that there are no good substitutes for what we are selling. Everyone can be persuasive at some point in time to some degree. The more persuasive we are, the less elastic is the demand for that which we are selling, and the more market power we hold.

We talked about so as to discuss price searching. Price searching is what those with market power do: they seek a price that allows them to maximize their net benefits. Those who want to see the analytics of this process can look here. We spent a good deal of time talking about the behavior of price sellers, such as differentiating profit margins on different goods they sell (grocers putting the advertised beer in the back of the store; camera retailers selling cameras at cost but marking up accessories 100%.) We talked as well about how many businesspeople will tell you their "markup rule" for pricing goods; economics would say that businessowners do not use simple markup rules.

We left on this thought: These models are simply that, models. You won't walk into a mom-and-pop grocery store, or Coca-Cola, or any other firm and find someone drawing the demand curve on a boardroom easel pad. Therefore we do not believe that someone actually calculates MB=MC at any point in time. But the models point out some realities, such as the fact that price searchers -- even those with lots of market power -- face a demand curve, and thereby a marginal benefit curve. They are limited by consumers' preferences and their own ability to persuade.

And who said anything about noble? 

Arnold Schwarzenegger and the two state university systems in California have announced a new program to create more teachers of math and science. Joanne Jacobs, covering the story, points out that part of the inducement is $19,000 in student debt forgiveness. In comments on her post, David Foster points out,

'[UC President Robert] Dynes said that many students graduating from UC have "noble intentions" and would like to teach, but that they are currently trained for research and industry. 'We will build a curriculum aimed at preparing teachers,' he said"

Not a good sign. A big part of the problem with education today is the curricula "aimed at preparing teachers."



According to the National Center for Education Statistics, 59% of students earning a bachelors degree in 1999-2000 got credits from more than one school. Some of this is due to students first using two-year programs, but 47% of those who began college in a four-year college or university either transferred to another school or co-enrolled in a second institution. This is interesting insofar as many universities spend an inordinate amount of time trying to devise general education curricula that will include attempts to "foster diversity" or "create responsible citizens". Students simply are voting with their feet. (Our university system encourages it.) While no program is without its diversity requirement, students may increasingly learn that not all are created equally odious. Of course, as this process expands, where one receives his or her degree will matter less and less, which may reduce investments in academic distinction; there's no value to branding SCSU with the cachet of academic prestige when many of its students will have taken only half of their credits here.

Wednesday, June 01, 2005

You can't teach the post hoc fallacy often enough 

Gary Miller called my attention to this column in the STrib.

Rep. Mark Kennedy wants to represent Minnesota as a U.S. senator. He also has flirted with voting in favor of an expansion of the NAFTA trade deal that could spell the end of one of Minnesota's key industries. He can't have it both ways.

The NAFTA expansion deal is known as CAFTA, the Central American Free Trade Agreement. NAFTA cost our country a million good jobs and put nearly 2 million farmers in Mexico out of business. CAFTA, which includes five Central American nations and the Dominican Republic, would multiply the bad news.

I hear that statistic from many people, and it's flatly wrong.

For private sector U.S. workers, real hourly compensation rose by 14.7% from 1993 to 2003 (2nd quarter to second quarter); in the 10 years preceding NAFTA the increase was 10.6%, or over a quarter less. U.S. manufacturing wages increased dramatically, with real hourly compensation up by 14.4% in the 10 years since NAFTA, more than double the 6.5% increase in the 10 years preceding NAFTA.
Your data source is here. Also for manufacturing employment; here are two graphs.

NAFTA is passed in 1993. Manufacturing was in decline before passage; it grew during the 1994-2000 period while NAFTA continued. The decline from 2000 on -- which was a big part of the Kerry campaign's economic platform -- is certainly cause for concern, but it's not established that NAFTA lies at the root of it. And wages rose in the 1990s while NAFTA was in force. No giant sucking sound.

Also the op-ed writer says,
But CAFTA has a new, even worse, wrinkle. It would allow enough new sugar into the United States that it could wipe out the U.S. sugar industry. "As I see it, you have just negotiated away another industry here," Sen. Kent Conrad, D-N.D., told the U.S. trade representative at a hearing of the Senate Finance Committee last month.
That is rich. In fact the sugar lobby has been keeping prices high for decades. CAFTA actually tears down a barrier that would lower sugar costs in the US and improve the lives of Central American countries. Indeed, they are one of CAFTA's biggest attackers. So my commission back to Gary -- is there some connection between Big Sugar and the Weiss' Citizen's Trade Campaign?

UPDATE (6/3): Reader and colleague David Wall passes along this article from the Federal Reserve Bank of Minneapolis' fedgazette. It offers a fuller description of the current sugar support program and complaints from Big Sugar about CAFTA.

How much did Coleman stretch? 

Last week I discussed the now-overdiscussed visit some bloggers and outstate talk-radio to the Governor's mansion, and its discussion by Nick Coleman. Coleman's only quote from an attendee was from Kelli Gorr, the program director at WJON here in St. Cloud. I clipped the quote then and repeat it here:
"I'll stand as the one person who would not be considered right-wing," said Gorr, who broadcast a talk show from the governor's reception room in St. Paul on the day of the reception, but who took pains to present a politically balanced program. "The spin was that they [the governor's staff] wanted to reach new media able to disseminate information quickly and to say thank you to the nontraditional media. That was the spin. But if you call it most definitely right-wing, you're not off base."
I was the only person from St. Cloud at the meeting besides Gorr, and while she's interviewed me for economic pieces (largely from the local business report I co-author) we had never met in person until that meeting. Mrs. S. played piano in rehearsals for a musical Gorr was in here, and that's the extent to which we know each other. When we met at the Governor's, I had to introduce myself.

On his show Friday, Coleman made additional claims about the conversation he had with Gorr. Between yuks with Brian Lambert, he tells the story behind the story, as it were:
And I said to him [I'll guess this is McClung, the press secretary] tell me anybody there who wasn't a right-wing wingnut, and they gave me the name of a woman who is a news, a program director at ... WJON in St. Cloud [Lambert: And she was the only one] and he said "Talk to her, she'll tell you it wasn't partisan," so I called her up and she said "I was the only person there who wasn't a right-wing wingnut," you know, and she obviously felt out of place. It was totally partisan.
Here's the clip to hear for yourself (0:21 MP3). I heard this and thought this simply couldn't be right. I had visited with her, as did Mitch -- we ended up with an interview to help advertise MOB Road Show -- and I did not sense any of that sort of discomfort.

So I decided to investigate this and sent the clip to her and asked whether it was accurate. I got back this message.
As far as Coleman's column...he was 98% within context. The only thing I would correct was my reference to the "room" being right-wing had to do with the radio broadcast that morning (All were conservative except for WJON.) As far as the bloggers went, well Mitch and you were the first I had ever met.
That might seem a minor correction but it matters quite a bit. Coleman is specifically focused on the new media event -- a.k.a. the bloggers -- and to make his point the one quote he uses is referring to an entirely different event! She could not have said to him it was totally right-wing wingnuts as Coleman represented on the air, because she had not ever met us. If she was uncomfortable it would have been only from preconceptions of bloggers as pajamaheddin wingnuts, a preconception fueled by Coleman. I rather doubt this to be the case. I think she was in an unusual place and tried to investigate who bloggers were ... which led to the interview. And doing that means, when it comes to reporting on bloggers, Gorr has done a better job than Coleman.

At minimum -- assuming Coleman simply was confused about which part of Gorr's day she was discussing in the newspaper quote -- he's been sloppy. If he knowingly used the quote from one part of her day with the Governor to discuss another, it's dishonest. Given the experiences others have had trying to get Coleman columns fixed, it's not worth our time getting this story to the STrib. This merely serves as another item in the indictment that Coleman's columns are held to an editorial standard that remains a mystery.